Ms. Nappinai, a renowned lawyer, specializing in constitutional, criminal, IPR and cyber laws also has a passion for legal aspects of Blockchain and emerging technologies.
Interview Date :12th March 2020
India is a Nation of Full of Youngsters
India is a nation of youngsters, and we are probably one of the youngest Nations. Comparing the culture of Indian job hunting to that of present-day Japan, many new university graduates are in search of a job at various companies and try to create a stable life. In contrast, young Indians prefer to become entrepreneurs. They prefer to make a living by themselves and are more willing to take risks and take a chance of creating a business of their own, even if it is a small company. The Japanese perspective of becoming stable by finding a job at a company was the scenario in which I grew up back in the day.
In my time in India, people would always go to find a job as it was safer rather than trying something new. I was, I guess in a way, a millennial as well because I always went for something different. I was never happy with just going with the safe bet. This is just the start-up scenario in India, and I think it is very encouraging. For me, as a professional who comes from an older generation than the millennial, I have been doing a lot of advisory and mentoring work for start-ups, not just now but from a long time back. I think that the millennials are happy to experiment because their risk-taking proportion is much higher. They much rather would like to be their masters than working for somebody else.
People’s Reaction to Crypto around You
Whenever I address government officials or police, effectively, these are the people in authority, and their immediate reaction is resistance and rejection. As humans, we do not like something which we do not understand. Now there is a lot more understanding, and yet there is a lot of fear. So the typical reaction that comes forth is “let us play safe”. This goes back to what we spoke about Japanese people’s preference for stable jobs, which was the same as my time when I was growing up in India and the rebellious youngsters in present India. The youngsters are very enthusiastic about it, and we would have very long debates about why we need regulations. However, as they would hear me out, they usually feel convinced.
Middle-aged people are very interesting. Some of my contemporaries would want to dabble in this field only to show how cool they were. This is only to show that they somehow still belong to the millennial category but they do so with a lot of fear and caution in trying out or becoming adventurous into this field as opposed to the completely casual attitude and risk-taking millennials.
Millennials do not understand risk, and they are willing to go forward and explore. They are willing to go forward, not because they want to show how cool they are, but to experiment with something new. They are willing to go forward because this is something that they connect with, and they are willing to be part of the ecosystem, whereas the middle-aged are trying to show that they can be part of this ecosystem.
I think that is where a little bit of regulation could balance out for both parties. This way, it gives confidence to the older generation that can dabble in something that they can go into as a mechanism or a process independent of short bursts of interest, and the millennials can get some protection whether they want it or not.
Young people feel “Regulation will mean Death of the System”
Young people’s narrative is what is getting them into trouble. The first issue is that they do not want traceability and they like their anonymity. They do not want regulation because they like this un-regulated system, even with the risks that are there in crypto such as hacking, etc. The crypto enthusiast still feels like they are better off without governments getting into the picture as they are yet willing to take the risk even with respect to volatility in the market.
They would rather do that than allow governments into this field and regulate it because young people feel that regulation will mean the death of the system. On the other hand, we are talking about things that can help the cryptosystem when regulation comes into play. It is the same problem in terms of what demographics are involved, and what their understanding of regulation is. They carry a young rebellious attitude towards any form of restraint and their rights. It is like an entitlement scenario where I am already entitled; by allowing you to regulate me, I allow you to restrain me, so why would I want to be restricted?
We need to take a pause, and the system and users have to mature. From the government’s side, there should be maturity in understanding that a product has come up, and they cannot just shy away from it or wish it away. They cannot put their head into the sand and say “I do not like this product and want it to disappear”. They have to acknowledge that it exists and figure out methodologies on how they want to deal with its existence.
The crypto world has to mature as well in understanding that they cannot have the world at their favor, and need the governments. They are better off with governments functioning effectively, and they need a good and stable fiscal system, or else, they most probably will not survive. Given this scenario, giving up a little bit of this anarchic freedom to a soft-touch regulation or a regulation that gives them stability, will benefit the crypto world.
Blockchain per se has never Suffered as a Technology
The government has always been supportive of blockchain technology. They wanted to ensure that whatever the circular stated should not affect the blockchain ecosystem. The government, therefore, clarified that they were not against “blockchain”. Many state governments in India, and to some extent the central government as well, have adapted blockchain into its governance mechanisms. Therefore, blockchain per se has never suffered as a technology.
The problem lies in terms of much broader use of blockchain, and especially the incentivized blockchain. An incentive is any design element of a system that, without any government involvement, influences the behavior of system participants by changing the relative costs and benefits of choices those participants may make. From miner rewards to transaction fee-setting mechanisms to token curated registries, to prediction markets, incentives are everywhere in blockchain platforms. But, the question would be, how do you incentivize beyond cash? How do you incentivize in a non-permission blockchain ecosystem? Those have not evolved yet.
Finally, everybody needs to take a look at the technology underlying the product, which is blockchain. If the world wants to encourage blockchain technology, it needs to deal with cryptocurrency and blockchain separately and not combine the two. Today we have seen the millions of dollars that are being pumped into blockchain technology evolution, we have seen governments adopt it and accept it, and yet there has been a slump in the market. Why is that slump there? Because of the uncertainty in the market to permissibility or otherwise of various structures of blockchain systems. While permission blockchains functioning within controlled environments can and are succeeding, incentivized non-permissioned blockchain use cases are struggling with legal issues.
Interviewer , Editor : Lina Kamada
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