Bitcoin is the world’s largest and arguably the most popular cryptocurrency. It was created in 2009 by Satoshi Nakamoto — although the real identity of the creator remains a mystery. So, what is Bitcoin exactly? It is a digital currency that does not have a physical form. It is not backed or issued by any government or bank and exists on a digital ledger that keeps a record of all transactions made using Bitcoin. The digital ledger is transparent and people from all over the world can access the information stored. Though Bitcoin is not ‘legal’ tender, it is gradually beginning to gain acceptance as a currency in many countries across the world. Many major companies are beginning to accept the cryptocurrency as a mode of payment for their products, including in India.
Bitcoin as a currency
American sandwich chain Quiznos has started accepting Bitcoin as a mode of payment at their restaurants. Quiznos is one of the largest restaurant companies in the US and has been working with digital asset company Bakkt to enable payments through cryptocurrency. Another US-based company AMC Entertainment that owns Odeon Cinema has decided to dabble in Bitcoin payments. The cinema chain that has movie theatres across US and Europe announced recently that it would let moviegoers pay for tickets and concessions using Bitcoin by the end of the year. Bitcoin price in India stood at Rs. 35.25 lakhs as of 4pm IST on August 18.
Bitcoin as a currency in India
In India, cryptocurrency is neither legal nor is it illegal. The cryptocurrency trade in India is yet to be regulated but Indian companies are slowly warming up to the idea of accepting cryptocurrency as a mode of payment. Several Indian businesses have begun taking cryptocurrencies like Bitcoin and Ethereum as payment for their products. A Delhi-based home decor company called The Rug Republic, an electronic goods company called Purse, and Suryawanshi Restaurants located in Bengaluru are some of the Indian businesses that have welcomed cryptocurrency payments. Ethereum price in India stood at Rs. 2.37 lakhs as of 3:30pm IST on August 18.
Bitcoin: The original vision
Bitcoin, unlike a government-issued currency, promises lower transaction fees than most traditional online payment mechanisms. It is operated by a decentralised authority. Bitcoin was one of the first digital currencies to use peer-to-peer technology to facilitate instant payments. The individuals and companies who participate in the Bitcoin network, known as Bitcoin miners, are in charge of processing the transactions on its blockchain network. They are motivated by rewards like transaction fees paid in Bitcoin. Bitcoin can be easily accepted as a currency by online businesses if they add it among the online payment options.
Value and uses of Bitcoin as a currency
Currently, Bitcoin is being welcomed as a currency but the development is still in its nascent stage. Hence, its use is limited. It can only be deemed as a valued currency in companies, restaurants, and businesses that accept it as a mode of payment. One cannot try to use Bitcoin to buy products from a store that does not use it for its day-to-day transactions. In terms of its commercial use, Bitcoin is yet to grow in terms of value beyond its market set value. However, Bitcoin can be easily sold to other cryptocurrency investors and miners, or traded for a different virtual currency or even fiat currency — such as Indian Rupee or US Dollar — via a cryptocurrency exchange.