Bitcoin's soaring popularity and value since its inception in 2009 is a curious case for many investors. Like the Internet boom, cryptocurrency also took only a few years to become a mainstream topic, and it is growing now more than ever. Many investors, as well as professionals, have made cryptocurrency investment a part of their portfolio. But Bitcoin and other cryptocurrencies, unlike fiat currency, aren't a physical asset. These digital currencies do not follow a centralised system and don't rely on banks. Their transactions happen through a decentralised network of computers.

So, are we investing in anything at all? Or are we just speculating some returns that may happen only in the far future?

In 2018, business magnate Warren Buffett had publicly denounced Bitcoin as not an investment. Three years since, the world has seen a lot happening on the cryptocurrency front. On one hand, there are business giants investing in these digital assets. On the other hand, crypto scams have left wreckage behind them.

We should perhaps stop asking whether buying Bitcoin is speculation. Instead, let us focus on the simple rules to follow in the cryptocurrency market for the ones who would like to turn it into a real investment.

1) Long-term or short-term profits

Speculation is when we are engaging in a risky transaction, hoping for a short-term profit. Instead of being a speculator, become a real investor by focussing on long-term goals. It's a thumb rule not to invest an amount that we can't bear losing. Cryptocurrency risks are as real as they can get. So, we should weigh the risks and goals that suit us best.

2) Cryptocurrency quality

It's better to stay away from flashy and risky projects while buying coins. The promise of a quick profit may often leave us hoping for returns for eternity. But if we want to really invest in a coin, we should check the red flags. Profits may not be as quick, but it'll save us in the long run. Bitcoin price in India has increased manifold since its inception.

3) Diversify holdings

Don't put all the eggs in the same basket. Diversify the portfolio, so that, in case a coin fails in the market, all isn't lost. That's better than stocking up on one cryptocurrency and speculating that things get better. Real investment is when we prudently choose a safe ground in a volatile market.

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Cryptocurrency Investments: Is Buying Bitcoin Investing or Speculating? - Gadgets 360

Well, it is not the first time that the Indian government has pondered over banning cryptocurrencies. Initially, in 2013, when bitcoin was launched, the first few years went in hush-hush. The technology was new. This was something that was a store of value with no central authority.

Not only the government but also, enthusiastic investors were speculating how bitcoin will turn out to be. When after the end of 2016, this revolutionary financial asset made noise, the Indian government came to action.

Any government of the world is about authority, power and regulation. And bitcoin, or rather say, cryptocurrency, took that power from the government. There was no bank, no RBI or no scrutiny around your money. You held an asset and you did your investment, you used the money gained and you made sure your investment strategy works for you. There was no advisory, no policymakers, no brainwashing whatsoever. The bitcoin investment grew so much in 2017, that the Indian government had to come into action.

On the same lines, we thought writing letters is the best way to reach farther places. Then boom. The 2000s came and the internet was all over. The communication could be done in milliseconds.

So now let us talk about what we cannot do when there is a ban. When we say the ban, we mean that the transactions between the bank and your crypto exchanges will be stopped. This means that you will not be able to convert your local currency into buying any kind of cryptocurrency. This also means that you will not be able to liquidate your HODLed cryptos and get them encashed. This means, your HODLed cryptocurrency will be on *HODL* for some time more until the ban is uplifted.

But what if you send your cryptos to someone who is not an Indian resident and belongs to a country where crypto is legal. Well, in that case, you can always send your acquired crypto, and get the equivalent INR in your bank. However, this procedure of exit would come at a cost. The foreign exchange cost and penalties would cost you more than the actual exchange fees, had there been no ban in your own country.

But, you still need to identify the catch here. By the above method, we see that the transactions that involve crypto are still possible. No government can ever tame the internet. The government tried to ban PUBG. The gaming community in India identified VPNs that would still make PUBG accessible to them. The government tried banning porn, but anything that is accessible to everyone, or is made available on the cloud, can never be fully tamed. The same goes with the decentralised and open source-based cryptocurrencies as well.

Unocoin is one such platform that lets its user buy, sell and trade 40+ cryptocurrencies. The transactional fees are very nominal as compared to the features that it provides. Unocoin has always respected and abided by the laws set by the government of India and RBI. But it also makes sure it creates a space where the crypto exchanges are smooth. Hence, Unocoin collaborated with Airtm for a cross-platform transaction. With this Unocoin - Airtm collab, any Unocoin user can buy any crypto from either platform in exchange for his/her local fiat currency and via the pairing coin US

It is like entering a bridge, walking on the bridge and reaching the other side of the river. With the USDT acting as a pairing coin or the bridge, the walk from one end to the other and back to the first end is possible.

While there are speculations on the cryptocurrency, the virtual currency enthusiasts know for sure, that these are only the ups and downs that come in their investment plan. India would eventually be a country where there will be no inhibitions over cryptocurrencies, sooner or later.

The writer is Co-founder & CEO of Unocoin Technologies Private Limited

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What happens to the cryptocurrency you buy if India decides to ban it - Economic Times

Reserve Bank of India (RBI) governor Shaktikanta Das on Friday said that the central bank may launch a pilot of its digital currency by December this year. Das said in an interview that the RBI is working on a phased implementation strategy for the same.

He added that the bank is "extremely careful" about the central bank digital currency (CBDC), which is a new product for it.

This is an important statement from the governor of the country's central bank, in view of the rise in popularity of cryptocurrency. The Supreme Court has already quashed a 2018 circular of the RBI to ban banks and financial institutions from providing services to any individual or business entities dealing with or settling cryptocurrencies, including Bitcoin.

At a webinar last month, RBI deputy governor T Rabi Sankar had said that the time for CBDCs has come.

What is a central bank digital currency?

The RBI defines CBDC as a legal tender issued by a central bank in a digital form. It is the same as a fiat currency and is exchangeable one-to-one with the fiat currency. Only its form is different.

It also said that the idea is not new. At his keynote address, Sankar said in July that the origins of CBDCs can be attributed to American economist and Nobel laureate James Tobin, who proposed a digital form of payment in 1980s.

What is the need for a CBDC?

Across the globe, the adoption of CBDC has been justified for three main reasons: Central banks, faced with dwindling usage of paper currency, seek to popularize a more acceptable electronic form of currency; Jurisdictions with significant physical cash usage seeking to make issuance more efficient and Central banks seek to meet the publics need for digital currencies, manifested in the increasing use of private virtual currencies, and thereby avoid the more damaging consequences of such private currencies.

Moreover, the RBI says that payments using CBDCs are final and thus reduce settlement risk in the financial system. CBDCs would also potentially enable a more real-time and cost-effective globalization of payment systems, according to the central bank.

Difference between cryptocurrency and CBDC

Virtual private currencies like Bitcoin have gained wide acceptance in the last few years. Sankar said that if these private currencies gain recognition, national currencies with limited convertibility are likely to come under threat.

Virtual currencies like Bitcoin are digitally encrypted, decentralised and not linked to or regulated by any government. A CBDC, on the other hand, will be a digital version of the fiat currency - one backed by the government.

While cryptocurrency operates independently, a fiat currency is issued by a country's central bank. The latter requires intermediaries to make transfers.

Moreover, the supply of fiat currency is regulated by the central banks, and can be increased of decreased depending on the usages, whereas the supply of cryptocurrency is limited.

Also, a currency marked as a legal tender can be kept in bank accounts; the cryptocurrencies need to be stored in digital wallets.

CBDCs, depending on the extent of its use, can cause a reduction in the transaction demand for bank deposits and reliance on cash.

Why we need CBDCs in India?

According to RBI, India's high currency to GDP ratio calls for a switch to CBDCs. If large cash transactions can be replaced by CBDCs, the cost of printing, transporting, storing and distributing currency can be reduced.

It also said that freely convertible currencies like the US dollar may not be affected as most of the private virtual currencies in vogue are denominated in US dollar. The RBI said that virtual currencies might encourage the use of US dollar. So, a digital currency developed by India could help retain public preference for the Rupee.

Read more:
RBI may launch e-currency: How will it be different from cryptocurrency? - Hindustan Times

Cryptocurrency, and Bitcoin in particular, is always in the news nowadays and is becoming a significant factor in modern financial markets. Unsurprisingly, the subject of regulating cryptocurrency in one form or another has become an important concern. China is alreadyrestrictingits use. Central banks around the world are looking at decentralized cryptocurrencies to assess their potential impact on financial stability, or to even issue their own digital currencies. Securities and Exchange Commission Chair Gary GenslerGary GenslerSEC ups disclosure requirements for Chinese companies seeking US IPOs: report Crypto industry seeks to build momentum after losing Senate fight Equilibrium/ Sustainability Tree alive 'when Jesus was on Earth' threatened by rising seas MORE described crypto trading as theWild Westrecently calling for Congress to create a protection regime for crypto investors. A major impasse for the critical infrastructure bill was the issue of taxing crypto transactions. Others have proposed that stablecoins beregulated like banks.

Unsurprisingly, the crypto industry has developed a formidable lobbying force to ward off further regulation. Regulation is totally antithetical to the very idea of decentralized cryptocurrency.

Yet, little focus has gone to the environmental dangers of cryptocurrency. Yes, Elon MuskElon Reeve MuskThe Hill's Morning Report - Presented by Facebook - Biden continues to grapple with Afghanistan chaos Can SpaceX's Elon Musk help NASA get back to the moon by 2024 after all? Hillicon Valley: Key QAnon influencer 'GhostEzra' identified MORE attracted the usual hype when he first announced that Tesla would accept Bitcoin and then stated (rather belatedly given thescience) that since he learned of the environmental damage inflicted by cryptocurrencies he would reverse that decision.

Cryptocurrencys impact on the environment is indeed very serious possibly the single most important policy factor against its growth.

Cryptocurrencies, Bitcoin and Ethereum in particular, are so damaging to the environment that they threaten to reverse any gains achieved through the transition to electric vehicles and the reduction in fossil fuels use. Much of this consumption and output derives from the energy and processing intensive mining of Bitcoin and proofs of work. Even now the total Bitcoin carbon footprint exceeds the total emission reductions of electric vehicles. According to the Cambridge Bitcoin Electricity ConsumptionIndex, Bitcoin already consumesmore energythan the whole of Argentina (pop. 45 million).

Digiconomists Bitcoin Energy Consumption Indexestimates that Bitcoin and Ethereum together consume the same amount of power as Ukraine and Israel, totaling 52 million people. The carbon footprint of asingleBitcoin transactions equates to nearly 2millionVisa transactions, or 135,229 hours of watching YouTube! A single Ethereum transaction consumes the equivalent power used by an average U.S. household over 4.55 days. Furthermore, the energy and carbon footprints of both these and other cryptocurrencies are projected to grow exponentially in volume as speculation, hype and criminality continue to drive volume. Already, total crypto energy consumption is roughly comparable to the carbon emissions produced by the metropolitan area ofLondon, according to The Gaurdian.

Apart from these staggering energy consumption statistics, crypto is alsointensifying competition for chips, for which there is already a global shortage impeding the manufacture of alternative energy devices, including EVs. Crypto has already grown exponentially. Further growth will only broaden its carbon footprint.

Given thedaunting targetsfor carbon reduction that we face in the U.S. and globally, this development should concern everyone. If there were offsetting gains with crypto, one might justify it on a cost-benefit basis, as we do with EVs (which inflict some damage but less overall than combustion engines). Yet, there are no real gains.

There are many classes of crypto adventurers: libertarian idealists who dream of freedom from sovereign monetary control; hardware and software players mining the stuff for reward; traders who derive revenue from crypto transactions; speculators who ride the wild volatility of crypto; crypto wallet raiders; and criminals who exploit the relative degree of anonymity crypto offers as ransomware. Despite grand statements about reducing transaction costs and liberation from fiat money, none of the legitimate players have made a case for crypto contributions to general welfare. Beyond rhetoric they have not even seriously attempted to. Instead, they have relied on the naivete of lawmakers, regulators and journalists.

Well-informed commentators have described crypto as agiant bubble. Yet, regulators continue to display timidity in addressing the subject. While the Biden administration urges the auto industry to transition to 50 percent EVs by 2030, we recklessly allow crypto to escalate at huge current and potential cost to our carbon footprint.

China has at least taken one step in the direction of connecting crypto to climate change concerns: It hasbannedcrypto mining. This activity will only move elsewhere. Legislators and policymakers should inform themselves now and act soon to stop the counterproductive growth of this industry, no matter how potent their lobbying forces have become. If they do not, even as the threat posed by global warming enters code red according to the Intergovernmental Panel on Climate Change we will find ourselves in yet another situation where an entrenched industry prevents us from advancing the common good and tackling climate change.

LawrenceG.Baxteris the David T. Zhang professor of the practice of law at Duke University where he also directs the Global Financial Markets Center.

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Cryptocurrency makes the climate crisis worse | TheHill - The Hill