One of the first cryptocurrencies, Bitcoin is a component of the global peer-to-peer payment system.
Digital money is called cryptocurrency. Compared to real money, it is thought to be more secure. Cryptography is a technique used by cryptocurrencies to protect their transactions. To put it simply, cryptography is a technique for encoding understandable data in difficult-to-decipher codes. A subset of digital currencies, alternative currencies, and virtual currencies are referred to as cryptocurrencies.
In the year 2009, the first cryptocurrency, Bitcoin, was developed. As a result, a large number of new cryptocurrencies have been developed, some of which include Litecoin, Ethereum, Zcash, Dash, Ripple, etc. Given the government’s efforts to transition to a cashless economy, bitcoins have quietly begun to acquire appeal in India.
However, one should be aware that, as of right now, bitcoins are not controlled or centrally managed by any one organization, unlike the RBI, which controls actual currency in India. In fact, the blockchain technology, which acts as a public ledger for all transactions, is used to govern peer-to-peer transactions with bitcoins.
How is bitcoin created or where does it come from?
When engaging in mining, a person (referred to as the “miner”) uses his expertise with computers to solve challenging computational puzzles. The process of solving these riddles, which are essential to blockchain technology, aids in keeping them up to date. This results in the generation of new bitcoins, which is what mining is, and the miner receives them as payment.
Purchasing them with actual money on a bitcoin exchange
Not everybody can mine bitcoins for a living. As a result, you might think about purchasing bitcoins via bitcoin exchanges and keeping them in digital form in an online bitcoin wallet. Some of the bitcoin exchanges operating in India right now are Unicorn, Bitxoxo, Zebpay, Coinbase, and others. Such bitcoins would be bought in exchange for actual money. It’s interesting to note that 1 bitcoin is currently worth approximately INR 31,99,620.
Buying them on a bitcoin exchange with real money
As was previously said, no central authority in India has sanctioned or regulated bitcoin as a form of payment. Furthermore, there are no established standards, rules, or rules for resolving conflicts that can occur with taxes on crypto exchange such as bitcoins. As a result, there are certain dangers associated with bitcoin transactions.
Getting bitcoins as payment for products and services provided:
There are a few intelligent businessmen who accept bitcoins (instead of real money) on sales of the items or services they deal in, even though this may not be a typical practice in India right now.
In India, is bitcoin accepted?
Given this context, it is impossible to conclude that bitcoins are forbidden because they have not yet been outlawed in India. In a decision issued on February 25, 2019, the Supreme Court of India ordered the government to develop regulations for cryptocurrencies. The subject was postponed during the hearing on March 29, 2019, and a new hearing date has been set for the second week of July 2019. Binocs is a one stop solution to tax and crypto portfolio management with a great ease.