On February 10th, at the 7th Annual Crunchies Awards, one particular technology took a major step into being accepted into the mainstream. Bitcoin won the Best Technology Achievement of 2013, making the virtual currency almost legitimate. But there are still a lot of concerns about making it part of the mainstream currency, and trading it as one would any other currency in a foreign exchange.
And these are real concerns too. If you look at any of the currencies traded in any of the foreign exchanges, there is stability to the value of a currency. True, there will be ups and downs in how valuable a currency is perceived, but not in the wild way we have seen the value of Bitcoin differ. As a result, investors are not exactly fond of putting their money on this virtual instrument.
Any currency that is not being controlled by a central bank or a government, and is run by users, would certainly lack investor confidence in it. And that is also one of the reasons why its value moves so wildly. Till date, no country has been able to truly embrace Bitcoin, with most governments fearing that it will mostly be used for money laundering and for nefarious activities that cannot be traced.
Some stories that have come out in the open haven’t helped Bitcoin’s case either. The notorious case of Silk Road and the Dead Pirate Roberts put a major dent in people, and especially law enforcement, having any faith in the virtual currency. What Ross William Ulbricht did almost caused irreparable damage to Bitcoin.
But thankfully, there are a lot more responsible people out there who understand the value of having a legitimate virtual currency. As a result, we have seen many exchanges pop up that have been successful. Also, the good work being done by the Bitcoin Foundation is bearing fruits as well, leading to awards such as the Crunchies. Of course, there have been accusations from users that the Bitcoin Foundation is only there to represent the big businesses, but that is perhaps beside the point at this stage.
Where does India stand in terms of embracing Bitcoin technlology? There has been considerable interest in this cryptographic currency, enough to start a raft of virtual exchanges, forcing the RBI to come out with a warning. In fact, in a conference that was organised by Nasscom, this is what Raghuram Rajan had to say:
“As a currency, I do worry a little bit when the underlying (value) fluctuates tremendously. One of the values of a currency is stability and the extent (to which) a currency is target of speculation as opposed to primarily a means of exchange”
The RBI has the same concerns that most other central banks in different countries have: untraceable currency could be used for money laundering and drug trafficking. For now, there is only one e-commerce site in India that accepts bitcoins as a payment option. But with the RBI not giving any clear guidelines as to how this virtual currency can and cannot be used, and how it plans to track the usage, there would be a long way to go before a nation that is usually cautious about spending money can willingly take up the option of investing and converting their hard earned money into Bitcoins.