Abstract : After New York’s Blockchain week in May, ChainDD has been continuing its Consensus Night series globally. A heated blockchain and crypto-related panel discussion among the entrepreneurs from Shenzhen, China and New York, USA had taken place via Zoom-based conference call on July 12th, 2019.
Alex Wearn, the co-founder and CEO at IDEX, Per Jirstrand, the founder and CEO at Block5 Ventures, and Max Dilendorf, the co-founder at Dilendorf Khurdayan were invited from the US to share their thoughts around Facebook’s Libra initiative and cryptocurrency market development in the US. The current state of China’s regulation was also discussed. Following is the summary of the panel discussion.
Part 1 Thoughts on Facebook's Libra
Alex Wearn believes crypto itself is neutral and Facebook's large customer base is the key advantage distinguishing it from peers.
1) Larger user base leads to mainstream adoption and distribution
Facebook has more than 2 billion users, 1 billion on Whatsapp and Instagram, and lots of properties they can use to promote products into the hands of users. The problem faced by most cryptocurrencies is to get enough users.
2) Bitcoin can serve regulated and unregulated markets
Bitcoin can serve regulated and unregulated markets.
What I mean by the regulated market is that transactions can be tracked on the chain to fulfill KYC-AML requirements. But it can also be used for illegal transactions since it is not well regulated.
Max Dilendorf's doubts from the use of Libra and regulatory sides
1) It is exciting that Facebook is trying to build a new financial system with Libra. However, for the regulatory side, it is unclear how Facebook will manage its cryptocurrencies with its 2 billion users and what if Facebook runs away to Switzerland?
Facebook needs government approval from the central bank and monetary authorities.
I think it is an interesting project and I will follow the hearing on the 17th.
Part 2 Mining in the US
No restriction but costly to mine in the US.
Max Dilendorf: no such regulatory restrictions to mine for bitcoin and other cryptocurrencies in the US. However, it is costly.
Alex Wearn: To my knowledge, I know there are some mining in Washington and Seattle in the US. Still, many choose not to mine in the US because of the costs.
I think there might be more PoS mining in the US because PoS are using crypto as collateral. And there are not much hardware and electricity requirements.
However, PoS is still new and experimental.
Part 3 How crypto/blockchain startups compete with big companies
Each company have its own focus, startups have to find their own advantages.
Alex Wearn: Amazon will have stronger standing than Facebook because of the economy that they have built. Amazon has connections with customers and suppliers. Amazon would have its coin bring self-sustaining from day 1.
Apple might look at it from a hardware perspective, like how can it build a device to help customer store their cryptos.
So, it is important for startups to find something they are good at and differentiate from those companies.
Per Jirstrand: I believe more innovations will come from startups, instead of from the existing big companies.
Part 4 Will Chinese companies join Libra network
Not now, but maybe later.
Per Jirstrand: for now, Facebook's model is still very centralized. But in the future, if it wants to get mainstream adoption, then they might add some more Chinese companies.
Max Dilendorf: Facebook is still meeting the regulators in Asia such as Singapore. It takes time for Facebook to add new partners.
Part 5 What's driving this round of rally
Per Jirstrand: I can name some reasons
1) More institutional investors came into this space
2) Large companies started to look into blockchain technology and cryptocurrencies.
3) More projects are coming, and many of them are more than just ideas.
Part 6 Thoughts about Libra among Chinese
Feifan Li: Basically, there are two types of opinions. One fears that the US might take Libra as a tool to promote its political influence into other regions. And the others believe it is a good thing for the crypto industry since it promotes the use of cryptos.
Part 7 Will PBOC launch crypto
Feifan Li: The PBOC (The People's Bank Of China) actually started doing research on cryptocurrencies back in 2014. After Libra's white paper released, the PBOC put more focuses on R&D on cryptocurrencies.
So, in the future, there might be a central bank-backed crypto in China.
And it is also possible for companies to launch cryptocurrencies in the future, since Pony Ma, the CEO of Tencent, said it's not technically difficult.
At this stage, buying and selling crypto is not allowed in China, no matter it is conducted on a basis of B2B, C2C, or B2C.