Rahul Sharma (name changed), by his own admission, prefers computers over friends. So, it is no surprise that he was among the early adopters of bitcoin, now the most popular and valuable of all digital currencies. The Gurugram-based computer science engineer holds 44 bitcoins which he mined in 2011 when a coin was valued under a dollar. With a bitcoin trading for just under $4,000 (Rs 2.5 lakh), Sharma’s holding is worth over $150,000. That’s a neat profit. (Mining is a method to unlock bitcoins. Bitcoin miners use powerful computers and a special software to solve certain mathematical puzzles that validate a bitcoin transaction. If you succeed, you are rewarded with newly released bitcoins.)

But he doesn’t intend to cash in yet and “plans to keep it in cryptocurrency for at least the next 10 years”. Even if he wants make use of the profit he made, his options are few. He could convert the bitcoin to rupees or dollars, but he would have to pay a commission to bitcoin exchanges for currency conversion, which would trim his profit. The other option is to buy an asset directly in bitcoin .

But that isn’t so straightforward in India. Digital currencies like bitcoin operate in a legal grey area. The Reserve Bank of India has not authorised any company to trade in bitcoin or any digital currency, which makes such investments highly risky. “The RBI has not given any licence /authorisation to any entity/company to operate such schemes or deal with bitcoin or any virtual currency. As such, any user, holder, investor, trader, etc. dealing with virtual currencies will be doing so at their own risk,” the central bank said in a circular in February. At the same time, there’s no clear law that says bitcoin, or any digital currency, is illegal.

To add to the uncertainty surrounding bitcoin, regulators from the U.S. to China are clamping down on digital currencies or businesses based on them. Last month, Beijing authorities mandated the closure of all bitcoin exchanges in the city, a move that is bound to have repercussions in India. Already, Indian authorities are looking at global developments before they draft regulations on digital currency. In April, the Ministry of Finance constituted an interdisciplinary committee chaired by the special secretary (economic affairs) to “examine the existing global regulatory and legal structures governing virtual currencies” and “suggest measures for dealing with such virtual currencies including issues relating to consumer protection, money laundering, etc.”. The committee submitted its recommendations in August. The ministry, however, is yet to take a decision on the subject.

Yet, bitcoin enthusiasts and exchanges like Delhi-based Coinsecure are promoting the usage of bitcoin for high-value purchases like real estate. Coinsecure is among the few exchanges in India that facilitate purchase and sale of bitcoin in rupees. To do so, Coinsecure asks a customer to submit KYC details such as PAN number, and link his or her bank account.

Coinsecure CEO Mohit Kalra’s pitch is simple: Since bitcoin is a volatile currency, with its value against the dollar changing every second, if played smartly, one can walk away with a good profit. “It’s like a 24-hour running stock market with the advantage that the price keeps fluctuating. Bitcoin buyers will benefit as they could buy property at a much lesser price than its real value. If they purchase bitcoins when their value is low, they can actually buy real estate at unthinkably low prices.”

“Of course, it can go the other way around, too,” he admits.

Kalra believes bitcoin has a promising future in the real estate sector in India. Real estate experts, though, are not so optimistic about the digital currency. But the idea of bitcoin as payment for real estate is gaining ground in some international markets. Last month, Reuters reported that an Isle of Man-based developer will facilitate the purchase of residences in a Dubai property, the first major real estate development to accept bitcoin as payment .

For those willing to take the risk, the opportunity could be tempting. Sonny Singh, chief commercial officer of U.S.-based BitPay, a bitcoin payment processor, told Bloomberg in an interview about a man in California who purchased a house in bitcoin and made a gain of around $1 million through currency fluctuation. “The bitcoin price was at $750 when the transaction to purchase the house was initiated. By the end of the transaction, the bitcoin price was $1,000,” Singh told Bloomberg .

India hasn’t seen any real estate transaction in bitcoin yet. But a website with bitcoin listed properties from across the world, bitcoin-realestate.com, has three from India: a plot in Tamil Nadu, a condo in a “Jaisalmer Hotel”, and ownership of rooms in a “5 Star hotel” in Gurugram.

But legal and real estate experts are sceptical. “The viability of any currency as a means of transaction in real estate in India would depend on whether or not the RBI and the government recognise it as valid tender,” says Anuj Puri, chairman, Anarock Property Consultants, a Delhi-based brokerage firm. Puri says the Indian real estate market is in the process of becoming more transparent, making payments in bitcoins unfeasible. In March, the government, in an amendment to the Finance Bill, restricted cash transaction to Rs 2 lakh from the Rs 3 lakh proposed in the Budget. That is for currency notes issued by the central bank. Bitcoin is not even a legal tender .

Mohit Kapoor, founding partner of law firm Universal Legal, also ruled out bitcoin as a “viable option for Universal Legal, also ruled out bitcoin as a “viable option for people to invest in people estate”. Kapoor says it makes more sense for bitcoin holders to keep it as digital currency until there is clarity on regulation.

Coinsecure’s Kalra admits that legal hurdles are keeping people from using bitcoin as tender. “People treat it only as an investment option right now. A lot of our customers buy coins but never come back to sell them. We assume that they are holding [it] for now and keeping it as an asset for the long term.” In other words, the safest asset a digital currency can buy you in India is not land, or gold, but digital currency itself.

(The article was originally published in the October - December 2017 special issue of the magazine.)