Flaws Of Bitcoin Trading With Indian Exchanges Like Unocoin, Zebpay And Others

Bitcoin has seen tremendous growth in the last few months and just recently it broke the $3,300 mark after the hard fork. The future of bitcoin seems very bright taking in account the recent developments. Bitcoin(BTC) holders were also offered a treat of getting equivalent amount of Bitcoin Cash(BCH) on their account balance/private wallets after the hard fork. However, this doesn’t seem to be the case with Indian exchanges. Only recently after a lot of complains from users Zebpay agreed to give their customers their equivalent BCH balances. There’s no news from Unocoin on this as of this writing. Not only this, but there’s a whole lot of other problems with bitcoin trading through Indian exchanges. Here are a few problems that I personally encountered and should be addressed in order to improve this situation.

The Problem With Trading Through Indian Exchanges:

I started trading in bitcoins just a month before the hard fork happened and ever since have been hooked on to the developments I am seeing in the cryptocurrency. I use Unocoin for trading bitcoins because I found that they offer really good ease in trading. However, on investigating a little I found out that the rates that Indian exchanges offer to their customers compared to the market rate of bitcoin are way too exorbitant. Here are a few screenshots:

Bitcoin rate on FreeWallet
Bitcoin rate on Bitfinex
Bitcoin rate fetched through Bitstamp API through an app I developed “My Bitcoin Advisor
Bitcoin rate on Unocoin

Observe all the rates above. To sum them up here they are:

FreeWallet:
1 BTC = $ 3,174.79
Bitfinex:
1 BTC = $ 3,167
Value Fetched From Bitstamp Through My App:
1 BTC = $ 3,169.13
Unocoin:
1 BTC = ₹ 2,03,973 almost $ 3,203.09!!

The current dollar rate as of this writing is ₹ 63.68. That makes 1 BTC = (2,03,973 ÷ 63.68) = $ 3,203.09! Isn’t that outrageous? Almost $30 more than the actual market rate. And guess what? Even after those charges Unocoin charges 1% as transaction fee. So basically, if you are using Unocoin you end up buying Bitcoin at a much much MUCH higher rate than what you can through other exchanges.

Bitcoin Value Calculation Fiasco On Unocoin:

Okay fine, so we get bitcoins at a higher price through Unocoin. No problem, but let’s take a look at another problem with this app. See the screenshots below:

Buying selling rate on Unocoin at 1:23 pm on 6th August, 2017
Selling price of my bitcoins supposedly worth ₹8378

They show you the worth of your bitcoins as a multiple of buying price. Naturally you will think that you will fetch that amount if you sell. But no! When you actually want to sell your bitcoins that’s when you come to know that the worth of your bitcoins is not actually what they show to you as INR equivalent. It would be great if they could simply show the worth of your bitcoins as a multiple of the selling price because quite frankly that’s just plain misleading. And that too in a very big way. Look at the numbers:

Buying Price:
₹2,04,683
Selling Price:
₹1,92,402
No. Of Bitcoins I hold:
0.04093361
Bitcoin INR Equivalent Price:
₹8378
Bitcoin INR Selling Price I get:
₹7,876
Difference between value shown as worth and actual selling value:
₹502 (approx $ 7.8)

Needless to say that here again the real time market rate of Bitcoin is way lesser than what you’ll be trading through Unocoin. That’s really absurd and this might cause a lot of confusion if one wants to sell their coins. Also, if you are trading on Zebpay, the calculations they show are in “bits” which is a small unit of bitcoin and in a way can be a bit misleading for trading.

1 Bitcoin = 1,000,000 bits

Although the volume would seem impressive to see but it’s clearly just smokes and mirrors. It would be better if Zebpay displayed the units as Bitcoins rather than bits.

No Private Key Import Support On Unocoin:

I took the wise decision of taking off all my BTC balance from Unocoin into a secure paper wallet. And once the issue was settled I decided to bring my coins back into the exchange so I can resume trading. I went inside the app but was unable to find a way to import my bitcoins back into the app. So I went on to their website.

They have an option of “Import Private Keys” which can be used to sweep your private wallet and put your bitcoins back into the exchange. I keyed in my private keys but to my surprise there was a blank error message that popped up. I thought may be it was a network problem so I tried again, and again and again and AGAIN. After almost 20 tries I decided to call their support center and ask about this issue. The answer I got from them really disappointed me to the core. They told me that I cannot import private keys currently on Unocoin. I was shocked. Why would they keep an option on your LIVE website dashboard when they know that the feature is not working??

I had no other option than to simply sweep my private keys through a different wallet than Unocoin and so I had to take the long way of transferring my coins to MyCelium and from there to my Unocoin wallet.

I had successfully transferred my entire BTC balance from my private keys back into my Unocoin wallet. Now there was a question of claiming my free Bitcoin Cash (BCH) but again I was disappointed with Unocoin. They have publicly told that they will not be supporting BCH. However, my BCH balance was safe as I had only claimed my BTC balance through my private keys and even though I had transferred my ENTIRE bitcoin balance to my wallet in Unocoin, because of replay protection my BCH balance was still in the paper wallet.

Claiming Your Free Bitcoin Cash:

If you had transferred your bitcoins to a cold storage/paper wallet/hardware wallet you are lucky. You now have both versions of the bitcoins. You can use exchanges mentioned on the official Bitcoin Cash Website to claim your free BCH. Here’s a really helpful video to help you claim your BCH balance: https://www.youtube.com/watch?v=kTU9H7nAiK4

If you kept your bitcoins on exchange it is still not clear if you will get your free Bitcoin Cash or not. Zebpay has announced that it will be giving it’s customers their equivalent BCH balance but there’s still no confirmation from Unocoin on this. Certainly because of the split EVERY holder of Bitcoin has received Bitcoin Cash and so these exchanges also have millions of worth of Bitcoin Cash of their customers. If you haven’t received your share of BCH you can sign a petition that’s going online for customers to get their equivalent share of BCH from Indian exchanges: https://www.change.org/p/bitcoin-cash-scam-bch-by-indian-bitcoin-exchange-zebpay-unocoin-coinsecure

I feel lucky that I made the right decision by transferring all my bitcoins to a paper wallet before the hard fork. But looking at the current state of Indian exchanges I think I’ll use other alternatives for trading from now.

If you have experienced similar issues let me know through your comments. I have also developed an app titled “My Bitcoin Advisor” that helps you decide when to buy or sell your bitcoins based on your portfolio. You can download the app for free from Google Play.

If you want to get in touch with me you can do so through my social IDs mentioned below:

Facebook: https://www.facebook.com/nikmlnkr
Twitter: https://www.twitter.com/nikmlnkr
LinkedIn: https://www.linkedin.com/in/nikhil-malankar-05537078/
Email: nikmlnkr@gmail.com
Website: www.nikmlnkr.com
App Link: https://play.google.com/store/apps/details?id=nikmlnkr.bitcoin.advisor

Thanks for reading and happy bitcoin trading!