Bitcoins - A Viable Currency? Regulatory and Legal Issues

The financial institutions that E-Commerce nowadays relies almost exclusively on, to serve as third parties to process electronic payments can hardly avoid disputes that arise through such mediation. In order to have a decentralized currency which would eliminate the need for any mediator and would make the transaction effortless and secure, Bitcoin, cryptography based digital currency, was introduced by a pseudonymous software developer, Satoshi Nakamoto, in 2009. This paper aims to analyse and understand the technicalities as well as the advantages and disadvantages involved in the implementation of such a virtual currency. However, the grey areas of such implementation arise out of the novelties of its own creation, whether it is the aspect of anonymity or the complete lack of regulation. The paper also delves on the widely debated issues of legality and viability of Bitcoins, as a universally acceptable currency, replacing fiat money.