What is Bitcoin?
Bitcoin is one of the first cryptocurrencies that were formed as a peer-to-peer payment system. Bitcoin is more secure than Fiat currencies and is encrypted using complicated codes that are very difficult to hack. These cryptocurrencies are alternative to the traditional Fiat currencies. Bitcoin was founded in the year 2009 and since then many currencies similar to bitcoin were founded. In India, these currencies are slowly becoming more popular and the government is also moving towards a digital economy.
Is it Legal to perform Bitcoin transactions in India?
As of now, the bitcoin transactions are not regulated nor are they monitored by any central authority. There are also no rules and regulations regarding these transactions and no way to resolve in case any disputes should arise. Therefore, there is a lot of risks involved in performing bitcoin transactions. Although not illegal, there is no guarantee on these transactions.
Indian cryptocurrency exchanges are beginning their support after the ban on the cryptocurrency was lifted by the Supreme Court of India. After a period of more than two years, this victory has come as a welcome sign for all crypto traders in India. Many agencies have brought back the support to use INR and integrate their bank accounts.
Cryptocurrencies use blockchain technology which addresses most of the issues that the global economy is facing now. The main advantage of these digital currencies is that their settlements are real-time and there is no need for a central authority for authorizing the payments. However, RBI has not made them legally acceptable currency. Though people can still trade on them, it is only possible to trade via cryptocurrency agencies and the money acts as an escrow until the transaction is complete.
Where do these Bitcoins come from?
If you are looking to Buy BTC in India, there are many ways using which you could get one.
- Mining: Miners are people who use computers for cracking the difficult puzzles to earn bitcoins. This process helps in keeping the blockchain technology safe and for this reason, miners get paid in bitcoins.
- Buying from an exchange: There are also many bitcoin exchanges in India where you can convert INR to BTC. There are many exchanges such as Coinswitch that accept payments in the form of INR and provide you with equivalent bitcoins. You could use these bitcoins for making payments and trading etc.
- Exchange of goods: You could also earn bitcoins in exchange for goods. This is very rare in India.
Like any trading transaction, bitcoin transactions involve some risks too. It is a good idea to understand the risk factors involved before investing in bitcoin. There are so many trading agencies in India that allow you to convert INR to bitcoins and vice versa. RBI is still working on regulating and coming up with some rules with regards to trading with Bitcoins.
In case there is any ambiguity, there is no central authority at the moment to resolve these disputes. A good idea is to not invest your entire savings in bitcoins but keep a part of your investments in the cryptocurrencies and rest in other investments to diversify the risk.
Video – Cryptocurrencies
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