A new wonder BITCOIN

We have evolved from ages and a structural gap is filled right through umpteen inventions, right from the cavemen to the mercantile economic system to the industrial age and today in the INFROMATION AGE. Well- well, in these evolutions one most essential element has been Money in various forms and it has been a platform to transact business all along   We are well aware of the fiat currency we use one which is considered to be a tangible legal tender, which has a value, a regulated denomination having a centralised authority over it. It could be cash, cards (online payments). But money can also be decentralised not controlled and most essentially even intangible this is not an oxymoron folks and this is reality, we are talking about BITCOIN.

 

A bitcoin is a virtual cryptocurrency, peer-to-peer electronic cash and is easily transferable. The crunch is that it is not regulated by any government body and let’s stay restricted to the current Indian Scenario. In India, money is regulated by RBI (The Reserve Bank of India) but one thing to note is that the Bitcoin derive its value in the form of money and hence could be considered as a security, thus shall be regulated by SEBI (The Securities and Exchange Board of India) and this is the prime reason India is yet to come up with some guidelines or legislation. Bitcoin pricing is similar to that of principle of demand and supply and bitcoin could either be mined or be bought and sold. The price of the bitcoin is based on it mining and availability it is not a rocket science and you only need is a CPU with strong ram, processor, permanent electric supply and internet. Now then, Bitcoin is a concept motivated by the concept of HashCash by Adam Back. Bitcoin, as allegedly invented by a man of Japanese origin named, Satoshi Nakamoto (pseudonym) in 2008. This was a spark in the information age, people in the earlier times were not able to decipher the idea behind bitcoin but on 22nd November 2017, Bitcoin touched its peak value- 8100$ which in INR means- Rs. 524519 approximately. Well, bitcoin in a most simplified version is an algorithmic value which is hashed in a 256- bit- encryption system, having a proof of work and is time stamped. The transactions are recorded in a public ledger which is easily available in the network or more precisely Internet. People in India are yet very ambiguous about the concept of bitcoin, well to say so yes it is totally out of the purview of taxation means no matter what amount you hold. The bitcoins as our physical wallets are held in digital online wallets   but it is highly essential to note that if you forget the wallet password your Bitcoin is as good as lost and can never be recovered. The Bitcoin is neither regulated by FEMA(Foreign Exchange Management Act) and is finite in number so, in total only 21 Million could be mined yet again there is loop that it is divisible in small units of SATOSHI as similar to our PAISA being the smallest unit of our currency.

Since Bitcoin is uncovered by any law there is also a darker side to it. Bitcoin as we all know is permitted as a means of transaction by the great automobile company Lamborghini. The highlight is that it has a huge usage in the dark net as well as on the normal internet. The ransomware attacks consequentially ask for Bitcoin for the data release and a lot of Hawala business or money laundering activities had been witnessed in India after the rising rage of Bitcoin and even after the most memorable day of 8th November 2016. Countries like Japan has legalised Bitcoin and Russia has come up with their own concept of CryptoRuble. Hence, this was a brief understanding of Bitcoin intangible, decentralised, tax-free and could be considered as commodity in the existing Indian Laws.

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Author
Ayushi Richa Mishra
Ayushi Richa Mishra
4th Year BA.LLB(Hons.),
New Law College, BVDU, Pune

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