CEO of Singapore’s first blockchain unicorn shares insights on the Asian crypto space

The team at Qtum / Photo credit: Qtum

One of the prominent concerns of the blockchain revolution is how different countries are approaching the technology. Some have been hesitant while others have thrown caution to the wind. Asia is unique in this regard, as it has unmatched blockchain ambitions.

With this in mind, I spoke with Patrick Dai, the CEO of Qtum (the first Singapore-based blockchain project to earn a US$1 billion valuation). Since he’s a former Alibaba employee and blockchain and cryptocurrency expert, I jumped at the chance to pick his brain.

Does Asia see blockchain and cryptocurrencies as a chance to compete with the West?

In some respect, yes. Asian countries like Japan have embraced blockchain technology due to their competitive spirit. In less developed Asian jurisdictions, we might see more favorable regulations on ICOs and cryptocurrency, particularly in Southeast Asia where it would be easier to leapfrog brick-and-mortar banks and go straight to digital banking. This would be an enormous advantage for small businesses and the budding tech sector in places like Singapore.

However, blockchain adoption is not exclusively for wealth generation. Asia can use blockchain to shore up some weaknesses in its business environment, where there is mistrust in the quality of manufacturing or intellectual property. The ledger will help prove to partnering countries or corporations that Asian businesses respect the collective good and don’t cut corners.

Finally, on a government level, Asian territories want to better track the flow of money and combat corruption, but also to cut their reliance on the dollar and Western banking systems.

What unique issues are blockchain and cryptocurrency solving in Asia specifically?

Some of the major issues I see blockchain technology and cryptocurrencies solving in Asia revolve around supply chain tracking, digital identities, and digital banking. The quality control and intellectual property paradigms in Asia aren’t as enforced as they are in the West, but the ledger can help.

When the sources of all the parts of a machine, the parts themselves, and the finished product are tracked on the ledger, it’s easy for a merchant at the end of the retail chain to demonstrate the authenticity of their product.

Digital identity is a problem that plagues all nations, not just Eastern ones. If countries like the US suffer millions of stolen identities, credit card fraud, and more, why should Asia assume it is immune? Blockchain can help solve these issues before they become too common.

What obstacles does blockchain face in places like China, where uniformity and censorship are common?

An entirely decentralized content platform might run into trouble in China, as it would allow citizens to easily bypass government restrictions.

But it’s not blockchain that threatens this status quo; it’s decentralization. As we’ve seen with ideas like Ripple, blockchains do not need to be centralized to be effective. In fact, mixing centralization with some of blockchain’s best attributes creates a model that is arguably more effective and would allow a country like China to block content while still protecting identities, reducing fraud, and benefitting from a transparent ledger.

In fact, a ledger-like system would help China track its citizens more effectively, especially if its use was mandatory.

What’s the most important consideration regulators must address regarding ICOs?

More important than any other factor is how much capital to raise. An ICO is a very new, relatively unregulated form of funding that doesn’t impose many restrictions or quality controls on the launching company. As such, it might seem easy to set coin circulation and price to achieve the largest amount of funding as early as possible.

But we must be cautious. Most ICOs have been raising capital too early in the process—some before they even have a whitepaper or an MVP. This is unsustainable and frankly irresponsible.

What can an ICO’d startup do to protect itself amid a cryptocurrency market downturn?

Which parts of the world do you envision as blockchain leaders, given current trends?

Which industry will be the first to “fully decentralize?”