Bitcoins, cryptocurrency? What is all the hype behind these words and what sort of a relationship does it have with Nepal?
‘Nepal Rastra Bank has declared dealing in bitcoins illegal in Nepal.’ This statement made quite an impact and it started a chain of conversations that left people wondering, ‘what is bitcoin?
Lets first talk about what crypto currency is all about and how bitcoins emerged from it. In simple terms cryptocurrency works as a medium of exchange that uses the concept of cryptography to secure its transactions, to control the creation of additional units, and to verify the transfer of assets.
Bitcoin, created in 2009, was the first decentralized cryptocurrency. What makes it stand out is the fact that unlike regular currency which has a regulatory authority, bitcoin does not have one. What this offers people is the chance to remain anonymous and that it is a peer-to-peer based exchange system. All of bitcoin in the world is held by users of its network in their own individual bitcoin wallets or bitcoin clients.
Nepal has had a brief affair with bitcoins. Although there is no proper evidence, in 2009 bitcoins were rumored to have been launched in Nepal and the mining started in 2011. The main reason why it lured people was the fact that it has some monetary value. Bitcoins is a currency but the problem is that is not very stable. Since its introduction, the value has fluctuated anywhere from a $100 to $500. At the start of the 2017, it was valued at $800. In recent months, the cryptocurrency has undergone a staggering increase in value; surging from roughly $3,500 in mid-September to its current price which is a mind boggling $15,000! This marked another milestone in the ascent of its value.
Yurop Shrestha, an investor shares his views, “I think that cryptocurrency in general is very interesting. The systematics and function behind it is unique.” He further adds, “Developed countries are still struggling with bitcoins so Nepal is not the best place for them!’
But as mentioned above, Bitcoins are illegal in Nepal according to a notice released by Kedar Prasad Acharya, the deputy director of Nepal Rastra Bank. The Nepali government banned bitcoin on account of it not being able to track its transactions, and it has gone so far as to arrest individuals suspected of trading in bitcoin.
President and CEO of IMS Group, Dikesh Malhotra says, “All that I know about Bitcoins is that it is illegal. I haven’t really looked into them and since it has been declared illegal I haven’t embarked on any sort of research either.” He further adds, “The government must have thought very carefully about it and thus taken the decision to ban it.” When asked about whether there could be a future for bitcoins in Nepal he states, “Nepal is still developing in terms of country and currency. We all know that bitcoin is very unstable. Maybe in the near future once it is fully developed and established, then it should be thought about. But it seems like it won’t be coming anytime soon.”
Similarly, Prakiran Shrestha, co-founder of Sastodeal doesn’t see any future for bitcoins in Nepal. “The only thing that people know about bitcoins is that they are illegal. The public has a very limited knowledge about cryptocurrency. Only those who are interested would do research on it.”
He further explains, ”Bitcoin is like a bubble. It is very unstable and though its value is increasing, it can pop at any moment. It will collapse eventually and in the process will hurt a lot of people financially.” In addition to that, ”The government has taken the right step by banning it because there is no future for bitcoins in a developing country like Nepal,” Shrestha claims.
Bitcoin has a very uncertain future as the system and structure is still being understood by people in developed countries like the US, UK and many more. It has a very erratic nature which leaves people wondering whether they should buy in or bypass it. On one hand countries like Nepal have banned it due to its promotion of black money and money laundering. Although it has a restricted presence in Asian countries like India and Indonesia, there is scope for development of bitcoin as an independent currency with the right tools.
As fascinating as bitcoins are, we just have to wait and see if anything will stop this rocket to the Moon, or if it will collapse and fade into nothingness.
Note: This article is not intended to be taken as any form of endorsement or promotion of bitcoin.