American billionaire, investor and bitcoin evangelist Tim Draper is bullish on India once again, in part because of the Narendra Modi administration’s crackdown on corruption, but is also critical of the government’s lack of acceptance of cryptocurrency. He believes bitcoin and blockchain will not only disrupt industries such as banking, healthcare and real estate, but also enable governments to become more transparent and efficient.In an interview with ET Draper, an early investor in Skype and Baidu, warned that discouraging entrepreneurs in the blockchain and cryptocurrency sector would result in a brain drain and handing over the advantage to other countries more welcoming of the new technologies. Draper Venture Network allied with Blume Ventures last year to potentially open up access for Blume’s large portfolio companies across geographies, allow global venture capital firms that are part of DVN to make investments in Indian companies, and for more networking and co-investing opportunities.That also marked Draper’s reentry to India after Draper Fisher Jurvetson , another VC firm founded by him, sold its entire Indian portfolio to Hong Kong-based NewQuest Capital Partners in 2016, after having shut its India office in 2013. Having invested in blockchain startup Nucleus Vision, founded by Indian entrepreneur Abhishek Pitti, Draper says he will look at more opportunities in the blockchain space in India. Edited excerpts:We found that there was a lot of ambition but little adherence to investing norms or, at times, even rule of law. In certain cases where an investment did well and profits were earned, the owed returns would not make their way back to us investors. But things have significantly changed for the better in India with more sophisticated investors and entrepreneurs, many of whom have brought home learnings from time spent in Silicon Valley. We are much more confident going back into the market now.In China, unfortunately, things have veered in a less favorable direction. Government controls have made it much harder for foreign investors to support Chinese startups, and even for Chinese investors to make investments abroad. Given India’s fast-growing innovation economy and its government’s support for domestic and foreign investment in the sector, India looks more promising now… (Also,) when (Prime Minister Narendra) Modi came in, he sent a strong message (against corruption) with the currency (demonetization). I thought this is where you start turning around the country. That’s why we decided to come back.The acquisition of Flipkart could be great for the company’s founders, employees, investors, and the sector as a whole, regardless of the origin of the acquirer. Large exits such as these free up capital that is often reinvested in local startups, thus creating more future winners, many of which will be Indian-run and owned.It’s been just over a year since we announced Blume’s admission into the Draper Venture Network. Since joining, they have been one of the most active members, consistently introducing their portfolio companies to our other Member Funds and enlisting the help of theDVN operations team to help their founders in US expansion. (Blume managing partner) Sanjay Nath has been nominated to the network’s board and we are co-hosting events with them often in Silicon Valley and India. I hope to visit India soon and look forward to meeting Blume’s local portfolio (companies) and others.That’s the stupidest thing. When China said bitcoins are illegal, all those entrepreneurs and engineers working on this new technology went to Japan. Japan is open to cryptocurrency… It is as if America says the internet is illegal. They were talking about doing that. It was the luddites and the idiots, not someone who understood economics or business.Bitcoin and blockchain are the best things to have happened for business. Wherever countries have accepted these, they have become huge beneficiaries. (If) India is thinking of making (crytpocurreny) illegal… other countries will raise their hands to get all the (blockchain) entrepreneurs (from India). If I had a meeting with Modi, I would have let him know he is making a huge mistake. (Bitcoin) should be the national currency. People talk about crypto as volatile. Bitcoin is stable. The other currencies are falling against it… Bitcoin is global, can store value. Within 2-3 years, I think it will be acceptable everywhere for transactions.If the local authorities are banning crypto, then companies in the space should move elsewhere. The government needs to realize that it is stifling innovation and should instead be creating an environment where these ideas can be tested and promoted. They have the choice to be trendsetters and attract the world’s best engineers and coders, or lose their best and brightest to other regions. Countries such as India, where billions of rupees are wasted on inefficiencies and needless paperwork, will benefit most from the ease and security of blockchain.ICOs are ways for entrepreneurs to get money for their vision. Entrepreneurs are saying, ‘here’s my vision, if you believe in it, buy my coin.’ If the coin grows in the network, it will grow in value. I would recommend people who want to buy into ICOs to buy the ones you feel have a movement that you want to be part of. You are helping someone push a societal transformation, so make sure it’s the one that you want.We do one out of every 95 (ICOs). The ones we back are when the entrepreneur has figured out the societal transformation. Is there a reason for someone to use this coin? You need to create an economy around the coin. If an ICO doesn’t do that, you need to stay away. For an ICO to be a successful, it has to be a successful token post the IPO. It has to be something people can use to buy something, or sell.Blockchain is going to be used for copyrights, to keep track of data. It will change the media industry. Another industry that blockchain can change the most is healthcare. There will be a lot of deep learning and neural networks are going to do extraordinary things with that data. We will have a much better healthcare with or without the doctor.Governments will change all the things that they do that are virtual, (as these) can be done more efficiently with bitcoin and blockchain. Insurance and real estate and banking will also change. Banking is gone. A ledger (hardware) can be a bank. It’s a trusted third-party. The bitcoin blockchain has hundreds of thousands of miners watching every block that every transaction is real and is not hacked.It rocks my business, it rocks the venture capital business. A huge portion of money raised by startups is going to be from ICOs. That means our market is growing smaller. We have to be more flexible and reinvent. VCs that do that will be very successful. This is a new technology and we have to get onboard. This technology is an opportunity to transform industry. The industries that are most easily transformed are those giving bad service at a high cost. Venture capital, banking, investment banking, healthcare, government are giving bad service at a high cost. They will now be all in competition with each other. Down the road, you won’t have to physically leave a place to choose a better government. From wherever I am, I can get social security from Chile, healthcare insurance from Canada, education from Russia. The whole system will be much more virtualBlume Ventures and Boost VC coinvested in UnoCoin. I will continue to seek other opportunities.(Tim Draper is Founder, Draper Venture Network)