Introduction:

A digital currency which captured the fancy of hundreds and thousands of investors is Bitcoin, which was conceived sometime in January 2009 by a group of private individuals. When it was created, a cap of 21 million Bitcoins was decided upon. Unlike other currencies, Bitcoin is based on a cryptographic protocol, meaning that it cannot be seen physically, but is completely digitalized. There are no banks or financial institutions where Bitcoins are available since all Bitcoins are recorded in a ‘blockchain’, which is a public ledger. 

Advantages of Bitcoin:

Bitcoins can neither be taxed nor be counterfeited, as they do not pass through any third party, but are transferred directly between two holders of Bitcoins, referred to as peers. Thus, there are no issues of government or public monitoring of transactions. Bitcoins are stored in a digital wallet, which can be loaded on a mobile or desktop, ensuring total privacy, and extremely fast and cheap money transfer. These can also be exchanged for several currencies, giving flexibility to the parties. One can earn bitcoin by accepting them as payment for a service or material or even purchase Bitcoins through a Bank account or a credit or debit card. Bitcoins can also be used to make payment to an ever-increasing number of merchants across the globe. You can use Bitcoins to make payment for several goods and services including the retail market services.

How does it work?

Bitcoins are stored in a software wallet, which is available for all versions of mobiles using iOS or Android platforms, as well as through a wallet on your desktop computer. Perhaps the best way to load the wallet is to accept Bitcoins as payment for goods or services you sell, by signing up for a Bitcoin merchant account. This is perhaps the best way for a person to earn bitcoin. One can also buy Bitcoins through a bank account. Bitcoins are generated by qualified professionals called Bitcoin Miners who perform the highly specialized task of mining, through a specially designed hardware. This process of mining is referred to as Bitcoin Cloud mining services. Not everyone can attempt mining to get a Bitcoin. Since all transactions are done through a ‘peer to peer’ network, no centralized institution is there to monitor the transactions.  If one wants to convert Bitcoins to cash, it has to be done by withdrawing the same from the wallet and transferring it to the linked bank account.

Is Bitcoins legal?

Bitcoins are not a currency, so they cannot be termed legal tender. However, the governments of various countries are yet to come up with detailed laws regarding Bitcoins. Some governments have declared Bitcoins illegal, so one cannot buy or sell Bitcoins in those countries.