The Blockchain Month

And (some) developments from Southeast Asia

It’s been an interesting month in the Blockchain world. Bitcoin hit peak market cap at $45B before tumbling down. Ethereum continues to hover at its new-found peak of $21B. Token Summit by William Mougayar saw overbooked halls. Consensus too saw overpacked 8 floors and has already started selling tickets for Consensus 2018. Kik messenger launched Kin. Storj finished a one-month planned token sale of $30M in 7 days. Rare Pepe might be the new Pokemon Go, no kidding. USV announced two new investments: Blockstack and Protocol Labs (Coinlist). All we need are a few dinosaurs to show up and we have the perfect Spielberg movie set here. Oh wait, Walmart just showed up. There you go.

All of this is obviously a lot to process, and it will take me 2 or 3 weekends to do that. I have been fooling around with Ethereum project for almost a year but only now am I starting to see signs of the inflection point. Even as USV’s Albert Wenger warns of a Cryptobubble and TechCrunch’s Jon Evans compares Blockchain with Linux rather than the Internet, everyone else is still trying to figure out the next big (or infact any) real use case for the technology. All this buzz is pushing people to throw their dirty socks at the wall to see which ones stick. But the buzz is also compelling enough for a few hundred college students to invest $40 million in various ICOs and it’s also compelling enough to force me to stock up on a bit more Ether.

Coming to buying Ether, I had my first experience of buying crypto currency a couple of weeks ago and this was no walk in the park. I started off first researching a few options to buy and came across a dozen exchanges. After spending a few hours going through pros and cons of each I tried to give some of the Indian ones (Zebpay and Unocoin) a run for their money. But when I did a quick calculation of the exchange rate difference, there was almost a 10% commission fee included in there, and hence it was back to US/SG based wallets/exchanges. I finally settled on Coinbase and was glad to see Xfers offering a low fee bank transfer option. Only to be disappointed by the next screen message that the payment channel was not being supported anymore. Dejected, I agreed to pay 3.5% credit card commission (wasn’t Bitcoin/Blockchain supposed to reduce the fee in the financial industry rather than increase it?). Only to be foiled by the latest passthrough-proof all-digital KYC check which failed for first three attempts until Coinbase locked me out and asked me to come back in 24 hours. Some 24 impatient hours later, still highly resolved to buy my Ether, I finally managed to get through the Z Security and bam, I had finally bought Ether for $100. Coinbase doesn’t allow more. Point of this whole rant being, buying cryptocurrency was supposed to be easy in 2017, but it sure is not, especially when sitting in Southeast Asia. Which brings me to my next point.

So where is the Southeast Asian blockchain ecosystem really? Well firstly, we seem to have some innovative companies here. Otonomos I hear is one of them. But its difficult for me to see why some one will trust Otonomos offering for a standard company incorporation over simpler traditional methods. Probably Coinlist is a much better use case than Otonomos as it is targeting ICOs specifically and building its own SAFT (sort of like a SAFE agreement for ICOs).

We have Coins.ph, that has gone on to raise more than $10M for its Series A. Again, I’m a bit skeptical of the frontend use of bitcoin here. If a an OFW need to buy Bitcoins to send money from Singapore to Philippines, I am concerned about initial adoption. Just refer to the section above of the bitcoin purchase experience. And I also see a lot of new offerings on Coins.ph don’t even mention Bitcoin, which probably means the company is trying to diversify away from crypto-currency.

Lastly, and most interesting of all, we have Omise. Omise just announced that it’s going to launch an ICO of $16M for a new Payments service Omise-Go. The details are yet to be announced, but after watching their 4 minute introductory video, I am pretty confused of what the company is planning to do with OmiseGo. There is a mention of e-Wallet capability where users can send in money from point to point. There is mention of Cash-In and Cash-Out but not really sure how that can happen without having physical presence while dealing with cryptocurrency. There is mention of a white-labeled Wallet-as-a-service for Telcos to enable wallet interoperability. I guess only time will tell what OmiseGo will shape up into, but for now seems to be a lot of marketing gimmick (*cough* Slumdog Millionaire *cough*) to get through the ICO hoop.

Don’t get me wrong, even though I might sound skeptical, it’s great that all these companies are trying to push the barriers on Blockchain. It’s high time that Asian companies start taking the charge in new technologies. During the Token Summit, it was mentioned that Singapore is the best place to launch an ICO. This is because the government is allowing more and more companies to become part of a Sandbox and still do an ICO. It’s amazing that the government is trying to put the Little Red Dot on the Blockchain map. But what we really need is more companies thinking even more creatively to develop the next blockchain business models in daily use cases. For example, how about removing Uber and Grab from the equation and allowing a decentralized Taxi network with tokens acting as Taxi licenses? The more you drive the more Tokens you earn and later on you can sell these off to somebody else who wants to drive. Clearly use cases like these will not be experimented by incumbents such as Uber and Grab as it hurts their own business model, but a new startup can definitely aim to work on it with an existing network such as Bluebird.

The danger of not being the early bird here is quite clear. More and more foreign companies are setting up a base in Singapore to do their ICOs. The tech remains elsewhere, the capabilities remain elsewhere, but the regulatory framework is here. There is a danger of Singapore becoming the Delaware of Blockchain economy, while it’s the Silicon Valley of Blockchain that we should be aiming for.

Update: Since the blog post, Brave raised $35M in an ICO in under 30 seconds.