Bitcoin and cryptocurrency industry in general experienced a dramatic year full of ups and downs, although the budding technological and economic sector have been making waves ever since it first appeared. People’s opinions on cryptocurrencies are becoming more controversial, while industry insiders, even governments, are taking different stands towards them.
This morning at TechCrunch Beijing, five prominent figures in the sector shared with Rui Ma, venture partner at 500 Startup who also served as moderator of the panel, about their insights on Bitcoin and digital currency industry.
There are over 200 kinds of cryptocurrencies over the world, but most of the trading platforms are focused on a few categories. In the case of Chinese leading Bitcoin trading service OKcoin, Star Xu, CEO of the company, said the platform currently only support the trading of Bitcoin and Litecoin. Xu added that they are very cautious in including new cryptocurrencies into its platform in a bid to control the risk of investors. “But we are also open to new digital currencies if the technology is stable and well-received by users”, he added.
Leon Li, founder and CEO of China-based digital currency exchange Huobi, shared Star’s opinion. Leon said Huobi has an internal evaluation system for new virtual currencies in terms of market values, liquidity, etc. Huobi included Litecoin this March.
Huobi just launched BitVC, a trading platform for derivative products of cryptocurencies, in June this year. Leon introduced that the platform targets at global platform and its oversea users account for over 50% of the total. Huobi also acquired Bitcoin trading app Kuaiqianbao, a Bitcoin-focused security-as-a-service provider.
ItBit is a leading Bitcoin provider in system security, market making and data keeping and is one of the first trading platform to introduce infrastructure and expertise of a global financial exchange. Although ItBit do not support RMB transactions at present, Richmond Teo, co-founder and CEO of the company, said the team is considering to cooperate with Chinese trading platforms to tap Chinese market.
Different from other three companies which are focused on cryptocurrency trading like Bitcoin or Litecoin. Yin Chen, cofounder and the CTO of Melotic, positioned the company as a digital assets trading platform. Chen cited two examples of digital assets that are currently trading on the platform. One of them is a Bitcoin media-backed virtual currency which will be distributed to content contributors and readers, and can be used to pay for advertisements on the web media. The other one is a gold-backed digital currency.
Challenges and Prospects of Bitcoin Industry
The biggest challenge Bitcoin industry faces now is that we still haven’t found an application scenario in which users can see the values of Bitcoin on the first sight, Leon pointed out. As a currency, users can see the values of Bitcoin only when its user base reached a certain scale. But at present, Bitcoin industry is still in the early development stage to accumulate seed users.
Bitcoin industry experienced exponential growth in 2013. The number of investors reached 5 million to 10 million by the end of 2013, but we still have a long way to go, said Star Xu. “Our key challenges here is continuous upgrading and improvement of infrastructures.”
According to Richmond Teo, the most significant challenge of the industry is the lack of cooperation with traditional banks, exchanges, financial agencies and Bitcoin exchanges. “We need to develop faster, otherwise, traditional banks or payment methods will invent similar cryptocurencies to replace Bitcoin.”
But to Chen Yan, the challenges mainly come from unclear administrative regulations, cause they will lead to slow development of various applications and infrastructures. The problem is also true to P2P lending industry, he noted.