Legal Status of Bitcoin in India to Be Addressed at Global Summit by Assocham

Legal Status of Bitcoin in India to Be Addressed at Global Summit by Assocham

  

Legal Status of Bitcoin in India to Be Addressed
at Global Summit by Assocham

 

After the demonetization of 85 percent of the circulating currency in India in November 2016, ASSOCHAM organized the first global summit on Blockchain technology. Now it is all set to hold the second global summit on Blockchain technology with a focus on opportunities and challenges for the Indian economy. ASSOCHAM is a ‘chamber of chambers’ in India having been in existence since 1920 and having in its fold more than 400 industry chambers. The mission of ASSOCHAM is to ‘articulate the genuine, legitimate needs and interests of its members.’ They are also thought of as promoters of new business models.

Going beyond just a nascent technology

While the Blockchain has made a major impact in the world and its potential has been realized and is being released around the globe, in India the situation is still one of considering Blockchain as a nascent technology. The Second Global Summit which will be held in Bangalore on Friday, 21st April 2017 will focus on opportunities and challenges associated with Blockchain technology and explore the future prospects in India. The key discussion areas for the summit are the impact of Blockchain technology on banks, insurance, and financial institutions, legal perspectives and regulation from Bitcoin to Blockchain, applications of Bitcoin and Blockchain and criminal activity, security and data in the Blockchain.

It is expected that a wide variety of people from different backgrounds will attend the summit including company management, telecom and IT sector workers, security and legal heads, Bitcoin exchanges, regulators, bankers, fund managers and etc. Important representatives of the Indian government are expected to be present including Ravi Shankar Prasad, the Minister for Law and Justice and Electronics and IT. PP Chaudhary, the Minister of State Law and Justice and Electronics and IT, Dr. A.S. Ramasastri, Director for Development and Research in Banking Technology and others.

Negative news can be countered by information

In recent days there has been a lot of controversy regarding the status of Bitcoin and other cryptocurrencies in India. This is the result of misconceptions and misunderstanding of what Blockchain and Bitcoin are all about. We talked with Santosh Parashar, joint director and Head-Corporate Affairs and Capital Market Division of ASSOCHAM about the legality of Bitcoin and how this summit could help address these issues.

He says:

“I absolutely agree that in recent days there has been a lot of news about the legality of Bitcoin and other cryptocurrencies in India. Indeed, this is happening due to the lack of related know-how at different levels in the economy. A few illegal transactions that recently came into notice cannot be ignored with reference to Bitcoin and its legality in India. In our first summit organized in March 2017, nearly all such possible negatives related to Bitcoin were addressed. They were not a fairy tale but based on worldwide experiences that may or may not happen in India. Simultaneously, the investments and transactions in Bitcoin are not altogether ceasing to an end due to any such fear of legal status in India.”

Santosh further adds about learning from other countries and the role the summit is supposed to play, “The options available for India to choose from are – learning by practice, learning by mistakes or learning through others. To what extent, the cost of particular learning is affordable should be a subject matter of utmost priority. Certain countries like the US, China, and Japan which had banned Bitcoin earlier and now following the trend of acceptability must have learned through mistakes. This has to be taken care of by the investors as well as the government and regulators in India because it is a matter of economic significance. In the absence of any such legal tender of Bitcoin in India, ultimately opportunity cost is foregone as there is a loss of taxes to the government. Therefore, this summit is expected to address the legal issues, applications, and implication of Blockchain Technology in the light of recent global developments happening.”

India can become a Fintech Hub

India has been known as an IT hub for more than a decade now. The contributions of India’s IT sector can’t be downplayed as the country is the world’s largest sourcing destination for Information technology (IT) industry and accounts for 67 percent of the $124-130 bln market according to ibef. The industry also gives employment to close to 10 mln people. India can capitalize on its IT experience and recreate a similar success story in the Financial Technology (fintech) sector as well. The need though is for a better understanding of the possibilities that reside in this area and for changing perceptions in New Delhi.

The need for a conducive environment

Demonetization was followed by a push for a Cashless India where all the transactions are done digitally. In fact, if India truly does want to go digital, it will have to rely on the emergent fintech sector and try to embrace digital currencies and Blockchain technology.

Santosh points out:

“The traditional technology models used in the financial sector and sub-sectors for operations are becoming inoperative at the same cost. Hence the new cost effective and efficient technology has much scope to become handy. Fintech has gained substantial attention of traditional players in the Indian financial system. However, the participants of the fintech ecosystem require having a conducive environment of collaboration and dynamism. To build a robust fintech ecosystem, the proper mix of innovative and technical skills, CapEx, government policies and regulatory framework could drive fintech as a key enabler.”

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

F2Pool: We Were Never Against SegWit. Wait…

F2Pool: We Were Never Against SegWit. Wait…

  

F2Pool: We Were Never Against SegWit. Wait…

Earlier today, Wang Chun, the owner of F2Pool, the second largest Bitcoin mining pool in the world, clarified that he was never against the activation of Bitcoin Core’s Segregated Witness (SegWit) on Litecoin.

Chun stated:

“Please let me do Charlie Lee a favor and clarify: I was never against SegWit on Litecoin.”

Just a few hours later, Chun offered a completely opposing stance on SegWit to his previous statement. What are Chun’s intent and motive? During an interview in February, Chun reaffirmed that F2Pool is pushing the activation of SegWit on Litecoin to observe its impact on overall scaling, on-chain capacity expansion and providing an infrastructure for two-layer solutions. At the time, Chun planned to support SegWit on Bitcoin upon the activation of SegWit on Litecoin.

Since then, Chun has emphasized his opposition to the Bitcoin Unlimited software and its team, due to multiple bug exploitations and the software’s instability. However, Chun has since expressed his concern over the Bitcoin Core development team as well.

In a rather conflicting statement, Chun wrote to Cointelegraph’s journalist:

“I've tried my best to love Core. But Core doesn't love me. Now I know Charlie Lee has a backup plan and it is called UASF.”

Chun’s criticism of Bitcoin Core came as a surprise to the Bitcoin community as he previously explained that Greg Maxwell, a Bitcoin Core developer, helped make his decision to support SegWit on Litecoin. It is highly likely that Maxwell introduced the benefits and advantages of activating SegWit and Chun agreed to observe the solution’s effect on Litecoin prior to implementing it on the Bitcoin network.

Currently, Chun is not in support of SegWit on Bitcoin, Bitcoin Core and Bitcoin Unlimited. He went as far as to encourage developers to find an alternative solution to SegWit since the majority of miners are not willing to accept SegWit as a scaling solution. “If the majority of the miners say no to SegWit, developers must find an alternative solution,” Chun said. Over the past week, a new solution called Extension Blocks was introduced by Bitcoin startup Purse’s BCoin. However, the community doesn’t seem to be convinced as of yet that Extension Blocks is the answer to Bitcoin scaling.

Based on the current trend, a user activated soft fork (UASF) is likely, considering that some of the largest businesses and companies within the Bitcoin industry already expressed their support toward UASF. Throughout this month, Chun has changed his stance on SegWit and Bitcoin scaling in multiple occasions. On April 6, Chun stated that he decided to reconsider SegWit on Litecoin. While Chun has been offering ambiguous statements to his followers and to the Bitcoin community, it is still likely that Chun will change his stance on SegWit on Bitcoin if the solution is activated properly on Litecoin.

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

Cryptocurrency Boom Predicted By Bitcoin Market Data CEO Confirmed, Trend ‘Set To Continue’

Cryptocurrency Boom Predicted By Bitcoin Market Data CEO Confirmed, Trend 'Set To Continue'

  

Where’s the cryptocurrency market heading?
A stack of bitcoins 
stand on top of U.S. dollar bills.

Well, a prediction made in January over a boom in market capitalization of cryptocurrencies – and particularly in the altcoin market – by the founder of a crypto-market intelligence start-up that raised over 10,000 Ethereum (ETH) in a pre-sale financing round, has fully come to pass.Maksim Balashevich, the Belarusian CEO and founder of Santiment based in Germany, which collects and sells live markets data feeds to crypto traders, predicted such a boom in altcoin cryptocurrency capitalization last quarter on January 5, 2017.

And, even though bitcoin is the ‘Big Daddy’ of cryptocurrency and accounts for just under 70% of overall market capitalization today, the boom predicted would “outpace bitcoin by a wide margin”, according to the crypto-market platform’s CEO in Frankfurt Am Main. Based on the Elliott Wave theory, his prediction posited that the cryptocurrency altcoin markets would increase to over $6 billion (bn) in market capitalization. This has already come true and gone a fair way beyond. Fast forward and the combined altcoin market cap today stands in excess of $8.4bn. Some going and much aided by the recent strong performance of Ethereum (ETH), ranked the number two crypto currency behind bitcoin.  

The Elliott Wave theory (or principle), which is named after professional accountant Ralph Nelson Elliott who developed the concept in the late 1930s, is a form of technical analysis that traders apply to analyze financial market cycles and forecast market trends by identifying extremes in investor psychology. The theory claims that markets enter periods of mass pessimism (negative/depression) and euphoria (positive/hype) that drive prices.

The driver of this latest growth in the crypto space was cited as the increase in smart contract awareness and anonymous blockchain technologies. Digging a little deeper into the Elliott Wave theory, the move in the direction of the main trend is made of five waves, with corrections always being in three waves, and patterns repeat themselves on any time scale due to the fractal nature of the waves.

Fear & Greed

Balashevich, who has over a decade of experience in financial markets analysis, argued that the crypto markets are driven by fear (i.e. selling in panic almost at the bottom), greed (i.e. Buying close to the top in fear of missing out) and ignorance (i.e. entering an asset/project with weak fundamentals), with altcoins exhibiting particular “sensitivity to collective emotional impact as participants fear potentially missing out on rapid gains and extreme risks.”

And, having good information at your fingers should help to spot the potential danger signs. The Minsk-born CEO who came to Germany in 2000, predicted that market sentiment in the altcoin market, which encompasses all digital coins except bitcoin, remains extremely bullish. He claimed that 2017 would see a “dramatic boom”, and that this boom is just getting started.

‘Third of a Third’ Wave

On his blog from January, Balashevich wrote: “The altcoin market is entering the ‘third of a third’ wave in the Elliott Waves theory." This represents a moment the crowd realizes that the main trend – either up or down – is occurring. “Following the recent rise in bitcoin, we believe the altcoin market is set to experience a similar bull market over the course of the next six to twelve months as cryptocurrency investment enters the mainstream conscious,” he contended at the time.

Applying such wave analysis to the altcoin market since May 2013, Balashevich showed using graphs that the combined altcoin market capitalization (ex-bitcoin) was entering the so-called ‘third of a third’ wave. This point is regarded as something special in the Elliott Waves theory. Also at the time, he stated: “It represents the capitalization of the entire crypto market and we have just had a decisive breakout to new highs. This means we are most likely entering the next wave of crypto acceptance and would not be surprised to see continually rising prices for most or all major crypto assets.”

As an aside, he noted that “it is, by the way, the only time the crowd is right about price direction” and the trend gets accepted by the majority. [Thereafter] the good news keep coming and the price steadily climbs higher. For practitioners of the science of waves patterns, looking at the whole crypto market at the start of this year it was noted that the pattern was slightly different and “close to the middle of wave 3”. It still required “a few sequences of up and down to finish this wave”, the CEO suggested. That said, moves in the latter would not be “as volatile and intense” as those in the alts-only market.

By comparison at the time to the whole crypto market and based on the analysis presented, Balashevich asserted: “We can comfortably expect the alt-crypto market to rise substantially more in percentage terms than the bitcoin market over the next 6-12 months.” He added: “We might see ‘alts’ capitalization reach somewhere around $7bn. This figure is based on a typical Elliott Waves Fibonacci projection, where wave 3 is either 1.61 or 2.61 the size of wave 1. We saw wave 1 rise from $0.5bn to $2.8bn (a move of around +$2.3bn). So based on the next wave pattern, we could see an increase anywhere between $3.5bn and $6bn in the next move.” This has proven to have been exceeded.

Smart Contracts & Anonymity

Santiment, which is aimed at traders and investors that touts a network giving participants an "information edge" over the competitors thanks to machine learning and the wisdom of the crowd, predicts that areas focused on smart contracts and anonymity are set to benefit most from the next wave of investment in the cryptocurrency sector. This is given that these are areas that bitcoin has "failed to innovate on", according to the Belarusian.

“Smart contracts could potentially have the greatest effect on the way we use the internet in the not-so-distant future,” Balashevich elaborated. “One way, which already exists now, is ICOs (Initial Coin Offerings) and tokenized economies. ICOs have had their share of problems already – not all funded projects will deliver what they promise – and we might see an ICO bubble pop at some point." Adding a caveat he stated: “Yet, ICOs are by far the most democratic, transparent, and frictionless ways to fund and run modern digital companies. I have little doubt that strong communities will be able to establish proper open-source environments to get the most out of this trend.”

Noting that the start of 2017 that Ethereum appears to be the “de-facto platform of choice” for developing smart contracts and the rise of the ICO, Balashevich remarked: “Most ICOs are created here and we expect the trend to continue. The openness of Ethereum platform allows many teams to work together on building the many needed components, such as decentralized exchanges, mobile clients, CDNs (content delivery networks), oracles, prediction markets and stable cryptocurrencies…for running the modern digital companies.”

The upshot – as predicted by the German-based Belarusian – was that ETH (the cryptocurrency behind Ethereum) alone, with all incorporated Ethereum blockchain companies, “could bring in a significant portion of this additional valuation.” Ranked number two cryptocurrency behind bitcoin, some have dubbed Ethereum ‘Bitcoin 2.0’. Trading at $46.43 today (April 12), its market cap currently stands at over $4bn. This is significantly up from just over $8 a pop at the start of this year with a then market cap of around $722 million. It rose to the $30 mark by the middle of this March before reaching a peak at the end of last month – touching $53. But even with the recent dip in price, it has still added to the overall altcoin market capitalization.

Still, one has to question if the altcoin market's performance overall is heavily dependent on the contribution of Ethereum for its market cap, what happens if there is a reversal in its price? On that score, only time will tell. But with hundreds of cryptocurrencies on the market one has to figure that there is junk out there amongst the winners. A point in fact, which Jack Tatar, CEO & President of Research at GEM Research in New York and co-author of 'What's The Deal With Bitcoins?', underlined in an engaging presentation ('Blockchain Assets & Investing In The Future') during a Coinsbank-hosted event last October in Turkey. As I recall his precise words at the time were "some real garbage out there." So it pays to pick wisely and do your research.

Crowd Sentiment

Santiment’s crowd sentiment platform claims that it enables users to access “sentiment data that cannot be found anywhere else.” The theory and sales patter says that this should enable faster and more profitable crypto-trading decisions. Furthermore, it can be used to earn tokens – Santiment Network Tokens – in ‘crypto-financial’ games or spend them to access what are described as “exclusive market insights.” By using their platform users are able to receive clear market analyses, chart trading data, visualize and compare sentiment data with friends to "turn weaknesses into strengths", and, benefit from a 'Battle-test' simulator.

Earlier this year on February 13, Santiment raised 12,000 Ethereum (ETH) in an initial crowdfunding campaign in a matter of  2.5 hours, which is the equivalent today to around $525,000. The start-up, which had been a fair while in planning, stated after reaching its pre-sale goal that the venture would go to work on its white paper and MVP (Minimum Viable Product). It has also forged a number of partnerships that includes universities in Germany.

Predicting The Market

One might well ask is it possible at all to predict the market and the crypto market come to that? On that notes and as Balashevich noted in a separate blog at the back end of last year: “The truth is, no one can make predictions with 100% accuracy. It’s just the nature of the beast. I’ve come to accept that if no one can absolutely predict the market, it means we’re all in the same boat, guessing what will happen next.” Phew, so we are not alone on that front. But whatever investors in the crypto space do, it should go without saying don’t forget to store your crypto assets securely. Any gains built up over a sustained period of time in a cryptocurrency could be wiped out if this aspect not addressed properly.

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

Bitcoin value rises over $1 billion as Japan, Russia move to legitimize cryptocurrency

Bitcoin value rises over $1 billion as Japan, Russia move to legitimize cryptocurrency

  • Bitcoin price has risen over 8 percent in the last week
  • Japan passed a law to accept bitcoin as a legal payment method
  • Russia is reportedly looking into ways to regulate bitcoin

  

A bitcoin token stands next to a collection of U.S. one dollar bills in this arranged photograph in London, U.K., on Wednesday, Jan. 4, 2017.
 

Bitcoin is up nearly $100 in the past week, hitting levels not seen since mid-March after Japan legalized the cryptocurrency as a payment method and Russia is seeking to regulate it too. The digital currency was trading at around $1,223.04 at the time of publication, up from highs of $1,124.88 on April 5, and hitting prices not seen since March 16, according to Coindesk data. Bitcoin's market capitalization has risen from $18.34 billion on April 5, to $19.5 billion on Wednesday, according to Coinmarketcap.com data. Bitcoin has suffered a recent dip in price thanks to a debate over the future of its underlying technology, but the recent support appears to have come from Japan.

Earlier this month, Japan began accepting bitcoin as legal currency with major retailers backing the new law. Consumer electronics retailing giant Bic Camera began accepting bitcoin last week. Bitcoin trading in Japanese yen is the second-most liquid market globally, according to data compiled by cryptocurrency trading platform Gatecoin. "The Japan virtual currency act has likely had a major impact, as there has been a lot of buzz in Japanese media over the ruling over the last few months," Aurélien Menant, founder, and CEO of Gatecoin, told CNBC by email.

At the same time, Russia, one of the strongest opponents of bitcoin is seeking to regulate the digital currency. Russian Deputy Finance Minister Alexey Moiseev told Bloomberg in an interview this week that the authorities hope to recognize bitcoin and other cryptocurrencies as a legal financial instrument in 2018 in a bid to tackle money laundering.

"The state needs to know who at every moment of time stands on both sides of the financial chain," Moiseev told Bloomberg."If there's a transaction, the people who facilitate it should understand from whom they bought and to whom they were selling, just like with bank operations."Increasing state regulation around bitcoin could make the cryptocurrency an attractive investment for investors who previously shied away from it due to the high risk and price swings.

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

Washington Lawmakers Finalize New Bitcoin Business Rules

Washington Lawmakers Finalize New Bitcoin Business Rules

   Legislators in Washington state have put the finishing touches on new rules for businesses that offer digital currency services.

Senate Bill 5031, public records show, has cleared both chambers of the state's legislature, setting it up to be sent to the office of Governor Jay Inslee. The bill was first introduced in January, clearing its first vote the following month. While not guaranteed to be signed, the broad support the bill attracted signals that it may pass.

Still, its contents could lead some digital currency-focused startups to think twice about operating in the state – and in the past year, several firms have already pulled out, citing a difficult regulatory environment. The bill represents an update to the state's existing money transmission laws, in order to make them account for firms that handle digital currencies. According to the text of the measure, businesses would be required to maintain reserves – denominated in the relevant digital currency – equal to the funds they retain on behalf of their customers.

The bill states:

"A licensee transmitting virtual currencies must hold like-kind virtual currencies of the same volume as that held by the licensee but which is obligated to consumers in lieu of the permissible investments required in of this subsection."

Other requirements include mandatory third-party cybersecurity audits of "all electronic information and data systems", the text reads. Even absent the new legislation, the past months have shown that some startups working with the tech have moved to steer clear of the state. These include digital currency exchanges Bitfinex, Bitstamp and Poloniex, the latter of which moved to exit Washington just last week. According to an email circulating on social media and dated 8th April, Poloniex said that it would be suspending services to customers in the state after 21st April.

Chuck Reynolds
Contributor

 

Alan Zibluk Markethive Founding Member

India sets up high level committee to study cryptocurrency

high level committee set up to study cryptocurrencies

India sets up high level committee to study Cryptocurrency

The Indian government will setup a high level inter-disciplinary committee to take a close look at the circulation of crypto currencies in the country.

“The circulation of Virtual Currencies which are also known as Digital/Crypto Currencies has been a cause of concern,” said a finance ministry press release on Wednesday. The ministry said that the committee will take stock of the present status of Virtual Currencies both in India and globally, examine regulatory structures and tackle issues like consumer protection and money laundering.

The committee, comprising of top officials from the department of economic affairs, financial services, revenue, home affairs, Reserve Bank of India, NITI Agog and the State Bank of India, will submit its report in three months.

India’s central bank had earlier cautioned that virtual currencies, including bitcoins could be risky. However, the Reserve Bank of India has also been studying blockchain technology and bitcoins closely. Blockchain is a database that acts as a digital ledger for transactions.

There are four major bitcoin exchanges in India: UnoCoin, CoinSecure, ZebPay and BTCXIndia. These are mostly startups and operate within the banking system by asking buyers to submit ‘know your customer’ documents before they can trade on the platform. According to one estimate, India has only 50,000 bitcoin enthusiasts and users.

David Ogden
Entrepreneur

Alan Zibluk Markethive Founding Member