This concept led to an idea among entrepreneurs to come with a new digital product termed as a Wallet. This wallet acted like a mini gateway system where people can transfer money to it and use it for any online purchase or transaction. Earlier days, wallet also used to store all your login id’s and passwords for all the sites that you used to frequent and hence retrieval from a single site was easier
The first of the wallet concept arose when a Japanese developer, Satoshi Nakamoto created a digital currency called “Bitcoin”. This had the most astounding impact on the world currency. Suddenly a lot of people began investing and trading in Bitcoin as they found it to be profitable
Bitcoin could be used to buy things from online sites like Ebay.com . They could also be used to pay for a hotel room or even a medium where merchants and consumers could directly interact with one another.
Bitcoin had its own valuation system against the Euro and Dollar that had a sizable impact on the Foreign Exchange market. Though derecognized by several countries and banks, it continued to have its impact on the online and offline world
Bitcoin worked on a peer to peer payment system and acted a digital currency introduced as an open source software. So unlike a bank which has a payment gateway as an intermediary, this was a direct payment system. Transactions were authenticated by the network nodes and recorded in a public Bitcoin ledger
Given that it was a currency without a local administrator or no central repository, the US Govt and the US Treasury had to categorize it as a decentralized virtual currency
The adoption of bitcoins is slowly on the rise as more merchants and consumers have realized the profitability of it owing to its lesser transaction fees than the standard credit card companies. Though bitcoins are generally not accepted in offline retail shops, a lot of websites have come forward to accept bitcoins for payments, transactions or even donations
One of the negative impacts of Bitcoin however was its frequent usage in illegal transactions such as selling of black market products, drugs and other illicit goods. Owing to its privacy controls, it became very difficult for the authorities to track its owners dealing in bitcoins which was not the case through credit cards
Incidentally , in India , the Reserve Bank of India has strictly warned people to not deal in Bitcoins as they arent recognized by any national financial institution
This blog post is inspired by the blogging marathon hosted on IndiBlogger for the launch of the #Fantastico Zica from Tata Motors. You can apply for a test drive of the hatchback Zica today.