Blockchain and Bitcoin: Hong Kong can win, but must get religion, says acolyte James Bang.
Bitcoin and the Blockchain present Hong Kong with a second chance to make things right
The Second Coming
Bitcoin is the greatest technological advancement since the Internet. As an entrepreneur, there have been only two moments in my life when I saw something that has the potential to transform our world. First was the Internet, the second is Bitcoin. Hong Kong missed out on the Internet revolution and is lagging behind in the current Mobile revolution. Local startups are failing to make a name globally, while startups from Silicon Valley (Facebook) and even tiny Luxembourg (Skype) dominate. Hong Kong is yet to produce a Billion Dollar Unicorn startup while tech hubs in Asia such as Seoul and Shenzhen already have several to boast of.
Bitcoin and the Blockchain present Hong Kong with a second chance to make things right and become the innovation hub for FinTech & Startups — a dream the Government has been imagining since long time ago. The most promising applications of this new technology have yet been built. This presents Hong Kong with a golden opportunity to create a favorable environment for local entrepreneurs, allowing them to develop an ecosystem which can create the first Killer Apps, in turn attracting international investors and creating jobs in rewarding careers.
Simon Dixon, founder of BNK To The Future, an equity crowdfunding platform, recently raised over HK$12 million on the platform for his venture capital firm Bitcoin Capital. It is to be headquartered in Hong Kong to invest in the most promising local Bitcoin & Blockchain startups. When asked why he chose Hong Kong when his current company is based in London, he says he is confident about Hong Kong and believes it will learn from other countries and adopt regulations to gain a competitive edge on a global level.
Now is the time for the Hong Kong Government to begin engaging with the community and formulate a plan to steer the industry in the right direction before it is too late — again.
Next step: Acceptance
Arthur Schopenhauer, a German philosopher, said “All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident.” The opinions on Bitcoin from Hong Kong Government officials have passed through all three stages.
Financial Secretary John Tsang ridiculed Bitcoin, comparing it to Warcraft Armour. The Democratic Party’s James To opposes Bitcoin and calls for a complete ban. Legislator for Information Technology Charles Mok may be one of the few legislators who actually understands the potential of this technology. Mr Mok’s support might come less a surprise in that he is an IT professional. It is worrying to hear the Financial Secretary’s comments while his counterpart in the US former Chairman of the Federal Reserve raves about the potential, saying “Digital Currencies may hold long term promise, particularly if the innovations promote a faster, more secure and more efficient payment system”.
The general attitude towards Bitcoin & Blockchain technology from mainstream media and business leaders around the world has shifted towards acceptance. Co-Founder of PayPal Peter Thiel, who was recently in town, says, “I do think Bitcoin […] has the potential to do something like change the world.” Now is the time for the Hong Kong Government to begin engaging with the community and formulate a plan to steer the industry in the right direction before it is too late — again.
There will be a country with its own Blockchain based Digital Currency sooner than we all think.
Digital currencies are here to stay and the Blockchain will be a part of our lives. There will be a country with its own Blockchain based Digital Currency sooner than we all think. Denmark may be the first as the Danish Government declared they want to move towards a ‘cashless’ economy. In The Philippines, a member of the House of Representatives proposed a bill that would seek to create a Government backed ‘e-peso’ currency. Countries who adopt the technology early will experience tremendous financial & technological benefits for all of their citizens.
We’ve still got time
So is Hong Kong ready to be the innovation hub for this new breakthrough technology? While many challenges lay ahead, I believe we have a very good chance of succeeding. One of the biggest issues Bitcoin companies in Hong Kong face is opening a bank account. Bitcoin businesses in Hong Kong are finding it increasingly difficult to open or even keep their accounts from closing as the absence of local government regulation pushes banks to self-regulate. They deem Bitcoin businesses to be ‘High Risk’ especially after the MyCoin scandal. By limiting access to banking for Bitcoin businesses, Hong Kong is acting very similarly to China where it is very difficult to maintain a bank account for a Bitcoin company. The absence of regulation acts as a ban without officially restricting Bitcoin.
Nic Cary, CEO of Blockchain.info, one of the most successful Bitcoin startups, came to Hong Kong to give a talk on FinTech and the Blockchain recently. Mr Cary took the opportunity to meet with the local Bitcoin community, and discussed some of the barriers that are holding Bitcoin from back from going mainstream. I pointed out some of my frustrations with poor local Bitcoin ATM operators whose service levels are terrible and illustrated this point with examples. Mr Cary says he sees the same issues in London and there could be a ‘purge’ of Bitcoin businesses similar to the dotcom crash in 2000, in which poor operators were wiped out of the Internet business. Only after the crash did we see a tech resurgence with quality Web 2.0 Internet companies such as Twitter and YouTube ascending. We could see a similar bubble with Bitcoin and Blockchain startups as investment levels have exceeded those of the early Internet. The good news is, Bitcoin is still at the equivalent of the early Internet during the mid 90’s. Imagine Windows 95 and Dial Up modems! There is a long way to go for the technology — which also means that this is a once in a lifetime opportunity for Hong Kong startups to innovate and succeed.
One of the most positive signs I have seen for the growth of Digital Currencies and Blockchain technology in Hong Kong is the growing interest from professionals not in the technology community.
Hong Kong’s opportunity
Hong Kong is perfectly positioned to capitalise on the rise of Bitcoin. There is an enthusiastic and talented Bitcoin community in Hong Kong. Business relationships and friendships are built as organisations such as Bitcoin Association of Hong Kong hold regular meetups for the community to network. Just this year, prominent figures in the Bitcoin community such as Max Keiser from StartCOIN and Vitalik Buterin from Ethereum stopped by to meet the Hong Kong Bitcoiners and share their knowledge.
One of the most positive signs I have seen for the growth of Digital Currencies and Blockchain technology in Hong Kong is the growing interest from professionals not in the technology community. Not too long ago, nobody outside of the Bitcoin community I’ve spoken to had interest in the subject except to ask where I think the price is going. This year, people are asking how Bitcoin will disrupt their industry and what they can do to stay ahead. The shift is a welcoming sign that innovation is still alive and the future for Bitcoin and the Blockchain is bright for Hong Kong.
Founder of Luxly Media, Regional Director of StartCOIN
James is the founder of Luxly Media, a full service Digital Agency in Hong Kong helping Bitcoin companies with Development, Marketing and PR. Luxly Media also works with companies to innovate by adopting new technologies such as the Blockchain and Smart Contracts to replace legacy systems. He is also a Director at StartCOIN, a crowd funding focused Digital Currency, currently the 24th largest Digital Currency in the world.”]