Is India missing on the Bitcoin wave?
For so many people, bitcoin seems against the natural order of things they know. In 1999, Douglas Adams wrote an essay on the natural lifecycle for technologies. This is what it says.
1) everything that’s already in the world when you’re born is just normal;
2) anything that gets invented between then and before you turn thirty is incredibly exciting and creative and with any luck you can make a career out of it;
3) anything that gets invented after you’re thirty is against the natural order of things and the beginning of the end of civilisation as we know it until it’s been around for about ten years when it gradually turns out to be alright really.
All of us in the world fall in the second and third categories when it comes to Bitcoin. But in the past few years bitcoin is being widely accepted favorably worldwide, including by the US government. In India the story is different. We are lagging behind. Except for a few startups trying to set up websites for trading, India doesn’t have full fledged bitcoin trading platforms yet. We don’t have definite data on how many bitcoin are held by Indians.
Besides the uncertain regulatory framework, awareness seems to be one of the bottle necks. According to Samuel Benson, India needs more learning outlets to generate mass interest about Bitcoin. A lot of schools and colleges are actively holding debates about Bitcoin in cities like Bangalore, Delhi, Mumbai, and Kolkatta, etc. This needs to grow virally and spread across India. He says, “Exchanges need to come up across the country as well. As a large population, localizing exchanges with state level presence is very important for Bitcoin in India.” Exchanges offer liquidity allowing people to get in and out of the market at ease.
After raising $250,000 funding from Barry Silbert's Bitcoin Opportunity fund in August 2014, Unocoin recently launched merchant services. They enable online and offline merchants to accept bitcoin and have it converted to rupees into their bank account the next day.
Harish B V, compliance and accounting officer of Unocoin, is very optimist that India will soon catch up on the bitcoin race. He says, “I feel that Indians tend to be a bit more risk averse than the rest of the world. They tend to watch from the sidelines at first, and then once they know that there is a clear opportunity ahead, they charge forward. Take the internet for example: It was not invented in India. India was slow to adopt. But now, one of India's leading sectors is the IT sector and is globally renowned for its talent. Regulation is also a concern for many Indians. The lack of regulatory clarity makes adoption even harder. Bitcoin is a very confusing subject and we understand that the government needs to take its time to understand. We are also very open to speaking to government officials at all levels and being transparent in all of our business matters.”
Harish also reiterates the awareness issues as a major concern. “India needs more people to recognize the astronomical benefits of bitcoin and then spread that message to their friends, family and co-workers. Bitcoin has taken over the media in places like North America, and China, etc. In India, the media has not done bitcoin proper justice. People need to take a deeper look into the technology and realize that India is in a position to benefit immensely from the widespread adoption of bitcoin.”
Another upcoming Indian bitcoin company is Zebpay, founded by Saurabh Agrawal, Mahin Gupta & Sandeep Goenka. It won the first prize in a bitcoin startup competition in Las Vegas. Sandeep, the Co-founder of Zebpay, believes “Bitcoin awareness in India really needs to go up as we are lagging far behind other countries, including other developing SE Asian countries.”
Zebpay Wallet will be live for public before the end of December 2014.
Sandeep has a word or two for Reserve Bank of India and Income Tax officers. He says, “The most important thing is government clarity on the following:
- Allow Bitcoins to be imported to India
- Allow Bitcoin Exchanges to operate without need for any commodity exchange licence
- Clarity on how Bitcoin will be treated in your tax books
In many countries, governments have played a proactive role in clarifying the above points. Besides clarity, we don't need anything else. If this happens, nothing can stop Bitcoin from becoming mainstream in the future.
Regarding raising funding in India by Bitcoin startups, it is hard. Sandeep says Indian VCs are absolutely averse of bitcoin investment compared to their Singapore & US counterparts. Investors in the US are hunting for bitcoin startups that can have huge impact in developing world in Asia and Africa. Mean while Indian VCs aren't getting their feet wet.
Another bitcoin startup that is making series stride is Coinsecure, founded by Benson Samuel and Mohit Kalra. The CTO & Co-founder of Coinsecure, Benson Samuel tells YourStory, “We are days away from launching a powerful tool to help people from across India enable themselves with Bitcoin. We have been in development mode over the past few months and thanks to a stellar team, we have a secure, fast and easy Exchange in place. We had earlier launched coinsecure.info - a block explorer aimed at India, a Paperwallet Service and news.coinsecure.in - a news portal that aggregates news about Bitcoin in India.”
He adds, “Our trade engine is now the focus for us at the moment, as we get a tool to finally direct people who want to get involved with Bitcoin. We launched as a mock trading exchange where each user is given test rupees and test Bitcoin. In order to make this a bit more interesting, we are rewarding the top 20 user balances at the end of its first month. It is still very early for India and we are hoping to see a lot more active participation through 2015.”
Beyond currency – Blockchain
More than the currency the underlying protocol that bitcoin is based on is exciting for many, blockchain. Using the Blockchain technology for the first time we can enable different people to securely exchange digital items without any prior relationship, over the Internet. Any document that requires authentication can be digitized and coded into the blockchain as record that is ineradicable where no one can meddle with it, except the authorized personnel who is given consensus by the community.
Benson Samuel suggests some possibilities, however wild it may seem now. He says, “Record keeping, mass surveys, population census, railway ticket authentication, the list is endless in terms of how India can leverage Blockchain technology. Several corporates and groups are already looking into maintaining their internal ledger on a Blockchain.” He is right on that. Recently, UBS CIO talked about the Blockchain as the best thing that can simplify banking. Top banks like ING, ABN Amro and Rabobank are all testing the Blockchain technology. It would be awesome for Indian developing on Blockchain technology tying it up with aadhar card to come up with innovative use.
Parting thoughts
Here are the thoughts of Harish Bv from Unocoin. He says, “There are a few very important ingredients which are only present in the Indian ecosystem that we can use as an advantage to push bitcoin revolution forward.”
$500 Billion Gold Market: About 181 million families in India hold an average of 64 grams of find gold ($3,000 USD). Bitcoin is often referred to as digital gold.
$100 Billion Remittance: Remittances to India grew to $100 billion to 2013 - 14, highest amongst countries receiving remittances from overseas workers. Bitcoin may be used to reduce the cost of remittance by an order of magnitude.
Banking the unbanked: 40% Indians (~480 million people) have little or no access to financial services. Bitcoin is built in a way to integrate with sms technology, thus making it viable to bank the unbanked in India using existing cell phone technology.
Mobile phone adoption: There are 900 million mobile phones in use in India. These phones may be used to hold and transfer bitcoin.
Information technology: The Indian Information Technology sector aggregated revenues of $120 US Billion. There are millions of people in India who clearly have the technical aptitude to appreciate bitcoin for what it truly is: open source code.
The fact that the U.S. government is now favorably looking upon bitcoin is definitely paving the way for mass adoption in India. People are beginning to realize that this is really the future. In the US a user can spend his/her bitcoin in over 20,000 places that accept bitcoin, including Amazon, Expedia, WordPress & Wikipedia. Indian users and merchants, your move now.
