Crypto Currencies in India – A brief report on the cryptocurrency scenario in India

Report By: Block Next Solutions LLP, Mumbai

This report is issued by Block Next Solutions LLP, Mumbai (India) and is timestamped on the Bitcoin Blockchain via the transaction hash which can be verified for proof of existence and copyrights : a55be73c7382b01b3f52513858194405df79f2f2a4631b4e4373564ad577f5d7.

This report is created for a specific reason and no reader should act on the basis of any statement contained herein without seeking professional advice. The authors and the firm expressly disclaim all and any liability to any person who has read this report, or otherwise, in respect of anything, and of consequences of anything done, or omitted to be done by any such person in reliance upon the contents of this report.

There is information used in this report which is available on the internet. The authors and the firm do not take guarantee about the information(s), links, references and availability as they may be subject to changes, deletion, amendments and editing by their respective authors or publishers without any notification. By clicking on the links provided in the report, the reader may be redirected to a third party website for which the author and firm take no guarantee for security, information or changes in the information provided therein.

The report is subject to the data available on the internet and is subject to change anytime without notifications. The authors and the firm do not take responsibility for any data accuracy in this report. The information in this disclaimer and firm is governed by the laws of Republic of India and any disputes, objections and activities shall be subject to its jurisdiction. The Information is updated till May 2018 and the reader is requested to note the same.

About: Block Next Solutions LLP and the Report’s Authors

Block Next Solutions was founded by Sidharth Sogani in late 2016 with a view to Advise and consult in Blockchain Technology and Cryptocurrency. The basic objective of the company is to educate the masses about the emerging technology of Blockchain and Cryptocurrency such as Bitcoin and remove the misconceptions regarding the same. Sidharth Sogani is a Certified Bitcoin Professional from the Cryptocurrency Consortium Canada and has been practicing in this field since more than 2 years now. Sidharth also has a strong educational background in Economics and Finance and has management experience of almost a decade. Block Next Solutions, as a company, has consulted many individuals to invest into cryptocurrency-based assets and has assisted companies in setting up Blockchain based applications. The company has consulted Initial Coin Offerings, Token Launches and Crypto Exchanges in India and abroad. The company is also expanding into Cryptocurrency Transaction Intelligence. We would also like to thank Dhawal Chopda, an Investment Advisor under the aegis of Block Next Solutions LLP, for his valuable inputs in this report on behalf of the firm.

i. Executive Summary and Making of this report
This report will highlight the possibilities for the Indian Government to regulate and understand Cryptocurrencies, or Crypto-assets, and the Blockchain technology. This report is the first part of the two parts where the first one focuses on Cryptocurrencies and the second part focuses on the Blockchain technology. The report ends with a comparative study on the legislation and legal status off this sector in various countries. Cryptocurrencies such as Bitcoin not only use the very hyped Blockchain technology but the ecosystem is a mixture of Cryptography, P2P Networking, Internet, Economics and the Blockchain.
This is the technology of the future and is in a very developing and nascent stage as of now. Keeping in mind the Hon’ble Prime Minister’s vision of Digital India, we must try to regulate and adapt to the technology at a very early stage which will enable India to be a leader in this sector.
While making this report, we have kept in mind the regulations of major developed and developing nations in order to understand and learn why and how they have adapted themselves with regards to this technology. In order to be a global leader, we must keep in mind what our partner countries are doing so that we can be at par with the global economy.
During the making of this report, we have consulted experts from the field of technology, Chartered Accountants and Lawyers to make sure we are going in the right direction even though we do not take any responsibility of the correctness of this report. The report is a kept short and brief on purpose so that the reader can go through the report in less than 15 minutes.

1. Introduction to cryptocurrencies.

What are Cryptocurrencies
Cryptographically signed transmissions which hold a record in a distributed ledger based on consensus are also known as Crypto Currencies or Crypto-assets, as some Governments put it. They don’t have a physical presence but are present digitally which can be accessed through a private key. They are essentially more of entries in the ledger, than having their own presence, which builds up a mechanism of copy-proof digital asset, the first of its kind in history. The Bitcoin system is based on decentralized trust, thus it heavily relies on cryptographic technologies, such as:
i. Cryptographic hash functions (i.e. SHA-256 and RIPEMD-160)
ii. Public Key Cryptography (i.e. ECDSA – the Elliptic Curve Digital Signature Algorithm)

In Bitcoin, a transaction is a record informing the network of a transfer of bitcoins from one owner to another owner, which confirmed by a network of decentralised parties. Ownership of bitcoins is established and accessed through digital keys pairs, Bitcoin addresses, and digital signatures. Digital keys are created and stored offline (and at times – online) and consist of a mathematically-related Private-Public key-pair, created using the Elliptic Curve Digital Signature Algorithm (ECDSA). When transactions are broadcast over the network, the SHA-256 hash function (few others have used other hash functions) is used to verify data integrity (i.e. to establish that data was not corrupted or modified during transmission).

All Bitcoin transactions are stored in blocks, which are linked (or “chained”) together in a chronological sequence to form the “Blockchain”. Cryptographic hash functions are generally used to verify block integrity, and establish the chronological order of the Blockchain. Furthermore, hash functions are used as part of the Proof-of-Work (PoW) algorithm, which is a way of reaching consensus in a network and forms a prominent part of the Bitcoin mining algorithm. There are other hash functions methods of achieving consensus such as Proof of Stake and Proof of Identity as well which are used in many other Cryptocurrencies and are being experimented upon to achieve a Consensus Mechanism that is secure, efficient and environment friendly.

Public & Private Keys
The Private key (Privkey) is initially generated at random, and is kept secret at all times. It is used by the current owner of bitcoins to digitally sign a Bitcoin transaction, when he authorizes the transfer to the new owner. A transaction’s digital signature confirms ownership, and can be used to verify that the transaction is authentic.

The Public key (Pubkey) is generated from the Private Key using a one-way cryptographic hash function. It is used by the new owner to validate a transaction’s digital signature

P2P Network and Ownership
Bitcoin is run over a peer-to-peer (P2P) network of computers, called nodes. Nodes are responsible for processing transactions and maintaining all records of ownership. Anyone can download the free open-source Bitcoin software and become a node. All nodes are treated equally, and no single node is trusted. However, the system is based on the assumption that the majority of computing power (i.e. at least 51%) will come from honest nodes Ownership records are replicated on every node and Bitcoin users possess digital keys that allow control over bitcoins recorded in a public ledger (the blockchain)

The public ledger records transactions transferring ownership of a quantity of bitcoins from one owner to the another, like a double-entry bookkeeping ledger.

Mining and Miners
Mining is record keeping of the transactions taking place in near to real time by deploying electricity/energy, equipment and time. This is usually done on heavy duty computers equipped with ASICs graphic cards in order to be more efficient.

Miners (also known as nodes) are individuals or group of individuals or organizations who deploy their resources on the cryptocurrency’s blockchain in order to maintain the records of the transactions. In return, they are paid by the new originated cryptocurrency rewarded to them in their wallets. These rewards vary from currency to currency, currently Bitcoin gives a reward of 12.5 Bitcoins to the miner who successfully mines one block of transactions.

The Bitcoin system of trust is based on computation. Transactions are bundled into blocks, which require an enormous amount of computation to “prove” (or “confirm”), but only a small amount of computation to verify as “proven”, in a process called mining.
Mining serves two purposes in Bitcoin (POW):
-Mining creates new bitcoins in each block, almost like a central bank printing new money. The amount of bitcoins to be created is fixed and diminishes with time.
-Mining creates trust by ensuring that transactions are confirmed only when enough computational power was devoted to the block that contains them. More blocks mean more computation, which means more trust.

Mining Difficulty
Bitcoin nodes that mine, actively regulate the rate of creation of new blocks. As more miners join, the rate of block creation will go up. As the rate of block creation goes up, the mining difficulty rises to compensate, which pushes the rate of block creation back down. The creation of new blocks must take an average of 10 minutes. The regulation is done by periodically adjusting the hash target value for blocks. Every 2,016 blocks (which ideally spans every 2 weeks, with each block taking 10 minutes to confirm) Bitcoin nodes calculate a new difficulty accordingly, based on the time it took to mine the last 2,016 blocks

Mining Reward
Solving the Proof of Work problem requires a lot of computing power and that power costs money. To encourage participants to invest their resources in mining, Bitcoin provides a reward in each successfully mined block (plus the transaction fees of the transactions contained in the new block). When a block is discovered, the discoverer will award themselves a certain number of bitcoins, which is agreed-upon by everyone in the network. Currently this bounty is 12.5 bitcoins, Based on Bitcoin’s algorithm, this bounty halves every 210,000 blocks (i.e. approximately every 4 years). Eventually, the reward will be removed entirely when the limit of 21 million bitcoins is reached asymptotically, by the year 2140. After that, transaction processing will be rewarded solely by transaction fees. Additionally, the miner is awarded the fees paid by Bitcoin users sending transactions.

How are cryptocurrencies valued
The beautiful part about bitcoin is that it’s a debt free instrument, that means nobody owes the bitcoin to anyone. Bitcoin comes into existence as Equity, and not Debt – which is usually the mode of creation of currency in the current economic ecosystem. Example: the US Government or the FED takes responsibility (owes) value of dollar. But bitcoin is a debt free instrument. It belongs to a debt free decentralized network. It is unlike the fiat currency, which at least traditionally, was backed by Gold. The value of Fiat Currency has floated from that previous valuation and travelled with time as the market conditions change. We don’t always trust the central authority which issues the currencies but we trust a decentralized network which can not be manipulated or corrupted. There is no intrinsic value of gold in this case like the traditional system to value currency (as was previously the case before the 1970s).

There are many factors which affect valuation of a cryptocurrency
1. Strength of the network: The more the number of nodes, the stronger the ledger it will have; adding to the strength of the network which can be global, national or private.
2. Number of users: Metcalfs law of telecommunication states that the more number of users a technology has the more the value of it increases. Just like a telephone, If just one person has a telephone, it will be of no use because he cannot call anyone; but as the number of users on the telephone network increases, the value of telephone and its network increases.
3. Technology: The value of a cryptocurrency also depends on what kind of technology that cryptocurrency is using. Bitcoin uses SHA256. Similarly, IOTA claims to use an customised version of SHA3 – a futuristic but unverified hash function.
4. Demand and Supply: The supply of cryptocurrencies are fixed as per the protocol of that cryptocurrency. Bitcoin is fixed at 21 Million coins and does it have a limited supply.
5. Consensus: When all agree that the value of the certain commodity is X amount, that value is assumed to that commodity.
6. Longer chain of blocks: The longer the chain of blocks the older and more reliable network it is.
Note: The above factors contribute to the calculation of the ‘value’ of the Blockchain or Cryptocurrency and NOT the price of the tokens, if any. The ‘price’ is the money the public is willing to pay considering the hype created around it, the market frenzy, the fear, along with the abovementioned factors etc.

How are they transmitted
When we send an email to somebody or forward a whatsapp image, we send a copy of that content because we have that copy with us as well. But when we transfer somebody a bitcoin, a cryptographically hashed signature is created which moves from one digital wallet to another, that means that the sender has no copy of what he has sent, but just a cryptographic hash code which confirms the sent transaction which can be verified on the blockchain. The main reason for this is that Bitcoin in its essence is not a ‘coin’ but a mere entry in the distributed ledger. Thus, it becomes a push technology and not a pull technology. i.e. no third party can charge or debit your account without your will/consent as you are in control of the private key. Just like banks charge us enormous amounts for petty services like IMPS charges, Remittance charges, non maintenance charges etc; No third party can do it without full access to the clients wallet.

A Bitcoin transaction tells the network that the owner of a number of bitcoins has authorized the transfer of some of these bitcoins to another owner, the new owner can now spend these bitcoins by creating another transaction that authorizes transfer to another owner, and so on, in a chain of ownership. Transactions are like lines in a double-entry bookkeeping ledger. Each transaction contains one or more inputs, which are debits against a Bitcoin account. On the other side of the transaction, there are one or more outputs, which are credits to a Bitcoin account. The inputs and outputs (debits and credits) do not necessarily add up to the same amount; instead, outputs add up to slightly less than inputs and the difference represents an implied transaction fee, a small payment collected by the miner who solves the mathematical calculation to mine the block which includes his transaction in the Blockchain. The transaction block contains proof of ownership for an amount of bitcoins (inputs) whose value is transferred, in the form of a journal entry from the owner, secured by a digital signature, that can be independently validated by anyone in the Bitcoin network.

2. Why do we need Cryptocurrencies & What problem is it solving?
In the digital and global age where we send an email in 1 second, where we are doing video calls and are virtually present everywhere, why is it that transfer of money takes days to reach from one country to another?

The major problem bitcoin solves is that transfer of store value can take place across the borders within seconds and without any third party involvement. The network is peer to peer in nature and thus, beyond the control of any single entity, secure by the network.
Thus by using internet as a medium we can empower people who have access to a smartphone to be a part of not the national but a global economy and send payments and enter into transactions across the globe with minimum transaction fees across the borders without any 3rd parties who usually end up taking a huge transaction fees, sometimes to stop the cross – border flow of capital. Recently, 99 Million Dollars worth of CryptoCurrency transaction took place with a transfer fee of just 0.40$ in 2.5 Minutes. We are looking at transfer of payments and trust regardless of where you are located or how much amount you wish to transfer. This is a major problem which cryptocurrencies are solving.

Thirdly, Bitcoin cannot be copied. That solves an age old problem that every digital asset has faced. You can copy, cut or edit a video, an image, a website or even a game. Bitcoin, through ‘non-existence’ solves this problem. Being merely a record of ownership, it cannot be copy pasted or edited without permission. One of the biggest technological breakthroughs of Bitcoin has been the creation of the first copy-proof digital asset.

3. Can crypto assets be traced?
This is a major concern for any government – whether cryptocurrency transactions can be traced. The government doesn’t want to lose control over the movement of money which could be a capital outflow for it.

Yes, Bitcoin can be traced using the information on the blockchain which is a public ledger, but the names of individuals or entities owing the Bitcoin is not linked to the address which has the ownership. In fact the blockchain is of pseudonymous nature. That maintains a certain level of anonymity which is crucial. Hence we can trace the transactions on the bitcoin or any other cryptocurrencies blockchain but we cannot trace cash because it doesn’t leave any trail. Unfortunately, the biggest mode of transaction in the drug mafia and terrorism is the US Dollar. There have been incidents where the US Government successfully caught the drug mafias and other illicit groups with millions of dollars in cash. Eventually they also caught 30,000 bitcoins which they auctioned which can be seen on the blockchain at this address: 1Ez69SnzzmePmZX3WpEzMKTrcBF2gpNQ55

We need excellent data scientists to develop the tracing mechanism which US and other central governments are already venturing into.

We must not forget the advantages of Bitcoin and other cryptocurrencies that it can be enjoyed by over 6 Billion people on the planet and only 1% of it may be used for illicit activities which can be traced and controlled with the right approach and technological development.

We must understand that money is money only when it is exchanged for goods and services, right now bitcoin is more of a store value and very few options are available for exchange, but whenever a bitcoin is exchanged, and if strict AML and KYC is followed we can trace the origin of that bitcoin in few minutes. Hence, it is not at all ideal for any terrorist or mafia to use Bitcoin for mode of payment AFTER the implementation of strict guidelines and careful eyes. What is productive for them today, may become counterproductive with proper regulation and scrutiny by the Governments of the world.

Currently the easiest way to trace the transactions is through regulations involving KYC and Anti Money Laundering (AML) Laws, Just like how many countries are evolving towards it.
It may be noted that slowly the amount of money laundering with bitcoin is reducing because globally the crypto to fiat exchanges are becoming stricter with their regulations and are following stringent KYC norms and limiting the bank accounts with one customer. They also do not deal in cash transactions at all, thus its getting in better control.

4. How are Cryptocurrencies Secure
Crypto currencies provide a cryptographically secure hashing which works on different cipher texts. In bitcoin its SHA 256.
It has a Public Address(Key) and a Private key. If you want send a bitcoin to somebody you need to know his public address. You can enter that public address and has your wallet with your private key in order for the transaction to take place. i.e. if you have your private key, only then you can do a push transaction.

In other words, if you hold your private key, there is no way for the hackers or anybody to get hold of your money pertaining to the wallet of the private key. Since the start many hackers have tried to hack the blockchain of bitcoin but they were unable to do so because they could not hack the entire blockchain but only the exchanges which hold users monies by holding their private keys. The blockchain as a whole is unhackable in today’s technology. We would need a quantum computer to do that which is not available in today’s date and shall not be possible for the next few centuries. But we must not forget that along with that even the existing technology will evolve to become better.

5. Public & Private Blockchains:

There are two kinds of Blockchains, Public & Private; example of a public blockchain is Bitcoin blockchain because it is being maintained by thousands of nodes in real time from different parts of the world making it impossible to fidget with, once any transaction is on the blockchain, it is there forever and can not be reversed with technology present in today’s time. Private blockchains are more of servers maintaining data in a controlled or centralized environment due to which they are less reliable compared to public blockchains. The idea and success of blockchain belongs to the decentralized nature of it and the number of nodes. Another important aspect which adds value to the public blockchain is a token of exchange which is considered as store of value, just like Bitcoin. Without Bitcoin, its blockchain won’t make much of sense! Hence, blockchain technology can be utilised to its true potential only when it is public, decentralised in nature and has an exchange token.

6. ICOs, Airdrops and What are the scams in the Crypto Space
Just like Initial Public Offering of stocks, there is Initial Coin Offering of private cryptocurrencies. If a company wants to raise funds, it can go to the public and ask them to invest in their companies and in return they give them a digital token just like bitcoin which ensures their investments.

For many companies this is a very good way of raising money because at this moment it’s an unregulated space. Most of the companies who don’t have potential projects also plan to just raise the money by showing a white paper and then not actually deploy the funds to the project but just run away with it. This has started to bring a lot of uncertainty in the crypto space. Airdrops are mostly bonus tokens given as a gift of appreciation to the existing owners of some tokens just like bonus shares in the stock markets. There are many scams happening in this space because of lack of knowledge among the investors in ICOs. Usually investors don’t have understanding of the project and invest in the project just on the basis of the whitepaper and many times get fooled by the wrong projects. Education and regulations is the only way to stop this from happening. Even though, There is a huge opportunity in this sector and most outstanding is the fact that this technology gives an opportunity to raise funds from around the world unlike the regular IPOs in the stock markets which are restricted only to the Indian markets. Further the costs involved in initiating an ICO is far less when compared to the traditional IPO system. This sector shall be regulated in India as the amount of FDI inflow would be outstanding.

7. Position of Cryptocurrencies in India
As on today, India is doing what most smaller countries are doing by not taking a firm decision and not regulating this space as we do not know the outcome that may arise due to the regulation. In the meantime RBI is taking protective measures by not encouraging the cryptocurrency space. Even Though some expert lawyers and CA’s have come out with most promising solutions and have been placing Bitcoin in many other regulations observing its nature. Because Bitcoin is a store of Value and can be exchanged for goods and services to, most chartered accounts speculate it to fit in the sale of goods act 1932 and treat it as a commodity whereas it also generates profit and is taxable for capital gains or income from business for people associated in this sector.

8. Different Acts which affect cryptocurrencies such as RBI, FEMA, IT Act
Existing regulations which will have to be enhanced with Bitcoin
We have to look at the existing regulations which will be covering Bitcoin and cryptocurrencies.
Currently we have
1. Coinage Act
2. RBI Act
4. Income Tax Act
5. Sale of Goods Act
6. Information Technology Act
7. Securities contract Act (SCRA)
8. SEBI Guidelines
9. AML

As by buying Bitcoin and transacting in them we should be careful that none of the Acts are violated in any way, if so proper measures shall be taken to regulate the acts by adding additional sections covering Use, Transactions and Trades related to cryptocurrencies. For example if we buy Bitcoin from a regulated Indian Exchange and Sell it on a regulated Indian exchange without sending the bitcoins to an exchange situated abroad we are not violating any FEMA regulations because no cross border dealings are taking place even though LRS Scheme allows 250000 USD worth of transactions to be sent out of India by an individual every year.[11] Keeping that in mind, we must regulate the laws and by laws immediately so that we can prevent capital outflows from India.

9. Why should Indian Government regulate it?
We all must understand the most important factor related to Bitcoin – We can not stop it, so we might as well regulate it and watch it grow the right way!
By regulating bitcoin and other cryptocurrencies, we will b able to control the environment in more sustainable manner
1 .Prevention of scams
There have been recent incidences of scams which had taken place in Surat and Delhi where the companies took investments from the investors and disappeared. All this happened because those companies did not get any kind of certifications from the government or any other regulatory body. If new projects are regulated then such scams and investors interest could be protected.
2. Prevention of parallel economy (Cash Economy)
Bitcoin is facing a growing demand in the global markets and due to which more retail investors want to invest in it. If a person wants to sell his bitcoin in cash, he can do that easily by doing a peer to peer cash settlement charging a premium on the market rates which can aggravate the black money economy. The government must hence put certain regulations in place which can make purchases using traditional banking methods and KYC so that people don’t deal with cash money.

3. Better global standing compared to other leading nations.
India should not stand out as most of the leading world economies have regulated bitcoin and cryptocurrencies making laws and regulations for the same.

4. Income tax benefits
The total turnover hit 3.5Billion Dollars last year generating income for a lot of investors and thus creating a great tax revenue opportunity for the Indian Government.[12] We believe India will earn more than 10 thousand crore in revenue soon after Bitcoin is regulated as the amount of people investing will be very high as more than 1000 individuals register on the exchanges right now under the current scenario.

5. Digital India
We should regulate because it is a digital currency and should serve the best for the digital economy dreams of the current government.

6. Foreign Direct and Indirect Investments will spike up as most of the blockchain engineers are from India working globally over the internet and are being paid in bitcoins for their work. if this space is regulated global multi billion dollar exchanges will shift base to India as we are way ahead in Information Technology compared to many nations making india an Ideal destination.

7. Higher employment opportunities.
The Industry is valued at 40,000 thousand crores in India and is expected to shoot up by 700% in the coming few years on the condition of regulations which will create a great opportunity for the employment.

8. Capital outflow.
If we do not regulate bitcoin capital outflow can not be tracked. People will convert their monies into Bitcoin and send it out of the country. If we have certain regulations in place we can keep a tab on inflow and outflow of the currencies.

10. How can Indian Government Regulate this sector 1. Tax Situation The Indian income tax department must decide how should gains and losses from Bitcoin and other digital assets must be treated. Most countries are charging Capital Gains tax on the gains earned also for the businesses working in this industry should also be taxed in the right manner. GST treatment and proper HSN Codes must be created. 2. Regulate exchanges The exchanges must be regulated like how Bombay Stock Exchange is regulated under the SEBI. KYC, Regular Reporting of performance and funds, updating of client information with the SEBI and other government departments etc. 3. Create a framework for ICOs Initial coin offerings are a great and cheap way to raise funds not only from India but globally. But that comes with some great problems, a majority of the ICOs which raise funds on a promise of launching a great project, never really launch the project but only run them on a white paper. ICOs could be allowed to be treated as security tokens in future and for that there should be a regulated framework. 4. Make exchanges Handle ICOs If new ICOs are launching, make it a mandatory rule that only the legit and regulated exchanges are allowed to manage it. Because when the money get routed through the exchanges, the funds can be tracked easily. 5. Set up a new regulatory body just like SEBI Regulatory bodies like SEBI or SEC which regulates Cryptocurrency and Blockchain. The committee must have IT Professionals, Bitcoin Professionals, Economists, etc as this industry involves all these aspects.

6. Setting up Specific legislations targeting Bitcoin.

The legislations will incorporate laws related to the Information technology act, GST Act, Income Tax Act etc so that none of the existing legislation shall be violated in any way.

11. Currency outflow and the risks involved: From the RBIs perspective
If compare countries like Japan, Germany, USA with countries like China we understand the reason why china has banned Fiat-Crypto whereas others haven’t. We all know that the Chinese economy is inflated and the Yuan is undervalued. [13][14] This results to the Chinese people not trusting their economy and try to protect themselves by moving their monies into digital form like bitcoin. The Chinese government stopped crypto to fiat (Chinese Yuan) conversions to curb the capital outflow in form of digital assets. For a stronger and growing economy like Germany Japan and India, we should not be afraid of capital outflow because India has a great potential of capital investment. But the reserve bank must keep a watch on the same by regulating Fiat to Crypto exchanges and verifying the KYC of the user.

12. Industries around it, Employment and FDI opportunities
There are many new segments of Industries and jobs being created around Cryptocurrencies and blockchain technology. There are a new set of job opportunities for the programmers out of which many are working out of Indian markets to work because there are better opportunities. The new industries being set up relating to blockchain and cryptocurrencies Such as exchanges, digital wallet companies, blockchain consultants, smart contract writers, coders, etc. Most important are Mining industries which requires good capital investment. There are ways even sustainable and renewable energy can be used to mine bitcoins and to run blockchain technology and that has a huge industry potential as that will bring more capital investments for machinery and renewable energy equipment which could be a long term foreign direct investment. We must not forget that most MNCs globally hire Indians as they are very good are programming skills. If India creates a positive environment for such technologies, it will be no surprise that MNCs from over the globe start investing in India for the Human Resource availability creating fantastic job opportunities. As per a research, the job searches internet increased 290% which was related to crypto assets and blockchain technology. The industry is valued at around 450Bn Dollars globally and is expected to grow 400% by the end of 2020.

13. Which countries have regulated it and which have banned?
The below chart is updated as on 1st May 2018 which reflects the global situation of Bitcoin. It is clear that most countries have no regulation for it because it is a very new technology and they are still learning it. But if we see the developed and technologically advanced nations, except China (Due to its Economic conditions), most have regulated it positively.

The following chart will tell you the country wise status of Bitcoin Country/ Territory Legal Status:

1 Algeria[15] Unregulated but Legal

2 Argentina[16] Virtual currencies are not legal tender under the country’s National Constitution, which designates the Central Bank as the only authority that may issue legal tender.

3 Australia[17] Regulated and Legal -Digital currency exchanges will be subject to registration and regulation -Digital currency transactions are no longer subject to goods and services taxes (GST) but remain subject to incomes and capital gains taxes. — On March 20, 2017, Australia’s securities and investments regulator, ASIC, released guidance on the use of distributed ledger technology (including blockchain) in financial services and financial markets. -On Aug. 8, 2017, Australian senators from both major political parties announced that the Reserve Bank of Australia (RBA) should formally recognize bitcoin and other digital currencies as official forms of currency. -On Oct. 18, 2017, Australia approved legislation introduced on September 14 to remove the double taxation on digital currency. Dec. 8, 2017, The Australian Taxation Office updated its guidance on GST and digital currency to address tokens and ICOs.

4 Brazil[18] Legal The Central Bank of Brazil has not yet regulated virtual currencies, but has issued the new-standard warnings about their use.

5 Bosnia[19] and Herzegovina Legal Unregulated

6 Bulgaria[20] Legal – Personal income from the sale or exchange of bitcoin is taxable, and will be treated as income from sale of financial assets.

7 Belgium[21] Regulated, Taxed

8 Belarus & Armenia`[22] Partly Regulated – Legal

9 Bermuda[23] Legal, Unregulated The government is working on regulatory framework and is expected in mid 2018

10 Bolivia[24] Illegal, Virtual currency has been explicitly banned.

11 Bangladesh[25] Illegal, Bangladesh Bank issued a warning against conducting transactions in cryptocurrency, and reportedly stated that such use is punishable by up to 12 years in jail

12 Canada[26] Legal, Partly Regulated and Taxed

13 Colombia[27][28] Legal Colombia’s financial regulatory body (SFC) has prohibited banks from working with virtual currency. The SFC and the Central Bank have also indicated that bitcoin is not a currency.

14 Chile[29] Legal, Unregulated, Restricted Banking

15 Cyprus[30][31][32] Legal and Regulated

16 Croatia[33] Legal Informal statements by the Croatian National Bank are favorable regarding the legality of bitcoin.

17 Canada [34] Legal, Regulated, Taxed On Nov. 2, 2017, the Ontario Securities Commission granted regulatory relief to Toronto-based Funder, Inc. to allow Ontario’s first regulated ICO/ITO. On May 25, 2017, the Bank of Canada stated that its experiment with blockchain, or distributed ledger technology, showed it is currently not compatible with operating the country’s centralized interbank payment systems

18 Czech Republic[35][36] Legal Czech Ministry of Finance has indicated that virtual currency transactions are subject to anti-money-laundering laws and reporting requirements.

19 China[37] Legal to hold but Restricted On Sept. 4, 2017, China banned all companies and individuals from raising funds through ICO activities, reiterating that ICOs are considered illegal activity in the country. It is not illegal to hold cryptocurrencies in china but the conversion from Fiat money (Chinese Yuan) to Digital currencies is restricted. It is not a legal method of accepting payments. China still continues to give huge volumes in trading. This is a clear indication that in spite of heavy restrictions, Chinese are still trading in Cryptocurrencies which is beyond the government’s control.

20 Denmark[38] Legal, Taxed Financial Supervisory Authority has issued warnings about the risks of virtual currencies, similar to other European nations, and has suggested there may be amendments to regulations regarding virtual currencies. Currently, it does not appear that virtual currencies are regulated, at least under money laundering or financial institution regulations.

21 Estonia[39] Legal , Regulated, Taxed. Estonia is one of the world leaders in Cryptocurrency regulations and blockchain technology

22 EU[40] EU has many of its members who have regulated cryptocurrencies positively and are allowing companies to operate in this sector but EU as a whole is still working on better regulatory framework. Mostly by 2019 1st half EU is expected to fully regulate the crypto scenario

23 France[41] Legal, Unregulated but positive

24 Finland[42][43] Legal, Taxed Unregulated Bitcoin and other virtual currencies are treated as commodities for taxation

25 Germany[44] Legal, Regulated and Taxed Virtual currencies are financial instruments under German law and, more specifically, are a form of “private money” that can be taxed as capital. Certain uses may also require a license or permit.

26 Greece[45] Legal

27 Ghana[46] Unregulated, Legal status is assumed to be unregulated

28 Hong Kong[47][48] Legal and Partly Regulated. Legal Informal guidance suggests that regulatory authorities are monitoring virtual currencies, particularly with regard to money laundering. Virtual currency considered a virtual commodity and not legal tender.

29 Israel[49][50] Legal Regulated

30 Indonesia[51][52] Legal to trade and hold but Illegal as payment method better regulations expected

31 Iceland[52][53] Legal but restricted – new laws expected soon Regulates virtual currencies as electronic currency through the Icelandic Exchange Act, which effectively prohibits entities from engaging in the exchange of virtual currency. Bitcoin mining is legal in the country and so is transacting with Bitcoin, but apparently if those Bitcoins cannot be purchased from a foreign exchange but have to be mined in Iceland. This leaves a lot of room for questions. The statement reads: There is no authorization to purchase foreign currency from financial institutions in Iceland or to transfer foreign currency across borders on the basis of transactions with virtual currency. For this reason alone, transactions with virtual currency are subject to restrictions in Iceland.

32 Italy[54] Legal but Unregulated A law requiring identification of parties in bitcoin transactions has been proposed in the Italian Parliament, but no regulation yet. Virtual currency is not legal tender.

33 Ireland[55] Legal The Central Bank of Ireland does not regulate bitcoin. Ireland’s Revenue Commissioners are monitoring bitcoin for tax-related developments.

34 Israel [56] Legal On December 27 media reports said Israel’s markets regulator will propose regulation to ban companies based on bitcoin and other digital currencies from trading on the Tel Aviv Stock Exchange. In Jan. 2017, Israel’s government said it was set to apply capital gains tax to bitcoin sales, categorizing digital currencies as a type of property. Each time a bitcoin is sold, the seller would have to pay a capital gains tax of 25%. Miners, traders of bitcoins would be treated as businesses and would have to pay corporate income tax as well as charge a 17% VAT

35 India [57] Unregulated, Legal, Taxed

36 Jamaica[58] Legal, Unregulated

37 Japan [59][60] Regulated Legal Taxed Japan officially recognizes bitcoin and digital currencies as a “means of payment that is not a legal currency” (see Article 2-5 of Japan’s Payment Services Act (PSA) 25 May 2016) On Sept. 30, 2017, the Financial Services Agency (FSA) of Japan granted its first licenses for digital currency exchanges to 11 companies. On April 1, 2017, Japan’s Financial Services Agency enacted a new law authorizing the use of digital currency as a method of payment, essentially granting it the same legal status as any other currency. The law follows months of debate which ultimately brought Bitcoin exchanges under anti-money laundering/know-your-customer rules, and resulted in the categorization of Bitcoin as a kind of prepaid payment instrument.

38 Jordan[61][62] Unregulated

39 Lebanon[63][64 Unregulated, Regulation expected in 2018. Lebenon plans to create its own cryptocurrency

40 Lithuania[65][66] Legal, Unregulated

41 Luxembourg[67][68][69] Legal, Regulated and Taxed The issuance of virtual currency is not regulated “from a monetary point of view.” Financial services providers, which could include virtual currency businesses, must receive authorization from the Minister of Finance which have set rules and regulations for businesses in cryptocurrencies.

42 Mexico[70] Legal

43 Malta[71][72] Legal, Regulated, Taxed Worlds largest cryptocurrency exchange recently moved to Malta as it regulates Fiat to Crypto, Crypto to Crypto and ICOs in the right manner.

44 Malaysia[73][74][75][76] Legal, Regulations Awaited in end of 2018, exchanges are required to follow KYC guidelines strictly. ICOs are restricted

45 Namibia[77] Unregulated, Legal

46 Nigeria[78][79][80] Unregulated, Restricted by banks but Legal The CBN, Deputy Director on Banking and Payments System, Musa Itopa-Jimoh clarified the circular and its stance on bitcoin, citing that a lot of people misinterpret the central bank’s recent warning. It noted that “Central bank cannot control or regulate bitcoin. Central bank cannot control or regulate blockchain. Just the same way no one is going to control or regulate the Internet. We don’t own it”.

47 Nicaragua[81][82] Legal, News reports indicate that bitcoin is being used in the country

48 Norway[83] Legal, Taxed Unregulated

49 Netherlands[84][85][86] Legal, Taxed, Regulated

50 New Zealand[87] Regulated, Legal New Zealand aims to promote Technology and is smoothly granting permissions to start ups in cryptocurrency sector. It is treated as securities and strict AML and KYC Laws are to be followed

51 Nigeria [88] Unregulated, Positive regulation expected soon

52 Pakistan[89] Legal, Restricted and Unregulated

53 Philippines[90] Legal

54 Poland[91] Legal, Taxed and regulated

55 Portugal[92] Legal, Unregulated

56 Romania[93][94] Legal, Unregulated

57 Russia[95][96][97][98] Legal, Regulated and Taxed The Russian Government passed a draft law in march and will officially release it in next 3 months which Regulates ICOs, Digital Currency payments and Cross Border Transfer Laws of Bitcoin and other Cryptocurrencies. The Government also plans to launch its own Russian Rubel in Digital Form

58 Sweden[99][100][101] Legal, Regulated but ICOs are not encouraged

59 South Africa[102][103][104] Not officially but positive South African Reserve Bank has warned that virtual currencies have no legal status and are subject to lack of security, may lose value, and may not be convertible to legal tender.south

60 Saudi Arabia[105][106][107] Legal, Unregulated but positive regulations expected in 2018 Declared Halal under the sharia laws in March

61 Singapore[108][109] Legal, regulated, accepted as payment and taxed but MAS is closely monitoring the developments in this field and have warned investors about its volatility.

62 Slovakia[110][111] Legal, Regulated, Taxed

63 Slovenia[112][113] Legal Unregulated

64 Switzerland[114] Legal, Regulated and Taxed It’s a leading country inviting Bitcoin and Cryptocurrency companies subject to strict regulations.

65 Spain[115] Lega land Unregulated Virtual currencies are reportedly taxable as an electronic payment system under gambling law, but its treatment under other areas of law is unclear.

66 South Korea[116][117] Legal, Regulated but Restricted to certain norms and regulations The exchanges are required to follow strict KYC norms and fiat to crypto conversion is strictly monitored. ICOs are not allowed as of now.

67 Trinidad and Tobago[118][119] Legal, Unregulated

68 Taiwan[120][121] Legal, Regulated, Included in AML Laws, accepted as payment systems

69 Thailand[122][123][124] Legal, Expecting regulation in mid 2018 for ICOs and other aspects

70 Turkey[125][126][127][128] Legal

71 United States[129][130][131] Legal, Regulated, Taxed and has allowed Chicago board for futures trading. SEC and CFTC have guidelines for cryptocurrency operations (elaborated below in Conclusion)

72 UK[132][133][134] Legal, Regulated, Taxed Considered as a private currency. Exchanges and other businesses must follow AML and KYC

73 UAE[135][136] Legal Taxed and Regulated certain aspects. Hopefully many new additions are expected by the end of 2018 clarifying the laws further

74 Vietnam[137][138] illegal

75 Venezuela [139] Legal, Regulated and Taxed. On Dec. 3, 2017, Venezuela launched its own digital currency, the “petro”, backed by oil, gas, gold and diamond reserves. President Nicolas Maduro announced the launch, which he said would Help Venezuela advance its sovereignty and overcome the burdens of global economic sanctions.

76 Zimbabwe[140][141] Unregulated, Legal and Positive

77 Morocco[142] Illegal On Nov. 21, 2017, Morocco’s foreign exchange authority, the Office des Changes, stated in a press release that transacting with cryptocurrencies within Morocco violates existing regulations

79 Ecuador[143] Illegal Ecuador has banned issuance, promotion, or circulation of virtual currencies, and plans to issue its own digital currency for use as legal tender.

80 Kyrgyzstan[144] Illegal

81 Nepal[145] Illegal

14. Conclusion
India and many other countries shall learn from countries like USA and UK who have come out with partial regulations. It is obvious that the technology is very new and is in its nascent and developing stages and has not been practically tested in many areas. We will know the pros and cons of its usages and disputes arising only after it is in operations in a regulated environment. By looking at the above country wise classifications, we can understand that most countries have unregulated status and some have partially regulated Bitcoin and other cryptocurrencies. On this aspect we can totally conclude one thing, we cannot regulate something or ban something which doesn’t belong to us. Bitcoin doesn’t belong to a country, a person or an organisation, it is a network based on the internet and that cannot be regulated. If a country wants to do that, they will have to stop the internet itself which doesn’t make sense.

Understanding this aspect of its inevitable and immortality, most countries have partially regulated its use by regulated exchanges and tracking users by the KYC. That’s the only way. Any regulator must understand one aspect of Bitcoin before framing any regulation, that it cannot be stopped or banned in any way because of internets wide reach. One must draft a regulation only after understanding this. We must learn from the United States of America who have very smartly drafted rules and regulations for the exchanges which solve a major problem.

The Security Exchange Commission (SEC) of the USA SEC has not approved any exchange-traded products (such as ETFs) holding cryptocurrencies or other assets related to cryptocurrencies for listing or trading. SEC has not registered any initial coin offerings as of now. But plan to do so soon after the NASDAQ announced that they are interested in becoming a crypto exchange as well. On July 25, 2017, the SEC issued an investor bulletin about initial coin offerings, saying they can be “fair and lawful investment opportunities” but can be used improperly. The SEC has issued three enforcement actions against ICO sponsors- one halt and exposure of two alleged frauds. SEC Chairman Clayton has also expressed concern about market participants who extend to customers credit.
The Commodity Futures Trading Commission (CFTC) has designated bitcoin as a commodity and announced that fraud and manipulation involving bitcoin traded in interstate commerce and the regulation of commodity futures tied directly to bitcoin is under its authority. The CFTC allowed the CME and CBOE to launch bitcoin futures trading for the first time. CFTC also approved a platform for the trading and clearing of virtual currency derivatives for LedgerX, LLC, a swap execution facility and derivatives clearing organization.
The Internal Revenue Service (IRS) says bitcoin must be treated as property for tax purposes. This means a capital gain or loss should be recorded as if it were an exchange involving property. It should be treated like inventory if it is held for resale, and therefore an ordinary gain or loss recorded just like the sale of goods act 1932. If it is used as payment, it should be treated like currency, but must be converted, and its fair market value checked on an exchange at the time of the transaction.

Treasury Secretary Steven Mnuchin said in November he had established working-groups at treasury looking at bitcoin and that it is something they will be watching “very carefully.” This is crucial to bring together experts from this field and make a department in the government.

Bitcoin and Cryptocurrencies are the technology of the future due to its disruptive and decentralized nature. It’s a transparent way of transferring values without the banks. Just imagine the scams related to the banks and other financial institutions disappearing in near future! We must educate the investors and users about protection of their funds because they themselves will be responsible for their funds on the network. We must understand that the network cannot be hacked by using today’s available technology! only exchanges can be hacked who hold the private keys to the funds. That is the major reason why exchanges must be regulated immediately.

We hope we have introduced the pros and cons briefly enough in a simple way so that the anybody without having enough knowledge can understand the matter in a nutshell.
Thank You
Sidharth Sogani
On Behalf of Team – Block Next Solutions LLP

15. References
[1] Introduction to Digital Currencies University of Nicosia, 2017 [2] Bitcoin White Paper, Satoshi Nakamoto 2008 [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13] [14] [15] [16] [17] [18] [19] [20] [21] [22] [23] [24] [25] [26] [27] [28] [29] [30] [31] [32][32] [33] [34] [35] [36], [37] [38] [39] [40] [41] [42] [43] [44] [45] [46]
[53] [54}
Cryptocurrencies in India – May 2018
Copyright Block Next Solutions LLP | Page 24 of 31
[77] [78] [79]
Cryptocurrencies in India – May 2018
Copyright Block Next Solutions LLP | Page 25 of 31
[131][ocurrency-taxes/, [132],
[145] [146} Various date collected from the report by Perkins and coie [147] Various data collected from Law & trust Internationals article [148]

16. Definitions and General Terms Associated at various places
Addresses (Cryptocurrency addresses) are used to receive and send transactions on the network. An address is a string of alphanumeric characters, but can also be represented as a scannable QR code.
Agreement Ledger
An agreement ledger is distributed ledger used by two or more parties to negotiate and reach agreement.
Alt Coin
An alt coin is a Bitcoin alternative. There are many hundreds of alt coins currently being marketed.
Attestation Ledger
A distributed ledger providing a durable record of agreements, commitments or statements, providing evidence (attestation) that these agreements, commitments or statements were made.
ASIC is an acronym for “Application Specific Integrated Circuit”. ASICs are silicon chips specifically designed to do a single task. In the case of bitcoin, they are designed to process SHA-256 hashing problems to mine new bitcoins.
Blocks are packages of data that carry permanently recorded data on the blockchain network.
A blockchain is a shared ledger where transactions are permanently recorded by appending blocks. The blockchain serves as a historical record of all transactions that ever occurred, from the genesis block to the latest block, hence the name blockchain.
Block Height
Block height refers to the number of blocks connected together in the block chain. For example, Height 0, would be the very first block, which is also called the Genesis Block.
Block Reward
A form of incentive for the miner who successfully calculated the hash in a block during mining. Verification of transactions on the blockchain generates new coins in the process, and the miner is rewarded a portion of those.
Central Ledger
A central ledger refers to a ledger maintained by a central agency. Bitcoin is decentralised because it is not maintained by a central body but a community on the internet.
The successful act of hashing a transaction and adding it to the blockchain.
Consensus is achieved when all participants of the network agree on the validity of the transactions, ensuring that the ledgers are exact copies of each other.

Cryptographic Hash Function
Cryptographic hashes produce a fixed-size and unique hash value from variable-size transaction input. The SHA-256 (Signature Hash Algorithm) computational algorithm is an example of a cryptographic hash.
A decentralized application (Dapp) is an application that is open source, operates autonomously, has its data stored on a blockchain, incentivised in the form of cryptographic tokens and operates on a protocol that shows proof of value.
Decentralized Autonomous Organizations can be thought of as corporations that run without any human intervention and surrender all forms of control to an incorruptible set of business rules.
Distributed Network
A type of network where processing power and data are spread over the nodes rather than having a centralized data centre.
Difficulty, in Proof-of-Work mining, is how hard it is to verify blocks in a blockchain network. In the Bitcoin network, the difficulty of mining adjusts verifying blocks every 2016 blocks. This is to keep bitcoin block verification time at ten minutes.
“The Other Blockchain” Ethereum is a blockchain-based decentralized platform for apps that run smart contracts, and is aimed at solving issues associated with censorship, fraud and third party interference.
Where you Buy or Sell bitcoin and altcoins to or from your bank or credit card or from various coins on the open market. There are internal wallets yet the exchanges have the private keys to the wallets so it’s never safe to store the cryptocurrency on these exchanges for a long period of time. Fiat Currency A legal tender issued by a government or a central bank such as Federal Reserve which issues US Dollars and Reserve Bank of India which issues Indian Rupees
The term for constantly rotating your AltCoins on a trading platform trying to catch the raising percentages as the coins constantly go up in value.
Forks create an alternate version of the blockchain, leaving two blockchains to run simultaneously on different parts of the network
Genesis Block
The very first block in a block chain.
Hard Fork
A type of fork that renders previously invalid transactions valid, and vice versa. This type of fork requires all nodes and users to upgrade to the latest version of the protocol software.

Bitcoins have a finite supply, which makes them a scarce digital commodity. The total amount of bitcoins that will ever be issued is 21 million. The number of bitcoins generated per block is decreased 50% every four years. This is called “halving”. The final halving will take place in the year 2140.
The act of performing a hash function on the output data. This is used for confirming coin transactions. See this for a detailed explanation
Measurement of performance for the mining rig is expressed in hashes per second. Mh/S (mega hash per second)is the speed that a graphics processor, GPU, can hash per second.
From Reddit: HODL is used for “hold” – it’s a term that was invented by a psycho who did a typo and it became famous. Whenever people talk here (reddit website) about holding their coins, they would rather say “hodl your bitcoins”. Also “hold on for dear life”.
Initial Coin Offering (ICO)
An Initial Coin Offering (also called an ICO) is an event in which a new cryptocurrency sells advance tokens from its overall coinbase, in exchange for upfront capital. ICOs are frequently used for developers of a new cryptocurrency to raise capital.
An append-only record store, where records are immutable and may hold more general information than financial records.
A peer-to-peer cryptocurrency based on the Scrypt proof-of-work network. Sometimes referred to as the silver to bitcoin’s gold.
The process by which transactions are verified and added to a blockchain. This process of solving cryptographic problems using computing hardware also triggers the release of cryptocurrencies.
Multi Signature
Multi-signature addresses provide an added layer of security by requiring more than one key to authorize a transaction.Multi signature addresses have a much greater resistance to theft.
A copy of the ledger operated by a participant of the blockchain network.
Off-Ledger Currency
A currency minted off-ledger and used on-ledger. An example of this would be using distributed ledgers to manage a national currency.
On-Ledger Currency
A currency minted on-ledger and used on-ledger. An example of this would be the cryptocurrency, Bitcoin.
Oracles work as a bridge between the real world and the blockchain by providing data to the smart contracts.
Peer to Peer Exchange
A person who owns bitcoin or other cryptocurrencies willing to sell it to you or you buy/sell to them.
Where a lending platform is setup to accept payment but eventually disappears before fully paying back their investors. Usually when they claim to payout more than they can actually afford to. Always look for red flags with investing platforms before investing or you could potentially risk losing your entire investment.
P2P Peer to Peer
Peer to Peer (P2P) refers to the decentralized interactions between two parties or more in a highly-interconnected network. Participants of a P2P network deal directly with each other through a single mediation point.
Public Address
A public address is the cryptographic hash of a public key. They act as email addresses that can be published anywhere, unlike private keys.
Private Key
A private key is a string of data that allows you to access the tokens (cryptocurrency)in a specific wallet. They act as passwords that are kept hidden from anyone but the owner of the address.
Proof of Stake
A consensus distribution algorithm that rewards earnings based on the number of coins you own or hold. The more you invest in the coin, the more you gain by mining with this protocol.
Proof of Work
A consensus distribution algorithm that requires an active role in mining data blocks, often consuming resources, such as electricity. The more ‘work’ you do or the more computational power you provide, the more coins you are rewarded with.
Where an organization is setup on a referral to referral basis constantly accepting investments with locked contracts in order to hold onto investors money. The more people underneath each other investing in the system, is the only fuel for maintaining these infrastructures until they can no longer withstand the demand for payouts. At this time, they will generally disappear or crumble.

A payment network built on distributed ledgers that can be used to transfer any currency. The network consists of payment nodes and gateways operated by authorities. Payments are made using a series of IOUs, and the network is based on trust relationships. The banking industry is adapting this platform.
An alternative proof of work system to SHA-256, designed to be particularly friendly to CPU and GPU miners, while offering little advantage to ASIC miners.
SHA-256 is a cryptographic algorithm used by cryptocurrencies such as Bitcoin. However, it uses a lot of computing power and processing time, forcing miners to form mining pools to capture gains.
Smart Contracts
Smart contracts are contracts whose terms are recorded in a computer language instead of legal language. Smart contracts can be automatically executed by a computing system, such as a suitable distributed ledger system.
Soft Fork
A soft fork differs from a hard fork in that only previously valid transactions are made invalid. Since old nodes recognize the new blocks as valid, a soft fork is essentially backward-compatible. This type of fork requires most miners upgrading in order to enforce, while a hard fork requires all nodes to agree on the new version.
Solidity is Ethereum’s programming language for developing smart contracts.
A test blockchain used by developers to prevent expending assets on the main chain.
Transaction Block
A collection of transactions on the bitcoin network, gathered into a block that can then be hashed and added to the blockchain.
Transaction Fee
All cryptocurrency transactions involve a small transaction fee. These transaction fees add up to account for the block reward that a miner receives when he successfully processes a block.
A file that houses private keys. It usually contains a software client which allows access to view and create transactions on a specific blockchain that the wallet is designed for.

ANNEX I The bitcoin white paper ANNEX II Companies accepting bitcoin and cryptocurrencies as method of payment ANNEX III Country classification- legal status of bitcoin.
(if the hyperlink to access the above reports is not working, you can mail us at to get a copy of the same. You can also access the same at the resources section at
Document information b85f1eaddc6f569aeece56cb10b459f6a367f94ae4e0d224192c2b3e47aa24a4 Registered in servers since: 2018-05-07 10:34:46 Transaction broadcast timestamp: 2018-05-07 10:36:41 Registered in the bitcoin blockchain since: 2018-05-07 10:45:24 Transaction ID a55be73c7382b01b3f52513858194405df79f2f2a4631b4e4373564ad577f5d7
Block Next Solutions LLP Regd Add. TC Gupta Compound Kherani Road Saki Naka Andheri East Mumbai 400072 Contact: +91 22 28520117 | +91 98671 11133 EMail:

Share this: