Bitcoin is the world’s first and most well-known cryptocurrency. In India, it has become a recognisable name even among people who have never bought crypto. But what exactly is Bitcoin, how does it work, and what should Indian investors understand before considering it? This guide covers everything you need to know.
What is Bitcoin?
Bitcoin (BTC) is a decentralised digital currency launched in January 2009 by an anonymous individual or group using the name Satoshi Nakamoto. It operates without a central bank or single administrator.
Instead of being issued and controlled by a government, Bitcoin:
- Exists entirely on a distributed network of computers (nodes)
- Is governed by a protocol written into code, not by any person or organisation
- Has a fixed total supply of 21 million BTC that can ever exist
- Uses cryptography to secure transactions
Bitcoin was designed to be digital money that no government, bank, or institution could control, censor, or inflate by printing more units.
How Does Bitcoin Work?
Bitcoin operates on a technology called the blockchain: a distributed digital ledger that records every Bitcoin transaction ever made.
When you send Bitcoin to someone:
- Your transaction is broadcast to the Bitcoin network
- Miners (computers running Bitcoin software) compete to validate and record the transaction
- The validated transaction is added to the blockchain as part of a block
- It is permanent and irreversible
Miners use significant computing power (Proof of Work) to add blocks. In return, they earn newly created Bitcoin as a reward. This is how new Bitcoin enters circulation.
Why is Bitcoin’s Supply Limited to 21 Million?
Satoshi Nakamoto designed Bitcoin with a fixed supply cap to make it deflationary, unlike government currencies that can be printed indefinitely.
New Bitcoin is created at a predetermined rate that halves approximately every four years in an event called the Bitcoin Halving. By the time the last Bitcoin is mined (estimated around 2140), all 21 million will be in circulation.
This scarcity is why many investors refer to Bitcoin as “digital gold.”
Bitcoin as a Store of Value
Over its 15+ year history, Bitcoin has attracted increasing attention as a store of value, an asset that can preserve purchasing power over time.
Arguments for Bitcoin as a store of value:
- Fixed supply prevents inflation
- Decentralised, not controlled by any government
- Growing institutional adoption (spot Bitcoin ETFs approved in the US in 2024)
- Portable and divisible (you can send fractions of a Bitcoin globally in minutes)
Arguments against (risks):
- High price volatility relative to traditional stores of value like gold
- Regulatory uncertainty in many countries
- Relatively short track record compared to gold (thousands of years)
Past performance does not guarantee future results.
Bitcoin in India
Bitcoin is legal to buy and hold in India. It is classified as a Virtual Digital Asset (VDA) under the Finance Act 2022 and taxed as follows:
- Gains from selling BTC are taxed at 30%
- A 1% TDS applies on qualifying transactions
- Losses cannot be offset against other income
ZebPay was one of the first Indian exchanges to offer Bitcoin trading and has supported Indian investors in buying BTC since 2014. As India’s oldest crypto exchange, ZebPay has served 6 million+ registered users and supported BTC trading through multiple market cycles.
How to Buy Bitcoin in India on ZebPay
- Download the ZebPay app
- Register and complete KYC (PAN, Aadhaar, selfie)
- Deposit INR via UPI, NEFT, or IMPS
- Search for BTC in the Markets section
- Buy at the current market price via Quick Trade or set a limit order
- Your BTC appears in your Portfolio
You can start with as little as ₹100.
Read more: A Complete Guide on Crypto SIPs
Risks of Investing in Bitcoin
Price Volatility: Bitcoin has experienced drawdowns of 70% to 85% from its peaks during bear markets. Past performance does not guarantee future results.
Regulatory Risk: While Bitcoin is legal in India, regulations are evolving. Changes in tax or trading rules are possible.
Security Risk: Crypto held on exchanges carries exchange risk. Crypto held in self-custody carries the risk of losing access if your private keys or seed phrase are lost.
No Recourse: If you lose your Bitcoin through a scam, hack, or lost key, there is no insurance or recovery mechanism.
Always conduct your own research before investing.
Frequently Asked Questions About Bitcoin for Indian Investors
What is 1 Bitcoin worth in India?
Bitcoin’s price fluctuates constantly. Check the ZebPay app or any major exchange for the current BTC/INR price.
Can I buy less than 1 Bitcoin?
Yes. Bitcoin is divisible to 8 decimal places. The smallest unit is called a Satoshi (0.00000001 BTC). On ZebPay, you can buy Bitcoin with ₹100.
Is Bitcoin legal in India?
Yes. Bitcoin is legal to buy and hold in India. It is taxed as a VDA at 30% on gains.
Who created Bitcoin?
Bitcoin was created by Satoshi Nakamoto (a pseudonym) and launched in January 2009. Satoshi’s real identity remains unknown.
How many Bitcoins are left to be mined?
Approximately 19.7 million of the 21 million cap have been mined as of 2026. New Bitcoin is created through mining until the cap is reached (estimated around 2140).
Is Bitcoin better than gold?
Bitcoin and gold are different assets with different properties. Bitcoin is more volatile but more portable and divisible. Gold has a much longer track record. Many investors hold both. This is not financial advice.
What is the Bitcoin halving?
Every approximately 4 years, the reward miners receive for validating transactions is cut in half. This reduces the rate of new Bitcoin supply and has historically preceded significant price movements. Past patterns do not guarantee future results.
Final Thoughts
Bitcoin is the most established cryptocurrency in the world: decentralised, fixed in supply, and increasingly recognised as a legitimate asset class by institutions globally. In India, it is legal, taxable, and accessible through regulated exchanges like ZebPay.
Invest with a clear understanding of its risks, a long time horizon, and only with money you can afford to lose.
Get started today and join 6 million+ registered users exploring crypto investing on ZebPay!
Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Each investor must do his/her own research or seek independent advice if necessary before initiating any transactions in crypto products and NFTs. The information in this article is for educational purposes only and does not constitute financial or investment advice.
