This document discusses Bitcoin, a digital currency. It provides information on what Bitcoin is, how it works, and its key characteristics such as being decentralized, having a limited supply, and being pseudonymous. The document also discusses the legal status of Bitcoin in India, noting that the Reserve Bank of India does not recognize or regulate it as a currency. Finally, some risks of Bitcoin are mentioned such as volatility, risk of theft, and lack of consumer protection if exchanges collapse.

1. Presented by:
Vidyaranya.D 2nd year MBA

2. A currency is anything that has value and can
be exchanged for goods and services
 Fiat currency versus virtual currency
 Fiat currency is any legal tender designated and issued
by a central authority
 Virtual currency: Unregulated digital money
 E-money: Regulated digital money

3.  Developed by “Satoshi Nakamoto.”
 Started in 2009.
 Bitcoin is an electronic peer-to-peer (i.e. with
no third party being involved) payment
network and a digital currency.
 Decentralisation – not being backed by or tied
to any government or central bank.
 Exchanged for fiat money.
 The price of bitcoins is set purely by market
demand and supply.

4.  It is decentralized
 Peer to peer network
 No central clearing houses
 Not inflationary
 Only 21 million bitcoin ever created
 The last bitcoin mined in 2140
 It is anonymous
 One can hold multiple public addresses
 It is transparent.

6.  Buy
 Barter
 Mine

7.  Bitcoin listed in stock exchanges:
 BTC China, Mt.Gox in Japan, BitBox
in US, Bitstamp in Slovenia, and
Bitcurex in Poland.
 India does not have any centralized
stock exchange
 Users can buy or sell through various
websites.
 23000 Indians users currently have
bitcoin wallet.

8.  Mine, then sell
 Invest or trade
 Offer discount

9.  Case law: Trendon Shavers of Bitcoin Savings &
Trust (BTCST)
 Accused for scamming $4.5 million bitcoin.
 Argued bitcoin wasn’t money
 District court of US (2013)
 Bitcoin can be used as money. It can be used to purchase
goods or services, and as Shavers stated, used to pay for
individual living expenses.
 The only limitation of Bitcoin is that it is limited to those
places that accept it as currency.
 It can also be exchanged for conventional currencies, such
as the US dollar, Euro, Yen and Yuan.
 Therefore, Bitcoin is a currency or form of money, and
investors wishing to invest in BTCST provided an
investment of money.”

10.  FEMA act 1999: currency defined, ”all currency notes, postal
notes, postal orders, money orders, cheques, drafts, travelers
cheques, letters of credit, bills of exchange and promisory
notes, credit cards or such other similar instruments, as may be
notified by the reserve bank.
 the Payment and Settlement systems Act 2007,
 A payment system cannot be exist without the authorization issued
by the Reserve Bank of India.
 It cannot be a security: Securities contract act 1955
 It cannot be a derivative
 It cannot be a negotiable instrument
 The Indian Copyright Act defines the term “computer programme”
as “a set of instructions expressed in words, codes, schemes or in any
other form, including a machine readable medium, capable of
causing a computer to perform a particular task or achieve a
particular result”

11.  Reserve Bank of India (press release: 24 Dec 2013)
 Creation, trading or usage of VCs as a medium for payment are
not authorized including Bitcoin, litecoin, bbqcoin, dogecoins
 No regulatory approvals, registration or authorization stated to
have been obtained by the entities concerned for carrying on
such activities
 Risks:
 Hacking, loss of password, malware attack
 No established framework for recourse of customers problems
 No underlying or back of any asset for VCs
 Huge volatility in price
 Legal status of exchange bodies of bitcoin also unclear
 Media reports on illegal usage of VCs

12.  Anonymous:- take precautions
 Never devalue due to inflation :-don’t hold longer
period
 No transaction fee:-cheer up
 You can buy things:
 You can speculate on bitcoin

13.  No inherent value:- like US Dollar
 Not good for over-the-counter or face to face payments.
 Like cash, if you lose your Bitcoin wallet, you lose your
money
 They can be stolen
 Using for illegal activity
 volatility

14.  India Today( March 3, 2014)
Indians lose crores of rupees in bitcoin exchange collapse
 What happened?
 Japan based Mt.Gox collapsed.
 Loss over 3,000 crore. (7.5 lakh bitcoins)
 It has 1.27 lakh creditors(1000 Japanese)
 Indians 35000 bitcoins( 100 crores)

16.  Bit Coin: The Indian banker
 What and why Bitcoins: journal of Accounting and
Finance
 www.rbi.org.in › Press Releases
 www.indiatoday.intoday.in › India › West ›
Maharashtra
 https://bitcoin.org/bitcoin.pdf
 www.mondaq.com/india/x/310426/.../Bitcoins+Leg
al+Or+Illegal+In+Ind...
 An exploration of Bitcoin ecosystem.pdf