If you are in business and still unfamiliar with Bitcoin, don’t be. Bitcoin is the future of financial transactions that knows no boundaries, since it is a universal online peer-to-peer currency. In-built scripting language of Bitcoin makes it possible to make new kinds of financial instruments, that may help in creating new markets.

Understanding Bitcoin

To understand Bitcoin, you will need to know ‘public key cryptography’ and ‘cryptographic hashing’. If you are technologically-challenged, as most are, then suffice to know that Bitcoin is based on cryptography. Why cryptography? Because Bitcoin is a currency and like a secret message needs confidentiality, it needs secure transactions, so that this cryptocurrency doesn’t get stolen.

The Bitcoin is an open source in which everyone can take part, since its design is public and nobody owns or controls it. The network carries it out collectively. What makes this form of currency attractive is its exciting uses with a larger scope than any other previous payment systems.

The relevance of Bitcoin

Many leading countries around the world have started considering Bitcoin as ordinary currency. Australia did so on July 1, 2017, leading to some tangible benefits to enterprises. For one, cryptocurrency is exempted from double taxation in the country, which in turn, will make it easier for enterprises to operate in Australia.

Exemption from double taxation means that stakeholders will no longer pay tax when they buy the currency and again when they use it for merchandise and services covered by GST. The country hopes that this ground breaking financial technology will harness productivity and growth, and ultimately make it a primary global financial technology hub.

Another country that has legalized Bitcoin as a payment method is Japan. Russia too is mulling over regulating it. The US state of Nevada has recently passed a legislation in favor of Bitcoin. And India is also contemplating going in for this crypto currency.

A new law, the Virtual Currency Act, passed in Japan has made it legal to accept Bitcoin as legitimate currency. This law has had a major impact on businesses. Following this legislation, the giant consumer electronics retailer, Bic Camera, became one of the first to start accepting Bitcoin.

Russia, that has been a staunch opponent of Bitcoin in the past, is also seeking to regulate this cryptocurrency. The country hopes to recognize Bitcoin and other cryptocurrencies as a legal financial instrument as early as 2018. This is primarily to tackle money laundering.

The explosive growth

Bitcoin currently has crossed the US $3,000 mark, however in April 2017 it was trading around $1,200. It is not surprising that Bitcoin’s market capitalization has risen from $18.34 billion to $19.5 billion in April 2017 itself. Australia and Japan jumping onto the Bitcoin bandwagon has boosted this surge even more.

It is common knowledge that banks operating in Asian countries pay next to nothing for fixed deposits. However, Coin Check, a Japanese Bitcoin exchange, has already instituted an interest paying Bitcoin fixed deposit. In this, a 14-day deposit receives 1% annual interest, 30-day, attracts 2% a year and annual fixed deposit, 5% per year. The only risk to depositors is of digital currencies becoming insolvent, which as of now seems farfetched.

Conclusion

Initially, the acceptance of Bitcoin and other cryptocurrencies were not without their ups and downs. There was a time when this digital currency ceased to be accepted, since criminal syndicates started using it. However, these hiccups are being ironed out to make Bitcoin not only an attractive proposition formaking payments, but also to facilitate its explosive growth.