What is Bitcoins and How to use Them ? 11 Things to Know About !

1.What is Bitcoin?

Bitcoins are an anonymous, decentralised peer-to-peer payment network that is powered by its users with no central authority or middlemen. In other words, Bitcoin is cash for the internet.

In contrast to older forms of electronic money, no company controls Bitcoin, nor ever could: all the rules about how it works are embedded into the very operation of trade, including the rate of inflation and how to verify transactions.

Bitcoins is the most popular form of cryptocurrency , with number of users expected to reach 4.7 million by 2019. Other kinds include Litecoin, Dogecoin, Peercoin, etc.      

2.Who developed the idea of bitcoins?

The idea of Bitcoin was conceptualised by Satoshi Nakamoto, an anonymous figure. In May 2008, he shared a white paper [PDF] about Bitcoin, a peer-to-peer cryptocurrency.

Without disclosing who he was, Satoshi outlined how the currency would work: bitcoins would be ‘mined’ by computer software, transferred directly amongst users and recorded in an untamperable ledger without the need of a third party.

Then he disappeared.

Part of Bitcoin’s appeal is Satoshi Nakamoto’s anonymity, who many view as a selfless act towards a new era of financial revolution. Online detectives have identified a few candidates, including a real-life Japanese person sharing the same name. Some even theorised that Satoshi Nakamoto is a pseudonym for a collective.

In May 2016, the Bitcoin community was shocked when Australian entrepreneur Craig Wright identified himself as Satoshi Nakamoto. Some people believe his claim, some didn’t, but on the whole the Bitcoin community is unaffected – the Bitcoin ecosystem is decentralised, and cannot be controlled by any person(s), including the creator.

Read : Man buys ₹ 1700 of bitcoin, forgets about them, finds they're now worth ₹ 6 crore

3. How to Use Bitcoins?

Bitcoin can be used for spending, similar to money. Some people also keep them for investment purposes, while others prefer to use them as a method to make international money transfer.

Bitcoin exists electronically and is kept in ‘bitcoin wallets’. There are many types of bitcoin wallets: desktop wallet, mobile wallet, online/web-based wallet, hardware wallet and even paper wallet.

To read more about bitcoin storage, check out this article by CoinDesk. You can have as many wallets and bitcoin addresses (where you receive money from others) as you like.

4.How many people are using bitcoin?

Estimates vary – it is hard to find out the exact number of people who use Bitcoin. One way to measure number of bitcoin users is by measuring the number of bitcoin wallets.

According to CoinDesk’s State of Bitcoin and Blockchain 2016 report, bitcoin wallets doubled to 12.77 million in one year, from the end of 2014 to the end of 2015. Even though many bitcoin users have more than one wallet (it is common to hold a few wallets), this is an indication that the number of bitcoin users worldwide is increasing.

Read : Man buys ₹ 1700 of bitcoin, forgets about them, finds they're now worth ₹ 6 crore

Another way to estimate bitcoin usage is by the number of bitcoin transactions, which has steadily increased. Although this could mean that the same people are simply making more bitcoin transactions, it is fair to assume that there are new bitcoin users in the mix, too.

5.Who's making money from Bitcoin?

People who bought early and sold at the peak. The currency has been through two boom-and-bust cycles, with the cost of one Bitcoin rising from $2 to $30 in 2011, and then from $13 to $266 earlier this year. But having a fortune in Bitcoin is a bit like having a fortune in gold: you have to sell your holdings to really make the most of it.

6.Is it really popular?

Several online firms such as WordPress, Namecheap, Reddit and Flattr are already using Bitcoin. It is a new concept, but it is picking up fast. "At the end of August 2013, the value of all bitcoins in circulation exceeded $ 1.5 billion with millions of dollars worth of bitcoins exchanged daily," according to bitcoin.org. A few small physical stores are also accepting the digital currency.

7.How do I acquire bitcoins?

There are three main ways to get bitcoins: mine them, buy them, or work for them.

Bitcoin Mining

Bitcoin mining used to be really profitable. However at the current time it is no longer cost effective for the average individual. One will need to buy specialised Bitcoin mining equipment, get/rent dedicated spaces for them, and pay their associated costs (rental, electricity and cooling costs).

Buy Bitcoins

You can buy bitcoins from many online exchanges. There are a lot more options now than ever before – there are global bitcoin exchanges and also country-specific bitcoin exchanges. You can also buy them from other people via Localbitcoins.

Read : Man buys ₹ 1700 of bitcoin, forgets about them, finds they're now worth ₹ 6 crore

Work for Bitcoins

Some people get paid in bitcoins, instead of cash currencies. Websites such as XBTFreelancer

… and Coinality list jobs with bitcoin payments.

There are other less effective ways to acquire bitcoins. You can get (very) small amounts of bitcoins from bitcoin faucets, which pay you to look at advertisements. You can get them as donations.

There are also bitcoin ‘investments’ but if you wish to not lose money, avoid companies that are listed in Badbitcoin Badlist.

8.How do I send/receive/spend bitcoins?

Bitcoin wallets come with bitcoin addresses, which represent a destination, similar to an email address. Bitcoin addresses are alphanumeric, between 27-34 characters in length. 

Many bitcoin service providers have user-friendly user interface which allows users to generate bitcoin addresses, send and receive bitcoins.

To send bitcoins, users simply have to ensure positive balance in their bitcoin wallets, insert the receiver’s bitcoin address, and hit send. There is a small miner’s fee to process the transaction – miner’s fees are given as a reward and incentive to Bitcoin miners for maintaining equipment.

Bitcoin transactions usually take less than an hour to arrive, but it can take longer or shorter depending on the fee amount and the bitcoin service provider.

You can spend bitcoins anywhere that accept bitcoins as payment. You can also use a Visa/Mastercard-linked bitcoin debit card issued by companies like Wirex or Coinbase.

9.Where can I buy bitcoins in India?

3 most popular BitCoin Trading Platform's In India:

1.) Coinsecure | India's Bitcoin Exchange

2.) Unocoin | India's Bitcoin Wallet

3.) Zebpay Bitcoin India | Buy Bitcoin | Sell Bitcoin | Bitcoin India

10.Are these legal ?

Legal status varies from country to country. In 2013, RBI said it had no plans to regulate Bitcoins, though it had earlier prescribed caution in dealing in them. A formal guideline is yet to come.

11.Can these be used in India?

Only with vendors who can accept them. One can also pay overseas vendors that accept Bitcoins from India. Some Indian startups also offer Bitcoin 'wallet' services.

Read : Man buys ₹ 1700 of bitcoin, forgets about them, finds they're now worth ₹ 6 crore

Man buys ₹ 1700 of bitcoin, forgets about them, finds they're now worth ₹ 6 crore

A Norwegian man  Kristoffer Koch invested 150 kroner ($26.60= ₹ 1700  ) in 5,000 bitcoins in 2009, after discovering them during the course of writing a thesis on encryption. He promptly forgot about them until widespread media coverage of the anonymous, decentralised, peer-to-peer digital currency in April 2013 jogged his memory.

Bitcoins are stored in encrypted wallets secured with a private key, something Koch had forgotten. After eventually working out what the password could be, Koch got a pleasant surprise:

“It said I had 5,000 bitcoins in there. Measuring that in today’s rates it’s about NOK5m ($886,000= ₹ 6 crore),” Koch told NRK.

Income Tax Slab And Rates Applicable from April: FY 2017-18

Proposed income-tax slabs for FY 2017-2018 (assessment year 2018-19) applicable on income earned during 01.04.2016 to 31.03.2017) for various categories of Indian Income Tax payers, announced in Budget 2017 

1.Individual resident aged below 60 years (i.e. born on or after 1st April 1957)

Income Tax :Use Tax Calculator for AY 2017-18

Income Slabs		Tax Rates
i.	Where the taxable income does not exceed Rs. 2,50,000/-.	NIL
ii.	Where the taxable income exceeds Rs. 2,50,000/- but does not exceed Rs. 5,00,000/-.	10% of amount by which the taxable income exceeds Rs. 2,50,000/-. Less : Tax Credit u/s 87A - 10% of taxable income upto a maximum of Rs. 5000/-.
iii.	Where the taxable income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-.	Rs. 25,000/- + 20% of the amount by which the taxable income exceeds Rs. 5,00,000/-.
iv.	Where the taxable income exceeds Rs. 10,00,000/-.	Rs. 125,000/- + 30% of the amount by which the taxable income exceeds Rs. 10,00,000/-.

Surcharge : 15% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)

Education Cess : 3% of the total of Income Tax and Surcharge.

2. Citizen (Individual resident who is of the age of 60 years or more but below the age of 80 years i.e. born on or after 1st April 1937 but before 1st April 1957)

Income Tax :Use Tax Calculator for AY 2017-18

Income Slabs		Tax Rates
i.	Where the taxable income does not exceed Rs. 3,00,000/- Less : Tax Credit u/s 87A - 10% of taxable income upto a maximum of Rs. 5000/-	NIL
ii.	Where the taxable income exceeds Rs. 3,00,000/- but does not exceed Rs. 5,00,000/-	10% of the amount by which the taxable income exceeds Rs. 3,00,000/-. Less : Tax Credit u/s 87A - 10% of taxable income upto a maximum of Rs. 2000/-.
iii.	Where the taxable income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-	Rs. 20,000/- + 20% of the amount by which the taxable income exceeds Rs. 5,00,000/-.
iv.	Where the taxable income exceeds Rs. 10,00,000/-	Rs. 120,000/- + 30% of the amount by which the taxable income exceeds Rs. 10,00,000/-.

Surcharge : 15% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)

Education Cess : 3% of the total of Income Tax and Surcharge.

3. Super Senior Citizen (Individual resident who is of the age of 80 years or more i.e. born before 1st April 1937)

Income Tax :Use Tax Calculator for AY 2017-18

Income Slabs		Tax Rates
i.	Where the taxable income does not exceed Rs. 5,00,000/-.	NIL
ii.	Where the taxable income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-	20% of the amount by which the taxable income exceeds Rs. 5,00,000/-.
iii.	Where the taxable income exceeds Rs. 10,00,000/-	Rs. 100,000/- + 30% of the amount by which the taxable income exceeds Rs. 10,00,000/-.

Surcharge : 15% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)

Education Cess : 3% of the total of Income Tax and Surcharge.

4. Any NRI or HUF or AOP or BOI or AJP

Income Tax :

Income Slabs		Tax Rates
i.	Where the taxable income does not exceed Rs. 2,50,000/-.	NIL
ii.	Where the taxable income exceeds Rs. 2,50,000/- but does not exceed Rs. 5,00,000/-.	10% of amount by which the taxable income exceeds Rs. 2,50,000/-.
iii.	Where the taxable income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-.	Rs. 25,000/- + 20% of the amount by which the taxable income exceeds Rs. 5,00,000/-.
iv.	Where the taxable income exceeds Rs. 10,00,000/-.	Rs. 125,000/- + 30% of the amount by which the taxable income exceeds Rs. 10,00,000/-.

Surcharge : 15% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)

Education Cess : 3% of the total of Income Tax and Surcharge.

* Abbreviations used :
   NRI - Non Resident Individual; HUF - Hindu Undivided Family; AOP - Association of Persons; BOI - Body of Individuals; AJP - Artificial Judicial Person

5. Co-operative Society

Income Tax :

Income Slabs		Tax Rates
i.	Where the taxable income does not exceed Rs. 10,000/-.	10% of the income.
ii.	Where the taxable income exceeds Rs. 10,000/- but does not exceed Rs. 20,000/-.	Rs. 1,000/- + 20% of income in excess of Rs. 10,000/-.
iii.	Where the taxable income exceeds Rs. 20,000/-	Rs. 3.000/- + 30% of the amount by which the taxable income exceeds Rs. 20,000/-.

Surcharge : 12% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)

Education Cess : 3% of the total of Income Tax and Surcharge.

6. Firm

Income Tax : 30% of taxable income.

Surcharge : 12% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)

Education Cess : 3% of the total of Income Tax and Surcharge.

7. Local Authority

Income Tax : 30% of taxable income.

Surcharge : 12% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)

Education Cess : 3% of the total of Income Tax and Surcharge.

8. Domestic Company - Turnover upto Rs. 5 crores

Income Tax : 29% of taxable income.

Surcharge : The amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge

• At the rate of 7% of such income tax, provided that the taxable income exceeds Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)
• At the rate of 12% of such income tax, provided that the taxable income exceeds Rs. 10 crores.

Education Cess : 3% of the total of Income Tax and Surcharge.

9. Domestic Company - Turnover exceeding Rs. 5 crores

Income Tax : 30% of taxable income.

Surcharge : The amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge

• At the rate of 7% of such income tax, provided that the taxable income exceeds Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)
• At the rate of 12% of such income tax, provided that the taxable income exceeds Rs. 10 crores.

Education Cess : 3% of the total of Income Tax and Surcharge.

10. Company other than a Domestic Company

Income Tax :

• @ 50% of on so much of the taxable income as consist of (a) royalties received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 31st day of March, 1961 but before the 1st day of April, 1976; or (b) fees for rendering technical services received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 29th day of February, 1964 but before the 1st day of April, 1976, and where such agreement has, in either case, been approved by the Central Government.
• @ 40% of the balance

Surcharge :

The amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge as under

• At the rate of 2% of such income tax, provided that the taxable income exceeds Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)
• At the rate of 5% of such income tax, provided that the taxable income exceeds Rs. 10 crores.

Education Cess : 3% of the total of Income Tax and Surcharge.

* Marginal Relief :

When an assessee's taxable income exceeds Rs. 1 crore, he is liable to pay Surcharge at prescribed rates mentioned above on Income Tax payable by him. However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of Rs. 1 crore by more than the amount of increase in taxable income.

Example

In case of an individual assesseee (< 60 years) having taxable income of Rs. 1,00,01,000/-

1.	Income Tax	Rs. 28,25,300
2.	Surcharge @15% of Income Tax	Rs. 4,23,795
3.	Income Tax on income of Rs. 1 crore	Rs. 28,25,000
4.	Maximum Surcharge payable (Income over Rs. 1 crore less income tax on income over Rs. 1 crore)	Rs. 700/- (1000 - 300)
5.	Income Tax + Surcharge payable	Rs. 28,26,000
6.	Marginal Relief in Surcharge	Rs. 4,23,795/- (423095 - 700)

That Chip on Your Credit Card May Not Be Stopping Fraud After All

It's a different world, where the science and technology have registered some of the most magnificent developments and innovations, which are potentially, help the society in having a massive growth in almost all sectors. The advent of the computer and the internet are one of the major inventions of the scientific development, which have changed the world to a great extent and today we can find some sort of touches in almost all products and issues in our existing society.

While the primary sectors are getting huge supports from the computer technology; the financial sector also has seen some of the major breakthroughs in the operation and management of the financial instruments and data. The Credit card is considered as one of the important issues in the financial market, which is now being used by millions of users, throughout the globe, for ease and comfort.

Today the credit card or debit card are using as the avenue of the cashless transaction, which safeguards the malpractices and helps in efficient accounting purpose. It can be noted that the safety of using the credit card is getting the highest priority and several measures are being taken to get the utmost safety of the cards, which are often found quite inadequate and vulnerable.

Credit Card and Relevant Issues

It is now known to everybody that the transaction through these cards are quite popular among the people, especially in the younger generation, and there are lots of chips and other devices are being used in order to check potential frauds. But at the same time; the fact is that there are some problems inherent in these chips, which are essentially meant for the safety of the credit cards. In the present scenario, the security chips are widely used in the financial world and it becomes a bit difficult for the criminals to counterfeit any debit or credit card.

But in recent days, the fraudulent activities are on a rise and various criminals are now pilfering cash from the plastic card by using some different mode of operation, which is considered as a great threat to the general people, who are using the credit card for convenience and safety. The new study, done by the renowned research organization, Javelin Strategy and Research, has made some unique revelations in the frauds of the credit card, which are as follows:

• The most common identity fraud has been rose about 16% in the year 2016, which cost individual an all-time high of USD 16 billion; 
• About 15.4 million people are affected by this kind of fraud, which is about 6.15% of the total consumers and a 2 million more from the earlier year i.e. 2015;
• While the study was not been done exclusively for the credit cards, but the researchers made it a point that the majority of these identity thefts are predominantly linked with to the credit cards; 
• This escalation in fraudulent activities, which is about USD 700 million more than the previous year, seems to be unspecified.

Schools don't teach this

17 years

This is the minimum time spent by most of us getting a formal education.

2 years of Kindergarten
10 years of School (Primary and Secondary)
2 years of junior college (11th and 12th)
3 years of Degree College

Am not even taking into account the years invested in education by engineers, lawyers, doctors, PHDs and even those who do any sort of post graduation.

The vast majority of those who invest so many years in education do it at great cost. Both in monetary and non monetary terms. Being saddled with loans the priority is to secure a job which pays a handsome amount so that the loan emi is completely covered rather than looking for a role which offers learning and fulfillment.

This problem is not faced only by Indian schools but world over. Schools in the US are struggling with education children on basic financial lessons such as even opening a bank account.

In India, there are multiple reasons why children turn out to be financially illiterate adults. Some of them are:

a) Parents themselves are unaware about basic investing and insurance concepts
b) They trust what their parents did historically. For example: Fixed deposits being a safe investment destination. However they do not take into account that fixed deposit rates have been falling and inflation will end up pummeling whatever little returns a fixed deposit will offer. And I am not even counting the impact of TDS.
c) It is taboo for a child to discuss financial matters with parents, except, in certain communities. 
d) Taking up part time jobs are still frowned upon

Some of you may feel this doesn't make sense. How can little children be financially literate?

Let us look at what happens in the United Kingdom:

An organization called Personal Financial Education Group (Pfeg) organizes My Money Week.

This is what it does:

Pfeg has reached more than 2.5 million students since 2008. These students have shown a marked improvement in both financial knowledge and skills. Fashion shows, Youth Parliaments, Dramas, Debates and community economy projects have been used to educate young people.

However all is not lost for Indian students.

Interestingly in 2012, RBI came up with a draft to improve financial literacy in Indian schools: https://goo.gl/JyV7gY The list of topics covered seemed quite exhaustive and one can go through the draft in detail. Raghuram Rajan also spoke about spreading financial literacy in 2016.
Indian schools will take a few more years to warm up to the concept of spreading financial literacy and the initial baby steps will not teach children about the long term benefits of investing.

In the interim it would be great if atleast those parents who are aware about the long term value of investing encourage their children to understand the benefits of investing. A demat account can be opened in the name of a minor by its natural guardian provided the latter is atleast 18 years old.

Let us assume you create a demat account for your child by the time she is three and begin investing Rs 500 per month. By the time she is 12, she could invest this amount as children of most people reading this article would be getting a lot more than Rs 500 as pocket money by the time they are 12.

When the child is 20, she could earn:

At a CAGR of 15%, one can earn a corpus of Rs 4.7 lakhs
At a CAGR of 20%, one can earn a corpus of Rs 8.5 lakhs

At a CAGR of 25%, one can earn a corpus of Rs 16.19 lakhs

According to this article, Birla Sun Life Equity Fund has offered close to 20% returns over 15 years.

Imagine completing formal education with a corpus of Rs 16 lakhs. Not bad eh?

The standard disclaimer: Mutual funds are subject to market risk. Please read the offer document before investing

The important disclaimer: You are inviting inflation to destroy you if you dont invest in equity for the longer term.