Business leaders need to be thinking about and they should be worried about and they should be getting excited about the fact that- Internet is entering the second era, and they need to transform their businesses around that. For the last forty years, we’ve had the internet of information but when we send some information we are actually sending a copy, pdf, a PowerPoint, and even with the website we keep the original ones with us. But that’s fine with the information but when it comes to the things that business leaders really care about assets, things of value, money, stocks, bonds, intellectual property, cultural assets like art, music, or votes sending a copy of these is a terrible idea because political leaders don’t want someone copying their votes, their identity and if someone transacts money so it is very important to know that it still is there or not. In 2008 Satoshi Nakamoto entered and changed this game of people transacting doing business assets with peer-to-peer and trust is not achieved by middle man but by cryptography, by collaboration and some clever code. And hence, because of this blockchain technology people can now trust each other and the codes and could transact for anything I.e money, to music, voting, to their identities peer-to-peer. After that, it spread like a wildfire into the market and changed the game of transaction. This whole system is decentralized which allows the data to be stored globally on thousands of servers, so this is very much difficult to gain control of this network. But in the last five years, we have seen certain blockchain frauds that have been hacked due to fewer nodes as thieves trying to gain control of some. So in this paper, we are going to discuss some of the cases and legality of bitcoin in India. And how it is working right now.
Blockchain technology has profound implications for every business and every aspect of our lives. It’s about the power and potential of underlying technology platforms. In earlier times users had to give away too much personal data to 3rd parties for any transaction they are performing.
In 2008, when the global capital system went down, Satoshi Nakamoto an anonymous person introduced Bitcoin. This protocol set up rules to verify the data exchanged among billions of devices without going through a trusted 3rd party.
- What really is blockchain?
Bitcoin or other digital currency isn’t saved in a file or somewhere. it is represented by transactions recorded on a blockchain. It is a global spreadsheet or ledger. Each Bitcoin transaction entered on it is verified by a large-to-peer peer network. Each blockchain is distributed over the wide network and it runs on computers provided by volunteers around the world.
In business, expectations are that the other party will at with integrity- which boils down to-
How it works?
Say I want to buy a piece of artwork, maybe a painting I saw in an online gallery, to buy it, I would open my wallet app. Say, for example, a Bitcoin wallet. Bitcoin is the most popular cryptocurrency. There are others I could use but I’ll keep things simple and go with bitcoin. With my bitcoin wallet, I create a message specifying the amount of bitcoin I want to send to buy the painting. I enter the gallery’s public key as where I’m sending that bitcoin to. Then, I use my private key to sign the message verifying that it’s me who’s sending it. This two-step process is called public-key cryptography.
EMERGENCE IN INDIA-
India with a population that is over 1 billion strong has been on something of an economic renaissance in the last few years. Such has been the extent of the country’s growth that the IMF has called it the fastest-growing emerging economy. More than 40 percent of the country’s population has access to telecoms and internet services. A country steeped in mystery, history, and culture, it is also not one to fall behind when it comes to technological advancement. Bitcoin and other cryptocurrencies have been operating within the country for a number of years now. This article looks at the state of the Indian cryptocurrency market. As early as 2012, small-scale Bitcoin transactions were already taking place within the country.
These were still early days in the development of Bitcoin when only crypto hobbyists were interested in Bitcoin. By 2013, Bitcoin was beginning to gain a level of popularity that was spreading across many countries. That year, a few businesses
began to accept Bitcoin payment. A vintage-era pizza shop called Kolonial in the Worli area of Mumbai became the first restaurant service in India to accept Bitcoin payments.
In a short space of time, cryptocurrency exchanges began to spring up within the country. Pioneers like BtcxIndia, Unocoin, and Coinsecure began offering cryptocurrency exchange and trading services in India. Over time, others like Zebpay, Koinex, and Bitcoin-India were added to the list. With the proliferation of crypto trading and exchange platforms, the crypto market in India has grown from its modest
level in 2013 to what it is today.
Apart from these online exchanges, there are also a number of over-the-counter
(OTC) crypto shops in the country. Add to this, numerous Bitcoin ATMs in major Indian cities and you have the makings of a crypto-economic hub.
On November 8, 2016, Prime Minister Narendra Modi announced the commencement of a demonetization policy. The move by the government to demonetize approximately 86 percent of the country’s paper currency sent shockwaves all across the subcontinent of India. People with large cash holdings required a new means of
holding such wealth without incurring significant tax burdens and sundry government scrutiny. It became common practice for some to buy large orders of Bitcoin or other cryptocurrencies and then sell them at a later date. This meant that they were effectively circumventing what would have been considerable taxes if they had
tried to circulate their wealth through the banking system.
The demonetization policy also led to widespread criticism of the mainstream financial scene in the country. In the space of 24 hours, 86 percent of the country’s paper currency in circulation had been rendered valueless by virtue of a single government proclamation. Realizing that fiat money isn’t exactly “real” money since it isn’t backed up by anything, Indians began to seek alternative currency models. Many Indians, especially those in the 40 percent bracket with access to the Internet began to take up Bitcoin and other cryptocurrency investments.
The 2016 demonetization policy may have spurred the adoption of cryptocurrencies among a considerable portion of the population but realities soon began to emerge that have stifled the growth of the market in the country. Despite its vast population, India only contributes 2 percent of the total global cryptocurrency market
Mcapitalization. The small role being played by such a large economy can be attributed to the high cryptocurrency prices & the RBI-led government crackdown.
The general level of prices of cryptocurrencies in India is on the
high side. Market rates are relatively higher by as much as 5 to 10 percent compared to the global average. This means that Indians can only get involved in peripheral participation in crypto trading as far as international crypto exchange platforms are concerned. Lack of large-scale mining facilities & strict government restrictions
on international money flow also make it significantly difficult for Indians to transact with many of the large foreign crypto exchange platforms.
The Reserve Bank of India (RBI) has been consistent in warning citizens of
the risk associated with cryptocurrencies and issued a circular that banned banks from providing services to crypto businesses in April 2018. It caused all crypto exchanges in India to suspend INR support and began offering peer-to-peer (P2P) trading services. . While the government of the country hasn’t banned cryptocurrencies, they haven’t exactly been endorsing it. The coming months will reveal the direction in which the crypto market will move as far as India is concerned
The RBI banking ban on crypto businesses was quashed by the supreme court in March. Meanwhile, cryptocurrencies, including bitcoin, was not banned in India.
- FAMOUS SCAMS
- On 25thSeptember forty-three people complained a file against cryptocurrency investment scheme from Connaught Place. Police. The complainant told the police about the mining business named “f2poolminin” under which they urged him to invest and will get 20-30% return every month. And will also give him a commission if he brought more clients to him. And he invested 5 lakhs ($6,780) but never received any returns or payouts. After that he inquired at Pluto Exchange, where he was told that due to the falling price of bitcoin and account’s size he can’t receive anything. So he was told to wait for few more months but still after some time he didn’t received anything. When he again inquired at the office he came to know that it has been shifted to Dubai and likewise the director had collected 50 Crores in the name of business.
And on further investigation they got to know that people had invested more than 2 Crores in the business.
- In August 2018, Amit Bhardwaj publicized himself as a bitcoin enterpreneur and started a crowdining business named gain bitcoin ,he ascerted that he hs a company in china and even uploaded some of the pictues looted more than 8000 people Rs. 2000 crores across the country. He used to generate a contract for 18 months offering return of 10% however, he didn’t gave the returns and fled the country.
- He used MLM I.e multilevel marketing to include more and more people due to which more and more people got flexed.
- He also started other busines named amaze mning and blockchain research ltd, coinbank wallet, GB wine and also published some books
- IN 2018 RBIput banking ban on all types of crypto currencies stating that this is a new technology and they don’t have enough knowledge and information on how to operate it. It could revolutionalize the world in future but for now they are not well versed with it and hence we cannot allow our banking channels to regulate it.
- But this was not a complete ban people could regulate and invest through P2P.
- But on 4thMarch 2020 Supreme Court gave a landmarking decision and upheld the ban on cryptocurrencies by RBI by declaring it unconstitutional. As a transaction is a trust relationship between 2 businesses and no one could declare it invalid on any norms and regulations. And the circular was quashed.
- In July, Subhash Chandra expressed in a webinar that crypto currency is banned as a currency but not as a transaction one.