For long, I have been struggling to find out the basic concept behind Bitcoins. I did understand that it was digital currency, but how it fitted the description of ‘money’ interested me. So I started my chase for articles on Bitcoins, watched a couple of shows and decided to write down something which was far away from technical terms.This article is meant for people who have avoided the topic of Bitcoin for long ‘simply’ because they got too tied up in the complex jargons. Well, since Bitcoin and Ven will be something that could be a threat to traditional money markets, we might as well start understanding and using the terms more often.

1. Bitcoin - Virtual Currency Becoming A Reality!
'Money'by definition is a good that acts as a medium of exchange in
transactions. Classically, it is said that money acts as a unit of
account, a store of value, and a medium of exchange and in the past,
a standard of deferred payments. Now, any object that fulfills this
definition and has the mentioned functions can be termed as money.
Money has evolved over a period of time from commodity money to
fiat money. With IT gaining momentum and rapidly technological
driven economies, digital currency was introduced in 2000 albeit with
little success. Recently, Bitcoin and Ven have been the talk of the
electronic money markets. As people got to know more and more
about the currency and its conveniences, they also started doubting
its security and value in foreign markets. Digital currency is a step
beyond wire transfer or Electronic Funds Transfer (ETF).
Bitcoin is designed specifically as a free and independent currency of
established power, allowing direct transactions between the holders
out of any legislation, tax or supervision. The Bitcoins are an
electronic code that can be converted to any other currency in the
approved platforms. Bitcoin was introduced in 2008 by a developer or
group of developers named Satoshi Nakamoto. Every day, the
"mining" of Bitcoin create new Bitcoins using ever-faster computers to
solve complex mathematical problems. Bitcoin, as a form of payment
for products and services, has seen growth and merchants have an
incentive to accept the currency because transaction fees are lower
than the 2–3% typically imposed by credit card processors.2013 saw

2. the popularity of Bitcoin since the virtual currency saw a major
increase. Bitcoin has time and again been criticized and Bloomberg
published it as a means of payment rather than real currency. The
Bank of Finland said that Bitcoin does not meet the official definition
of money, and the Internal Revenue Service of the United States has
just pointed out that studying the subject without offering any official
indication. But Bitcoin is making small strides. So why exactly is
Bitcoin becoming famous? Well, first is its ease of transactions and
low transaction costs. Second, is the fact that it is not subject to
fluctuations in foreign exchange market.
With a few advantages, Bitcoin is slowly making its mark. In
November
2013,
Richard
Branson announced
that Virgin
Galactic would allow payments in Bitcoins. Bitcoins has been
received with mixed reactions. In many cases, it has not been very
receptive with many countries. At present Bitcoins are highly volatile
leading to speculation. After jumping into the media spotlight, the
price of Bitcoin has soared over $ 900, compared with $ 60 worth a
year ago. However, this volatility is also owing to its limited supply.
The European Banking Authority has even warned that the risks of
engaging in such speculation go beyond the possibility that the value
of Bitcoin drops. Others too have been critical. Economists Paul
Krugman and Brad DeLong have found fault with Bitcoin for

3. numerous reasons, including that Bitcoins are not a reliable store of
value, and that there is no floor on the value of Bitcoins to prevent
deflation.
China has recently urged people to refrain from trading with coin
banks and even prohibited transactions 'online' made in giant
Alibaba.Norway has directly said that it is not real money.
Bitcoin is a coin of high volatility and that is exactly one of its
weaknesses. If ever, Bitcoins replace the official currencies, global
markets could get affected. Having said that Bitcoin is slowly making
its mark in the money market. Historically, money has evolved and
every transition has faced criticisms. Digital currencies like Ven and
Bitcoin will definitely be a shift from the traditional methods of trading
and a big leap in the foreign exchange markets. It will be worth to
watch as to how economies react to this progress, which will be
recorded in yet another major development of money.
© 2014 Deena Zaidi. All rights reserved