Bitcoin – Is it the future of Currency
By: Avinashkaur Sudan
A recent announcement by the University of Nicosia in Cyprus that they would be accepting Bitcoin as a form of payment for tuition has made Bitcoin a hot topic of discussion at various forums. While this initiative would make the university the first accredited institution in the world to accept the crypto currency, it has led to one interesting debate- Is Bitcoin the future currency? Well, before that, let us understand more about Bitcoin.
Bitcoin is an open source, digital, decentralized, and partially anonymous currency. It is not backed by any government or other legal entity, and not redeemable for gold or any other commodity. It relies on peer-to-peer networking and cryptography to maintain its integrity.Bitcoin was introduced in 2008 by a pseudonymous developer “Satoshi Nakamoto”. Individuals who want to own or transact in Bitcoin can either run a program on their computer (which implements Bitcoin protocol) or create an account on a website that runs Bitcoin client for its users.
Advocates of Bitcoin believe that Bitcoin has many properties that could make it an ideal currency for mainstream consumers and merchants. Bitcoins are highly liquid and have very low transaction cost. They can be used to send payments quickly across the internet and can be used to make micropayments. However, there’s flip side too. Bitcoins are susceptible to thefts, packet sniffing, Denial of Service (DoS) attacks, and other security vulnerabilities and bugs. Also, it is not backed by any government or legal entity.
In an interesting development earlier in November, the New York State Department of Financial Services announced that it will be holding a public hearing on virtual currency regulation, specifically to consider if a certification called “BitLicense” might be needed to help in managing the spread of online currencies like Bitcoin. This announcement helped Bitcoin cross the $ 1000 mark. However, considering the huge fluctuations that Bitcoin has experienced since it came into existence, only time would tell if Bitcoin will be able to sustain this value. But in any case, with these developments, it is clear that the importance and usage of Bitcoin cannot be ignored.