Truth or Hype: Bitcoin and other Cryptocurrencies
The meteoritic rise of cryptocurrencies from seemingly nowhere has confounded lawmakers and bankers, and polarised opinions. Some have heralded them as the future of currency, while others have dismissed as an elaborate e-Ponzi scheme. Cryptocurrencies or cryptocoins are neither new nor few.
To put it Simply, cryptocurrencies are digital assets similar to any currency held in e-wallets. But unlike them, cryptocurrencies are not issued or controlled by any bank or corporation. Their value is derived from the belief that others users will also value them.
The first attempt at creating a cryptocurrency goes back to the early 1980s with 'ecash', but it was in the 1990s that researchers began to make key advancements which led to the launch of 'b-money' and 'bit gold.' Then in late 2008, the bitcoin.org domain was registered, and a paper titled 'Bitcoin: A Peer-to-Peer Electronic Cash System.' was published by the pseudonymous 'Satoshi Nakamoto.' Then in January 2009, Nakamoto published Bitcoin's open source software, and the bitcoin network came into existence.
Nakamoto became the first to solve the problem of double-spending in digital currencies. Another thing that made bitcoin unique was the fact that it was the first truly decentralized digital currency, where the transaction took place directly between the users using the 'peer to peer' model with no centralised intermediary.
Bitcoin used the 'trustless verification' model to secure these transactions. The 'trustless verification' model does not mean that there is no trust among the users of the system, but that the trust is distributed or decentralised.
In a normal face-to-face cash transaction, one person gives money to another person and they mutually verify on the spot that the amount is correct and that the currency is valid. However, if the two persons are not able to meet face-to-face, then they have to employ a third party that is 'trusted' by both; such as a bank, e-wallet, remittance agency, etc. In such cases, the trust resides completely with the third party.
Cryptocurrencies use the blockchain technology as the 'trusted' third party to facilitate two individuals to carry out a peer-to-peer transaction, to authenticate the sender's identity, and to validate the transaction using a transparent and decentralised infrastructure.
The Bitcoin model is the foundation on which other cryptocurrencies have been built.
How does it work?
In the bitcoin model, a transaction consists of an input (receipt) or an output (payment). A group of these transactions generated by different users is recorded in a public ledger known as a 'Block'. For a transaction to be valid, one cannot spend more than what one has, and each transaction must have an encrypted digital signature attached to it. This encrypted digital signature is generated by the system and ensures the authenticity of the sender and also prevents any alterations being made to the transaction once it is issued.
Since the Blockchain technology has no centralised system, the Blocks are maintained transparently on a decentralised global network of computers, all of whom share the same information regarding the transactions and therefore all share the same 'truth' at the same time.
This network uses what is known as the 'Machine Consensus' protocol to incentivise all the machines to come to a 'consensus' on the activities occurring within the network. The machines performing these tasks are known as miners.
Bitcoin, for example, uses a 'Machine Consensus' protocol known as 'Proof of Work,' which gives financial incentives to the miners to compete with one another to find new Bitcoin transactions, validate them, and add them to a Block. They then have to solve a complex mathematical problem to prove that they did the work of putting together the block of transactions. The Solution to this complex mathematical problem is what is known as a 'Hash' of the Block and is attached to the block as a seal and acts as a second layer of encrypted authentication on top of the transaction signature mentioned earlier.
Once a Block is complete with its list of transactions and its Hash, it gets attached to the end of an existing chain of Blocks based on a sequence determined by the Block's Hash. A chain of these Blocks is called a Blockchain. Once a new Block gets attached to the Blockchain and broadcast, everyone on the network update and synchronises to the new information. The longer a Blockchain gets, the more secure and incorruptible it becomes.
The system rewards the miners for the work done in two ways. First, every time a miner successfully completes a new Block, the system rewards the miner with cryptocurrency. Second, the miners are also given the transaction fees collected from the payers every time a transaction occurs.
Mining is required because the system periodically changes the key number attached to each hash, thus requiring fresh decryption every time the key changes. In the bitcoin system, it takes an average of 10 minutes for a new Block to be found by a miner. As more and more miners join, it gets that much harder for a miner to find a new Block. The average time to find a new Block varies between cryptocurrencies. For example: Litecoin is 2.5 minutes, Ethereum is 15 Seconds and Ripple 3.5 seconds. The faster a new Block can be found and added to the Blockchain, the faster a transaction can be verified.
The encrypted transaction signature and the hash sequence means that any alteration to a transaction, or to the Block sequence in a Blockchain, once it is published is practically impossible to alter. Therefore, the longer a Blockchain, the more trustworthy the transaction becomes.
Nakamoto mined the first 'Genesis Block' on the Bitcoin system, and was the first to make a Bitcoin payment. There are now well over 12,000 cryptocurrencies and the number is growing. About 25 of them have a market capitalisation exceeding $ 1 billion, and the top ten have a combined capitalisation exceeding $ 300 billion (2018 Q1). Cryptocurrencies are not all clones of one another; they have differences in their protocols, their algorithms, and their levels of centralisation.
To invest, or not to invest in cryptocurrency?
In reality, cryptocurrencies are just a series of ones and zeros within a computer network. Their real value as a medium of exchange will depend on three key determinants: their real-world usability or acceptance, their convertibility which will depend on their recognition by established financial institutions, and on them remaining legal. These are three simple yardsticks one should consider if investing in cryptocurrencies.
Let the Truth be known. If you read VB and like VB, please be a VB Supporter and Help us deliver the Truth to one and all.
SC dismisses pleas seeking review of 2023 verdict declining legal sanction to same-sex marriage
New Delhi, Jan 9: The Supreme Court on Thursday dismissed a batch of pleas seeking to review its October 2023 verdict declining legal sanction to same-sex marriage.
A five-judge bench of Justices B R Gavai, Surya Kant, B V Nagarathna, P S Narasimha and Dipankar Datta took up about 13 petitions related to the matter in chambers and dismissed them.
"We do not find any error apparent on the face of the record. We further find that the view expressed in both the judgements is in accordance with law and as such, no interference is warranted. Accordingly, the review petitions are dismissed," the bench said.
It said the judges have carefully gone through the judgements delivered by Justice (since retired) S Ravindra Bhat speaking for himself and for Justice (since retired) Hima Kohli as well as the concurring opinion expressed by Justice Pamidighantam Sri Narasimha, constituting the majority view.
The bench also rejected a prayer made in the review petitions for hearing in an open court.
According to practice, the review pleas are considered in chambers by the judges.
The new bench was constituted after Justice Sanjiv Khanna, the present CJI, recused from hearing the review petitions on July 10, 2024.
Notably, Justice P S Narasimha is the only member of the original Constitution bench comprising five judges which delivered the verdict, as former CJI D Y Chandrachud and Justices S K Kaul, Ravindra Bhat and Hima Kohli have retired.
A five-judge Constitution bench led by then CJI Chandrachud on October 17, 2024, refused to accord legal backing to same-sex marriages and held there was "no unqualified right" to marriage with the exception of those recognised by law.
The apex court, however, made a strong pitch for the rights of LGBTQIA++ persons so that they didn't face discrimination in accessing goods and services available to others, safe houses known as "garima greh" in all districts for shelter to members of the community facing harassment and violence, and dedicated hotlines in case of trouble.
In its judgement, the bench held transpersons in heterosexual relationships had the freedom and entitlement to marry under the existing statutory provisions.
It said an entitlement to legal recognition of the right to union, akin to marriage or civil union, or conferring legal status to the relationship could be only done through an "enacted law".
The five-judge Constitution bench delivered four separate verdicts on a batch of 21 petitions seeking legal sanction for same-sex marriages.
All five judges were unanimous in refusing the legal recognition to same-sex marriage under the Special Marriage Act and observed it was within Parliament's ambit to change the law for validating such a union.
While former CJI Chandrachud wrote a separate 247-page verdict, Justice Kaul penned a 17-page judgement where he broadly agreed with the former's views.
Justice Bhat, who authored an 89-page judgement for himself and Justice Kohli, disagreed with certain conclusions arrived at by the former CJI, including on applicability of adoption rules for such couples.
Justice Narasimha in his 13-page verdict was in complete agreement with the reasoning and conclusion of Justice Bhat.
The judges were unanimous in holding that queerness was a natural phenomenon and not an "urban or elite" notion.
In his judgement, the former CJI recorded Solicitor General Tushar Mehta's assurance of forming a committee chaired by the cabinet secretary to define and elucidate the scope of entitlements of such couples in a union.
The LGBTQIA++ rights activists, who won a major legal battle in 2018 in the Supreme Court, which decriminalised consensual gay sex, moved the apex court seeking validation of same-sex marriages and consequential reliefs such as rights to adoption, enrolment as parents in schools, opening of bank accounts and availing succession and insurance benefits.
Some of the petitioners sought the apex court to use its plenary power besides the "prestige and moral authority" to push the society to acknowledge such a union and ensure LGBTQIA++ persons led a "dignified" life like heterosexuals.
