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The Art of a Good Unicorn | Creating a Product-Market Fit for Your Crypto 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 seems that the fundamental trust in the traditional financial system has been somewhat broken, which is kind of the genesis of something like cryptocurrency. Perhaps the idea was to have something decentralized with limited circulation without a central entity controlling the fortunes.
PREMIUM Being a crypto entrepreneur in India could face Herculean challenges as, from a regulatory perspective, it is a difficult relationship with crypto without much legitimacy.
And among those who are considering being part of the crypto space, to what extent is it a monetary system or a medium of exchange or a barter system upon which the future economy would be built, as opposed to a medium of exchange for goods and services? Is cryptocurrency seen as a fundamental economic tool for the future or just another method of transaction?
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Being a crypto entrepreneur in India can be a herculean challenge because, from a regulatory perspective, the relationship with cryptocurrencies is difficult and without much legitimacy. And if someone invests their hard-earned salary in cryptocurrencies and something goes wrong, they may not be able to knock on the regulators’ door either because policymakers might consider cryptocurrencies as gambling.
In an interview, Vikram Subburaj, CEO and co-founder of Giottus, a crypto asset trading portal, answered a series of questions on crypto entrepreneurship in India.
So what does the crypto landscape look like for entrepreneurs in India?
Cryptography is a parallel technology, like the Internet, in which several industries are being redefined and transformed and even new industries are being created. It is also a horizontal technology capable of creating a network in a decentralized way. Traditionally, the benefits and value of a network belong only to the entity or company that creates it and this is where cryptocurrency comes in to spread this value to everyone. Think of those old dial-up connections where the network was very slow, but it could still do certain things; it is the promise of what it can do that we must keep in mind. We are currently at a stage where there is a limitation on the number of transactions per second, but this problem is being solved.
But what could this mean from a consumer perspective?
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It is possible that one does not want a centralized entity to dictate the terms of the digital media that people use. People should have a say in defining the rules of the technology, which proves the need for a decentralized system… Let’s say that people invest or own a particular cryptocurrency project. They have a say in the rules of the project, how the network works, possible sanctions, such as deducting a certain percentage or banning access to the network, etc.
So they set the rules by owning the network. And if that network really grows, it becomes like a decentralized nation with people spread out in different parts of the world. But imagine that on a smaller scale, where the rules and habits and characteristics are set and a culture is formed if the network survives.
But what could the use cases for cryptocurrency actually look like?
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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 yet to increase drastically is in regulation. So, there are sectors where regulation is the obstacle, not the product. And the amount of monetary gain that this will bring to the people who adopt it is much higher than that of existing systems and processes…
At the same time, there is no problem from a regulatory perspective and where adoption would be more cemented is the gaming industry, which has an imminent need in the form of NFTs, which are going to be very important in this sector. In 10 years, I predict that most of the infrastructure behind the payment and remittance markets will be run through cryptocurrency networks.
And how can we organize a product market that fits into the crypto field?
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Out of the 8-10 players out there, we are the only ones who have successfully launched and we are considered to be in the top 4 in terms of volumes. And we have not spent any money on acquiring customers, we have simply used our product and our referral program, which has allowed us to build a customer base of about 1 to 1.5 million customers…
At one point, there was an RBI circular that banned crypto entities from having a banking exchange. At that point, there were about 50 exchanges and it came down to about 10, which made our work much clearer. And then, a Supreme Court verdict lifted that ban a few years later… We also created models through which customers could buy and sell crypto in India and we were the first to launch those models. That’s how we got our first customer base. If we build a really good technology, our competitors might also build it in the next few months, so it’s not going to be a differentiator, so we had to build something where people feel like they are being looked after.
So what about the regulatory hurdles facing crypto entrepreneurs in India?
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From a regulatory perspective, India needs stricter taxation. Certain laws or regulations have the potential to kill the industry or create a scenario where the industry leaves India, with foreign entities encouraged. There should therefore be no disparity created by taxation. We see something like this even in an interstate form, where one state has a higher tax than the other, which leads to many illegal goods moving from state to state.
As crypto entities, we want to make sure that we are part of the engine that is trying to do good for the nation, rather than being sidelined or blamed for problems.
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Shrija Agrawal is a business journalist. The views expressed are personal.