What is a cryptocurrency?
Ever received a paper token from your next-door paan shop in lieu of a small change, which he would accept the next time you visit him? Imagine that token digitally, and that’s your cryptocurrency. The big difference is, here there is no owner-issuer and it would, at least in theory, be accepted globally. Cryptocurrency is a digital or virtual coin secured by cryptography, which makes it next to impossible to counterfeit. They have their own store values, and are designed to use as a medium of exchange for buying goods or services. Cryptocurrencies are decentralised, meaning that no authority regulates them They are built on the blockchain network technology, which ensures transparency and helps track every transaction. Such currencies, theoretically, are immune to government interference or any kind of manipulation.
Because cryptocurrencies do not have an underlying economic base, they are inflation-proof. Plus, the digital structure facilitates free portability across geographical borders, divisibility and transparency. However, they are often criticised for the possibility of misuse in illegal activities, exchange rate volatility and the vulnerability of the infrastructure underlying them.
How can an Indian investor invest in bitcoins?
Can an Indian citizen purchase and sell bitcoins? A lot of people have been asking their brokers and financial advisors that same question. The correct response is that there are no restrictions on your ability to buy and sell bitcoins in India. Of course, there are associated hazards, but most investments carry some level of risk. Select Bitcoin exchanges, which are legitimate businesses with initial capital from well-known individuals, allow for Bitcoin investment in India. Additionally, you should be aware of how to invest in Bitcoin mining in India because this activity may be quite profitable.
The strange price history of bitcoin.
A Bitcoin was worth around 10 cents, or about 1/10th of a US dollar, around the end of 2010. The value of Bitcoin as an alternative currency didn’t start to rise until the Greek crisis and the ensuing worry about the devaluation of world currencies. Bitcoin actually gained traction after gold prices topped out at roughly $1930/oz in late 2011, and by 2014 it had reached the $1000 mark. In the four years between 2010 and 2014, that amounted to an almost 10-fold increase. But after a significant amount of speculative unwinding and regulatory worries, Bitcoins corrected back to the $200 mark by 2016.The second significant Bitcoin price increase started in 2017, during which time the currency rose from a low of $700 to an intraday high of $20,000. It is another thing that the price of Bitcoin did drop by almost 50% after that, but the tale has been one of extreme volatility and unheard-of returns over a longer period of time.
 |
| India & bitcoins :Starline – Freepik.com |
India & bitcoins (Are they legal).
To make a long story short, Bitcoins are completely legal in India because they have not been deemed illegal. The Ministry of Finance and the RBI have, of course, issued warnings about the hazards associated with Bitcoins, but that is more logical given that the majority of people are not familiar with all of their intricacies and may potentially fall victim to a speculative bubble. Indians can enter the Bitcoin market and trade there without any restrictions, though. An asset like Bitcoin has the ironic property of increasing in value as its price rises, attracting more dealers and users to the Bitcoin network. In that regard, it functions similarly to a telecom network, which naturally increases in value as more users join it.
The steps involved in trading bitcoins in India.
You must first comprehend how bitcoins are made. There are currently 21 million Bitcoins in existence. The asset class value of Bitcoin might be over $231 billion given the current market price of about $11,000 per Bitcoin. If you take into account that the asset class was introduced less than ten years ago and that less than a month ago, the value was double that, it is a significant amount. The 21 million limit is barely a restriction because bitcoins may be created and traded in extremely small quantities. Let’s return to the issue of where and how to get Bitcoins in India. Here are 5 things you should know.
Here is a basic investment strategy for bitcoin in India.
- You can buy Bitcoins on digital exchanges. There are popular exchanges like Coinbase and Coindesk where you can actually buy Bitcoins at the prevailing market price. On Coinbase you can buy Bitcoins using your international credit cards.
- Indians can also buy Bitcoins from a website called ZebPay in India which facilitates trading in Bitcoins. You can do a transfer from your bank account into ZebPay and similarly you can also withdraw from your ZebPay back into your bank account.
- ZebPay also offers a downloadable app that is compatible with IOS and Android platforms. You can link your bank account to your specific smart phone and use the IOS or Android platform to link your bank account for quick transfers and transactions.
- You are required to undergo a basic KYC before you start trading in Bitcoins. Your PAN card has to be uploaded and your bank account used to withdraw and transfer funds from ZebPay must also have the same PAN mapped to it.
- Trading Bitcoins is one side of the story. If you are looking to store Bitcoins then it is essential to have a Wallet. This wallet can be stored in your computer or even in your smart phone. You can also back up your wallet at an external site.