Saturday, 31 December 2016

Risks Involved In Swap Business For A Swap Bank

While the earnings of the swap bank are from the bid-ask spread of swaps and the fees charged (upfront fees), it has to entail the following risks, which are inherent to the swap business and are mostly inter-related:

1. Interest Rate Risks: Interest rate risk arises mostly on fixed rate legs of swaps. While the floating rate interest can be periodically adjusted to the prevailing interest rates, the fixed rate in the market not accompanied by a change in the yield of debt instruments of the same time period as the interest rates will entail interest rate losses to the bank. Unless the swap bank is fully hedged, losses will be incurred.

2. Currency Exchange Risk: Currency exchange risks happen when there is an exchange rate commitment given to one party and there is a steep change in the exchange rate between the currencies in the swap. If the swap bank is not able to match the counterparty well in time, it will incur losses due to the exchange rate difference.

3. Market Risks: Market risks occur when there is difficulty in finding counterparty to a swap. Usually, longer maturity swaps have less takers and vice versa. Lower the number of takers, higher the risks of losses.

4. Credit Risks: Credit risks are those risks which the swap bank has to bear in case the counterparty to a swap defaults on payment due to bankruptcy or any other defaults, legal or otherwise. The bank continues to the obliged to pay the other party of the swap, irrespective of the fact whether the former party defaulted or not. Market risks and credit risks together amount to default risks of the bank.

5. Mismatch Risk: Mismatch risks take place when the swap bank comes across mismatches in the requirements of both counterparties to the swap. Usually, banks have a pool of swaps and have no difficulty in finding matches, but if no party is found, the risk of mismatch losses is there. This risk is further aggravated in case one of the parties defaults.

6. Basis Risks: Basis risks take place mostly in floating-to-floating rate swaps, when both the sides are pegged to two different indices the sides are pegged to two different indices and both the indices are fluctuating and there is no proper correlation between both.

7. Spread Risk: Spread risks happen when the spread changes over the time period the parties are matched. The spread risk is not the same as interest rate risk, as spreads may change as a result of change in basis points, while the interest rate may still remain constant.

8. Settlement Risk: Settlement risks take place when the payments of currency swaps are made at different times of the day mainly because of different settlement hours in capital markets of two countries involved in the currency swap. If a limit on the size of the settlement is placed for each day, this risk is minimized.

9. Sovereign Risk: Sovereign risks are those risks that can take place if a country changes its rules regarding currency deals. It mostly happens in the underdeveloped or developing countries which tend to have more political instability than the developed world.

Friday, 30 December 2016

Various Functions Performed By Financial System

The functions performed by a financial system are: 

The Savings Function:

The public savings find  their way  into  the hands of  those  in production  through  the financial system. Financial  claims  are  issued  in  the money  and  capital markets which promise  future income flows. The funds in the hands of the producers result in production of better goods and services,  increasing  society's  living  standards.  When  savings  flows decline,  however,  the growth of investment and living standard begins to fall. 

Liquidity Function:

Money in the form of deposits offers the least risk, of all financial instruments. But its value is most  eroded  by  inflation.  That  is  why  one  always  prefers  to  store  the  funds  in  financial instruments  like  stocks,  bonds,  debentures,  etc.  The  compromise  one  makes  in  such investments is (1) that the risk involved is more, and (2) the degree of liquidity, i.e. conversion of  the  claims  into  money  is  less.  The  financial  markets  provides  the  investor  with  the opportunity to liquidate the investments. 

Payment Function:

The  financial system offers a very convenient mode of payment  for goods and services. The 
cheque system, credit card system et al are  the easiest methods of payments  in  the economy. The  cost  and  time  of  transactions  are  drastically  reduced.  In  India,  the  cheque  system  of payment  is  widely  practiced.  The  credit  card  system  has  entered  only  urban  India  and  is widely used in these areas for payments of consumption expenditure. 

Risk Function:

The  financial  markets  provide  protection  against  life,  health  and  income  risks.  These are accomplished  through  the  sale  of  life  and  health  insurance  and  property  insurance policies. The financial markets provide immense opportunities for the investor to hedge himself against or reduce the possible risks involved in various investments. 

Policy Function:

India  is  a mixed  economy.  The  government  intervenes  in  the  financial  system  to influence macroeconomic variables like interest rates or inflation. In 1996-97, by bringing about several cuts in the CRR from 12% to 10% the government, the RBI has tried to force the interest rates down and increase the availability of credit to the corporates at cheaper rates. 

Modern  day  economies  require  huge  sums  of money  for  investment  in  capital  assets (land, equipment,  factory,  etc.) which  are  then  used  for  providing  goods  and  services. The  funds required  are  so  huge  that  it  is  not  possible  for  a  single  government/firm  to provide  for  the requirement.  By  selling  financial  claims  like  stocks,  bonds,  etc.  the required  funds  can  be quickly  raised  from  a  variety  of  investors.  The  business firm/government  issuing  such  a financial claim then hopes to return the borrowed funds from expected future inflows. Indeed, we see that the financial markets within the financial system have made possible the exchange of  current  income  for  future  income  and transformation of  savings  into  investments,  so  that production and income grow. 

Sunday, 25 December 2016

Reasons of Forecasting Exchange Rates For MNC's

Virtually every operation of an MNC can be influenced by changes in exchange rates. Several corporate functions for which exchange rate forecasts are necessary follow:

  • Hedging decision: 
MNCs are constantly confronted with the decision of whether to hedge future payables and receivables in foreign currencies. Whether a firm hedges may be determined by its forecasts of foreign currency values. As a simple example, consider an Indian firm that plans to pay for imports from Mexico in 90 days. If the forecasted value of the peso in 90 days is sufficiently below the 90-day forward rate, the MNC may decide not to hedge.
  • Short-term financing decision: 

When large corporations borrow, they have access to several different currencies. The currency they borrow will ideally  (1) exhibit a low interest rate and  (2) weaken in value over
the financing period. If, for example, a U.S. firm borrowed Japanese yen, and the yen depreciated against the U.S. dollar over the financing period, the firm could pay back the loan with fewer dollars (when converting those dollars in exchange for the amount owed in yen). This financing decision should therefore, be influenced by exchange rate forecasts of any currencies available for financing.

  • Short-term investment decision:

Corporations sometimes have a substantial amount of excess cash available for a short time period. Large deposits can be established in several currencies. The ideal currency for deposits would (1) exhibit a high interest rate and (2) strengthen in value over the investment period. Consider, for example, a Japanese corporation that has excess cash deposited into a British bank account, and assume the British pound has appreciated against the yen by the end of the deposit period. As the British pound are withdrawn and exchanged for yen, more yens will be received, due to the pound’s appreciation against the yen. Exchange rate forecasts of the currencies denominating available deposit accounts should therefore be considered when determining where to invest the short-term cash.

  • Capital budgeting decision: 

When an MNC attempts to determine whether to establish a subsidiary in a given country, a capital budgeting analysis is conducted. Forecasts of the future cash flows used within the capital budgeting process will be dependent on future currency values. Accurate forecasts of currency values will improve the estimates of the cash flows and therefore enhance the MNC’s decision-making abilities.

  • Long-term financing decision: 

Corporations that issue bonds to secure long-term funds may consider denominating the bonds in foreign currencies. As with short-term financing, corporations would prefer the currency borrowed (denominating the debt) to depreciate over time against the currency they are receiving from sale. To estimate the cost of issuing bonds denominated in a foreign currency, forecasts of exchange rates are required.

  • Earnings assessment: 

When earnings of an MNC are reported, subsidiary earnings are consolidated and translated into the currency representing the parent firm’s home country. Forecasts of exchange rates play an important role in the overall forecast of an MNCs consolidated earnings.

Saturday, 17 December 2016

Floating Rate Mechanisk & Fixed Rate Mechanism

In the  floating  rate mechanism,  the  exchange  rate  is  determined  by  the market  forces, while  in  fixed  rate  mechanism,  the  exchange  rate  is  determined  by  the  government. Therefore, in floating rate mechanism, the exchange rate depends on the perception of the market about the relative worth of various currencies while  in the fixed rate mechanism, the rate depends on what the government wants it to be.

      In fixed  rate mechanism,  the government needs  large amounts of  reserves  to be able  to maintain  the  currency  at  the  level  it wants.   In  the  floating  rate  system,  the government does not interfere in the market.

 In some  variations  of  the  fixed  rate mechanism,  the  value  of  the  currency  is  adjusted upwards or downwards depending on the values of certain key parameters such as money supply. The fixed rate system though useful for maintaining a stable exchange rate, may give rise to market distortions  in  the  long  run.  
    The  floating  rate  system, on  the other hand, may result in wide fluctuations in the exchange rates over short time intervals but is expected to settle down at its true value.

Many experts favor the flexible exchange rate mechanism on the following arguments:
  • Better adjustment
  • Better confidence
  • Better liquidity
  • Gains from freer trade
  • Increased independence of policy

Better adjustment: One of the most  important arguments  for flexible exchange rates  is that  they provide a  less painful adjustment mechanism to trade imbalances than do fixed exchange rates. For example, an incipient deficit with flexible exchange rates will merely cause  a  decline  in  the  foreign  exchange  value  of  the  currency,  rather  than  requiring  a recession to reduce income or prices as fixed exchange rates would. It should be clear that a  decline  in  the  value  of  a  currency  via  flexible  exchange  rates  is  an  alternative  to  a relative  decline  in  local-currency  wages  and  prices  to  correct  payments  deficits.  The preference for flexible exchange rates on the grounds of better adjustment is based on the potential for averting adverse worker reaction by only indirectly reducing real wages.

Better confidence:  It  is  claimed  as  a  corollary  to  better  adjustment  that  if  flexible exchange rates prevent a country from having  large persistent deficits, then  there will be more confidence  in  the  country and  the  international  financial  system. More confidence means fewer attempts by  individuals or central banks  to readjust currency portfolios and this gives rise to stable forex markets.

Better liquidity:  Flexible  exchange  rates  do  not  require  central  banks  to  hold  foreign exchange reserves since there is no need to intervene in the foreign exchange market. This means  that  the problem  of  insufficient  liquidity does not  exist with  truly  flexible  rates, and competitive devaluations aimed at securing a larger share of an inadequate total stock of reserves will not take place.

Gains from  freer  trade: When  deficits  occur  with  fixed  exchange  rates,  tariffs  and restrictions on  the  free  flow of goods and capital  invariably abounds.  If, by maintaining external balance,  flexible  rates avoid  the need  for  these  regulations, which are costly  to enforce, then the gains from trade and international investment can be enjoyed.

Increased independence  of  policy:  Maintaining  a  fixed  exchange  rate  can  force  a country to follow the same economic policy as its major trading partners. For example, if the United States  allows  a  rapid growth  in  the money  supply,  this will  tend  to push up U.S.  prices  and  lower  interest  rates  in  the  short  run,  the  former  causing  a  deficit  or deterioration in the current account and the latter causing it in the capital account.

Friday, 16 December 2016

Right Wallet To Keep Your Bitcoin Safe

It was not easy to get Bitcoin or earn Bitcoin earlier by late 2011. But in today world it has reached the daily transaction of 2,56,044 from the mere 11,000 till April, 2012. This value is the only proof to gauge about Bitcoin security. Due to the nature of Digital, Bitcoin can’t be touched or feel like the fiat one but it has the same worth. So, that needs to be pick your wallet for storing and transacting Bitcoin safe fore ever. The Bitcoin network created using cryptography technology by a sophisticated algorithm to secure your hard-earned Bitcoin with hassel free transaction and avoiding doubble spending issues. There are many digital wallet provider who are also giving you the freedom of storing your Bitcoin with their safe wallet. Except Blockchain others also like Xapo, Coinbase, Zeb Pay providing their client for storing the Bitcoin securely free of cost. In this section I am going to aware you the various kind of wallet with their multi security features and the benefits to make you choose not only the right but the most safest wallet according to your need.

  1. Xapo : 

With xapo wallet you can create your account easily by mobile number and e-mail ID also one identification is required but can be possible to open multiple wallet by other name also with fake ID. The security level is no-comprommised but your coin is always safe with their secure vault. So, get your smooth transistion from fiat to digital currency.

Features & Benefits:

  • Keep and Carry your money securely by your moblle. Simply install xapo app from your IOS or Android and always track your balance, trade and receiving or sending Bitcoin easily with this safe wallet.
  • Store your Bitcoin in xapo vault that is another level of safe wallet except your main wallet. Now keep your hard-earned Bitcoin more securely.
  • Buy new Bitcoin or the fraction of Bitcoin with any kind of fiat money incuding your home currency.
  • Expense Bitcoin easily at any store with Debit Card or withdraw your fiat one from any ATM machine world-wide.
  • it’s never been easier to send or receive money from your family or friends at the same time you won’t be charged any fees or mere fees.


  • Using of offline encrypted server made xapo more reliable for their users to keep there wallet safe. This server never connected to internet so the coins are always safe from the hacker.
  • Restricted & monitored vault access mantain the strict control to the server. Xapo server is situated behind reinforced concrete walls, a steel blast door and a radio wave-blocking faraday cage.
  • The secure vaults are housed in high-security installations, including deep within a decommissioned swiss military bunker.
  • Your hard-earned money secured in the swiss ALPS that offers extra robust protection against physical theft.
  • The global network of storage vaults make you completely insure that no-single breach of network if happen regulatory action would ever compromise your account.
  • Another level of security that is used by xapo is a Satelite based x-ray of their terrestrial network.

 There are more than 60 Million transaction over a day with 8 million plus wallet user that is provided by Blockchain official wallet. Blockchain is serving in more than 120 countries and still growing.

features and benefits:

  • It’s safe and simple. Transact any time with anyone over the world.
  • Security centre that helps you back up your funds time to time and protect them fro unauthorized access.
  • Cross-platform access that is providing you accesses your funds anytime, any-where by your desktop, IOS or android devices.
  • Anytime supporting team, low fees and the hirearchical deterministic address that monitoring and spending from watch only address.
  • 20+ conversion rates and more than twenty-five languages available.
  • You can change your wallet theme according to your eye-catched interface.

Zebpay is created for Indian citizen with extra feature of recharging & pay bills by Bitcoins. You can recharge your Air-time and pay DTH bills with 15 supported operators with fast and easy way. But anybody can use it world-wide for sending and receiving Bitcoins. Indian users can trade bitcoin with their local currency even they can sell and withdraw their bitcoin to the local bank and the transaction is completed within two hours or the same day. Zebpay has the multi-platform user based that can be used in your android or IOS devices. Just download the app in your Android or IOS mobile or tablet and register with your mobile number. You need to verify atleast one of you ID to sell or withdraw your bitcoin.

     4. Unocoin:

Unocoin is another Bitcoin exchanger for Indian users that is offering buying, selling, accepting, and sending of Bitcoin. Apart these features it is offering extra feature of mearchant services. Merchants are now accept Bitcoin online by using this as payment gateway and also use POS machine in their shop. Users can also track all POS transaction in Android mobile by downloading Unocoin Pos app. As payment method Unocoin does not charge any fees to customers to accept bitcoin. With 0% volatility the fluctuation in bitcoin prices pose no risk to merchants, you can either choose to keep your bitcoin or instantly sell them for INR.

     5. Coinbase:

Coinbase is the world’s most popular and widely used bitcoin wallet for buying and selling of both digital currency Bitcoin and Ethereum. Can be connected to your debit card or credit card and bank account so that you can exchange your digital currency as and when you want.

Features & Benefits:

  • In addition to desktop wallet is for multi cross-platform for Android & IOS.
  • All Bitcoins are stored in a vast off-line storage.
  • All digital currencies are prorected by insurance policy.
  • Access full control of your private keys with the multi-signature vault.
  • Hassle free sending and receiving of your digital currency that is immediately exchanged to your local currency.
  • Make SIP by Invest in bitcoin and ethereum slowly over time by scheduling buys weekly or monthly.
  • Merchant service of availability make payments from anywhere in the world, with low transaction fees.
  • The leading platform for professional digital currency traders.
  • Developers are benefited by the world’s most popular digital currency API. Financial infrastructure for your apps.

Thursday, 15 December 2016

Risk & Exposure In The Forex Market

Exchange rate risk can  be categorized into three types based on the nature of exposure and the whole trading process involved. These risks are: (1) Transaction Exposure, (2) Translation Exposure, (3) Operating Exposure. These are the risks that are faced by all the financial institutions, MNCs or the individuals is almost same. So, lets have a discuss about these:

  • Transaction Exposure:

 Transaction exposure measures the risk involved due to the change the foreign exchange rate between the time the transaction is executed and the time it is settled. For instance; Radge Ltd. An Russian Company enter into a trade for purchasing from a US based company and the transaction will be invoiced in US Dollar for 5 USD. The terms of contract provide for payment after two months. At the time of transaction if the Russian Rubble depreciates then it will loss significant more Rubble over it’s actual expenses of 5 USD it could have been at the time of entering the contract. Thus, transaction exposure leads to a risk of loss while fluctuation of currency become unfavorable and conversion of currency occur. In the same way a gain will be also possible if there is the movement of exchange rate gone favorable.

For a financial institution, this type of a risk does not normally occur in its routine business operations. manufacturing/trading units are more exposed to such risk. If Radge Ltd. Buys US Dollar from a bank either on the spot or in the forward market, then the bank will become short having sold the US Dollar. However, the bank takes up a long position immediately to square up the transaction so as to eliminate the exposure. Thus banks, in general, hold a square or near square positions at the end of each day by going long (short) corresponding to every transaction with the customer (Merchant Transaction) which is short (long). Hence the transaction exposure to the banks mostly remain an intra-day exposure. The bank helps the customers to hedge their exposure while ensuring that it also hedges its exposure.

  • Translation Exposure:

 Differentiating itself from the transaction exposure is the translation exposure which refers to the risk arising on account of changes in exchange rates at the time off inalizing/consolidating the financial statements which has assets/liabilities denominated in foreign currencies. When a company has to finalize/consolidate its account, it has to convert its foreign currency denominated assets/liabilities at the applicable exchange rates as against the rates at which they are initially recorded. The rates at which the existing liabilities/assets are to be converted are governed by the guidelines issued by Foreign Exchange Dealers Association or the designated body that are governing the exchange rate for their respective country. The financial institution is directly affected by this translation risk.

  •  Operating Exposure:

 Operating exposure arises because of the impact of change in the foreign currency rates on the profit of a corporate house. Even this impact affect the corporate which also not deal in foreign currency. The future cash flow of a firm mainly depends on the two factor that is the exchange rate and the prevailing inflation rate of the different countries. 

Sunday, 11 December 2016


While talking about Bitcoin as a currency whether it be the in the name of many aliases like crypto currency, digital currency or virtual currency the main orientation of the holder of Bitcoin is to en-cash it as demanded. Is there any value of this simple written amount that has been stored in our digital wallet? Then we say a easy answer is “Yes” it has more value than worth it. As the Bitcoin supply will be limited to the market in future so, the value of this currency will be more & more year-wise. Til now there are 15.9 million Bitcoins are mined and circulated in the market and more than 5000 wallets are in use. Total number of bitcoins can be mined over the period of time not more than 21 million bitcoins and this  is final amount of bitcoins that will be existed in the market and the demand will be increase then due to no more supply of bitcoins the price of the bitcoin will be definitely increase.

 Lets debate on the real value of bitcoin that we can get having this currency. Bitcoins are now accepted as a global currency over the world and everybody using this for their cross border transaction. USA, Canada, Russia, Australia and almost all of the European countries are given acceptance to the Bitcoin and also Bitcoin ATM machine are established in their country for quick cash out. India has also granted permission some of the Banking institution and financial bodies to transact with bitcoin if it really not granted to general public. But there are many transacting over bitcoin regularly. Except bitcoin there are also 600 more crypto currency likewise; Litecoin, Doge coin, Name coin, Peer coin, Dash coin Ethereum. All these are also their derived value. All these currencies are traded, exchanged and transacted daily in the crypto-currency market and also in the fiat currency market. One can exchange any of currency to bitcoin and vice-versa and ultimately can exchange to any of fiat currency to it’s respective country for expense any-where. But, today most of the shoppers, individuals, websites and even big companies like Microsoft, Dell, eBay, Flipkart, Amazon are accepting Bitcoin globally. Many of the forex brokers are also accepted bitcoin payment system as their funding to the client account. So, it’s the matter of no more time consumption to start forex trading within 10 minutes. Now lets have look about forex market understanding.

The term Forex is the blending of two words, that is foreign and exchange. The word exchange here refer to the interchange of currencies between the different cross-border parties for their goods and services. With the increasing demand of goods and services across the globe drive the nation to supply the same to fulfill the demand of other nation. Hence, this trade gave birth to globalization, which automatically involved the nation or individual into foreign exchange market. This term Foreign Exchange gradually became shortened to Forex market.
Today, man goes beyond it’s limit in the business world where we could just imagine how he surpasses the way of trade from it’s barter system to electronic system. With the growing demand of products & services and increase competition in the domestic market led the business houses to go for internationally. This automatically led to involvement of different currencies. And the demand & supply of these currencies led to exchange rate fluctuation or exchange rate risk. The international monetary system includes rules, regulations, procedure, practices and mechanisms that facilitate settlement of international payments. Whether it be the companies, country or the individual who involved in forex trade should be conversant and familiar with the exchange rate mechanisms so that they can anticipate the appreciation or depreciation of foreign currencies against the domestic currency for investing and financing decisions or trade on Forex market.
The existence of number of currencies gives rise to need to transact in different currencies for settling of international payments. This is obvious that at least one of the parties would be dealing in foreign currency while transact in international trade. For Example: If an Indian exporter sells some goods to an American resident and the price of that goods denominated in dollars, the exporter would be dealing in a foreign currency. Similarly, if  an Australian residents makes an investment in the German money market, he would need to deal in German Mark or in Euro which would be a foreign currency to him. Sometimes, both the parties involved in international trade will go for foreign currency because of the price denominated for the product is foreign currency for both the parties. For Example: if the resident of Australia buys a car from a resident of Spain and the and the transaction is denominated in US dollars, both the parties will be dealing in a foreign currency because parties have own Australian dollar & Spanish currency or Euro respectively. The exchange of currency happen due to the buying and selling of other commodities. So, it is difficult to find the buyer and seller of other currency as currency is also termed as a commodity. This fact resulted in the development of a market which deals specifically in currencies, called the foreign exchange market. This is an Over-The-Counter market (OTC) market, that is no physical marketplace where the deals are made. Instead, it is a network of banks, brokers and dealers spread across the various financial centers of the world. These players trade in different currencies through telephones, faxes, computers and other electronic networks powered by Internet like the SWIFT System (Society For Worldwide Interbank Financial Telecommunications). These trade are generally done through a trading room. The deals are mostly done orally with written confirmation following later.

  • Foreign Exchange
Foreign exchange involves all kinds of claims of residents of a country to foreign currency payable abroad.In terms of Indian FEMA Act, 1999, foreign exchange is defined as foreign currency, which includes:
All deposits, credits, balances payable in any foreign currency.
Any drafts, travelers’ cheques, letters of credit and bill of exchange expressed or drawn in Indian currency and payable in foreign currency.
Any instrument giving anyone the option of making it payable either partly or fully in a foreign currency.

  • Market Participant
Foreign exchange market structured by various large commercial banks, Forex brokers, Large corporations, Central banks, Speculators, Hedgers and Traders,. These players are facilitate the settlement of payment with their own point of view.
Commercial Banks:

      These commercial banks act on behalf of their client whether it be the corporates or individuals and also deal with their own accounts. They function as market makers in the forex market. When commercial banks deal with each other it is called as whole sale market or inter bank market and whenever deal with it’s client it is called as retail market.

  • Forex Brokers:
      The foreign exchange brokers do not actually buy or sell any currency, but they bring the buyer and seller together. They mostly deal with major currencies on which they have specialized.

  • Central Banks:
     These Banks act like as a regulator over the market. These banks deal with the large fluctuation of currency which leads to large exchange rate risk.

  • Speculator, Hedger and Trader:
Normally commercial banks are acted as speculator. Along with other function their speculation on the market brings the market greater liquidity.

     Hedging is a technique that is applied by many investors. Normally investor go for sell an asset in future market at a stated price which he has already owned to avoid the any adverse price movement in future.

     Trader always owned an asset for a shorter period of time for a minimum amount of profit.
  • Market Timing
The world-wide forex market is a 24-hour market and virtually open all the 24-hours a day at least one one of the financial markets across the globe. Normally, this market begins from Monday 00:01 hours to Friday 00:59 in accordance with the respective time zone of country.
  • Exchange Rate Quotations
When the price of one currency is stated in terms of another currency it is called exchange rate quotation. There are various types of quotations given by banks which is explained below:
  • American vs. European Quote:
       In an American quote you see that number of units of dollars are expressed per unit of any other currency while in an European quote number of units of any other currency are expressed per dollar.
  • Inter bank Quote vs. Merchant Quote:
       While the quote is given by a bank for another bank it is called Inter bank quote. On the other hand quote given by bank to it’s customer is called Merchant quote. In the Inter bank sector the quote is accepted which bank acted as market maker that is, the bank who is requested by another bank for the quote.
  • Bid and Ask Rate
Generally bid & ask rate is the buying & selling rate of the bank that is given to it’s customer. It is obvious that the bid & ask rate is different. While bank gives quote someone the ask rate or selling rate is higher than the bid or buying rate always. This difference between the bid & ask rate is called spread and it is the cost to bank incurring in transactions. Some of the fact about bid & ask is given below:

The bid rate is always precedes the ask rate. For Example, In a quote of $ per Euro : 1.4656/1.4658, the bid rate is 1.4656 and ask rate is 1.4658. The bid & ask rate either separated by a slash(/) or a dash(-) sign. The quote is always given by banker’s own point of view. That is here on the above quote bank is ready to buy Euro with $1.4656 and sell on $1.4658.   

Saturday, 10 December 2016


Bitcoin function over peer-to-peer technology and operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by it’s own network called as blockchain. Every transaction must go by this public network and verified automatically. Hence, the nature of open-source and publicly designed; nobody owns or controls Bitcoin and everyone can take part in this network. Though many of its unique properties and public supported , Bitcoin allows exciting uses that could not be covered by any previous payment system nor any other currency will get this much of value as the Bitcoin stands today in the growth trajectory.

Bitcoin is a virtual currency or digital currency which was developed by an anonymous programmer or a group of developers under the name of Satoshi Nakamoto. It is said that or we may say it’s a rumour that Mr. Nakamoto is from Japan but still nobody knows the confirmed identity of this developer. First, Bitcoin was introduced on 31st Oct’ 2008 to a cryptography mailing list and gradually it is releas2ed as2 open-source software in 2009 and later this whole functionality known as crypto currency. The whole network is peer-to-peer and transactions take place between the users directly and there are no interference of any Govt. or designated body means there are no intermediary. Every transactions are verified by network nodes and recorded in a public distributed ledger called as the blockchain. Users may check it’s transaction of sending and receiving on blockchain ( Bitcoins are created as a reward for payment processing work in which users offer their computing power to verify and record payments into a public ledger. This working activity referred as mining and every miners rewarded with transaction fees and newly created bitcoins. Except mining Bitcoin can also be obtained many ways like exchanged for other currencies and offering product and services. With the growing popularity and uses of bitcoin the U.S. Treasury categorizes bitcoin as a virtual currency which has really no existence but some few bytes of memory.

Should I Use Bitcoin?

While talking about world-wide payments everybody wants to be more accurate and fast system  Bitcoin is the simplest way to exchange money at very low cost as well as fast network within of 10 to 15 minutes.

  • Seamless Mobile payments
You can take your funds in terms of Bitcoin by your mobile device. Bitcoin on mobiles allows you to pay with a simple two step scan-and-pay. There is no need to swipe your card, type a PIN, or sign anything. And all you need to do to receive Bitcoin payments is to display the QR code in your Bitcoin wallet app and let your friend or shopper scan your mobile, or touch the two phones together (using NFC radio technology).
  • High level Security and control
All Bitcoin transactions are secured by military grade cryptography. A network that is named as block-chain recorded all the ledger transaction that works publicly and nobody has the central authority on it. Nobody can charge you money or make a payment on your behalf. So long as you take the required steps to protect your wallet, Bitcoin can give you control over your money and a strong level of protection against many types of fraud.
  • Works World-wide, anytime
Bitcoin can be send and receive world-wide within a minutes. You need only an address which is a long string of character and symbols mixed with to receive and send. Just like with email, you don’t need to force your family or payee to use the same software or the same service providers. Just let them stick to their own favorites. No problem there; they are all compatible as they use the same open technology. The Bitcoin network never sleeps, even on holidays!
  • Fast international payments
Bitcoins can be transferred from Africa to Canada in 10 minutes. There is no bank to slow down the process, level outrageous fees, or freeze the transfer. You can pay your neighbors the same way as you can pay a member of your family in another country.
  • Zero or low fees
Bitcoin allows you to send and receive payments at very low cost. Except for special cases like very small payments, there is no enforced fee. It is however recommended to pay a higher voluntary fee for faster confirmation of your transaction and to remunerate the people who operate the Bitcoin network.
  • Identity protection
With Bitcoin, there is no credit card number that some malicious actor can collect in order to impersonate you. In fact, it is even possible to send a payment without revealing your identity, almost just like with real money. You should however take note that some effort can be required to protect your privacy.
  • How you Get Bitcoin & it’s users:
At this very moment, 10.70 millions of Bitcoins are in existence, which is like 207.929 million USD worth! In fact, the Canadian government is working on their own crypto-currency, named MintChip. In one day, more than 45,000 transactions of a total of BTC 2.5 million (worth of USD48.5 million) is handled by the bitcoin network.

   You can get bitcoin by means of various method like mining the bitcoin, through exchangers and providing goods or services in return of bitcoin as your payment method. But, a single method that is so, easy you get the bitcoin from the bitcoin faucet site like this faucet. Bitcoin faucet are those who are providing some bits for free to it’s users by only solving the Captcha.
  • What’s Mining?
Mining is a process of extracting Bitcoins currency this needs of some sophisticated computer hardware and software and one time investment of large money. Bitcoin mining is a business – most people mint Bitcoins to gain profit. Bitcoins are minted using a special software known as bitcoin miner, which tries to find a new block in the chain of Bitcoin network.
  • Storing the Bitcoin:
Storing the bitcoin is very easy and no need for any physical plase. You need to only open a digital wallet for storing the bitcoin. Whether you are using computer, smart phone or any other electronic device no matter your digital wallet can be synced in all devices.
  • Spending the Money:
Mostly uses of bitcoin is the great question in today’s  economy. But, you no need to be worry for this because almost all over the world it is transacted and you can spend it in any website which accepting the bitcoin. Can be purchased software and goods & services because most of the  trader now-a-days accepting bitcoin as their payment because gradually world is going towards complete digitization. Many digital wallets are also offering sell option for your bitcoin so you can exchange your bitcoin to your fiat currency.

BitMiner - free and simple next generation Bitcoin mining software

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