With a 300% increase in value in just a year (https://bitinfocharts.com/), Bitcoins are making their way into the world without much effort and are offering very attractive investment options. However, many of us remain new to its concept and workings, left wondering if it is safe to buy, invest, store and sell Bitcoins in India.
Where do you get started?
Are bitcoins legal in India?
First off before you dive in, you’d of course want to determine the legal status of bitcoins in your country. Even though countries like Japan and Russia are on the move to legalize the use of Bitcoins in their economies, India, regardless of being at the cusp of a digital revolution is yet to still officially recognize this crypto-currency.
“The creation, trading or usages of virtual currencies including Bitcoins, as a medium for payment are not authorized by any central bank or monetary authority. No regulatory approvals, registration or authorization is stated to have been obtained by the entities concerned for carrying on such activities,” the Reserve bank of India has said.
In March 2017, RBI Deputy Governor, R Gandhi had warned against crypto-currency circulation. “They pose potential financial, legal, customer protection and security-related risks.” he said. “Payments by such currencies are on a peer-to- peer basis and there is no established framework for recourse to customer problems, disputes, etc. Legal status is definitely not there,” he added.
However, Bitcoins are not unequivocally banned in the country. There’s simply no rule to regulate them yet — thus they are legal, since they haven’t been rendered illegal.
How can you obtain bitcoins in India?
Unlike paper currencies, bitcoins cannot be minted; they can only be mined or bought. There can only be 21 million Bitcoins that can ever be created/mined. At the time of writing this article, about 16.8 million or 80% of all the Bitcoins have already been mined.
Should you mine bitcoins or buy them? Our Bitcoin mining vs buying guide here should help you decide.
There are multiple ways to to buy bitcoins in India.
The first (and least convenient) method is to buy bitcoins in cash from other sellers. This method usually involves a direct meeting between both parties, and is less safer than the other option — buying online via your bank account.
In India, bitcoins can be purchased online from exchanges like Unocoin. Unocoin provides services that include Android and iPhone apps that let you link your bank account for rapid transfers. They can also be bought by making a payment to Unocoin’s bank account.
To be able to store purchased or mined Bitcoins, a bitcoin wallet is needed — either on your device (computer or smartphone), or on the exchange you hold an account with. A high level of security is essential when storing bitcoins on online wallets, and exchanges usually make sure such measures are enforced.
Take Unocoin for example — the wallet addresses they use for offline storage are generated on a computer that has never and never will be connected to the internet. This serves as a crucial security measure against theft, loss and hacking. The address-private key pairs obtained are encrypted using AES-256, sealed in envelopes and stored in multiple safe deposit lockers.
How does Unocoin work and what is the registration process?
As a verified Unocoin user, you will be able to trade, transact with, accept and store bitcoins. You can easily transact Bitcoins with your friends using Unocoin.
How you can get started with Unocoin:
- Registration: Visit the Registration page, and enter your email id along with a password you wish to set. You will now receive an email with a validation link. Please click on this link to verify your email id.
- Verification: Navigate to the ‘Edit Profile’ page on ‘Account Settings’ (menu on the left) and enter the requested details. Enter your Name, PAN number, phone number and your address. In the subsequent form, upload a scanned copy of your PAN card and a valid address proof with a photograph. You will receive a phone call verification from one of our team members for verification, once completed your account will be verified and ready for use.
- Verified Account: Once your account has been verified, you will be able to buy and sell 10 BTC/day with no limits on sending and receiving BTC. Regular and continued buy/sell transactions over a period of 60 days will upgrade your account to premium ‘Gold Member’ service with lower transaction fees and higher buy/sell limits. The last step would be to add your bank account details to your profile by visiting Account Settings > Bank Accounts.
Why should you buy bitcoins in the first place?
Despite the RBI’s reluctance to recognize bitcoins officially, bitcoin interest in India has not waned. After Prime Minister Narendra Modi’s demonetization act was announced in 2016, Unocoin saw a rise in its user base to 1,20,000 after demonetization.
The value of bitcoins is not expected to reduce as there are limited numbers of bitcoins that can exist. Moreover, the demand for these coins is only going up with large number of people showing interest in investing in this crypto-currency.
Given the population and increase in internet penetration of India, bitcoin can provide a great leap for the virtual currency usage.