Around 2009 a new concept of currency was introduced.
The concept seemed a little vague about the usage of
this currency but two years later, Bitcoins has emerged
as a fast catching trend. Proclaimed as a decentralized
digital currency, more people and business have
started using Bitcoins. Though the currency is still in
its experimental stage regular updating and frequent
tweaking is done to improve it in every way possible.
Unlike other banking networks Bitcoins are not
controlled by anyone. The network has a set of
protocols protected by cryptography.
It's a new payment system which has no central authority
other than the cryptography (open source software
working with the laws of mathematics) which handles the
creation and transaction, making it impossible to cheat
around the system. The Bitcoins share a public ledger
(block chain ledger) where every transaction is recorded
making it a prominent triple entry bookkeeping system
and a transparent recorder. Using the peer to peer
system and a cryptographic key, transactions are
processed between clients. As the key cannot be
deciphered it's a more safe form of internet cash than
performing transactions with credit and debit cards.
As with every new emerging trend, the Bitcoins have
advantages and disadvantages. But if the obstacles are
removed, it might help re-imaging of International
finance. The advantages of Bitcoins are:
The users have total control over the money, they
can send and receive any amount of payments at
time of the day. As these transactions are not
performed by banks or organizations but between
individuals its easy as sending a file.
The transactions require no or very less money
compared to other online money transfers which
stick up a hefty fee, the only service in Bitcoins is
done by the miners to facilitate the transaction
recording on the block and that doesn't cost much.
This is the most secure and irreversible form of
cash transactions where no personal information is
traded. Most people will opt for this method as it
removes major hassles involved in other
Large markets and small businesses have widely
accepted it as it helps in quicker and reliable money
transfers with very little administration cost.
When other currencies are affected by price
fluctuations, the same cannot be said for Bitcoins.
The disadvantages of Bitcoins are listed
below though they can be turned around.
The new rules and updates are being
constantly worked on by various trusted
parties to help shape this up.
There is no guarantee and no purchasing
power provided yet.
The Bitcoin price has yet to stabilize,
which can only happen when the number of
users and businesses using bitcoins
Client programs used as wallets cannot
guarantee or provide insurance on the
The currency has yet to mature and get a
better hold on the market.