Edgy Labs’ very own Krista Grace Morris recently sat down with Remitano co-founders Dung Huynh and Phuong Nguyen to talk cryptocurrencies and their future potential.
Remitano is a Vietnam-based third-party cryptocurrency exchange that includes exchanges between Bitcoin, Ethereum, and centralized currencies. It is an easy and secure way to navigate cryptocurrency trading for people unsure of how to operate within the anonymous interworkings Blockchain transactions.
Initially, the company only traded in the highly-valued Bitcoin, but as Ethereum saw a 3,000% rise in its value over the past year, Remitano added this cryptocurrency to the exchange just a couple of months ago.
Ethereum is unique in that it allows escrow platforms and smart contracts. Ironically, the Ethereum Blockchain resembles a traditional bank or escrow model–it’s just the virtual, more accessible version.
A quick review of the differences between Bitcoin and Ethereum, according to Investopedia:
“Bitcoin and Ethereum differ in purpose. While Bitcoin is created as an alternative to regular money and is thus a medium of payment transaction and store of value, Ethereum is developed as a platform which facilitates peer-to-peer contracts and applications via its own currency vehicle. While Bitcoin and Ether are both digital currencies, the primary purpose of Ether is not to establish itself as a payment alternative (unlike Bitcoin) but to facilitate and monetize the working of Ethereum to enable developers to build and run distributed applications (ĐApps).“
Without further ado, here’s our interview with Remitano:
Edgy Labs: What kinds of fraudulent activities prompted you to start this company?
Remitano: We started the company because local Bitcoin services were lacking. We launched the product in Malaysia and grew it from there based on the successful reception of the test.
With that said, botched trades and pyramid schemes in Asia and Africa are rampant. In Malaysia, Vietnam and in Singapore, just to name a few.
EL: It’s interesting that you mention pyramid schemes. In fact, Ilan Goldfajn, the president of Brazil’s central bank, recently dismissed Bitcoin as a pyramid scheme.
I think we’re all in agreement that blockchain technology in itself isn’t a pyramid scheme. But, the argument could be made that certain uses of the technology (especially with regard to cryptocurrencies) do function like a pyramid scheme.
For example, the classic pyramid scheme depends on more people buying into the pitch to make money. The only way that people in on the scheme get paid is to constantly recruit new parties to invest more money. No goods or services are being bought, sold or traded. Plus, there are a finite number of Bitcoins out there.
That’s the difference between a legitimate pitch that revolves around a product and a pyramid scheme that doesn’t. With Bitcoin, for instance, there is no product, either. The product is the money, i.e. the coin is the capital and the good. With traditional trading, investments like stocks and bonds uphold a price-value ratio. Or as Oaktree Capital Co-Chairman Howard Marks put it:
“Serious investing consists of buying things because the price is attractive relative to intrinsic value.” “Speculation, on the other hand, occurs when people buy something without any consideration of its underlying value or the appropriateness of its price.”
What do you say to the folks out there that are of the same opinion as Goldfajn and Marks? Is Bitcoin speculative? Is it being used as one giant pyramid scheme?
R: Some leaders in the banking industry, such as JPMorgan, denounce Bitcoin as a fraud and deny the future potential of Bitcoin as an economic force. This stance can be explained by a few obvious reasons.
Although many banks are interested in Blockchain technology, they have a strong opinion against Bitcoin since it is one of their potential competitors.
The fact that Brazilian central bank president Ilan Goldfajn recently compared Bitcoin to pyramid scheme proves that banking industry is desperately fighting against the escalating threat of Bitcoin. However, the claim is absolutely absurd.
People join pyramid schemes mainly for unreasonably high-interest rates and most of the pyramid models are easily proven unsustainable. In contrast, the majority of people buy Bitcoin as a means for trading, remittance or speculation. The price of Bitcoin reflects the current market demand
They try to make use of their influence to manipulate Bitcoin’s price for their own gain. Take JPMorgan Chase’s case for example. It was revealed that the company bought shares of the Bitcoin Tracker One exchange right after the bank’s CEO, Jamie Dimon, publicly denounced Bitcoin. The bank later alleged that the purchase was on behalf of its clients.
“Success” is also synonymous with “scam” in the blockchain platform world and Ethereum is no exception to the rule.
Our company has responded to traders’ emergent demand for the support of the Ethereum cryptocurrency, as well as a primordial need for cybersecurity, with our own solution: Remitano allows entirely safe transactions (via the Escrow platform) at the best price (1% fee) by acting as an intermediate between traders who are constantly assisted by instant support.
Peer-to-peer Ethereum international exchanges are also facilitated since the platform supports a remittance service allowing quick and untroubled trades based on privacy and security.
EL: Don’t you think that blockchain and cryptocurrencies like Bitcoin are being used inappropriately?
Aside from the pyramid scheme accusations and recent hacks that exploit vulnerabilities inherent to both currency’s coding, I mean that there are plenty of purposes that use blockchain where another platform would probably be more efficient. Blockchain and Bitcoin have become such hot topics that we seem to want to apply them to everything even where they don’t necessarily fit.
Would businesses and consumers benefit from more regulation on cryptocurrency trading? How do we strike the right balance between consumer protection and the kind of over-regulation that stifles innovation?
R: Easy money schemes most likely result in huge losses at some point. They are unsustainable. That has to do with how the technology and the currencies are being used and not with their underlying value.
Part of the appeal of Bitcoin and other cryptocurrencies is that there is no government oversight. It’s a P2P system. It’s disruptive to the JP Morgan’s because it eliminates the middleman and gives consumers more freedom over their money and how they use it. It breeds transparency and increases access.
Traders and consumers don’t need to work through the government. Whether is a classic pyramid scheme pitch or a strange salesman calling your home or a shady Bitcoin offer, there are always questionable individuals out there looking to scam. Technology isn’t the problem and harsh regulation isn’t the solution.
EL: ICOs are everywhere. They help provide startups with access to capital and the public with new ways to invest in technology and innovative business ideas.
We already talked a little about the fact that cryptocurrencies are largely unregulated but some countries are making very public moves toward regulations. China just banned ICOs and the U.S. just announced an SEC cyber taskforce to oversee ICO and FinTech breaches.
How might this kind of regulation affect the price of Bitcoin? What causes the value of Bitcoin to depreciate?
R: The fact that a government announces that it will make Bitcoin or ICOs illegal will definitely affect the currency’s price (while China’s banning of ICOs did have a brief effect, cryptocurrencies rebounded). On the other hand, if Bitcoin appreciates too much over a short period of time it might dip.
However, Bitcoin becomes more resistant and resilient over time.
- (Or do they?)
EL: So, what advice do you have for potential investors or normal people looking to buy Bitcoin or Ethereum?
R: Be smart. Be vigilant. Just like with anything else in life, don’t trust a deal that sounds too good to be true or asks for a fund transfer outright.
Remitano exists to help secure cryptocurrency trades. So, if you do decide to trade your Bitcoins for cash, use a trusted third party like Remitano to help protect you against a scam.
Investing in Bitcoin should be simple: just buy Bitcoin and watch it appreciate. In fact, it could be an investment that helps protect your money against inflation, war and other factors that cause economic uncertainty and instability.
In times of war, turmoil or in the case of rapid inflation, Bitcoin can be used to purchase food or supplies. And, even safely get your assets to a safer location.
- Read here about cryptocurrencies’ potential to help stop a future “Brexit.”
EL: Mining Bitcoin and Ethereum requires a significant amount of energy. We’re talking terawatts of energy. Mining these currencies is so energy-intensive that it matches the energy consumption of entire small countries like Iceland. What do you think about this? What does this say about our values?
R: Humanity is resourceful and innovative. We’re not worried about our ability to find new energy sources to power all of our needs and activities. It might be renewable energy, it might be sources that we can’t even imagine. We’re already coming up with solutions and with the way our population is expanding, our species works well under pressure.
Energy is the most basic form of life. People will always find a way to get it.
EL: Speaking of Iceland, they are already developing solutions to powering more and more of itself with renewable sources like geothermal energy.
In the newest chapter of Philip K. Dick’s original story which was adapted to create the film Blade Runner 2049, there is a massive “Blackout”. All tech goes dark. Tons of data is lost. If this were to happen in real life, Bitcoin would take a huge hit. This is something that just can’t work without the internet.
We’re putting a lot of eggs in one tech basket. We might be making a mistake to assume we’ll always have the means to power the internet, to assume, as economics does, “all things being equal”.
That leads me to my last question: what will the world economy look like in 10 years?
R: Wow [laughs]. Interesting question [pauses].
Things change so quickly. Cryptocurrencies like Bitcoin will become the norm. They will replace platforms like PayPal. They will replace governmental central banks.
People will learn about Dollars in history books.
EL: What makes you think we’ll still have books?
R: [laughs] You’re right. But, if one thing’s for sure, globalization will get stronger.
Individual countries may still have their own currencies all organized differently but blockchain and cryptocurrencies will help standardize trading. Actually, in the same way that each county today has its own currency that’s organized differently than another, each cryptocurrency is like a different country’s currency, and the person holding a certain coin is like its citizen.
In that way, having a single, global currency isn’t necessary. Trading will just become more decentralized and local.
The point here is access. Twenty years ago, having electricity in Vietnam was a luxury.
One heated debate in Bitcoin conversations is the speed at which one can make a transaction. For now, about 1000 transactions every 10 minutes is the limit. But, new technology could push that to 1 billion transactions per second. This would help make Bitcoin accessible to everyone. That’s not even possible for credit cards like Visa or American Express.
EL: Do we need quantum computers to be able to make that number of transactions possible in that little time?
R: We don’t see a need for quantum computers to make this possible but they could definitely help.