Guwahati, Feb 25: The Advertising Standards Council of India (ASCI) recently announced a set of guidelines for crypto products and virtual digital assets mentioning that these products are ‘unregulated and can be highly volatile’.As per the guidelines which will be effective from April 1, crypto companies are required to include a disclaimer in all ads of the potential risk factor associated with the digital assets.The advertising watchdog has considered these guidelines as this is a new and as yet an emerging way of investment.Hence there is a need to make consumers aware of the risks and ask them to proceed with caution.What is crypto currency? Unlike physical or tangible money, cryptocurrencies are digital assets or digital form of money that is built on blockchain technology and only exists online.It is a medium of exchange that uses encryption to authenticate and protect transactions.They are not managed by any central authority such as a government or bank.Rather it is a decentralised network based on blockchain technology and uses a distributed ledger enforced by a disparate network of computers.
The first cryptocurrency was Bitcoin and it was coined by Satoshi Nakamoto in 2008, and described it as ‘an electronic payment system based on cryptographic proof instead of trust.’ Is it safe to invest in crypto-currency? Although it provides the facilities to trade online without carrying the physical money around and exchanged in the real world, cryptocurrency payments exist purely as digital entries to an online database describing specific transactions.Upon transferring cryptocurrency funds, the transactions are recorded in a public ledger.They are usually stored in a digital wallet.It uses encryption to verify transactions that use advanced coding in storing and transmitting cryptocurrency data between wallets and public ledgers.The encryption aims to provide security and safety.However, investing in cryptocurrency remains a debatable topic as it comes with certain risk factors.Cryptocurrency exchanges are vulnerable to being hacked and becoming targets of other criminal activity.These security breaches have led to sizeable losses for investors who have had their digital currencies stolen.
Despite the inherent risks, cryptocurrencies and the blockchain industry are consistently growing stronger.Experts suggest that is advisable not to invest more money than one can afford to lose.How to invest in crypto-currency? Despite the lack of a centralised authority, and cryptocurrencies being a vulnerable asset, it is the newest thing that has gained popularity among the masses as it provides an opportunity to invest and earn substantial returns.However, it is advisable to have a thorough understanding of the crypto market before landing in the world of digital assets.Some of the popular crypto exchanges’ platforms, in the country where one can easily buy and sell digital currency are: ZebPay, WazirX, UnoCoin, CoinDCX, and CoinSwitch Kuber.The first thing an investor needs to do is establish a crypto account and fund it with fiat money or with another currency such as U.S.dollars.After creating an account and transferring money, it is now time to decide which cryptocurrency one wants to buy.
There are various crypto coins one can choose from.The most popular one is Bitcoin, followed by other altcoins such as Ethereum, Dogecoin, Binance Coin etc.Following the purchase, the cryptocurrency needs to be stored in a digital wallet.Recent govt taxation on cryptocurrencyIn India, the new age currency had its breakthrough moment, after Finance Minister Nirmala Sitharaman proposed to introduce tax on digital assets in the Union Budget 2022.
The govt announced that 30% tax will be levied on any income from the transfer of any virtual digital asset.This includes cryptocurrencies to non-fungible tokens (NFTs).The finance minister also proposed to provide an additional 1% TDS (tax deducted at source) on payment made for the transfer of virtual digital assets.The decision was welcomed by many as this was considered to be the first step towards regularization, as crypto players have been demanding clarity on taxes.
On the other hand, few associated with the platform said that it will hurt active traders as tax levied will hamper those who are at the lower tax bracket because of their yearly income.How volatile is the cryptocurrency market? Two people may invest in the same coin while one may lose money the other will gain profit.The fluctuating valuation of the coins makes cryptocurrency a volatile entity in the digital market.Some of the few factors that determine the trajectory of this market are: – It is still at a nascent stage compared to other forms of investment.It leads to experimentation by the investors who often try to figure out the cause of fluctuation and whether they could influence its prices.- The fluctuation is also determined by the….
