Part #1

It’s an eye-opening experience having the great opportunity to attend the exclusive Crypto Asset Revolution (CAR) program, held by ICORA Co.Ltd. together with Thai Fintech Association. The program will last for 11 weeks from June 12 until August 27, 2018. There will be 3 main modules, including

  • Introduction to Cryptocurrency
  • Fund raising via ICO
  • Back-end development using Blockchain

Photo Source: ICORA

Some key points, which we learnt from Ajarn Aor -Dr. Karndee Leopairote – CEO of ICORA and K. Opal- Ms. Nintita Loetruangsuphakun – Co-Founder of ICORA & Board Member of Thai Fintech Association, in their welcoming speech, are the following:

  • Opportunity to be part of community

It’s a good opportunity for us to learn from & to be part of the community, which could help make different for our country, related to the new trends in digital economic systems.

  • To get ready for future global digital economic system

We can expect from the program the right knowledge from the speakers & more understanding among the audience, including influencers, smart movers, techies, strategists, investors, researchers, regulators e.g. BOT, SEC, Ministry of Finance, Revenue Department, and others from universities, or even media industries.

  • Impact of blockchain

Blockchain today is still in the early stage, which is similar to the Internet 20 years ago. The blockchain is believed to have the potential to make drastic change in many industries, and of course it could end the era of middle man and start the peer-to-peer exchange of value. More transparent processes could be applied, e.g. for titled deeds and elections. It could add trust to a trustless system.

  • Right timing

Many new things covered in this class are still in a grey area. Hence, that’s the right timing when an opportunity could still be grasped.

Photo Source: ICORA

Part #2

It’s not often we have the opportunity to meet and learn from the Former Finance Minister and Chairman of the Thai Fintech Association, Mr. Korn Chatikavanij. This Crypto Asset Revolution program brought us that opportunity. We witnessed his strong willingness to help educate people to reduce the fear in society regarding new technology, especially crypto-currencies based on blockchain technology. Thus, this course was designed for people in various fields (e.g. politic, legal) to gain the basic understanding in the context of Crypto & its revolution in financial systems and blockchain & its revolution in all industries.

  • The end of Money & Future of Finance

K. Korn cited an example from his visit to the Forbidden City in China. In the souvenir shop, he noticed that among the people in queue in front of him no one except him used cash. This situation made him feel uncertain & concerned if they still use bank notes or coins. In the meantime, another city in China, Tianjin, just announced plans to become the cashless city. This made him wonder whether we will still use money or if it will be developed to any other form.

  • Money Definition

To be considered as “money”, it has to be able to address 3 characteristics: (1) store of value (monetize into value measured by money); (2) unit of account (represent financial status); (3) media of exchange (used to make payments). In his personal point of view, crypto may be regarded as an asset but not reach the state of money as yet, but it has high potential to reach that state.

  • Financial history

He further explained about financial history. In his opinion the starting point was not from barter systems but from debt and the usage of tokens. US currency (dollars) were backed up by gold until the period of deficit, when the U.S. stopped using gold to back up currency. Thus the U.S. can print the US$ bank note without limit. This caused the volatility in the financial market and finally the world economy suffered from the bubble burst during the 2008 financial crisis.

  • Bitcoin’s idea

From the financial crisis in 2008, the new idea of Bitcoin was initiated. It was claimed to be invented by a man with Japanese name, Satoshi Nakamoto. Due to the situation of people loosing confidence in currency, e.g. US$, the new currency was designed so that no one can have absolute power over that currency. The idea is to limit the number of Bitcoin not to exceed 21 Million Bitcoin as per a fixed formula, the Bitcoin algorithm. The room for expansion is allowed upon the condition that each Bitcoin can be expanded into 100 Million unit to add into the liquidity. So far the Bitcoin has already been mined up to 80% of the ceiling, already meaning that the ceiling may be reached soon. The limit should be an advantage in term of financial stability, so that Bitcoin could potentially be regarded as one of the most stable currencies in the world.

  • Cost reduction via Bitcoin

The Blockchain technology can help create various forms of currencies, e.g. Bitcoin. Comparing the current banking system, which requires the transfer of money- the technology allows us to dramatically reduce the cost per transaction, from 44 Baht (using a bank) to 13 Baht (using a call center), 5 Baht (via ATM), 1 Baht (via mobile banking); and 0 Baht (via Bitcoin). The reason why the change occurs in financial industry first is because the savings has been clearly proven. Thus, many banks started to announce their strategy to reduce branches and staff and apply more technology as they need to be able to compete. Banks also need to think of how to be closer to customers, e.g. using mobile phone. In other countries, the internet only banking is allowed, enabling a dramatic cost reduction. Technology like crypto should be able to disrupt banking if it can become popular.

  • Millennials as Digital Native

Spending will be influenced by the behavior of millennials (group of 21-36 years of age currently) as the former generation like baby boom or generation x are consuming less when aging. It’s very important to consider the behavior of millennials as they are the 1st group regarded as digital natives. Previous generations may have learned to use digital technologies after they grew up in an analog world while millennials were born in a digital world. They don’t have to learn but absorb by their instinct.

  • Millennials’ Behavior

From the survey result – 75% of Millennials do not rely on banks, and more than 80% don’t invest in the stock market. Thus their attitude towards investment and financial direction will be different from the previous generations. However, the current financial infrastructures (stock mkt/bank/ store) are not yet ready to serve their needs.

  • Chinese financial market

Today in other countries like China and the U.S., most of people don’t use cash. Chinese people skipped banking services a long time ago as they were outdated and didn’t serve their needs. 90% of financial transactions are via Alipay.

  • Non cash transactions prosper in Asia

Millennials are aware of Crypto more than any generation and will be the key group to make changes & define the disruption. Millennials in Asia will be more influential than those in other continents as their attitude towards future earning opportunity is more optimistic than those in Europe. In Europe, many things are too pricey, thus creating the feeling for millennials that they have less chance to own their own home. In Asia, millennials feel there is more opportunity than there was for their parents. Use of forms of payment other than cash are estimated to grow by 30% annually (e.g. mobile banking/QR code) in the next decade. The growth is expected to be much higher than for other regions.

  • Five influential technologies in financial world

Machine Learning/AI: This allows more opportunity for borrowers to secure loans as credit scoring via big data analysis is applied.

Chatbot: Some can be smart enough to adjust the guideline questions to improve the service level

Blockchain: It will be highly influential in many industries, e.g. as crypto/ ripple, reducing cost in International Money Transfer and Letter of Guarantee Issuance

IOT: today around 11,000 Million devices are connected via internet. (more than the number of people on earth, which are estimated around 7,000 Million) which will grow to 60,000-80,000 million in the next 4-5 years. All are connected seamlessly allowing for immediate payment processing.

Cryptocurrency: His personal view is that there are still concerns in terms of security. It can be stolen from a virtual wallet and once it’s lost – no one is in charge of notification. 30% of Bitcoin was stolen. If it remains a risk and we don’t develop protections to limit the risk, then it’s difficult for this be recognized as money yet.

• Adoption by government around the world

90% of Central banks around the world are considering using cryptocurrency. Bank Of Thailand (BOT) is also in this stage of studying whether we should issue Baht Coin.

  • Stay tune

“Is it the end of dollar? Blockchain will replace conventional finance groundwork while Crypto will replace money today.” No one can tell if this statement will become a reality or not.

  • Important to gain popularity within short period

“One great idea can quickly gain market share.” From tracking the past, technology can gain a potential to change the world by reaching a base of 50 million users. The newer technology uses less & less time to gain popularity, e.g. Radio 38 years, TV 13years, iPod 4years, internet 3years, Facebook 1 year and Twitter 9 months. Thus if blockchain really becomes a broader trend it should not take a long time.

  • Concentration risk of Bitcoin owners

Only around 1600 wallets of Bitcoin owners account for 50% of all Bitcoin ownership. This represented concentration of ownership leads him to believe that Bitcoin has not reached the time to be recognized as money yet due to this accessibility issue.

  • Blockchain in various fields

Blockchain can disrupt the middleman in various areas e.g. property (verification of right over title deeds), medical information (sharing &tracking). In the future Blockchain should also be able to allow owners of data to gain revenue sharing from their own data.

  • Meaning of ICO

ICO stands for Initial Coin Offerings. It is the fund raising via Crowdfunding + Blockchain + Crypto. Fund raising via ICO is increasing continuously.
It’s an option for startups, who have limited access to funding, especially for startups that rely on blockchain to serve as a base in their innovation. He feels that the regulations or taxes imposed by government should try to encourage flexibility for startups to grow.

  • Some samples of ICO in Thailand

JFin Coin (under J Mart) – using blockchain to build a platform for P2P Lending – borrowing directly without a middleman in Thailand. The gap of interest is the largest in the world. If this model is successful, meaning the benefit is allocated to the majority, since the gap of interest can be allocated to borrowers and lenders, instead of the benefit being gained only by a middle man.
Carbonium (subsidiary of stockradar) – platform for social trading, allowing people to invest by following the ideal investors.
Six Network (JV among Ookbee & Tencent & Yellow Korea) – platform to exchange IP (creative assets) and distribute their work, e.g. cartoons or songs, without the requirement for a middleman. This form is initiated in Thailand but registered in Singapore as there is a concern about taxation.

  • Outstanding speakers line up

There is a list of high quality speakers in this program. They are among the very first group who have been there & done that for many years, gaining experience in the CryptoAsset world. Their names capture our attention and make us look forward to learning more and more in upcoming classes.

Author: Waleeporn Sayasit, Corporate Communications Director, TCC Technology
Advisor: Dr. Karndee Leopairote, CEO, ICORA
Editor: John Bickel, Senior Consultant, TCC Technology
Source: ICORA ‘s class, CryptoAsset Revolution (CAR) #1