30, March 2019 30/03/2019 – Posted in: MAINS QUESTIONS

What are Bitcoins and how do they work? Discuss the need and advantages of Bitcoins in Financial Services?

Approach

 

Introduction

  • Background: First introduced in 2009.
  • Bitcoin : It is a type of digital currency, Instant Payments to anyone.

Main Body

  • Work: Open source protocol, not issued by any central authority.
  • Peer-to-peer currency.
  • Needs & Advantages: Easily currency exchange for trade; Great way for small business; No chargebacks or fees; Sent easily through internet; without third party engagement; Fast & secure; Bitcoins is regulated by software; cannot be manipulated by any government/bank.

Conclusion

  • RBI not advocates Bitcoins
  • Potential risk of hacking/loss
  • Bitcoins are not authorised by any central bank or monetary authority