Bitcoin India

bitcoin:

In a newsletter from Mondato (@MondatoPortal) is an article on how underground money transfer networks are subverting central authorities as well as the traditional financial system.  Excerpts:

As mobile penetration continues to grow exponentially, even in restrictive economies such as North Korea and Iran, underground value transfer may soon find a new vehicle – the mobile phone.

Newly emergent virtual currencies like Bitcoin have the capacity to fly beneath government regulations, opening alternate channels for subversive money transfer.

The international community may be powerless to stop the emergence of Bitcoin, particularly in contexts such as North Korea, Somalia, or Iran where there is demand for alternative monetary systems.

Bitcions will become more global once Coinapult expands their SMS Wallet capability beyond the U.S. and Canada.  With that, bitcoins can be sent to any mobile phone with SMS text messaging.  Compared to mobile transfer systems like M-PESA, fees for bitcoin transfers are trivially small.

Coinapult’s SMS text messaging wallet might have limited potential as a subversive tool, however.  Unlike native Bitcoin transactions, Coinapult’s approach is dependent on the mobile phone network.  This leaves it vulnerable to disruption by the authorities who control the network and could block messages send to or from Coinapult.  Additionally, text messaging is not a secure communications protocol and there might be no method that would protect against a dishonest person who has access to the telecom operator’s systems.

The article’s accompanying infographic shows the scope of remittances including those to nations where there are restrictions.

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Forum user minorman on BitcoinTalk.org describes in a post a number of attributes that would indicate Bitcoin should be starting to gain a little interest in India but to-date, so little progress has been made.

minorman writes in support of the open question:

• India has more programmers/computer people than the rest of the world combined.
• People in India love tangible assets (gold/silver)
• The Rupee is crashing and the gold price has just hit an all time high in Rupees.
• 108 people in India have no bank account or otherwise access to financial services.
• Millions of Indians live outside India and send money to/from relatives in India.
• Unlike China, India has no “great firewall”.

The forum board has a restriction the limits new users to a specific newbie forum as an approach to limit posting of duplicate questions and to bring trolling to manage levels on the other boards once a new user “graduates” (or gets whitelisted) out of the newbie forum.  This is an unfortunate hurdle that the moderators felt needed to be put in place but the equivalent of “forum vandilism” that had been occurring had made the boards unusable for everyone without this restriction.

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An article featured on MoneyControl.com introduces its visitors to Bitcoin.  Excerpts:

Bitcoin is a mathematical money system driven by code. It allows users to send money directly from their computer to another on the other side of the world.

Units can be sold on online marketplaces in exchange for dollars, euro, sterling, Polish zloty, Australian dollars, renmimbi, yen and others.

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bitcoin:

Paxum (@PaxumInc) has introduced electronic funds transfer (EFT) for customers in nearly two dozen countries.  For the first time those holding bitcoins in those countries can now use an exchange to move funds to Paxum (directly with Mt. Gox, Intersango and TradeHill or indirectly through the use of BitInstant) and from there withdraw as an electronic bank transfer.

Paxum does require the customer to first prove identity during the set up of the customer account (with two forms of photo identification required for customers in areas considered risky) however subsequent transactions will occur in a more timely manner.

The Canadian registered money service business been offering global money transfer and merchant payment services since 2007.  Paxum is among the financial organizations whose service offerings mesh relatively well with the needs of Bitcoiners.  This new EFT offering is the first such electronic link between Bitcoin and the banking systems in many nations.  The full list of countries where Paxum funds may be withdrawn via an EFT now includes:

• Australia
• Austria
• Belgium
• Canada
• Finland
• France
• Germany
• Holland
• Hong Kong
• India
• Ireland
• Japan
• Mexico
• Poland
• Russia
• Singapore
• Spain
• Sweden
• Turkey
• Ukraine
• United Arab Emirates
• United Kingdom
• United States

Additionally, Paxum announced that it has resumed its ACH service, giving the ability for customers in the U.S. to load and withdraw funds between their bank and Paxum.

Customers may hold balances with Paxum in USD, CAD, EUR and GBP through a wallet for each currency desired.

This EFT withdrawal will likely be valued by immigrants wishing to send remittances to family members back home.  Recently the U.S. Consumer Financial Protection Bureau issued new rules requiring greater transparency regarding fees along with additional regulation.  To-date, Bitcoin hadn’t been particularly useful for remittances due to Bitcoin exchanges not having banking relationships in the developing countries where the bulk of remittance transfers land.

From the U.S. alone there are US$400 billion in remittance payments made and globally nearly that same amount in remittances are transferred to just to developing nations.

tl;dr: Paxum just expanded to the developing world — a new frontier for Bitcoin.

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The English-language Indian daily newspaper The Economics Times published an article by Gaurav S Ghosh on Bitcoin.  Excerpts:

But why would anyone trust a virtual currency that was nothing but a few lines of code generated anonymously by a process indecipherable to a non-expert audience.

There are huge inequities with respect to the bitcoin mining process, whereby early miners were able to mine much larger quantities of bitcoins than newer miners.

The author makes an argument that Bitcoin cannot be trusted and uses Zimbabwean inflation as an example — a delicious irony as the ZMD was ruined as the result of inflation and Bitcoin’s raison d’être is its protection from that very same occurrance.

Bitcoin never promised that those who were speculating in bitcoins at bubble levels would incur no losses.  There was however the expectation that the amount of bitcoin currency issued is limited and that it would occur at a predeterminted rate (roughly 7,200 bitcoins per day at current levels).  That promise is encoded in the software and enforced by massive amounts of computing power provided by those mining.  That promise has been kept.  Trust that this system can continue to meet this expectation has not lessened but has strengthened in the past few months.

The author also writes that the when a rapid increase in the money supply occurs that prices would increase afterward is just “one of many competing theories of how the economy works” so at least he is clear on his bias.  Sadly the readers will need to learn from elsewhere the benefits that Bitcoin offers.

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The first Bitcoin exchange to accept deposits using funds using a domestic bank transfer from any Indan bank is TradeHill.

Along with becoming the first exchange to offer the ability to buy bitcoins with India / INR bank transfers, the exchange also was the first to accept bank transfers for Chile / CLN and Peru / PEN. The exchange also accepts international USD bank transfers as well.

The exchange also provides a number of bitcoin cash out methods, including withdrawing to PayPal, to Amazon Payments, or to virtual instruments such as prepaid debit Mastercards, gift cards and game cards.

• TradeHill web site
• Article on Bitcoin wiki
• Overview on Bitcoin Money

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