What is Bitcoin? How do you buy Bitcoin in India?

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If you’re also someone who has recently come across the buzz of cryptocurrency and bitcoin, and wondering what it is and can you invest in bitcoin as an Indian citizen? The following things are going to be covered in today’s article:

1. What is Cryptocurrency?
2. What is Bitcoin?
3. Can you invest in Bitcoin in India?
4. How to invest in bitcoin? What are taxes/charges paid for trading or buying Bitcoin?
5. Conclusion

Coming to the first topic of this article

What is Cryptocurrency?
Cryptocurrency is a digital currency or virtual money, which is secured by cryptography, which makes it difficult to counterfeit. Many cryptocurrencies are based on blockchain technology. Cryptocurrencies are produced by the process of mining- a process where mathematical puzzles are to be solved to be rewarded in cryptocurrency. But a person can also buy cryptocurrency. Special crypto wallets are used to store cryptocurrency- which are of 2 types hot&cold wallets. There are a lot of cryptocurrencies out there such as Ethereum, bitcoin, dogecoin etc. But in today’s article, we will mainly focus on bitcoin.

What is Bitcoin?
Founded in 2009, Bitcoin is also a type of cryptocurrency. Bitcoin is the most prominent and expensive cryptocurrency out there. Similar to other cryptocurrencies bitcoin also works on blockchain technology. Bitcoin is produced by mining, but the fact that only 21 million bitcoin can be mined makes it even rare. There is no known person out there known to have invented bitcoin but it is said that it was invented by Satoshi Nakamoto. Bitcoin is also an investment option and if you’re looking to diversify your portfolio, you can surely invest in bitcoin. The current price of bitcoin is $21,697.80, as the bitcoin has rained recently. The highest price that bitcoin has touched to date is $64,400.

Can you invest in bitcoin in India?
Yes, you can invest in Bitcoin in India, there are many crypto exchanges out there from which you can buy bitcoin. But in India, any type of cryptocurrency isn’t considered legal tender.

How to Invest in Bitcoin in India?
1. Choose a crypto trading app-
To buy bitcoin you would first need to have an account with any of the online crypto exchanges. Names of some of the popular crypto exchanges are given below Wazirx, Coindex and Unocoin. As a beginner, you would want to choose an app which is easy to use and has affordable charges.

Note: None of the apps above is guaranteed by us, no responsibility for any issue relating to the app is taken. User discretion is advised.

Decide a payment option-
To invest in Bitcoin, you would first need to transfer funds. Depending on your crypto exchange you would have different options such as bank transfer, UPI, net banking and also MobiKwik. Different crypto exchanges would charge you different transaction costs, also you need to understand that different fund transfers have different costs. If we take the example of Coindcx, it doesn’t charge its users anything for fund transfers through UPI and bank transfers. However, a 0.5% charge is levied on using net banking and 1% if you transfer funds above 2000 rs through MobiKwik. While Wazirx charges 23.6rs (taxes inclusive) for fund transfer using Net banking or you would require to first transfer funds to your MobiKwik wallet and then top up your wallet using MobiKwik. Usually, credit cards are not supported for such payments.

Place an order-
Now when you are ready with your funds, you would need to find a bitcoin (BTC). You would see the current price of bitcoin, and then enter the amount you would like to buy for. Unlike shares, you don’t have to buy cryptocurrency in 1 or 2 units. Usually, crypto is expensive and bought in a percentage of the whole, for example, if you buy a bitcoin worth $1000 when the price of bitcoin is $50000 you would receive 0.02%.

Select a storage option-
Once you are done purchasing the bitcoin you would need to store it somewhere. Usually, the crypto exchanges store your crypto in a web-based wallet, you also have an option to use cold storage or offline storage. You can transfer your crypto to your other storage, but users can be charged for this transfer.

What are taxes/charges paid for trading or buying Bitcoin?
Currently, in India, there is no separate bill passed for cryptocurrency. But on buying and selling Bitcoin one would be charged 1%tds, and on any profit made through the trade of bitcoin or any cryptocurrency, one would be charged a 30% tax on profit.

Conclusion- Cryptocurrency is surely one of the best investment options to beat inflation. And also for the diversification of your portfolio, it may be a great option. But there are a lot of fake cryptocurrencies out there, so one is advised to properly research and then invest. Note: This article is not investment advice, just written to guide people through the concept of cryptocurrency.

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