Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do.

There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Sunday, 6 August 2017

In the Eyes of the Beholder ?

Of late , there is a lot of news about Bitcoins

It says , there are Bitcoin miners and Bitcoin traders and Bitcoin exchanges

But , what is a Bitcoin ?

I am a Bit-Confused !

In case , you wish to be a Bit-Confounded , I suggest you study :

·         What is Bitcoin ? 

Or , go to Google and just search for Bitcoin

But here is my understanding :

·         It is not any 3 dimensional physical thing which you can touch with your hands

It is a “ unique piece of software code “, generated by software geeks , using a very complicated Mathematical Algorithm

This “ Mining “ of a Bitcoin is somewhat like solving a SUDOKU or a CROSS-WORD puzzle, of which , there are only a total of 21 MILLION correct “ Solutions “ - making its supply LIMITED

     These geeks are called Miners and it takes many days of working on a computer ,
     to Unearth / Discover / Mine , just ONE Bitcoin

·         Each “ discovery “ ( no matter by whom and from where ), is  recorded / stored and its “ ownership “ established and made known publicly to everyone

·         Obviously , you cannot carry Bitcoin in your wallet like a metal coin of Rs 5

·         Hence , a Bitcoin is of very little day to day “ practical value “ to you / me

·         It is this RARITY ( limited supply ) , that gives its VALUE to the Bitcoin

In this respect , it can be compared with a metal called GOLD ( as opposed to another metal called IRON , which has plenty of SUPPLY , and therefore , a low value )

·         You can also compare a Bitcoin with a painting of Van Gogh / Picasso / C├ęzanne / Monet / Hussein / Ravi Verma etc

There are just a few / limited number of these available ( SUPPLY )

Their VALUE lies in their RARITY ( - and in the HUMAN GREED ! )

·         Art Connoisseurs buy these paintings at auctions , for millions of dollars ( only to lock up in vaults – no practical value ! )

·         Traders ( auctioneers ) , come out with fancy / expensive brochures and even SELL these brochures ( of course , for a fancy price ), among the potential rich buyers

Now , you get the idea !

Just as the Beauty of a piece of RARE painting lies in the Eyes of the beholder ( and goes on increasing , with time ) ,

The VALUE of a Bitcoin lies in the mind of the buyers and keeps increasing as more and more traders / speculators ,  enter the market !

Yesterday , its value reached $ 3200 per piece !

But if you want to bid – and buy – a rare painting at an auction , you need to have a fat / official bank balance in dollars and must pay for your purchase only through official banking channels , in a transparent manner !

But as a recent Malaware ( WannaCry ) showed , Bitcoins do not form part of official banking channel ( national and international ) and can be used for Ransom / Terrorist activity etc , without any knowledge of governments .

Very difficult to trace who owns , how many , since when and bought from where and at what price

Or worse , generation of tons of BLACK MONEY , through BitCoin hawaala  !

After reading this , it would be understandable , if you are a Bit-Scared  !

07  Aug  2017