Bitcoin uncertain rise is looking like that i will replace gold someday. Indians are fond of gold not because of shiny nature but it has inherent properties which makes it a store of value. Lenders use gold as collateral to secure their money. Yet another stone human values are directed to keep it forever and pass on generations.
Gold is naturally not scarce but there are cost involved for mining which puts a cap on its supply. Same is the case with bitcoin. Indians tend to think and associate bitcoin as a new gold.Bitcoin comes with unique properties which gold cannot have such as
- Easily transferable.
- No maintenance cost.
Why Bitcoin as gold? Better form of Gold ?
Gold is mined using machines and in coal mines these mines are owned and controlled by government, when gold reaches the market including every possible cost for producing it attains a new price for the market.
Bitcoin works similarly to understand this we have to assume matter and energy is equivalent which is true. Running bitcoin mining take gigantic amount of energy about 37.15 TerraWatt hours.
According to einstein e= mc2 we can simply calculate the mass produced by the above energy.
Converting 37.15 TWH to joules which is 1.3374×1017 .
Now let’s divide the above number with speed of light which is 1.3347x 1017 / (3 x 108m/s)2 which will yield 1.5 Kg worth of mass. Now apply the same equation to bitcoin.
Right now every 10 minutes you have 1 block which contains certain transactions for every year we have 52,560 blocks with reward of 12.5 BTC on every block mined a total of 657000 of Bitcoin will be generated every year. At the current price of $ 16,159 the total value per year is 10 Billions (that is a lot of money) and when we divide it by 1.5 kg worth of mass we will have 7077642000 dollars per 30 grams.
Indians will do everything to take this kind of gold, not only it is expensive but it has its own status quo.
According to various news articles it is widely reported that exchanges are under scrutiny from central banks those who are operating in India they have been asked to maintain the KYC and AML process as strict as possible and if exchanges see malicious activity notice RBI asap.
Currently there is no legal status about bitcoin or cryptocurrency as such but according to sources the report and regulatory framework is due till 30th December. One can expect that RBI will miss out on big tax opportunity if they declare cryptocurrency illegal.
Various exchanges are running in India, like Koinex, Unocoin though these exchanges are premature in services and reported to bad at customer services. Indian customers are buying bitcoins from websites like localbitcoins which are safe and has good price spread.
Days are gone when your elder one advises you about savings , Indian millennium aged from 20 to 30 are moving to bitcoin and other cryptocurrency as a mode of savings because banks are not providing such returns in such short period of time. Another reason could be the financial turmoil created by banks which have not yet left the marks on memory of young ones as India is entering in millennial population chances are high that we will move to cryptocurrency soon as other nations.
There are many startups who are working in crypto land irrespective of legal status of coins in India
- Coinsecure is a delhi based startup offering bitcoin trading platform
- Zebpay , unocoin, koinex working as wallet service provider as well as exchanges.
More than 10 startups have come up which are providing wallet and exchange services.
Bitcoin promises to send money globally without any intermediary involved or without going to a bank. Believe it or not bitcoin is next after western union in terms of market capital and settlement.
Indian’s are using bitcoin as global money, now if you want to money to your daughter or son living outside country simply send bitcoin using a wallet without any hassle.
Remittances is still a big issue in India, where SWIFT takes few hours to day bitcoin transaction can happen instantly depending on the fees paid.
Effect of Demonetization
When modi government decided to roll back 500 and 1000 tender changes as India is a country known for savings where people were forced to put money in bank, on the other hand that was the time when Indian started buying bitcoins and cryptocurrency the volumes rose and that was the time when bitcoin gained Asia trust in terms of storing value. This lead to high rise in bitcoin prices and more people were attracted to buy bitcoin and use as savings.
The idea of owning a cryptocurrency in India acts like collecting stamps or valuable which can be used as status quo that is what gold is about. Bitcoin is a money of internet but it is secure by rules of mathematics and no entity governs. Moving away from traditional sources of savings and deposits , Indians need time to adopt cryptocurrency. The best currency for Indians should be which does not throw technical jargons around here and there and simple to use.
The presented content may include personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Disclaimer The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.
I am an entrepreneur and a writer with a bachelors degree in Computer Science. I manage the blockchain technology and crypto coverages at Coingape. follow me on Twitter at @arya_achal or reach out to me at achal[at]coingape.com.