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.
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MP minister's veiled remark on Col Sofia Qureshi sparks major row; he apologises, Cong seeks ouster
Bhopal/Indore, May 13 (PTI): Madhya Pradesh Minister and BJP leader Vijay Shah has sparked a major controversy with objectionable comments that appeared to be directed at Col Sofia Qureshi, whom he tried to project as a "sister of terrorists."
Under severe flak, Shah said if anyone is hurt by his statement, he is ready to apologise ten times, adding that he respects Colonel Qureshi more than his sister.
The Congress has appealed to Prime Minister Narendra Modi to sack Shah from the Madhya Pradesh cabinet.
Colonel Qureshi had conducted regular press briefings, sharing details of the 'Operation Sindoor' launched by Indian armed forces to strike terrorists, joined by Foreign Secretary Vikram Misri and Wing Commander Vyomika Singh.
"Those people (terrorists) who had wiped out the sindoor (vermilion) of our sisters (in the Pahalgam terror attack)..We avenged these 'kate-pite' people by sending their sister to destroy them," Shah said.
"They (terrorists) killed our Hindu brothers by making them remove their clothes. PM Modi ji responded by sending their (terrorists') sister in an Army plane to strike them in their houses. They (terrorists) made our sisters widows, so Modiji sent the sister of their community to strip them and teach them a lesson", the BJP leader said while addressing a gathering in Ramkunda village near Indore.
He said, "Revenge was taken for the honour of our country (India), respect, and for the (slain) husbands of our sisters by sending a sister from your (terrorists') community to Pakistan".
The tribal welfare minister clarified that his remarks should not be construed otherwise.
Shah's remarks drew wide-scale condemnation, with Congress demanding his immediate dismissal from the MP cabinet.
Congress President Mallikarjun Kharge said Shah, who made 'derogatory' remarks in reference to Colonel Sofia Qureshi, should be dismissed immediately.
"A minister of the BJP government of Madhya Pradesh has made a very derogatory, shameful and cheap remark about our brave daughter Colonel Sofia Qureshi. The terrorists of Pahalgam wanted to divide the country, but the country was united during the entire 'Operation Sindoor' to give a befitting reply to the terrorists," Kharge posted on X.
He alleged that the BJP-RSS harbours an anti-women mentality.
"First, the wife of the naval officer martyred in Pahalgam was trolled on social media, then the daughter of Foreign Secretary Vikram Misri was harassed, and now the BJP ministers are making such indecent comments about our brave woman Sophia Qureshi," Kharge said and appealed to PM Modi to immediately sack Shah.
Madhya Pradesh Congress president Jitu Patwari shared the video of Shah on X and asked whether the BJP agrees with the minister's "low thinking"?
The MP Congress Committee alleged that Shah's "indecent' and hate-filled" statement is not just a personal attack, but an open attack on India's military dignity, national unity, and women's honour.
Amid the raging controversy, the BJP's Madhya Pradesh general secretary Hitanand Sharma summoned Shah to the state headquarters in Bhopal.
According to sources, Sharma reprimanded the minister, who also met the state BJP president, Vishnu Dutt Sharma.
Speaking to reporters, Shah sought to attribute the intemperate remarks to his "disturbed" state of mind in view of the brutal killing of innocent people in Pahalgam by terrorists.
He claimed many members of his family have a military background and many were martyred.
"Sister Sophia has brought glory to India by rising above caste and religion. She is more respected than our own sister. I salute her for her service to the nation.
"We cannot even think of insulting her in our dreams. Still, if my words have hurt society and religion, then I am ready to apologise ten times,'' he added.
Meanwhile, Congress leader Manoj Shukla and the party workers blackened the nameplate of Shah at his bungalow and raised slogans seeking his resignation.
'हमारी सेना की जांबाज बेटियां आतंकवादियों की बहन हैं'
— Congress (@INCIndia) May 13, 2025
- ये घटिया बात मध्य प्रदेश में BJP सरकार के मंत्री विजय शाह ने कही है।
भारत की जिन बेटियों पर सबको नाज है, उन बेटियों को लेकर ये शर्मनाक बयान दिया गया है। उन्हें आतंकवादियों की बहन बताया गया है।
ये हमारी पराक्रमी सेना का… pic.twitter.com/y591M3ky8G
