Banning Cryptocurrency In India Isn’t Really The Answer We’re All Looking For
A panel led by finance secretary Subhash Chandra Garg drafted a bill titled, “Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019.” While the Reserve Bank of India has distanced itself from this draft bill, people on both sides of the economic aisle are asking for this Bill to be scrapped. Cryptocurrency isn’t supposed to be banned without discussing its values and downfalls.
Around the world (except China), the Internet is free from any central authority, administration, and control. If a currency exchange is facilitated entirely on the backs of a decentralized system operated using blockchain technology, we are looking at global banking reforms that will help more than hurt.
The Current Banking System Is Predatory
If we look at internet services like search engines and social media platforms that have been condemned by international governments including India, at the face value, they provide free services. But they collect data, analyse the raw information and then use it to create targeted advertising for the highest bidder.
That’s precisely what the banking sector does these days — they centrally monitor all our financial data and then they sell us ‘offers’ that fancifully normalise debt. If we look at the financial crash of 2008, banks gave out bad loans (predatory lending) and then bet on the creditors defaulting. That wouldn’t be possible with a cryptocurrency exchange as there’s no monitoring involved. In fact, cryptocurrency giant Bitcoin was invented in 2008 after the infamous Lehman Crash of ’08 to counteract the influential pull of large, private banks that have their claws bared around the world.
Decentralization Is The Key Word
The main idea behind a decentralized banking system (a cryptocurrency exchange) like Bitcoin is to turn all the participants within the system into the bank. There’s no third party involved — it is just people and blockchain. A blockchain is simply a digital ledger that is universally available, highly encoded, and tamper-proof (transactions locked using hashing). There’s a specific network that has a synchronised copy of the blockchain which tends to record every transaction that is made within this system.
Cryptocurrencies Are Similar To The Tech Companies That Sprung Up During The Y2K Boom
When Alphabet.inc came up with Google, the world laughed. Not many were able to visualize the impact of internet technology to their lives. Now, more than two decade later, these tech companies dominate every sector that exists around the world. In fact, it is this factor that has inspired the current government’s massive funding to Niti Aayog’s Atal Innovation Mission that encourages innovators to innovate and then disrupt the market. This Indian think-tank is currently researching Artificial intelligence, machine learning, Internet of Things, blockchain and big data. So, why is it that cryptocurrency is being singled out when many experts predict its revolutionising potential?
Crypto is still a young industry that emerged like a phoenix rising from the ashes of a global financial meltdown. More than a decade later, we are still discovering new facets of the potential it harbours. Cryptocurrencies in general are being vilified in India due to the litany of scams that are perpetrated via hacks like the BitPoint hack (55,000 users losing around $28 million) and Ponzi schemes like BitConnect. However, we shouldn’t let a Divyesh Darji (alleged head of BitConnect Asia) deter us from researching and developing a newly emerging technology.
The Three Unreported Uses Of Crypto In India
Along with all the technical benefits offered by crypto technology, they might also help us push out the hatred that is associated to every open comment section. Currently, we use a username and password to register an account to use any service. There’s no authentication system in place. With crypto however, each user will need to have a digital certificate that will require authentication of identity to get on the publicly accessible blockchain. People think twice when their name is associated to a particular brand of insidious hate speech which is why they currently hide behind anonymity. The blockchain, however, will maintain and display a globally protected record of every user so identifying a miscreant using their digital certificate will become easy. Also, blockchain groups are private, so outsiders cannot infiltrate a closed system.
Additionally, you will never stand the risk of forgetting your losing your password. A unique crypto one-time password (OTP) will be issued to you, every time you log into a service. The system will see your digital certificate on the blockchain and message the encrypted OPT to your phone.
For India where voting is a Himalayan task, crypto technology will enable us to vote from our phone! The current government is considering a One Nation, One Election policy where this technology could do wonders. An internet voting system that is operated using blockchain makes voting anonymous and interference proof. Reluctant and lazy voters can vote from the comfort of their surroundings, and the blockchain will register the token that transfers between the eligible voter and the relevant candidate eliminating all claims of EVM Tampering in one fall sweep.
We are all sceptical about anything that’s new. We wouldn’t know a good thing unless we tried it. Economically, banks charge high surcharges which get eliminated completely with a crypto exchange as there’s no third party involved.
We should know more before considering such a ban.