The Most Misunderstood statement of Financial year 2017-18

Indian Financial Markets Most volatile to political statements

Do we get this right?


Finance minister Mr. Arun Jaitley statement in budget 2018



The Government does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system.’

However, the government has recognized blockchain and said that a “distributed ledger system or the blockchain technology allows organization of any chain of records or transactions, without the need of intermediaries. The government will explore the use of blockchain technology proactively for ushering in a digital economy.

The statements had a negative impact on cryptocurrency market which falls drastically resulting in a dropping value of bitcoin to around 9% and with further misrepresentational news from media, it gets a more drastic turn, where all cryptocurrency related ads and news are banned by social media sites. also, the public interpreted it as a bursting balloon of cryptocurrency market.


What we Misinterpreted and what it actually means


Misinterpretation:

1) Cryptocurrencies are illegal in India and it will be banned
2)Cryptocurrencies are utilized to cater all the illegal activities in the world and it should be stopped completely
3) It will take more time to develop this technology and make it secure and smooth

What it Actually Means: 

Now, let's understand this step by step

What is a Legal tender?
legal tender is any official medium of payment recognized by law that can be used to settle a public or private debt or meet a financial obligation. the national currency is a legal tender in practically every country. 
So, currency notes and coins are a legal tender 
That doesn't make any comment on the 'illegality' of other assets. It must be emphasized that gold, stocks, bonds, and other such assets are also not 'legal tender'.

use of crypto-assets in financing illegitimate activities:

Let's understand this more clearly by a statement from IAMAI panel (internet and mobile association of India) 

"Our members already maintain a no-compromise approach to KYC (know your customer) and AML (anti-money laundering) processes. We encourage the government to work with our members, as we are committed to detect, report, and eliminate suspicious transactions in pretty much the same way as other institutions do. This will also generate confidence in our banking partners,".

The IAMAI panel statement said that every citizen and business in this country should play their role in eliminating financing of illegitimate activities, regardless of whether such financing is done using legal tender, cryptocurrency, gold, or any other medium. The panel appreciated the stance of the government and said it wants to wholeheartedly support the government in a move to check use of cryptocurrency for illegitimate activities.

Practice to regulate illegal usage of cryptocurrencies:

an important point to be noted is that cryptocurrency works on end to end encryption technology, therefore, it doesn't have any regulatory body or owner but it doesn't mean that all the transactions made through bitcoins are illegal.
now, let's understand about the portals that help in making all the transactions secure and ethical by following strict adherence to KYC (know your customer) policy like done by banks if you want to open an account.

Zebpay,, Unocoin and Coinsecure:


it is Leading and fastest way to buy, sell and trade bitcoin and other cryptocurrencies in India.
steps:
1) verify your email-id, upload your pan card, bank account and Aadhar details to complete the KYC and verification which normally takes 2-3 days.
2) make payment: add fund to your Rs account from your registered bank
3) Start Trading


Poloniex: Cryptocurrency Exchange Platform

it is a cryptocurrency exchange platform with maximum security and advanced trading features
but the most important feature Poloniex use to avoid any illegal transaction or activity is that only individual with a valid passport can only move further in the process which has to be uploaded and verified.

2nd Statement by FM: The Positive Talk


very few of us see the 2nd statement by FM Mr. Arun Jaitley where he clearly explains that the blockchain technology allows organization of any chain of records or transactions, without the need of intermediaries. The government will explore the use of blockchain technology proactively for ushering in a digital economy.
Which shows that Government understands the importance of cryptocurrency and use of blockchain technology to accelerate growth in the digital economy.

What is Blockchain?

A blockchain is a digitized, decentralized, public ledger of all cryptocurrency transaction. Constantly growing as ‘completed’ blocks (the most recent transactions) are recorded and added to it in chronological order, it allows market participants to keep track of digital currency transactions without central recordkeeping. Each node (a computer connected to the network) gets a copy of the blockchain, which is downloaded automatically.


G-20 Summit Argentina: Rise of a new terminology- 'The Digital Asset'



Cryptocurrency prices recovered above 20 percent after regulators had "productive" discussions on cryptocurrency at a G-20 meeting of finance ministers and central bank governors in Buenos Aires, Argentina, on Tuesday.
"The spirit of the discussion was very productive, and I agree that everybody left very pleased," governor of the Central Bank of Argentina, Federico Sturzenegger
The team comes up with a new terminology instead of digital currency it is termed as a 'digital asset' which is received positively by everyone in the panel


Pros and Cons of investing in Cryptocurrency


Massive Potential for Returns:

One of the statistics that makes everyone consider investing in cryptocurrency is that $1,000 invested in bitcoin in 2013 would be worth over $400,000 today.

Shorter Time Horizon:

Since cryptocurrencies are riskier investments, it is best to compare them to angel investing and venture capital investing

Increased Liquidity:

When you purchase equity in a startup, in order to realize a profit, you need to find someone to buy the equity from you or wait for an acquisition or IPO to occur. However, none of these options allow you to control when you cash out your investment. while in cryptocurrency investors can liquidate instantly for ether or dollars

Clear Direction for Execution:

With a cryptocurrency ICO, when you invest you know exactly what the network does and will be doing. As such, you are able to more accurately evaluate the product–market fit for the platform and can use that insight to determine your investment.

Cons:

Increased Volatility-

Of course, when compared to investing in the stock market or even real estate, cryptocurrency ICO's are much more volatile. 

Potential Network stall-

The real value of any cryptocurrency relies on building a strong product that a significant network of users will want to use. However, if these networks either fail to attract users or never get users to actually utilize the platform, then the currency will likely see a drop-off in price. Many of the recent ICOs that failed to perform after launching did so due to a lack of network engagement.

Potential shortage of resources-

Just as startups can run out of resources and be unable to continue operations if a cryptocurrency ICO does not raise enough money or the startup spends more money than expected, the doors close and the network really takes off. Many cryptocurrencies are doing pre-ICO raising in order to have firm commitments of resources and demonstrated demand for the currency.

Most Popular Digital Asset in Town: Ethereal


Ethereal is smallest ICO (initial coin offering) of the globe.
With the total supply of 30 million out of which 20 million tokens are offered in ICO and pre-ICO stage with 10% bonus to investors.

Current pricing: 0.75 USD

ICO Start date: March 01, 2018
ICO End date: April 30, 2018

The Price at which the ICO will End is going to be: 3 USD

Ethereal is giving 3 free Ethereal coins to every single user just for registering on their portal and downloading the app- Airdrop
you can earn more on your every Referral Signups as well.

For more info: http://theethereal.info/


The Question we need to ask ourselves:

In today's scenario Are we ready to welcome technologies with open arms or we are still living with a thought of India 20 years back where every new technology is opposed and debated before experimenting?

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