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Digitalization has made it possible for the global population to deal with currencies that are not regulated by the government. Cryptocurrency carries its share of problems, which are lack of public trust, and susceptibility to fraud. Despite that, it has attained the green signal in countries around the world, each with a different regulatory framework governing its action. Things have not been a smooth run in India where the Central Bank issued a notification for impeding banks from undertaking Bitcoin transactions.
The Bitcoin Journey In India
The first Bitcoin exchange was launched in India in 2012 but it underwent a major surge in 2017. By October 2017, the price of 1 BTC became INR 295000. This was accompanied by a drastic rise in the user base of major Indian bitcoin exchanges like Unocoin and Zebpay. But the Reserve Bank Of India played it safe by sending cautionary messages against the use of this virtual cryptocurrency since 2013. The main concern surrounded the lack of any authority to look after its licensing and registration.
Another problem pertaining to Bitcoin is its extreme volatility. This led to the RBI terming the crypto market as a “Ponzi Scheme and an environmental disaster” in August 2018. The Bitcoin live price in India is approximately 975000 INR. RBI prohibited investors from exchanging it for INR from banks and other financial institutions. It has also placed a ban on financial institutions from offering their services to crypto businesses.
Amidst these issues, the Indian Supreme Court lifted the banking ban imposed on crypto exchanges. The BTC market in India has been experiencing a massive rise in peer-to-peer activity ever since then, it has even managed to exceed China. The blanket ban was deemed to be unconstitutional by the Indian Supreme Court as prohibiting tech was not a solution. Rather a risk-based framework needs to be put into place for monitoring the cryptos. Following the order by the Supreme Court, different crypto agencies around India made solid efforts of re-integrating INR support via bank accounts.
Opportunities Ahead For Bitcoins:
- Bitcoin can be used in the legal services field for systematizing specific obligations like contractual payment duties. Automating these payments for self-execution after certain contractual obligations have been fulfilled can simplify the whole process. This can reduce the time spent on compliance directives and monitoring of resources.
- The real estate sector is handicapped by red-tapism which makes even the simplest of processes highly time-consuming. But the decentralized nature of blockchain can do away with the requirement of middlemen and other verification requirements for regulatory compliance.
- The providers of wholesale insurance stand highly benefited by the applications of blockchain in the insurance sector. Different procedures of processing of claims and KYC regulatory compliance can be streamlined. Deloitte has projected smart contracts that can pave the path for a smooth workflow and seamless error checking. The reach of micro-insurance can also be enhanced in this way by facilitating micro-payments on the basis of data availability.
- Bitcoins can provide the perfect solution to rights management and revenue sharing of intellectual property. This is the reason behind its massive popularity amongst gaming companies trading in gaming content.
- Users can opt for bitcoins in making small payments and disbursing other health-related payments automatically. This helps to streamline the healthcare process of patients during times of crisis.
Bitcoin completely eliminates the role of third parties which might otherwise make the transactions a highly risky affair. The low transaction fee of bitcoins further adds to its lucrativeness as the fee you pay is directly proportional to the amount of money transferred online. Usage of bitcoin requires zero paper verification and also allows payment through mobile wallets.
Challenges Of Bitcoins
- Bitcoin is immensely affected by high price volatility. One day it might be worth thousands and the other day it might hit a record low level. This volatility makes it difficult for investors to park their funds while aiming to buy Bitcoin in India.
- Speculating in Bitcoin is also very cumbersome as it is not affected by normal factors which influence other banks.
- Bitcoin mining consumes a lot of energy and miners mostly rely on non-renewable sources. This adversely affects the environment in the long run.
- The crypto world keeps on evolving continuously and Bitcoin might lose its position if a new contender comes in to take its spot in the upcoming years. Bitcoin’s value in the trading market can get adversely affected following the development of other superior currencies.
- Cryptocurrency market has been linked time and again with black market transactions and this has severely damaged the image of bitcoin trading. Scammers often take advantage of the lack of any governing body and this can lead to massive losses for the investors.
Recent Developments In Crypto Sphere
An inter-disciplinary committee was formed by the SBI, RBI, and NITI Aayog in collaboration with the Secretary of Department of Economic Affairs. The Indian government has thoroughly encouraged the utilization of various technological benefits while cautioning against the potential grey areas.
Final Words
Antipathy towards central regulation and authority has led to the birth of Bitcoin. It gained initial popularity, given the anonymous nature of the transaction but this also drew the attention of governing authorities and financial regulators. RBI has made it evident from the very beginning that the lack of trust and fear of the unknown is its biggest concern. The Central Bank has not explored the probability of fraud in any of its documents although chances of fraud cannot be eliminated even with traditional money. However, regulation can minimize the risk and the same needs to be implemented in India for the effective development of this virtual currency. One of the biggest questions concerning the Indian population is the outcome of imparting legal status to Bitcoins. Whatever be the result, Indian citizens have been advised by the RBI to keep vigil while entering into crypto transactions using Bitcoins.
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Frequently Asked Questions
How Does Bitcoin Work?
The blockchain, a distributed digital ledger, is what Bitcoin is based on. As the name suggests, blockchain is a linked database made up of blocks that store information about each transaction, such as the date and time, total amount, buyer and seller, and a unique identifier for each exchange. Entries are linked in chronological order to form a digital blockchain. Entries are linked in chronological order to form a digital blockchain. Blockchain is decentralized, which means any central authority does not control it.
What Is Bitcoin Used For?
Bitcoin was created as a means of sending money over the internet. The digital currency was designed to be a non-centralized alternative payment system that could be used in the same way as traditional currencies. Bitcoin is being used by an increasing number of businesses and individuals. This includes establishments such as restaurants, apartments, and law firms.
How To Invest In Bitcoin?
Bitcoin may be invested in two ways: through mining or exchanges. Bitcoin mining is carried out by high-powered computers that solve challenging computational arithmetic problems that are too difficult to complete by hand and complex enough to tax even the most powerful computers. WazirX, a Bitcoin exchange, is another alternative.
How Can I Get Bitcoin?
To begin, go to the WazirX website and register. After that, you will receive a verification email. The link received by verification mail will only be available for a few seconds, so make sure you click it as quickly as possible. This will successfully verify your email address. The following step is to set up security, so choose the best solution for you. After you've set up the security, you'll be given the option of continuing with or without completing the KYC process. Following that, you'll be sent to the Funds & Transfers section, where you can begin depositing Bitcoins into your wallet. You may also use INR to fund your WazirX Bitcoin wallet and then use it to purchase Bitcoin.
Is Bitcoin Safe And Legal In India?
In 2020, the Supreme Court of India lifted the RBI’s restrictions on cryptocurrencies. According to the Supreme Court, the existence of Bitcoin or another cryptocurrency is unregulated but not unlawful. The verdict has greatly aided the world of digital money in the country. To put it another way, investing in Bitcoin is perfectly legal, and you may do so through various apps and traders.
Can Bitcoin Be Converted To Real Money?
Crypto exchanges, Bitcoin ATMs, Bitcoin Debit Cards, and Peer Peer Transactions are all options for converting Bitcoin to cash. This can be accomplished by using Bitcoin exchanges such as WazirX. A Bitcoin ATM is a real place where you may purchase and sell Bitcoins with cash, unlike standard ATMs that allow you to withdraw money from your bank account. Many websites provide the option of purchasing Bitcoin in return for a prepaid debit card that works similarly to a standard debit card. Through a peer-to-peer marketplace, you may sell Bitcoin for cash faster and more privately.
How Many Bitcoins Will Ever Be Created?
The source code of Bitcoin stipulates that it must have a restricted and finite quantity. As a result, only 21 million Bitcoins will ever be generated. These Bitcoins are added to the Bitcoin supply at a predetermined rate of one block every ten minutes on average. The supply of Bitcoins will be depleted once miners have unlocked this number of Bitcoins. It's possible, however, that the protocol for Bitcoin will be altered to allow for a higher supply.
Is Bitcoin Mining Free?
Bitcoin mining isn't free, but it can be tried on a budget. Bitcoin mining is an essential part of the blockchain ledger's upkeep and development and the act of issuing new Bitcoins. It is accomplished by the use of cutting-edge computers that tackle complicated computational arithmetic problems. The effort of auditor miners is rewarded. They're in charge of ensuring that Bitcoin transactions go off without a fuss and that they're legal.
Who Created Bitcoin?
Bitcoin is the first application of the concept of "cryptocurrency," first articulated in 1998 on the cypherpunks mailing list by Wei Dai, who proposed a new form of money that relies on cryptography rather than a central authority to manage its creation and transactions. Satoshi Nakamoto published the initial Bitcoin specification and proof of concept on the cryptography mailing list in 2009. Satoshi exited the project in late 2010, with little information about himself available. Since then, the community has evolved, with numerous people working on Bitcoin. Satoshi's anonymity has sparked unfounded fears, many of which may be traced back to a misunderstanding of Bitcoin's open-source nature.
What Is Bitcoin?
Bitcoin is a decentralized digital currency that may be purchased, traded, and traded without intermediary like a bank. Bitcoin is built on the blockchain, which is a distributed digital ledger. Wei Dai suggested a new kind of money that relies on cryptography rather than a central authority to oversee its production and transactions on the cypherpunks mailing list in 1998. Bitcoin was the first application of that notion. In 2009, Satoshi Nakamoto sent out the first Bitcoin specification and proof of concept to a cryptography mailing group.
Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.
