‘Someday, I Would Love to Pay My Income Taxes Using Bitcoins’
It was circa 2011 when I came across Bitcoin cryptocurrency – our favourite internet gold on the world’s most popular Black Hat internet marketer’s forum, ‘BlackHatWorld.’ It generated a lot of buzz and got my attention. But it was a radical new technology and seemed to be built by engineers for engineers. It was difficult to comprehend its real world utility at the time.
Nevertheless, I wanted to get a tiny sum. But there wasn’t any easy, straight forward way to buy Bitcoin from India in 2011. However, you could still mine some bitcoin easily by setting up a server and running its algorithm. But this required a considerable investment in computing hardware, programming skills and most importantly, stable electricity. It was complex, expensive and best left to some programming nerds. The returns weren’t all that great either.
A few years later, the global interest in cryptocurrencies grew and I decided to take the plunge to make inroads into this parallel financial economy that exists on the internet. I enjoyed trading in my spare time and therefore in January 2015, I opened an account with Unocoin by providing my ID and PAN and bought a tiny sum of Bitcoin worth Rs 1,000. The price of 1 BTC in those days was around Rs 11,500 and I got about 0.085 BTC (approx) for my money.
Creating a free BTC wallet was easy! In under 2 minutes of using blockchain.info, I had a place to safely store a few digits on the internet. There was no need for documentation or address proofs to sign up to use the wallet. It was a piece of cake compared to traditional banking that takes days to open an account!
In early 2016, I began looking at new projects and understanding the fundamentals of various new altcoins in this space. The cryptocurrency space in 2016 was starting to mature with plenty of new projects – some of them quite radical. In March 2016, we saw the rise of Steemit.com – the world’s first blockchain and cryptocurrency powered social media platform that rewards users to participate on its platform in its own crypto called Steem and SBD.
This new platform enables thousands of users across the globe to sign up and start blogging, sharing and reaping rewards in crypto tokens, currently valued at $2 for each token of Steem. A minimum monthly income on the internet has been made possible today by a disruptive new Steem blockchain technology.
By September 2016, Ethereum crypto started gaining popularity and other altcoins such as Dash, LiteCoin and various other cryptocurrencies were steadily increasing their market cap. You can view market capitalisation of all cryptocurrencies at CoinMarketCap.com.
There are various crypto exchanges in the world and you can use them to buy/sell various cryptos. It is similar to using a forex agent locally to trade Indian Rupee for US Dollars or any other FIAT currency – just that there is no need for any human interaction or documentation required to trade in cryptos.
Earning in cryptocurrency has solved many problems for me. Today, I hire freelancers at my consulting firm and pay them in Bitcoin/Altcoins. This has made life so much simpler. Often we are restricted by the traditional rules of banking – limited banking hours, restrictions on deposits/withdrawals, crazy documentation needs, expensive cost of bank transfers across borders with heavy identification requirements, reasons for transfer etc. If you have a disability and cannot sign properly, then it’s another traditional banking hurdle that you have to encounter!
About 90 percent of my investment portfolio today is spread across various altcoins. My very first investment of Rs 1,000 in Bitcoin alone was recently worth around Rs 17,000 when Bitcoin hit the Rs 2,00,000 mark. I used it to buy a tiny sum of gold on the internet.
Today, you can buy real gold with Bitcoin on Vaultoro.com and store it in their secure vaults in Switzerland at a negligible fees charged on a monthly basis. It is deliverable legally in physical form in several countries. There are also services such as BTCJam and Kiva, which enable micro-lending and easy credit to anyone who wants to apply for a loan to start their business.
Cryptocurrency is portable. It has incredible potential to improve commerce across the globe, making it easier than ever before for anyone to trade across borders. It would be great to see the Indian government take the right step towards welcoming cryptocurrencies in our economy, as someday in the near future, I would love to pay my income taxes directly using Bitcoin, instead of a regular conversion to the Indian Rupee to do the same.
The same could potentially happen in India if our government makes an effort to fully comprehend the radical technology and regulate Bitcoin and Altcoins. Our government needs to form an excellent framework around cryptocurrencies that would allow borderless internet currencies – such as Bitcoin – to make a greater, positive impact on the Indian economy. Today, in Bangalore, you can visit Suryavanshi Restaurant’s outlets at Indiranagar and Whitefield and pay for your meals with Bitcoin. This is just the beginning!
Many are often worried about the security aspect of Bitcoin. As a decentralised and flat system, Bitcoin’s system is secure and cannot be compromised. However, unsecured wallets of any individual are still prone to some risks, but that can be easily mitigated.
How do you stop this giant from rising? Well, to do that you have to turn off the world’s internet to stop Bitcoin today. It’s a disruptive new technology that is likely to become mainstream within a decade. Bitcoin and many of the top cryptocurrencies with strong fundamentals are certainly here to stay.
Disclaimer: This is a personal experience of the author and should be treated as such. The author is not a financial adviser and this is not a financial advice! His blog can be found at Steemit.com/@firepower.
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