Bitcoins – New Age Money?

Technology has been inventing several things that can make life easier for us. One such thing is Bitcoin. It is a new payment system that is completely digital money. Currently, not a legal tender in India, bitcoin is slated to disrupt the economic system through computer technology, in future time. We, at A Journalist Reveals, decided to find out more about it since it has the potential to become the currency of the future. We contacted Rishi Gangoly, who gives talks about this system, for his opinion. Here are the excerpts from the interview:

Can bitcoins be called alternate currency?

Yes. I would even think once people understand it’s benefits to society, it would become a very prominent and mainstream currency in the future.

How can they be transferred from one account to another? Do you need a specific website?

An account is called a Bitcoin Wallet. You can get a wallet from many websites, mobile apps or even paper wallets.

Can they be earned? How?

Yes. The correct term would be mined. They can be “mined” and they call it Bitcoin Mining.

We have already gone cashless with net banking, card payments, PayTM, mobile wallets, etc. Why bitcoin now?

Because Bitcoin is not created by a central bank of a nation or the policymakers, who are elected in power like Minister etc., it gives an opportunity for human beings to take the power back in their hands. People in power control the money system and with Bitcoin, no one controls the money system. It’s a software; which is an open source, meaning how it functions and what it does is 100% transparent to those who understand computer software. So although the average person does not have any training in computer software; those who do, have full access to the source code.

Are there any rules in place regarding bitcoin transfer – internationally and in India?

Technically there is nothing that stops people from transferring bitcoins to each other. Since it uses the internet to exist, it can travel anywhere on the internet.

Can the movement of the bitcoins you transfer to your friends be tracked?

If you bought bitcoins from an exchange like Zebpay or Unocoin, yes you can, since they took your identity documents when you signed up for an account with them. However, if you earned them on a wallet from someone who mined them or you mined them yourself, then those bitcoins are not tied to your ID. Legally, it is viewed as a commodity and not a currency, so consult your CA or lawyer if it would be considered legal to transfer it another person in India or abroad.

Can the bitcoin wallet be hacked?

The bitcoins are present as a ledger entry in blockchain software. This software is a public ledger where your transactions are present as ledger entries, which are verified from all the computers in the network. This system is very secure and it is being improved continuously. But, if it is on the website’s (from where you buy the bitcoins) server, then it can be hacked. However, there is a more secure method to protect the bitcoin wallet. A paper wallet can be created with a password, which will not be present on any server. We can keep hard copies of the same with ourselves and our nominees. This is called cold storage and this wallet cannot be hacked because it would be difficult to hack all the computers in the network.

Does the rate of Bitcoins in terms of the paper currencies change? How will it stabilize?

Yes, it is extremely volatile. It keeps changing every 10 minutes. The change in the rate is often in terms of 1000s and even lakhs of dollars. This rate might stabilize when the trading of bitcoins reduces.