I began by writing a bit about Bitcoins pervasiveness and infallibility as a currency in my previous article. This grim read will contain a few ways that Bitcoin has sealed itself as a currency that cannot be wiped out. An academic by nature, this is my attempt to simplify open source technology and ideas. Most of my reading and investigations have been based over six months, tunnelling through the networks and learning about Bitcoin.
Bitcoin’s value and popularity come from an underground Drug market known as Silk Road. Known to a few and unfathomable to others, Silk Road has come to define everything lopsided about our law system today. A blatant trade under escrow of any illegal drug imaginable, this ‘Perfect Market’ trades only in Bitcoin due to its security and ease of anonymizing. Other markets exist apart from Silk Road. Dealers of weapons, paedophilia, confidential documents, hacker skills and even assassins can be found meandering the gardens of Tor.
Tor (short for The Onion Router) is a system intended to enable online anonymity. Using Tor makes it more difficult to trace Internet activity, including “visits to Web sites, online posts, instant messages and other communication forms”, back to the users and is intended to protect users’ personal freedom, privacy, and ability to conduct confidential business by keeping their internet activities from being monitored. (Source: Wikipedia)
Let us take a look at the current Bitcoin Eco System.
- Bitcoin Miners: A lot has been documented on this subject, so I will not go into detail. This is part of the eco system, where Bitcoins need to be created from solving a complex mathematical equation. Most Bitcoin users do not mine. Mining is a very competitive business and requires far greater computing power than is available in an everyday VAIO. (Link posted at end)
- Speculators: Speculators have seen the potential of Bitcoin. They hoard them and sell at a point where they feel is right. Looking at Bitcoins historically volatile prices, there are millions to be made through trading based on speculation.
- Consumers: Consumers are the ones who need to purchase Bitcoins in exchange for fiat currencies such as USD, INR, GBP, etc. These consumers are driven to purchase Bitcoins as they wish to purchase goods which only list Bitcoin as a payment method. Ex. A person wanting to buy drugs will have to purchase Bitcoins in exchange for cash, in order to pay for Drugs on Silk Road.
- Merchants: These are the drivers of this movement. As long as merchants only accept Bitcoin, it can never be stopped being used. These merchants will eventually trade the bitcoins back to the consumers(new or existing) and continue the cycle.
- Exchanges: Exchanges are places where fiat currencies or any other digital currency can be traded in for Bitcoins. Mt Gox is the most reliable exchange till date. Merchants, Consumers and Miners can invest their bitcoins in exchanges and try to speculate on Foreign Exchange. (Link posted at end)
How easy is it in India?
- India is presently on this network accepting Bitcoins. Silk Road sports an array of prescription drugs and cannabis products being exported from India on the deep internet.
- Just place your order via encrypted e-mail and you get your discussion going. Worldwide deliveries are nothing much to worry about for these chaps.
- Several new exchanges are being setup for India, and it is only a matter of time, before we can have a robust environment supporting Bitcoins in an open marketplace.
- Several Indians participate in forums on Tor and have started engaging in open discussions about betterment and open business.
- Being an open worldwide currency that does not have a central authority, Bitcoin is currently unregulated across the world and even if regulated, it cannot be controlled by any one person or country.
- Another unique feature about Bitcoin is that, there can be no Chargeback’s. Due to this feature, Bitcoins can only be purchased through cash.
Steps for India:
- India houses some of the smartest business minds. We encourage entrepreneurship and trading in a free market society. With Bitcoin having permeated into our economy, it needs to be channelized and popularized.
- It needs to look as close to current forms of currency in order to bet faster merchant adoption. Coins, Cards and Cash.
- Merchants and consumers need a fluid exchange ability to transfer funds to and from Bitcoin.
- There are 1000’s of stores across the world that are now accepting Bitcoin as a mainstream form of payment.
Below, is the only way to make it a fully legitimate currency and bring its vision to the Indian masses.
Conclusion
As long as there is prohibition of an item of need or desire, there will remain a Black Market. As long as this continues, Bitcoin will have value and will continue to grow. Bitcoin will replace or become the main currency in lands where modern banking has failed. It will remain a steadfast channel of alternative commerce where the need is.
As we move into the next generation of disruptive payments, players in the US disruptive payments market have their efforts met. Inspired Indians have taken up the challenge to reshape the way we have banked for decades. Wallets, Paperless signups & mPOS solutions are all being tactically marketed by tomorrows start-ups.
A few possibilities for Bitcoin India should be easy to gauge, looking at the depth of options available for the rest of the world. Escrow Systems, Savings Banks, Global e-commerce and many more possibilities that do not carry any processing charge.
Do reach out, discuss and ask me more. I am keeping these articles as simple as possible.
We are at the cusp of a revolution and early adopters, risk takers and dreamers will reap benefits that we never knew we around the corner.
I believe that Prohibition laws are far more harmful than the prohibitted idea.
Sources/ Links
About Bitcoins: https://en.bitcoin.it/wiki/Main_Page
How to mine Bitcoins: https://en.bitcoin.it/wiki/How_bitcoin_works#Bitcoin_Mining
Exchange: https://mtgox.com/
Anonymous Email: http://www.Tormail.org
Comprehensive list of Tor sites: http://ahmia.fi/
Buy Bitcoin in India: https://www.mrbitcoins.com/
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