Block-the-Talk; CoinSwitch’s Ashish Singhal on the importance of encryption in the blockchain

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Ashish Singhal, co-founder and CEO of CoinSwitch, a cryptocurrency exchange, talks about the need for research before investments and the importance of choosing the right investment platforms with FE Blockchain.

What are the three best practices young people today should follow when it comes to digital assets?

Crypto is a new form of financial asset. It is digital, and its prospects and future prospects rely on the adoption of the underlying digital technology. Young people today are internet savvy, spend more time online and therefore understand crypto than any other generation.

Yet even for such advanced technology, the time-tested investment mantras hold true:

  1. Do research before investing. It is important not only to understand the technology, but also the particular project in which you plan to invest. Research what the part is, what problem the part or project solves, what are the use cases, what applications use or build using the technology. Once you understand them, dig deeper and learn about the economics of the token – what is its supply and demand, what is the circulation, how many of these tokens will be issued and when and so on. The good thing is that all of this information is readily available. You can check out the individual project websites, read the white paper and information on tokenomics, or CoinSwitch’s educational platforms which cover this information in the form of articles, videos and more.
  1. Choose the right investment platform. There is no shortage of crypto assets or apps through which you can invest in crypto assets. The same due diligence that an investor performs on different projects should also be applied when choosing the investment platform. Is it a trustworthy company? Does it perform due diligence on the crypto assets listed on its platform? Does it give you the right information to make sound investment decisions? Does it follow strong KYC practices? Is the app secured with a PIN or password? All of this should be looked at.
  1. Never act out of fear or under peer pressure. Investment decisions should not be made under peer pressure or fear of missing out. Make your decisions logically and rationally. To help you, you can try features like SIP and limit orders which are designed to help investors make better decisions and not take irrational actions.

How can blockchain be used to ensure the security of digital assets? What apps can consumers use?

Crypto assets are built on the blockchain, which is a secure digital system for recording and verifying transactions. Blockchain uses an advanced security mechanism called cryptography to record and store these transactions. It is a proven encryption technology.

But an investor should also do their due diligence and follow good security practices. Choose an investment app that follows good security practices: it must verify your phone number, it must be secured with a PIN code, it must be secured with an OTP. These practices ensure that only you can access your app and that your crypto assets are securely stored on the investment app.

What three tips would you like to give to people getting into crypto trading?

  1. Understand your risk appetite. Each individual’s risk profile is different. Their income and expenses should be carefully assessed and their investments carefully planned. Only invest the amount you can afford according to your financial profile. You can start as low as Rs 100, to start with, for example.
  1. Don’t try to time the market. Young investors often try to time market movements to maximize their profits. While this may sound reasonable, research shows that returns on investment can be maximized by instruments such as SIP. By investing through an SIP, you reduce the possibilities of decisions based on FOMO. You set aside an amount of your choice to invest in a chosen asset at regular intervals. Rupee cost averaging helps you maximize returns and reduce risk.
  1. Maintain a provident fund. Every individual should have a provident fund. The pandemic has served as a reminder of the health emergencies that could hit us when we least expect it. Building a contingency fund for such emergencies is as important as investing in growth assets.

What do you think is the leading country in the field and the Indian start-up ecosystem can capture the best use cases?

Traditionally, the United States has led the technology race by creating a progressive environment for innovation and embracing new technologies. That’s why the biggest tech companies today are in the United States. But that is slowly changing.

India is increasingly pulling its weight in the technology race. This is especially true on crypto. Crypto is a new technology and hence the growth opportunity for India is immense. Even in the young days of this industry, we have seen that some of the most innovative crypto and blockchain solutions and applications come from Indian developers and entrepreneurs.

Recently, in the state of Uttar Pradesh, the police department has started using blockchain technology to record and track FIRs registered by citizens. Secure and transparent documentation is a great use case for crypto technology and one that can be especially beneficial for a country like India.

India should recognize this wave of innovation that is sweeping our startups and colleges. We have the talent, the startup culture, the investors and the users to be a Web3 superpower.

What are the pros and cons of blockchain?

Blockchain is a state-of-the-art technology for storing and verifying data securely. This data can be financial transactions, property documents, commercial invoices or a personal identity. All of this data, when stored on the blockchain, can be easily verified and processed. And this data is infallible – no one can erase the data stored on the blockchain or make surreptitious changes to it. On a public blockchain, data and transactions can be easily traced.

The advantages of this technology are multiple. Blockchain-based ownership documentation, for example, could reduce the document forgery and ownership disputes that are so common. Bank lending, mortgages and refinancing could be simplified and quick, as banks can easily and quickly verify documents on the blockchain. Small businesses could qualify for funding based on their invoices stored on the blockchain.

The only downside here is that there is an initial learning curve, as there is with any emerging technology. But learning and gaining new knowledge is how a country can innovate and stay ahead. And fortunately, India is moving in the right direction.

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