Hello & Welcome Friends Today we discuss on Bitcoin in India, let’s talk about Bitcoin, what is Bitcoin? Why it’s made? What is it made for?
What are it’s advantages and the disadvantages. Is it legal in India? How to invest in Bitcoin? should you do it or no?
I would like to discuss you about all these things in this article.
If I have to sum up Bitcoin in very less words, then its a “Digital asset” or “Decentralised Digital Currency”
By digital asset I mean, Asset is something which has a value.
Like your house, your car, your gold.
If you are going to sell these things in the market, you will get money in return of it as people know that these things possess value.
Bitcoin is of such kind, it’s an asset which you can sell in exchange of money.
This is a digital asset because unlike your gold, car and house, it’s not available physically with you.
You can’t touch or see it. It’s stored in the hard disk as it’s digital.
It’s a currency as you can use it as a payment system. If you want to pay anyone across the globe you can do so through bitcoin.
Decentralised, because it’s not under any authority’s grip.
Just like our other currencies rupees, dollars has the central authority on it. Rupee has the authority of Reserve Bank of India.
Reserve Bank of India decides what is going to be the value of a rupee and how many notes can be printed.
This is not the case with Bitcoins. The value of a Bitcoin is decided based on the number of people using it.
No person or an organisation can control Bitcoin or can do so in the future.
Hence, no one can suddenly declare the demonitisation of Bitcoins overnight.
Who Invented Bitcoin?
Bitcoin is invented by a person named Satoshi Nakamoto.
Who is he? Where has he come from? What does he do? is not known by anyone. He is an anonymous person.
People doesn’t even know whether it’s just a person behind it or it’s a group of people who have invented Bitcoin.
Why was Bitcoin made?
The biggest reason why this was made, is the financial crises of 2008.
When due to some mistake of banks, the banks crashed hence lakhs and millions of people over the world suffered loss.
The banks were led to insolvency due to their own wrong decisions and the loss had to be borne by every individual and every tax payer.
After that people realised till when they will be relying on banks?
The founders of Bitcoins have said that the motive behind starting bitcoin is to create a decentralised system away from the banks and the government.
which won’t be under their control
because if there’s a failure on the part of the bank or the government the entire economy fails.
But if there’s a decentralised system like bitcoin, then due to an individual or an organisational error the entire financial system won’t crash.
Is Bitcoin in India legal or illegal?
There have been rumors spread regarding the legal status of Bitcoin in the country especially after the budget 2018.
But the truth is my friends, that during the budget 2018, our finance minister, Mr. Arun Jaitley has said that…
Bitcoin won’t be a legal tender. That means you can’t be using it to pay at any shop or any restaurant.
That’s obvious, just like the gold coins and the properties being not any legal tender in our country.
but all these things are legal and bitcoin is just one of them.
Trading bitcoin is 100% legal in our country, it’s legal to even exchange it.
It’s just that it can’t be used as the payment system.
How to buy Bitcoin in India?
If you want to buy bitcoins friends, or wish to trade them or invest in them, then the easiest way to do so is to use a cyrptocurrency exchange system.
Exchange services are such websites, apps or platforms where you can convert rupees into bitcoins or bitcoins in rupees.
These two are the largest and hence the most secured and trusted too.
If you want to buy bitcoin so I would recommend you to use Zebpay if you are residing in India or Coinbase if you in the other part of the world.
The good part of Zebpay and Coinbase is that not only bitcoin but you can exchange your money in the other cyrpto currency as well.
and the difference between other crypto currency and bitcoin will take a lot of time, so I’ll make another article to help you understand that.
What Taxes are there on Bitcoin?
And if you are trading on bitcoin then taxes are levied just like on the other assets in our country.
Short term capital gains and long term capital gains- The same taxes just like your other assets.
But one point I would to bring here is that the Government of India has not yet cleared the stand for bitcoin in India. They are going to introduce all the rules and regulations towards the end of the year.
based on the legal framework they would want to make for it.
Whereas most of the countries are accepting bitcoin worldwide.
In USA they are regulated just like another stock.
In Japan bitcoin is a legal tender and can be used to pay anywhere
In Germany you can even buy a house with it and in Switzerland you can even pay the taxes!
But there are some countries who have not accepted Bitcoin, like in China, these exchanges are banned but the mining are still happening In China.
In Russia there’s a flip flop policy, they have said yes sometimes and sometimes a no.
I’m sure India’s policy that’s going to come towards the end of the year will accept Bitcoin just like the other countries.
Advantage of Bitcoin in India
The biggest advantage of bitcoin in India over the physical currency is that is not under the control of any central bank.
So, if you are sending bitcoin to bitcoin money to anyone then there’s no middle man here, hence the transaction phase is very less.
and naturally if there’s no central bank so fluctuating the value of bitcoin is not in the hands of any Government or Bank.
The biggest advantage of Bitcoin is on International Payments. There are charges, currency conversion charges, remittance fee which you have to pay the bank to transfer your money
These charges you don’t need to pay here.
The other big advantage behind using Bitcoin is the Block Chain technology which is a financial sheet where every bitcoin transaction is recorded and secured cryptographically.
and whether bitcoin is going to get successful in the future or not, Block chain is going to be successful and it’s still is.
Many government and banks have already started using block chain.
I won’t be going indepth of this, you can research and read about it yourself.
The reason for the disadvantage of bitcoin is Decentralisation too.
As there is not central authority to control it, it’s price keeps fluctuating.
It’s price fluctuates based on the number of people investing and taking out from it.
The fluctuation is soo high that if you bought bitcoin worth 1 lac today, it can be of 2 lacs tomorrow or can be even worth just 50,000.
You can look at this chart to see how bitcoin has been fluctuating over the time.
In December bitcoin reached it’s peak and then the value has decreased substantially.
In future, whether the prices will rise or get low is very difficult to predict.
The biggest disadvantage which still prevails is that the transaction cost and time is still high and payment is also not very easy.
But these thing are slowly getting better, transaction time is improving as and when there’s an update in Bitcoin.
Few people are arguing that Bitcoin is giving way to illegal activities and criminals are using bitcoins for their transactions so that their identity is hidden.
But I don’t agree with this as all the transactions of bitcoin is recorded on the block chain however it is anonymously recorded.
which is not possible with the other currencies like rupees, dollars, gold’s transactions.
Earlier corrupted people used to transact using rupees and dollars and now using Bitcoins, so there isn’t any significant effect.
so as argued by many in India that this has increased the criminal activities is not true otherwise other developed countries of the world would have not made it legal.
Should you Invest in Bitcoin in India?
Now you will ask me, should we invest in bitcoin or not and how much?
So, my first suggestion would be to invest only the amount which you won’t mind even if turns to zero.
There should be a belief to invest in bitcoin that it can make an alternative financial system and an alternative worldwide currency
So we are encouraging a system alongside of rupees, dollars and other such currencies which can help us to transact worldwide without any middle man.
This should be the most important reason to invest in Bitcoin.
Some people also invest here as in the other assets like gold and properties hoping to get their money doubled however there’s no guarantee for the same.
So don’t believe in this reason much.
Some people also think that Bitcoin will be the future of the currencies and it can either replace the existing currency or exist alongside with them.
My believe is that whether Bitcoin stays or not in the future but out of these one cryptocurrency will definitely be there, Block Chain is going to stay.
and rest other currencies, government, banks have started using Block chain and since the face of block chain is Bitcoin hence it’s predicted that it’s going to be very successful in future.
here are many material available about it on this side. Read and understand about the subject and have it’s deeper understanding.
because it’s going to be very important in the coming future.
The need for research is also there as it’s a new strategy and there are a lot of scams related to it.
So, if you enjoy this article then don’t forget to share with friends,
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