Can cryptocurrencies and NFTs change the world for good?- The New Indian Express

In the sci-fi universe of Marvel and DC, superheroes and supervillains from other galaxies are constantly fighting over the fate of the world. Many a time, there is little difference between good and evil, as exemplified by the Incredible Hulk or the black-suited Spider-Mana grey moral area where power corrupts. All superhero stories are about state control, disruption and superweapons. But the plot is the samecontrol the earths economy and run the cosmos. The superhero of the day now is Cryptoman who was created by a mysterious digital vigilante or group named Satoshi Nakamoto. This is their story.

AD 2008. An age of invasive government. The Orwellian nightmare of an omniscient and omnipresent system that monitors every aspect of an individuals life had dawned. Nothing was a secret from the governments prying eyes. The miraculous solution was worthy of the Matrix trilogy a galaxy made up of billions of strings of code populated by planets of which the largest is Planet Bitcoin. After the virtual Big Bang came other smaller altcoins like Etherium, Cardano, Avalanche, Ripple and more, all fighting to reduce Bitcoins gravitational pull.

Bitcoins origin is also the story of its enigmatic creator. In 2008, the evasive Nakamoto bought the domain name .org and uploaded an academic document titled Bitcoin: A Peer-to-Peer Electronic Cash System. It was his manifesto of individual financial freedom, outlaying the theory and design of a new digital currency system beyond government control. Nakamoto wrote: The root problem with conventional currencies is all the trust thats required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. An idealist, like all anti-establishment heroes, Nakamoto believed in trust of a different sort.

A year after sending Bitcoin into its orbit on January 9, 2009, the mystery man or woman disappeared, leaving the most powerful economic project since the Industrial Revolution to its own fate. And what a fate! Just like Banksy in art, claimants to Nakamotos identity crop up at various intervals, the latest being Craig Wright, an Australian computer scientist. The comparison of Nakamoto with Banksy is spot on, considering both are secretive, faceless figures who command the power of billions of dollars; Banksys artwork Love is in the Air is being chopped up into 10,000 fragments, each to be owned by a different person, thus democratising art. But more on that later.

Superheroes love to untangle mysteries. Cryptomans software is transparent; an open source that can be viewed, used and to which more code can be added for free. Many companies and organisations, including MIT, are engaged in constantly improving Cryptomans weapons systems. What is his secret sauce? You dont need real money to purchase Bitcoin and its fellow travellers, but you can exchange them for real money. Does Bitcoin have a physical form? Yes. Mike Caldwell from Utah created $85 million worth of physical gold-plated brass coins, which he named Casascius Bitcoins. Each one is tied with the Bitcoin server and possesses a unique Bitcoin address. How can you cash a Casascius Bitcoin? By using a redeemable private key. Where is the key? Hidden under a hologram on the coin, it enables an online payout. To check for tampering, simply peel off the hologram sticker and check if the honeycomb mark is intact. Unfortunately for the coiner and hiscustomers, the US government shut him down.

How did Nakamoto, the Tony Stark of cyber finance, envisage Cryptomans system? In the crypto galaxy, digital money is power. Cryptomans power is not tethered to a specific location unlike Supermans; no digital bank, no vault. Nakamotos genius lies in Bitcoins nervous system called the blockchaina series of contiguous interlinked data blocks. The process is as much fun as it is tougha bit like a metaphysical puzzle in The Matrix Revolutions. Tech geniuses race each other to solve complex mathematical puzzles on a worldwide network of super-sophisticated computers (nodes). Each time a puzzle is solved, a new coin is generated. Then the process starts all over. This entire operation is called mining in crypto lingo.

During mining, thousands of data transactions are sparked in the nodes’each Bitcoin block holds over 500 transactions, with an average size of 1MB at the source. The chain of data blocks makes up a shared digital data ledger on which all activity and information within the chain are recorded concurrently according to the Proof of Work (PoW) protocol. So, no cheating, no tampering. The ledgers are stored across thousands of different servers internationally. Blockchain is so transparent that anyone on the network can see and verify all the entries in real-time as the blocks fill up with new data. Bitcoin Cashs block size could even be 8MB. Here comes another Matrix twist in the I am Morpheus and I have to find Nemo red pill, blue pill saganew Bitcoins continue to enter circulation as they are mined, but there can only be 21 million of them at any given time. Of these, 18.77 million have already been mined.

Hence, 83 percent of all the Bitcoin that will ever be born are already in circulation within 12 years of its creationAgent Smith, go figure. Moreover, the number of Bitcoin is halved every four years in a process known as halving events. A plus is that any Bitcoin unit can be subdivided into smaller units. The smallest Bitcoin unit extant is the satoshi (0.00000001 BTC.) But it can get even smaller should Bitcoins value grow to the stage when more reduction is possible. As of November 2021, there are 13,768 full nodes mining Bitcoin. The number is only growing. But security could be sketchymost Bitcoin owners and users got their tokens not by mining but by buying and selling on cryptocurrency exchanges.

So, how safe is Bitcoin? Should a cyber baddie wish to hack the blockchain, he or she would need to use up 51 percent of the computing power that mines Bitcoinnearly impossible to achieve because of the cost, gigabyte and time involved. This is not to say Cryptomans defences cannot be breached. Rare instances have occurred when hackers took control ofthe majority of the computing power and executed a fiendishly clever tactic which MIT Tech explains. Send users some Bitcoin, then rewrite the existing blockchain ledger. This new ledger becomes the real ledger with all the money. This heist is called the 51 percent attack, no explanations are needed.

And accidents happen. A man accidentally lost his hard drive containing 230 million of Bitcoin. Another investor forgot the password for his 175-million cryptocurrencies; he has only two guesses left. How will Cryptoman keep peoples money safe since billions are at stake? There is a safety hatch; should the baddie manage to crack a system, miners would simply create a brand new blockchain, rendering the attack futile through forking. Forking is the creation of a new type of Bitcoin with a new name. In a hard fork, the new coin shares its transaction history with Bitcoin up to the exact point when it splits. Then a new token is created, such as Bitcoin Cash (August 2017), Bitcoin Gold (October 2017), and Bitcoin SV (November 2018).

All Bitcoin tokens are stored in digital wallets. Each token has an exclusive public and private key. The first key, which is akin to a bank account number, is the visible address to which others can send digital money. The latter, much like an ATM PIN, is top secret and is only used by the Bitcoin wallet owner to send money. These keys are basically long strings of encrypted data linked through the same mathematical algorithm that creates them in the first placeSpielberg, please note. The Bitcoin wallet can either be a physical or digital device for trading Bitcoin and monitoring the ownership of coins. As of now, the four blockchain networks are public blockchains, private blockchains, consortium blockchains and hybrid blockchains.

Superheroes from Cyclops to Black Widow have pluses and minuses. The same goes for Cryptoman. With hackers, ransomware blackmailers and other baddies prowling cyberspace to hijack bank accounts and intercept money transfers, Cryptomans protection ensures that cryptocurrency is both the best investment and trading instrument. Blockchains are meant to be hackproof since payments happen in a totally safe and secure environment. However, Cryptoman has to buck up. So far, exchanges are targeted in most cases and not the blockchain itself. The majority of such hacks are phishing and malware attacks that con gullible people to give out their credentials. Sometimes keys to cryptocurrency wallets are stolen to raid money stored in the blockchain.

Smaller currencies are cheaper to take over. In 2014, the Japanese Bitcoin exchange Mt. Gox had to close down after millions of dollars worth of Bitcoins were spirited away by hackers. In 2017, cybercriminals exploited weaknesses in the technology to carry out a $2 billion heist of blockchain cryptocurrency. Last year, a hacker took control of Ethereum Classics network and stole around $1.1 million. The money was lost forever since any Bitcoin transaction can be reversed only if the recipient refunds it. Crypto transactions have taxmen yelling in frustration, since all payments are 100 percent encrypted, and cannot be checked by officials. Cyber currency is also the best method now to make anonymous payments since user privacy is protected.

What makes cryptocurrency a great monetary asset is that Bitcoin or Ethereum can be transferred to an end-user without institutional approvalthe receiver reveals his private key to the sender and hey, presto! There is money in the bank! No transaction fee, no paperwork. Unlike conventional online banking, credit cards and e-wallets, cryptocurrency payments cannot be declined and land in wallets seconds after a transaction. This is a big downside for Cryptoman, since any terrorist, drug trafficker, dodgy politician, crooked businessman and hawala operator can move dirty money around without oversight or leaving a trail.

Should a technical flaw in the cryptocurrency wallet cause all coins to vanish, claiming the money is hopeless since no agency controls the wallet. The loss cannot be reported simply because there is no one to report it to. What is Cryptomans advice? Choose a wallet according to good, trustworthy reviews and learn the current countrys policies regarding cryptocurrencygovernments have the power to freeze the wallet and the money. China and Egypt have banned cryptocurrency and India is on the way to regulating it. Volatility is a big bummer in the crypto universe since the market value of a digital currency is highly volatile.

Bitcoin was dealt a blow when Elon Musk changed policy by refusing to accept it for Tesla purchases last year. In May 2021, cryptocurrency crashed by $800 billion, bankrupting many investors. It is foolish to assume that Cryptoman, like all superheroes, is impervious to global upheavals. Early in January, China banned transactions of cryptocurrencies and ordered the total shutdown of Bitcoin mining in Sichuan province. But Planet Bitcoin is still the big daddy of the pack, its price having gone up from less than $1 in 2011 to over $68,000 as of November 2021. Such an intangible element commanding a high valuation (a total market cap of $1.11 trillion as of November 2021) is unprecedented in the history of moneyin the world.

Cryptoman has done the creative arts a favour, besides creating new products and a new marketplace. The Big Crypto Bang led to the big NFT (non-fungible token) Bang, a virtual billion-dollar bazaar that deals in creative products like art, music, videos and outlier products. The word fungible means something that can be exchanged. For example, money is fungible, shares are not. Hence, while one Bitcoin can be exchanged for another Bitcoin, NFTs cannot be, although they can be individually sold and traded. An NFT is a unique collectible created by an artist, musician, sportsman or even a selfie. These are stored on a blockchain ledger, transforming them into unique digital assets with verified certificates of ownership.

They can be bought with cryptocurrencies such as Bitcoin or Ethereum though NFTs work best in Etherium. They are artworks, real estate or rare first editions that cannot be replicated. The idiosyncratic nature of cyber money has made them the worlds new Super Goods. An NFT can either have multiple buyers or a single owner. Or can be broken into pieces like Banksys work. However, the cryptocurrency comparison ends there. NFT has no kryptoniteeven if the original item has vanished, proof of ownership lies in what it is linked to; books, music, art, memes, tweets, digital collectables, digital drawings and new media art. Whats more, the non-fungible bubble is constantly expanding. Twitter founder Jack Dorsey sold the NFT for his first Tweet for $2.9 million. The NFT for the Charlie Bit Me video on YouTube of a baby biting his brothers finger which gotover 800 million times sold for around 500,000.

Cryptoman is doing what superheroes are good atgiving power back to the people, helping the arts thrive and survive and economies expand horizons with innovations. But if Spidey can get infected with Venom symbionts and become a dark version of himself, Cryptoman must watch out for the sneaky supervillains hiding in the financial firmamentgreed for money, power lust, crime and treachery, all traits that have haunted civilisation since the first prehistoric artist drew a picture on a cave wall. Now, that could be one helluva NFT.

How to Invest

By Darshan Bathija, CEO & Co-founder,Vauld, a Singapore-based crypto platform

1. Begin by researching each coins tokenomics, or the factors that impact the demand and supply of tokens

2.When you are starting out, a two-four percent exposure to digital assets is recommended

3.Diversification of a portfolio is recommended, which is why even though Bitcoin rules the roost, look at other cryptos to distribute your funds

4.Look at a projects USP that includes its supply conditions and its raison detre. Whether the coins supply is finite or not can determine its worth. Every project tries to solve a bigger problem, and this narrates the coins reason for existingin the market. Look at transaction cost, transaction speed, divisibility.

5.The final step is to have a wallet, an online app that can hold your currency. You create an account on an exchange, and then you can transfer real money to buy cryptocurrencies.


What is it?
Cryptocurrency is a digital payment system that doesnt rely on banks to verify transactions. It lets you buy goods and services, or trade them to make a profit. When you transfer crypto funds, the transactions are recorded in a public ledger technology called a blockchain. The word crypto in itself refers to a system of encrypting and decrypting information, which is used to secure transactions between users. Advanced coding is required to facilitate this process. The first cryptocurrency was Bitcoin, which was founded in 2009 and remains the top cryptocurrency.

How Does it Work?
Crypto works on a sophisticated public ledger technology called blockchain that digitally records data and keeps track of all transactions. Simply put, a blockchain is a virtual chain of blocks, each containing a group of transactions and data. Once fed into the system, the information becomes immutable. Units of cryptocurrency are created through mining, a process that involves solving complicated mathematical problems that generate coins. One can purchase currencies from brokers too. You can store these in whats called a wallet. Transactions include bonds, stocks, and other financial assets.


Founded in 2009, it isthe most commonly traded cryptocurrency

It is a blockchain platform with its own cryptocurrency, called Ether (ETH) or Ethereum. Developed in 2015, interest in it has increased in the lastfew months.

Set up by Charlie Lee in 2011, it is similar to Bitcoin. The coin has built its credibility because of faster payments and processes that allow more transactions.

A distributedledger system that was founded in 2012, it is used to track different kinds of transactions and not just cryptocurrency

How to protect your crypto wallet
By gaining access to a Bitcoin owners computer hard drive, a hacker can steal their private encryption key and transfer the stolen Bitcoins to another account. To prevent this from happening, store the Bitcoin on a computer not connected to the internet, or use a paper wallet by printing out the Bitcoin private keys and addresses, and erasing them from the computer.

Kumar Gaurav Founder and CEO, Cashaa
The crypto economy is leading to the development of an alternative financial and technological infrastructure that is global, open-source, and accessible to all who have access to the internet, regardless of nationality, ethnicity, race, gender, and socioeconomic class. 2022 will see India leading the world in deriving utilitiesfrom this disruption.

Manoj Dalmia Founder and Director, Proassetz Exchange
The biggest advantage is that crypto is a 24×7 asset class. People dont have to worry about market movements over the weekend. There is a quick settlement and low fees in comparison with traditional markets. Also, crypto assets are a non-correlated asset class because crypto markets largely function independently, and their price action tends to be determined by factors other than those affecting stocks, bonds, and commodities.

Suman BannerjeeCo-founder and CIO, Hedonova
One of the biggest risks with crypto that isnt spoken about much is its irreversibility. Theres a risk that encrypted data may be unrecoverable in case a user loses or forgets the private key necessary to decrypt it. Once a crypto transaction is made, there is no central body to appeal to for reversal.

Abhinav R Soomaney Forensic and Cryptocurrency Expert
Cryptocurrency offers more yearly interest than normal banks. There are no minimum limits, and you can buy and trade cryptocurrency from as low as `100. Cryptocurrency also revolutionises sending money to anyone anywhere in minutes.People think this can be a way to launder money, but it is clearly present in theblockchain ledger and is impossible to manipulate it.

Abhishek Malhotra Managing Partner, TMT Law Practice
We expect the new crypto bill thats to be tabled in the Budget Session 2022, to impose onerous licensing requirements, with mandatory disclosures for the sake of compliance with KYC, prevention of terrorism funding, foreign exchange management provisions already in place in India. We further expect the introduction of stringent financial/ auditory declarations by individuals/entities, which engage in cryptocurrency trading, in line with the notification of the Ministry of Corporate Affairs in 2021.


NFTs allow creators to make moneydirectly from their work
All NFTs are collectables in that only oneof each kind can exist
You own digital collectables that arenon-fungible
It allows artists and content creators toretain their full copyright
People can earn a living from reselling NFTs, making them a popular investment option
You become a part of evolving technology as this has the power to shift consumer behaviour
Blockchain allows clear ownership records of all NFTs which is otherwise hard to maintain

Lack of personal connection with regards to viewing art physically
NFTs can be complex and confusing to understand and even when you buy an NFT art, youre not buying the copyright to the art
Environmental ramifications of blockchain technology cannot be ignored; computing involves a large amount of energy
NFTs are part of a highly speculativemarket and their worth as a long-term investment is not clear
Not all exchanges are credible. They dont follow security protocols, a result of which is security breaches and theft of NFTs

Crypto around the World

US – Cryptocurrency exchanges are legal. However,the federal government does not recognise cryptocurrencies as legal tender.

UK – It does not have any crypto laws but does treat them as property. They are not considered legal tender.

El Salvador- The only nation to recognise Bitcoin as a legal tender, it is planning to build an entire city based on Bitcoin

ISRAEL- Cryptocurrencies dont fall under the legal definition of currency, and neither are they a form of financial security,but they are a taxable asset

CHINA – It does not allow the circulation or exchange of cryptocurrencies

CANADA- Only the coins issued by the Royal Canadian Mint and notes issued by the Bank of Canada are legal tender. Bank of Canada is experimenting with token-based digital currencies.

Germany – It looks at digital currency as a financial instrument.Citizens can buy or trade crypto assets as long asthey do it through exchanges and custodianslicenced with the German Federal Financial
Supervisory Authority.

Gaining currencyin india

There have been talks about the RBI working on introducing the central bank digital currency (CBDC) in a phased manner. The main reason is the decrease in the usage of paper currency over time, especially since the pandemic struck. This will be a mass-scale digital asset in the form of a tender, which will have similar functions to existing currencies. It will be legal with the backing of an existing financial body. The CBDC can be exchanged with fiat currency.

From Ban toRegulations

The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 seeks to prohibit all private cryptocurrencies but allows for certain exceptions. However, there may be a further delay in its implementation. It may now be heard in the upcoming Budget Session.
Reports suggest that the proposed bill has replaced the word cryptocurrency with crypto-asset
India has reportedly gone from its stand on prohibiting all private cryptocurrencies in the country to allowing them with exceptions and regulations to promote the underlying technology of cryptocurrency

Their Crypto Story

Mrinal Desai Sonipat, Haryana
Desais button unit wasnt making much business, so he broke three FDsa substantial part of his savingsto invest in two well-performing cryptos. One did well over time but the other sank his money. Desperate to recover his lost fortune, he took a loan to further invest. He lost that too in the recent Bitcoin crash. Desai now desperately hopes for the pandemic to end and his business to revive so that he can pay back the loan amount at least.

Crypto is a bubble that can burst anytime. Nobody is immune to it.It is akin to gambling. Unless you have buffer money, do not investin cryptocurrencies.

Anuj Suvarna Bengaluru
After the crypto bear market ended in late 2019, thiscommunication professional started putting money in it.He has invested in projects such as Cardano, Polkadot, Nano and some others. Suvarna invests 40 percent of whatever he saves incrypto, and the rest in equities.

My investment has seen a 40 percent jump in value. Despite the happy news, I have learnt that crypto is extremely risky. It can really mess your mind too, so one must conduct preliminary research before trading. Due to its unregulated nature, it is prone to scams as well. Buy and hold in accordance with your risk appetite. Also, dont open the trading app every day.

with Smitha Verma