Bitcoin has always been a contentious issue for regulators and law enforcers.
It’s a cryptography based digital currency which facilitates e-commerce. It has got its own online market place where people can buy bitcoins in exchange of government issued currency against the floating exchange rate. They can store their bitcoins in an online wallet which serves as a virtual bank account.
Users can use this digital currency to purchase goods and services in the virtual market. But since the bitcoin does not have any backing from any institution, it cannot be well served for the purpose of purchasing goods and services as it always depends upon whether the seller accepts bitcoins or not.
Bitcoin also allows people to hide their identity, only wallet IDs are known, as all trading activities takes place on internet. Such anonymity gives freedom to people to indulge in illegal activities as the true identity of a person never gets revealed. Since the introduction of bitcoin, there has been a noticeable increase in the purchase of illicit goods such as drugs, guns and illegal pornography.
Lack of a regulating body, a major drawback of bitcoin, itself has become strength for the folks using this currency for their illegal purposes. It is difficult to regulate such currency because it is not issued by the government, it can still be created. Such a sense of lawlessness and anonymity not only provokes people to fulfill their shady purposes but also gives a threat to the national currency. There has been a drop in the percentage of people who carry actual cash since the introduction of credit cards, debit cards and now, we have digital currency too.
In India, there has been a restriction on the use of bitcoins and we are well aware of the reasons; its use for illegal trading, illegal payments and protection of the national currency. Moreover, tax fraud has also become a common practice due to such anonymity of the user.
We can only say that bitcoin is neither regulated nor officially a currency.
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3 Comments. Leave new
Bitcoin has both it’s pros and cons. On one hand it removes the need for foreign exchange and realizes the concept of Optimum Currency Area and on other hand it is held responsible for illegal trading and black money. However the nations can opt for the best by creating norms and laws so as to regulate the use of bitcoins.
Informative and interesting article..
nice one…