#cryptocurrency #bitcoin #blockchaintechnology #cryptography #RBI
• India plans to introduce a law to ban private cryptocurrencies such as bitcoin and put in place a framework for an official digital currency to be issued by the central bank.
• The law will “create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India (RBI).
Cryptocurrency
• A cryptocurrency is a digital currency that can be used to buy goods and services, but uses an online ledger with strong cryptography to secure online transactions.
• Much of the interest in these unregulated currencies is to trade for profit.
Bitcoin
• Bitcoin is a decentralized digital currency, without a central bank or single administrator that can be sent from user to user without the need for intermediaries.
• Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain.
• Bitcoins are created as a reward for a process known as mining.
• They can be exchanged for other currencies, products, and services.
• Bitcoin has been criticized for its use in illegal transactions, the large amount of electricity used by miners, price volatility, and thefts from exchanges.
Who controls bitcoin?
• The Bitcoin network is owned by nobody quite like how the email technology is not owned by anyone.
• All Bitcoin users all over the globe control Bitcoin. Developers can improve on the software but they cannot enforce a change in its protocol.
• This is because all the users have the freedom to opt for the software and version they wish to use.
• Payments by Bitcoin are simpler to make when compared to a credit or debit card transaction. They can also be received with no merchant account.
• Bitcoin can be used like any other money from either online or in a brick-and-mortar store.
Why govt plans to ban Bitcoin?
• Bitcoin does not have a central authority/ There is no single administrator- Anybody can become a miner.
• There is no central server; the bitcoin network is peer-to-peer.
• There is no central storage; the bitcoin ledger is distributed.
• The ledger is public; anybody can store it on their computer.
Illegal usage
• The use of bitcoin by criminals has attracted the attention of financial regulators, legislative bodies, law enforcement, and the media.
• Popularity of bitcoins hinges on the ability to use them to purchase illegal goods
• There were an estimated 24 million bitcoin users primarily using bitcoin for illegal activity.
• Hence Govt. plans law to ban bitcoin, set up official digital currency.
