After the supreme court verdict striking down the RBI ban, more people in India are interested in cryptocurrencies. News.Bitcoin.com interviewed Arjun Vijay, COO of crypto exchange Giottus, about the basics of cryptocurrencies in Tamil, focusing on the largest cryptocurrency – bitcoin.
We discussed what bitcoin is, how it works, how to purchase bitcoin in India, the recent supreme court verdict, and whether cryptocurrencies are legal in India.
Vijay has provided all the answers to the cryptocurrency questions in Tamil as well as English.
What Is Bitcoin?
Bitcoin.com: Can you explain what Bitcoin is and how it works?
Giottus: It is very difficult to limit Bitcoin to a one-line definition. It cannot be compared to any single object/concept that we already know. Imagine someone has to explain the internet now. The formal definition would be “a global computer network providing a variety of information and communication facilities, consisting of interconnected networks using standardized communication protocols.”
From the perspective of a general crowd, this definition would not serve any purpose for explaining the concept of the internet. But having said, when inquired everyone might have their explanation about the internet mostly based on the use cases of the internet. For someone, it might be a way to send emails or to bank with a mobile phone and for a few others, it might be a requirement for chatting on Whatsapp or watching movies on an OTT platform. So, though people may not have the actual knowhow of how the technology called internet works, many have developed an understanding from the use cases it serves.
Bitcoin “cannot be compared to any single object/concept that we already know. Imagine someone has to explain the internet now.”
Giottus (continued): So rather than dwelling too much on the technicalities, here is a list of features and a few key use cases of Bitcoin adoption.
- Bitcoin is like the dollar because it is a unit of currency and unit of account. Example: Bitcoin is an accepted form of payment in multiple online platforms like Wikipedia, Expedia, Microsoft.
- Bitcoin is a protocol like HTTP / TCP and rules of the protocol are well defined.
- Bitcoin is a store of value like gold, whose supply is limited. There can be a total of 21,000,000 bitcoins only.
- Bitcoin is a payment network like a Visa/Mastercard powering transactions between two entities.
- Bitcoin is analogous to email. Bitcoin enables peer to peer transfer of monetary value without intermediaries like how email enables direct communication.
- Bitcoin is programmable money as you can use programming scripts to define and how the Bitcoins will be spent based on some conditions.
How Bitcoin Works
Bitcoin.com: How does Bitcoin work?
Giottus: When Alice needs to transfer bitcoin to another person say, Bob, she puts the amount, a receiver address (Bob’s public address) and attests her signature. She also adds a small transaction fee which she herself can decide based on the priority of the transaction. All such transactions are verified if they follow the protocol rules, if the sender (Alice) has sufficient balance etc., and verified unconfirmed transactions are placed in mempool.
Another entity called a miner takes a batch of transactions from the mempool, tries to solve a mathematical problem to create a valid block. He attaches the block he created to the existing chain. For solving the mathematical problem, the miner gets paid a reward (currently 12.5 bitcoins) and all the transaction fee for all the transactions in the batch. Because this reward is roughly worth 90 lakhs, miners across the world compete against each other by using hardware specifically designed to solve the mathematical problem first.
The Bitcoin code is designed in such a way that, no matter how many miners are involved, no matter how much computing power is deployed, on average, the problem will take 10 minutes to get solved. The difficulty of the mathematical problem is designed accordingly. So new blocks are produced every 10 minutes on average with the confirmed transactions. If Alice’s transaction was included in the blockchain, Bob’s account is credited with the bitcoins.
Currently, one centralised central party, acting as a trusted third party, verifies all the transactions in the legacy payment network. In Bitcoin, the trusted third party is replaced by distributed entities called nodes and miners. The best part is that Bitcoin is an open network. Anyone who wants to become part of the network can do so by providing computing resources to power the network. Every time they successfully find a block they get paid for their efforts.
Benefits of Bitcoin
Bitcoin.com: What are the benefits of Bitcoin?
Giottus: Bitcoin was meant to eliminate the excessive reliance on financial institutions to facilitate monetary exchange. Bitcoin puts the user in control and allows secure immutable transactions through the use of blockchains. Bitcoin decentralises the financial system, currently controlled by large monopolies. The transaction fees are decided by the user and the system is safe from inflationary characteristics of fiat currencies by having a maximum cap for the supply. It has been the best performing asset of the decade.
As a reserve currency, bitcoin can be neutral and fair to all participating countries, unlike the dollar which favours the U.S. It makes currency smart by allowing scripts. Payments can be made automatically on meeting certain conditions. It is trustless and hence you don’t need a trusted third party. This means there is no single point of failure. Pre-planned inflation rates guarantee stability unlike fiat currencies whose supply is dependent on central bank’s monetary policy.
Price of Bitcoin in INR
Bitcoin.com: What’s the smallest unit of bitcoin and how much is it worth in INR?
Giottus: The smallest unit of bitcoin is a satoshi, similar to a paisa for INR. 100,000,000 satoshis make one bitcoin (just like 100 paisa make 1Rs). At the time of writing this article, the value of one satoshi was Rs.0.006898 and the value of 1 BTC was Rs.6,89,800.
Bitcoin Chart in INR
Bitcoin.com: Where can people find the price of bitcoin in INR, and where can they find a bitcoin to INR chart?
Giottus: You can find the price of Bitcoin in INR by going to the following link: https://www.giottus.com/tradeview
You can find INR prices of bitcoin and other coins like ethereum, ripple, USDT and many more coins listed in Giottus.
How to Purchase Bitcoin in India?
Bitcoin.com: On your exchange, can you explain how to buy BTC with INR?
Giottus: In Giottus you can buy bitcoin in a simple 3 step process. In many cases the whole process is:
Step 1: Register and complete KYC in Giottus.
Step 2: Deposit INR.
Step 3: Buy bitcoin.
Step 1: Register and complete KYC in Giottus
It is a simple registration process where you will be verifying your email address and phone number. For KYC verification, you will have to submit a scanned copy of your PAN card and Aadhar Card. These documents will be verified by our team usually within 15 minutes of submitting. You can start depositing and trading in Giottus post this verification.
Step 2: Deposit INR
You will have to deposit INR into your Giottus account if you wish to buy bitcoin. This is a fairly simple process and, in many cases, is processed within 10 minutes of transferring and submitting your deposit request.
Step 3: Buy bitcoin.
Customers can use the amount in their INR balance now to purchase bitcoin from the spot exchange. Buying is an instant process. You can purchase your bitcoin within seconds of placing your order.
Bitcoin.com: Also, how to sell BTC and get INR into an Indian bank account?
Giottus: A customer deposits his bitcoin, then sells the bitcoin in Spot Exchange and converts his bitcoin to INR. The customer initiates the withdrawal by entering the amount. The withdrawn amount is processed in under 15 minutes and reflects in the customer bank account.
Are Cryptocurrencies Legal in India?
Bitcoin.com: Is bitcoin legal in India?
Giottus: Yes. Bitcoin is legal in India. The Minister of State for Finance has stated on record in the upper house of the parliament that no ban exists on Bitcoin and that Bitcoin is legal. RBI has reiterated the same in the supreme court recently.
And the Supreme court on 4th of March, 2020, quashed the earlier RBI circular that had put restrictions on the crypto-entities availing banking services. As of now, there are no restrictions whatsoever for buying/selling or holding Bitcoins and other cryptocurrencies.
Number of Cryptocurrencies
Bitcoin.com: How many cryptocurrencies are there?
Giottus: Since anyone can create a cryptocurrency, the total number of cryptocurrencies is ever increasing. We cannot put an exact number to count all the cryptocurrencies in existence. Bitcoin, ethereum, litecoin, ripple, bitcoin cash, USDT are some of the most famous cryptocurrencies.
About Giottus
A cryptocurrency exchange located in Tamil Nadu, India, Giottus was founded by Vijay and CEO Vikram Subburaj. Both are IIM Calcutta alumni. Subburaj is a former category manager at Amazon and Vijay is a former sales manager at Vodafone. The platform offers a spot exchange and a peer-to-peer (P2P) exchange, with 0% INR deposits and withdrawals. The company says that INR withdrawals are processed in 10 minutes, or else the user gets 10 free XRP, adding that KYC is processed within 5 minutes.
Regarding the supreme court verdict quashing the RBI circular which bans banks from providing services to crypto businesses, Subburaj commented:
Big win for the crypto community in India. Landmark judgement for the crypto-enthusiasts. This will bring back lot of enthusiasm among customers and help India become a forerunner in cryptocurrency space.
