Bitcoin India

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  The full list of countries where Paxum funds may be withdrawn via an EFT now includes: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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Another BTC/INR Market Opens - Free Trading

Bitcoin-Central.net is an exchange that has been operating since 2010, which is long in the tooth as far as Bitcoin exchanges go.  The exchange recently added a INR deposit method and operates a BTC/INR market — the second exchange to now serve those wishing to buy and sell Bitcoins with the rupee.

Bitcoin-Central exchange has no trading fees.  Adding funds to the exchange account involves sending a bank wire transfer to the exchange’s bank account with ICICI (fee applies).  Withdrawal to any bank in India is available as well (fee applies).

Support from the exchange is available by e-mail from: amit@bitcoin-central.net

The exchange offers either Google or Yubikey multifactor authentication methods which can lessen the security risks significantly compared to transacting against exchanges without these methods.

Support fort the INR currency was just recently added so if the market follows the pattern that other new markets followed then first will appear some bids and offers that are far apart (a wide spread).  Then sporadic trades will likely occur before the market starts to function with competitive offers on one or both sides and eventually an efficient market becomes the result.

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First BTC/INR Trades Booked on TradeHill

Indian Rupees (INR) are now being used to buy bitcoins and bitcoins are now being used to buy Rupees.

INR funds may be deposited with the TradeHill exchange from any Indian bank.  Once funds have been received, a bid may be placed on the BTC/INR market and when there is a sell order willing to sell at that price the buyer’s order will be filled.

Those selling bitcoins for Rupees can then withdraw their INR funds at that the exchange to any bank in India as well.

TradeHill has been operating for over month now but these INR trades occuring this week were the first to execute through its BTC/INR market.

When the BTC/INR market firms up, this market will likely see a fair amount of activity from those who hold Liberty Reserve currency and wish to withdraw those funds as INRs.  TradeHill also has a BTC/LR (LRUSD) market so converting from LRUSD to INR will involve two trades.  The BTC/LR market has been favorable to those holding Liberty Reserve — enough so that even with the wide spread using TradeHill could become one of the least expensive methods for withdrawing LRUSD to INRs.

After PayPal this month added further restrictions for its customers in India, both Bitcoin and Liberty Reserve will likely get a boost.

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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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BTCRate.com provides a tool for converting between bitcoins and Indian Rupees.  

The tool uses the BTC/USD market rate from the Mt. Gox exchange and then uses the USD/INR exchange rate from XE.

When this post was composed (May 24, 2011) 1,000 INR will buy a little more than 3 BTCs.

• INR per 1 BTC (BTC/INR)
• BTC per 1 INR

The SI unit for a one thousandth of a bitcoin (0.001 BTC) is MilliBitcoin though there is not yet a widely used name to refer to unit smaller than a bitcoin.

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Liberty 2 Reserve digital currency exchange, email: info@liberty2reserve.com

Provide sale, purchase and exchange of electronic currency between all basic electronic payment systems: Liberty 2 Reserve, Perfect Money, AlertPay, and Webmoney.

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This article, by Deepa Kurup, provides a gentle introduction to Bitcoin.

BitCoin is yet to make an impact among Indian users. But considering the thousands of PayPal customers who suffered last year when the firm withdrew services from India, this is one idea that is likely to catch on among freelancers and small businesses.

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