People worldwide across every nation transacts as per their value of the currency, known as Centralized currency, which holds a stamp of authority over every transaction of the people in that nation. The total amount of currency to be printed depends on the size of the economy of a country as well as the value of the money in circulation at a given time. With changing times and burgeoning financial needs, people globally were on a look-out for an alternate mode of currency that not only is secure and safe but can also run as a parallel system to centralized currency without the need for a central regulating fiscal authority. The world, in particular, the online world saw the dawn of a cryptocurrency that is not only the first of its kind and decentralized, but also peer-to-peer at that.
( Image source: Hackernoon.com )
Cryptocurrencies or the new bitcoins have been envied especially by the law enforcing governments and financial authorities in almost all nations as the bitcoin revolution stood its ground without their manipulation through fiscal policies and since then also gained momentum day-by-day for it was embraced well both by the financial institutions and everyday people alike. Despite not being a serious threat to the fiat monetary system in ruling at present, governments all over are taking note of bitcoin’s increasing acclaim, and some of the nations even tried to stamp out on the currency’s usage. China went to the extent of even banning the bitcoin exchanges and also proscribing its citizens in any manner whatsoever from dealing with bitcoins.
( One of the Amazon Best Sellers on Cryptocurrency Investing and Trading – source: Amazon.com )
Has the usage of Bitcoin come to be ‘legal’?
Bitcoin, the first of its kind cryptocurrency stemming from blockchain technology, was originally a P2P payment network that bestows its users the privilege and the flexibility to transfer a net worth without the iron hand of a central authority or third-party owner. Bitcoin naturally caught the fancy of a very unlikely and radical community that involves both the drug dealers and drug users which ensued after its creation as an anonymous cryptocurrency. Nonetheless, Bitcoin soon became an alternative answer to centralization and took away the power to regulate money from a centralized authority thus establishing itself as a ‘pure’ market currency.
( Image source: WhatIsACryptocurrency.com )
If the use of Bitcoins became legal and people started to adapt it more regularly in place of fiat currency, then the following situations are likely to eventuate –
- Governments world over might fear that they will start to lose their control over currency.
- Being an anonymous and P2P currency in nature, any transaction with bitcoin can invite the wrath of a government as the encryption affects the surveillance efforts by the government in effect.
- India and China still haven’t made evident of the legal status of bitcoins as a currency/commodity. The governments of both these countries have left it to the citizens’ choice to deal with bitcoins as they deem fit. However, Japan legalized bitcoin as a tender via passing a bill.
- To hammer out the doubts regarding the enforceability of tax laws on bitcoins, bitcoin holding disclosures are likely to be made mandatory and tax evaders’ identity can be uncovered.
- Users of Bitcoin may become vulnerable to online fraudster attacks whose effects can only be mitigated either by employing multi-signature transactions or time-locked transactions.
( Israel’s first bitcoin ATM, Bitcoin Change in Dizengoff Street – source: calcalistech.com )
Whether hitherto legal or not, Bitcoin has triumphed as a decentralized currency fighting against all the odds with shining colors and verified itself with its underlying strong and secure mechanisms.
