Wednesday, August 21, 2019

Why Bitcoin is Legal – What Does it Represent?

Amidst the rise in its popularity and growing widespread usage, Bitcoin has become a matter of concern worldwide. The digital form of currency has risen greatly in its value. Due to the anonymity and ease of usage Bitcoin provides to the users in the blockchain network, it has also started to be used for the dealing of illicit goods and services.

Is Bitcoin Still Legal?

It is more or less legal depending on what you’re using Bitcoin for. The fact that it hasn’t been declared illegal despite its popularity among criminals operating in the online realm has also to do with the current laws not being applicable to cryptocurrencies. The laws on currency were made decades ago and they apply to the currencies that exist in a physical form. The laws were implemented to maintain control and eliminate counterfeit physical currency.
Bitcoin, being a cryptocurrency, exists purely in digital form. There is no storage of Bitcoins in a bank vault or under the mattress. There is only the blockchain network that verifies its existence and transactions. There are no laws written by any country that would make for an allowance to ban Bitcoin since its existence was unprecedented let alone its growth and popularity.

Concerns

Government agencies are getting worried about all the implications of Bitcoin as its ability to be used anonymously makes it an ideal tool for usage in varying criminal activities. The main problem is that it’s decentralized. Even though the currency exchanges in the US are now regulated, their foreign counterparts might not be. It all depends on the laws of that country. That can allow for a significant levee for money launderers and other criminals to exploit without being tracked down.

Related Article:  Pakistan May Legalize Bitcoin Trade Sooner Than We Expect

What Does Bitcoin Really Represent?

Bitcoin was introduced in the aftermath of the last market crash that struck the world. The mysterious programmer going by the name of Satoshi Nakamoto, presented Bitcoin to the world. It essentially was the world’s first decentralized, peer-to-peer electronic payment system. All the currency generation and verification of this digital currency is done by solving complex cryptographic puzzles. The data is put together into ‘blocks’ and the blocks are all linked together to form a chain of blocks called the ‘blockchain’. This blockchain is a record of every transaction ever made using Bitcoin.

There is no central authority controlling the ebb and flow of Bitcoin. The Bitcoin community itself runs the whole system based on the protocol provided by its core developers. It is an open source code so more developers got into action and continues to make it grow and make improvements. No individual or group of individuals decide the changes but the Bitcoin community works together to make the changes.

The public ledger of transactions called the blockchain provides an infalsifiable record which the whole community can verify but at the same time everyone who holds a stake in Bitcoin gets to retain anonymity should they choose to have it.

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