Monday, January 18, 2021
Home Business Is investing in Bitcoin safe? Get the basics first!

Is investing in Bitcoin safe? Get the basics first!

With the fussy mania of Bitcoin going around and past, your eyes and ears, in the news and peer discussions, you must be having some basic questions about it: What is bitcoin? Is it legal? How can I get it? But most of all, you must be thinking, ‘Is investing in Bitcoin safe?’

Let’s find out!

Pluto Exchange has launched first app that will trade in bitcoins in India
Pluto Exchange has launched the first app that will trade in bitcoins in India. Wikimedia commons

ALSO READ: Bitcoin Worth Millions Stolen Days Before US Exchange Opens

Clearing the basics

  • Bitcoin is the first ever cryptocurrency that existed, it was invented in 2009 by Satoshi Nakamoto.
  • Cryptocurrencies are nothing but computer codes that have monetary value. No Government has any control over them.
  • Bitcoins ‘self-contain’ their value i.e. there’s no need for any bank to move or store the money.
  • Bitcoin currency is completely unregulated and decentralized.
  • Bitcoins are mined, and they can be mined by anyone in the general public who has a strong computer. However, only 21 billion of bitcoins in total can be mined. Currently, there are around 11 million in circulation.
  • Bitcoin has no underlying physical monetary base to support its value, and it is totally subject to its demand in the market.

What are the risks?

  • Low demand: India has not legitimized bitcoin, hence investment returns are totally based on demand i.e. you get your return only if there is another buyer in the market who is ready to pay you more for it. Currently, the high-value of the digital currency owes to its high demand, but once people start selling, there is a possibility that rates will drastically fall.
  • Unregulated: There is no bank or government tax agency that can track your money and its movement. Hence, it can become a tool for money laundering.
  • Irreversible transactions: There is no insurance protection of your bitcoin wallet i.e. if you lose your wallet’s hard drive data or even your password, your wallet’s content is gone forever.

There is no insurance protection of your bitcoin wallet i.e. if you lose your wallet’s hard drive data or even your password, your wallet’s content is gone forever. Pixabay
There is no insurance protection of your bitcoin wallet i.e. if you lose your wallet’s hard drive data or even your password, your wallet’s content is gone forever. Pixabay

ALSO READ: How can you trade in Bitcoin in India?

Status of Bitcoin in India

Finance minister Arun Jaitley highlighted in a statement that cryptocurrencies are not legal tender and have no regulatory permission or protection in the country.

However, there was no announcement banning or imposing any curbs on the same. The government panel is also awaiting a report on tackling cryptocurrencies in India, Jaitley said.

The government has recently cautioned investors to be wary of virtual currencies like bitcoin, saying they are like Ponzi schemes with no legal tender and protection.

“One of the features of cryptocurrency is that there is lack of dependence on the state. It functions with a degree of anonymity. It operates within a virtual community which is created and enjoys the trust of that virtual community,” Finance Minister Arun Jaitley told the Rajya Sabha.

“The government is examining the matter. A Committee under the chairmanship of the Economic Affairs Department Secretary is deliberating over all issues related to cryptocurrencies to propose specific actions to be taken… Instead of taking any knee-jerk action, let’s wait for the report of this committee.” Jaitley added

STAY CONNECTED

19,120FansLike
362FollowersFollow
1,773FollowersFollow

Most Popular

People Are Advised To Avoid Alcohol After Getting COVID Vaccination

Alcohol intake should be avoided after getting the first jab of the Covid-19 vaccine for some days and abstinence should also be maintained after...

90% Road Accidents Happen Due To Human Error, Claims HP Chief Minister Jai Ram Thakur

People must be sensitised about ensuring road safety and obeying traffic rules as almost 90 per cent of the road accidents are caused due...

Peer Support May Be Helpful in Reducing Anxiety Problems Among Teenagers

One in three parents strongly support schools having mental health programmes like peer support leaders, a new poll suggests. The poll indicates that an...

Here’s Why People Experience Abdominal Pain While Consuming Certain Foods!

Researchers have identified the biological mechanism that explains why some people experience abdominal pain when they eat certain foods. According to the researchers, up to...

Is Tandav Web Series Promoting Religious Flares? Know The Reason Behind Controversy!

The Information and Broadcasting Ministry has issued notice to Amazon Prime, seeking its response to the complaints against its web series 'Tandav' starring Saif...

Akshay Oberoi: This Profession Can Knock You Down Multiple Times

Akshay Oberoi has been a part of Bollywood for almost a decade now. He agrees that the acting profession is difficult and can knock...

B-Town Actress Kangana Ranaut Shares Awful Thing About Nepotism

Actress Kangana Ranaut says after nepotism, the most awful thing about being an actor is going through a night shift. "Apart from nepotism and movie...

Cure. Fit Acquires Digital Fitness Company Onyx

Health and fitness startup Cure. fit on Monday announced it has acquired Onyx, a US-based fitness company that is building the world's smartest digital...

Recent Comments