Report examines the possible solutions provided by bitcoins

By Nicel Jane Avellana

Nov 28, 2013 02:02 AM EST

Virtual currencies are hot these days and the Bitcoin is at the top of the pack. Although it was not clear who created the Bitcoin or the reason behind its creation, a report on which appeared on The Irish Times by Chris Johns examined the different solutions that could be obtained courtesy of the digital currency.

For starters,Johns said the key feature of the Bitcoin is that it affords users near total anonymity when conducting their transactions. If anyone would like to keep their identity concealed while doing financial transactions, the Bitcoin offers an attractive alternative to physical money, Johns said in his report.

Bitcoins can be used as a cheaper alternative of transferring money around the world. Citing unverifiable data, more and more people are turning to digital currencies to finance cross border transactions, the report said. However, the report said the Bitcoin's volatility and its lack of transparency can become potential stumbling blocks to the transaction.

For people who do not trust the current policies about money, a digital currency can be a suitable alternative. According to the report, there is robust demand for digital money in countries where the local currency has depreciated or in countries where there are a lot of monetary restrictions.

The report also asked if the Bitcoin could be a possible answer to the crisis in the Euro Zone.  Johns added, "There is a strong sense amongst many market analysts that while the denouement may be years away, the euro remains stuck on an utterly unsustainable path. I don't think that Bitcoin is the answer to all of this but where it is one of few practical alternatives, it may become even more popular."

Bitcoins are mined through a network of computers. Newly-minted coins are given to those who have successfully solved these mathematical puzzles. The number of coins are finite, meaning once it has been stopped, the total number of bitcoins in circulation will be limited, the report said.

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