Cryptocurrency has its fan following
Cryptocurrencies (like Bitcoin) have been gaining attention worldwide. This is partly because of the decentralised nature of the technology (almost similar to what Akamai does on the web) and also because of the way stock prices of cryptocurrencies have soared worldwide. But it is disconcerting because they are used by people who do not want payments tracked. Not surprisingly, arms dealers, drug peddlers and money launderers love this technology immensely.
But lately, two major limitations have exposed this technology’s vulnerability. First, is the huge amount of CPU capacity each transaction takes up. As a result, cryptocurrency applications are energy guzzlers (http://bit.ly/2BlC2Hv).
Finally, there is the problem of there being no audit trail, and no central ledger, which makes it difficult for dispute resolution. Some Indian players believe that the government should allow cryptocurrencies in India in exchange for a central ledger which declares the users. But then, that would defeat the very purpose of any cryptocurrency.
Nonetheless, some Indian players believe that this could be made workable. One such player is Ashish Agarwal, Founder of Bitsachs. Agarwal, who has been in software and technology business since 2010, spoke to R N Bhaskar and Jescilia Karayamparambil recently. Given below are edited excerpts:How do you differentiate yourself from other cryptocurrency offerings?
We are not offering any investment opportunity, we offer a marketplace with simplicity to buy/sell and store cryptocurrencies.
You suggest that the government maintains a separate register. But doesn’t the concept of a central register defeat the very concept of cryptocurrencies and block chain technology?
I suggest a common database of addresses created by Indian service providers, and all holders of these addresses are KYC verified by respective service provider. This practice only assures that all transactions happening with Indian users are in the knowledge of government. It has nothing to do with decentralised nature of blockchain.
Blockchain technology is now discovered to be an energy and CPU guzzler. Hence it is now reckoned to be unfit for mainstream banking. Your comments.
The cost of mining gold is also huge and before fiat money the currencies used to be backed by gold only. Banking system can use blockchain for more transparency in transactions. Please note that in blockchain ‘Proof of work’ concept requires lot of energy and resources not ‘Proof of stake’.