A BIT OF CHANGE
There are now one million bitcoin enthusiasts in India, ranging from geeks to granddads, using the virtual currency to do business, pay bills, even order pizza
Vishal Gupta’s ears ring with the sound of coins he can’t touch.
The 34-year-old entrepreneur was gifted a single bitcoin, then worth a mere ₹3,100, back in 2011 and it got him hooked on to the idea of virtual money.
Today, one bitcoin is worth close to ₹40,000 and Gupta is waiting for India to realise that the currency is valuable not just in itself, but also for what it’s starting to represent.
It’s been around only since 2009. It circulates only as strings of code through a network of servers across the world. But Gupta believes bitcoin is the ideal monetary system for our connected, wired, postrecession world.
“Cash is unwieldy and unsafe. Cheques and credit cards need banks,” he points out. “But banks are incentivised to take risks and keep making a mess.”
Bitcoin is different. “It is operated by the people who use it, so it offers the accountability and trust banks cannot,” he says. “It also has no geographical boundaries. Unlike a dollar, a dirham or a rupee, a bitcoin has the same value the world over.”
The idea excited Gupta so much, he gave up his in-cab advertising business two years ago and set up SearchTrade, a company that collaborates with search engines. He pays his contributors in bitcoin.
Over the last few years, bitcoin’s reputation has cleaned up like a shiny new penny. Headlines have gone from alarmist (the 2013 bust of drug-trade site Silk Road, which accepted the currency) to awestruck (hackers stealing $65 million worth of bitcoins in a single heist in August). Governments, lawmakers, bankers and investors have begun studying it closely.
Enterprises as varied as MobiKwik, Dell, Expedia and Virgin Galactic now accept it as payment. In India, bitcoin enthusiasts now number 1 million. They include everyone from geeks to granddads, in big cities and little towns. They encompass brokers and businessmen, lawyers and homemakers, spenders and hoarders, hackers and the hacked. Here are some of them.
THE BROKER
In Jaipur, Shubham Nawariya sees bitcoin’s volatile price as the perfect opportunity for profit.
Nawariya, a 22-year-old computer science graduate, discovered bitcoin a year ago, watching friends shop from international sites without paying bank fees. By April, he’d learned enough to trade bitcoins online like stocks and help people transfer money out of India.
He now trades full-time, going through about 3 bitcoins (₹1.16 lakh) every day. “I have to keep explaining to people that, in India, no one is interested in buying drugs with bitcoin,” he says, laughing. “It’s for sending money anywhere, in a few minutes, with no leaks, instead of running around between banks the whole day. And, of course, to stash your wealth.”
THE SIMPLIFIER
In Ahmedabad, Sandeep Goenka’s start-up is helping make bitcoin as easy to use as cash. Goenka realised bitcoin’s potential in 2013. He also knew that its complicated functioning would put off most users.
“I didn’t want to be a Chief Explaining Officer,” he says. “I wanted bitcoin to be as easy to use as WhatsApp.” His solution: joining fellow enthusiasts Saurabh Agrawal and Mahin Gupta to set up ZebPay.
The app lets smartphone users trade in bitcoins and use them to pay cellphone and DTH cable TV bills and buy things online , just as they’d spend regular money.
He says the 13-month-old company’s trade turnover was 18,700 bitcoins or about ₹75 crore last month, when the app also crossed 1 lakh downloads. Goenka’s own bitcoin wealth, made by incremental investments over the last year, now has, “a 150% hike in value,” he says. “I’ve never sold; I think the price will rise higher.”
THE MINER
Mumbai undertaker Danny Pinto can seemingly generate bitcoins from thin air.
Pinto, 59, had been a marine engineer and a transport entrepreneur before he set up a successful chain of funeral parlours. “I’m always on the lookout for something new,” he says. So when he heard of bitcoin from a friend in November, he was intrigued by the idea of mining — being rewarded in bitcoins for contributing to the currency’s global accounting system.
Miners jointly buy servers in countries with cheap electricity, uninterrupted internet and frigid temperatures to keep machines cool, and then they split the bitcoin reward. “It takes a few days to figure out. But once people realise it’s the computers doing all the work, they stop being intimidated.” He signed on in December with his first bitcoin, then worth ₹22,000.
“Since then, I’ve put all my investments into mining,” he says, claiming he gets 9% returns a month.
Pinto is now trying to convince his son to accept bitcoin payments in their undertakers’ business. “It’s the money of the future,” he quips. “And it can be your last payment before you go!”
THE EARLY ADOPTER
If, at 24, Delhi entrepreneur Mohit Kalra is already the CEO of a bitcoin company, it’s only because he started early. Kalra’s interest in financial technologies led him to mine bitcoin “just for the experience” in 2010, when a bitcoin was worth less than a dollar. By 2013, when it crossed $260, he was still among India’s largest miners.
“I had all these coins but no way to spend them,” he says. This prompted him to set up Coinsecure, the first website that let Indians buy and sell bitcoins smoothly in rupees, with fellow enthusiast Benson Samuel. Today, users can start with just ₹100 worth of bitcoin, practise on a mock platform, and cash out through banks.
“We trade about 9,000 bitcoins a month,” Kalra claims. About 15% of the users are women, many over 30, and “a good number are students who turn to bitcoin because they can’t use debit cards abroad”.
THE VIRTUAL SPENDER
Monisha Kalra learnt about the currency from her son, Mohit, and turned her 40-member kitty party gang into users too.
“The difficult part was to explain how bitcoins were generated, because even I didn’t understand it well,” she said. But with help from her son, web videos, and multiple discussions, “my friends got curious about investing a little to start with”.
Kalra has used her bitcoin earnings to shop on e-stores. “I was amazed at how easy it is to use,” she says. “It’s as simple as using payTM or Mobiquik.” The unexpected bonus: “My friends have started calling me the Bitcoin Mom.”
THE UNWILLING RECRUIT
In July, Delhi businessman Abhishek (last name withheld on request) walked into his Delhi office to find all his computers jammed, his banking details compromised and key files encrypted. “My screen just showed a a five-day deadline counting down, and a message to transfer something called ‘satoshis’ to a specified account number.”
He’d been hacked, and the hackers had demanded 17,000 satoshis (10 million satoshis make up 1 bitcoin; the ransom was then the equivalent of about ₹8,000).
Delhi’s Cyber Crime cell couldn’t help. But, in two days, Abhishek had set up a bitcoin account, bought the satoshis and transferred them to the hackers.
“That experience taught me a few things,” he says. “First, I need to keep my data more secure. And second, the bitcoin system itself is clean.”