What is Bitcoin?
Bitcoin is a cryptocurrency, or a digital currency, that uses rules of cryptography for regulation and generation of units of currency. Bitcoin falls under the scope of cryptocurrency and was the first and most valuable among them. It is commonly called a decentralized digital currency.
Bitcoin is a digital asset and a payment system. It is commonly called a decentralized digital currency.
It was invented by Satoshi Nakamoto in 2009.
It is an open source software. This means, that no person, company or country owns this network just like no one owns the Internet.
The system is peer-to-peer, that is, users can transact directly without an intermediary like a bank, a credit card company or a clearing house.
How Bitcoin works?
Hitesh Malviya, Bitcoin Expert, itsblockchain.com explains, Bitcoins are completely virtual coins designed to be ‘self-contained’ for their value, with no need for banks to move and store the money.
Once you own bitcoins, they possess value and trade just as if they were nuggets of gold in your pocket. You can use your bitcoins to purchase goods and services online, or you can tuck them away and hope that their value increases over the year.
Why Invest in Bitcoin?
It seems silly to some people that one bitcoin can be worth hundreds of dollars.
What makes bitcoins valuable?
Bitcoins are scarce and useful.
Let’s look to gold as an example currency. There is a limited amount of gold on earth.
As new gold is mined, there is always less and less gold left and it becomes harder and more expensive to find and mine.
The same is true with Bitcoin.
There are only 21 million Bitcoin, and as time goes on, they become harder and harder to mine. Take a look at Bitcoin’s inflation rate and supply rate:
When is the right time to buy?
As with any market, nothing is for sure.
Throughout its history, Bitcoin has generally increased in value at a very fast pace, followed by a slow, steady downfall until it stabilizes.
Use tools like Bitcoin Wisdom or Cryptowatch to analyze charts and understand Bitcoin’s price history.
Bitcoin is global and not affected by any single country’s financial situation or stability.
For example, speculation about the Chinese Yuan devaluating has, in the past, caused more demand from China, which also pulled up the exchange rate on U.S. and Europe based exchanges.
Global chaos is generally seen as beneficial to Bitcoin’s price since Bitcoin is apolitical and sits outside the control or influence of any particulate government.
When thinking about how economics and politics will affect Bitcoin’s price, it’s important to think on a global scale and not just about what’s happening in a single country.
A few pointers for buying and holding Bitcoins
Never invest more than you are willing/able to lose – Bitcoin is a very risky investment and you should keep in that in mind at all times.
After buying Bitcoins make sure to move them into your own personal wallet and never leave them at the exchange. My personal recommendation is to use a hardware wallet to store your Bitcoins. If you can’t afford a hardware wallet, try a paper wallet.
Make sure to buy Bitcoins only from exchanges that have proven their reputation.
Bitcoins Legal Or Illegal in India?
Indian regulators, starting from the Reserve Bank (RBI) to finance ministry, have been extremely cautious in apprising the investors of the perils of investing money in bitcoins, among other digital currencies.
1) On December 24, 2013, the Reserve Bank of India (RBI) cautioned the users, holders and traders of virtual currencies, including bitcoins, about the potential risks that they are exposed to.
“The creation, trading or usage of (virtual currencies) VCs including Bitcoins, as a medium for payment are not authorised by any central bank or monetary authority. No regulatory approvals, registration or authorisation is stated to have been obtained by the entities concerned for carrying on such activities,” the RBI had said in a press release issued in the 2013-end.
2) The RBI had stated five major risks of trading in bitcoins. The first is the fact that digital currencies, being in electronic format, are prone to losses arising out of hacking, loss of password etc. The second risk is the lack of any authorized central agency to regulate the payments or to turn to for redressal of grievances. The third is that there is no underlying of asset for VCs, making the value a matter of speculation. Fourth is that the exchanges are located in various parts of the world, making the law enforcement a tricky thing for the multiple jurisdictions available. Fifth is that trading may subject the user to illicit and illegal activities since the VCs, can easily be used for illegal activities anonymously.
3) On February 1, 2017, the central bank again reminded the users of risk involved in bitcoin trading. “The Reserve Bank of India advises that it has not given any licence / authorisation to any entity / company to operate such schemes or deal with Bitcoin or any virtual currency. As such, any user, holder, investor, trader, etc. dealing with Virtual Currencies will be doing so at their own risk,” said RBI in the released early this year.
4) On December 5, 2017, the RBI reiterated its warnings in wake of significant spurt in valuation of bictoins. “Attention of members of public is drawn cautioning users, holders and traders of Virtual Currencies (VCs) including Bitcoins regarding the potential economic, financial, operational, legal, customer protection and security related risks associated in dealing with such VCs,” said the RBI.
5) On March 15 this year, the finance ministry had constituted an inter-disciplinary committee chaired by Special Secretary in Department of Economic Affairs to take stock of the present status of VCs both in India and globally and suggest measures for dealing with such currencies. The committee comprises nine members including representatives of RBI, SBI, NITI Aayog and Department of Financial Services.
6) In May this year, the government sought public views on future of bitcoins. Government’s official platform MyGov had asked, “Whether Virtual Currencies (VCs) should be banned, regulated or observed?” The comments could be posted before May 31. Nearly 4,000 submissions were made to the government’s queries.
7) On June 27 this year, Arun Jaitley held a meeting to examine risks related to virtual currencies (VCs) such as bitcoins. Although several issues concerning bitcoins were discussed, no concrete decision was taken. The meeting was attended by IT minister Ravi Shankar Prasad, NITI Aayog (then) vice chairman Arvind Panagariya, and other senior officials.
8) In the first week of August this year, the inter disciplinary committee submitted its report to the finance minister Arun Jaitley.
9) On the future of cryptocurrencies, finance minister Arun Jaitley on November 30 said that recommendations are being worked at. “The government’s position is clear, we don’t recognise this as legal currency as of now,” Jaitley said when asked whether the government has taken any decision on crypto currency.
10) Income Tax (I-T) department mulls taxing the gains made by bitcoin traders and investors as it conducted surveys, on December 13, of exchanges in Delhi, Mumbai, Pune, Bengaluru and Hyderabad.
Popular Bitcoin exchanges in India
Zebpay is well known and highly trusted bitcoin exchange in India. It has offices in Ahmedabad, India. They provide only app to trade bitcoin. The app is very friendly to use
Get bitcoins worth Rs.100 free on your first bitcoin buy or sell with referral code ‘REF83462006‘.
Download the app: Zebpay
Unocoin is one of the first bitcoin startup of India. It is also the most costliest bitcoin exchange in India. It has offices in Bengaluru, India.
Earn Rs 10 to your Paytm wallet. Just sign up with referral code ‘U529627′ by downloading the app from link below
Download the app: Unocoin
Koinex is India’s most advanced digital assets exchange. It’s the first complete exchange supporting multiple cryptocurrencies/ tokens on a single platform.
Check website: koinex.in
If you want to invest in any cryptocurrency, I will suggest you that before investing for long time please research on that cryptocurrency. But if you are interested to make some profit, invest for short term or trade intraday, but again with all your research.
Again, as everyone say, investment in cryptocurrency is very risky, mind it.
Disclaimer: Trading in bitcoins and cruptocurrencies is subjected to market, technical and legal risks. No one guarantee any returns. Users uses any exchanges at their own risk.
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