Is India Bitcoin-Friendly? Pros and Cons of the Virtual Currency

Independent digital currency, Bitcoin. (Photo: AP screengrab)

When Bitcoin made it to Indian shores, everybody was asking the same question, 'Yeh Bitcoin kya cheez hai bhai?’.

In simple language, Bitcoin is a digital currency that is not being regulated by any government body. It can be sent to anyone anywhere in the world over the internet and it does not cost much to make the transaction.

With a Bitcoin you can buy anything and there are several currency exchanges that convert Bitcoin into dollars, euros and other currencies. The Bitcoin network is secured by individuals called miners who are awarded newly generated bitcoins for verifying the transactions and they are recorded in a public ledger.

Also Read: 1 Bitcoin = Rs 30,000: What It Is, and How You Can Get It for Free

Bitcoin has attracted a lot of interest in the international market, so much so that countries like Japan have legalised it and have started recognising it as a form of currency.

They had to formulate specific laws and meet capital requirements for exchanges as well as have cyber security and operational stipulations.

Bitcoin also exists in India and the current value of 1 Bitcoin in India is Rs 78,941 approximately. However, it’s difficult to manage considering that block chain technology cannot be sustained with the current technology infrastructure in the country.

The block chain is a shared public ledger on which the entire Bitcoin network relies. It comprises all the transaction data which is there for public viewing.

So now that you have an idea what Bitcoin is all about, let’s now dive into some of the pros and cons of having Bitcoin.

Pros

• Greater liquidity and freedom of payment
• Accepted globally & easily accessible
• No/Low transaction fees
• Independent from government regulations
• Easily convertible into multiple currencies

Cons

• Lack of awareness and understanding
• Illegal and black market activities can be funded
• Non-refundable and no chargebacks
• High risk of loss

Since Bitcoins are being pushed in India with a lot of vigour, an inter-ministerial committee in India has been set up to study the legality of Bitcoins in the country but until now nothing conclusive has come out.