It is safe to say that the whole world is shifting towards digitization in today’s age. Whether it comes to shopping, buying groceries, or even watching movies, everything is now happening at the click of a button, and the need to go out and travel while making the tasks longer is depleting. The same goes for the financial world as well. Bank accounts have now created apps for their users to conduct all their transactions, developers have come up with platforms to buy and sell stocks and many such financial services are now happening online. It was only natural for the traditional understanding of the concept of ‘money’ to also shift towards a digital currency. This gave rise to the era of cryptocurrency.
Cryptocurrencies have rapidly emerged as the newer and easier method to purchase various forms of goods and services online. This form of digital money does not exist in physical forms; it is online and holds significant value. Imitating the concept of ‘real money’ as we know it, these currencies are also stored in digital wallets that are usually found on software applications and can be reflected on smartphones or laptops. Safety is one of the biggest concerns regarding dealing with large amounts of money, therefore, the development of online blockchain technology was done to enable the cryptos to function smoothly and safely. Blockchains are decentralized systems that record the transactions of computers all over the globe. The currencies are maintained using an online distributed ledger which results in anonymity and transparency as it uses codes and encryptions.
The working of cryptocurrencies – Any transaction that takes place through these online ledgers and digital platforms is free from authority or government interference. It is the same for cryptocurrency in India at the moment as the ledgers are formed on a global platform and are controlled by no one. Owing to this, we see that many Indian users are registering themselves on platforms like CoinSwitch to be able to exercise complete control on their own money as they buy and sell, and make transactions on the various currencies available online. Every transaction is recorded on the blockchain which is a vast database holding the information on the transfers in real-time. In simple words, it can be understood as a large spreadsheet. These interfaces are so strong that they are capable of holding the transactions forever. Additionally, it is also protected by complex systems of encryption.
The protection around each bitcoin purchase – Firstly, it has been established that the complete system of the online ledger is safe and secure as it is online, encrypted, and safe from cheats. Secondly, when a bitcoin is purchased by any user in any part of the world, they receive a private key. This key is unique and works like a password. When one wants to access their digital currency, they would be able to do so using the private key associated with their BTC purchase. In the updates systems, each wallet would have a public key (which is linked to the account address) and a private key (that is used for transactions).
Purchasing cryptocurrencies – At the initial stage, the cryptos like bitcoins are mined. This is the process of generating new bitcoins for people to buy, sell, or exchange. This is done using computers with complex software applications that would assist in high-power mathematical calculations to mine the bitcoins. As individual users, the purchase process is simple and can be understood in a few steps.
- To create a ‘wallet’ one would have to make an account on the mediums that allow exchanges of cryptocurrency.
- Complete the KYC verification and provide the ID proof, bank details, etc that are prerequisites.
- Select the cryptos they would like to purchase and decide the amount they would like to spend. For example, the selected crypto to purchase is bitcoin. To do this, they would have to convert the value of Bitcoin to INR and then decide the value of BTC they are comfortable investing in. This is a necessary step before buying bitcoins as the prices are volatile and rise and fall rapidly.
Things to keep in mind before purchasing bitcoins in India –
- Acquire knowledge via research about the overall scenario of the markets of bitcoin in India as well as the global level. Keep track of the prices of bitcoins and follow the rise and fall carefully to understand some patterns
- Keep in touch with other enthusiasts or experts in the area especially if one is new to the process.
- If one is unwilling to take the risk and bear some financial losses, it would be ‘safer’ to invest in the coins that have more or less promised high returns like BTC, ETH, or the so-called stablecoins.
- Complete a thorough risk assessment before entering this market. This will enable them to determine the amount one would be willing to let go of. Additionally, this would also assist one in deciding other methods of investment such as mutual funds or fixed deposits if they want a steady return with minimum losses.
This is an exciting time and if trends speak for anything, it is only going to get better. Looking for the right time to invest won’t yield any results as the right time is here. Get going at the earliest and reap benefits from the process.
