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European Journal of Business &
Social Sciences
Available at https://ejbss.org/
ISSN: 2235-767X
Volume 07 Issue 03
March 2019
Available online: https://ejbss.org/ P a g e | 1165
Virtual Currency Bitcoin in India
Mehak Singla
Research Scholar(Department OF Commerce), Chaudhary Devi Lal University, Sirsa
E-mail-mehaksingla.ubs@gmail.com
Abstract: The Bitcoin is a creative and innovative payment network and a new type of currency which can be used
by individuals and organizations to carry out their financial transactions virtually i.e. online. It gives people many
advantages like freedom to do financial transactions anonymously, increased level of privacy, very low transaction
fees with secure mode of working; cryptocurrencies like Bitcoin have emerged as an attractive currency option for
many investors and other stakeholders. This paper has reviewed the various news, articles of various authors and
find out that it should be legalized in India as it has many advantages and we can remove disadvantages by
legalizing it more.
Keywords: Bitcoin, Cryptocurrency, Legal, India.
INTRODUCTION
The Bitcoin is a creative and innovative payment network and a new type of currency which can be used by
individuals and organizations to carry out their financial transactions virtually i.e. online. It gives people many
advantages like freedom to do financial transactions anonymously, increased level of privacy, very low transaction
fees with secure mode of working; cryptocurrencies like Bitcoin have emerged as an attractive currency option for
many investors and other stakeholders. In fact, major retailers like the online travel booking website Expedia, the
computer maker Dell, the satellite television provider Dish Network and various other organizations have started
using the virtual currency and allow customers to pay their payment using currency like Bitcoin on their websites.
a.) History Of Bitcoins
The first public record of Bitcoin dates to October 2008, when a pseudonymous person or organization dubbed
Satoshi Nakamoto published a white paper with the technical outlines for a new, decentralized cryptocurrency.
Nakamoto’s identity remains unknown, though speculation centers on a handful of U.S.-based individuals (or
various groupings thereof) who were active in the cryptocurrency movement of the 1990s and 2000s. Nakamoto
introduced open source code file in 2009, which marked the public mining and commercialization of bitcoin.
Bitcoin was built on the theoretical and technical foundations of Bit Gold and b-money, a contemporaneous
cryptocurrency model that was never developed. Aside from being the first cryptocurrency to gain widespread
traction outside the relatively ultra-libertarian movement, its biggest claim to fame is as the first cryptocurrency
marked by totally decentralized control – in other words, no user is more influential than any other. In 2010, a
coding flaw resulted in the creation of huge numbers of un-mined Bitcoin, temporarily crashing the currency’s
value. A subsequent fix repaired the block chain and erased the unauthorized Bitcoin. Something similar occurred in
Page 2 of 6
European Journal of Business &
Social Sciences
Available at https://ejbss.org/
ISSN: 2235-767X
Volume 07 Issue 03
March 2019
Available online: https://ejbss.org/ P a g e | 1166
2013, although the results were less forceful. Bitcoin’s open source code has been modified to make such systemic
flaws less likely in the future.
b.) How Does Bitcoin currency works
It has two keys
primary one, called the “public key,” confirms the existence and unique identifier of the virtual
currency unit.
, called the “private key,” is the equivalent of a secret code which the owner stores in a digital
wallet.
Once the digital notecase is ready up victimization package or platforms supposed for this kind of
commercialism, users can buy goods or services, and trade or transfer virtual currency. These types of
transactions are done pseudo-anonymously due to the keys used.
When doing a payment, owners of a virtual currency unit validate their currency unit with the private key.
The payment is then submitted to a network of miners who make sure the owner of the virtual currency
unit, validating the transaction and the transfer to the new owner.
c.) Unit of Bitcoins
Symbol used to represent bitcoin is BTC. XBT and (U+20BF). Small units are called millibitcoin
which is represented as mBTC, microbitcoin is represented as μBTC and satoshi. Named in court to
bitcoin's creator, a satoshi is the smallest amount within bitcoin representing 0.00000001 bitcoin, one
hundred millionth of a bitcoin. A millibitcoin equals to 0.001 bitcoin, one thousandth of a bitcoin. One
microbitcoin equals to 0.000001 bitcoin, one millionth of a bitcoin.
c.) Acceptance as a Mainstream Currency
For the primary 3 years , Bitcoin was mainly used as a means of private exchange. After 2012, WordPress,
an online publishing platform, became the first major company to accept Bitcoin payments. Others,
including Ok Cupid, Baidu, Expedia, and Overstock.com, followed in 2013 and 2014. In 2014, Bitcoin- dispensing “ATM” (more accurately, an automated currency exchange machine) appeared in Vancouver,
British Columbia, and their number exploded in the subsequent years. 2014 saw the first major Bitcoin
crime scandals. In 2015, Barclays became the first major bank to process Bitcoin transactions, though its
embrace was initially limited to charitable contributions. The number of users has grown significantly
since 2013, when there were300,000 to 1.3 million users as per latest figures. In 2016, the number of
merchants accepting bitcoin exceeded 100,000. Instead of the 2–3% on transaction value typically imposed
by credit card processors, merchants accepting bitcoins often pay fees in the range from 0% to less than
2%. Firms that accepted payments in bitcoin as of December 2016 included PayPal, Microsoft, Dell et al.
d.) Current uses of bitcoins in India
People are buying bitcoins from digital currency exchanges by the credit card Coinbase.com and
Coindesk.com are the most popular exchanges. They also offer tutorials on digital currencies.
In India purchase of bitcoin from Zebpay exchange, Zebpay has android and apple ios apps which links the
bank account for quick transfer, there is a KYC requirement to do so. Unocoin another exchange in India
allows people to trade in bitcoins the company claims it has 1,50,000 customers in India. Post
demonetization, leading Bitcoin exchanges in India witnessed a rise in user base by up-to 250 %.
e.) Value of Bitcoins
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European Journal of Business &
Social Sciences
Available at https://ejbss.org/
ISSN: 2235-767X
Volume 07 Issue 03
March 2019
Available online: https://ejbss.org/ P a g e | 1167
The decentralized virtual currency that took the world by storm has witnessed a 300 % rise in value in just
one year. Despite RBI's reluctance to recognize the cryptocurrency, the interest in Bitcoins in India has not
waned. After Prime Minister Narendra Modi's demonetization move, Ahmedabad-based bitcoin trading
start-up Zebpay witnessed a 25 per cent surge in revenue.
f.) Can Bitcoins be considered as Securities?
The term “securities” is defined in section 2 (h) of the Securities Contracts (Regulation) Act, 1955 in the
following manner: “securities” include — (i) shares, scrips, stocks, bonds, debentures, debenture stock or
other marketable securities of a like nature in or of any incorporated company or other body corporate; (ia)
derivative; (ib) units or any other instrument issued by any collective investment scheme to the investors in
such schemes; (ic) security receipt as defined in clause (zg) of section 2 of the Securitization and
Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (id) units or any other
such instrument issued to the investors under any mutual fund scheme; (ii) Government securities; (iia)
such other instruments as may be declared by the Central Government to be securities; and (iii) rights or
interest in securities;” It is clear from reading of this definition that Bitcoin does not come within any of the
parts of the definition of securities.
g.) Regulation of Virtual Currency
Taxation of transactions where consideration is paid in Bitcoins While the general acceptability of
bitcoins in India is pretty low, it is not unusual to and savvy businesses accepting bitcoins as consideration
for the sale of goods and services. In so far as the tax code in India is concerned income, profits and gains
are taxable even if they are received in money’s worth instead or real money or currency. Therefore, the
value of bitcoins received would also be considered income in India in the hands of the recipient and the
profits on such income subject to tax at the rates applicable.
Advantages Of Bitcoin
1. No Central Command
Bitcoin isn’t owned by anyone.Bitcoin transactions are irreversible. This means that nobody, even banks, or
governments can block you from sending or receiving bitcoins with anyone else, anywhere in the world.
Just like physical money, don’t let strangers hold your bitcoins for you, and don’t send them to
untrustworthy people on the internet.
2. Secured Wallet
Many types of Bitcoins wallets are present in the market but the most important one is who is in control of
the private keys required to spend the bitcoins. Some bitcoin : wallets actually act more like banks because
they are holding the user’s private keys on behalf. If you decide to use such services, be aware that you are
completely at their mercy regarding the security of your bitcoins.
3. Bitcoin Price
Bitcoin’s price is determined by the laws of supply and demand. Because the availability is proscribed to
twenty one million Bitcoins, as more people use Bitcoin the increased demand, combined with the fixed
supply, will force the price to go up. As the number of people using Bitcoin in the world is still relatively
small, the price of bitcoin fluctuates significantly.
4. Bitcoin Exchanges
There are various ways to purchase Bitcoin, but trusted exchanges are a great way to acquire Bitcoin. But
there are many inefficiencies in Bitcoin exchanges. So, do your research and find an exchange you can
