Punit Agarwal, founder and CEO, KoinX, a cryptocurrency taxation platform, shares his views on how decentralised protocols such as smart contracts add an extra layer of security to digital assets with FE Blockchain.
1. What are the three best practices that today’s youth should follow when it comes to digital assets?
Digital assets are a fairly new type of entity in the markets that need to be approached with caution.
With a promising future and a generally noisy market, it’s easy to get overwhelmed by the discrepancies of crypto markets. However, one thing worth noting is that it doesn’t always work out.
A general rule of thumb is to be very careful with your investments. Considering the volatility and fluctuations of the market, there needs to be proper awareness of these digital assets.
Especially for the youth that is actively investing and trading these digital assets, the best three practices to follow would involve:
- Research and understand the use case and utility of every asset you are planning to invest in.
- Educate yourself well about the happenings of the crypto world and learn how to be safe in the online financial world.
- Research the authenticity of the exchange you are trading from a lot before investing your money in it.
2. How can blockchain be used to keep digital assets safe? Which are the apps consumers can use?
Blockchain technology is a tried and tested method of storing digital assets safely. Since it is a decentralized platform, that also makes it a systematic digital network that can allow you to safely conduct your transactions via digital assets.
Because of how transparent yet untouchable it really is, blockchain is actually an ungoverned technology that creates smart contracts which add an extra layer of security to the digital assets.
To store digital assets, consumers can either store it in cold wallets like Ledger, Trezor (which are the safest), or can store the assets on hot wallets like Metamask or Trust Wallet. They can also buy assets from exchanges like CoinDCX, WazirX etc.
3. What are three tips you would like to give to people who dabble in crypto trading?
- Invest in assets you see the utility in. Investing just because others are investing as well isn’t really a smart approach for a trader because often, it could result in uncertainty especially if a consumer usually isn’t enough educated about.
- Don’t believe everything you hear and see on social media sites that claim profits after trading a particular asset. Do your own research.
- Learn about the tax rules in your country or region before you start trading.
4. Which according to you is the country leading in the space and the Indian start-up ecosystem can pick up the best use cases?
The USA is actively involved in crypto trading more than any other country. Because of their advancements in Web 3.0 technologies and the creativity involved in digital assets such as NFTs, a variety of major brands right now are also following the same trajectory there.
This gives a good enough chance to artists and illustrators around to world, even in India, to try their hands with such assets.
The Indian startup ecosystem can also collaborate with such artists to adopt such assets and technologies to harness their maximum potential from them.
5. What are the disadvantages of blockchain?
Even though blockchain is a very advanced and safe network, it still requires a lot of power to function properly. Not just that, but it also takes time and cost to implement such technology for a digital asset.
Because of the decentralised nature of blockchain, at times it also slows down the process, same as a democracy.