In conversation with Coinswitch's CBO Sharan Nair on the future of cryptocurrencies.

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How to understand the intrinsic value of crypto?

Is it enough to consider the limited supply of bitcoin as the basis for its store value?

What kind of role will crypto play in the future of the web?

These are some of the questions that are on the mind of every investor - whether they have already been investing in the stock market or have invested in crypto in recent years.

To find answers to all these questions and learn more about the future of crypto in India, Finance Influencer Pranjal Kamra spoke to Sharan Nair, Chief Business Officer, CoinSwitch Kuber, one of India's top crypto platforms. 

Here we take a look at some questions and answers that were asked in CoinSwitch's Ask Me Anything session last week:

How to find intrinsic value or intrinsic value of crypto?

Sharan: In

 my opinion, intrinsic value is a very subjective thing.

It may be that the intrinsic value which is for me may not be valid for anyone else.

However, I think the intrinsic value of bitcoin and other crypto assets should be looked at with the question, what is it solving?

The value of bitcoin is determined on the basis of its store value.

Now, what are the current sources of value as of today?

It can be gold or property is also an option.

Now if you compare bitcoin with gold or property, you will see that bitcoin is such a portable thing that you can keep bitcoins worth billions of dollars in a small storage device.

And this is liquid money, unlike gold and property, you can get money whenever you want.

Now looking at all these things you can evaluate bitcoin.

I'm not a finance guy and (laughs) being a tech guy I'd value it that way.

Is its store value enough given the limited supply of bitcoin?

Sharan:

No, the limited supply is not enough to give bitcoin a store of value.

It is of little importance because after all you can make anything in limited supply.

Even my fingerprints are in limited supply, but could they be worth billions of dollars?

no way.

Like I said earlier, bitcoin has amazing potential.

Generally, people look at crypto from the aspects of price, volatility and specification, they do not see that crypto is much more than this and due to all these reasons their value is going up.

And many other factors, such as its use and the possibility of creating a world beyond limits, add to its value.

Now when it comes to usage, what would you say about the misuse of crypto?

Sharan:

If we take the example of the Internet... when it started there was a lot of criticism, especially against the dark web.

An impression was created that the Internet is a place where people can do the worst things.

People at that time had natural reasons to worry about it, and it's not their fault.

Even I myself used to be suspicious.

As for crypto, we cannot say that it is foolproof enough that there can be no wrongful activity through it, but it is certain that it is not a safe place for people involved in such activities.

and why is that?

Because this ecosystem maintains a permanent record store of transactions on the blockchain – these records cannot be deleted or changed.

So even if any fraudster goes out after committing any fraud, then they will be caught later.

Today or tomorrow, the way to catch them will open.

How Will Crypto Power Up the Internet of the Future?

asylum :

If we see today, we will find that the consumers are not deciding the content, but the centralized servers of platforms like YouTube, Google, Spotify, which store the content, they decide what the content is.

So it is clear that these companies can remove whatever they want from the platform according to their wish and need, so Web 3.0 becomes important.

This will remove the centralized system and then it will be in the hands of the users what they want to create and consume.

Web 3.0's servers will be decentralized, which means that many people can participate in and store information in a decentralized manner.

And giving these people their consent to participate, that is, to store data on their computers, means that they will get incentives for it, because then why would they do it for free?

And crypto assets will be used as incentives.

Web 3.0 will have a governance model where people will be able to vote on whether any content is false or promotes violence or hate speech.

And that vote will be represented through crypto tokens.

These are some of the usage methods, from which we can understand how important the role of crypto will be in Web 3.0.

Is crypto the most ideal way to invest in the future of the web?

Sharan:

Suppose you have stock of a bank, then this stock will go up and down according to the performance of the bank.

Now if you don't like something about that bank, be it the landing page or the way they operate, the truth is you can't do anything about it.

There is zero participation, nothing works for you, in such a situation, if the bank goes bankrupt, then your money will be lost.

But, this is not the case with crypto.

If you have invested in it, then you are an active part of this ecosystem.

And the system is such that if you have any suggestion regarding the change in functioning, then you will be heard.

Why do you think people are getting attracted to crypto?

Sharan:

Everyone I know has heard about crypto because of its price appreciation, and this is the truth.

It is not as famous for its technology as it is for its price growth in such a short span of time, and that is why people are getting drawn towards this industry. 

After becoming a part of this community, people put some money to taste it first, then they keep on learning, whether they are learning by joining groups on social media, or watching our content, then they stop.

How do you see the 30 percent tax on crypto?

Sharan:

The fact that crypto is now being brought under taxation is the first step towards legitimizing it.

And if we look at the status of crypto a few years ago, then I think it is a big deal.

Taxation will bring confidence among people to join it.

The good thing is that now we know the intentions of the government.

Some people say that taxing crypto has nothing to do with its legality, but we have never seen anything considered illegal and taxed on it.

So I firmly believe that taxation will ultimately lead to regulation and banning it would mean banning the internet.

Yes, the amount of tax that is being levied ie - 30% tax and 1% tax on Tax Deducted at Source (TDS) - is a matter of concern.

Many traders were not happy about this.

But I also take peace from the fact that our government listens.

We usually always lag behind in accepting and regulating technology, but India has shown a lot of speed in this matter, and I am really happy about that.

Where do you see crypto in the next five years?

Sharan:

I've seen smart and smart people investing money in crypto, from people calling crypto illegal and hearing that I'm running a ponzi scheme.

It's good to see that we have come such a long way.

Look at the government which is putting everything from COVID-19 vaccination certificates to land papers on the blockchain.

So from today's point of view, in the next five years, this growth will be 10 times faster than this, because now many people do not look at it with suspicion, and now it has everything needed to move forward. . 

Have you always been interested in the finance sector?

Sharan:

There is a saying in the internet: I didn't choose the thug life, the thug life chose me!

Well, crypto is the same for me.

When I entered the world of crypto, I did not know much.

I also knew very little about crypto, but over time, as I talked to more and more people, I started to understand all the concepts, and then I fell in love with it.

What are your views on the different ways of using blockchain technology?

Asylum:

Blockchain will change the lives of people in general.

This will make people know why decentralization is so important.

Big tech companies usually keep people in a bubble, which affects their decision making ability.

Decentralization allows them to move into a world where no one can influence their decisions or content choices.

Decentralized Finance (DeFi) has made it easier to get a loan in seconds as compared to banks.

And you can do so without revealing your identity.

That's what excites me about blockchain technology.