Legal Status of Bitcoin

Is Trading of Bitcoin is legal or not? 

Bitcoin is a virtual currency that moves peer to peer and can take a real dollar shape. It does not have any central government but its system of verification and transactions. Introduced in 2008 the software has gained the attention of countless individuals and the result is the triple increased value of the currency. The future seems to be very bright, but about this financial system, a question comes to our mind about the legal state of it. An individual thinks to wither the bitcoin system is legal or not. Having this issue is understandable. The simple answer is yes with the restriction “how you are using and doing with it”? 

This digital currency of biotin was introduced in the year of 2008 and become publically common in 2009. The considered inventor Satoshi Nakamoto and the first downloader of the bitcoin software named Feny made the first transaction through it. A person must know how this system works. The Bitcoin is a virtual currency whose transaction takes place peer to peer, and it can be converted into dollar currency as well. A blockchain system work in it. The blocks keep the record and keep on adding at the end of the string without interrupting the previous sequence. The system is safe and secure as verification take place on each transaction whereas the block act as a proof or record keeper giving the evidence that once the operation had taken place. The most important thing keep in mind that there is no central government in it like the real currency system.

The currencies like pound dollar or euro are real coins, but bitcoin is not a physical currency it is virtual that have an ability to be converted to the physical currency. The digital wallet is used to store it on the internet. It all uses the private key to keep the security high, and it enables the activity of transactions as well. The ledgers help in keeping the records and addresses helps in the peer to peer transactions. The bits coins can be traded e.g. purchase or sell at the global level. In this way, the value of the currency is going on its edge. The existence of Bitcoin is in a marketplace that is deregulated. There is no centralized issuing authority. There is no way to track back e.g. the creator of bitcoin.

Another fact is that in personal information is needed for the opening of an account of bitcoin. Even the payment of an account does not require it as the bank account demand the complete personal information there is no such system in it. Another fact I that, despite having a secure system, no oversight design makes surety about the ledger information e.g. either it is correct or incorrect. 

We must not forget an incident in this regard. The case of MT.GOX bankruptcy in the year of 2014. This event causes a risk inherent in the system.  The broken records said that about $500 million of Bitcoin was absence from the ledger list of bitcoin. The incident causes a loss to the software as the trust was lost with the money. This incident also hurt the global value. So the systems that prevent the interference of the third party still have a risk in the peer to peer transactions.

The system of bitcoin is being liked because of its anonymity. The facts say that the many likes and admirer includes the people who do not use the legal way of living. The use of Bitcoin makes the restriction.The illegal use cause problems. In this regard, the Silk Road case cannot be ignored. The drug trafficker is well-known thaw user of it who starts trading drugs through it. The dark web bitcoins are taking place still. So the incorrect way of its use is making it risky to use.

Due to some reasons, many countries have not allowed the bitcoin system in their economy. Like the government of Iceland has not allowed it in her region. Some countries like China have allowed the private use of bitcoin system with strict rules and regulations. Canada and Australia have given explicit permission to make the use of bitcoin.  So each country has its own rules and regulation about the using of bitcoins. Some regions have allowed it some have strongly prohibited the use of it and some have allowed the trade with strict rules and regulations.

Hence after the above discussion, we can conclude that the bitcoin use is legal, but each country has its own rules, and the risks are threatening as well. It depends on the individual that how he use and operate the trading.