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Naavi.org

Building a Responsible Cyber Society…Since 1998

The fact that Technologists have scant regard for law is well known. The developments in the Bitcoin scenario is an indication.

Despite Bitcoin is the established “Currency for the Criminals” and “Black Money Hoarding Tool”, technologists say “So What?… I will do what I want.. Let Modi catch me if he can”. Some will say it is “Innovation for Disruption”.

RBI does not have the courage to do what it knows is good for the society…that is banning private Crypto Currencies like Bitcoins like we ban drugs and arms trading.

One of the ways by which Crypto Currency is trying to establish itself is by making Block Chain technology creep into Banking transactions and gain a level of respect that will latch onto Bitcoin as well in due course.

Few in the public will realize that Block chain is a technology and Bitcoin is a product and Blockchain may be acceptable but Bitcoin is not. Bitcoin will be promoted on the adoption of Block chain as a technology under the pretext “Block Chain is adopted by Banks and hence Bitcoin is also likely to be adopted by them soon”… The myth will be corroborated by the news about the price of Bitcoins soaring.

We need to therefore to ensure that Block chain technology does not have an unfettered entry into the system. If Bitcoin has to be blocked, Block Chain’s limitations need to be exposed.

Now we have the dangerous tendency creeping into the Banking system where “Block Chain Technology” is being implemented for different transaction recording. ICICI Bank has reportedly made transfers of Bitcoins from Gulf though the legality of Bitcoin is itself not settled. As long as Bitcoin is being treated as a currency, it is illegal and any Bank indulging in activities related to Bitcoin is violating the RBI Act.

Today, it is reported that InfosysFinacle  has launched a new product “Finacle Trade Connect” incorporating the blockchain based trade finance solution for banks.

Mr Sanat Rao, Chief Business Officer speaking at the time of launch has stated ” the new solution will provide higher automation, increase transparency and enable real-time availability of data”.

Significantly, he has also said

“The framework is ledger agnostic and is capable of working with most industry leading blockchain platforms such as Bitcoin, Hyperledger, Ethereum and Corda”.

This is therefore to be construed as a promotion of Bitcoin, Ethereum and other “Criminal Currency” and Infosys will today join the ranks of terror sponsor organizations like People Front of India (PFI) in radicalizing the Indian Monetary system.

It is unfortunate that the business case made out by Infosys Finacle is to provide a platform for use of Bitcoins and other private Crypto Currencies which are an alternative to holding of Black money.

This is a direct affront to Mr Modi’s fight against corruption and fight against Black money and today Infosys Board including Mr Narayana Murthy and Nandan Nilekani has to explain the statement of Mr Sanat Rao.

I also state yet again, Mr Urjit Patel the Governor of RBI is allowing these developments because he has chosen to remain silent without showing the guts to oppose Bitcoin. I have no expectation from Mr Arun Jaitely and the Finance Ministry because I feel that they are actually in support of Bitcoins and are only held back by RBI’s opposition and possible Supreme Court intervention.

Where does Mr Modi and Amit Shah stand on this? As of now it is not clear. Though I have sent many communications to the PMO, Mr Modi and the PMO has chosen to remain silent because they donot want to go against Mr Arun Jaitely’s advise. I presume that Mr jaitely is still reeling under the pressure of managing the fall outs of demonetization and GST and is unable to take any other hard decisions and will be happy to procrastinate and keep “Observing” how Bitcoin creeps into our economy.

We Indians did the same mistake of allowing terrorism creep into Kashmir and today Kashmir is a problem that has become too difficult to handle politically. Same way Bitcoin if not killed today will eat into Indian Economy and devour our system.

While the politicians wait for the Gujarat elections to be over, I would like to ask some questions to RBI and IDRBT.

  1. Finacle Trade Connect is meant to be a product to be used in the Banking system. Is it not necessary for IDRBT to clear the software? Has it been done?
  2. Block chain is a technology of ledger keeping where there is no central authority for authenticating any transaction. It is a peer to peer authentication. Our Banking system involves a Banker-Customer contractual relationship. If I as a customer of a Bank propose a transaction to the Bank how can some Tom Dick and Harry operating a block chain node approve my transaction? Is it not a power of attorney holder of the Bank alone who has the right to approve my transaction?
  3. Why should every block chain node at all be aware of my transaction even if it is encrypted?
  4. How does Banking law permit disclosure of my confidential transaction to be published on the block chain?
  5. Who will take the liability if the approval is defective?
  6. What if the block chain forks?
  7. Since Block chain is a public chain, is it not amenable for DDOS attacks and malware injection?.. Who will be responsible for such malware attacks?
  8. Is the statement of Finacle indicative that IDRBT has approved Bitcoin as a technology and Banks are preparing for use of Bitcoins in their transactions?
  9. Since Infosys is the organization behind GST which had many technical glitches thanks to their inefficiency, will Infosys also push the Block Chain technology to GST as well?
  10. Dear Mr Modi, are you aware of the implications of remaining silent on Bitcoin introduction into our economy?. I donot see any difference between this and the poisoning of the Indian minds by organizations like Zakir Naik and PFI. Why are you shying away from taking control of this Black money alternative called Bitcoin?

I look forward to agencies like RBI and Finance Ministry to respond to these questions. Honest India wants to know if Corruption has grown so big that even Mr Modi has to bow his head before Bitcoin?

Naavi

P.S: As an honest Citizen of India, Naavi has done enough to highlight the dangers of Bitcoins and why it needs to be banned in India. If the Government, RBI and informed members of Public still wants to embrace Bitcoins it is their choice.

However, if the Indian economy collapses, then even people like us will have to suffer. But if this is the future of India we have to suffer and the concept of Achche Din, perhaps Naavi has to also accept defeat that Corruption in India is the king and Bitcoin which is the most effective tool of corruption cannot be defeated…. 

Hope this is the last article on Bitcoin that I need to write…

Naavi

 

On 27th, November 2017, a talk had been arranged by the Federation of Karnataka Chambers of Commerce, in the FKCCI building, K.G.Road, Bangalore. The gathering consisting mainly of members of the chamber was addressed by Mr Satvik Vishwanathan, CEO of Unocoin.com, one of the early entrants into the Bitcoin trading in India. He made an excellent presentation on why Bitcoin is a great investment. As could be expected, the talk focused on how Bitcoin price has grown by 9000% in the last few years and how it is a good substitute for fiat currency holding etc.

Many in the audience were perhaps impressed and decided that part of their export sales should be collected in Bitcoins.

After the meeting, promotional vouchers of Rs 500/- were distributed free to all the participants as seed money in the form of “Bitcoins” if they register in the Unocoin.com website.

There was a brief discussion at the end of the talk in which the undersigned cautioned the participants that until RBI and SEBI approve legitimacy of the Bitcoin, investment should not be considered. Some aspects such as the possible use of Bitcoins for Black Money hoarding was also briefly pointed out by some members.

However, the event itself being held in the FKCCI building under the patronage of the Chamber , and the recent two page ad in Sunday Express, indicate that the Promotion of Bitcoins is going unabated while the RBI and the Government is dithering and not coming out with a decision to ban crypto currencies.

Many in the audience were perhaps sold on the dream of Bitcoin soaring to the Moon/Mars faster than NASA’s rockets. The meeting was therefore successful in its objective of promoting Bitcoins as an investment and as an alternative to currency. Mention was also made about some entities in Bangalore receiving Bitcoin as a payment for goods and services as if the practice is welcome.

Will the  dreams of a Bitcoin investment soaring to the skies be a reality? only time will tell. But if people invest their hard earned money and lose, all responsible persons particularly in the regulatory structure in the country should take responsibility.

One of the participants mentioned that when a Malaysian Company made a marketing tour of India and sold the concept of investing in their Gold Coins, many lost money and about 56 persons committed suicide. I recalled that when that meeting was held in Chennai, I had shot off a letter to the DGP there predicting that it would be a scam one day. Ofcourse, DGP did not heed to the caution and investments were made by many. Similarly, today we are looking at another dream called Bitcoin and perhaps one more set of suicides in the coming days.

The RBI Governor and Mr Arun Jaitely will perhaps wake up when there is some major calamity that will result in a number of people losing their investment in Bitcoins. Until then, the dream of a $10000 value per Bitcoin will be attracting greedy people like moths take to light.

On our part, it is a fair speculation that some of the decision makers in the Government are sold out to Bitcoin industry because it represents the cumulative strength of all the black money which Mr Modi wanted to remove from the system. The Politicians, Criminals as well as Business men and IT evaders have all got vested interests in ensuring continuation of Bitcoins in use and are happy with the RBI not coming up with a ban but continuing to make ridiculous statement that “They are observing”.

It is depressing to note that Corruption is showing its strength and even Mr Modi is unable to kill Bitcoin which is the alter ego of Black money.

Hope Mr Modi will wake up from his slumber atleast after the Gujarat elections and talk about demonetization of crypto currencies in his next Man Ki Bat.

Naavi

A good news is flowing through the media about Bitcoins. It is that according to news reports,  “A Government Committee has recommended that all Crypto Currency Exchanges” in India are set to be closed.

Business Today says ” Crypto Currency dealers may face closure in India even as Bitcoin reaches new high of $7000″

Cointelegraph.com says “ Ban All Crypto Dealers, India committee reportedly tells Government”.

Economic Times says : War on bitcoin?.. Govt Panel seeks crackdown on cryptocurrency dealers in India

Moneycontrol.com says: Govt panel recommends shutting down cryptocurrency dealers in India

It is clear that multiple news media have received the information though there has been no official announcement as such.

We are happy with the development but we donot want to count the chickens before the eggs hatch. There is still a need for an official announcement since there is  continued lobbying by the vested interests in getting Crypto Currencies going in some form.

What the press report indicates is just the first step where it might be stated that under the SEBI Act, the dealing in the commodity called “Crypto Currency” has not been licensed as a “Commodity” and hence all forms of dealing is per-se illegal.

There was no other way this could have been treated.

What this notification achieves is that local trading against cash payment and even bank transfers will stop.

Some “Experts” seem to be stating that

“banning cryptocurrency dealers or exchanges would not work”

“Instead of closing cryptocurrency dealers, the government should take steps to curb buying and selling of bitcoins or cryptocurrencies in cash. This move can reduce illegalities in the country”

“…in case of closure of domestic cryptocurrency exchanges, buyers will start buying them from foreign exchanges”

….so says Hesham Rehman, CEO & Co-founder, Bitxoxo, a bitcoin exchange operating in India.

I am sorry Mr Hesham Rehman, nothing short of complete banning of Bitcoins and all Private Currencies would satisfy the needs of our country.

We have taken a vow to eliminate black money from India and Mr Modi has taken a great risk to his career by demonetizing currency last November 8. Bitcoin or any other form of Crypto currency is just another form of Black Money. They have to go.

Preventing conversion from cash will only address a small part of the issue. We donot want accountable Bank funds to be converted into unaccounted Bitcoin or Crypto currency form. This will only help criminals and terrorists to run a parallel economy and weaken our economic fabric.

I donot accept the contention that banning Crypto currency is difficult or will be ineffective since people may switch to foreign exchanges. Let them do. Dealing with any foreign exchange will directly attract FEMA and violations can attract higher penalty. Also, a number of Indians are wary of dealing with foreign exchanges and there will be a significant drop of Bitcoin patronage because the direction of the policy will be set with the current move.

We know that criminals will not abide by law and continue to deal in corruption or dealing in drugs or engaged in terrorism or Naxalism even though they are declared illegal. Similarly Bitcoin will continue to be used by some even after the ban. Let them face the law.

I therefore see no reason to show any mercy on Bitcoin or Crypto Currencies (other than a sovereign Government sponsored systems if any) and it must be banned fully.

I therefore urge the Government to go the full distance and announce the “Demonetization of Bitcoin and all other Private Crypto Currencies” with immediate effect.

Other measures that may be required are:

  1. Two days time may be given for any current holders to declare their Crypto Currency holdings and convert them to INR.
  2. Non declaration should result in impounding of the balance and possible punishment under the money laundering legislation.
  3. Conversion should be subject to taxes as may apply to buying and selling of commodities.
  4. Holding of Crypto currencies beyond this cooling period of 2 days should attract more penalty.

Let us continue our war on Bitcoins until the roots are plucked out…. (As per Chanakya’s theory)

Naavi