Can you imagine a thing- the value of which was zero around ten years back and today, its value has touched almost 48 thousand $ (35 lakhs rupees). Bitcoin, which recently peaked in the market by talking about it.
What is Bitcoin and what is its story?
As recently as 12 years ago, on October 31, 2008, A person named Satoshi Nakamoto published a research paper on the Internet. Satoshi’s main motif was evident from the front of the newspaper. A copy of electronic money that allows payments to be sent directly from one party to another without going to a financial institution. Cryptocurrency is a digital asset that central banks or financial institutions have no control or supervision over. For example, the US dollar is controlled by the US Federal Reserve. The Indian rupee is controlled by the Reserve Bank of India. But there is no major central bank or financial institution that controls bitcoins/cryptocurrencies. At the time, cryptocurrency was just an idea on this person’s mind.
But now thousands of millions of dollars are traded on cryptocurrency exchanges. Just like stocks that are traded on common stock markets. To understand Satoshi’s article and the context of cryptocurrencies, we need to understand some of the implications of our economic history. Our financial systems are built on trust. Banknotes and coins are valuable in our society because they are guaranteed by the government and the central bank.
Look at a note in your wallet. For example the amount of 200 rupees. “I promise to pay the carrier 200 rupees,” it said. This is a promise made by the Governor of the Central Bank, that is, the Reserve Bank. There is his signature right below. This note holds no value without this promise/guarantee This note will be reduced to an ordinary paper if it does not carry this signature. There is a small, but the interesting story in this context.
It helps you to guess how powerful the government and the banks- especially, the central banks of the country are as far as monetary policy is concerned. The fact of the matter is that when you deposit your money in the banks, you give the banks permission to play with that money, in one sense. Making use of these deposits, the banks give loans to companies and individuals. This is the rate of return, i. H. the profit from the money you deposited. We recently saw these banks use these savings and deposits very irresponsibly. It is common for banks to lend to large artisans without adequate scrutiny, then those loans become bad debts / NPA. Who is the victim in such cases? Depositors like us.
In the past 2-3 years, three custodians – Yes Bank, PMC Bank, and Laxmi Vilas Bank – have failed. But government decisions can also endanger normal people. Do you remember November 2016? Devalue! The government wasted 500 and 1000 banknotes in an instant, rendering 86% of Indian currency unusable. Those who prefer bitcoin and cryptocurrencies are because they don’t want either the government or the central banks. To have a lot of control over your money or currency.
Do you now understand Satoshi’s original idea/vision?
Think of Satoshi Bitcoin as an alternative financial system. It depends on the software technology and is beyond the control of third parties. You may remember the world economic collapse in 2008. Large investment banks like Lehman Brothers went bankrupt. Immediately after this scenario, cryptocurrencies were born. Bitcoin was the first to enter. Then many other cryptocurrencies appeared – Ethereum, Litecoin, and Ripple. In fact, at the beginning of the year, more than 2000 cryptocurrencies were available on the internet.