Cryptocurrency Conference in Mauritius (2018)
In 2018, I did a keynote speech with Nicolas Goldstein focusing on the blockchain technology, and cryptocurrencies adoption in Mauritius and around the world. This talk was part of the StartupGrind programme in partnership with Google for Startups. This article will give you an overview of what we discussed about during the video session, which you can find here.
Could you introduce yourself and how did you start in the blockchain industry?
I am Suyash Sumaroo, the founder of Codevigor — a Mauritius-based startup specialised in the development of mobile, web and blockchain apps. I did my undergraduate studies at the University of Mauritius and my Postgraduate at the University of Greenwich. Following this, I worked for about 8 years as a software developer and project manager in various projects. I started working on Blockchain some 2 years ago. At that time, I was looking for a solution to a very specific problem concerning an online service that I was launching. I stumbled on Blockchain and what it claimed to offer. After studying the concepts behind this technology, I became more and more interested, especially with the distributed ledger technology and the trustless environment that it offered. This new technology was aiming to revolutionise many industries and I wanted to be part of it.
What is the difference between Blockchain and cryptocurrencies?
It is very important to understand the difference. They are definitely not the same thing. Blockchain is one of the underlying technologies on which most cryptocurrencies run and is defined as being a distributed ledger which allows a decentralized control over the whole system. It is important to understand that this technology has very deep implications over how things work in our society and it can and will affect sectors like banking, financial sector, agricultural sector, distribution economy, and most probably all sectors that involve a middle man. Cryptocurrencies, on the other hand, as the name suggests are digital currencies or assets designed to work as a medium of exchange and which can have different attributes, like limited in quantity, are a store of value, are backed by Gold, and so on.
To provide a simple analogy, Blockchain is like the Internet while Bitcoin is Facebook. True blockchains have a very important attribute: decentralization. This is what allows innovative and decentralized systems to be developed.
How do we create a cryptocurrency? What are the main cryptocurrencies?
There are many ways to create a cryptocurrency, based on what you want to achieve with the cryptocurrency and the technical limitations which define the different technologies and platforms available. For instance, with a little technical knowledge, you can easily get the source code online — remember, most of these technologies are open source — and deploy a cryptocurrency on Ethereum in a few hours. Having done it in the past, it is not as straightforward as it sounds though.
Creating a cryptocurrency involves the following considerations:
- Technical — what are going to be the use of the cryptocurrency and what to integrate as inherent properties of the currency
- Community — how to engage people
- Deployment — how and where to deploy
- Maintenance — how to maintain the development (forks, mining, etc.)
This requires a careful setup and very good planning. Companies like the Mauritius-based TokenThunder offer the technical knowhow to implement and deploy tokens.
The cryptocurrencies with the highest market CAP are (https://coinmarketcap.com/):
- Bitcoin Cash
- KemCredit (Ranked at 1464) — to show the sheer number of cryptocurrencies which have already been launched.
Altcoins simply refers to coins that are an alternative to Bitcoin. Most of them are forks of Bitcoin but there are some completely different like Ethereum.
Tokens are a representation of a particular asset or utility, that usually resides on top of another blockchain. Tokens can represent basically any assets that are fungible and tradeable, from commodities to loyalty points to even other cryptocurrencies.
What about regulations? How to avoid losing all your money when you invest in a cryptocurrency?
At the start, cryptocurrencies and tokens took advantage of some grey areas in laws to develop and gain popularity. Since most countries and legal entities did not consider cryptocurrencies to be real currencies, they could not enforce any real laws which apply to fiat currencies.
However, things are beginning to change, principally because of the rise in value of cryptocurrencies and the popularity of ICOs and the amount of money that are being raised via this system (around USD 4 billion last year). So, basically, regulations are beginning to kick in the space and things will become more regulated.
Investing in a cryptocurrency is a risky business, but the risk can be greatly mitigated by doing the following:
- Due diligence — research the concepts and ideas described in whitepapers.
- Check the credentials and previous works of the people involved in the project.
- Check the current community — what people are saying
- Be wary of fake news
We are saying this industry is not good for the environment. Could you tell me more?
Miners ensure that information on blockchains are authentic and verifiable. However, this requires a lot of calculations and as a result a lot of computing power. Different consensus algorithms require different computing power. For instance, bitcoin uses proof of work which requires a lot of power. More and more blockchains are migrating or are using proof of stake as a consensus algorithm. However, there are certain problems with proof of stake — it is reactive instead of being preventive like proof of work, which is generally considered more secure.
I believe that the energy usage of mining activities have been blown out of proportion. It is true that mining uses a lot of energy but this is dwarfed by other more wasteful activities including banking and other financial institutions activities. Banks use a lot of data centres, for example, to process transactions, to detect fraud and so on. These things are inherently blocked in Bitcoin for example.
What are the main countries engaged in cryptocurrencies?
Among the countries which are the most open to cryptocurrencies are:
- Japan — The Japanese Government through the PSA (Payment Services Act) has set up a framework that which makes it legal to use cryptocurrencies for payment purposes. In short, Bitcoin is legal tender in Japan.
- South Korea — one of the biggest exchanges in the cryptocurrency space but lately the government has been curb its growth and are planning an outright ban on exchanges and cryptocurrencies.
- Canada — Canada is a friendly environment for cryptocurrency entrepreneurs as there are a number of Bitcoin Startups in the country as well as numerous Bitcoin ATMs.
- Estonia — known as the Blockchain nation. Their E-Residency programme is ground-breaking and they are now planning to create their own cryptocurrency and of course backed by the Estonian Government.
- Germany — German tax laws are also favorable to Bitcoin with an exemption from the 25% tax on profits for Bitcoin that has been held for one year.
- Holland — There is no Government regulation on Bitcoin and other cryptocurrencies in Holland. Many cryptocurrency startups are based in Holland as a result.
How could Mauritius take the lead in this market?
Taking the lead in this market is going to be difficult. However, becoming an integral player in this field is definitely achievable. The main factors affecting the outcome of this goal will be:
- Regulations — have the proper regulations in place to encourage activities related to cryptocurrencies.
- Incentives — provide incentives to foreign companies to use Mauritius as a development platform. But more important, provide incentives to local entrepreneurs to get into this field.
- Innovate — innovate — innovate — in this field, innovation is key. We should not only adopt but also create.
For example, Mauritius has seen a lot of recent development in this space, especially with the launch of an ICO — Earth Token (https://earth-token.com). All the blockchain technology is being designed and developed in Mauritius by TokenThunder (http://www.tokenthunder.com).
The ICO itself is being run out from an entity in the Isle of Mann.
They should look specifically at Switzerland, a country that has been at the forefront of managing people’s money and wealth for generations. Switzerland is inviting these startups, encouraging to bring their innovations to their country — they wouldn’t do this unless they knew there was a lot to be gained by those countries who embrace and don’t choke innovation in fear.
What is the future of cryptocurrencies in terms of adoption, trends and regulations?
It is very obvious that the blockchain technology and cryptocurrencies are here to stay. They have become more and more popular and this is only the start. Something to remember is that, right now, it is a bit of a niche. Imagine the impact that cryptocurrencies and blockchain will have when the laymen will start using it as a means of payment, or when people will use a blockchain-based social network instead of Facebook.
There is a general tendency for governments around the world to regulate and more drastically ban cryptocurrencies. However, on the other hand, a lot of countries are thinking about launching their own national cryptocurrency.
If bitcoin completely fails, it will mean that the most decentralised, most networked, strongest computational blockchain in the world could not make it — where does it leave Ethereum which has less than 5% decentralisation less than 5% security of bitcoin? Bitcoin will most likely be the internet — payment rails and a system of immutability, the lightning, rootstock, IVY, side chains, drive chains etc will be the “apps” and use cases upon bitcoin.