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Bitcoin 101

Bitcoin 101
Do you ever wish that the stash of cash, which you own in an online rummy or poker game were real? Bitcoin, is the topic of this course and is a paperless currency that is a peer-to-peer payment system. In simple terms,we can say that bitcoin is a digital currency or a form of online cash. It was outlined by a programmer apparently called by the name Satashi Nakamoto in 2008, in a paper published and built in 2009.
What are Bitcoins?
Bitcoins are like currency that can be exchanged for value. The only difference is that this currency is digital. No one can touch and feel it, but it can be exchanged with a few clicks.

Who controls Bitcoins?
No one controls Bitcoins. Bitcoins are a use case of the Blockchain technology. Like no one controls the email which a result of internet. A set of developers work on the technology to keep improving it.

How do you set value to Bitcoins?
Like any other commodity, the value of a Bitcoin is set by Demand and supply. The total number of Bitcoins that will ever be available is limited. And currently there are only a handful mined, hence the higher value. With time, newer bitcoins are obviously mined at a diminishing rate, controlling their value.

How do you mine bitcoins?
Mining in simple words is the discovery of new bitcoin-it is similar to finding gold. In simple words, it is the verification of bitcoin transactions. For example if two people carry out a transaction using a bitcoin, the job of the miners is to verify whether the bitcoin used for payment is genuine or not. There are multiple such transactions over the entire chain which are gathered into boxes with a virtual padlock on them called blockchains. Miners run a software that will help them find the key to the padlock. Once we get the key, the transactions are verified. Initially, when bitcoins started becoming known to the world, it could be mine using a regular CPU/GNU. But since more and more people have started mining, the minimum hardware requirements need an investment of 1000$ (approximately). Popular Bitcoin-mining hardware brands include Butterfly Labs, Bitcoin Ultra, CoinTerra amongst a few.
How do you buy bitcoins?
Buying bitcoin is similar to purchasing something online using your credit card/debit card or online money transfer. The first thing you need to do is download a bitcoin wallet by going to a site like Blockchain.info or to a mobile app such as Bitcoin wallet/Blockchain bitcoin wallet using your smartphone. Once you have a bitcoin wallet and you are registered user you can buy bitcoins using your credit card,debit card or online money transfer.
Should one invest in bitcoins?
Investing is the art of multiplying money, generating cash flow or services with the asset that you buy. Bursting the bitcoin bubble-Investing in bitcoin is quite relatable to a coin having two sides. Some claim that, it has gained attention and market value due to the underlying technology viz blockchain.Some claim that it is the next big thing and it will reduce frauds to a great extent and make your portfolio diversified. But when we take into account the wider picture, it depends on the individuals appetite for risk(Since it is highly volatile).

Is it legal to trade bitcoin in India?
Before we come to any conclusion about whether bitcoin trading is legal in India, let us look at some major risks caused by this virtual currency. Firstly,the currency being in digital format, it is prone to losses arising out of hacking, loss of password. The second risk being no central governing body or entity to regulate the functioning. The third risk is encouraging speculation to a great extent. In a notice released by the central bank it clearly says that "The Reserve Bank of India advises that it has not given any licence / authorisation to any entity / company to operate such schemes or deal with Bitcoin or any virtual currency. As such, any user, holder, investor, trader, etc. dealing with Virtual Currencies will be doing so at their own risk."Finance minister Mr Arun Jaitley said that “We don’t recognize it as a legal currency as of now”. To conclude this, if you are in India and start trading virtual currencies you will come under the Income Tax Department’s Radar.
Future of bitcoin.
Future of bitcoin is highly uncertain and unpredictable. Where experts say that it is better than fiat currency, traditional economists still think that somewhere in the near future, it’s value will become zero. All we can say is,it is a new technology and people must study it thoroughly before investing their money.
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