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The most talked about subject in India, i.e. Bit Coins is in news again, but it is all for the wrong reasons. Thanks to the malicious software ‘Wanna Cry’, a malware that would infect a system and encrypt its files. The files could be decrypted only after the victim pays sum of $300 to $600 only in bit coins and not by any other legal tender.
The question that comes to each and every individuals mind is why Bit Coins and why not other legal tender?
A bitcoin is a digital currency. It is just a currency that is widely accepted all over the world through the unofficial channels. India, though has not permitted the use of bit coins because of the security concerns it poses and the issue of no-traceability of the payment. The Reserve Bank of India (hereinafter, RBI) has raised concerns through its notifications and circulars time to time with regard to bitcoin and its usage problems. An individual can easily buy a bit coin, like one trades with other currencies. The bought bitcoin would be stored in an online wallet and it can be used to make payments for different services. There is also a method of production of bitcoin and it can be done only by a cryptic algorithm (also called as mining of bitcoins).
We have a lot of means to pay for a service i.e. credit cards and debit cards. But the masterminds of Wanna Cry only demand payment in the form of bit coins, the only reason is to pay using bit coin, is one does not need to give their personal information while a transaction is going on. It is anonymous from the senders as well as the receivers end. Where as in credit or debit card payments, one needs to register itself with a payment authority like VISA, MasterCard etc., to receive payments from individuals, and the payer also has to hold a valid debit card or credit card validated by a bank lawfully.
Instead, whenever you trade in bitcoin, you use a so-called private key associated with your wallet to generate a bit of code – called an address – that is then publicly associated with your transaction but with no personal identifying information. And in that way, every transaction is recorded and securely signed in an open ledger that anyone can read and double-check.
The only problem that the hackers can face now is the access to the open ledger. This open ledger can be accessed by law enforcement agencies to track down criminals. There is a big BUT on this aspect too. The criminals are sitting in an anonymous country and even if India has an access to the public ledger of bitcoins, it would be difficult to trace down and punish the criminals due to obligations of International Law.
Till date the criminals have collected a sum of $55,000, and as per the Europol, the European Union law enforcement agency, has said that more than 20,000 computers all over the world has been affected and the countries worst hit are United Kingdom, Russia and India.
 RBI Press release, ‘RBI cautions users of Virtual Currencies against Risks’ dated December 23, 2013, also available at https://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=30247.