ABSTRACT up when we typed ‘bitcoin’ in Google’s



The first search result that popped
up when we typed ‘bitcoin’ in Google’s search bar was a currency conversion
tool showing the Indian Rupees equivalent of the value of bitcoin in real time.
Clearly, this is what majority of people are searching for right now. One might
have thought that the first search result would be a description of the
cryptocurrency and its history but that is old hat now. Finance minister Arun
Jaitley and the Reserve Bank of India might be advising people to avoid this
new entrant but people are clearly not listening. Something that most people
had not even heard about till say two years ago is now a chart buster – the
fastest growing ‘startup’ of all. Here is another interesting trend. According
to Google Trends, number of searches for ‘bitcoin investing’ had overtaken
‘stock investing’ between November 26 and December 2.

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Bitcoin is a
cryptocurrency which can also be
called as a type of digital currency. It was founded in the year 2009 by
“Satoshi Nakamoto”whose real identity is still a mystery. There are Bitcoin
wallets available on Internet just like Paytm wallet and other wallets that we
use online. Although no cryptocurrency has any physical presence still Bitcoins
can be used to buy items online on websites that accept cryptocurrency as a
payment method. Even big companies like Dell and Microsoft accept bitcoins. One
can install the Bitcoin wallets on mobile or computer, the wallet will generate
an address that can be used for receiving bitcoins from anyone on the



CRYPTOCURRENCY:         A digital currency that relies on
cryptography to validate and secure transactions. There are different types of
cryptocurrencies. Bitcoin and ethereum are among the best known.

BLOCKCHAIN:                     Also  known as distributed ledger technology (DLT),
it is a shared record of information that is maintained and updated by a
network of computers rather than a central authority.                                                                                

MINING:                                  The process
through which transactions are verified and added to the blockchain and new
bitcoins are created.                                                     

PUBLIC LEDGER:                  A distributed ledger that is
open to everyone on the internet. Bitcoin’s blockchain is a public ledger.                                                          

A   distributed ledger that needs
permission to access. It is maintained only by a limited number of parties.
This is the kind of blockchain tech that large corporations, such as banks may
use due to data privacy needs.           

ALTCOIN:                                   An
alternative cryptocurrency to Bitcoin.

WALLET:                 Software that allows users to
make electronic payments, purchases and store their cryptocurrencies online.

KEYS:                        A form of cryptography
that allows users to access their cryptocurrency and is an essential part of
its security.


CONTRACTS:            Software that runs on blockchain
technology and can automatically enforce the terms of an agreement. A “smart
bond,” for example, would automatically make interest payments to investors.

Initial  Coin Offering, or a token
sale. This is the process or event in which funds are raised for a new
cryptocurrency venture and contributors receive tokens in return.

SECURITY MODULES (HSM):  It is a device that secures data such as
digital private keys in a very secure fashion. Sources: Investopedia,
Blockgeeks, Blockchaintechonologies.com

It is Bitcoin’s top rival. Both the blockchains differ primarily in
purpose and capability. While Bitcoin blockchain is used to track ownership of
digital currency Bitcoin, Ethereum blockchain can be used to build apps.

An alt-coin clone of bitcoin that was created in August 2017 when a
group of Chinese miners initiated a fork of bitcoin’s blockchain.

The speed of a bitcoin transaction.



interesting fact about Bitcoin is that no single entity or government controls
bitcoins. One can buy or sell even sub-units of bitcoin, 1 Bitcoin is equal to
1,000,000 bits, bit is a subunit of

Now, you
must be wondering how the records of the bitcoin transactions are kept to check
if there is any fraud or anything else. Bitcoin works on the blockchain technology which is a public
ledger. Any bitcoin transactions done by users on the internet gets recorded
into this public ledger. For the maintenance of this ledger, mining is done in
which users provide the energy of their supercomputers which helps in doing
calculations for this ledger. These users get bitcoins for providing computers.
The only information anyone will see in the public ledger is user’s Bitcoin
wallet address. This ensures anonymity of the user. One negative of bitcoin is
that its transactions can’t be refunded.


One can buy Bitcoin using
the ‘real money’. Bitcoin price is about $10,000 right now. Another method of
getting Bitcoin is let people pay you in form of Bitcoins for any service or
product online. The third way of getting Bitcoins is giving your supercomputer
for mining.


The Reserve
Bank of India has reiterated caution against the use of virtual currencies like
Bitcoins. On Tuesday, 5 December in a press release
they emphasized the risks again for the third time. 

The Reserve
Bank of India warned the users, holders and traders of Bitcoins and other
Virtual currencies like litecoins, bbqcoins, dogecoins etc. first on 24
December, 2013 when virtual currencies were still a growing community.

The RBI had
declared that it gives no regulatory approvals, registration or authorisation
to the Virtual Currency system. The persons using VCs are vulnerable to
financial, operational, legal, customer protection and security related risks.

In the press release
of 1 February, 2017, RBI repeated the caution referring to the previous one.

there has been a “wake of significant spurt in the valuation of many VCs and
rapid growth in Initial Coin Offerings (ICOs)”, where Bitcoin soared up to a
record high of $11,800 on 3rd in this month . RBI mentioned by Jose J.
Kattoor, the Chief General Manager that the current situation calls for a
reiteration of the warnings.


As the Bitcoins are stored
digitally, the wallet is subject to losses arising out of hacking, loss of password,
compromise of access credentials, malware attack, and since there is no
regulatory authority present, loss of the wallet for any reason, could be
permanent and irretrievable

the same reason of absent central authority, customer problems and disputes
will be unresolved, leading to probable loss of wealth.

Volatility in value could harm the
users’ interests.

Lastly, there is the threat of
violation of Anti Money Laundering and Combating The Financing of Terrorism.
Media reports say that illicit activities are funded by the Bitcoins, and in
that case, some users could unknowingly get involved.

However, the central bank is currently studying the usage of
virtual currencies under the extant legal and regulatory framework in
India, including Foreign Exchange and Payment Systems laws and regulations.



After the
massive surge in its price, Bitcoin is becoming mainstream in India. Even
though financial industry regulator Reserve Bank of India (RBI) has issued several warnings
about the cryptocurrency, that doesn’t mean that it is not catching the fancy
of investors in India. And courtesy that, a new initiative has been launched in
the country called the Blockchain Foundation of India (BFI). It is a community effort to promote the growth of
blockchain-based initiatives in India.

According to the organisation, the aim of BFI is to connect all
blockchain-based startups, tThe executive members of BFI are a blockchain
startup named Velix.ID, Bitcoin exchange in India called CoinSecure, and a
startup working to promote the startup culture in India, OneCo.Work.


Members of BFI are Vishnu Chandra – deputy director general with National
Informatics Centre, Padmaja Ruparel – president of Indian Angel Network,
Himanshu Bindal – founder of OneCo.Work, Mohit Kalra – CEO at CoinSecure, Manav
Singhal – co-founder at Velix.ID, Arun Mittal – director at Exide Industries,
Nilesh Gopali – country head for Cloudbuy, Ashutosh Chadha – group director at Microsoft India, Kunal Patel – advisor at Yes
Bank, Satendra Singh – head of strategy and business development at Nokia, Dipankar Chakrabarti – executive
director at PwC.

Commenting on the launch, Manav Singhal from Velix.ID said, “Blockchain is
the future of technology itself. We have a lot of talent working with
blockchain in India; what we truly needed was a platform to collaborate and
encourage. Through the BFI platform, we will be able to accelerate the growth
of blockchain technology in India remarkably.”

According to the company the goal of BFI is three-fold: Firstly, to create
awareness about the blockchain technology in a more Indian context. Secondly,
to build a unified community to advocate for improved blockchain reception in
India. And lastly, to accelerate Blockchain growth by making innovations in the
blockchain sphere. heir CXOs, blockchain enthusiasts and government bodies at a
one platform to collaborate.



Gang of
crooks floated a fictitious cryptocurrency, put up a website and duped several
people in Delhi and other parts of the country
before crime branch got on their trail and arrested a key player. The accused,
Narendra Dahiya, hails from Sonipat. Eight other members of the gang have been
identified and raids are being conducted to nab them.

Joint commissioner (crime) Alok Kumar said more arrests were likely in the
coming days. Explaining their modus operandi, Kumar said the gang had named the
“currency” Kashhcoins and put them up for sale on its website —
Kashhcoin.net. They devised a unique combination of cryptocurrency and
multi-level marketing to make huge profits. They asked each buyer to add their
families, relatives and friends in the chain to earn profits. For every new
member added, they were promised incentives over and above their profit.

On their website, the company
claimed to provide “all residents of earth” with sufficient number of
coins to achieve independence from other money. “There is a finite number
of KASHH Coins. The maximum amount of KASHH Coin is 2,515,020,000 and, unlike
money issued by government, KASHH Coin can’t be affected by inflation and are
impossible to counterfeit (sic),” the website says.


The website also had a disclaimer for indemnity and used complex legal
language. The gang promised a return of 10% for five years to their buyers,
apart from the “shooting rate” of the cryptocurrency, which they
claimed would soon cross the rate of Bitcoin. The initial price of each
Kashhcoin was Rs 3.5.

Cryptocurrencies sold by the gang were valued at Rs 50 crore.

One of the buyers, Arun Chauhan, smelled a rat and tipped off Delhi Police’s
crime branch. Chauhan was duped of Rs 14 lakh, he claimed. Cops filed an FIR in
August and raids were conducted in Maharashtra and Gujarat to nab the suspects.
During this time, more complainants poured in. A team, led by ACP Sandeep Lamba
and inspector Sandeep Malhotra, managed to track down Dahiya in north Delhi.



Bitcoin hit an all-time high just below
$8,000 on Friday; on talk that software upgrade whose suspension sent the cryptocurrency into a tailspin at the end of last week was, after all,
going ahead within hours.

Talk that the upgrade – which could split or “fork” bitcoin into two
versions – would go ahead was driven by a statement on the website of Coinbase, the world’s largest bitcoin company with operations in 32

“The Bitcoin Segwit2x fork is expected to occur in the next six
hours,” it said in a statement published at 1004 GMT.

If a bitcoin clone were created, any holders would also in theory instantly
become owners of the new spin-off.
Bitcoin, generally highly volatile, has been on a particularly wild ride,
sliding at the end of last week to as low as $5,555 after plans for Segwit2x
were suspended, before bouncing more than 40% since Sunday.
It reached as high as $7,997 in early Asian trading on the Luxembourg-based
Bitstamp exchange, before easing back a touch to trade broadly flat by 1115 GMT
at $7,863.
Market-watchers said speculation about the fork was driving bitcoin higher. If
it went ahead as expected, holders of the cryptocurrency would be able to sell
the spin-off at a profit if the market were to assign it any value.

But in a post on the Medium blogging platform, the company’s communications
director David Farmer said Coinbase did not expect the
fork to successfully split bitcoin in two, as it lacked the necessary support
from the network to do so.

“Whenever people hear ‘fork’
nowadays the price jumps, as people hope to get the free dividend,” said Charles Hayter, founder of
cryptocurrency data analysis site Cryptocompare.

“There is also a resulting spike in demand for people entering bitcoin”
from other cryptocurrencies.

Farmer said the company was actively monitoring the situation and that all
funds stored in Coinbase wallets remained safe. All bitcoin buying and selling
would be suspended on Coinbase in the hour prior to the fork, which is expected
between 1400 and 1600 GMT.

Bitcoin is
on track for its best week since July. For the year, it is up more than 700%.



With the cryptocurrency soaring to
another record high just a few percent away from $10,000 after gaining more
than a fifth in value .The digital currency has seen an eye-watering tenfold
increase in its value since the start of the year and has more than doubled in
value since the beginning of October, lifted by the prospect of crossing over
into the financial mainstream, amid a flurry of crypto-hedge fund launches.

It surged as much as 4.5% on Monday to trade at $9,721 on the Luxembourg-based
Bitstamp exchange, before easing back to around $9,600 by 1155 GMT.

Data compiled by Alistair Milne, the Monaco-based manager of the Altana Digital Currency Fund, showed U.S. bitcoin wallet provider Coinbase added 300,000 users between
Wednesday and Sunday, during the U.S. Thanksgiving holiday. The total number of
Coinbase users globally now stands at 13.3 million.

“The Coinbase data is evidence that adoption is not slowing down,”
Milne told Reuters. “Breaking $10,000 seems inevitable following the
recent price action.”

Bitcoin’s price has been helped in recent months by the announcement that the
world’s biggest derivatives exchange operator CME Group would start offering
bitcoin futures. The company said last week the futures would launch by the end
of the year though no precise date had been set.

So far, institutional investors have largely stayed away from the market,
viewing it as too volatile, too risky and too complex to invest other people’s
money into. But some say the launch of the CME futures could lure in more
mainstream investors.

“Promises of bitcoin futures opening the door to institutional money are
supercharging the price,” said Charles Hayter, founder of cryptocurrency
data analysis website Cryptocompare.


The latest price surge brought
bitcoin’s “market cap” – its price multiplied by the number of coins
that have been released into the system – to more than $163 billion, according
to industry website Coinmarketcap.

The market cap of all cryptocurrencies, meanwhile, topped $300 billion for the
first time, the site said, making their estimated market value greater than
that of Wal-Mart.

The staggering price increases seen in the crypto-market have led to multiple
warnings from central bankers, investment bankers and other investors that it
has reached bubble territory.

Some say that this could prompt regulators in the West to crack down on the
market in a similar fashion to China, where bitcoin exchanges were shut down
earlier this year.

“Regulators know the rewards of cryptocurrency and blockchain could be
huge but (they) have more than one eye on the catastrophic ramifications if good
governance, stability and control are not preserved,” said David Futter, a
fintech partner at law firm Ashurst, in London.

“If the carrot of
self-regulation proves insufficient, the regulators will not hesitate to use
their stick.”
Bitcoin’s biggest rival, ether – sometimes referred to as Ethereum, the name
for the project behind it – has seen even more stratospheric gains this year,
up more than 6000%. It hit an all-time high just below $500 on Monday, with its
market cap nearing $50 billion.



Bitcoin rocketed to a lifetime high well
above $16,000 on Thursday after climbing some 67 percent over one week,
intensifying the debate about whether the cryptocurrency is in a bubble about
to burst.
The largest US cryptocurrency exchange struggled to keep up with record traffic
as the price surged, with an upcoming launch of the first bitcoin futures
contract further fueling investor interest.
Proponents say bitcoin is a good medium of exchange and a way to store value,
much like a precious metal. They also argue it is preferable to traditional
currencies because it is not subject to central bank manipulation.
The supply of bitcoin will eventually be capped at 21 million, and some 16.7
million have already been released .But critics say that the price run-up is a
bubble that has been driven mostly by speculation, leaving bitcoin vulnerable
to a sharp reversal. JPMorgan Chase & Co Chief Executive Jamie Dimon famously called bitcoin a fraud in

“Bitcoin remains a major gamble as it is very much an asset that remains
in uncharted waters, we’ve simply not experienced this before,” said Nigel
Green, founder and chief executive of deVere Group.

“Also, an asset that goes almost vertically up should typically raise
alarm bells for investors,” he added.

The world’s biggest cryptocurrency has surged seventeen-fold in value so far this

The latest move brought its so-called market cap, its price multiplied by the
number of bitcoins in circulation, to nearly $305 billion, according to
Coinmarketcap, a trade website. By comparison, the market value of Wal-Mart
Stores Inc is around $288 billion.

Analysts said the launch slated for this weekend of bitcoin futures by Cboe
Global Markets Inc’s Cboe Futures Exchange, one of the world’s biggest
derivatives exchanges, was helping drive up the price on expectations it would
draw more investors to the market.

The CME Group will launch bitcoin futures one week later, while Nasdaq Inc
plans to get into the mix next year.

It is not clear to what extent big U.S. banks will participate in the new
bitcoin-related activity.
Goldman Sachs Group Inc will clear bitcoin
futures for certain clients when they go live, a spokeswoman said on Thursday.
The bank is “evaluating the specifications and risk attributes for the
bitcoin futures contracts as part of our standard due diligence process,”
spokeswoman Tiffany Galvin said.
Bitcoin climbed as high as $16,615.62 on the Luxembourg-based Bitstamp
exchange, up nearly 22 percent on the day. It was last at $16,607.14.
Coinbase, the largest U.S. platform for buying and selling cryptocurrencies,
said on Thursday on Twitter that it had experienced an outage due to record
traffic. The venue was last up and running.
Some investors said they still see scope for bitcoin to soar even higher.
“It will hit potentially $20,000 because so much capital is coming in and
it’s the most liquid secure coin out there,” said David Drake, founder and chairman of DLJ
Capital, a family office in New York.
Other trading venues showed different prices for bitcoin, which trades in more
than 100 cryptocurrency exchanges that are not accountable to any central
authority. For instance, at institutional trading platform GDAX, bitcoin topped
$19,000, while it hit above $16,000 at its Bit.


RBI has not given any licence/authorisation to any
entity/company to deal with Bitcoin or any other virtual currency

Bitcoin is prone to hacking and malware attacks

No legal recourse in case of Bitcoin fraud

Bitcoin value is based on ‘speculations’

Bitcoin exchange platforms are set up in jurisdictions whose
legal status is unclear

Bitcoins are used for illegal and terrorism activities


RBI has
constituted a group to look at the possibility of having a government-backed


The rising craze for bitcoin, a
cryptocurrency that has rocketed to shocking highs, has come under the
government’s lens. The government has begun a crackdown on illegal uses of this
unregulated virtual currency. Widening its probe into bitcoin investments and
trade, the Income Tax (IT) department is set to issue notices to 4 to 5 lakh
high networth individuals (HNI) across the country .In addition to financial
risks the value of bitcoins has seen huge falls within hours the regulators are
worried about their use for illicit and illegal activities, subjecting the
users to an unintentional breach of laws against money laundering and terror
finance. The jury is still out on whether such virtual currencies should be
allowed as legal payment tender or investments, though there are also
suggestions from some quarters for allowing them with necessary checks and




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