How To Buy Bitcoin In India: 5 Tips To Follow
Here are 5 questions we think you ought to have the answers to before you actually start investing in Bitcoin (CRYPTO:BTC) in India:
1. What is the ceiling function of the budget you have in mind?
Presently, the estimated value of a single bitcoin is around 43 Lakh Rupees as of early May 2021.
The usual reader would find this a staggering price for a single commodity, that too, a commodity which has no physical value of its own like other mediums of exchange. The average person does not have the means to spend such an extravagant amount. So instead, why not buy a part of a bitcoin? Such little portions are called Satoshi and you can afford to buy one at the price range of even 500 rupees.
2. Do you have a Bitcoin wallet? Why should you get one? What do you have to do to buy bitcoin?
In order for bitcoins to be transferred and received, Bitcoin wallets are used. The wallet is in the form of an online application that facilitates this transfer from one account to another after the details of both accounts are specified. The bitcoin is then sent and can later be traded into other cryptos.
The Wallet also allows safe storage of cryptocurrency. Other means of storing coins are cold wallets or offline wallets like USB drives which are considered very safe as well.
For the actual process of buying a Bitcoin, you use online platforms known as Bitcoin exchanges. These require some form of identity proof (KYC in any form) in order to verify the customer’s eligibility. The actual buying is done by transferring cash from a bank account using digital payment.
3. What legalities ought to be kept in mind?
In the previous year, the SC of India had legitimized the use of Bitcoin. The apex court observed that the existence of Bitcoin or any cryptocurrency is unregulated but not illegal. But, in India’s current scenario, the government’s mindset against Bitcoin and other cryptocurrencies is not favorable in light of the official statements by the Finance Ministry.
Further, there is also huge talk of a ban being pulled on several cryptocurrencies as per the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, which condemns and criminalizes possession, trading, and issuing of bitcoins. However, in midst of this fear for crypto lovers, there have also been clarifications regarding the official position on cryptocurrency:
As the finance minister, Ms. Nirmala Sitharaman, said, there will be emphasis laid on the blockchain and encryption technology used in future dealings. Hence, the ban will not be complete in nature. Rather, the RBI has alluded to coming up with a new cryptocurrency in India in order to usher in profit for India’s digital economy.
4. Do you know a good exchange when you see one?
There are several online exchanges where you can find the ease of transactions using Bitcoin. However, with any such platform, there are always questions of security, anonymity, and reliable completion of transactions in an online mode. Like Bitcoin Wallets, exchanges allow storage, buying, and selling of cryptocurrency. However, in order to identify the right exchange to use, keep in mind that it allows you to easily transfer the coins to your own secure wallet without fuss or additional requirements.
Further, Keep a lookout for exchanges prone to cyber-attacks. Other features you must be on the lookout for include the simplicity of the user interface, ease of withdrawing bitcoins, and various payment options.
5. Finally, What are the risks involved and future assumptions made by experts regarding Bitcoin?
Ms. Sitharaman called it ‘a Ponzi scheme’. Warren Buffet said it was an illusion or “a soap bubble” of some sort. Although the vast consensus on the opinion of Bitcoin has been that it is the future of payments, there are risks involved, let’s not deny. An investor may end up losing a substantial amount of money if they don’t take adequate security measures. Plus, as a trader, you need to have patience. Due to its volatile price swings, bitcoin might not be the most stable form of investment you could make. Other than this, there is not much consumer protection. Due to Bitcoin not having any central authority to regulate it, you are on your own if fraud occurs during one of your transactions. So be safe, and keep your private keys and passwords secure.
Although many early investors reaped the benefits of high returns with the currency, the volatile nature of this digital currency makes it hard to predict. But then, it is very liquid and difficult to corrupt. Turn your pockets inside out. Maybe you can find a way to show a little love to bitcoin.
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