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Buying Bitcoin in India: Know how it is done

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Offering lower transaction fees than traditional online payments, cryptocurrency Bitcoin has gathered considerable steam around the globe following its genesis in 2009. 

Bitcoin’s substantial growth in recent years bodes well with the rise in popularity of sports betting and lately, esports betting as well. 

With the Indian Supreme Court also exploring avenues to legitimize the usage of Bitcoins across the country recently, a fresh impetus has been injected into the ever-increasing popularity of digital transactions in the country, especially on the back of an already-thriving sports betting industry.

While virtual currency is a vast and constantly exploring world, Bitcoin is considered a giant of the industry. The Supreme Court of India’s recent interest in exploring ways to regulate cryptocurrency has spiked a renewed interest amongst the more tech-savvy sports-betting enthusiasts.

Read | Bitcoin and sports: The perfect combo?

With that in mind, how does one go about procuring Bitcoins may not be something everyone is familiar with, and for that reason, we decided to delve into some of the possible modes of buying Bitcoins on offer.

Bitcoin ATM

First off, we start with one of the most familiar options available today. The function of a Bitcoin ATM is similar to your regular ATM on the street. A Bitcoin ATM produces blockchain-based transactions that send cryptocurrency to the user’s digital wallet. The official website, Bitcoin.org, is your one-stop shop to guide you to your closest Bitcoin ATM via an interactive map.

“Bitcoin ATMs are one of the safest ways to buy, send or sell Bitcoin. First, instant transactions protect you from Bitcoin’s volatility. Secondly, passwords and 2-factor authentication protects your account from others,” as per the Bitcoin ATM company Coinsource.

A Bitcoin ATM also allows users to buy Bitcoins as well as other cryptocurrencies. Note that users are charged a service fee for using a Bitcoin ATM. The fee is usually a certain percentage of the transaction rather than a fixed value. By the end of 2021, it was reported that more than 34,000 Bitcoin ATMs have been installed globally.

According to a survey, around 90 per cent of the total Bitcoin ATMs are operating in the US (29,801), followed by Canada (2,133), Europe (1,384), Spain (168), Austria (144), Switzerland (137) and the UK (101). However, it’s worth noting that Bitcoin ATMs are currently not functional in India. 

Having said that, their re-introduction in the country seems to be just a matter of time since the Supreme Court of India is exploring new ways to regulate cryptocurrency as mentioned earlier.

Bitcoin exchange

Given that there is no interference from centralized banks, Bitcoin exchange apps and websites are platforms where you can go to purchase the currency. Bitcoin.org has listed several comprehensive lists providing detailed information on a country-by-country basis.

In simpler words, a bitcoin exchange works as an intermediary between a seller and a buyer. It is a digital marketplace where users buy or sell bitcoins using fiat currencies, which are basically currencies that are not backed by commodities such as gold. That said, it’s also worth mentioning that in such exchanges, there is a price to pay depending on the payment method chosen to transfer funds. 

While bank transfers have a low risk of chargeback, funding with PayPal or a credit/debit card comes with greater risks as the funds can be reversed and returned upon request to the bank.

Furthermore, there are also additional charges for currency conversion while transaction fees are usually applied depending on the volume of Bitcoin transactions that are conducted.

P2P Directory

A P2P (peer-to-peer) directory is a peered app or website which is connected to organisations that help establish trading connections to cryptocurrency organisations.

Read | The fall and rise of Bitcoin in India - a new hope for sports bettors

It allows you to stay abreast with current Bitcoin prices and buy them. As a sports bettor, you will simply have to link your bank account, upload the money and start putting money on your favourite sports entities and events.

With regards to virtual currency, P2P refers to the exchange of cryptocurrencies by eliminating the processes of any financial institution. But then again, this requires encryption and creation of blockchain technology for smoother transactions between the two parties.

Lastly, besides the above three Bitcoin buying methods, Grayscale funds is another option that’s likely to grow further in popularity in the future. A digital currency manager, Grayscale Investments’ two trusts - Grayscale Ethereum Classic Trust (ETCG) and Grayscale Bitcoin Trust (GBTC) - are publicly traded. This means that they are up for buyers through several discount brokers, who charge reduced commission on transactions without generally providing any investment advice or other services.

It’s worth noting that there are still fees attached to such transactions and Grayscale Bitcoin Trust trades are often at a premium. However, the thought process behind opting for such transaction methods is that some investors may be willing to pay extra to buy Bitcoins via traditional means rather than needing to depend on wallets and other forms of storage.  

Feature image courtesy: Chris Liverani / Unsplash

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