August 29, 2023
By Anjali Kochhar
NFTMetta’s Anjali Kochhar talks to Vikram Subbraj, the CEO of Giottus, one of India’s top crypto exchanges, about the global adoption of blockchain, the environmental impact of blockchain, cross-chain platforms and much more.
Kochhar: How is blockchain technology being adopted in non-financial sectors, and what innovative use cases do you find most promising? How is blockchain technology being integrated into IoT applications, and what potential benefits and risks does this convergence present?
Vikram Subbraj: Blockchain technology is cutting edge and it is proving to be transformative beyond the realm of finance. The highlight of blockchain is that it is decentralised, secure, and transparent. It offers an array of innovative use cases across various sectors. Some of the promising non-financial applications include supply IoT, supply chain management, healthcare, governance, and intellectual property.
To state a case, the Union Ministry of Electronics and Information Technology (MEITy) is working with state governments to store all revenue certificates in blockchain. States like UP and Andhra Pradesh have gone ahead and are working towards creating blockchain-based land registries and other revenue records. In UP’s Firozabad district, the police are using blockchain for FIRs. An FIR or a land ownership certificate will thus become an indelible record and any change at any level will be visible to every stakeholder. This will make the operations transparent while providing trust and value to the common man.
In IoT, specifically, blockchain can address its inherent challenges by verifying the identities of IoT devices, allowing for seamless authentication and access control.
AK: As cryptocurrencies gain popularity, concerns about blockchain’s environmental impact have surfaced. How can blockchain technology address scalability while becoming more energy-efficient?
VS: The blockchain and crypto space is actively researching and implementing more energy-efficient consensus mechanisms. Ethereum, for instance, has transitioned from Proof-of-Work (PoW) to Proof-of-Stake (PoS) with the Ethereum 2.0 upgrade last year to reduce its energy consumption. This upgrade has also made it more scalable. Bitcoin miners are also shifting to cleaner sources of electricity to maintain the system. Traditional financial systems, like banks, are also energy-consuming, given the massive infrastructure they have garnered over the years.
Blockchain is a relatively recent technology that has come in at a time when there is a lot of scrutiny on the environmental footprint of all things new. Blockchain is nimble and adaptable. The value blockchain imparts to the ecosystem is only unravelling. Hence, over the years, the energy use of blockchain could be lower than the traditional energy-guzzlers like banks and financial institutions.
AK: Cross-chain platforms and protocols are emerging. Can you explain how blockchain interoperability can enhance the overall crypto ecosystem, and what challenges need to be overcome?
VS: In simple terms, blockchain interoperability is the ability of different blockchain networks to communicate, share data, and execute transactions seamlessly. This interoperability can enhance the overall crypto ecosystem by enabling the movement of digital assets and data across blockchains.
The scalability issues of individual blockchains can be solved if there are more interconnected chains that can manage and share the load. This will increase the general efficiency of the system. Also, different blockchains are made for specific purposes. For example, Ethereum’s blockchain is tailored to enable smart contracts and decentralised applications, while Ripple’s is designed to facilitate efficient cross-border payments and settlements. Interoperability allows developers to leverage the strengths of multiple blockchains to create complex applications that straddle various sectors, such as finance, supply chain, and gaming.
The challenge in the whole exercise is that it requires standardisation. Also, interoperability brings with it the risk of security as the weaknesses in vulnerable chains can be exploited across the ecosystem. There is also a regulatory challenge as different blockchains may operate under different regulatory environments.
AK: DeFi applications are revolutionising traditional finance through smart contracts. What are the latest trends and challenges in the DeFi space, and how do they relate to blockchain technology?
VS: DeFi (Decentralised Finance) has brought about a revolution in finance by leveraging blockchain technology and smart contracts. The core principle of DeFi is that it focuses on open access (anyone with internet can access), transparency (it is on blockchain and everyone in the chain can access), and permissionless nature (no approving entity is required).
The capability of DeFi is evident in the quick adoption by big institutional players across the world. From a customer perspective, DeFi can provide increased liquidity as many platforms offer incentives and tokens to increase liquidity to their protocols. DeFi also reduces throughput cost as projects explore ways to expand beyond a single blockchain.
DeFi uses smart contracts to offer innovative synthetic assets and derivatives. These products track and manage traditional financial instruments like stocks, commodities, and indices using smart contracts.
However, DeFi faces challenges like security, audit, and regulatory uncertainty. The open nature of DeFi exposes it to attacks. Rigorous audit and security practices are crucial to prevent hacks.
DeFi projects often operate in a legal grey area. Navigating regulatory challenges while staying true to the decentralised ethos of DeFi is a significant challenge.
AK: Blockchain offers transparency, but how can it ensure data privacy and security, especially in sensitive sectors like healthcare and identity management?
VS: Ensuring data privacy and security while maintaining the transparency benefits of blockchain, especially in sensitive sectors like healthcare and identity management, requires a careful balance and the implementation of specific strategies.
One way is to use private and permissioned blockchains. These chains allow access to authorised participants alone.
Zero-knowledge proof (ZKP) is another way to ensure data privacy. ZKP enables one party (the prover) to prove to another party (the verifier) that a statement is true without revealing any specific details. This technology allows for the validation of data without exposing the underlying information.
Off-chain data storage is yet another solution that allows storage of sensitive data away from the chain while using the blockchain to securely reference and verify the authenticity of the data. Entities or businesses can use one or a combination of these approaches to ensure optimal use of the blockchain and ensure data privacy and protection at the same time.
About the author
Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.