Bitcoin: Revolutionizing money

The digital money, Bitcoin has revolutionized the way of transaction.

No one has ever thought of Bitcoin, the digital money would trigger a juggernaut that would one day revolt the concept of money. Bitcoin is a groundbreaking concept in payment systems and a new kind of money. It is a generated by computer software, called mining, producing cryptic codes regarded as currency. It can be stored in digital wallets—as codes, in mobile phones, tablets, and personal computers. Further, the transaction is instant, from peer-to-peer, and can be anywhere throughout the world, without the support of any banking institutions. Moreover, the digital money, Bitcoin can be cashed out for any currencies—Dollar, Euro, British Pound, Yuan or any other existing currency.

Bitcoin was created by an anonymous developer—Satoshi Nakamoto in 2009. For three years, it remained silent. However, it took a dramatic rise from January 2013 when it was valued less than US $15. The value of this cryptic cash skyrocketed to as high as US$ 1250 in November 2013. It was until China’s central bank who refused to trade in for Bitcoin, then it’s worth slipped to US$ 650. It is evident that the price of an individual digital currency has become as expensive as gold.

Astonished by its enormous possibility, Bitcoin stole the media limelight only in late 2012. It stayed in the hall of fame when multinational giants; OkCupid, Baidu, Reddit, Humble Bundle and Foodler began accepting it. Further, in November 2013, a panel of experts made a hot debate on Bitcoin in the US. Later in the month, the US Senate conducted a hearing into Bitcoin on its possible risks or threats of this virtual currency. The senators were in fear of the Bitcoin would facilitate money laundering thereby taking jobs and revenue with them, thus needs to be regulated. However, the soaring uses of Bitcoin, acceptance of it by American companies as payment has forewarned the US Senate—consequently compelling them to say—we’re ready for this.

The journey of this creepy digital money doesn’t end here. Recently, a New York based media and financial analyst, Bloomberg TV hosted a program entitled, ’12 days of Bitcoin’ shedding light on various aspects of it—from mining to trading the coin. The Economist portrayed some associated possible risks involved with this digital money, calling it as a soaring Bitcoin bubble, that may crash, and others may follow in its edition of the last week of November 2013. Nevertheless, its December last week December issue publishes ‘Bitcoin Paradise’ portraying its inevitability in the expanding world economy. Next, CNN this month praised the coin as it is reshaping the future of money. It says that Bitcoin is going to stay despite of our affinity or rejection.

It is obvious that once the companies started accepting this digital cash, people have started buying goods with Bitcoins. People have purchased books, foods, and gifts from supermarkets; softwares, apps and movies from online retailings. Moreover, one notable guy bought a high performance sport car, Tesla S, worth $ 103 thousands in Florida, US, by paying in Bitcoins. More recently, some restaurants in India’s Silicon Valley, Banglore started to receive in Bitcoins instead of rupees for pizza. A man, named Tarun Thadani, the owner of a pizza outlet in the posh Worli area of Mumbai, started the pioneering move in India, according to the Times of India.  

Bitcoin is, nevertheless, not hundred percent secure. Sometimes it takes more than one attempt to transfer this cryptic currency to another receiver, and needs confirmation and reconfirmation. The money can be stored in electronic wallets as a group of codes which is impossible to break by steal. Those encryptions are so strong that it is almost impossible to intercept while the fund is being transferred. However, if you forget the password, it is almost impossible to re-draw your money back. In one such case, a British national in Wales, James Howells accidently threw his computer hard drive to landfill site, containing 7500 Bitcoins worth a 4 million pound. Eventually, he lost all the money. Due to its simple nature, made of computer code, some hackers are active in stealing this digital money. In early November this year, a group of hackers stole Bitcoins worth a million pounds from an Australian developer, TradeFortress.

Love it or hate it; Bitcoin is making a worldwide debate on money. Most of the financial analysts in the west have said it as a paradigm shift; and, an era of new money. The Bitcoin surge, according to them, would one day replace the hegemony of the dollar. Jeffery Tucker, a celebrated publisher of Laissez Fair Books in US, and a writer editor once said to Reuters that there is a probability of Bitcoin becoming a new international currency, somewhat similar to gold standard in the 19th century has enormous potential.

At the advent of new digital currency, the world is running after till the end of 2013, has sparked a global debate. The shock wave, starting from the US, Europe to Asia, will sooner or later affect small or fragile economy like Nepal. Especially when Nepal’s currency is pegged to Indian rupees, the latter relies on the dollar for trade; we are facing enormous difficulties for international transactions. At this juncture, if we can take part in this global race of Bitcoin, and mine Bitcoin in our digital devices, can make international purchases hassle free. Furthermore, if Nepalese banks start to make exchanges in Bitcoins, supermarkets and cinema halls accept payment in it, it may in no time integrate us into this revolutionizing digital money.