The most talked about cryptocurrency Bitcoin picked up momentum this week and is now trading at lifetime high levels against the US dollar. Bitcoin is just about $200 away from hitting the $10,000 mark for the first time ever, as per the price quoted on Google Finance. According to a leading Bitcoin exchange Coinbase, Bitcoin had appreciated about 70%, or $4,000, in the last one month. Today, Bitcoin topped a level of around $9,790, as per the Google Finance data. Earlier yesterday, Bitcoin breached the $9,000 mark and added nearly $800 in today’s trade.
According to an Indian Bitcoin exchange Zebpay, one Bitcoin equalled Rs 7,15,042, while it is quoted at $9,768.89 on Coinbase. However, the world’s largest cryptocurrency Bitcoin has the dubious distinction of being called as a ‘fraud’, illegal, fad, and many such names by eminent bankers, investors and regulators across the world.
Concerns over Bitcoin
The worst thing is that people keep confusing it with the concept of cryptocurrency and blockchain, and all of them are not fraud; in fact, some can even be a great digital tool in future backed by central Banks — some are already on it, including India. Reserve Bank of India executive director Sudarshan Sen in September said that the central bank is considering its own cryptocurrency, even as Bitcoin has not got any legal status so far.
In another incident, the rapidly surging price of Bitcoin, without any underlying asset or value-based, seems to have irked the top banker Jamie Dimon. “Bitcoin is a fraud and will blow up,” Jamie Dimon said at an event in New York in September 2017, adding, “The currency isn’t going to work.” While any cryptocurrency launched as a sovereign digital alternative to currency is legal and promises to pay the value encrypted in it, Bitcoin has no such value as it is like a digital form of private currency. Bitcoin does not have any underlying asset or a value-base.
From the US to China to France to Japan, central banks of all these countries have expressed concern over the rising popularity of Bitcoin with it being a private currency. India’s central bank is opposed to cryptocurrencies given that they can be a channel for money laundering and terrorist financing. Nevertheless, the Reserve Bank of India has a group studying whether digital currencies backed by global central banks can be used as legal tender. Currently, the use of cryptocurrencies is a violation of foreign-exchange rules.
What is Bitcoin?
Bitcoin is a type of cryptocurrency, which operates on the encryption technique, but does not have a legal backing from the central bank. It is an unregulated digital private currency created by Satoshi Nakamoto in 2008. Bitcoin is a digital asset and a payment system. It is commonly called a decentralised digital currency. It was invented by unknown person using the alias Satoshi Nakamoto in 2009. In India Bitcoin is traded on three virtual exchanges namely Coinsecure, Unocoin, Zebpay.