Bitcoin - A holistic view
What draw interest for cryptocurrencies?
Bitcoin one of the virtual currency saw its value trading above $ 18,000 (or about Rs 11.52 lakh) per unit, which is up by appox (1760%) from it's value on Jan 2017 is all time high on major exchanges and digital currency index, including Luxembourg-based trading platform BitStamp. There are multiple such currencies in market as of now - Ethereum up by (10,427%), Ripple up by (149%) even Venezuela is also set to launch it's virtual currency "Petro" oil backed cryptocurrency in a desperate bid to dodge strict US sanctions and to overcome present financial crises.
Bitcoin - An overview
It's one of the many cryptocurrencies that have gained immense popularity and attraction since it's inception. A cryptocurrency is basically a virtual asset/money that uses cryptography, a complex process of encoding data, to keep the data secure from the outside party and to help in authentication and prevention of duplication of transactions. It's basically act as a medium of exchange and these are simply numbers on screen. Interesting fact is that no central bank or financial regulator issue them or regulate them. It's popularity is immense that Even investment alumnus Mike Novogratz is launching a hedge fund and exchange like Chicago Mercantile exchange is with bitcoin futures.
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Bitcoin - Boon or Bane?
Bitcoin is peer to peer cash system invented by Satoshi Nakamoto way back at 2009. Bitcoin has been seen with opportunity as well as with skepticism. On one hand speculators and traders from across the world find opportunity, on the other regulator and central bank throughout the world have caution view regarding the same.
Bitcoin and other cryptocurrencies have created another world of virtual currency which is decentralized and can be used with sophisticated encrypted complex process and are limited in number. Bitcoin was in news recently during ransomware attacts - Petya and wannacry. As hackers sought about $300 in bitcoin as ransom. And now the surge of more the $ 18,000 which is a product of speculative bubble with no relation to any sort of underlying assets.
Current surge of bitcoin within few months is due to excitement amongst speculative trade and imbalance between demand and supply factor, combined with other factor ie., can be traded into global platform without any regulation as well as to evade from legal challenges.
Many bankers as well as global regulator have skeptical view over this new technology and its use. Indonesia's central bank has issued a regulation banning use of cryptocurrency. At the same time the RBI has banned the use of it to pay for goods and services within the country. Many bankers from prominent Banks had provided doubts over the use of Bitcoin.
At present scenario definitely there is sense of skepticism about the future of Bitcoin and other cryptocurrency but still their is hope of advancement in the filed of virtual currency. Only is the need is proper environment and control so that this can develop and flourish. Their is a need of setting up of global regulator for future growth and market prospect as single country or regulator cannot control. Banning will give a clear message that trading and acting on the interest of bitcoin is illegal and will discourage investors and speculator from taking risk.
Bitcoin can be boon for future technological advancement in the present state and can result in future currency prospect if act in regulated market, but at present scenario it may end up with disaster as this is solely product of speculation and excitement in investment community. Bitcoin and other cryptocurrency needs to be bring under the ambit of regulation as at present case it can impede tax collection, illegal acts, encourage ransom-ware even can help in avoiding sanctions and bypass law to promote terror funding and money laundering acts.