Cryptocurrency is the talk of the hour. From business tycoons to the general public, everyone has a divided opinion about the future of cryptocurrency. While Bill gates might call it "better than currency" or Warren Buffett may term it as "a mirage", its worthwhile to know what exactly is cryptocurrency. A cryptocurrency is a digital or virtual currency that is secured by cryptography. Many cryptocurrencies are decentralized networks based on blockchain technology. In simple terms a blockchain is a type of database. A database is a collection of information that is stored electronically on a computer system.
Bitcoin is one of the widely recognized cryptocurrencies. It is digital currency which was invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto whose identity still remains a mystery. The currency began use in 2009. Bitcoin offers the promise of lower transaction fees than traditional online payment mechanisms and, unlike government-issued currencies, it is operated by a decentralized authority.
There is no physical bitcoin, only balances kept on a public ledger that everyone has transparent access to. All bitcoin transactions are verified by a massive amount of computing power. Bitcoin is not issued or backed by any banks or governments, nor is an individual bitcoin valuable as a commodity. Despite it not being legal tender or legally recognized money within a given political jurisdiction, in most parts of the world, bitcoin is very popular and has triggered the launch of hundreds of other cryptocurrencies, collectively referred to as altcoins, like Ethereum, Binance Coin, Tether, etc.
Many bitcoin supporters believe that digital currency is the future. Many individuals who endorse bitcoin believe it facilitates a much faster, low-fee payment system for transactions across the globe. Although it is not backed by any government or central bank, bitcoin can be exchanged for traditional currencies; in fact, its exchange rate against the dollar attracts potential investors and traders interested in currency plays. Indeed, one of the primary reasons for the growth of digital currencies like bitcoin is that they can act as an alternative to national fiat money and traditional commodities like gold. But many people purchase bitcoin for its investment value rather than its ability to act as a measure of exchange as the lack of guaranteed value and its digital nature means the purchase and use of bitcoin carries several inherent risks.
Thus, No one knows what will become of bitcoin. It is mostly unregulated, but some countries like Japan, China and Australia have begun weighing regulations. Governments are concerned about taxation and their lack of control over the currency.
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