In this article, we will discuss cryptocurrencies and the laws associated with them for Indian residents.
Cryptocurrency is decentralized, peer-to-peer digital money, which lets consumers conduct the money transfer through digital units of exchange. The popular and the first cryptocurrency that came into existence is Bitcoin. It was launched in 2009 by Satoshi Nakamoto.
Digital money works on blockchain technology and is stored electronically. It can be used to make purchases on online platforms. Casino players can also use cryptocurrencies to make deposits at real money online casinos that accept this mode of payment. Investors have found a great interest in cryptocurrencies and they prefer purchasing for investing purposes similar to what we do with gold and other precious metals.
Cryptocurrency is still new to many investors and it can pose a lot of hassles to people who are not familiar with its working and its laws. If you reside in India and want to invest in cryptocurrencies, make sure that you conduct thorough research before dealing with them.
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History Of Cryptocurrencies
The history of cryptocurrencies started with one individual, the cryptographer David Chaum. He developed a cryptographic system, called ecash in 1983. After a decade back, he created another system, referred to as DigiCash, which made use of cryptography to make the transactions confidential.
The term cryptocurrency was given by Wei Dai in 1998. In the same year, he started to create a new payment method that works on a cryptographic system with a decentralized system. An online ledger transfer the cryptocurrency transactions is known as blockchain and all parties in the chain are aware of any actions related to this cryptocurrency.
Different Types of Cryptocurrencies
Bitcoin is the first cryptocurrency that made waves in the online world. It is also the one that is popular amongst Indian investors and users. With the growing fame of Bitcoins, many other cryptocurrencies came into existence. Some of the best ones are listed below.
- Ethereum: Launched in 2015, Ethereum is the best alternative to Bitcoin, and is popularly known as Ether. It has a decentralized software platform. Ethereum is created with the aim to make decentralized suits of financial items that anyone can have free access to.
- Litecoin: Created in 2011 by Charlie Lee, Litecoin is based on an open-source global banking method. It is not managed by any central agencies and it makes use of ‘scrypt,’ which is decoded with the assistance of the CPU. Litecoin is similar to Bitcoin, but it has a quicker block generation rate, and therefore a faster transaction confirmation time.
- Tether: It was created in 2014 and it is a blockchain-enabled platform that makes use of fiat currencies in a digital manner. It has also a wide user base. Recently, in January 2021, it was declared the third-largest cryptocurrency.
Cryptocurrencies At Online Casinos In India
Casino players from India who want to play with real money can use cryptocurrencies to transfer funds into their casino account. If you are new to digital money, you will need to make your account with an exchange. After you have done this, you can purchase digital money and use it to make deposits at online casinos. Some casinos and sportsbooks online offer Crypto or Bitcoin casino bonuses to encourage deposits with the cryptocurrency.
Keep note that not all online casinos in India accept cryptocurrencies so you will need to first search for a safe and reputed online casino that has included cryptocurrencies payment mode.
The Benefits of Using Cryptocurrencies
Cryptocurrencies offer several benefits to users who play at online casinos. Some of them we have listed here.
- Autonomy: When you use bitcoins to make transactions at online casinos, you can control how you spend your money without the need to deal with any third party agencies such as a Government or a bank. Cryptocurrency rates are separate from other market influences.
- Discretion: Players can purchase bitcoins discretely without disclosing their identity. The bitcoin addresses that are generated for the purchases changes with every transaction. This doesn’t mean that Bitcoin transactions are totally anonymous; however, they are not easily traceable as compared to other forms of payment. Blockchain technology means that every transaction is accounted for but the owners have a pseudonym keeping the owner's identity private.
- Low Transaction Fees and Fast Processing: There is no involvement of middle man and therefore the cost of money transactions is pretty low. Besides, the transfer in bitcoins occurs quickly; thus lessening the waiting period.
Cryptocurrency And Indian Tax Laws
Cryptocurrencies are widely used all around the world today, including in India. Even though cryptocurrencies worked in the same way, their laws work differently in every country. The laws of cryptocurrency in India lack clarity and most people dealing with them still have vague knowledge about it.
This is because the income created with digital currencies is not considered as a normal income but as a capital gain. The auditors compare the value of digital money with gold or assets, and therefore, the laws applicable to cryptocurrencies are just like the laws of capital gain.
The periods for which the users have held the digital money determine the tax rates. The users who have mined their cryptocurrency will have no capital gains tax.
According to the latest news, Indian agencies are framing new laws of cryptocurrencies, which will have digital money users pay taxes on income generated through cryptocurrency.
More updates, limitations and laws are yet to come. The field is still very new for the Indian market.
Even though the laws of cryptocurrencies are not clearer yet, their popularity continues to grow. Indian users who are familiar with cryptocurrencies are using them to create revenues and make purchases from online platforms.