ByAli Raza
Bitcoin is the currency of the people, for the people and by the people. Bitcoin is a type of digital currency, also known as cryptocurrency which is mined and stored on interconnected computer networks of the world. It is peer to peer currency without central authority of a central bank or government. This currency could be used for shopping physical and virtual good on eCommerce websites. Another feature, which sets it apart from traditional currencies, is that it is decentralized, not printed and regulated by central banks.  Bitcoin is an independent from regulation of any central band and it is easily transferable on minimum fee.
Bitcoin is completely different from currencies like rupees, dollar and euro and it is more like payment systems like PayPal and Visa Cards. This is a currency which not only holds value for its user but also allows make payments and transfer of currency from one place to another place just on one click.
Bitcoin is automatically regulated and created by an open community by using distributed power of computer networks. The computer networks process and manage transactions of this Bitcoin. Bitcoin is not backed by any gold or silver reserves; it is purely based on a mathematical formula based on open source software. This digital currency can be mined up to the limit of 21 million coin agreed in Bitcoin protocol. It has been estimated that Bitcoin will reach to its assigned limit of 2 million in the year 2140. Furthermore, Bitcoins can be divided into small units, one hundred million which call Satoshis. The Bitcoin is independent from the influence of central banks like State Bank of Pakistan. The central bank cannot take out Bitcoin from the financial system at the time of market failure as happened in Greece.
This currency can be bought from regulated exchange or any person holding this currency in his digital wallet. As far as storing of this virtual currency is concerned, Bitcoin are kept safe in digital wallets which from which this currency is used in the time of shopping. Bitcoin can be stored on desktop wallets, mobile wallets, online wallets and hardware wallets as well. Furthermore, this currency can also be stored on paper wallet.  Bitcoins are mined by computer geeks all over the world by using software that solves mathematical puzzle on computer software. Same like internet, Bitcoin use protocols like internet that will open opportunities for technopreneurs to develop applications around ecosystem of Bitcoins.
The advantages of virtual currency on traditional currency are that secure and fastest transaction and it only take ten minutes to confirm the transaction. The Bitcoin transaction is almost free of cost as compared to transaction through credit cards.
The technology behind Bitcoin can be used to manage number financial transactions which were previously handled by banks, exchange companies and e-commerce websites.
This currency will reduce the fee, which is charged by buyers and sellers in 1.2$ trillion in e-commerce market of the world and financial industry of the world. Bitcoin is not a just currency; it is actually internet of money that will spur growth of innovation in virtual currencies. As far as applicability of this currency in routine life is concerned, it is being accepted as a mod payment in many shops, restaurant and shopping mall in many countries around the world. Many entrepreneurial activities has spurred for developing Bitcoin solutions in order to help customers pay and merchants accept Bitcoin as currency.
No doubt Bitcoin is a revolutionary currency, but there are some weak points of this currency. It is not regulated by any central exchange and its unregulated nature hurting investors who want to invest in this currency. There will be nobody responsible in case of loss or theft of currency by hackers as happened in the case of Mt. Gox exchange default. Bitcoins are a controversial issue government regulatory agencies. Governments all over the worlds are trying to enact legislations in order to regulate this cryptocurrency.
Bitcoin is based on a mathematical formula and it is not backed by any tangible value like gold. It does not fit into the definition of durability of a currency. This makes the Bitcoin subject to speculation and volatility, which is not a good feature of currency. There is a lack of guaranteed security agency where customers and merchants held Bitcoin in wallet in order to make secure transactions. This currency has limited scope and it is not available to every person and it is difficult to buy as well.
But these demerits do not reject the Bitcoin as currency. Merits of Bitcoin like its low transaction cost and user anonymity of this currency is attracting many people around the world. There is a dire need to put the infrastructure in place in order make Bitcoin as currency acceptable to the masses.
The advent of Bitcoin is like to begin an era of internet. In order to cut the long story short, Bitcoin will disrupt the financial industry same way the internet had disrupted the information industry.