A bunch of bureaucrats at the utterly pathetic Ministry of Finance have come up with a draft bill basically banning any economic activity using bitcoin or other cryptocurrencies. Well, good luck.
It might be hard for these bureaucrats and ministers to get this in their heads, but we repeat:
1 = message
4 = code key
1 + 4 = 5 coded message
5 – 4 = 1 decoded message
The question for the political and ruling caste is – exactly how are you going to regulate that?
The obvious answer is you can’t.Pierluigi Paganini , The Dark Art of Encryption
No entity in the world can stop any other entity from transferring or storing bitcoin.
Here are the only three steps that are necessary for any entity in the world to receive the currency:
- Generate a bitcoin wallet and addresses (nobody ever needs to know you have one)
- Share the receiving address with the party sending you bitcoin
- After receiving the bitcoin, send it to another wallet no one knows about and destroy the first wallet.
For sending bitcoin, the only three steps that are necessary are the following:
- Obtain the bitcoin address to which the funds need to be sent
- Open your secret bitcoin wallet in an offline machine, enter the receiving address and the amount to send, create the transaction and sign it offline
- Copy the signed transaction and publish it anonymously on one of several websites dedicated to this purpose.
Unless the Indian government is going to completely disconnect the internet (another difficult feat), it has no technical solution to stop bitcoin. The Chinese have already realized this the hard way, and despite the Omnipresent State and its Great Firewall, China remains a land of hundreds of small bitcoin miners and thousands of bitcoin users, which are impossible to shut down.
The only effect of the proposed ban is going to be a transfer of wealth from the technically competent to the technically incompetent sections of the population, as the Government continues to devalue the rupee for its socialist causes.
As for the technical competence of the government, last we heard, our “nationalists” haven’t found a way of getting the NSA out of India, while our babus were seen with Nandan Nilekani inventing another Rube Goldberg machine.
The move will only accelerate the downfall of the Central Government, as it looses both resources and political power to holders of sounder money.
We would advise our readers to stock up on popcorn as the naked emperor deals with the eggs on his face in the near future.