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Bitcoins: Mind Map for UPSC Exam
Mind Map for UPSC Exam (Bitcoins)
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Mind Map Important Topics:
Bitcoins
About Bitcoins
- Bitcoin is a cryptocurrency and an electronic payment system, it was invented by a group of programmers, under the name of Satoshi Nakamoto.
- It is a system wherein these currencies could be created (mined) by those who could solve some complex algorithmic equations.
- Every bitcoin transaction is recorded and verified in an open ledger called block-chains, thus preventing counterfeiting or double spending.
- The system is peer-to-peer, and transactions take place between users directly, without an intermediary
- Bitcoins work without a central repository or single administrator
- Uniqueness of Bitcoin is in the fact that it has its own currency while the other payment systems like Paytm do not have that.
- Bitcoin would let transacting parties remain anonymous, keep transactions very secure, and eliminate middlemen fees.
Risks
- Bitcoin prices are discovered through exchanges that are unregulated with very lax KYC compliance process.
- The value of bitcoin is determined largely by unregulated pools of investors.
- With no overseeing authority, instances of price manipulation is common.
- If the user suffers a loss due to an unfair transaction charges, he has no one to complain to.
- Bitcoins are very highly volatile currency also, which makes it difficult to store.
- Governments and central banks have been vocal about the risks involved in dealing with virtual currencies
Situation in India
- In 2016, an IT company in Mysuru became the target of a ‘denial-of-service’ attack, the attackers demanded Bitcoins in return.
- India’s biggest Bitcoin trading platform, BuySellBitCo.in, suspended its operations, citing RBI public advisory highlighted the risks involved in dealing with Bitcoins.
- Despite the programmes like digital India, internet penetration is low in India. Which makes it difficult touse the Bitcoins.