Building Scalable Blockchain Solutions To Support Dapps of Tomorrow – An Interview
@Ishan PandeyIshan Pandey
Technology Lawyer working on code and everything law.
Founder : Blockchain Research
Lower transaction fees and settlement time is crucial for the success of any decentralized application, and for that, you need to have a scalable blockchain framework
Hi Benjamin, welcome to our series “Behind the Startup”. Tell us about Elrond Network and its upcoming mainnent?
Elrond network’s architecture is based on a state of the art sharding scheme with practical scalability in mind. We recently saw how Ethereum transaction fees increased ten folds due to network congestion. This is what Elrond aims to solve as high throughput capability is essential for any blockchain network that wants to see mass adoption.
Lower transaction fees and settlement time is crucial for the success of any decentralized application, and for that, you need to have a scalable blockchain framework. Elrond mainnet is going to be a game-changer as it would provide access to staking products, DeFi, and 100+ fiat on-ramps to users from their phones.”
Even though RBI’s circular has been overturned, there is still much legal uncertainty around the regulation of cryptocurrencies in India. How are international companies that want to expand into India, looking at this?
“There is a saying attributed to Mahatma Gandhi, which says, “First they ignore you, then they laugh at you, then they fight you, then you win.” We think that, in the pursuit of blockchain, India is nearing the winning stage.
Many countries are yet to have the cryptocurrency discussion, whereas India already fought important battles. This signals a strong local appetite for blockchain technology, and we are ready to meet this demand.
Elrond recently got listed on WazirX, India’s largest digital asset trading platform. We believe that India is a huge market for everyone, and by listing on the WazirX, Indian investors get exposure to world-class digital assets, and it also provides blockchain startups with exposure to the Indian tech community, which is full of talent and expertise.
The Supreme Court judgment over the blanket ban by RBI has made the Indian blockchain community excited and bullish about the future of cryptocurrencies and blockchain technology in India.
Before the government imposed the banking ban, 1 out of 10 bitcoin transactions were transacted from India. Even during the ban, the demand for blockchain-based engineers and programmers has continued to grow. Still, it provides the best pays and opportunities of migration for blockchain developers to foreign nations next to AI and Data Scientist jobs.
This tells us how big an impact blockchain has on the skilled employment market in India.
The adoption of new technologies offers prosperity and stability to society. It also offers new opportunities for entrepreneurs, developers, accountants, lawyers, etc.
AI and Big Data are already a big part of business operations, with more and more companies deploying new technological applications to streamline operations, reduce costs, or increase their efficiency.
Reliance Jio is already experimenting with blockchain technology, and this indicates to me that in the future there is much scope for blockchain and open-source technologies in India.
I feel that even when there is still legal uncertainty related to cryptocurrencies in India, companies are willing to take the risk.
There is no doubt India is rapidly transforming itself into a technological and economic powerhouse due to which international corporations are willing to make a bet and expand to India to become the first mover in the market.”
What makes India a favorable growth destination for blockchain startups and companies from your perspective. Even when there are so many legal and political challenges in front of foreign investors and organizations?
Even when cryptocurrencies were banned in India, we had various several Indian developers who continued to contribute towards open-source projects.
The Indian blockchain’s community perseverance is an indicator as to why Indian technocrats feel that fighting for cryptocurrencies is a battle worth fighting for.”
Can you explain what is Decentralized finance (Defi) and why Indian technocrats should look at it?
“We look at DeFi as a means of reimagining all financial instruments based on a global, high performance and transparent blockchain layer, extending vital access to these services to people in both developed and developing countries.
By adopting DeFi products, technocrats can help improve the economic infrastructure and open new growth opportunities for people in their specific regions.”
Can you explain to readers why blockchains have scalability problems and how Elrond solves this?
“The current implementations of blockchain architectures have proven that the technology can work, and it can be used to build things that have never existed before: 24/7 inexpensive borderless payments, self-sovereign identity, a true peer to peer relationship between strangers on the internet, to mention a few.
But the technology used to demonstrate these concepts in current implementations comes with severe performance limitations, with Bitcoin or Ethereum not being able to process more than 7 and 15 transactions per second.
Elrond uses state of the art research to bring an important breakthrough to the market. We have created the first blockchain platform that can accommodate internet-scale performance.
In practice, Elrond can now process 10.000 transactions per second, with a 5-second latency, and 100x less cost than current alternatives. The change we bring will be very similar to the transition from dial-up to broadband in the early internet era.”
Briefly, what smart contracts and decentralized applications are? What can be the impact of these technologies on our economy?
“Smart contracts are specific pieces of blockchain software that automatically enforce the terms of a digital contract without the necessity of any middlemen. They can facilitate a simple payment, service offering, asset swap, or any other multi-party agreement that can be digitized.
Once you have a fast, agile, and scalable smart contract platform, all financial services can be digitized.”
Do you believe that the blockchain ecosystem would be able to survive in India, even if cryptocurrencies are banned?
“The question about blockchain ecosystems being able to survive has already been answered by more than ten years of experience with bitcoin. The inherent properties of blockchain technology make it unstoppable, and there will always be ways to access the blockchain and use it, even if it becomes temporarily forbidden.
Perhaps more important, the countries that will lead the blockchain adoption wave will be in a special position to strengthen their economies and explore the many opportunities that arise. Even if cryptocurrencies are banned in India, the blockchain tech will survive.
The government looks favorably towards blockchain but is not that comfortable with cryptocurrencies in particular. I think the reason for the unfavorable behavior towards cryptocurrencies is due to various reasons such as; lack of investor awareness to reports of Ponzi schemes and frauds.
Due to this reason, the Indian government wants to ban cryptocurrencies altogether, as regulating cryptocurrencies is not easy.”
What do you believe should be the approach of the government when developing a regulatory framework for cryptocurrencies in India?
“We believe that any government should listen to its people first and foremost. Then, we encourage officials to look at blockchain with an open mind and see the opportunities such technology can bring to benefit India’s progress in an ever more competitive global environment and to identify the local challenges that blockchain technology can help address.
We are more than happy to support the Indian digital ecosystem and facilitate the access to a blockchain that can work at the internet scale.
The internet has created a new metaphysical “Virtual” world, and whole economies are being built around it. Everything is going digital, and with that comes new risks and vulnerabilities. This is where blockchain plays a crucial role as it has answers to many challenges that arise with going digital.”
What major trends and challenges do you see in the year 2020 for the blockchain and cryptocurrency industry?
DeFi and CBDCs are the torch bearers of the year 2020. Decentralized lending is disrupting the market, and with Compound and Aave’s growth, DeFi success is cemented.
Countries are researching and developing digital currencies to strengthen their digital economies, and we would be seeing more and more countries taking this route, which is only accelerated due to the coronavirus pandemic.
In my opinion, the pandemic is playing an essential role by accelerating the adoption of blockchain universally. Corporations and governments are cutting costs and removing intermediaries by leveraging blockchain technology, and we are going to see this trend increase as we move forward.