Bitcoin is a new currency that was created in 2009 by a person using the alias Satoshi Nakamoto. The best part of bit coin is that you don’t really have to rely on someone regarding the transaction and it is much safer as neither the bank nor any person is involved in the entire procedure. One of the goals of bit coins is to avoid any centralized control. Every participant maintains its own copy of the ledger. 

Currently the price of 1 bit coin =Rs 2019049.55 

Bitcoins can be used to buy merchandise in large quantity. Moreover, worldwide payments are quite easy and cheap because bitcoins are not bound to any country. Small businesses favor bit coins because there are particularly no credit card fees. 

A private key comes along, which is mathematically linked to the account number when new account is created. Bit coin wallet stores the key which allows you to create wallet. In order to form a signature, a private key and transaction message are fed into a special crypto graphic function that is called a signature creator. Another function allows other people to check this signature making sure that it was created by the account owner and that it applies to specific transaction. As the signatures are unique to each transaction they cannot be copied. 

ADVANTAGES OF BITCOINS: 

Usage of bit coins is increasing at a rapid pace. 

Many vendors around the globe have started to treat bit coins as a legal method of payment. Examples include Expedia which accepts bit coins for hotel reservation, Microsoft which recently added payment options for its digital content,etc. 

Price volatility is getting reduced as many retailers are now accepting bit coins, which actually favors the user. The value of bit coin is becoming more stable as fluctuations is decreasing with a rapid pace of time. 

Bitcoin works as a hedge because it is disconnected from the traditional financial system. 

All you need is a credit card, bank account or PayPal to get started.There are enormous number of platforms in order to trade and store bit coins. 

Be it bank or a person neither of them is involved. All of the transactions is done by a single person. 

As no third party is involved therefore there is no way to implement taxes. 

DISADVANTAGES OF BIT COINS: 

A customer cannot completely rely on bit coins as there are really few vendors accepting bit coins right at the moment. 

For instance, if the hard drive crashes or an individual loses its wallet there is no way to retrieve back the data. 

An individual cannot physically buy goods from a store unless he converts the money to some other currency. 

The value of bit coins may never remain constant. For instance, in June 2011 the value of bit coin was around $9 and then within a period of around 6 months it suddenly fell to around $1. 

MAHA MUZAMMIL AND ZAIN MUBASHIR,  

Lahore, January 2.