India is walking fast on a digital future roadmap and its slowly but gradually settling in the minds of developers and technology leaders across India that blockchain is the revolutionary technology for the Digital India promising advanced security mechanisms and improved connectivity.
Blockchain is much more than only cryptocurrency and thats something government of India is slowly beginning to understand and therefore is adapting (or is trying to) blockchain technology extensively.
Here’s how Blockchain Technology and Artificial Intelligence together can help businesses gain a competitive edge, as per our discussion with Santhosh Palavesh, Chief Digital & Innovations Officer of Belfrics.
Santhosh is responsible for developing blockchain-based solutions at Belfrics for Indian conglomerates, Banks as well as state governments.
Tell us something about yourself and what does Belfrics do?
I am Santosh Palavesh and I have 10 years of digital transformation experience. I mainly focus on digital transformation. I have been traveling in the blockchain sector for all most 2 to 3 years now. I handle marketing digital and innovations at Belfrics. Belfrics as you know it’s a multi-vertical blockchain group. Belfrics is split into Belfrics exchange which is the largest revenue making vertical, we are in over 7 to 8 countries live at the moment. In these countries people can register on our platform and start buying and selling or trading in crypto currencies.
Belfrics BT is a software vertical, which is purely focused on blockchain products and solutions for government and private entities. We also have Encrypts which is a media app, which basically covers the aggregating news of blockchain and cryptocurrency from all over the market. We also have our Belfrics Academy, where we are focusing on nurturing young blockchain talents. We also have our own KYC blockchain which is called Belrium which is backed up with su-token called BEL
What is the future of cryptocurrency in India?
As per the RBI mandate that was released on April 6th 2018, which says that banks will not be allowed to deal with cryptocurrency payment through their system. Because of this, most of the exchanges have lost banking support without which we definitely cannot do a fiat to cryptocurrency transaction so that’s why a lot of exchanges are focusing on crypto to crypto market which we are also doing currently.
But I don’t think the future of cryptocurrency would be staying the same way, because cryptocurrency as a market is defiantly going to grow and today it’s not that Indians don’t have an option to invest in cryptocurrency’s even if the Indian exchanges don’t pay way through, they all are matured enough to choose International exchanges to buy and sell cryptocurrency, as cryptocurrency industry in India will be forced to improve. The only way to tackle this is for the government to explore a sandbox license,as Belfrics has got a sandbox license from Bahrain.
And we were the first to get it from Bahrain. RBI has to work on a sandbox license along with the exchange on regulating the entire sector. Knowing this as one of the problems, we have launched a solution which is Belrium or better put a KYC solution. One of the biggest problems that RBI is facing right now is the enormity of knowing the transaction of the funds. With Belrium KYC process in place, KYC has married this deep rooted within the blockchain layer itself, because of which we will be able to identify the end parties in the wallet and will be able to stop money laundering and other aspects which is an RBI friendly method to the approach.With the upcoming technology like Belrium and other KBC solutions in place I think RBI would soon start working on a sandbox license. This is a huge market for India to lose upon. My personal opinion is that cryptocurrency will soon be regulated in a couple of months or even a couple of years.
How can cryptocurrency and blockchain technology play a role in building social and solidarity finance?
With respect to blockchain technology as you know there are a lot of regulations that are coming into place. Specially the recent one being the GDPR “General Data Protection Regulation” which was introduced by the European countries andwhich is fast spreading throughout the world. The PSD2 derivative wherein both of these regulations there is a common factor that the rights and the data rights of a user with respect to anywhere, let’s say for eg if I am banking or I am doing transaction, the end data rights are to be with the user and not any centralized agencies.
We can look and expect banking and major financial sector and the government sector slowly starting to adopt GDPR and PSD2 derivatives. So tomorrow if you want to transfer funds to your dear ones and once you initiate a NEFT request, before the bank can initiate the fund transfer from your account you will have to give your permission for it. The bank cannot do the fund transfer or access your account without your approval. We are talking about that level of data rights being handed over to the user for which blockchain plays a very important roll. Itwon’t be too long, before blockchain would start getting into our day to day lives, it is as simple as using another mobile application or web application.But the backend makes a huge difference when it comes to the data schema so that’s how I see it completely shaping social and solidarity finance
How blockchain and artificial intelligence together can help businesses gain a competitive edge?
With respect to blockchain and artificial intelligences, I would say that two super powers can combine to form ultimate power. For example, when it comes to the blockchain, it is one of the most secured distributed immutable database shared in the digital distributor network. Blockchain is clearly more of a data structure in the distributed data. What we do with the data is one of the major things right now. So blockchain and AI can partner together to form beautiful infinite possibilities. Now look at a large network like bitcoin for example the energy consumption that is happens because of bitcoin is completely huge, because at any given point there are even millions of nodes working to solve a problem so the power consumption is pretty huge. And we know that only one system will end up crying the problem.With AI in place it can calculate base on the previous patterns like hardware would solve the problem and can help reduce energy consumption scalability, for example because of the transaction there is almost 1 MB growing every 10 minutes at a steady pace which adds up to almost 85 GB data over a period of time.So now if with AI in place it can also help delete the unprocessed transaction and all the unnecessary data it can delete and help the blockchain to become more scalable. If we consider looking at blockchain from the scalability perspective and security perspective than AI definitely plays a major role. Once large organizations and industries like insurance etc.comes on to the AI part then the amount of data that will be generatedon the blockchain, we could expect a lot of beautiful things. So artificial trust can be predicted, risk scenario can be predicted and such things are possible when the right industries data is corrupted. One of the new concepts that have been emerging is called the decentralized intelligence.
Are there specific industries that you think Blockchain will disrupt in future?
There are a lot of industries because the world is filled with industries that are still unable to cope with a lot of middle man in place. Take even logistics for example,Uber is still a middle man even in agriculture there are still middle man controlling it because of which the pricing gets inflated. The first attack on the industries waspurely surviving because of the middleman, blockchainwill completely disrupt it. Which is why banks which are also the middleman of financial transaction will get affected in a huge manner. The questions come down to, if it is a negative disruption or positive disruption. This completely depends on how the industry absorption it, there could be ways in which you could positively marry blockchain into daily use or how it could even kill an industry. So that completely depends on time. Some of the major industry include where blockchain will complete disrupt arebanking,finance actors,BSFI, even some aspects of government, bidding systems, supply chain, logistics,healthcare, etc. Evenindustries like agriculture, energy sector etc. can be disrupted by blockchain. So blockchain will completely disrupt the way business are handled. But we don’t know whether it’s going to be a positive disruption or a completely negative disruption depends on industry to industry and how the industries adopt blockchain as well.
Why do you think the governments across the globe are nervous about cryptocurrencies?
The answer is pretty simple; everybody fears what we cannot control or what we do not know. For example, I could wire you a hundred million dollars and nobody will ever know who wired it to whom. It’s not necessary to use the exchange-based wallet, I could either download or even just open an open source wallet and do transfer of funds through it.Why are governments across the globe nervous, it’s purely because of the enormity of not knowing the identification of the parties involved in the transaction of funds. This is the biggest problem that we are solving by the adoption of the Belrium KYC blockchain. With the Belrium KYC blockchain in place you will be able to identify the end parties. For example, take a classic scenario, any government doesn’t want to become a week economy. The economy becomes weak if the money flows out of the country and most of the countries want to stop it. India also doesn’t want money flowing out of the country, so with exchanges in place and cryptocurrencies in place, the money would flow from India to outside countries. The government took a mandate of disapproving the exchange business. But if an identity management is putin place then government would be able to control it. Like for example, Balrium KYC is put in place and if we can define AML in it and program and algorithm stating that funds moving from India to Dubai is banned, so Belrium as a KYC blockchain will identify the wallet to which country belongs to and stop the fund moment. So, with new technologies coming,the governments will slowly start to adopt blockchain onto the regular use but, till then it’s purely because of the enormity the governments are completely nervous. So, anything that government cannot control government will definitely be nervous about it.