Bitcoin A Cryptocurrency & Beyond

Source: The Hitavada      Date: 10 Jul 2017 11:33:02


 

By Prof Saurabh Ratnaparkhi I n 2009, a global byproduct had been accouched in the world. To apperceive we may call it- a catalyst, a gift, a boon, or a catastrophic element of the digital world. It’s really knotty at first and highly horrifying too! Why so? The answer is - I got acquainted with the term ‘Bitcoin’ aka BTC, it has value of 1 BTC = Rs 50,555 (10 Nov 2016). And today 1 BTC = Rs 1,53,408 (J une 27, 2017). Let’s try to understand what, why and how’s about this impetus investment in near future.

What is the Bitcoin ? Satoshi Nakamoto, the unknown inventor of Bitcoin, invented this leading cryptocurrency in 2009. Bitcoin is completely decentralised with no single server or central authority.

It means neither any government nor any central agency or organisation that manages monitors or mitigates Bitcoin. Bitcoin transaction is considered as the safest money transfer in the world. And beauty of these transactions is only sender and receiver is involved in the process. At time of conversion, bearer has to take help of the exchange centers.

According to a research produced by Cambridge University in 2017, there are 2.9 to 5.8 million unique users actively using a cryptocurrency wallet. Bitcoin had acceptance over most of the leading countries except India yet (Eventually, we will like- plastic cards, ATMs). Recently, on 7th March 2014, Japan government officially recognized Bitcoin and digital currencies as money.

What is the blockchain techniques ? All the Transactions are confirmed and proven by nodes in the network and like bank ledger it is recorded in a publically distributed global ledger called the ‘Blockchain’. In the blockchain, a copy of the ledger file is shared between thousands of participants globally, These brilliant techno savvy minds are called ‘Miners’. Even you can become a miner by simply downloading the open source Bitcoin software. A normal person having analytical and mathematical-problem solving skills & interest can use this software.

How it works ? Just like a physical ledger bankers or accounts used to maintain transactional data records before computers. It used to be a register. Miners collect all the Bitcoin transactions globally executed in the last 10 minutes. They then record it together and this is called a block. So the miner with the most common version of the blockchain and who first solves the mathematical puzzle wins, updates the chain and in return gets a reward of newly created Bitcoins.

Currently this reward is 25 Bitcoins. And so the miner earns the benefits. Lucky miner may float these coins through the exchange centres throughout the world for monetary transactions. This could be easily converted into any international currencies within 24 hours at anywhere in the world where lies the beauty of Bitcoin. What are miners doing? Principally everybody in a decentralized network has no authority to delegate this task, a cryptocurrency needs some kind of mechanism to prevent one ruling party from abusing it. To avoid forged transactions which could break down the system, Satoshi set the rule that the miners need to invest some work of their computers to qualify for this task.

In fact, they have to find a hash - a product of a cryptographic function - that connects the new block with its predecessor. This is called the Proof-of-Work. In Bitcoin, it is based on the SHA 256 Hash algorithm. Why do people trust Bitcoin? Much of the trust in Bitcoin comes from the fact that it requires no trust at all. Bitcoin is fully open-source and decentralized.

This means that anyone has access to the entire source code at any time. All transactions and Bitcoins issued into existence can be transparently consulted in real-time by anyone. All payments can be made without reliance on a third party and the whole system is protected by heavily peer-reviewed cryptographic algorithms. Can I make money with Bitcoin? You should never expect to get rich with Bitcoin or any emerging technology.

It is always important to be aware of anything that sounds too good to be true or disobeys basic economic rules. Bitcoin is a growing space of innovation and there are business opportunities that also include risks. But at the same time we cannot deny the truth of inflated currency in price.

So, it’s being a boon for few lucky people in the future who are with the belief and continue to be in currency cum commodity investment as an opportunity. Once again I would I like to make aware about the pongy and fraudulent money making market schemes. Bitcoin is a cryptocurrency and not any fetid scheme at all. (The author is SAS Expert, J D College Of Engineering & Management, Nagpur. And can be contacted at [email protected]) ■