Cryptocurrencies are becoming increasingly popular as is clear by the rise in their values. While some people are already engaged in the cryptocurrency/bitcoin rush, many are looking for ideas on how to reap benefits by taking an interest in the parallel economy that is emerging online. This article attempts to help these people begin investing in cryptocurrencies like the bitcoin.
Before You Start
Investing in cryptocurrencies is not easy. Although the prices of digital currencies like bitcoin, Ethereum and Litecoin have been consistent, there are factors like the risks and delays in international transactions or difficulties in gauging trends that make investing in it a tricky business. Nonetheless, it is worthwhile even to lose some money in the process of learning how this new economy works. And for those who are willing to invest time and energy, there are also healthy returns to be earned in the initial high-growing stages of the digital economy. So, if you’re up for it, here is what you need to get started.
To invest in cryptocurrencies, you need a digital account. Start by getting one. Digital accounts can either be wallets, or, quite simply, exchanges. They have two keys – a private and a public one. The public key is to identify your account. It performs the role of a traditional bank account number. The private key, on the other hand, is more like a password for validation. It lets you verify the transactions associated with your digital account.
If you’re looking to be a regular and long-term investor, get a wallet. It allows you to store your currencies. Wallets can be one of three types – paper, hardware or digital. Paper wallets store your keys on, as the name suggests, paper. For those who are used to recording passwords and other important personal information in a diary, the paper wallet might be the best option. Then, there are hardware wallets, which are expensive. They are safe, however, and detachable. You can purchase these from authorized sellers. And lastly, there are digital wallets in form of apps that allow you to easily store cryptocurrencies.
You don’t have to be in the cryptocurrency trade for the long haul. The astronomical increases in bitcoin’s prices in the past are proof that money can be made by investing in digital currency even if for a short period. Exchanges are for this very purpose. If you don’t feel the need to safeguard your crypto-profits in a wallet, then simply trade, as you would in stocks, by using your digital account to buy and sell cryptocurrencies as you see fit.
Avoid shady dealings in cryptocurrencies. Don’t offer money or gifts to trade unofficially. Use your Aadhaar, PAN and bank details to register for a digital account. Get your KYC authenticated. Transfer money from your registered bank account to the digital account using NEFT or net banking. Pray to God for returns and start investing. You can login and logout of your account from time to time to track the progress or losses you are making.
Trading Platforms in India
It is not surprising that quite a few platforms have already established a customer base among Indian investors. More are expected to prop up as cryptocurrency trading really becomes mainstream in India. Some of the famous platforms are Koines, Coinmama, LocalBitcoins, Zebpay, Bitcoin ATMs and Coinsecure.
Are Returns Taxable?
There has been much discussion among Indian politicians and in the media regarding the authenticity of cryptocurrencies. Are they legal? Should they be recognized and returns from them made taxable? Despite the frenzy surrounding these questions, there are no legal statutes on cryptocurrencies as such. Bitcoin and other currencies are neither legal nor illegal. Income from cryptocurrencies must hence be disclosed as “income from other sources”.
Wishing You Luck
Now that you have the necessary information, it’s time for you to get started. Remember that trading is a matter of skill and luck. Don’t let early successes get to your head or failures break your heart. With the advent of blockchain and the early success of cryptocurrencies in the parallel digital economy, these assets are valuable today and promise to be valuable in the future. For this reason, it is better to take your shoes off and let your feet sink into the free-flowing stream of cryptocurrencies. Here’s wishing you luck with your investments.