First launched in 2009, Bitcoin is a kind of cryptocurrency or digital currency that exists completely online. It is decentralized without a single central bank to administer it and the currency is stored in digital wallets. These wallets are backed by private and public keys for security, and the public key is what lets users transact with each other. Because of its decentralized nature and the anonymity associated with it, the currency can be easily traded across users and countries without identifying the person who holds the bitcoin. The popularity of bitcoin has spurred a range of alternate crypto currency including Etherium, Dogecoin and Binance.
The major problem with these private cryptocurrencies is that they create an alternate to real money, which may lead to the problem of 'double spending.' Hence, the government had set up a committee in 2017 led by the then Economic Affairs Secretary Subhash Chandra Garg to study the issues related to virtual currencies. The committee, in its final report made public in 2019, had drafted a Bill to impose a complete ban on private cryptocurrencies after the regulators expressed their concerns over it.
It is not known what effect this step will have, but many have opposed it because of the inherent flaws in the argument of 'double spending' and since Tesla has renewed interest in cryptocurrencies by investing in bitcoin. Only time will tell whether this action will impact the markets significantly or not.
