Yesterday’s post titled “Bitcoin is Digital Black Money… Is Fake news being promoted by Cogencis?” attracted some serious counter comments which has raised some questions. This article was not the first of the articles I wrote on Bitcoins.
In fact, like many other technology supporters, I was also fascinated by Bitcoins when the concept was first introduced and even pointed out that Bitcoin is an electronic document that is recognized in Indian law namely the Information Technology Act 2000. However, some of the current readers of this blog might not have followed my views in the past and why I changed my views on Bitcoins and now came to the conclusion that Bitcoin is Digital Blackmoney. One such person has raised some questions which I will try to respond here.
Ofcourse, for those who may have a financial stake in Bitcoin, my criticism of Bitcoins and urging the Government to ban it, hurts. I am sorry for it since many of these people are honest individuals of the society and may not themselves be either corrupt or persons who accumulate black money by design. They are the people who have been caught in the crossfire in the fight between the Government trying to curb black money and the real blackmoney holders which includes the politicians, businessmen and even bureaucrats who are expected to take decisions on either legitimizing or banning bitcoins.
But these are the people whom the real blackmoney holders are using as a shield to prevent the Government from going ahead with its anti corruption drive. Unfortunately, since my eyesight is focussed on the people behind this shield, I keep firing my thoughts which may look damaging to the innocent persons in between. Readers need to excuse me for hurting them which I cannot avoid in the larger fight though I have suggested some remedies in the past to address their concerns. But the time for protecting the interests of innocent bystanders is now past and we need to go ahead with the elimination of the menace called Bitcoin.
Why do I call Bitcoin as the “Digital Black Money”?
Bitcoin is mainly supported for it being a “Decentralized Currency with wide acceptance” that can be used in lieu of fiat currencies. In otherwords, the most common use case is to convert our legacy holding of legit currency into bitcoins. If such Bitcoins are held in wallets that are managed by a service provider who is not a “Authorized Dealer of Currency” licensed by RBI, the Government of India has no control or even count of how much of such currency is in circulation and who is the owner of the wealth. The very fact that holdings of Bitcoins is anonymous and is protected by “Encryption” which is unbreakable, makes it vanish from the radar of Government control.
The philosophy of Bitcoins as suggested by Satoshi is born out of a distrust of the sovereign Governments which control the currency systems and hence the inherent nature of bitcoin is that it will remain anonymous and outside the radar of any sovereign Government. There is no name to such anonymous privately managed currency other than calling it “Black Money” in the traditional sense.
I agree that Black Money is also money and in the underground world it is having a value. But while the conventional black money is actually the currency in the form of notes issued by RBI, Bitcoin is “Digital”. Hence I have used the term “Digital Black Money”.
I am sure that the terminology cannot be disputed even if some of the users may love “Money which is Black”.
Why Do I dislike Digital Black Money?
I dislike Digital Black Money more than Paper Black Money because, Digital Black Money can be easily used by terrorists across the border to fund the stone pelters of Kashmir or the terrorists across the globe. It can also be used seamlessly for political corruption and funding fake journalists who spread rumours to discredit the progressive political opponents.
We know that Pakistan prints Indian currency and sends it across the border to fund terrorists and also destabilize our economy. One of the reasons why during the demonetization exercise, RBI got nearly 100% of the estimated black money coming back to its fold was that there was nearly 100% of black money in circulation in the form of fake currency printed by Pakistan. These were so indistinguishable from genuine currency that RBI could not make out the difference.
There is an unconfirmed report floating around that Pakistan is even buying the old currency to use it either as paper feed for printing new fake currencies or for some other sinister purpose. I even welcome the suggestion made by some that if we carry a statement on our currency “Kashmir is an integral part of India”, then Pakistan may stop printing our currency though it may be comment made in jest.
If Bitcoin becomes a legitimate currency exchangeable into legit currency in India, then it becomes so easy for the Pakistani terror supporters to transfer funds to India for their nefarious activities.
I request all those people who donot like my opposition to Bitcoin give me a good reason to believe that Pakistan will not use Bitcoin transfers to fund terrorism in India if Bitcoin is legalized.
Also remember that if Bitcoin is brought into the main stream, it will bring along the entire family of crypto currencies including the Etherium, or Ripple or Monero any 1500 other currencies which are in use by the Cyber Criminals to collect ransom for drug trafficking or illegal weapon trade. Since Bitcoin is easily fungible with these other Crypto currencies, the entire market capitalization of crypto currencies estimated at one trillion US dollars (equivalent to Rs 65 lakh crores). As against this, the money in circulation in India is probably about 12 to 15 lakh crores.
In otherwords, if Bitcoins are legalized in India the total currency available for exchange of goods and services in India would increase to six times the current level.
People can estimate if this 600% increase in available money circulation would help in making the economy inflation proof or bust the economy.
I have been an ex-Banker but not a currency specialist. But to me it is clear that there is no logical reason why Bitcoin should ever be legalized. I am not bothered with what Japan or Switzerland or what the global community does in respect of Bitcoin.
After all all European economies have grown by exploiting the developing countries. Switzerland in particular has benefited by the numbered bank accounts which were the original repositories of black money of all those who cheated their respective Governments of tax and revenue and increased the cost of living of honest citizens who donot access such proxy bank accounts to park their wealth and continue to pay taxes to their respective countries though much of this goes to funding the politicians. We donot have to take lessons from such exploitative economies.
I cannot therefore understand why Mr Arun Jaitely is dragging his feet in not banning Bitcoins. I cannot understand why Mr Rajnath Singh has put his foot down to ensure that Bitcoin is banned. RBI is being pressurized by the Finance Ministry to remain ambiguous. Some of the members of MCX even tried to manipulate the public opinion when the Government tried to collect public views on Bitcoins.
As of today I still trust Mr Modi and Amit Shah but I feel that he is not getting support from the Finance Ministry in his fight against Black money because the officials are not in favour. People may be planting doubts even in the Modi-Amit Shah duo that perhaps Black Money Monster is too big even for them and it is better not to disturb it further. This I think is the reason why Government is not able to come out openly and ban Bitcoin.
In the process we are missing an opportunity to use technology in a manner that benefits the global financial community. We can use lessons from Bitcoin and create a Global Crypto Currency that is supported by sovereign Governments and could reduce cost of currency management in the globe without adversely affecting the economies by creating chaos in the society.
We all have to say “We Trust Judiciary” and there is the “Honourable Supreme Court” to protect our interests. But when it comes to Bitcoins, there have been many references to Supreme Court and it has remained silent and has not also come out strongly against the Bitcoins. While Supreme Court can react at the drop of the hat on political issues or religious issues, it is strange that they donot have a responsibility to protect the country against Black money in the form of Bitcoins.
I am not therefore surprised that commercial journalists like Cogencis try to plant stories in support of Bitcoins. In fact I know that I have lost many friends because of my opposition to Bitcoins. But as somebody committed to a cause, I continue to express my opinion counter to that of Bitcoin supporters.
I hope that this answers my friend who sent a detailed objection to my earlier article…. and many who might have had similar queries but did not write to me?
Naavi
Bitcoin is Digital Black Money… A Currency of the Criminals and Terrorists. Neither RBI nor Government of India can legitimize it without sacrificing the interest of the country.
Despite planting of fake news and support of some journalists, it would be too much to expect that Mr Modi will make a U-Turn on Black Money control.
Naavi
In the last few days, Economic Times has been carrying on a campaign for legalization of Bitcoin. The article “U-turn on bitcoin? Government panel may allow cryptos with riders ” which does not carry the name of the reporter suggests,
“A panel formed by the government to look into crypto-currency does not seem to be in favour of banning it. Instead, it may suggest allowing crypto-currency with riders, ETNow reported quoting Cogencis. “
It is not clear why ETnow is spreading this news which could be a fake news planted by some interested Bitcoin holders.
ET bases its story on “Cogencis” which is a company co founded by one Mr Kalyanram Kodakalla having directors such as Paurush Roy, Vimal Agarwal, and Deepak Ghaisas. The company professes to be a “Trusted” global provider of Financial Data and Analytics. It has offices in Mumbai, Bangalore, Hyderabad, New Delhi etc. (Refer www.cogencis.com)
I would like to request Cogencis to disclose what was the source of their information which should have been from the Ministry of Finance.
To an ordinary observer, it appears to be a Fake News planted for promoting the Bitcoins. It is unfortunate that Economic Times is trying to legitimize this fake news.
I request the Government of India to conduct an enquiry into how this news has been manufactured. In case there is any involvement of the officials of the Finance Ministry, they should be punished.
Let us remember that Bitcoin is Digital Black Money and the people who are supporting it include those who converted their black money during the demonetization time into Bitcoins. Additionally there are criminals and terrorists who have built up Bitcoin wealth and want a legitimate channel to bring it into the legacy currency system so that they can destabilize the economic progress of India.
There is no way any official who is himself not corrupt to support any move to legitimize Bitcoin. RBI has been opposing this move though it appears that some of the officials in the Arun Jaitely Ministry are in favour.
It is now left for Mr Modi and Mr Amit Shah to show their commitment to Black money eradication by sticking on to the policy of “Banning of Bitcoin”.
Let us hope that even if Ministry of Finance has been corrupted, PMO still remains uncorrupted. The proof of the pudding would be how Mr Mr Modi will react to the news doing the rounds now.
If Mr Arun Jaitely is honest, he should clarify if the news report is correct or is fake.
Naavi
Information Security Media Group a global organization managing several media assets (Refer: www.ismg.io) organized a two day event at Taj Vivanta, Bengaluru titled Fraud and Breach Prevention Summit, starting today the 12th June 2018. It will conclude tomorrow.
In a widely attended conference, several eminent Info security professionals shared their valuable thoughts on different subjects relevant to the Information Security practitioners through sessions through out day. The undersigned also participated in a discussion on “Aadhaar Security Conundrum”.
One of the interesting sessions during the day was a session on “Detecting and Fighting Fraud with Cognitive and Behavioural Biometrics” presented by Mr Tamaghna Basu, CTO neoEyed. Mr Basu shared some interesting thoughts of using behavioural biometrics such as the Key Board strokes, Gait recognition, Signature Analysis etc. Mr Basu showed how an analysis of how a person would enter a PIN or signature or password could be analyzed to develop a distinct pattern that can be used as an additional form of authentication that would be able to significantly reduce the forging of key strokes.
The solution briefly demonstrated by Mr Basu appears to have a good potential to be used by Banks and Financial institutions and deserves a serious trial.
Mr Vishal Salvi of Infosys delivered the key note address in which he presented useful perspective on the Changing Threat Landscape and how different aspects of Cyber Security such as the regulation, Controls etc are out of sync with the frequency of change of the threat scenario and why it is necessary to achieve a resonance between different aspects of Cyber Security so that there could be a quick adoption of controls to the changing threat scenarios. Mr Bharat Panchal of NPCI gave a thoughtful presentation on the status of payment systems in the Digital economy. There was also discussions on Block Chain technology for security and other subjects of interest which were widely appreciated by the audience.
The discussions will continue tomorrow.
Naavi
One of the confusions that is prevailing in the domain of Privacy and Data protection is whether the two terms “Privacy Protection” and “Data Protection” are same.
A time has come to distinguish the two concepts since this confusion should not percolate into the Indian Data Protection legislation as and when the Justice Srikrishna Committee comes up with its recommendations.
Let’s put things in the right perspective. “Privacy” is a right that is recognized as a fundamental right of an Indian Citizen. This is a concept that arises from human rights domain. This has nothing to do with data or computers though data can be a means of Privacy breach and therefore relevant to Privacy Protection.
India at present does not have any specific Privacy Protection legislation. In 2006 a draft bill was presented in the Loksabha and it lapsed subsequently. On the other hand ITA 2000 has been present since 17th October 2000 and was strengthened by the amendments of 2008 (effective from 27th October 2009) and it inter-alia protects “Data that is related to Privacy Protection”.
Despite the Puttaswamy judgement, “Privacy Protection” remains an elusive concept since “Privacy is a mental state of a person to experience the feeling of being left alone as he desires” and this cannot be identified and protected by external agencies who handle the “Information Privacy”.
It is for this reason that an individual feels happy to voluntarily share his personal intimate information on his Face book timeline with his friends without feeling loss of privacy but objects to it being viewed by some body else whom he has not authorized.
In such cases it is the “Unauthorized access to personal data” that is considered as Privacy Breach and not the fact that it was first shared with one set of persons.
Data Protection on the other hand relates to efforts to protect data from unauthorized access, modification and access and must be considered different from Privacy Protection irrespective of what kind of data it is. What the Puttaswamy judgment called as “Information Privacy” is within the scope of Data Protection.
“Data” is information in binary form which is generated, processed, stored and transmitted using devices which we call as “Computers” which includes other similar devices such as mobiles and also as per the definition of ITA2000/8 also includes peripherals attached to a computer. There are specific provisions in ITA 2000/8 which protect data. This is the current “Data Protection Law of India”.
ITA 2000/8 distinguishes “Personal Data”, “Sensitive Personal Data” but does not restrict itself to only protecting such “Personal Data”. Protection of Data under ITA 2000/8 extends to a”Any Data” and penalizes any action when data is used maliciously for causing wrongful loss to some person. For example, when some non personal data is deleted without the permission of the owner of the data or the owner of the system holding the data, it is recognized as an offence. If this data had been “personal” or “Sensitive personal”, then also the same law (Section 43 and 66) would be available as a protection of the data.
Thus the Data Protection under ITA 2000/8 is at a level higher than the protection which the data protection laws now being drafted are designed to provide.
We can still debate if we need to augment the “Adjudication” system of dispute resolution with a “Data Commissioner” or “Director CERT-IN” has to be augmented with a “Supervisory Authority”, whether the compensation under Section 43 (which is unlimited) has to be quantified at some terrifying level such as Rs 1000 crores, etc…
….But we cannot say that ITA 2000/8 does not provide data protection.
The Compliance officers under ITA 2000/8 work for ITA 2008 compliance with the Information Security Managers to ensure practice of “Reasonable Security Practice” under Section 43A or “Due Diligence” under Section 79. They are the current “Data Protection Officers” in India.
As compared to this role of a “ITA 2008 compliance officer”, the role of a “Privacy Officer” could be considered as restricted to be a “Watch dog for Privacy Protection of Customer Data processed by a Company”. Under GDPR the role of a DPO is restricted to this aspect where the Data Subject’s Rights are protected in the Data Processing environment.
The proposed Indian Data Protection Act should therefore recognize that what it needs to protect is a sub set of data already being protected under ITA 2000/8 and cannot be in conflict with the provisions of ITA 2000/8. Similarly the role of Data Protection Officers under Indian Data Protection Act (proposed) is a subset of responsibilities of ITA 2008 compliance officials and cannot be in conflict.
Further ITA 2000/8 does not exclude data of citizens of other countries from its jurisdiction when they are processed in India. Hence any adverse impact on such data is also within the provisions of ITA 2000/8. Hence the role of ITA 2008 compliance officers encompass the roles of DPOs as envisaged in EU GDPR or UPDPA or German DPA.
The industry should therefore realize that a “ITA Compliance Official” is having a larger role than the DPOs under the data protection laws both existing and forthcoming including laws such as GDPR or UK DPA.
ITA 2000/8, it will therefore remain the supreme Data Protection law in India atleast for the time being.
Naavi
