Ramanuj Sen

CRYPTOCURRENCIES – AS UNDERSTOOD. CRYPTOCURRENCIES – was a concept that was floated by a Japanese Gentleman called Satoshi Nakamoto in 2008 and launched in 2009. In simple words, it is a Digital Currency that enables a seamless, timesaving and cost-saving Digital Transaction, not involving Third Party Financial Service Providers, such as Banks. It is an aftermath of the frustration and shortcomings faced by Financial Traders, the World around, with the existing Banking and Financial System, Globally in place. A Cryptocurrency may be divided into two parts as follows : While CRYPTOGRAPHY is the codified language that interprets, and guides the Crypto Digital World, end to end, CRYPTOCURRENCIES are the mode of performing the Digital transaction, just as other currencies, round the Globe. As of now, Cryptocurrencies have become a popular mode of Digital transaction, and have provided a speedy platform for transacting to many round the Globe. But they have their own characteristics, such as, Legal but not to be used as Legal Tender, Fungible, and flexible to transact in any part of the World, without hindrance. However, out of all the Cryptos in operation today, BITCOINS are the most popular form and have gained paramount supremacy in the Digital World today. It wasn’t allowed in India until 2018, as RBI Banned it in that year, but the rule was overturned by the Supreme Court, in the same year, and today they account for a sizeable growth in the Indian Economy. BITCOINS V. PAPER CURRENCIES. Unlike Paper currencies used Worldwide, BITCOINS are digitally transactible, not to be used as Legal tender, and have a limited supply of about 21 Million at present, with 18.6 Million is use. They could also be transacted in Decimal forms, unlike Legal tender. The Indian Stock Exchanges provide a Platform for their Investment, and Investors could invest in them through Legal tender in part or full, as decided upon by them. In other words, they are a Digital form of Cash. The growth in value of BITCOINS is fluctuating as initially it did not have much value, but in present context, its value is more than 40,000 USD per Coin. Yet it is a HIGH RISK, HIGH GAIN Phenomenon, and Investors are advised not to be lured in investing all their stake into it, as the value may fluctuate anytime. But having said that, it may also be mentioned that, BITCOINS are absolutely legal and this is evident in the following Statistics pertaining to the Indian Financial Market : CAGR – 2014 – 2021 SENSEX = 11.62% NIFTY 50 = 11.64% GOLD = 4.71%, BITCOINS = 96.95% The BITCOINS and Other CRYPTO Transactions are taxable under the Indian Income Tax Act as – “ Income from Other Sources ”. As the concept of Crypto has just spread its wings, it may be anticipated to grow popularize and take the Global Financial Market to a new Digital Age. But then, as the present days of uncertainty have taught us to be skeptical, it would be worthwhile to wait, watch, explore and invest like a Watchful Investor. Given the situation as it stands, there would be new forms of CRYPTOCURRENCIES such as PI, emerging upfront, but they have to compete with the existing CRYPTOS and make their way with the progress of time. Hence, if you are planning to invest in these forms, your first step should be to invest in the one that is highly in use, and that too in small bites. Next you could think of crunching the new ones, in sizeable lots, as long as the monetary factor doesn’t come into picture. I would like to conclude saying that, all should be done keeping in prospect the long-term gains that may be derived out of such investments, hopefully. May be, that would take a few years from now. By – Ramanuj Sen, Dated – 8.9.2021. Reference : From an Expert’s YOUTUBE recordings.