RBI, government try to get a grip on Bitcoin business

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A number of bitcoin operators in India began suspending their business following RBI's warning against the use of the currency. A number of bitcoin operators in India began suspending their business following RBI's warning against the use of the currency.
SummaryAfter RBI’s warning against the use of virtual currencies, many bitcoin traders suspend ops.

Bitcoin. You have to submit your PAN card and and bank details. You have to create a Bitcoin wallet in your computer which can be downloaded. Once the verification is through and wallet is created, you can buy and sell the e-currency. The price of Bitcoin has gone up from around $200 to $700 in the last one year.”

But on Thursday it had posted a notice on its website saying, “Post the RBI circular, we are suspending buy-and-sell operations until we can outline a clearer framework with which to work. This is being done to protect the interest of our customers and in no way is a reflection of Bitcoin’s true potential or price.”

Another entity, INRBTC also said that “in light of RBI’s notice, services of INRBTC.com are being suspended indefinitely”.

Before the ban, buysellbitco.in claimed it had around 1,500 customers. “They are buying and selling to make money... it’s speculative business. Volume has also increased. The entire business is done online,” he said, refusing to divulge details about the transactions.

So why are Bitcoins so popular? “First of all, they provide an almost anonymous and secure means of paying for goods. After government surveillance stories hit newspaper headlines in 2013, there is perhaps little surprise that people are looking for alternative forms of payment. Secondly, there is perhaps little doubt that they are also popular with cybercriminals, who are looking at ways to evade the law,” said a report by Kaspersky Security Bulletin.

“As Bitcoin becomes more popular, it will be interesting to see if there is any government crackdown on the exchanges in a bid to safeguard the system. Any collapse of the Bitcoin business can have ramifications in the entire financial world,” said an analyst who tracks the e-currency.

BITCOIN FACT FILE

A bitcoin is a crypto currency on the internet. It appeared in 2009 as a currency unit just after the global meltdown. The first Bitcoin ATM opened in Vancouver in Canada in October 2013

PRODUCTION: Bitcoins are “mined” based on a pre-defined mathematical algorithm and is a reward for carrying out computational operations that aim at discovering the solution to a random mathematical puzzle. There is no central bank or monetary authority that controls its production

USAGE: To use Bitcoin, one needs to download the software from Bitcoin.org. The software acts as a bank account. It stores a secret code on the user’s computer which enables funds to be spent from

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