Economy

KEY POINTS

Bitcoins

·        Bitcoins are electronic currency, comes under an umbrella term Crypto-Currency.

·        Bitcoins are, in essence, electricity converted into long strings of code that have money value.

·        Bitcoins are completely virtual coins designed to be 'self-contained' for their value, with no need for banks to move and store the money.

Working

·        Bitcoins are a form of digital public money that is created by meticulous mathematical computations and policed by millions of computer users called 'miners'.

·        The digital transaction log that maintains the records of bitcoin’s location and the time of transactions is called Block-chain.

·        People, who are constantly verifying the block chain, ensuring that all the information is correct and updating it each time a transaction is made, are called 'miners'.

·        Once you own bitcoins, they behave like physical gold coins: they possess value and trade just as if they were nuggets of gold in your pocket.

·        You can use your bitcoins to purchase goods and services online, or you can tuck them away and hope that their value increases over the years.

·        Bitcoins are traded from one personal wallet to another.

Lakshmi Bitcoins

·        RBI is examining possibilities to legalise crypto-currency in India.

Impacts of legalising crypto-currency

·        Regulated crypto-currency will reduce money laundering, terrorist financing, tax evasion and fraud.

·        It could become a new source of earning for our Government by imposing TAX on every Transaction done through bitcoin wallet.

·        Will give a push to India’s digital India initiative and cashless transactions.

·        It will maintain the financial stability and leaves monetary policy undisturbed.