Bitcoin Investment – Bitcoin is cryptocurrency. Bitcoin has started gaining popularity in the year 2016. In five years, bitcoin has become the costliest currency across the world. As Bitcoin trading has become legal in India, many people India are searching for legitimate ways to invest in bitcoin. In this post, I will share useful insights about Bitcoin. I will also share various methods to invest in Bitcoin.
What is Bitcoin?
Bitcoin is a digital currency invented in 2008. It is a decentralized currency not administered by the central bank. Bitcoin can be sent from one user to another user. The transactions of Bitcoins are recorded in the ledger called as blockchain. Bitcoins are created by the process called mining. Bitcoins are exchanged over bitcoin exchanges and stored in the Bitcoin Wallets.
Bitcoin Investment – Why one should Invest in Bitcoin?
The reasons why you should invest in the bitcoin are given below.
- It is a digital currency that can be stored in the Bitcoin Wallets. It is secured and stored using encryption methodology.
- Bitcoin payments are accepted on many online portals. You can use bitcoin for spending money online.
- Bitcoin investment can be done with a small amount of Rs.500.
- The return of investment in bitcoin is very high. The cost of one bitcoin before 5 years was in thousands and today it is available by spending lakhs of rupees.
- You can easily beat inflation by investing in bitcoin.
How to buy Bitcoins in India?
Looking at the growing rate of bitcoin, you must be excited to purchase bitcoin. Here is a method to purchase bitcoin in India.
You can buy Bitcoins in India using trusted apps. The first step before starting an investment in bitcoin is KYC verification. To complete KYC, you need to submit your PAN card, valid address proof, and bank account details. The verification of KYC usually takes 2-3 days. The KYC details are asked by bitcoin exchanges whenever you register at the online site for buying a bitcoin.
There are two methods to invest in Bitcoin.
#1 Using Cryptocurrency Exchange
You can invest in Bitcoin using a cryptocurrency exchange. The cryptocurrency exchange is a place where buying and selling of cryptocurrency take place. It is like a stock exchange. On cryptocurrency exchange, all types of cryptocurrencies are exchanged such as bitcoin, ethereum, ripple, etc.
You need to register at cryptocurrency exchange and open an account to start trading in cryptocurrency. You need to transfer money into the account and start buying bitcoins. The transaction fee is applicable to buy sell of cryptocurrency via exchange.
#2 Using Peer 2 Peer Platform
Peer 2 Peer Platform is another method to buy/invest in the bitcoin. In Peer 2 Peer platform you are directly dealing with a person instead of an exchange. This means you need not to pay any transaction fees for using Peer 2 Peer Platform.
The peer 2 peer transaction takes place on the platform. The platform act as an interface for buying or selling cryptocurrency. However, few platforms charge nominal fees for usage of the platform it is generally 1% of the transaction amount. You need to verify the charges before starting the use of the Peer 2 Peer Platform.
You can also earn bitcoin by doing the mining.
How to select Bitcoin Exchange for Investment in Bitcoin?
#1 Easy to Use
The bitcoin exchange used for the transaction should be easy to use, fast and reliable. It should be accessible across devices like smartphones, desktop, laptop, etc. One should be able to trade anytime anywhere. The exchange should support net banking, mobile wallet, UPI support for the deposit, and withdrawal of money.
#2 Cryptocurrency Support
The cryptocurrency should support different trading pairs. If you are planning to trade in different currency pair it will help you. The example of a currency pair is bitcoin – INR pair, bitcoin – ethereum, bitcoin – ripple etc.
#3 Transaction Fee
You need to pay transaction fees as and when you buy or sell cryptocurrency on the exchange. You need to select a platform that offers currency exchange at a reasonable rate. The fee depends upon transaction volume. The fee is in the range of 0-1%.
As the currency is stored in the digital format it must be stored in a secure way. The exchange should use the highest encryption standards and latest technology like firewall, Anti APT appliance, two-factor authentication to protect the cryptocurrency. This is to prevent hacking, virus attack, and theft.
You should select a secured exchange for performing a transaction.
You should check the legal aspect of the currency exchange. The exchange should be registered and legal. You can refer to website bitcoin.org to find out the registration detail of the bitcoin exchange.
FAQ About Bitcoin Investment
- Are returns from Bitcoin Taxable?
Yes! the returns (money earned) via investment from bitcoin are taxable in India. This means you need to make tax payments on money earned via bitcoin. You will be taxed 30% for short -term investment and 20% for long term (3 years) and above.
- Which are other cryptocurrencies available in India?
There are multiple cryptocurrencies available in India. Few examples are given below.
- Can I make money via Bitcoin?
Yes! you can make money via Bitcoin. However, it is a risky investment. Bitcoin is a decentralized and virtual currency. Bitcoin rate is growing, but there is no guarantee that bitcoin will continue to grow in the future. You should evaluate your risk-taking capacity before investing in bitcoin.
Over to you
Bitcoin is a digital asset and you can make a lot of money using bitcoin. However, before investing your money in bitcoin you should consider the risk associated.
Do you invest your money in Bitcoin?