[PDF]“Use Bitcoin”

Wild NOTE 16 March 2021
“Use Bitcoin”


Edited by Abhigyan Kumar


Money in itself has no value until given so. In everyday life where you pay for your
morning tea with some piece of cloth or metallic coins, that is what you call money.
However, money is not what we generally think or perceive. To understand bitcoin, or
cryptocurrencies in general, it is necessary to understand money and Adam Smith’s
famous “demand and supply” theory.


The Demand and Supply Theory explains how we give value to any object. It was first
proposed by economist Adam Smith. The is theory lays the foundation for economics.
It says that any resource or object holds value only if it is scarce. Scarcity is possible
only if the resource is limited in quantity. In the case of cryptocurrencies, there are only
21 million bitcoins available. However, there exists cryptocurrencies such as doge coin
which are unlimited in quantity. As a result, one doge coin does not hold much value.


Now since there is a scarcity, people start to give value to this digital currency. As
people start to buy bitcoins, the value of each bitcoin also increases. This happens
because with purchase of every bitcoin, the scarcity increases. More the scarcity, more
the value. That’s the reason a gram of diamond costs more than a gram of bread. All
cryptocurrencies are built on a software design principle called blockchain. Blockchain
is intricate and will prefer not to explain further in this article. Blockchain has a feature.
The more transactions happen with a cryptocurrency, the more secure it becomes.


You can buy bitcoins just like you buy things on a E-shopping website. There are
several online platforms available which allow you to buy and sell bitcoins. Once you
buy bitcoins, you can even spend them. For example, Tesla recently promised that they
will accept bitcoins as a mode of payment. Signal Messenger also moved a step
forward to accept bitcoins as a mode of donation.


With great features must come great problems. Of course bitcoins has a few problems.
Every transaction you do with bitcoin gets listed openly on a database, also called
ledger in technical terms. However, no one can identify who are involved in the
transaction. For example, if | gave two bitcoins to a person X, everyone can see the
amount involved in the transaction but not the people involved. No person except | and


Wild NOTE 16 March 2021


X will ever Know who were involved. This is a security feature but is openly exploited by
criminals. Criminals can use bitcoins instead of cash and bank transfers to safely
conduct transactions without the fear of ever being traced back.


The Government of India has been talking to ban cryptocurrencies with an argument
that cryptocurrencies are “not trustworthy”. The irony is that cryptocurrencies come
packed up with trust. Cryptocurrencies deliver power to the people since there is no
central authority controlling the currency, but the people through ownership and
transactions. Cryptocurrencies have also helped several startups to emerge and build
tools one could never imagine. The Government has left people in great despondency
after their strong statements to support the ban.


One of the theories developing behind the ban after V-Dem, a Swedish institute calls
out India an “electoral autocracy”, is that the Government wants to make use of every
way to take power away from the population. One way to deprive the people of
financial power was to ban cryptocurrencies. On the other hand, it is also believed that
the ban won't affect people and criminals in any way. Nothing can be completely
banned on the internet. People can easily trade bitcoins by using proxies, a different
DNS and VPNs. This effort of the Government, | believe, is just a waste of time.