Crypto Basics – Introduction, Blockchain, Regulations & Why It’s Necessary

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Feb 18, 2022

Crypto Basics – Introduction, Blockchain, Regulations & Why It’s Necessary

Transcript:

Bhumika Shah: Hello and welcome folks. Hope you all are doing well today. I am Bhumika Shah. Welcome to the Public Accountant on Purpose, a podcast setup initiated by Unison Globus. And here we are today to discuss the most buzzed topic of Millennium, the Crypto crux series.

We invite Mr. Tejas Ghadiyali, a prominent member from Unison to have an unfiltered conversation with us about crypto. Thank you sir for being with us.

Tejas Ghadiyali: Thank you Bhumika for inviting me to this wonderful podcast.

Bhumika Shah: So let’s start with the most basic question. What is Cryptocurrency?

Tejas Ghadiyali: I would say it is a collection of binary data encrypted that can be stored as well as used as means of dealings. It is irredeemable.

Bhumika Shah: Right. Okay. So how would we define that?

Tejas Ghadiyali: Blockchain is a ledger representing the transfer of all Bitcoin back to the Genesis block. There are actually three types of blockchain, public, private and hybrid.

Public, you can say Bitcoin or Ethereum.

Right?

The second is private. You can bifurcate into a single entity and multi-member, Single entities like a government or any group of a business organization use that. Multi is kind of a federated model.

And the third, which I say is a hybrid model that is a kind of public and private where there is more than one network member. Hybrid blockchains incorporate Select Privacy, security and auditability elements required by the implementation.

Bhumika Shah: Right. So it’s a mix of both private and public.

Tejas Ghadiyali: Correct.

Bhumika Shah: What are the prominent characteristics of Blockchain?

Tejas Ghadiyali: Great. Thank you for this question. There are basically four fundamental characteristics. The first is censorship. That’s very important. Censorship is like it’s a suppression of speech and information. Public blockchains like bitcoins are censorship-resistant. There is no third party or centralized control which can censor the network.

The second most important thing is, “Borderless” – there is no geographical limit, as the name suggests. There are no legal jurisdictions. It is the first global financial network to operate the same for everyone everywhere.

The third is neutral. There is absolutely no bias. It operates on predefined protocols and algorithms.

Fourth is it’s also open. It’s like freely accessible where innovation happens rapidly.

The developers can access the code without permission.

Bhumika Shah: Right.

Tejas Ghadiyali: Yes.

Bhumika Shah: So here we have one part of the podcast series which we call Million Dollar Question.

So how would you describe the impact of cryptocurrencies on the global economy? Is it an alternative to the traditional financial system?

Tejas Ghadiyali: To an extent, I will say yes. As Bitcoin was originally designed with the purpose to transform the existing financial system and remove the financial intermediaries, it has the strong potential to affect the global economy. It can function both as a safe haven asset in some cases for many of its attributes like storage, security, portability.

On the other hand, experts are having an ongoing concern about the Bitcoin collapse. You might be aware that a lot of governments are introducing bills to regulate the coins and that can spark a global financial crisis because of a lack of intermediaries.

So regulations are absolutely important. That’s what I believe.

Bhumika Shah: Right. But as a crypto enthusiast myself, I personally feel like it is the basic reason that it is yielding higher returns because it is not having any regulations. Isn’t it the most fascinating part about it?

Tejas Ghadiyali: Yes. But it also exposes the economy and investors to unrealistic and unforeseeable risks and losses.

However, people are also losing a lot through scams, ICOs and coins. Because the market is so unregulated. Scammers can launch scam coins. They are pumped into the market and the investors put in their money. Still, the project owners go away and take away the money to investors who have worked fewer tokens or codes that are delivered by the exchanges if regulation exists.

Bhumika Shah: Right. Though a large part of the investor community and the huge investors do say and according to that tweet, they aren’t in the favor of regulation because their identity would be revealed and they may withdraw their large chunk of investment from the market.

Tejas Ghadiyali: Yes, maybe. But that’s possible threat regulators are ready to take as they view the market from a holistic view benefiting the investors committed at large. So I would explain to you technically, it’s a travel rule. For example, it’s dividing crypto assets into regulated and unregulated versions of markets. But if crypto investors act identities are attached to assets running through flow lot is going to get sorted and clean the market.

I will also say that regulators and exchanges can identify money laundering through virtual currencies and isolate it easily. It’s going to reduce the amount of crime, terrorism and the stakeholders can trace their cryptocurrencies origins with verified and real-world identities on the blockchain. That way you can utilize the blockchain to its full potential. Win-Win! Right? Does it sound great?

Bhumika Shah: So this way we can break the misconception of many people who are not investing in thinking that it is used only for illegal activities. But now we can invite a large group of potential investors.

So thank you, Mr. Tejas, for being with us today.

Tejas Ghadiyali: Thank you, Bhumika.

Bhumika Shah: Introducing us to a more practical and feasible approach to view cryptocurrencies and let’s pledge to healthy investing.

Tejas Ghadiyali: Absolutely. Thank you.

Bhumika Shah: So, folks, stay tuned with us for the next episode of the accounting treatment of cryptocurrencies. Till then, stay blessed. This is Bhumika Shah. Signing off. To connect with us, Visit our website, www.unisonglobus.com. Unison Globus beyond outsourcing.

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