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The Art of a Good Unicorn | Curating a Product Marketplace for Your Cryptocurrency Startup
So, cryptocurrencies, like Bitcoin, seem to have their ups and downs. These cryptocurrencies are built on decentralized Blockchain technology and one can understand the motivations of the West to adopt such technology. After all, it seemed that the fundamental trust in the traditional financial system had been somewhat shattered, giving rise to the genesis of something like cryptocurrency. The idea may have been to have something decentralized with limited circulation without a central entity controlling the fortunes.
PREMIUM Being a cryptocurrency entrepreneur in India could present herculean challenges, because, from a regulatory perspective, it is a difficult relationship with cryptocurrencies without much legitimacy.
And among those who think they are part of the crypto space, what about seeing it as a monetary system or a medium of exchange or a barter system based on which the future economy will be built, as opposed to a way to exchange goods and services ? Is cryptocurrency seen as a key economic tool for the future or just another method for transactions?
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Being a cryptocurrency entrepreneur in India could come with herculean challenges, because, from a regulatory perspective, it is a difficult relationship with cryptocurrencies without much legitimacy. And if someone invests his hard-earned salary in cryptocurrencies and something goes wrong, he may not be able to knock on regulators’ doors, because policymakers may see cryptocurrencies as a gamble.
In an interview, Vikram Subburaj, CEO and co-founder of Giottus, a cryptocurrency exchange portal, answered a series of questions on crypto entrepreneurship in India.
So, what does the cryptocurrency landscape look like for entrepreneurs in India?
Cryptocurrencies are a parallel technology, like the Internet, where more than one sector is being redefined and transformed and where new sectors are also created. Furthermore, it is a horizontal technology capable of creating a network in a decentralized way. Traditionally, the benefits and value of a network reside only in the entity or company that creates it and this is where cryptocurrency comes in to spread that value to everyone. Think about those old dial-up connections where the network was really slow, but could still do certain things; the promise of what he could do was what needed to be kept in mind. Right now we are at that stage where there is a limitation of transactions per second, but the problem is being resolved.
But what could this mean from a consumer perspective?
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You might not want a centralized corporate entity dictating the terms of the digital media that people are consuming. People should have a say in defining the rules of the technology, which demonstrates the need for a decentralized system… Let’s say there are people who invest in or have ownership of a particular cryptocurrency project. They have a say in what the rules of the project should be, how the network should work, what the punishment could be, such as a certain percentage deduction or being banned from the network, and more.
So, they are defining the rules by having ownership of the network. And if this network gets really big, it becomes like a decentralized nation with people sitting in different parts of the world. But imagine it on a smaller scale, where rules, habits and characteristics are defined and a culture is formed if the network survives.
But what could the concrete use cases of cryptocurrencies be?
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Cryptocurrency use cases are already considered better than existing systems, such as payments in the remittance market. One area or challenge where adoption has not yet grown dramatically is due to regulations. So, there are industries where regulation is the obstacle, not the product. And the amount of monetary gain this will give to the people who adopt it is much higher than that of existing systems and processes…
In parallel, when there are no issues from a regulatory perspective and the adoption would be more established, it is the gaming sector, which has an imminent need in the form of NFTs, which will be very important in that sector. In 10 years, I predict that the majority of the infrastructure underlying the payments and remittance markets will be operated via cryptocurrency networks.
And how can you curate your product market placement in the cryptocurrency realm?
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Of the 8-10 players in circulation, we are the only ones who are self-financed and it is said that we are among the top 4 based on volumes. And we didn’t spend any money acquiring customers, it was just our product and the referral program that we had, which led to a customer base of about 1 million to 1.5 million…
At one point, an RBI circular banned crypto entities from having a bank exchange. At that point there were about 50 trades and we were down to about 10, which made our job a lot clearer. And then, a Supreme Court verdict lifted this ban a couple of years later… We also created models through which customers could buy and sell cryptocurrencies in India and were the first in the market to launch these models. That’s how we got our initial customer base. If we build really good technology, our competition could build it within the next couple of months too, so that won’t be a differentiator, so we had to build something that people feel like they care about.
So, what about the regulatory hurdles for crypto entrepreneurs in India?
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From a regulatory perspective for India, what is really needed is fiscal pain… There are some laws or regulations which have the potential to kill the industry directly or create a scenario where the industry moves out of India with foreign entities effectively incentivized. So, there should not be a disparity created due to taxation. We see something like this even in an interstate form, where one state has a higher tax than the other, leading to a lot of illegal goods flowing from one state to another.
As crypto entities, we want to ensure that we are part of the engine that seeks to do good for the nation, rather than being sidelined or blamed for the problems.
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Shrija Agrawal is a business journalist. The opinions expressed are personal