Many Indians are seeing a huge business potential in the cryptocurrencies and are rushing up to set up companies to cash in on the same. A minimum of a dozen companies have been registered across different parts of the country with “bitcoin” as part of their names while many similar applications lie pending before the Registrar of Companies.
The numbers are much higher for companies with the word “crypto” in their names while many have sought to become innovative by adding a number of prefixes to the word “coin” which include Indian versions like “BharatCoin” and “IndiCoin”.
The mad rush of investors seems to be continuing despite the regulatory warnings about bitcoins and its alternatives that operate in an unregulated domain. There are also possible chances of money laundering and terror financing risks associated with such cryptocurrencies. A large number of regulators and enforcement agencies are actively looking into the recent craze for bitcoin and searches were conducted by tax authorities at a number of places where they believed to have collected details about a large number of investors trading on bitcoin exchanges.
There are concerns that the operators could be running illicit money pooling pyramid activities in the name of virtual currencies. Some have already been unearthed and are facing action from the police. While the regulators continue with their probes, the entrepreneurs seem to be undeterred by any risk factors and only expect good business to come by in the future. They belong to various parts of the country-from Kanpur to Jaipur to Delhi to Mumbai to Ghaziabad to Ahmedabad.
A large number of entities have been established under the Limited Liability Partnership model while many are being set up as privately held companies. Further, there are many entities operating in the digital world by setting up the websites while others have gone in for the registration of their companies. According to the data by RoC, the registered entities include Bitcoin Exchange, Bitcoin India Software Services, Bitcoiners India, Bitcoin Bazaar and Bitcoin Infotech among others. There are more like Crypto Infotech, Crypto Labs, Crypto Yo Coin India, CryptoMudra Digital Services.
The popularity of bitcoin has grown manifold in the last few months with its price soaring close to $20,000 earlier this month. However, the price has been swinging widely and fell by almost half to $10,000 only to again rebound to $15,000 level. Currently, bitcoins command a market cap of more than $240 billion and more than 16 million units are said to be in circulation. The maximum supply is pegged at about 21 million. High risk is associated with bitcoin transactions. Its popularity has given rise to various other cryptocurrencies globally as several entities and exchanges have gone bust with huge losses. No such currency has got legal tender status from any bank in the world but is being accepted mostly for online trades.
The coins are minted and traded using blockchain technology which uses cryptography for security of exchanges and provides a decentralized digital ledger of transactions for all on the network which is open. Blockchain is a distributed ledger technology algorithm for managing the digital cash without any central administrator. The users remain unaware about each other and the network has thousands of nodes and a transaction is verified only after a majority of nodes reach consensus.