BITCOIN: An Disruptive currency in

Digital Economy and its challenges

in Harnessing Entrepreneurial
Gains.
INTRODUCTION
Bit coin is software based online payment system described by Satoshi Nakamoto in
2008 and introduced as open source software in 2009.Although its status as a
currency is disputed media reports often refer to Bit coin as cryptographic, digital
and experimental currency. It is referred to as peer-to-peer, electronic payment
system. It is in virtual form and can be used to make payments online as well as in
digital mode ,a decentralized virtual currency without a central repository or single
administrator .Bit coins are created as a reward for payment processing work in
which users offer their computing power to verify and record payment into the
public ledger.Bitcoin as a form of payment for products and service has seen
growth.Bitcoins can be stolen and chargebacks are impossible. It is the largest
crypto currency by market capitalization. Followed by Lite coin and Ripple. it is a
currency that lives in the world of computer code and can be sent anywhere in the
world without racking up bank or exchange fees ,and than stored on a cell phone or
hard drive until used again. Because the currency resides in code, it can also be lost
when a hard drive crashes ,or stolen if someone else accesses the keys to the code.
The currency has attracted the attention of U.S Senate,the department of Homeland
security, the Federal Reserve, The internal Revenue service etc. The paper proposed
electronic cash that would allow online payments to be sent directly from one
party to another without going through a financial institution with transactions time
stamped and viewable to all.Bitcoin production is designed to move at a calibrated
pace to boost value and scarcity and remain inflation proof.
BASICS OF BITCOIN
Bit coin is a snippet of codes based on algorithm. They can be divided by up to eight
decimal places ,with the smallest unit called as satoshis.bitcoin network shares a
public ledger called the block chain. Approximately six times per hour, a group of
accepted transactions, a block is added to a block chain, which is quickly published
to all network nodes. The authenticity of each transaction is protected by digital
signatures corresponding to sending addresses. Anyone can process transactions
using the computing power of specialized hardware. This process is called
mining.and those who are rewarded with newly created bitcoins and transaction

fees.they can be located anywhere in the world.As of 2014 ,payment processing is

rewarded with with 25 newly created bitcoins