How can I invest in Bitcoin in India? What are the chances of it growing in the next 5 years?

Please note that answering your question is not a recommendation, and I am not qualified to give advice on investments.
It is said that- “ one doesn’t invest in bitcoin, one gambles on bitcoin ”.
Note: Bitcoin with a capital “B” references Bitcoin the network or Bitcoin the payment system; bitcoin with a lowercase “b” references bitcoin as a currency or bitcoin the currency unit.
If you are investing, does bitcoin have an intrinsic value, like gold?
To me, bitcoins look more like tulip bulbs. The price of a bitcoin may increase because, for example, it is attractive to technology enthusiasts, and because we are all reading stories about how people made –or failed to make - fortunes. But, like tulip bulbs, bitcoins could be worthless when the bubble bursts.

How Bitcoin gets in?

Bitcoins are “mined” by people solving problems with computers. In the beginning, the best way to make money from bitcoins was to mine them with a home PC. However, bitcoin mining becomes more difficult the more miners there are. Today, you need specialised hardware, and you need to join a “mining pool” where large numbers of miners work together and share the results. Coins are not pure profit because of the cost of the hardware and the electricity consumed when mining. Also, you don’t know what bitcoins will be worth when you start mining them.

How to Buy bitcoins?
You can buy bitcoins from a bitcoin exchange or online broker, directly from another individual. There are Android app which let you buy bitcoins and provide wallet to store that currency.
If you buy a digital currency from an exchange, it may well offer you an online wallet, but your money is at risk unless you have the keys. When the Mt Gox bitcoin exchange was hacked, around 850,000 bitcoins went missing. It was a $450m loss at the time, but at today’s exchange rate, it would be $2bn.

How to Secure Bitcoins?

As with anything valuable, hackers, thieves, and scammers will all be after your bitcoins, so securing your bitcoins is necessary.
If you’re serious about investing in bitcoin and see yourself buying a significant amount, we recommend using Bitcoin wallets that were built with security in mind.
  • Ledger Nano S – Ledger is a Bitcoin security company that offers a wide range of secure Bitcoin storage devices. We currently see the Ledger Nano S as Ledger’s most secure wallet. Read more about the Ledger Nano or buy one.
  • TREZOR – TREZOR is a hardware wallet that was built to secure bitcoins. It generates your Bitcoin private keys offline. Read more about TREZOR or buy one.
Bitcoins should only be kept in wallets that you control.

Bitcoins are scarce and useful
There are only 21 million Bitcoin, and as time goes on, they become harder and harder to mine. Take a look at Bitcoin’s inflation rate and supply rate:

Bitcoin’s Price
There is no official Bitcoin price. Bitcoin’s price is set by whatever people are willing to pay. CoinDesk’s price index is a good resource.
Bitcoin’s price is generally shown as the cost of one bitcoin. However, exchanges will let you buy any amount, and you can buy less than one bitcoin. Below is a chart showing Bitcoin’s entire price history:

When is the right time to buy?
As with any market, nothing is for sure.
Throughout its history, Bitcoin has generally increased in value at a very fast pace, followed by a slow, steady downfall until it stabilizes.
Use tools like Bitcoin Wisdom or Cryptowatch to analyze charts and understand Bitcoin’s price history.
Bitcoin is global and not affected by any single country’s financial situation or stability.
For example, speculation about the Chinese Yuan devaluating has, in the past, caused more demand from China, which also pulled up the exchange rate on U.S. and Europe based exchanges.
Global chaos is generally seen as beneficial to Bitcoin’s price since Bitcoin is apolitical and sits outside the control or influence of any particulate government.
When thinking about how economics and politics will affect Bitcoin’s price, it’s important to think on a global scale and not just about what’s happening in a single country.

Final Thoughts
It’s important to understand how Bitcoin works before investing any money.
Bitcoin is still new and it can take months to understand the true impact Bitcoin can have on the world.
Take some time to understand Bitcoin, how it works, how to secure bitcoins, and about how Bitcoin differs from fiat money.
The above information should not be taken as investment advice. It is for general knowledge purposes only. You should do your own research before buying any bitcoins.

Comments

Post a Comment