2. A currency is anything that has value and can
be exchanged for goods and services
Fiat currency versus virtual currency
Fiat currency is any legal tender designated and issued
by a central authority
Virtual currency: Unregulated digital money
E-money: Regulated digital money
3. Developed by “Satoshi Nakamoto.”
Started in 2009.
Bitcoin is an electronic peer-to-peer (i.e. with
no third party being involved) payment
network and a digital currency.
Decentralisation – not being backed by or tied
to any government or central bank.
Exchanged for fiat money.
The price of bitcoins is set purely by market
demand and supply.
4. It is decentralized
Peer to peer network
No central clearing houses
Not inflationary
Only 21 million bitcoin ever created
The last bitcoin mined in 2140
It is anonymous
One can hold multiple public addresses
It is transparent.
7. Bitcoin listed in stock exchanges:
BTC China, Mt.Gox in Japan, BitBox
in US, Bitstamp in Slovenia, and
Bitcurex in Poland.
India does not have any centralized
stock exchange
Users can buy or sell through various
websites.
23000 Indians users currently have
bitcoin wallet.
8. Mine, then sell
Invest or trade
Offer discount
9. Case law: Trendon Shavers of Bitcoin Savings &
Trust (BTCST)
Accused for scamming $4.5 million bitcoin.
Argued bitcoin wasn’t money
District court of US (2013)
Bitcoin can be used as money. It can be used to purchase
goods or services, and as Shavers stated, used to pay for
individual living expenses.
The only limitation of Bitcoin is that it is limited to those
places that accept it as currency.
It can also be exchanged for conventional currencies, such
as the US dollar, Euro, Yen and Yuan.
Therefore, Bitcoin is a currency or form of money, and
investors wishing to invest in BTCST provided an
investment of money.”
10. FEMA act 1999: currency defined, ”all currency notes, postal
notes, postal orders, money orders, cheques, drafts, travelers
cheques, letters of credit, bills of exchange and promisory
notes, credit cards or such other similar instruments, as may be
notified by the reserve bank.
the Payment and Settlement systems Act 2007,
A payment system cannot be exist without the authorization issued
by the Reserve Bank of India.
It cannot be a security: Securities contract act 1955
It cannot be a derivative
It cannot be a negotiable instrument
The Indian Copyright Act defines the term “computer programme”
as “a set of instructions expressed in words, codes, schemes or in any
other form, including a machine readable medium, capable of
causing a computer to perform a particular task or achieve a
particular result”
11. Reserve Bank of India (press release: 24 Dec 2013)
Creation, trading or usage of VCs as a medium for payment are
not authorized including Bitcoin, litecoin, bbqcoin, dogecoins
No regulatory approvals, registration or authorization stated to
have been obtained by the entities concerned for carrying on
such activities
Risks:
Hacking, loss of password, malware attack
No established framework for recourse of customers problems
No underlying or back of any asset for VCs
Huge volatility in price
Legal status of exchange bodies of bitcoin also unclear
Media reports on illegal usage of VCs
12. Anonymous:- take precautions
Never devalue due to inflation :-don’t hold longer
period
No transaction fee:-cheer up
You can buy things:
You can speculate on bitcoin
13. No inherent value:- like US Dollar
Not good for over-the-counter or face to face payments.
Like cash, if you lose your Bitcoin wallet, you lose your
money
They can be stolen
Using for illegal activity
volatility
14. India Today( March 3, 2014)
Indians lose crores of rupees in bitcoin exchange collapse
What happened?
Japan based Mt.Gox collapsed.
Loss over 3,000 crore. (7.5 lakh bitcoins)
It has 1.27 lakh creditors(1000 Japanese)
Indians 35000 bitcoins( 100 crores)
15.
16. Bit Coin: The Indian banker
What and why Bitcoins: journal of Accounting and
Finance
www.rbi.org.in › Press Releases
www.indiatoday.intoday.in › India › West ›
Maharashtra
https://bitcoin.org/bitcoin.pdf
www.mondaq.com/india/x/310426/.../Bitcoins+Leg
al+Or+Illegal+In+Ind...
An exploration of Bitcoin ecosystem.pdf
Editor's Notes
Anything that has a value and can be exchanged for goods or services