Opinion | The importance of the blockchain for India

Photo: iStock

Photo: iStock

The unprecedented exuberance around the blockchain is due to the promise of a completely new Internet: the Internet of Value. Beyond the Internet of information today, what would happen if the ownership of digital resources of any kind – money, stocks, government registers, financial instruments or art – could be stored, monitored and transferred securely? Blockhain technology is considered revolutionary for its ability to allow safe movement of goods, without intermediaries, with its economic impact projected to exceed $ 3 trillion over the next decade.

Globally, we are still in an exciting but nascent stage of the blockchain's evolution as it moves from the protocol phase to the infrastructure, before mass consumer interfaces and application layers are addressed. This is the perfect time for an emerging power like India to pay attention and take advantage of the enormous opportunities of this new Internet. Sectors such as financial services, agriculture, healthcare, real estate and public services, all crucial elements for an emerging economy such as India, can reap huge benefits from the application of technology blockchain.

There are two worlds for public-blockchain chains that create networks of reliable transactions between entities that do not know each other or trust each other, and private networks that are only found between known entities. While implementations of private distributed registers may have incremental value, the essence of the blockchain is in the power of decentralization. This is because the true value of the blockchain lies in creating consensus and trust among strangers. It is extremely important to understand that blockchains without cryptocurrency incentives (tokens) are just data networks, not valuable networks. Cryptocurrency tokens play three key functions, maintaining decentralization by providing the necessary economic incentive for network nodes to validate transactions, allowing developers to create decentralized applications on blockchain networks and allowing early-stage projects a new way to access capital and users.

Public blockchain offer huge opportunities for India through four dimensions, jobs, capital, solutions to India's problems and global strategic positioning. In juxtaposition with the shrinking of India's IT sector, with the slowdown of jobs in the technology sector and with the status of a latecomer of India in emerging technologies, the advantages offered by blockchain can not be taken lightly by Indian politicians.

Earnings for India: Blockchain is now the fastest growing set of skills required at work sites, with job growth rates of 2,000-6,000% and wages for blockchain developers 50-100% higher than normal developer jobs. The decentralized nature of projects with distributed teams can translate into lakhs of well-paid jobs from all over the world, available to Indian developers.

Initial offerings of blockchain-based coins (ICO), once properly executed, open a whole new channel for startup finance and draw on more than $ 20 billion collected through the ICO route. With its strong IT ecosystem, India can become a major hub for blockchain development and a major net beneficiary of global capital inflows.

Resolving Indian problems: Decentralized applications on public blockchains can solve a myriad of Indian problems, such as eliminating brokers, ensuring data security, reducing corruption and tampering with financial registers and improving the speed of service delivery by governments and corporations.

The global positioning of India as a technological power: Several emerging technologies such as blockchain, artificial intelligence and the Internet of Things will not work in silos but will converge. That is the space in which the next Googles and Amazons of the world will be created. Blockchain is a layer of basic data / transactions and losing on it will damage the global technological competitiveness of India.

Regulation in India: The current debate in India has unfortunately focused too much on trade and speculation, considering cryptocurrencies as an investment tool, rather than understanding the potential of core blockchain technology and the fundamental role of cryptocurrencies as a mechanism of incentives to guarantee transactions decentralized.

As a central developer / shapers of this technology in India, we are fully aware of and sympathetic to the government's concerns about money laundering, tax evasion, investor protection and capital flight. However, the blockchain sector is particularly sensitive to regulation. Any regulatory intervention on cryptocurrencies that lacks the nuance of separating speculative activity from the development of basic software inadvertently also interrupts core development. There are sufficient global examples of countries that have taken nuanced and cautious measures in technology regulation and are focusing on the arrest of illegal activity without harming innovation.

In the current regulatory environment, Indian developers do not have the capacity to develop large-scale blockchain solutions. Serious blockchain professionals are rapidly migrating to countries with more friendly regulations. As a result, India's ability to benefit from jobs, capital, local innovation and positioning is reduced without the talent ecosystem.

The government has legitimate concerns about money laundering, tax evasion and capital flight using cryptocurrencies. However, adjusting the space is not too difficult with a light touch and smart policies.

Tanvi Ratna is Nitin Sharma is, respectively, a political consultant and founder, Incrypt Blockchain.

Comments are welcome to [email protected]

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