1.Introduction to Cryptocurrency:
Cryptocurrencies are a subset of alternative currencies, or specifically of digital currencies which uses encryption techniques to regulate the generation of units of currency and verify the transfer of funds, operating independently of a bank. It is a digital asset that works as a medium of exchange by using cryptography to secure the transaction.
Bitcoin is the first decentralized Cryptocurrency. Bitcoin lets you exchange money in a different way than with usual banks. Unlike the usual form of currency, it is in virtual form and can be used to make payments online as well as in physical stores. Bitcoin should be treated with the same care as your regular wallet, or even more in some cases!
2. Indian Prime Minister Narenda Modi has accepted policies that allow Bitcoin to flourish in struggling economics:
Unlike many of the currencies, the value of Bitcoin continues to grow. Once a mysterious Cryptocurrency, Bitcoin has now beenÂ widely acknowledged and accepted as a valid form of payment. Cash-strapped governments are taking notice of this digital currency, in one such move when the government decided to demonetize the two highest denomination of the country(India). A data compiled by Coin Dance, trading volumes at peer-to-peer Bitcoin exchange – Localbitcoins has spiked aggressively in India after the announcement of demonetization. Leading Indian Bitcoin exchanges Zebpay, Unocoin and Coinsecure are witnessing a surge of new users coming onto their platform to exchange rupees for Bitcoins.
3. Scope – What is the future of Bitcoins?
Nobody has gone ahead to predict the future of Bitcoins, now having said that it is also almost certain that future is definitely bright. Bitcoin is based on block chain technology, it is transparent database designed to keep track of Bitcoins moving across accounts. Indiaâ€™s aggressive move toward becoming a cashless society, however, is not only benefiting e-money companies.Â It has also created a boom for Bitcoin in the worldâ€™s seventh largest economy.
In India usage of Bitcoins has seen a surge rise after prime ministerâ€™s demonetization stint. According to official statement from Zebpayâ€™s trade volumes have increased by 25 percent from October to November; they have had 50,000 new users sign up to their exchange in the month of November alone, well above the usual 20,000 new-user increases they have experienced in previous months, Coinsecure experienced a 300 percent increase in user sign-ups in November, while Unocoin had their user base increase threefold in the wake of Indiaâ€™s currency reform. The new currency reform and the subsequent push toward digital payments will give Bitcoin a boost as a means of making online payments. More merchant adoption will also lead to more individuals adopting the digital currency and governmentâ€™s initiative to promote cashless transaction, which in turn, will help Bitcoin flourish in Indiaâ€™s future cashless society.
4. Risk – Volatility of Bitcoins:
Unlike traditional currency, determining the value of Cryptocurrencies is a bit tricky. It is relatively new and lack sufficient knowledge before making the actual transaction adds to the volatility of the Cryptocurrency. Bitcoins can be highly unpredictable as the price can see a sudden increase or a sudden decrease over a very short period of time due its young market and novel nature. Basically, here you must make a note that Bitcoins should be seen as a high-risk asset.
While using Bitcoins, to carry out a safe transaction you need to remember few points. Never keep your savings with Bitcoins, specially the money you cannot afford to lose. If you receive payments in Bitcoins, service provider are available who would convert it into local currency for you. And a transaction once issued with Bitcoin cannot be reversed. Dodging instability will definitely make itÂ risk and hassle free.
5. How Bitcoin became the new dollar for Venezuela:
In november last year the Venezuelaâ€™s currency Bolivar lost 45% of its purchasing power in just one month. Exchanging bolivars to US Dollars became very expensive. Many people in Venezuela didnâ€™t even have a bank account. Where Bitcoin came to the rescue of the countryâ€™s economy. We can learn from the situation in Venezuela why the world needs a Cryptocurrency like Bitcoin. We need a currency that corrupt governments can’t control. These people in Venezuela prove how Bitcoin will protect their wealth during a financial or political crisis. Another major positive to Bitcoin for a country in disarray is that its government canâ€™t control the value of it. Venezuela became a case study for the whole world for how Bitcoins can come to the rescue of crashing economies.
6. Legality of Bitcoins in India:
Many countries have legalized using Bitcoins as currency, while many outright banned it. Though in IndiaÂ RBI or any other banking institution have not declared that Bitcoin is a â€œCurrencyâ€ â€œBitcoinâ€ is an electronic document recognized under Section 4 of Information Technology Act 2000 (ITA 2000) and is admissible as an evidence like a paper document in any Court in India. A digitally signed transfer of this electronic document is also legally recognized. Hence there is no way (except by retrospective amendment of ITA 2000) that â€œBitcoinâ€ can be considered as an â€œIllegal Assetâ€ or trading in Bitcoins is not a permitted business activity. possession of Bitcoins and trading is perfectly legitimate as any dealing with any asset recognized in law. RBI recently went ahead to warn against using cryptocurrencies and the risk involved in them. While the regulatorâ€™s official stance is one to urge caution among users and adopters, RBIâ€™s Ex-governor and chief Raghuram Rajan has previously stated â€œBitcoin is fascinatingâ€, in late 2014
There you have it folks. With this, you now have both sides of the coin. Bitcoin, as it is obvious, it is not perfect. It does have many advantages that physical currencies don’t provide its users; however, it also has its disadvantages. This is mostly due to the fact that Bitcoin is still a relatively young and new currency. People are just beginning to become more aware of it. In order to support the growth of the Bitcoin eco-system, more people need to understand what it is and not let their preconceived notions distort the concept of digital currencies. We, at Finlaw Consultancy give you the facts; you are the ones who make your decision.
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