Back in 2020-21, I used to talk about crypto all day long. I still do, but now I can at least word it better (I think so). So just to avoid a difficult conversation with my parents, I once told mom that I work for Bitcoin.

A few days later, my maternal uncle called me. Extremely unhappy, he pointed out that I don’t call him enough. He was angry that I did not tell him about my job switch and he wanted to invest in Bitcoin as well.

For those of you, who do not get the joke, this post is for you.

For those, who realize that Bitcoin is not a company, enterprise, brand or startup, and still figuring out their next moves, this one is for you too.

Today, we will talk about the nuances of investing in Bitcoin. LFG.

How to Get Started?

Not so soon!

First thing’s first. Understand your ‘why’ of investing. I mean you must have some goals and stuff. Else, how will you disappoint yourself? Right?

Okay, assuming that you have figured your risk appetite.. wait.. what’s that, you ask?

I think a cute little disclaimer here should be fun.

Generally, the investing landscape in India follows the below risk-o-meter:

Government Bonds < FDs < Private Bonds < Equity < Unlisted Market < Crypto 

Now one could look at this in the opposite direction and you will find the potential returns.

So, given the above information, check if you want to invest in crypto at all. Full disclosure; it is pukishly volatile, extremely uncertain and definitely not the government’s favourite. At the same time, it is also subject to the most harsh taxation, akin to gambling. Awesome!

If you are still reading, take a bow.

Thou shall prove your worth, before you invest in Bitcoin

-Self

Investing Via Centralized Exchanges:

“No! Stop asking me if I invest in Crypto because it makes me feel alive temporarily. That is not the case!”

“I am still dead inside.”

Regardless, this one is a relatively simple method.

Since then the only thriving crypto exchanges in the country are CoinDCX, WazirX and CoinSwitch.

While this is not a recommendation, but I use CoinDCX personally. Its simple, compliant and the founder has a vision of how to work with government to extract the best outcome.

WazirX’s founder has sold it off to Binance and working on a new Blockchain project now.

Congratulations. You now own your first crypto.

But do you? Like really own-own?

The Curse of Centralized Exchanges:

Quick task.

Find a crypto bro in your vicinity, give him a tight slap to pull him out of delusion and ask him why should one invest in Bitcoin. You are most likely to hear the word D.E.C.E.N.T.R.A.L.I.Z.A.T.I.O.N pop up in that conversation at least 5 times.

Then come back home and question yourself.

Do not worry, we are not contemplating life choices tonight.

But yes, ask yourself that you invested in an asset class that is independent of all intermediaries and sovereign superpowers (hence the term, decentralization).

And then you decided to trust a random internet nerd who built that exchange and handed over all your funds to him.

Let me break it down for you (while you have a breakdown)

• You invest in stocks through brokers like Zerodha/Upstocks/Groww.
• These brokers are merely a frontend of NSE/BSE which is the custodian of your stocks.
• All the entities that I just mentioned are heavily regulated by SEBI.
• So you have a guarantee of sorts from the government in case of some funky business.

While in crypto:

• These exchanges are not yet regulated. Government is still figuring out.
• It is not a Blockchain transaction when you invest in crypto through a centralized exchange. So it is not self-governing either.
• So you literally have the worst of both worlds.
• No government guarantee, no blockchain based self-governance.

So what do we do now?

Enter: Decentralized Exchanges

“Not your keys, not your crypto”

-Anon

If I have learnt anything after burning my hands, it is this line.

In order to really own your crypto, you need to be a self custodian.

And there are ways to do it without much hassles.

However, since this blog post is part of the blog challenge ‘Blogaberry Dazzle’ hosted by Cindy D’Silva and Noor Anand Chawla in collaboration with Bohemian Bibliophile, I will not go into the details of investing via decentralized exchanges.

I am told it is outright unfair and borderline psychopath to barge into crypto conversations out of the blue here.

However, if you want to nerd your way into degenery, be my guest. Read this and this for more details.

So What Do we Do Now?

Okay. I might have been too harsh on these centralized exchanges. Yes they are unregulated in India right now, but that does not mean they will remain regulatory orphans forever.

Therefore, your best bet as a newbie should be investing through a renowned centralized exchange. Moreover, these exchanges aren’t as evil as they may sound.

Web3 infrastructure is still at a nascent stage. Until that matures, the only route to mass adoption is through these exchanges.

But yes, the asset itself is fiery as ever. So once again. Invest only what you can afford to lose.

Future is uncertain, death is coming, buy bitcoin! Or maybe don’t. You call the shots!