Should the Bitcoin be Classified as Legal Currency?
By Vidisha Kaul
Bitcoin is the largest, popular and the most versatile block chain network which was launched in 2009. Bitcoin is a virtual currency or cryptocurrency that is controlled by a decentralized network of users without a central bank or single administrator. A cryptocurrency is a digital asset designed to work as a medium of exchange that uses strong cryptography or complex algorithms to secure the financial transactions and to prevent unauthorized duplication. Bitcoin is used in electronic transactions for making payment for the goods and services which uses encryption techniques which are next to impossible to counterfeit.
Bitcoin exchanges allow users to exchange bitcoin units for currencies or other crypto-currencies. It helps to maintain liquidity in the market. Bitcoin regulates the transactions but at the same time, it can also be used to facilitate illicit activities such as the purchase of illegal drugs on dark web market place.
The legal status of bitcoin varies from country to country. In some, its use is completely banned and restricted whereas many countries have not clearly determined the legality of bitcoin but indirectly assented the use of bitcoin. However, in India investing in bitcoin is completely legal but is unregulated by the law and is certainly not a legitimate currency.
The legalization of bitcoin would result in demolishment of physical currency and would ruin the economy. Bitcoin is a risky and volatile form of currency with fluctuating prices that changes on a daily basis which makes it scarier to invest in. The value of bitcoin can go from being on the peak to hit the bottom any time which is least predictable and therefore makes the investment unpredictable and uncertain. The increased value could make a person earn fortunes but its fall can make him hit the ground. It’s like investing in shares wherein you are not certain of the returns.
The worst consequence of making bitcoin as a legal currency would be that it would be a haven for black marketing. It would be perfect for black marketing dealing and would rather provide them for easy and secure access to all such transactions. As a result, the seller of contraband could easily sell the products without the fear of getting caught and can change their addresses for each and every transaction and can never be traced by anyone. A person can also launder their money and convert the illegal money to legal by exchanging laundered USD to bitcoins and then from another account with a different address, those bitcoins can be exchanged to legitimate USD and all they have to do is prevent another account address from getting caught. The safest means of transactions could become a hub of illegal activities by providing protection to their activities and can open all the doors for dark web activities with a safeguard key.
Bitcoins have some major merits which cannot be missed out like the bitcoin wallet app makes our work much easier. There is no need of swiping card or entering the pin, all we need to do is scan the QR code and we’re done. It can be used anywhere and everywhere, just add to your favorites and send bitcoin with one click. There is no time bar for bitcoin it is always up, 24X7. Bitcoins are extremely secure and impregnable. No one can make the payment on your part, it can give you a strong level of control and protection over your money. Bitcoins have made international transactions very easy. Making international payment is as easy as making payment across the streets. There are no banks involved here which make you wait for days for completion of transactions.
It can become one of the best modes of transaction but as discussed earlier it has demerits like black marketing which can give rise to many illegal activities and it being legalized would eventually make it rule the world which will destroy our economy and the economy will face a great hit as the physical money would not be circulated.
Bitcoin with its volatile and fluctuating nature has made it impossible to deliver things like paying salaries and day to day money transactions. Bitcoin can only be utilized in the transactions involving a great sum of money like the overseas transactions. Still, in the present scenario, the bitcoin has not able to overcome the problems related to its devaluation or appreciation.
Bitcoin, without a second opinion, could be used as the best and the most secure and protected way of paying but at the same time we cannot under look it's danger of being misused for illegal work. Considering all its merits bitcoin can be the best blockchain network but in today's era, it is not completely prepared to be legalized as it will increase the number of crimes and all the black marketing would be done under its protection and the people could never be caught. So, in the light of its pros and all the beneficiary uses we cannot overlook to what can be done if it will be legalized, it will be a well-defined gateway for all the criminals with a surety of never getting caught. Therefore, to get bitcoin legalized and in the mainstream market, it should be foolproof so that there is the minimum risk of any criminal activities that could be done.
Therefore, the use of bitcoin can overpower the physical currency and change the way people deal in money related transaction as every payment system needs rules to regulate the monetary units and they cannot be altered in any mechanism.