The Curious Case of Window Shopping over Cryptocurrencies
If you have ever wound up at a shopping mall by yourself with an inordinate amount of time on your hands, chances are you have come across a few different types of shoppers! My favourite of these categories is the seemingly enthusiastic window shopper.
Of late, I have found that the moves of the Indian government with regard to the crypto industry are increasingly beginning to mirror the manoeuvres of a professional window shopper.
Do they love it? "Yes!"
Will they take it and make some space for it in their old and prosaic wardrobe?
"Uh, no, not today!"
To be, or not to be, that is the question
It has hardly been long since a report and draft bill prepared by a Subhash Garg-led Inter Ministerial Committee (IMC) seemingly snuffed away the possibility of India embracing crypto as legal tender.
More recently, however, a Steering Committee report, drafted under the leadership of the same Garg, a former Department of Economic Affairs Secretary, has taken a slightly different stance.
Without explicitly distancing itself from the similarly constituted IMC report conclusions, the new Steering Committee report has waxed eloquent about the merits of crypto.
However, it is crucial to note that the latter has focused almost exclusively on the role of crypto tokens, without exploring what it would mean for us to actually use crypto as what it was originally meant to be: a form of currency!
The Steering Committee, which was tasked with assessing the newest contours of the global fintech space, eulogized the role of crypto tokens quite liberally. Having categorised them into two main categories of security and utility tokens, it said:
Use of digital tokens resolves the issue of multiple currencies, improves liquidity and capital compliance costs, allows for micro-payments and expedites the payment process, which further eliminates liquidity risks.
Furthermore, the report explored the use of the ICO model for fintech businesses eager to raise some much-needed capital, and noted that ICOs and other crypto-related mechanisms were responsible for "revolutionising" the crypto space altogether. If I were to judge by the tone of this report alone, I'd have to say that the Indian government is finally warming up to the possibility of embracing crypto and much of what it embodies, if not all of it.
Yet, that would be a little too naive for me to assume.
After all, the much-debated Inter Ministerial Committee report, which (in)famously recommended a definitive crypto ban, had also admitted to the virtues of the space.
It had accepted that it recognizes that technological innovations, including those underlying virtual currencies /crypto tokens, have the potential to improve the efficiency and inclusiveness of the financial system.
Regardless of this unequivocal admission, the said report had gone on to suggest a ban on crypto in its original form, instead proposing the adoption of a watered-down model of a Central Bank Digital Currency, that strikes at the very root of decentralisation as a concept and takes away from the sanctity of crypto.
As I see it, the new report is symptomatic of the same window shopper syndrome that the Indian authorities touring the crypto marketplace have long been guilty of. Just like the habitual window shopper who lights up in excitement at the sight of the latest wares but refuses to loosen his purse-strings, the Indian government has persistently been blowing hot and cold on the question of crypto adoption. In fact, Finance Minister Nirmala Sitharaman herself had referred to the report proposing a crypto ban as being "very futuristic and well-thought out", making a volte face unlikely anytime soon.
The latest report is merely an evaluation of the fintech space as a whole, without commenting on what it would be like to integrate crypto into the system.
It is not the first time an influential entity has engaged in some noncommittal crypto browsing. The cryptoverse has long been accustomed to the love-hate relationship between crypto and finance behemoth JP Morgan. Although the latter has seemingly bridged the gap with an intriguing crypto project to introduce the new JPM Coin, diehard crypto loyalists are still quite skeptical about the corporate commitment to true blue decentralisation.
All that glitters is not gold
However, what worries me more than the iffy reluctance of major players such as governments and corporates, is the unwillingness of an overwhelmingly large section of laymen to commit to the blockchain and crypto ecosystem.
The Indian authorities' frustrating ambivalence makes me think that - like in brick and mortar shopping malls - the crypto world also has far too many of these indecisive window shoppers. Sure, there are more takers for Bitcoin than ever before, and quite a large section of new techies are signing up to ride the blockchain wave nowadays. But, leaving the loyalists and the materialistic profit seekers aside, there are hardly enough laymen looking to transition to a decentralized world powered by blockchain or run by crypto. Yet, somehow, the lack of user adoption simply does not seem to be at the forefront of the crypto-blockchain community's concerns.
If one rifles through the unending blog posts and discussions on blockchain on the internet, one would see that most of these discussions focus on the need to scale blockchain systems. "Scaling" has been the buzzword in the crypto-blockchain space for way too long now, and I honestly don't see why that is the primary concern while we are yet to win over such a massive section of the population originally meant to benefit from the supposedly "revolutionary" wave of decentralisation.
Every other day, I come across a new use case for blockchain, or yet another crypto launch, even as the number of actual users, remains painfully scanty in proportion to the barrage of blockchain innovations being sent out into the world.
Fair is foul, and foul is fair
It has been over ten years since Nakamoto launched #Bitcoin to be the go-to "peer-to-peer electronic cash system" and I, despite being quite the crypto enthusiast myself, am yet to pay for a cup of coffee or a magazine with the "revolutionary" cryptocurrency! Yet, that has not stopped crypto innovators from coming up with hundreds and thousands of new cryptocurrencies at a frightening frequency instead of fixing the primary problem of user adoption that lies at the core of a simple cryptocurrency system. Even the #Ethereum ecosystem, which is an undeniably smart blockchain network with great applicability, has a woefully low number of users.
If you have watched as many Shark Tank episodes as I have, you would know that the thumb rule for any promising yet nascent #startup is to not scale too much too soon. The blockchain industry is fast becoming a poster boy for exactly that kind of a mistake. Instead of consolidating its base and sustaining the merits of its core applicability and attracting more users first, it is expanding too much way too soon, without as many takers it would have had, if it had gone a tad slower.
Looking at the blockchain and crypto industry as it stands now, it increasingly feels like I am staring at a parade of snazzy and gimmicky innovations that play to the gallery instead of consolidating the base first. Somewhere, along the way, we seem to have lost the original notion that lay at the heart of the blockchain system: to reach out to as many people as possible and free them from the shackles of centralised control of their finances or data.
Going back to my shopping mall analogy, it is safe to say that the owners of the mall wouldn't continually amp up their offerings without winning over at least a section of their noncommittal window shoppers first. If they did, even a child would call them out on their idiocy.
Similarly, it seems to me that it is high time that the crypto-blockchain space set out to accomplish a higher user adoption first, before dishing out some more fancy use cases that will not even be implemented adequately in the real world.
Of course, the Indian authorities may be a lost cause as far as crypto is concerned, but there are many users left to be enlisted to actually use the multifarious blockchain applications that have piled up over the last ten years.
It is perhaps best to focus on that, before we go building some more use cases that are impressive only on paper!