
The fiat money is portable, easy to transfer and is authorised by the central nation. But from the past few decades, we have increasingly transferred money through electronic networks. Now with electronic networks, there’s a problem. In electronic networks, we need to trust a third party like a bank, credit card company who oversees and authorises our transactions. So, these third parties are really powerful. They can disallow our transactions and so much more. Although electronic money is ours we can only use it upto a permissible level set by the third party. All we have to do is trust third party. We also find difficulties in transferring money to the people outside the country where we have to pay tax for the exchange. The usage of fiat money can lead to the cause of inflation and sometimes hyperinflation too. In January 2009 an anonymous person by the name Satoshi Nakamoto invented bitcoins, which is regarded as the best kind of money. It has the benefits of both electronic and physical money in which we don’t need any third parties. So with the Bitcoins, we can maintain our data and privacy during transactions. Even a villager can open Bitcoin account easily, all he needs is a smart phone and can pay anyone in this world. Bitcoin is a global currency and it does not depend upon any other currencies and no one controls it. Bitcoin is rare which means there are only 21 million bitcoins ever created with the Bitcoin network. As the supply is fixed and demands goes high, price will increase. Bitcoin is resistant to inflation and hyperinflation. So the fixed number of bitcoins can be easily distributed to the world population as it can be infinitely divisible. Bitcoin is legal and most of the multinational companies have invested huge amounts of money for the startup of Bitcoins. 8million Bitcoin accounts were created in a couple of years. There are Bitcoin ATM’s where we can withdraw our local currency. So the present value of 1 bitcoin is 419682.55 indian rupee . it changes time to time. Many apps were created for use of Bitcoins.
-Pranay Kumar
(IMT-2017-028)