The fate of Indias cryptocurrency ecosystem has been in limbo for a while.
In April 2018, the countrys central bank cut off the communitys ties with the financial system by barring banks from dealing with crypto exchanges. In July this year, an inter-ministerial panel, set up to study bitcoins, led by the top bureaucrat Subhash Chandra Garg, recommended imprisonment for those who even hold cryptocoins.
Yet, a steering committee report by the finance ministry, released in September, recommended a softer approach, citing the importance of blockchain technology, which powers cryptocurrencies, to fintech.
The uncertainty arising from the lack of a legal framework for the sector has taken its toll. It is important to take a fresh look at bitcoin, and see it not just as a cryptocurrency, but also a computer network and a technology protocol.
As crypto investor Meltem Demirors recently argued before the US Congress, in a hearing on Facebooks Libra, bitcoin is a store of valuea digital gold of sorts. Despite its volatility, it is being used as a medium of exchange in places such as Venezuela, Argentina, and Zimbabwe.
Its true nature, though, goes beyond that.
Bitcoin is an open source technology protocol, not controlled by a single entity. In that sense, it resembles some of the more enduring vignettes of our times, such as Wikipedia or, arguably, the Linux operating system.
Cryptocurrencies can also be thought of as a network formed by computers running this open source code. This networks computing power is 72 million TH/s (trillion hashes per second). To put that in perspective, the computing power of Googles 10 million servers would be less than 1% of this.
It is their brute computing power that makes bitcoins uncensorable, inviolable, and ultimately, valuable.
Given these three ways to interpret bitcoins, the pertinent question is: what exactly should Indias regulators be regulating?
Apart from some anodyne lip service to blockchain technology, are policymakers trying to clearly parse out the distinction between the currency, the technology, and the network?
The Garg panels document seemed to be exclusively concerned with bitcoin as a cryptocurrency, and its destabilising effect on monetary policy. To be sure, these are valid concerns, and there are no easy, near-term answers.
Yet, the Indian government would do well to keep in mind the other two perspectives on bitcoin, which has inspired many to invest in cryptocoins.
In the period between the first quarter of 2017 and the second quarter of 2019, venture capital funds worth over $6.2 billion was poured into over 400 companies in this space, most of them in the US.
The top 10 unicorns in this space, led by Binance and Coinbase, are collectively worth around $50 billion, and companies built on top of the bitcoin protocol collectively employ hundreds of thousands of the sharpest business and technology minds globally.
Large corporations such as Facebook, Google, JP Morgan and Goldman Sachs are investing heavily in research and developmental efforts in this space. Institutions such as MIT, Stanford, and Berkeley are also emerging as leading centers of bitcoin research.
The important thing is, these efforts are not just focused on bitcoin, the cryptocurrency. They are looking at making the bitcoin network more scalable and more reliable so that people can send money to each other faster, corporations can settle international transactions more efficiently, participants in a supply chain can collaborate to make it more efficient, and some of the most disenfranchised people in the world can access financial services in a safe, secure, and convenient manner.
The current stifling of crypto enthusiasts in India will only hasten the exodus of some of the sharpest minds to global centers like Singapore, San Francisco, and Berlincities where they are likely to be welcomed with open arms, funding, and a friendly regulatory framework.
Indias Garg panel had also recommended that India must consider introducing an official virtual currency, the Digital Rupee, to replace private cryptocurrencies such as bitcoin.
This is an impractical idea.
For one, there is the infrastructure hurdle. Some entity (usually from the private sector) needs to invest heavily to build out the payment gateways and the user and exchange interfaces that will be needed to drive adoption of a crypto rupee.
The public sector has limited resources to develop virtual currencies.
The public sector has limited resources to develop or manage projects at this scale. Most Indian governmental websites still use the older, insecure, HTTP protocol without the SSL encryption. A wallet to store the proposed crypto rupee, for instance, would be considered highly unsafe, and find little traction.
Designing and developing critical components and building blocks like these is typically best left to motivated, young, geeky engineers congregating in hacker houses in Powai and Palo Alto, than to an army of for-rent consultants hired by the governments IT department through archaic tendering processes.
Some have termed cryptocurrencies as the Wild West of the financial world. Terrorists, pornographers, and money launderers can misuse it.
However, living in fear is to lose the battle to the neo-luddites and the rentiers reluctant to change the status quo. Given that bitcoin is here to stay globally, we might as well consider a progressive approach to a sector that is nascent, evolving rapidly and has transformational potential.
We welcome your comments at email@example.com.
Read more from the original source:
India must note that bitcoin is much more than a cryptocurrency - Quartz India
- Protesters Around The World Are Putting Their Hopes Into Cryptocurrency - Forbes - June 24th, 2020
- The Benefits of Cryptocurrency Trading Crypto Benzinga - Benzinga - June 24th, 2020
- UNICEF Cryptocurrency Fund announces its largest investment of startups in developing and emerging economies - UNICEF - June 24th, 2020
- Akon City: $6 Billion Cryptocurrency City Set to Begin Construction | News - Bitcoin News - June 24th, 2020
- From Ethereum to Stellar, to Solana: Cryptocurrency Kin Confirms Blockchain Migration - CoinDesk - June 24th, 2020
- More Than 14 Million XRP Deposits Within the First Week of Listing on CoinLoan - PRNewswire - June 24th, 2020
- Market Makers Hold The Key To Success Of Early-Stage Cryptocurrency Projects - hackernoon.com - June 24th, 2020
- Jim Rogers Discusses Bitcoin as Money and Why Governments Will Stop Crypto | News - Bitcoin News - June 24th, 2020
- South Korea to Unveil Rules of Cryptocurrency Taxation in July - Finance Magnates - June 24th, 2020
- Evorese.com, a new and promising cryptocurrency exchange - PR Web - June 24th, 2020
- Accessible crypto: Will the arrival of ziglu drive new levels of cryptocurrency adoption? - FXStreet - June 24th, 2020
- Cryptocurrency: Redefining the Future of Finance - Visual Capitalist - June 14th, 2020
- A Cryptocurrency User Paid $2.6M In Transaction Fee To Send $136 Twice - Benzinga - June 14th, 2020
- CryptoMixer.bz: Bitcoin Mixer for your anonymity in the Crypto World - Yahoo Finance - June 14th, 2020
- 80% of US and European Institutional Investors Find Cryptocurrency Appealing: Survey - Bitcoin News - June 14th, 2020
- Cryptocurrency Quotes and Forecasts: Last Updates on Cryptocurrencies - FinSMEs - June 14th, 2020
- Justice Gets 15 Guilty Pleas for International Crime Ring that Laundered Money Through Cryptocurrency Exchanges - Nextgov - June 14th, 2020
- Cryptocurrency Mining Hardware Market Growth Trends, Key Players, Competitive Strategies and Forecasts to 2026 - Jewish Life News - June 14th, 2020
- Cryptocurrency Market News: Bitcoin drops to $9,100, the rest of the market follows suit - FXStreet - June 14th, 2020
- Chainalysis Partners with A&D Forensics, Expanding Access to its Cryptocurrency Investigative Tools in Africa - bitcoinke.io - June 14th, 2020
- Bitcoin: A Value Investor's Take On This Asset Bubble - Seeking Alpha - June 14th, 2020
- CashTelex Is Driving Mainstream Crypto Adoption Through Its Brand New Physical Asset-Backed Cryptocurrency CTLX - Yahoo Finance - June 14th, 2020
- Ethereum 2.0: The Choice Between Ones Own Node and a Staking Service - Cointelegraph - June 14th, 2020
- Cryptocurrency Can Become a Medicine to Treat the Challenges Caused by Covid-19 - Coin Idol - June 14th, 2020
- Binance Launches Quarterly BTC/USD Futures With Up To 125x Leverage - Benzinga - June 14th, 2020
- What Is The Future Of Cryptocurrency Going To Look Like? - About Manchester - June 6th, 2020
- Watch | What is crypto-jacking? - The Hindu - June 6th, 2020
- Regulating cryptocurrency exchanges - The Indian Express - June 6th, 2020
- HOW TO BUY BITCOIN ON THE ISLE OF WIGHT - Island Echo - June 6th, 2020
- Could Bitcoin Trading Volume Really 100X in Four Years? - Cointelegraph - June 6th, 2020
- First Mover: Bloomberg's Pie-in-the-Sky Bitcoin Call Looks Directionally Defensible - CoinDesk - June 6th, 2020
- $1.4 Billion In Cryptocurrency Stolen In The Spring of 2020 Amid Coronavirus and WoToken Scams - CryptoPotato - June 6th, 2020
- How to win cryptocurrency by playing Flappy Bird - Decrypt - June 6th, 2020
- What Is The Best Cryptocurrency Broker? - Cryptonews - June 6th, 2020
- Todays cache | Crypto-jacking, and more - The Hindu - June 6th, 2020
- Who are the distributors, traders and dealers of Cryptocurrency Market? - Fresno Observer - June 6th, 2020
- OKEx Continues Their Ongoing OKB Token Buyback - Cointelegraph - June 6th, 2020
- Cryptocurrency And Blockchain Technology Market size Reap Excessive Revenues size COVID-19 2022 - Cole of Duty - June 6th, 2020
- Will Shopifys New Cryptocurrency Partnership Widen Its Moat? - Motley Fool - June 1st, 2020
- Meet Theta Fuel, the cryptocurrency that catches world's attention - Nairametrics - June 1st, 2020
- Bitcoin founder may have just moved nearly $400,000 in untouched cryptocurrency - The Independent - June 1st, 2020
- Bitcoins $100K Probability Speculation or Economic Theory Backed? - Finance Magnates - June 1st, 2020
- Bitcoin hodl waves indicate 60% of the cryptocurrency is being hoarded analysts suggest a bull run could be - Business Insider India - June 1st, 2020
- Everything to Know about the Emergence of Prepaid Cryptocurrency Debit Cards: - PaymentsJournal - June 1st, 2020
- Africa's young population and the drive for cryptocurrency - Techpoint.ng - June 1st, 2020
- Kraken CEO: Bitcoin (BTC) Would Be Worth $1,000,000,000,000 If the Masses Knew the Power of Cryptocurrency - The Daily Hodl - June 1st, 2020
- Cryptocurrency Market Update: Bitcoin bleeding as the market gets ready for CME futures expiration - FXStreet - June 1st, 2020
- Cryptocurrency Cardano increased by 15% - The Times Hub - June 1st, 2020
- Calibras Rebrand to Novi: An Effort to Create Distance from Facebook? - Finance Magnates - June 1st, 2020
- Why Have Cryptocurrency Payments Failed to Take Off So Far? - Cointelegraph - May 25th, 2020
- What to Know About Billions' Cryptocurrency Drama If You Know Nothing About Cryptocurrency - Vulture - May 25th, 2020
- Cryptocurrency and COVID-19: Bitcoins Path to a Safe Haven - Cointelegraph - May 25th, 2020
- Bitcoin prices slip amid speculation that a block of the cryptocurrency possibly linked to creator Satoshi Nakamoto just changed hands - MarketWatch - May 25th, 2020
- Zcash's First Halving May Solve Its Inflation Problem - CoinDesk - CoinDesk - May 25th, 2020
- The Global Cryptocurrency Mining Hardware Market is expected to grow by $ 2.80 bn during 2020-2024 progressing at a CAGR of 7% during the forecast... - May 25th, 2020
- Is 2020 the year to invest in cryptocurrency? - About Manchester - May 25th, 2020
- RenBTC Quietly Goes Live in Latest Bid to Bring Bitcoin Into Ethereum - CoinDesk - CoinDesk - May 25th, 2020
- Eight Countries That Don't Tax Your Bitcoin Gains | Finance Bitcoin News - Bitcoin News - May 25th, 2020
- The Top 5 Cryptocurrencies to Mine  | Coin Insider - Coin Insider - May 25th, 2020
- Can Stablecoins Be the Answer to Cryptocurrency's Biggest Problem? - News Anyway - May 25th, 2020
- ZIMBOCASH Lists Cryptocurrency Token, Wants To Be Alternative To ZW$ - Technology Zimbabwe - May 25th, 2020
- Bitcoin investors are bracing for a key technical event here's what you need to know - CNBC - May 11th, 2020
- Teen Hackers Accused of Cryptocurrency Theft, Sued For $71 Mn - CISO MAG - May 11th, 2020
- Coinbase CEO Says New Cryptocurrency Bill Would Have Major Impact on Future of Finance - The Daily Hodl - May 11th, 2020
- Paul Tudor Jones calls bitcoin a 'great speculation,' says he has almost 2% of his assets in it - CNBC - May 11th, 2020
- No way around it: the irreparable damage cryptocurrency does to the environment - Green Prophet - May 11th, 2020
- Bitcoin halving explained: What is cryptocurrency event and will it boost price? - The Independent - May 11th, 2020
- Cryptocurrency Market Update: Bloodbath as Bitcoin nosedives to $8,000, Ethereum $180 and Ripple $0.1780 - FXStreet - May 11th, 2020
- Investors Who Bought iMining Blockchain and Cryptocurrency (CVE:IMIN) Shares A Year Ago Are Now Up 56% - Simply Wall St - May 11th, 2020
- Ethereum, XRP, and Litecoin Prices Wait for Bitcoins Halving - Crypto Briefing - May 11th, 2020
- Bitcoin's halving might see a large influx of investors wanting a piece of the cryptocurrency market - Mashable SE Asia - May 11th, 2020
- What is a cryptocurrency and why is it needed? - AMBCrypto English - May 11th, 2020
- Cryptocurrency Market Update: Bitcoin, Ethereum and Ripple have a bullish start to Saturday, following Fridays drop - FXStreet - May 11th, 2020
- Cryptocurrency Litecoin dipped to 12% - The Times Hub - May 11th, 2020
- Bitcoin halving, coronavirus and recession: Is an adoption surge ahead? - Verdict - May 11th, 2020
- Cryptocurrency Exchange Bityard Launched A Global Business Layout Using Singapore As Its Base - IndianWeb2.com - May 11th, 2020
- The IRS Wants to Know About Your Cryptocurrency Transactions - Interesting Engineering - May 7th, 2020
- Cryptocurrency Market Update: Bitcoin whales massively accumulating, Ethereum and Ripple commence consolidation - FXStreet - May 7th, 2020
- Rand Corporation report finds bitcoin is still the dark webs preferred cryptocurrency - Yahoo Finance - May 7th, 2020
- Cryptocurrency and the future of the automotive trading industry - Irish Tech News - May 7th, 2020