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Updated on: Tuesday, February 09, 2021, 10:52 AM IST

FPJ Explains: What is Bitcoin and how does it work?

Cryptocurrencies are yet to earn the faith of governments in many countries but despite the legal troubles, they are booming at a searing pace. Bitcoin, one of the biggest name in cryptocurrencies is not illegal in India but it may get banned soon.
Bitcoin is a virtual currency that can be generated through complex computer software systems with solutions shared on a network |

Bitcoin is a virtual currency that can be generated through complex computer software systems with solutions shared on a network |

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Bitcoin is again making headlines after Tesla recently invested $1.5 billion in the cryptocurrency. Musk's multi-billion dollar enterprise might start accepting the cryptocurrency as a form of payment.

Tesla's investment would play a major role in legitimizing the electronic currencies which so far haven't been able to win the faith of governments. Bitcoin became a mainstream asset in recent times but after Elon Musk expressed his interest in the company, things might change rather quickly for the Cryptocurrency.

Here's how Bitcoin works-

Bitcoin was launched in 2009, it is a cryptocurrency or digital currency that exists online only.

The currency is not administered by any centralized bank and the currency is stored in digital wallets.

The wallets, in which the money is kept, are secured by private and public keys. Public key allows the users to transact with each other.

The transactions are verified and recorded in a 'blockchain', a public ledger. This ensures complete transparency and drastically reduces the chances of cheating.

The cryptocurrency is decentralized and the anonymity attached with it allows the users to make payments across the world with relative ease.

Bitcoin is not the only cryptocurrency which is gaining pace, Etherium, Dogecoin and Binance are growing at brisk pace.

As of now, Bitcoin is not illegal in India but the Cryptocurrency and regulation of Official Digital Currency Bill may lead to its ban.

Looking at the growing digital landscape in India, the government is looking to create its own national cryptocurrency.

Crypto transactions were banned in India in 2018, however, the Supreme Court overturned the bill after cryptocurrency exchanges filed a lawsuit.

Cryptocurrencies are gaining popularity rapidly in India. It would be interesting to see how the Government regulates its usage.

(With inputs from agencies)

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Published on: Tuesday, February 09, 2021, 11:01 AM IST
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