Getting started with cryptocurrency in India
By: Marvyn Paul
Tags: Bitcoin, Getting Started, How To, Cryptocurrency, India

The Supreme Court of India has shot down the ban that prevented cryptocurrency exchanges from interacting with banks. Here’s an article to catch you up on the mayhem that the government caused, but let’s not dwell on the missteps of those in power from months ago and focus on the now. You might have read/been told that cryptocurrency is all sorts of things, so let’s clear that initial fear up right now. If you are totally new to this, you can have a look at a simple video explainer below. I would highly recommend reading the longer form article, since it covers a lot of the important implications of cryptocurrency, without throwing you off with nerd babble speak. Remember, cryptocurrency is an investment. Like all investments, you *have* to know what you are getting into. Also, the Indian Government has not set any rules regarding capital gains tax, so be meticulous in your accounting if you are converting crypto to rupees.

Take your time to understand the risks involved. Each cryptocurrency has its own pros, cons and use cases. Some are obvious scams, some are going to be uncovered as scams eventually, and there are several rock-solid projects too. Which ones are good and which ones should you avoid? Hindsight is 20–20, so you MUST do exhaustive amounts of research so that you don’t become just another cautionary tale.

What is cryptocurrency?

Simple explainer (video)

Longer form explainer, also covering the Indian government stance, with arguments for and against cryptocurrency. Basically, *why* should you care about cryptocurrency.

How do you buy cryptocurrency?

There are several ways to buy cryptocurrency.

- Cash through a stranger (please please please don’t do this)

- Cash through a friend (if you have a friend who can help you out, then ideal. Real friends don’t rip each other off)

- Exchanges (the closest to a provably safe option that we have right now)

Exchanges

Koinex, one of India’s largest cryptocurrency exchanges, was forced to shut down during the government-mandated turbulence. We do have options of other exchanges, but the question in your mind right now must be “why do we need more than one exchange.” The simple answer, not every cryptocurrency is listed on a single exchange. And the even simpler answer, owning an exchange is *very* lucrative. Here is a very simple list of exchange-focused praxis.

Do

- Research every project you are going to invest in. Learn who is behind it, their background, and the use case they imagine for the project

- Use a fresh new password, and set up two-factor authentication

- Use multiple exchanges, since prices vary on each. It also mitigates your risk if an exchange is hacked

Don’t

- Panic buy/sell. Trading is all about risk management, patience and discipline. We can get into this in detail in future updates

- Put all your eggs in one basket.

- Store your crypto on exchanges for long periods of time. If you do not hold your private key, you do not control your crypto.

There are 2 types of exchanges. The first kind is to exchange fiat currency ($/Rs) into cryptocurrency. You will require Aadhar, PAN Card information and a bank account. I will provide more information on the specifics of this as we get more clarity on how the government wishes to proceed. The second type of exchange is only for trading between cryptocurrencies, and will not require banking information. However, they may still ask for your ID proof.

When I trade, I use an India-based exchange to add rupees, and then withdraw the cryptocurrency to my personal wallet. From here, I can send the crypto to an international exchange, where I will have higher trade volumes (resulting in more competitive prices) and a larger variety of assets to trade in. Here is a list of cryptocurrency exchanges that I would recommend using, there are many more but here are the big hitters. New exchanges will pop up all the time because $$$

India-based exchanges

BitBNS, WazirX

International exchanges

Binance, KuCoin

Storing your cryptocurrency

You may think cryptocurrency is stored in a wallet. While you can use said wallet to send and receive crypto, the crypto is stored on the blockchain. A wallet is just a window into the blockchain that gives you control over your assets. You have a public key (share this all over, this is the address where people will send you money) and a private key (DO NOT SHARE THIS WITH ANYONE) so that you can send from your wallet to another address. You need to understand that there is no completely safe way to store cryptocurrency. Your computer, browser, phone, house can all be compromised, so there is no 100% secure way. But there are ways to mitigate risk. Here are a few wallets, and it’s not uncommon to have all of them, since you should not keep all your eggs in one basket. There are also projects that have their own wallets, but that’s more advanced stuff so, as promised, I won’t bore you with jargon.

Multi-currency wallets — Exodus is my favourite one, since it makes life easy. Available for PC/Mac as well as mobile, this is a simple way to keep crypto both safe and easily accessible.

Ethereum & ERC-20 wallets — for tokens built on the Ethereum network. MyEtherWallet is the oldest player in the game, so check them out.

Browser wallets — Google Chrome has turbocharged functionality on the web. You probably use/know of AdBlock and other browser extensions, and crypto has a part to play here too. Metamask is a secure way to interact with the Ethereum blockchain without remembering/typing/copy-pasting long codes, while keeping your data encrypted. While you’re at it, you can also check out the Brave browser, which is also built on Chrome. It’s faster, because of its privacy lean by stopping a lot of the trackers that plague the internet. You can earn cryptocurrency tokens by watching ads, we can get into this later.

Hardware wallets — the gold standard of wallets, this is where you keep your crypto if you are going to hold on to it for a long time. The market leaders are Tresor and Ledger.

So that’s it! Crypto 101 in its most simple form. If you’d like any follow-ups to this, do let me know, and I’ll be glad to help!