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India Rupee vs Bitcoin: 6 things you should compare

By March 16, 2021March 29th, 20224 minute read

The Indian crypto community has grown exponentially ever since the Supreme Court lifted the banking ban on digital currencies and the ongoing Bitcoin bull run. The gap between 1 BTC to INR continues to increase in value. 

In the process of educating ourselves about Bitcoin and other cryptocurrencies, we have all asked how the Indian rupee (a fiat currency) is different from Bitcoins. To understand this, one needs to understand what Bitcoin is and what it brings to the table.  

What is Bitcoin?

A Bitcoin is a digital currency that is not issued by any government organization or a private institution. It is backed by powerful technology known as the “blockchain,” which makes the process trustless and prevents a single party from taking control over the process. Relative to fiat, Bitcoins provide a more secure, privacy-oriented, and cheaper way of transaction. 

The markets decide the value of the Indian rupee, Bitcoin, or any other asset. The constant rise of Bitcoin price in India over the years shows strong adoption trends of Bitcoins and other cryptocurrencies

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INR vs. BTC – a comparison 

INR vs. BTC: Governance 

The biggest difference between the Indian rupee and Bitcoin is their governance. INR is issued by the Reserved Bank of India (RBI), India’s central bank and regulatory body. Like other fiat currencies, INR is centralized, and the supply could be changed according to the market demands.

On the other hand, Bitcoin is governed by the community, i.e., every decision regarding the blockchain and network will be taken by the miners. The voting process in the community follows the rule of 1 GPU: 1 vote. The supply of Bitcoin is predetermined by the algorithm, and so is the number of coins. 

INR vs. BTC: usability

Billions of Indians use the Indian rupee for multiple decades; like other fiat currencies, INR is mostly used in cash for day-to-day monetary needs. People can also transfer money from bank account to bank account via IMPS, NEFT, UPI, or by debit or credit cards. The cross-border transaction, where INR is converted to any other fiat, can be proved to be very costly and hence not a good option. 

Bitcoin, on the other hand, is a cheaper and dependable alternative for cross-border transactions. But the algorithm of Bitcoins restricts it for commercial purposes only; the transaction speed of Bitcoins is way lower than fiat. For instance, a MasterCard can carry out thousands of transactions per second, but Bitcoin can only carry out seven transactions per second, and if the network is busy, the price could shoot up. This leaves Bitcoin room to improve usability in day-to-day life. 

INR vs. BTC: How are new currencies made?

In the case of INR, as mentioned above, RBI mints new currencies. The supply is variable according to the economic conditions of India. 

Bitcoin’s transactions are supported by the community, the validators of Bitcoin transactions are known as miners, and they have to solve complex mathematical problems with the help of the computation power of their hardware. In return for their computation efforts, the algorithm rewards the miners with new Bitcoins, thus adding new Bitcoins to the supply. To further increase the demand, the supply of Bitcoin is fixed to 21 million. This process determines the Bitcoin price in INR, or any other currency for that matter.

INR vs. BTC: volatility

Since the whole country uses INR, it is important that it not be volatile. Due to this stable nature, you will find pairs like BTC to INR on Indian crypto exchanges. Traders can still trade INR on forex markets but less profitable than Bitcoin and other cryptocurrencies. 

Bitcoin is volatile in nature, so volatile that it sometimes makes moves worth lakhs of rupees in a matter of hours. But this volatile nature of Bitcoin helped it increase its value from less than INR 50 to more than INR 40 Lakhs.

INR vs. BTC: currency model

The value of INR depends on inflation, forex demand, economic conditions, and many other factors. Even though the RBI can’t directly influence INR’s forex value, it can alter the supply by minting more or less amount, potentially influencing the buying and selling power. 

Bitcoin comes into the category of the deflationary model of cryptocurrencies; this is because the mining reward is halved after every 210,000 blocks are mining. Also, the supply of Bitcoins has an upper market cap of 21 million. Due to these demand and supply rules, the price of BTC to INR is always on the rise. 

INR vs. BTC: investment

INR vs BTC investment
From: Tradingview

INR and other fiats are generally safer than cryptocurrencies and require skills for good returns. Forex markets are generally not volatile and are made for scalping. They are certainly not profitable as the BTC markets.

Even though cryptocurrencies are volatile, they can bring you significant returns if you play your cards right. The above chart shows the exponential growth of BTC over the years in the monthly time frame. 
Want to invest in Bitcoins from India? WazirX has got you covered with hundreds of cryptocurrencies from BTC to INR pairs. Sign up on WazirX right now.

Further Reading:

How to trade in cryptocurrency in INR?

What is a Cryptocurrency?

What is Bitcoin?

6 Things to Consider Before Investing in Bitcoin

4 Things to Consider Before Investing in Cryptocurrencies

Frequently Asked Questions

Is Bitcoin Cash A Good Investment?

Bitcoin Cash is a hard fork of Bitcoin formed in 2017 to address Bitcoin's scalability and challenges. Bitcoin Cash seeks to make global transactions faster, cheaper, and more secure. Bitcoin Cash is now accepted by thousands of online and offline businesses all over the world. Studied correctly, Bitcoin Cash may be an investment worthy of consideration.

What Is Meant By Bitcoin?

Bitcoin is a digital currency that was initially released in January 2009. It is based on ideas offered by Satoshi Nakamoto, a mysterious and pseudonymous figure, in a whitepaper. The name of the person or individuals who invented technology has not been revealed. Bitcoin promises lower transaction fees than other online payment systems, and unlike government-issued currencies, it is decentralized.

How Many Bitcoins Are There?

There are 18,730,931.25 Bitcoins in circulation as of June 2021. The total number of Bitcoins that would ever be there is just 21 million. On average, 144 blocks are mined every day, with 6.25 Bitcoins per block. The average number of new Bitcoins mined every day is 900, calculated by multiplying 144 by 6.25.

How Does Bitcoin Technology Work?

The blockchain is the foundation of Bitcoin. It is a decentralized, distributed ledger that tracks the provenance of digital assets. The data on a blockchain can't be changed by design, making it a real disruptor in industries like payments, cybersecurity, and healthcare.

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.

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 Bitcoin Mining Works?

Bitcoin mining is a crucial element of the blockchain ledger's upkeep and development and the act of bringing new Bitcoins into circulation. It's done with the help of cutting-edge computers that solve exceedingly challenging computational arithmetic problems. Auditor miners are rewarded for their work. They're in charge of ensuring that Bitcoin transactions go through smoothly and legitimately. This standard was established by Satoshi Nakamoto, the founder of Bitcoin, to keep Bitcoin users ethical. By confirming transactions, miners assist in avoiding the "double-spending issue."

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.

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.

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.
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