Bitcoin rose from $3,300 in January 2017 to over $20,000 by December 2018. In addition, interest in cryptocurrencies has never been higher. The question is whether investing in Bitcoin makes sense today. Are cryptocurrencies worth their high price? What risks are involved?
Bitcoin was invented in 2009 by an unknown person or group using the name Satoshi Nakamoto. Although its true identity remains unclear since then thousands of other cryptocurrencies have appeared around the world. Today, a huge number of financial institutions want to get into the cryptocurrency space. This is why the prices of bitcoin and ether (the two biggest tokens) skyrocketed during 2018.
There are clear benefits to investing in cryptocurrencies. As an investor, you benefit from an innovative new asset class. Moreover, you can make extra income by mining or trading them. On the downside, these investment vehicles are highly volatile. Also, they come with big risks due to regulatory uncertainty.
Buying cryptocurrencies isn’t particularly simple anywhere around the world, but it’s even harder in developing nations like India. Is it possible to get started with cryptocurrency without having to travel overseas?
As of September 2017, India is home to almost 40% of the global population. More than 200 million Indians live below the poverty line, and billions of dollars worth of goods and services are sold daily throughout the country.
With a large user base, low transaction costs, and growing regulatory support, India has emerged as the largest consumer of cryptocurrencies globally. This article covers how to buy bitcoin in India using local payment methods including cash, debit/credit cards, and mobile wallets. Read on to learn how to invest in cryptocurrencies safely and securely.
Table of Contents
Where do I buy bitcoins in India?
Source: freepik.com
You can find exchanges that allow you to purchase bitcoins online in India, but using them requires understanding some legal issues. As per existing laws, cryptocurrencies are not considered currency, rather, they are property. In simple terms, if you use these exchanges and pay someone else’s bank account, you could get arrested. You should always use caution while dealing with unknown people, especially online. To avoid scams, you need to know how to identify scammers before getting involved in any fraudulent activity.
What are the risks associated with buying bitcoins in India?
The biggest risk is fraud. If you don’t know what you’re doing and make yourself vulnerable to con artists, you may lose your investment. Scam sites often mimic well-known websites, making them look legitimate. When entering data, take care to enter only valid entries and never type in passwords or personal identifiers. Also, be careful about clicking links in emails. Emails sometimes phish for login credentials or ask you to download attachments. Always verify messages and URLs in email headers.
Can I sell my bitcoins back to RBI?
Source: freepik.com
No. However, the Reserve Bank of India (RBI), the central banking authority, does provide access to its blockchain ledger for law enforcement agencies. The blockchain records all transactions and stores details of each bitcoin sent and received over time. So, if investigators want to trace a specific transaction, they would require the help of the respective public node operator (PONO). PONOs store complete copies of the entire blockchain on their servers.
What are the best ways to trade with Bitcoins?
Trading platforms are becoming popular for trading bitcoins. Bitstamp is one of the oldest platforms to operate in Europe. Coinbase operates primarily in the United States, but recently expanded into Canada and Australia. Another popular platform is cryptex.net, a place where you can invest, buy and sell or exchange from any location in the world at any time.
There exist various ways to buy Bitcoins including using debit/credit cards (with high fees), Paypal or banks, etc. But, I am going to list down the methods below that help you purchase bitcoins at low costs.
1. Cryptocurrency exchange services
Source: freepik.com
Cryptocurrency exchanges offer to buy bitcoin online from anywhere in the world. These websites allow users to buy bitcoins instantly using their bank accounts and card payments. There are different types of cryptocurrency exchanges including centralized and decentralized platforms. Decentralized exchanges do not have control over customer funds, they operate peer-to-peer without any central authority. On the other hand, centralized exchanges are operated by companies that provide security and financial protection. A few popular exchanges are Coinbase, Cryptex, CoinMama, Paxful, LocalBitcoins, BitPanda, etc.
2. Buying Bitcoins using debit cards
You can easily purchase bitcoins using debit cards. In this method, you have to set up an account. You can then fund your account using either a wire transfer or credit/debit card. Once funded, you can use your card to make purchases at vendors that accept a digital currency. While this works well, it does require opening a separate account. If you already have a good relationship with your current banking institution, you may prefer to simply add a BTC wallet address to your existing bank account. The advantage of doing this is that you don’t need to open a separate account and funding your account only takes a couple of minutes.
3. Using Paypal to purchase Bitcoin
PayPal offers a service that allows you to purchase anything using its platform. It lets people send money around the globe using its payment system. To purchase BTC you will need PayPal account. Go to their website and sign in to your account. Next, go to the “Buy” tab in the top menu bar. Finally, select the “BTC Wallet” option under Sellers and follow the steps to sell your coins.
4. Purchasing Bitcoins using Credit Card
They work great for purchasing your favorite coin (BTC). Most major credit cards such as American Express, MasterCard, and Visa let you use them to invest in currency such as Bitcoin and Ethereum. Here’s how you go about buying these coins using a credit card. First of all, find a reputable crypto exchange based out of a country where you plan to spend most of your time. After signing up for an account, navigate to the trade page and click on the plus button (+) located next to the trading pairs list. Now choose whether you’d like to purchase some depending on what coin(s) you want to invest in. Next, enter the amount of coins you wish to invest in. Click continue and wait for the order confirmation notice. You’ve just bought some BTC!
5. Exchange Services
Source: freepik.com
If you are looking for a place to trade fiat currency for crypto, then you should try an online trading platform. These platforms allow users to buy and sell cryptocurrencies without having to go through any verification process. They also offer a wide range of payment methods so you can choose one that suits your needs best. Before you start trading make sure you understand what you are doing. Read about the risks involved and ensure you do not lose money.
Buying Bitcoin in India has never been easier. With the above methods, you should be able to get started within no time. Remember, though, that investing in virtual currency comes with inherent risks. So do your research and learn everything you can before getting involved. Good luck!