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Bitcoin was trading above $23,000. The rally to these levels, which has sustained over the last four months, has also seen various stakeholders taking steps towards legitimising the cryptocurrency. But before one decides to invest in Bitcoin, there are a number of factors to be considered.
They are a cryptocurrency and a digital payment system. They are just like normal currency but without any physical form. It is completely managed electronically. They are used for secure and instant transfer of value to anywhere in the world. Bitcoin is the world’s first decentralized digital currency. It is not owned or controlled by any government or financial institution.
In India, you can buy bitcoins from some trusted Bitcoin apps. There are quite a lot of such apps. To name a few there is Zebpay, UnoCoin, CoinSecure etc. Choosing the best platform to buy them from is another task.
Today one Bitcoin costs you somewhere around 12 lacks. But you need not buy one Bitcoin to begin investing with. You can start with buying a part of the Bitcoin. The minimum amount that is needed to begin investing in Bitcoins is around Rs.500. Check on Google to know the latest price of Bitcoin in INR.
According to those closely watching the currency, the prices have been driven by various factors, including increased acceptance during the pandemic. Globally, large players like payments firm PayPal, and Indian lenders like State Bank of India, ICICI Bank, HDFC Bank and Yes Bank, have given legitimacy to cryptocurrency through some of their decisions. For example, these Indian banks reportedly have allowed their customers to use their bank accounts to fund cryptocurrency trading. In India, accounts of several exchanges were frozen by financial institutions back in 2018 following a fiat from the Reserve Bank of India that barred banks from using their systems for cryptocurrency-related transactions. However, the Supreme Court ruled against this order in March this year.
The origin of Bitcoin is unclear, as is who founded it. A person, or a group of people, who went by the identity of Satoshi Nakamoto are said to have conceptualised an accounting system in the aftermath of the 2008 financial crisis. Nakamoto published a white paper about a peer-to-peer electronic cash system, which would “allow online payments to be sent directly from one party to another without going through a financial institution”. According to Bitcoin.org, a website originally co-owned by Nakamoto, Bitcoin from a user’s perspective is “nothing more than a mobile app or computer program that provides a personal Bitcoin wallet and allows a user to send and receive Bitcoins with them”.
Bitcoins are generally identified with a Bitcoin address, which comprises 26-35 alphanumeric characters starting with either “1” or “3”. This address, which remains anonymous, represents the destination of a Bitcoin, or a fraction. Originally, the Bitcoin was intended to provide an alternative to fiat money and become a universally accepted medium of exchange directly between two involved parties. However, after Bitcoins picked up momentum, some entities started establishing exchanges — on lines of stock exchanges — for people to buy and sell Bitcoins against fiat money such as dollars or euros or pounds. Early proponents of the cryptocurrency argued that once an exchange was established, all the strengths of a Bitcoin went away, considering a third party institution was involved once again for money to change hands.
Firstly, you will need to get yourself KYC(Know Your Customer)verified. For that, you need to submit your PAN card and a valid address proof. Next is a bank account. Make sure that the PAN and bank account belongs to the same person. The verification process takes about 2-3 working days. After this, you are good to go.
According to the government of India, any returns obtained from investments are taxable. So, of course, you get taxed for Bitcoin investments. You are taxed up to 30% for short-term investments and around 20% for long-term (3 years) for the capital gains.
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