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Bitcoin - What, Why, Where and How? Legal in India?

Bitcoin? What, Why, Where and How? Legal in India? Complete information here

January 3, 2021


A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers. A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation. Bitcoin is the most popular cryptocurrency worldwide.

Bitcoin - What, Why, Where and How? Legal in India?

What is Bitcoin

Bitcoin is a cryptocurrency invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto and started in 2009 when its implementation was released as open-source software.

Why so Hype

There’s a handful of reasons. Let’s take a look.
  • Bitcoin broke a key resistance level making investors believe there is further upside.
  • Rising inflation and the potential for even more stimulus continues to push people to safe-haven assets.
  • Increased adoption from payment applications like PayPal will give far more people easy access to cryptocurrency.
  • Publicly traded companies purchasing Bitcoin shows a high level of confidence in its appreciation.
  • Bitcoin's historical trend of closely following its halving stock-to-flow model shows an ambitious and extremely bullish outlook.
Some more reasons of this hype are:

Inflation and the Rush Toward Safe-Haven Assets

Another reason for Bitcoin's rise is the growing inflation of the U.S. dollar. While inflation is on average 2% each year, recent stimulus spending is poised to greatly increase the level of inflation and decrease the dollar's purchasing power.

Adoption as a Means of Payment

Another reason for Bitcoin's price appreciation is its growing adoption as a payment method. Recently, PayPal (PYPL) announced that it would soon allow its users and merchants to buy, sell, hold, and accept Bitcoin and other cryptocurrencies as a form of payment.

Halving and the Stock-To-Flow Model

Perhaps the most important reasons for the rise in Bitcoin's price are two attributes that are inherent in its design.
The first: there is only 21 million Bitcoin that will ever exist. There will be no more and no less and this number will always stay static. This makes bitcoin more scarce than anything that has come before it. Other scarce assets are not 100% finite and in some cases, they can be synthetically manufactured.
The second is a process coded into Bitcoin called the halving. Essentially, Bitcoin has its own built-in escrow mechanism where Bitcoin is released and given to miners as a reward for processing transactions. This reward is cut in half every four years.

Where to Begin

There are so many options these days to start your journey with Bitcoin, you can be a Trader or Investor.
Some popular and trustworthy platforms are:


How to Make Money with Bitcoin


Mining

the first ways to ever obtain BTC. This is the process in which miners use powerful computers to solve complex mathematical problems. Mining can be done using on these platforms.

SIP in Bitcoin

Systematic Investment Plan allows you to systematically invest in Bitcoin, which is the highest returning asset the world has ever witnessed. Bitcoin’s dollar cost averaging has proved that compared to a bulk investment in Bitcoin, dividing the investment into small, regular instalments returns much more due to reduced impact of volatility leading to declining average buy price with time. Start your SIP journey.

Let us have a quick analysis of the returns BTC has delivered over 2, 4, and 6 years, when invested in regular intervals. Considering the time of analysis as today, 12 November 2019, let us see what the valuation of regular instalment-based investments in Bitcoin of different time periods would look like today.

2 years
Let’s say you have been investing Rs. 400 
every week in Bitcoin till date for last 2 years 
(12 November 2017 to 12 November 2019). 
Then:
Each Instalment = Rs. 400
Frequency of Instalments = Weekly
Total Number of Instalments = 96
Total Investment = Rs. 38,400
Current Valuation = Rs. 71,220
Profit = 85.50%

4 years
Let’s say you have been investing Rs. 400 
every week in Bitcoin till date for last 4 years 
(12 November 2015 to 12 November 2019). 
Then:
Each Instalment = Rs. 400
Frequency of Instalments = Weekly
Total Number of Instalments (approx.) = 192
Total Investment = Rs. 76,800
Current Valuation = Rs. 7,97,982
Profit = 939%

6 years
Let’s say you have been investing Rs. 400 
every week in Bitcoin till date for last 6 years 
(12 November 2013 to 12 November 2019). 
Then:
Each Instalment = Rs. 400
Frequency of Instalments = Weekly
Total Number of Instalments = 288
Total Investment = Rs. 1,15,200
Current Valuation = Rs. 23,74,079
Profit = 1961%
(The number and figures recorded and mentioned here have been calculated using the real price trends in Bitcoin, and they actually represent the real valuation of an investment in Bitcoin. Pretty apparently, a consistent weekly investment in Bitcoin for last 6 years returns a surreal 1961% profit, which looks believable only in the chapters of history books, not investments.)

Buying and holding Bitcoin

is one of the most straightforward and most beginner-friendly trading strategies out there. First, get a Bitcoin wallet, buy BTC, and then hope that the price spikes in the future—no matter how long that may take. It could be weeks, months, or even years before you decide to sell.

Trading Bitcoin

is its fast-paced equivalent. Essentially, BTC trading means taking advantage of Bitcoin’s highly volatile nature. This method requires practice and knowledge of the market, so be sure to do your homework before you even think about giving it a shot. It can be Day trading, Swing trading and Arbitrage.

Accepting Bitcoin

as payment and receive it to your wallet.

Prediction and Expectation

The below prediction chart outlines some of the minimum and maximum BTC price forecasts offered by technical analysts and industry experts in an easy to digest format.

Year		High			Low
2020		$17,000			$3,800
2021		$25,000			$5,000
2022		$75,000			$9,000
2023-2025+	$410,000		$31,000


Is it Legal in India

In the present day, one can LEGALLY invest in or buy cryptocurrencies in India. Crypto-exchanges are allowed to have transactions through scheduled banks.

Investing in cryptocurrencies and Initial Coin Offerings ("ICOs") can be highly risky and speculative, and this article is not a recommendation by us. Informations has been collected from Investopedia, Wikipedia, Paxful, PrimeXBT and Bitdroplet.

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