Do you want to invest in cryptocurrency in India and want to know how to do it? In this blog, we will discuss what is cryptocurrency and how to invest in India.
Which is a buzzword you often heard in the last few years. In my case buzzwords that I listen to the most are crypto, cryptocurrencies, and bitcoin.
And in these few years, I just feel like the whole internet is trying to explain cryptocurrencies literally everyone is talking about it.
The YouTuber is talking about crypto, news channels are talking about it, influencers are talking about it crypto startups are talking about it, and honestly, it feels annoying.
But when so many people are talking about it even if it’s annoying you still tend to think about it you start thinking.
what is it that important should I think about it seriously am I missing a golden chance to be rich fast and more importantly if everyone is investing in crypto should I invest that too?
And as you’re reading this blog I know this is what is in your mind but you don’t know how to invest cryptocurrency.
But you don’t need to worry because we will help you explain how you can invest in cryptocurrency in India in detail and in the easiest way possible.
First, let’s find out what is cryptocurrency.
What is Cryptocurrency?
So what is a cryptocurrency? Crypto is unique compared to the actual currency. It’s a digital form of currency which means it’s not hard money that you can keep in your wallet.
Like actual currency no country issues cryptocurrencies. The actual currency transaction mostly happens through banks which is not the case with cryptocurrencies.
In simple words, cryptocurrencies are digital currency that works without any third-party interference hence also called decentralized currency.
But how is this possible to invest in cryptocurrency in India? let’s first see what is blockchain.
What is blockchain?
Blockchain is information about transactions when a person sends crypto to another person the record is added to a block.
Every transaction creates various blocks that form a chain of blocks and it is hence called a blockchain. The record of it is known as a ledger.
It is shared with every person who’s in the transaction. As they record with everyone there are fewer chances of fraud.
How to Secure Cryptocurrency
But still how the system could be called a secured system. To make it secure the system uses cryptography. Now cryptography is a chunk of information that can make it more secure.
When you create an account for crypto known as a wallet you receive two keys known as the public key and the private key.
The public key is known to others but only you can use the private key. So when you do a transaction only those you know who have the private key can mark it as one.
And others can verify it with the help of a public key.
There may also be one question that will pop up in your mind how does the system verify if you have enough crypto in your wallets?
For hard currencies, this is done by banks when you send money to another person the bank verifies if you have enough bank balance in your account yes then the transaction will be successful or it’ll fail.
But in the case of cryptocurrencies, the bitcoin networks and your wallet check if you have enough crypto to send.
If yes the transaction is done if no then it will fail. But to check the transaction data it should be in the blockchain first.
But who actually adds this data to the blockchain it is done by a few people known as miners.
Is Cryptocurrency Legal in India
Before we know how to invest in cryptocurrency in India we should know what the government says about cryptocurrencies.
Many get confused if cryptocurrencies are legal or not so let me tell you that they are absolutely legal but only to invest sell and trade.
Crypto is still not permitted as legal tender which means you can’t use it for daily transactions as you do with other currencies.
Also as per the new budget, we’ll also have to pay 30 tax whenever you receive any profit in crypto from the month of April.
How to Invest In Cryptocurrency in India
1. Create Crypto Exchange Account
To invest in something online you need to go to platforms like amazon and Flipkart and create your own account similarly to invest in cryptocurrency you need to create a cryptocurrency exchange account.
Which is the first step toward investing in crypto. After creating this account you can invest sell and trade crypto.
So these exchange platforms work as an intermediate platform between buyers and sellers.
You can choose any of these platforms but look for a few things before you choose like security.
Blockchain technology is considered a secure place but you should know that any institutions like banks do not back it.
So you must have an idea of how secure the exchange platform is before signing in with another fee. You should have an understanding of how much fees they are charging for trading crypto.
You should also see which coins these platforms offer and a few other things.
2. Get Your KYC Done
Once you choose the exchange platform now it’s time for step 2 which is getting your KYC done.
First, let’s understand what KYC is. KYC is an acronym for knowing your customer which is a process that is used for customer identification.
It is a mandatory process hence you have to complete it when you create an account you should complete this process to start invest in cryptocurrency in India and selling and trading crypto.
The documents required for KYC are a Pan card and Address proof.
An address proof could be anything like your Aadhaar card, driving license, passport, etc.
To complete this process you have to go to a specific tab of the app or website where you can complete the KYC process.
Here you have to upload all the details like a picture or scanned document. Just make sure to upload all the required documents correctly.
After you upload your document the platform will also ask for your bank detail so fill that too correctly. Once done you have to wait for your KYC to get approved.
3. Add Funds to Crypto Account
Another step is adding funds to your account. Of course, cryptocurrencies have a cost that can be more expensive than actual currencies hence you need funds to invest in crypto.
Once you have added your funds you can now invest in crypto in India but as there is not only one cryptocurrency you first have to choose which is best for you before investing.
There are a few most popular cryptocurrencies like bitcoin which is also the first cryptocurrency then Ethereum, Binance, etc.
Now you may have thought that this is the last step but it’s not even after investing in crypto things don’t end there.
4. Store Your Crypto
Now the next thing is storage. Choosing where you store your crypto is very crucial.
When you invest in cryptocurrency you have to store it in a wallet. So basically, there are two types of wallets hot wallets and cold wallets.
You can use one or both of these types of wallets but before you start storing your crypto you should know how these wallets are different than each other.
A hot wallet is basically a web wallet desktop wallet or mobile wallet.
On the other hand, a cold wallet is a paper wallet or hardware wallet that looks similar to a USB drive.
So the hot wallet is actually an online wallet and a cold wallet is an offline one.
The hot wallet is considered to be easier to use compared to a cold one.
But when it comes to security a cold wallet is considered best as it isn’t online and hence protected from malicious attacks.
The hot wallet is usually free whereas the cold wallet may cost you money.
As both are their pros and cons what should you choose well that’s up to you now but using a combination of both is considered ideal.
Also Checkout – What is The Key Difference Between Crypto And Stocks
So these are all the steps required to invest in Cryptocurrency in India and store cryptocurrencies.