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Insights on Cryptocurrency from Crypto Techie Anubhav Singhal

Insights on Cryptocurrency Mr Anubhav Singhal is a software developer intern at CoinSwitch Kuber, India’s fastest-growing crypto trading platform. He has worked in various fintech organizations building backend services. Prior to CoinSwitch, he worked at BrightMoney, a sequoia-backed startup building debit solutions for American credit cardholders.
India, at this stage, is at a very critical juncture when it comes to adoption of Cryptocurrencies. Cryptocurrency is a prominent buzzword in India already. According to statistics approximately 20 Million people have jumped on to the Crypto bandwagon in just 2021; but, the recent regulatory developments concerning Cryptocurrencies, have left many pondering about the road ahead. 
In this interview, Anubhav Singhal shares his understanding of Cryptocurrencies and the insights on various aspects of this new age economic ecosystem for Indian and global users.  
Read on!

1. What inspired you to get into the Cryptocurrency industry as a developer?

I won’t say that I am inspired to be part of the cryptocurrency industry, but I am extremely interested to be part of the blockchain industry or web3 industry( speaking in a fancier way). For most Indians, when they hear ‘Crypto currency’, the only thing that pops up in their head is money. It might be through BTC or ETH but eventually, everyone looks at cryptocurrency as some kind of asset that has exponential ROI. This is as exciting as it sounds, but am not a big fan of this.

I have been following web3 for a few years now, and then last year I came through a book “Life After Google, George Glider”. I can say reading this book was the pivotal point, where I became very much enthusiastic to dive into the blockchain space. My motivation has always been to learn more and more, and you can never learn without getting your hands dirty.

2. In your words, how would you get a layman to understand the concepts of Blockchain and Cryptocurrency?

When you look at the current internet architecture, which is dominated by companies like Google, Facebook, and others, you'll observe that every company has turned into a 3rd party service. These businesses have massive monolithic databases that serve billions upon billions of services every day. Let's take this article as an example: I never sent this article to you, but you're still reading it, thanks to 3rd party services that have stored my article and are delivering it to you.

However, a new internet system is rising, in which data centers will no longer be centralized. Rather than giving data to a single database controlled by a single company, we intend to give data to everyone. This may sound absurd, but it is incredibly beneficial. As a result, your data will be shared with everyone on the network in a system, without endangering your data's ownership. This system architecture is called a blockchain, promoting peer-to-peer interactions over 3rd party services.

In a blockchain, every communication is referred to as a transaction, and there are tokens that are used to incentivize a transaction. These tokens are called crypto tokens, and when they are used as currency, then they are called cryptocurrencies.

Insights on Cryptocurrency 3. Which are the major cryptocurrencies traded globally?

There are thousands of cryptocurrencies in the market right now, and new ones are getting registered as you’re reading it. In terms of value and popularity, Bitcoin(BTC) and Ethereum (ETH) are perhaps the most famous cryptocurrencies. The Bitcoin chain was started by Satoshi Nakamoto and Martti Malmi, which is considered the first blockchain which was publicly released to facilitate monetary transactions using BTC. Ethereum chain was started by Vitalik Buterin, which aimed to empower businesses to use the power of blockchain and their crypto-token is called ETH.

Later many companies have released their own tokens in order with their own blockchain networks. They all have been competing ever since. Not to mention numerous such companies failed, and many of them used this opportunity for scams too.

4. Could you share your insights on the challenges in handling the user traction in the Crypto industry?

More than 100 million users worldwide are trading with cryptocurrencies, millions of crypto transactions happen daily, and this number is increasing rapidly. CoinSwitch itself has crossed more than 7 million monthly active users. Not only users, but the number of coins is also increasing exponentially. From around 60 tokens in 2013 to nearly 10,000 tokens now, which is about 150x increment in less than a decade. Also, unlike the stock market, the crypto market is live 24x7.

Like it is said, with great power comes great responsibility, handling this huge massive user traction is a big challenge for every crypto trading platform. Companies spend massive resources on the latest technology and hiring the best engineers to construct reliable services. Since actual money is involved by users, they don’t tend to tolerate any kind of failure or glitches on the app.

5. What are your views on the 30% tax slab on income from Cryptocurrencies in India?

I have very mixed feelings about this flat tax rate introduced by GOI. This won’t bring large differences to big investors because they were already paying big taxes on the bigger profits they made. But if you look at the middle class and lower middle class, then earlier they use to pay 5-10% taxes based on their slab, which is now going to be flat 30%. Also, they don’t generally make big profits, and still, they have to pay a third of their profits to the government in form of taxes. So this is surely bad news for them.

But I think it is a good move, for now. Investing in crypto assets is very risky, and high government taxes can be a good reason for lower and middle-class investors to give second thoughts towards their investment portfolio, and they may put a smaller chunk of their portfolio in crypto-assets and a bigger chunk for assets with less risk. The Crypto market is very volatile now, and it’s better if users are cautious while making any investments.

Insights on Cryptocurrency 6. The current period of the downward trend in prices of Crypto tokens is regarded by many as ‘Crypto winter’, similar to what happened in 2018. What are your thoughts on it?

The Crypto market is very interesting when it comes to volatility. Every token is an independent token, not controlled by any entity, so whatever happens in the market, happens on the basis of shared beliefs. These shared beliefs often change by the opinion of social media influencers, or perhaps business tycoons. A very decent example is Dogecoin, which skyrocketed with Elon Musk’s tweet.

The fact that the current period is regarded as ‘Crypto Winter’ itself is a shared belief. If everyone is thinking its a downtime, that means people are scared, and surely prices will drop. I don’t think this will stay for long, one little push and every coin will start rising again. But again, nothing is certain.

7. What is your take on market volatility due to Cryptocurrencies not being recognized as legal tender in India?

In my opinion, cryptocurrencies have nothing much to do with legal tenders. The whole concept is peer-to-peer interaction, so it shouldn’t be affected by any 3rd party, say banks or government. Also, the Indian crypto market is very young, it is growing rapidly but still, compared to many other countries we are far away from them. Crypto market volatility is hugely impacted by the shared belief, and right now, India doesn’t contribute enough to the world crypto market share that its government norms will have much impact on market volatility. Therefore, cryptocurrencies not being recognized as legal tender in India isn’t going to be a big deal for the world market.

8. Your views on the classification of Cryptocurrencies as digital assets?

I am a software development engineer, and the way I look are crypto tokens is pretty straight, it is a mode to pay the gas fees while performing blockchain transactions. A lot of people have gained an enormous amount of wealth just by investing in crypto coins, and a hell lot of people have lost their life savings here. I can see these tokens to be actively traded for daily profits, and that makes sense to me, but I never understood how some people are convinced that a collection of crypto tokens can be an asset. I actively explore different opinions on this, but I haven’t reached any conclusion yet.

9. In your opinion, what is the impact of the Ukraine-Russia war on the Crypto industry globally?

Ukraine-Russia war has been impacting a lot of industries and of course, the Crypto industry is affected too. Many big countries are involved directly or indirectly in the war for different benefits, and it has negative repercussions to their businesses and financial sectors. Obstacles in business and financial sectors always negatively impact the public market, be in stocks or crypto. We have all witnessed a sharp drop in the market since the war is announced, and they are even expected to stay low for a good amount of time until we have some good news to improve the market mood index.

10. According to you, what would help increase the adoption of cryptocurrencies in India? Also, do share your views on the same for the global market.

Investment is something that has taken a sharp turn very recently in India. The number of retail investors is increasing rapidly, but still, the mass majority of India doesn't like to invest in public markets. Now if you look at the crypto market, which is much riskier, and not even governed by any official body like SEBI, and not to mention crypto coin is still an unsolvable mystery for a lot of people. So yeah, the adoption of cryptocurrencies in India has its own challenges. Thanks to companies like CoinSwitch which are investing heavily in educating people about cryptocurrencies and making them aware of opportunities and the consequences, I have high hopes here.

11. One quick piece of advice for first-time Crypto investors in India.

I am not the right guy to give investment advice, but I surely have some advice for first-time investors. Stay cautious while investing in any asset, and don’t just follow the hype. Make sure you do your homework, like at what price you should be buying and how long you are going to hold it, and when to sell it. And please don’t invest what you can not afford to lose. There are various resources to learn about crypto-assets and their trading, you should go through them, invest some time in learning before you jump into investing money for earning.

Image Credits:Image 2 & 3: Photo by Kanchanara on Unsplash

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Any facts, figures or references stated here are made by the author & don't reflect the endorsement of iU at all times unless otherwise drafted by official staff at iU. This article was first published here on 18th April 2022.

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