BITCO IN: ANOTHER PONZI SCHEME?
The proponents of Bitcoin, are as vociferous as its detractors. The crypto- currency may have taken a step toward legitimacy but global financial regulators are warning about the risks of investing in it
With the final verdict of the FinTech fraternity still awaited on this new age financial instrument, what is certain is that it has attracted a lot of celebrity attention. Right from Amitabh Bachchan to Paris Hilton, the crypto- currency fever has spread like wildfire.
Sainath Gupta, CEO of the Hyderabad- based Anything AI
Cyber Pvt. Ltd., who works on maximising returns on Bitcoin, says, “It’s already a mainstream currency in markets like Japan, Venezuela and Zimbabwe. It’s increasing in value and it’s very simple to open a wallet using a private digital key. You just enter the wallet address of the Bitcoin to send and the transaction time is between 30 to two hours, depending on certain factors. It can be bought in most countries by authorised exchanges such as Coinbase in the US and Coinsecure or Koinex in India.”
While Bitcoin investors like Gupta feel the crypto- currency is gaining increasing legitimacy,
others feel it is a highly volatile, New Age ponzi scheme in its very early days. In fact, its volatility is also a financial risk that most Governments cannot control and developing economies like India are not technologically mature enough to handle. Investing in Bitcoin is currently a high risk- high reward proposition, which many fear could destabilise economies.
“It is an investment like any
other ( stocks, bonds, real estate), and the motive behind any investment is to get returns. Bitcoin has yielded returns excessing more than 1000 per cent in the last 18 months. This kind of returns on investment are unheard of and world governments are understandably a bit vary of the hype. Governments feel the need for a regulatory frame work to avoid future crises,” says Vinod Ranka, MD, Avni Tech Ventures Pvt. Ltd.
Partha Pratim Pal, crypto- currency analyst and co- founder cryptbuzz. com and thepolicytimes. com, however, is of the opinion that, “In the long run, Bitcoin is one of the safest investment with lowest possible risk. and high gain. Firstly, it is a digital currency, which means buyers and users can use it for regular digital transactions. Secondly, it is an investment option as real as real estate, stocks or any other option.”