There are many supporters of Bitcoin in India. The Indian government also supports the new digital currency but has yet to regulate it. The financial crisis of 2013 has led to an increased interest in Bitcoin across the world, including India.
Since its introduction by Satoshi Nakamoto in 2008, Bitcoin has disrupted several industries, including finance, electronic retailing, art and music, transportation, real estate, food delivery, etc. Government bodies globally are currently grappling with the legality of Bitcoin; while some countries like Japan have accepted it as legal currency, others like India are yet to do so.
Bitcoins can be mined through powerful computers that use complicated calculations to produce this cryptocurrency. Bitcoins are entries in a public ledger using cryptography to secure the transactions and create new bitcoins. This makes them difficult to counterfeit.
Ten reasons why Bitcoin disrupted the agriculture and mining industry in India.
Bitcoin can also change how agriculture and mining are done today. Here are ten ways they can be disrupted.
1) Flexibility of contracts
The biggest problem in agriculture is the flexibility to change the contract terms. Farmers do not have any bargaining power, and, therefore, their income goes down every year because costs are increasing, but the prices they get for crops remain static. With Bitcoin, it is possible to create flexible, intelligent contracts, benefiting farmers and buyers.
2) Trust in trade
When there is no trust, the exchange rate of money gets affected. For example, if Rajasthan’s government has to buy Rajpoot atta from Haryana, it will buy it for a higher rate than it can get in Haryana because trust is not there. Using Bitcoin, creating bids, and getting results could be automated and solve this problem.
3) Availability of finance
Currently, financing has to be done through time-consuming and cumbersome banks, where verification takes a long time. In Bitcoin, the financing is based on contracts that can be automated. Risk assessment of a farmer is done in minutes, and he gets his loan immediately.
4) Reliable information flow
In agriculture, brokers exist in every market who buy for a low price and sell it to another trader at a higher price. By using technologies like Big data, it is possible to get this information in real-time which will help buyers make decisions faster.
5) Payment reconciliation
Bitcoin can be used for payment reconciliation as well. For example, in a farmer’s market, the payments are made through cheques or cash, and traders keep money with themselves, creating many problems. If this is done through Bitcoin, the money can go directly to the trader’s bank account, eliminating reconciliation costs.
6) Risk mitigation
Bitcoin miners are paid for their work for 12.5 bitcoins every 10 minutes. This has created an enormous investment in mining equipment used to solve complex algorithms. This computing power reduces the risk of double-spending in Bitcoin transactions. This can also be used by miners working with agricultural produce, where they can use this power to mitigate the risks involved. Know more at meta-profit.org
7) Providing liquidity
Currently, the markets are not open on weekends which means farmers cannot sell their produce. Using Bitcoin makes it possible to provide liquidity to farmers who can sell their produce 24 hours a day, seven days a week.
8) Lower transaction costs
Transaction fees in Bitcoin are 1/10th of any other existing system. This will also attract more buyers, which will increase market size and hence farmers’ income.
9) Insurance on crop insurance can be done using Bitcoin, giving more transparency. Currently, this is a very vague process.
10) Investments in agriculture
Bitcoin is an excellent way to invest in agriculture if you cannot buy land and other equipment directly.
Bitcoin can have a significant impact on the agriculture sector in India. The early adopters of this technology should be from this sector. With flexible terms and conditions and access to better technologies, it can create a massive change for struggling farmers.
It can also lead to better development in financing and investments, which will benefit everyone involved. But, as with any new technology, it will take some time before people get used to this and see its full potential. Only then will we say that Bitcoin has come to stay.