A bit of change: Indians using bitcoin to trade, shop, even pay for pizza
Vishal Gupta’s ears ring with the sound of coins he can’t touch. The 34-year-entrepreneur was gifted a single bitcoin, then worth a mere Rs 3,100, back in 2011 and it got him hooked on to the idea of virtual money. Today, one bitcoin is worth close to Rs 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, post-recession world. “Cash is unwieldy and unsafe. Cheques and credit cards need banks,” he points out. “But banks are incentivised to take risks, so they keep making a mess and get bailed out at the literal cost of the people.”
Bitcoin is different. “It is operated by the very people who use it, so it offers the accountability and trust that our 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 searches engines. He pays his contributers 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, Virgin Galactic and Wikileaks 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 Virtual Spender
Monisha Kalra learnt about the currency from her son, Mohit, and turned her kitty party gang into bitcoin users.
Kalra knew that trading in bitcoin could be rewarding. What she hadn’t anticipated was her gang of 40 kitty party friends becoming interested in it 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 money to start with”.
Kalra has used her bitcoin earnings to shop on e-stores. “I was excited to spend bitcoin for the first time and 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.”
Mumbai undertaker Danny Pinto is among those who 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 running the currency’s ledger or global accounting system.
Mining, he found out, is rewarding but competitive work. 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 Rs 22,000.
“Since then, I’ve put all my investments into mining,” he says, claiming he gets 9% returns every month. Pinto is trying to convince his son to accept Bitcoin payments in their undertakers’ business. “It’s the money of the future. And it can be your last payment before you go!”
In Ahmedabad, Sandeep Goenka’s start-up is helping make bitcoin as easy to use as cash.
Angel investor Goenka realised Bitcoin’s potential back 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 simple to use as WhatsApp.” His solution: joining up with enthusiasts Saurabh Agrawal and Mahin Gupta to form ZebPay. The app lets smartphone users buy and sell bitcoins. It also lets them spend bitcoin to pay their cellphone and DTH cable TV bills, buy data and talktime top-ups and etailing and pizza vouchers, just like they’d spend regular money.
The 13-month-old company’s trade turnover was 18,700 bitcoins or about Rs 75 crore last month. Their app crossed 1 lakh downloads across Android and iOS, last month. Goenka’s own bitcoin wealth, made by incremental investments over the last year, now has , “a 150% increase in value,” he says. “I’ve never sold; I think the price will rise higher.”
The Early Adopter
For Delhi entrepreneur Mohit Kalra, bitcoin is the curious gamble that’s starting to pay off.
If, at 24, Kalra, is already the CEO of a bitcoin company, it’s only because he started early. Kalra’s interest in financial technologies as a student 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,” Kalra 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 as little as Rs 100 worth of bitcoin, practise on a mock platform before trading, and cash out through reputed banks.
“We trade about 9,000 bitcoins a month,” Kalra claims. About 15% of the users are women, many of them over 30, and “a good number are students who need bitcoin because they can’t use debit cards on foreign sites”.
Bitcoin is finally getting India interested, Kalra says. “Even a year ago, when I told people my job, they’d assume I was doing something shady, like selling drugs, or running a hawala scam,” he says. “These days, they want to know how and how quickly they can start using it.”
The Unwilling Recruit
Delhi businessman Abhishek adopted bitcoin the hard way, when hackers demanded a ransom in the virtual currency.
In July, Abhishek (last name withheld on request) walked into his Delhi office to find all his computers jammed, his banking details compromised and a few 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 set a ransom of 17,000 satoshis (10 million satoshis make up 1 bitcoin), worth about Rs 8,000 at the time. Delhi’s Cyber Crime cell couldn’t help. But, in two days, Abhishek set up a bitcoin account, bought the satoshis and transferred them to the hackers.
“I cut my internet wire the second I recovered my data,” he recalls. “It taught me a few things – that I need to keep my data more secure. But that the bitcoin system itself is clean.”
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. “It was confusing – how do you count something that doesn’t exist?” he says. But by the time he took his final exams in April, he’d learned enough to trade bitcoins online like stocks and help people transfer money between India and the world.
He now trades full-time, going through about 3 bitcoins (Rs 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.”