What is a Cryptocurrency and Blockchain? How to buy Cryptocurrency in India?

 Cryptocurrency, Bitcoin, Dogecoin, Ethereum are the terms we all have become familiar now and have definitely heard either of them. And specially, when you are not into trading or investment fields, these norms confuses.

So, What is Cryptocurrency in real ?

  • A Cryptocurrency or digital currency is a digital payment system that is managed through computer networks and doesn't rely on any authority, government or banks to verify the transactions.

  • It is a peer to peer system that can enable anyone to send and receive payments. Let's make it more easy to understand, In India we use UPI for our digital transactions and for that both peers should have an UPI Id but in this case transaction would be managed and linked by banks or authorities. But it doesn't happen in case of Cryptocurrency because when you do transaction in Cryptocurrency, you are able to do it directly from anywhere on the globe and no authorities would interfere into your transaction. And more of that the transaction would be managed and stored in a digital ledger called BLOCKCHAIN.

What is a Cryptocurrency and Blockchain?
What is a Cryptocurrency and Blockchain?

Now What is BLOCKCHAIN ?

  • BLOCKCHAIN is a type of shared database or we can say it stores data/information, as Blockchain contains data in blocks. When new data comes in a blockchain system, technically it is entered into a fresh block and once the block is filled, it gets chained with the previous block and because the data is chained together, it is called as Blockchain.

  • Various kind of data can be stored onto a Blockchain but more of it is used for as a digital ledger for transactions.

  • As a digital ledger of transactions, Blockchain is used in a decentralized way so that nobody or any group could have control on it but at the same time all users collectively retain control.

Basically blockchain is a distributed ledger system (D.L.S) technology that is used for Cryptocurrency transactions which makes it encrypted, safe, secure and anonymous.

There are so many kinds of Cryptocurrencies out there.

Here are some of the popular Cryptocurrencies-

Bitcoin, Ethereum, Litecoin, Dogecoin, Ripple, Cardano etc. But Bitcoin is the most popular out of them.

Bitcoin is the first Cryptocurrency. It was launched on 3 January, 2009. In reality nobody really knows who is behind the pseudonym Satoshi Nakamoto, but he was the first one who mined the first Blockchain of Bitcoin and the one who published the white paper about the digital currency.

What is Blockchain ?
What is Blockchain ?

What is the use of Cryptocurrency?

  • Payment -> Cryptocurrency can be used as a medium of payment. But it's not tangible like other currencies because the only way we can do transactions with Cryptocurrency is via online.

  • Investment -> This is the most popular reason why people buy Cryptocurrency. People choose to invest their money in different Cryptocurrencies and especially in Bitcoin. And seriously Cryptocurrency is a great opportunity for investors to invest.

  • Crypto as Currency -> Though it's not a tangible currency but still Crypto has so much value and therefore it can be used for purchases.

Yes, it is not quite popular yet, for that kind of payment but countries like El Salvador has considered it as a legal tender in their country and many more countries are looking forward to do the same.

  • Future Currency -> After reading the article or either hearing from the outside you should have understood that the Blockchain technology is the future and in terms of currencies Crypto will be definitely create a big impact in the future. And slowly if growth trends remains the same, it's popularity would be on peak, Crypto may replace current monetary system in future.

How to invest in Cryptocurrency in India?

As we know India is a developing country and it is the world's fourth largest economy. And India has become one of the biggest marketplace for everyone even for the international investors. So, definitely there's no chance that we could leave this asset class without taking advantage of it.

To understand this concept efficiently we would focus on world's most popular Cryptocurrency Bitcoin, it's market and 

-> How to invest in Bitcoin in India?

The frequent versatility of Bitcoin's prices make it a good investment among all the investors and traders who are okay with confronting risks, want quick and high returns out of their investments.

  • The recent fluctuations of Bitcoin has brought about a stir in the market. Due to the fact that it gives out high returns and is one of the top - performing assets across the globe right now.

  • A few years ago, buying/selling or investing in Bitcoin may have sounded like a tedious concept amongst people, that fits only for professionals, experts or techies.

But the good news is that now the scenario has completely changed.

  • The point to be noted that amidst the pandemic situation, something good happened. Bitcoin prices hiked up and now more and more investors got to noticed it, due to the global institutional support and their faith behind this has made it a valuable asset class.

  • If we look at the numbers so, it's price has actually skyrocketed to around $47,000 by the end of the year 2021. And in January 2022, Bitcoin's price valued at around $36,000.  As per the experts the price can cross $80k to $100k in 2022 itself.

  • Due to the fluctuation of Bitcoin's prices it has become the very first and fully functional and digitally native Cryptocurrency in the world.

  • Cryptocurrency is one of the fastest growing asset class, And Bitcoin holds around 69% of its market share. The cost may swing far up and down but such volatility in its market serves as a advantage for investors and attracts them.

  • For instance have a look of its price data. The value of Bitcoin has risen from zero to INR 30 lakhs in decade.

Though due to Bitcoin's popularity there are many platforms which has entered in the market where you can buy or invest in Cryptocurrency / Bitcoin in India.

Some of them are WazirX, Coinbase, CoinDCX and Coinswitch Kuber etc.

Bitcoin in India is neither legal not illegal because there is no legislative law to restricting it in the country and upon that in the recent budget of 2022 of India, the government has imposed 30% tax on the profits earned from Cryptocurrencies. Even the Indian Reserve Bank (RBI) said in a recent order that banks cannot deny services to their customers who are dealing in Cryptocurrencies. With the appropriate resources you can buy or sell Cryptocurrency in India especially after announcing the Indian Budget for 2022.

How to buy Cryptocurrency in India?

To buy Cryptocurrency in India you can use several online platforms or exchanges.

But choosing the best online exchange is also a task of a lot of research but here are the few things of them that you should keep in your mind while buying the Cryptocurrency.

  • It is always best to go with an exchange that allows you to withdraw Cryptocurrency in Indian Rupees, and to your personal online account or wallet because that would safeguard your money.

  • Always use safe internet practices and create strong passwords, keep them secret. Never ever share your AC details with anyone.

  • KYC is one of the most important part while creating account for the exchange and it stands for ( know your customer) is a must. And to complete those verifications you will need your PAN Card, some other documents and valid address proof.

  • Always make sure that your PAN Card is linked to your bank account. The verification may take around average of 2-3 days.

  • Once the verification is completed,

You can start trading Bitcoin / Cryptocurrenies in India. 

  • Currently the value of one Bitcoin is around 30+ lakhs, but don't worry you don't have to pay this entire amount to buy Bitcoin. You can buy Bitcoin in parts or a portion of it, you can start investing in Bitcoin with just rupees 10 and you will own the small percentage of Bitcoin called Satoshi's.

For transactions of Bitcoin between peers, there's a process called Crypto mining or Bitcoin Mining..

What is Bitcoin Mining?

It is a process in there has to be solved a complex mathematical equation to update the digital Cryptocurrency ledger called blockchain. If you want to mine Bitcoin you can do so, but it can only be done on high power computers and it is not as easy as it sounds. You will need a big setup to earn a better amount of money from Mining.

Advantages of Cryptocurrency

  • No Duplication -> Cryptocurrency can not be copied.

  • Decentralization -> Cryptocurrency is kind of decentralized currency that no authorities has control on it means nobody controls it, it is secure and encrypted.

  • Easy to buy -> Cryptocurrencies transactions are easy, cost effective and quick so. That you can buy Cryptocurrency with a little amount of money as well and now in the rising adoption there are many platforms available to do a Crypto transaction.

  • No Boundaries -> Our geographical boundaries or National borders are not any barrier between Cryptocurrency peers transactions.

You can transfer your Cryptocurrency or Bitcoin anywhere in the world and to anyone.

Disadvantages of Cryptocurrency

  • Since the Cryptocurrency transactions are end to end encrypted and completely anonymous. Some people may use it intentionally for illegal purposes such as buying illegal weapons, drugs or gambling or illegal trading etc.

  • Because it is a digital currency it can be used by cybersecurity breachers as a mode of payment to them. Recently many Cyber attacks were experienced by various countries around in which the hackers demanded the payment in Cryptocurrency majorly Bitcoin.

  • Because no authority controls it therefore it's ecosystem lacks of laws, rules and regulations and it could be a biggest threat for the Cryptocurrency.

  • Instability in prices -> Because of the instability in the prices of Cryptocurrency and the ups and downs of its market can cause tough risks and danger for those who choose to invest in it. And that is the reason why one of the richest man and investor of the world Warren Buffett consider the complete ecosystem of Cryptocurrency as bubble.

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