2018 proved as bad start for cryptocurrency. Budget 2018 fettered Crypto, embraced Blockchain
On 1st Feb our Finance Minister in budget 2018 read “The Government does not consider crypto-currencies legal tender or coin and will take all measures to eliminate use of these crypto-assets in financing illegitimate activities or as part of the payment system.”
Budget 2018 wasn’t in favour of cryptocurrency holder as Finance Minister Arun Jaitley, in his budget speech (Feb. 01) stated that the government will do everything to discontinue the use of bitcoin and other virtual currencies in India. He further clarified that India does not recognize them as legal tender. He further focused to blockchain technology in payment systems.
Cryptocurrency burgeoned highly in 2017. Bitcoin mounted all the year round in 2017, even hitting an all-time high of $19,783. Other cryptocurrency also flourished during the year. 2017 showed increase in initial coin offering all over the world including India.
This situation drew attention and called in for a commendable control over investment in cryptocurrency.
Since 2013 RBI issued three warnings to alert investors in cryptoassets. The first came in 2013 then later in Feb 2017 followed by next in Dec 2017.
Crypto investment remains no more attractive as Government is keeping a keen eye over crypto transactions much before the day of budget.
Although 2017 was most favourable for bitcoins in India, 2018 didn’t bring a good start for the same.
Five Reasons that show Bitcoin and other cryptocurrency is no more Isolate
I. In Jan 2018 top banks including State Bank of India, Axis Bank, HDFC Bank, ICICI Bank and Yes Bank had suspended accounts of some major Bitcoin exchanges in India over suspicious transaction.
II. Also, instruction was send to traders asking them to deposit 20% advance tax on crypto earnings. Investors, who made a treasure selling the virtual currency, will need to pay 20 per cent advance tax on the earnings to avoid any action by the income tax department.
III. Income tax department issued SHOW CAUSE NOTICES to those who used crypto exchanges.
Show cause notice will demand following information from the individual:
- Details of sources of income, ITR Filled, properties held
- Investment in cryptocurrency
- Source of Initial investment in cryptocurrency
- Accounts in cryptocurrency both in India and abroad
- Details of wallet along with unique ID
- Number of wallets held by you and your family on blockchain along with details
- Details of all transactions in bitcoin and other cryptocurrency for you and your family
- Profits or capital gains from such transaction
- Mode of payment for making purchase on website registered outside India
- Mode of receipt of payment on sale from website registered outside India
- History of cryptocurrency transactions in cash
- Details of investment in mining
- Information about bitcoins received in lieu of slaes of goods or services both in India and abroad
- Details of investment/sale of cryptocurrency both in India and abroad during 08/11/2016 to 31/12/2016.
IV. Government has planed to issue its own cryptocurrency Laxmi Coin. It is all set for launched in March 2018. The purpose being RBI is looking for fiat cryptocurrencies and not for privately issued cryptocurrencies such as Bitcoin. Although Government has not made any official announcement in this regard.
V. Cryptocurrency is not a legal tender in India. Until the cryptocurrency legislation comes in, it is hard to know whether the government will declare it 100% illegal or will it formulate rules to regulate crypto investments. However, the government will adopt the blockchain technology to encourage the digital economy which will truly contribute in making Digital India.
More focus is given on Digitizing India while drafting Budget related to cryptocurrency.
The Union Minister said, “Distributed ledger system or the block chain technology allows organization of any chain of records or transactions without the need of intermediaries… The Government will explore use of block chain technology proactively for ushering in digital economy.”
Now clearly block-chain is the backbone of cryptocurrency in India.
Blockchain is a digital ledger in which transactions made in bitcoin or other cryptocurrency are recorded chronologically and publicly. Blockchain may be the future of finance and financial technology.
Finance Minster Focused on usage of blockchain for crypto transactions as it is the platform that enables Bitcoin and other cryptocurrencies to be exchanged. In its elemental form, Blockchain is a decentralized database system. Also it will enable government to track heavy transaction and eliminate fraud to certain extent.
For the users altogether blockchain will prove to be beneficial as it helps to:
Reduced transaction costs:
Blockchain allows peer-to-peer and business-to-business transactions to be completed without the need for a third party, which is often a bank. There is no involvement of a middleman which will however reduce costs to the user or businesses over time.
This technology is almost always open source. It makes possible to track where money goes and how it is spent. Entries in the ledger can be made only if they are validated by the system. For making any changes every single other blockchain in the system is needed to be changed. It is impossible to delete a blockchain transaction in an attempt to hide it. However no fraudulent transactions can be added.
Faster transaction settlements:
When it comes to traditional banking system transactions to take days to completely settle. This is due to protocols in bank transferring software, as well as the fact that financial institutions are only open during normal business hours, five days a week. However, blockchain technology is working 24 hours a day, seven days a week, meaning blockchain based transactions process considerably more quickly.
Blockchain allows individual transactions to have their own proof of validity and the authorization to enforce those constraints. However it ensures that this information will not go in unwanted hands.
Maintain User-controlled networks:
Rather than having a third party control, users and developers are the ones who have control over transactions.
What does the Blockchain do?
Using cryptography to keep exchanges secure, blockchain provides a decentralized database, or “digital ledger”, of transactions that everyone on the network can see. This network is essentially a chain of computers that must all approve an exchange before it can be verified and recorded.
How does Blockchain mining work?
What is cryptography in Blockchain?
A blockchain facilitates secure online transactions. Furthermore a blockchain is a decentralized and distributed digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the collusion of the network.
How to create a Blockchain Wallet account?
STEP 1: Open blockchain.info website
Open blockchain.info. In addition choose Wallet option from the list of navigation menu located at the top of the web page.
STEP 2: Click “Wallet” button
STEP 3: Complete the Registration Form
STEP 4: Look up your Block Chain Dashboard
STEP 6: Secure your account – Level 1
STEP 7: LEVEL 2 – Add your mobile number
STEP 8: LEVEL 3 – Block suspect IDsLevel 3 safety: Further blocking IP that suspects to be part of anonymous from TOR network.
Get your blockchain account opened and start cryptocurrency transactions hazel free.