The first Business Today Crypto Conclave witnessed Kunal Nandwani, Co-Founder uTrade Solutions, Deepak Bagla, MD and CEO of Invest India, Nikhil Chinapa, Co-Founder OxdotTV, and R Vivekanand, Global Head, BSFI Platforms and Products, Tata Consultancy Services (Virtual), coming together for a session called Blockchain and Crypto: The Fintech Revolution.
Talking about the future of this industry and where this is headed, the panelists spoke at length about the products that need to come up in spaces that are not just regulation safe but also can add value.
Chinapa took up the discussion first by starting off with the fact that he believes that Web 3 is the future.
“In Web 3, what we are looking at is identity, a series or collection of wallets,” Chinapa said, adding that all the assets that we own - identity, the house or the car that you own, etc., will all reside somewhere.
“Like the way your identity resides in your passport or Aadhar card, your land records resides with the municipal corporation, and so on, and if one was to try to bring authenticity and transparency to all these aspects of life, the only solution is to put it all into blockchain. You can’t copy or cheat that and you can use that to identify what each person does,” Chinapa explained.
“The future of all of us is wallets, how we communicate with each other, how we send money, exchange trust between each other, will happen between wallets,” he added.
While Chinapa was confident about Web 3 and the future, Nandwani said he was “cautiously optimistic about this space” but he added that cryptos and blockchain have certainly offered a new way of looking at the world, like how it has created a parallel financial system in the form of crypto, also developed a decentralised mechanism of incentivising people into forming communities, etc.
He gave the example of Wikipedia as a pre-crypto community that was formed in a decentralised form - nobody owns Wikipedia, and everyone can contribute, curate, and consume content.
“Imagine if they launched Wikicoins and people are incentivised for creating and consuming content, that is what Bitcoin has essentially done. It has given the community a tokenised form of incentive on top of just the goodwill that existed before,” Nandwani said and added that while that is a very interesting concept, the challenge lies at the point where one has to think about the centralisation in the decentralisation.
“Besides Bitcoin, every other token out there has a CEO, they may not have a limited supply, they all have challenges,” he said.
Nandwani added that blockchain by definition is slow, it is inefficient as it slows down things. Imagine hosting an event like this and asking every single one here, every single time, for every decision, that versus one individual making a call in a second, he pointed out, and added that blockchain works only when workflows and decision-making is not centralised.
“If we try to bring a decentralised technology into a centralised world, it does not work. The very moment of you have a CEO of a company, whether is NFT, or Web 3, or the Metaverse, by definition you have centralisation. It’s like North Korea saying that we are democratic from tomorrow, and the leader saying that he’ll be the only one voting,” Nandwani said.
He pointed out that we need to understand and question if decentralisation is really coming in, if it is really an equal opportunity for the whole community as far as participation is concerned, or are the odds stacked in favour of some 10 wallets that hold 80 to 90 per cent of the Bitcoins in the world.
“Decentralisation as a concept is interesting, but we are yet to form communities to achieve certain goals. We need to carefully space it and not just go by the tip of the iceberg. We need to scratch a little more,” Nandwani said.
Chinapa added to Nandwani’s point by saying that it was not a “one size fits all” and that not everything can be decentralised.
“There is a use case for wallets, there is a space for that because you are using it to authenticate identity, ownership, so on and so forth, but not everything. It is like treating a gunshot wound with paracetamol,” he said.
Bagla took this point further to talk about democratisation and the alternatives in this space.
“Does it provide a more effective transparent, ability to move towards a democratisation than a decentralisation than otherwise? Now obviously there are always challenges in every situation, and we take that on the side. But is this a better form of doing it than the existing one is the question in point, and if this is a system which brings in a greater level of trust and ability,” Bagla pointed out.
He brought up the example Nandwani had mentioned about one person taking a call and voting and not allowing others to do the same and asked what if the system provided everyone in the room the ability to vote in quick real-time, that would be far more preferable.
He added that the certificate that they give out to participants of Startup India once they register is done with the use of blockchain tech and pointed out that they found it to be user friendly, easy to use, easy to reconcile and get things done.
“So from that side on the e-governance front, having e-districts, blockchain districts and blockchain villages, etc. Certain states have started to take on that e-governance and they are finding the utility of the technology and the platform there for sure,” he explained.
“There is a force of technology, which is now taking great momentum. The point is, how long will you be able to hold it?” Bagla asked.
Speaking about modernising older systems and introducing blockchain into the flow of things, Vivekananda said that they see blockchain as foundational technology, similar to internet protocols, 4G and 5G.
“We try to look at the technology as something that will be applied in a significantly game-changing manner. We are looking at that technology to change, but change over a period of time. Blockchain is not new. It's been there, seven years, nine years, 10 years in various forms, so it has to keep changing and keep getting better. But over a generation, the kind of change that you will see across Web 3 and over a number of other applications are significant,” Vivekananda said.
“Now what we do not do is to go and tell everybody that you will go out of business or get disintermediated. That's not the conversation that you can have in order to progress with these systems. What we actually do, we call it co-existence, in a number of cases, what you create as point solutions, have to coexist with current solutions. For example, if you take core banking solutions, fundamental decisions are taken by banks on the basis of core banking solutions. You need that to co-exist with banking ledgers and banking systems you cannot create islands and suck out liquidity. Islands suck out flow. So what we do is to create co-existence with current systems, so that you have a way of interplay, so that blockchain base systems coexist with existing technology, existing systems and solve a purpose, in a pragmatic manner,” he explained.
“There is a utility in what is being presented here. For example, if I can digitise all the land records and put them in a blockchain from my perspective, the Invest India perspective, I think of the impact on the ease of doing business. It will change the complete format and the challenges which we are working on and more so when we are talking of the MSMEs. So, from that perspective, when I said that it is already a utility which has a momentum, which is backing it,” Bagla said.
“Us, living in a society, which has one of the highest rates of adoption and adaption to technology, to my mind. I think that is the biggest inherent strength of India as we move into the next generation. But we are at a very critical inflexion point in our history of modern India. Never before have been at this inflexion point and this inflexion point has been driven both by digitisation and the adaption and adoption of that digitisation and blockchain is just an aspect of it,” he added.
Speaking about the “brain drain” in the crypto space and why most youngsters are looking at foreign pastures for their ventures, Nandwani pointed out that a lot of things we are trying to put on the blockchain now were functioning quite fine without it too.
“Blockchain is a sort of a hammer we have found and now we are looking for nails to put blockchains to it,” he said.
“I would love to see the problem that we're trying to solve. The problem is digitisation, we all agree. There is a digitisation problem, we should digitise. But is blockchain the only technology available? I would tend to disagree. Sequel, Oracle, many data bases have existed before. There weren’t as many conferences on them as there are on blockchain,” Nandwani said adding that if blockchain can solve a problem that’s great, but if it can’t there are other technologies that can.
“In India, we still have had a number of years of debate on crypto regulations. We've had no clarity yet. There is some clarity on taxes which is still barely acceptable. It has become prohibitive in some sense. Equally, there is a challenge that the lack of clarity on the crypto assets ownership. And in India, I mean no disrespect, but the reality is that there is not as much ease of doing business in India as we would all like. There is some improvement over the last few years, probably but still it's not enough. So due to that, I've seen a bunch of entrepreneurs, many in the blockchain and crypto space, go into more predictable economies. They have to give up the 1.3 billion consumer market, the reason why Indian startups and everyone has done so well. But they are giving it up in lieu of, and in order to, get more predictability for regulations for the clarity and the ease of doing business,” Nandwani said speaking about the ‘brain drain’ in this space.
“People are leaving, people want to set up in places where there's a better opportunity, better regulations, better infrastructure. In India, as far as blockchain technology is concerned, we're not building for India, building for the world. It doesn't need to be built in India. We feel proud when we have an Indian origin CEO of global companies, but those CEOs are not here setting up companies in India, there's a reason for that,” Chinapa pointed out.
“I think part of the reason is that the older generation doesn't get it. See innovation, innovation, great ideas. Revolution is almost the exclusive playground of the youth, and when somebody's a CEO of a company, they don't trust the youth because they don't understand it. When the Internet was coming about some of the best ideas about how to use the Internet and how to make it work for you came from interns, but CEOs didn’t want to listen. Because hey, what's your pay grade? What's mine? Where should I listen to you? So we're always going to be on the back foot with this and it becomes even worse when you're part of the government because I don't want to lose control. Decentralisation means that I can actually authenticate every single voter, would I really want to do that?” he added.
“The best ideas aren't necessarily in blockchain, they aren’t necessarily coming from IIMS and IITs. They're coming from small towns and villages at Hackathons where people just coming up with great ideas, and great use cases on how to use technology, any technology. Whether it's blockchain or otherwise and how to apply it on day to day things. But these ideas aren't coming to the forefront because of just the way we as people, where we're mistrustful, we believe that people who earn less than us aren't worth listening to or shouldn't be listened to, and if we're in control, then we don't want to do it. We don't want to relinquish control,” Chinapa said.
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