Industry Insights

Understanding the Crypto Industry Today, with CoinSwitch Kuber

Written By Aditi Chandrasekar | December 31, 2021

“We wanted to simplify the experience of buying cryptocurrency”

From this simple train of thought, grew a billion-dollar company. CoinSwitch Kuber is the latest entrant to the crypto unicorn club in India  —  their platform empowers millions of users to invest in crypto and witnessed a surge in its user base in the last year. While talking about crypto, it’s impossible not to also talk about blockchain, Web 3.0 and decentralisation; these were the gamut of topics we discussed with CoinSwitch Kuber’s CEO Ashish Singhal and CTO Govind Soni on HackerRankTV, recently.

Teamed with their insights, this blog post attempts to be a guide to understanding the crypto industry today. If you’d like to watch our conversation with Ashish and Govind in full, click below.

1. Do security and liquidity go hand in hand? 

In a stock exchange, assets are held in a depository. For example, the Bombay Stock Exchange holds stocks in the Central Depository Services Limited (CDSL). Trading crypto is different in the sense that the crypto exchange the trader is using, holds all their assets, making the security stack of a crypto exchange like CoinSwitch Kuber, that much more critical. 

“Today, CoinSwitch secures billions of dollars’ worth of crypto and we’ve laid out our security stack based on wallets.” said Singhal.

Here, wallets refer to where cryptocurrencies are stored. A cold wallet is one that’s not connected to the internet, which makes it near-bulletproof to attacks. However, it’s more difficult to carry out transactions in a cold wallet than a hot one, which is always connected to the internet, making it vulnerable to attacks. A third type of wallet — the warm wallet is similar to the hot wallet, with some minor differences.

“Since we are a part of a cryptocurrency exchange aggregator, liquidity is important to facilitate fast movements across exchanges.” continued Singhal, “This is where warm wallets and hot wallets prove beneficial for us; they provide liquidity for CoinSwitch’s operations and enable hassle-free transactions for our users.”

2. Fitting blockchain where it doesn’t fit.

When asked about the qualities they look for in hires, Singhal said, “Technical expertise comes second. What comes first are the problems they’re excited about; actual problems that blockchain can solve and not ones that blockchain is being forced to solve.”

He brought up a pertinent issue that blockchain adoption is witnessing today fitting blockchain where it doesn’t fit. 

Though the concept of blockchain was first introduced all the way back in 1991, it gained popularity only in the last few years, and many companies have since rushed to fit it into their tech stacks without evaluating if it's really the best available solution out there for their problems. 

This can cause complications down the road. The advantages of blockchain are many and promising distributing power from a central authority and immutable transaction records, but it also brings with it a cap on transactions and dispersed communication, among other drawbacks. Keeping these in mind, evaluating blockchain’s fit as a solution for a problem is a necessary first step to take.

3. Decentralisation as a harbinger of equity.

There is a dearth of boomers and millennials engaging in, and advocating for decentralisation today. On the other hand, a massive number of Gen Z folks are hurriedly investing in crypto, roaming in metaverses and establishing their presence in Web 3.0. When asked about it, Singhal said, “They (the older generation) have seen both the good and bad side of centralization They have seen businesses thrive because of a strong leadership and also, the 2008 financial crisis. I think most of them can predict the advantages and pitfalls of decentralization too.”

One of these advantages of a decentralised organization or system is that the rules are the same for everyone in it. Singhal explained, “There’s no denying that people of different social statuses are treated differently in centralised institutions today. The beauty of decentralisation is that it eliminates such bias.” 

At CoinSwitch, solving for equity is one of their top priorities. Singhal said, “We are trying to make money equal for everyone. Everyday, we’re trying to answer questions like 'how do we support all types and age groups of investors?’ and ‘how do we create opportunities for our users to grow their money?’” 

4. Crystal-gazing for the crypto industry.

The future is exciting — and uncertain. Web 3.0, blockchain technology and the crypto industry are all brimming with possibilities and Singhal and Soni had some predictions to make about the same. 

“The traditional finance industry and the crypto industry will work hand in 
hand in a new financial ecosystem.” 

As consumers demand faster, more secure and transparent services from traditional institutions, the advantages of adopting new-age technologies and joining forces with crypto companies loom large and clear for traditional banks and other financial institutions and many are already doing it In August of this year, Standard Chartered, a leading financial services company founded in 1969, made news when it invested in Ripple, a blockchain-enabled payment protocol and network.

“The next big technology company will emerge from the blockchain industry.” 

His prediction is not too far from reality. As Morning Consult’s latest report disclosed, 5 of the 20 fastest growing brands in 2021 were blockchain companies and there’s a massive exodus of talent happening towards these companies. 

“There will be two spaces that people will live in  the physical space and 
the digital space. Already, retail stores, corporate offices, and video games 
have established their presence in the metaverse.”

Though interest in metaverses like Decentraland and Axie Infinity has been growing steadily for a while, tech giant Facebook’s recent rebranding to Meta established the significance of virtual worlds. Companies are now rushing to grab a piece of land and set up shop in these metaverses, and become a part of the next generation of the internet.

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