Read the interview below conducted by Saigon Expat Services with Mr. Dominik, CEO of BitcoinVN about his experiences in cryptocurrency industry and the future of this field in Vietnam.
Why did you start Bitcoin Vietnam Exchange and what do you think the future holds for it?
The work on Bitcoin Vietnam actually started over 5 years ago in the summer of 2013 (at a time the Bitcoin price was still below 100 USD/each). At the time I was still living in Germany – but made already the decision that I want to get involved with Bitcoin on a full-time basis. Since Germany is generally a very hostile place towards innovation & entrepreneurship and we faced a lot of issues to launch our business ideas there – we were in parallel also eyeing potential opportunities in the Vietnamese market to which some private ties existed previously.
Back in 2013 there was no obvious activity at all around Bitcoin in Vietnam – and it took several months of digging & researching to find out about various hidden mining & trading operations happening in the country. The people conducting these operations were not interested in any public exposure at all though – they saw no benefit coming from that their way.
While this is a very understandable – and in a way quite smart – approach about handling one’s business affairs – it was not the way we chose to do business.
We were very public about what we set out to do from the very first day – with all the up- and downsides that come with it over the years.
Our fundamental idea was: In order to access and enable all the benefits and applications which come along with the use of Blockchain technology – you need to build the fundamental infrastructure first. And this entails first and foremost a way to enter the world of Digital Assets/”Cryptocurrencies” in a simple and convenient fashion.
Therefore the birth of Bitcoin Vietnam came about – Vietnam’s first Digital Asset Brokerage.
While initially only offering to convert Bitcoin into VND and the other way round – we have since then expanded our product offering to also include other popular Digital Assets such as Litecoin (LTC), Bitcoin Cash (BCH), DASH and Ethereum (ETH).
Our company since then also has expanded it’s product offerings – including Vietnam’s first Digital Asset Trading Platform VBTC (since 2014), our Blockchain-Remittance platform cash2VN (since 2015), Vietnam’s first Bitcoin ATM(s).
Born from vastly the same team has been recently our P2P platform Ginero which allows you to buy/sell Digital Assets without the need to go through a centralized middleman when converting your fiat currency into Digital Assets.
Our current focus is especially on upgrading our Trading platform infrastructure to be more competitive on a global scale – expect some news on it very soon.
Do you see Vietnamese adopting Bitcoin as a means of payment in the future?
We have to be cautious here – right now Bitcoin/Digital Assets are not recognized as a legal form of payments in Vietnam and possible fines can be levied if you use Bitcoin as payment method.
As long as the regulatory situation on this matter does not change we unfortunately can’t expect any large scale adoption as payment method within Vietnam.
What is Bitcoin mining in laymans terms?
Bitcoin mining provides the function to process/confirm transactions conducted by participants in the Bitcoin network.
They get rewarded with a (declining) Block reward and transaction fees of all transactions they process.
It gets far more technical/detailed than that – but then we would not be talking laymans terms anymore.
One thing important to understand is: Bitcoin mining in its insatiable strive for cheaper energy sources is currently spurring tremendous innovations in clean/renewable energy production and reduce the production of greenhouse gas emissions.
There are some mining projects which e.g. utilize the natural gas flares at oil wells and by doing so reduce the amount of CO² released into the atmosphere.
We also have seen that Bitcoin mining farms set up shop close to underutilized hydro dams and other renewable energy sources and start using the excess energy generated by these plants/installations. This in turn will help to make the financing of renewable energy plants much more predictable – since excess energy does not just get lost/wasted, but instead is going to be used to mine Bitcoins – and therefore make it easier/faster to pay off the investments into these plants; increasing their competitiveness against traditional means of energy production.
Opposed to government-subsidized clean energy programs which are often wasteful, misallocate capital and resources and ultimately unsustainable due to the constant uphill battle against market forces – Bitcoin is making use of these exact market forces and use the human drive for profits to achieve true innovation in the sector. Only the smartest and most innovative players stand to win out in this race for the most energy-efficient Bitcoin mining deployments.
Like in many other areas where Bitcoin succeeded in fundamentally challenging how people think about certain issues – Bitcoin is also forcing us to rethink and reevaluate the relationship between energy and money.
Those two might be much more synonymous than conventional wisdom dares to admit.
Would you advocate the legalization of Bitcoin by the appropriate financial regulators in Vietnam?
“Legalization of Bitcoin” is a very broad topic. Are we talking about Bitcoin as an investment asset, as payment method, the Bitcoin transaction ledger as some sort of timestamping mechanism which is used as a base layer for other applications to be build on top…?
In any case – we have been working since several years with the appropriate regulatory agencies to hold up a dialogue between industry and regulators and advance the knowledge around Bitcoin and related technologies.
One of the advocacy initiatives we have been involved with is BlockFin Asia which held back in summer 2016 Vietnam’s first international conference on Blockchain etc. with speakers such as Simon Dixon, Roger Ver, Pavel Kravchenko and many more under attendance of senior officials of the State Bank of Vietnam.
Currently we are accompanying and providing industry input to the Ministry of Justice in its efforts to create the regulary draft proposal for Cryptocurrencies/ICO’s in Vietnam – our CEO has just been speaking at a seminar on this very topic in Ho Chi Minh City this past Friday.
What do you think the future holds for Bitcoin in Vietnam and Asia as a whole, is Vietnam likely to become a hub of blockchain based innovation like say, South Korea?
Asia will definitely remain the “place to be” if you work in Bitcoin.
The US is shooting themselves in the foot with overbearing regulations in the financial sector. They will still play a relevant role moving forward since still a lot of large organisations and institutional money will continue to pour money into this space – but it can’t match the amount of interest and “Wild West” innovation and activity we have here in Asia.
Europe is – besides some “islands of hope” such as Switzerland, Malta, Gibraltar – for the most part a lost case. This has to do with macro-economic trends as much as with the general lack of ambition and strive in large parts of the population over there – and the few innovators and trailblazers left over there get constantly stopped out by the hostile regulatory environment.
The amount of interest in Bitcoin and related technologies by the public in hotbeds such as Korea, China, Vietnam, Japan is far exceeding anything I have seen in the West.
This also matches the general global macro-economic trend where the centre of economic activity is increasingly shifting towards Asia – which is something which the majority of people in the West still don’t comprehend. Asia is not just the “cheap workbench of the world” anymore. The amount of money China, Chinese business and Chinese citizens are investing all over the world is staggering – if you visit Chinese cities and compare those to Europe with their crumbling public infrastructure… – past versus future.
The 21st century will be an Asian century.
Do you see blockchain technology being adopted by financial institutions in Vietnam anytime in the near future?
If we leave aside for a moment the regulatory questions around this topic:
I am quite skeptical about most projects which claim to use “Blockchain technology” for supposed efficiency gains or otherwise magically resolving all kinds of random problems just by applying “Blockchain” to it.
The use cases for Blockchains are very narrow – and you have better a very good reason why you chose to add a Blockchain to your technology stack.
A Blockchain is a very slow and very expensive Database – and especially for most internal procedures in institutions; I fail to see how that can help them much. A traditional database solution is in the absolute majority of cases the better choice.
While you might be able to indeed run various processes and programs on a Blockchain – it does not mean that it makes sense.
I can also go back to install wooden wheels on my bike – and it will likely still be able to move. Does not mean that rubber tires are not the better solution here.
Banks and financial institutions have been throwing hundreds of millions of dollars into “Blockchain research” over the past 3 years – with very, very little to show for it so far.
What are your thoughts about the future of cryptocurrency as a whole, specifically about crypto trading? Are we likely to see traditional financial companies entering the market soon?
Traditional financial companies *are* in fact already playing in these markets since quite some time.
However as far as institutional infrastructure goes we have made a lot of extremely valuable progress over the past few years – and will continue to do so.
I don’t buy into this narrative, that all it needs for Cryptocurrency to leave the current bear market behind is some ETF or other tool made for/by Wall Street.
Wall Street is certainly not coming in to bail out a bunch of retail investors who are stuck with various scam-/shitcoins with no demand/use in the market which will continue to trend to 0.
This narrative is mostly pushed by people in order to justify some hope that their deeply red portfolios this year will see some relief soon. I think they will be in for a severe disappointment.
However – in the long run all this infrastructure *will* start to pay off. When the market ultimately turns – having all these additional inroads & onramps to enter the markets will help to propel the prices much higher than we saw it in 2017.
We have been through this whole process now 3-4x times already. Right now we are still in the cool-down period from the craziness which we saw in the cryptocurrency markets in 2017. More mature infrastructure continues to be built – which improves the whole foundation of the sector.
Just think about the differences between the late 2013 and the late 2017 bubble… – the late 2013 bubble still saw Mt. Gox with 90% of the global trading volume as the only real game in town. It was one extremely shady and shoddy operation on which basically the global Crypto economy was dependent on. Hardware wallets did not even exist back then. Secure institutional-grade storage solutions were non-existent as well. Bitcoin ATM’s just saw the first few prototypes rolled out. No bank/financial institution was even thinking about touching Bitcoin back in the day. We have come a really long way since then.
It might take a few years – but the markets will ultimately turn around.
However – people should take a close look at the fundamentals of the coins/token they are investing in.
Most useless coins/projects will simply die off as it was the case last time around in 2014 when all kind of shitty copy-paste altcoins were “invented” – and result in a total loss for the “investor”.
You might get lucky in the short-term some random altcoins/tokens which might outperform Bitcoin on a certain timeframe – just be aware, that it is not much different than gambling on penny stocks and will likely lose you money in the long run.
So my strong recommendation would be to stick with what works and has a proven market demand.