Part #3

We look forward to attending the class after hearing from K. Korn last week that today we will have the opportunity to learn from one of the best qualified people in the world to simply explain the concept of blockchain. He is Dr. Bhume Bhumiratana, Advisor of the Securities and Exchange Commission Thailand.

Photo Source: ICORA

Dr. Bhume started talking about Blockchain 2 years ago and today he has already spoken about it 270 times. Let us share some of his thoughts:

  • Limitation of Internet

Blockchain is new technology which can be called “The Next Revolution,” which will be part of our daily life,just like Internet today. Blockchain is an infrastructure for online currency development, using the internet as the foundation. Blockchain is further developed by closing the internet’s gaps in terms of value and trust. For example, the Internet can only ensure sending a message out but cannot guarantee whether the target will receive it or not. The Internet requires other functions, e.g. from applications, or platforms like Facebook and Twitter, to add value on top. The Internet requires a middleman to enhance trust.

  • Internet of Money

Blockchain is the internet of money.
1) It requires no trusted 3rd party. (no need for a middleman)
2) It can be verified thus a receiver cannot lie. (it adds transparency)
3) A finite amount exists.
4) Transactions can happen between anyone.
5) Transactions can happen from anywhere.
6) Clearing completes almost immediately.

From the above 6 characteristics, Dr. Bhume shared K. Korn’s point of view
that money status has not yet been 100% achieved due to security concerns. In case of wallet hacking, there is no one we can notify. The status of money should be fulfilled if any legal protection support.
On the other hand, Dr. Bhume viewed differently that money status has already been reached, that just as for cash that we need to be responsible for our own risk when we carry it. Thus, it can be regarded as money.

  • What is Blockchain?

Blockchain is

๐ A network of computers that cooperates to maintain sets of facts together as they grow.

๐ Keeping them consistent via consensus with algorithms that automatically repairs mistakes and errors, where each fact is validated by all participants as they are generated.

๐ As a result, the system can be trusted without trusting anyone in the network, as long as you can trust in the algorithm.

Again we heard the name, Satoshi Nakamoto, the starting point was the idea to bypass the middleman e.g. government. The idea is to eliminate the center & decentralize to many servers around the world, which can be scalable. Each one has its own copy (database), which needs to be consistent with the rest via the process of announcement once transaction occurs, and then verification together at the same time. This activity is called Bitcoin Mining. The fastest one will win and get the reward. Bitcoin’s Blockchain is fully transparent (unlikely to be falsified), as someone would need to hack every server to alter the facts, given that the key must be kept in the safe environment.

  • The benefit of Blockchain

It can be applied not only as money, which is known as Cryptocurrency, but it also can be used in various areas such as smart contracts, crowdfunding, governance, supply chain, provenance (place of origin), audit, data storage, trade, smart grid, identity, fraud protection, anti-money laundering, etc.

  • Types of Blockchain

1 Public Blockchain: Open Access -anyone can view & no privacy/ Slower Speed e.g. Cryptocurrency such as BitCoin, LiteCoin, Ether, etc.

2 Private Blockchain

2.1 Consortium (Permissioned): Controlled Access by group of members
2.2 Organization: Controlled Access within company/ Faster Speed

  • Software platform & technology
    • We can try creating the coin by using open source blockchain platform, e.g. hyperledger, Enterprise Ethereum, Bigchain DB, Tendermint, etc.
    • There are a number of technologies which were enhanced by blockchain development e.g. Hash graph; Cosmos (as internet of blockchains) ; Plasma (to be faster – used by Ethereum & Omise)

Photo Source: ICORA

Part #4

The story that we heard before was about Uncle Chalok, who is a well-known trader and Bitcoin Miner since 2011. He used to advice his students to aggressively invest in Bitcoin many years ago, and if someone had followed his advice they would have received a handsome return by now. His son is Mr. Piriya Sambandaraksa, Managing Director of Chalok dot com (CDC). Learning from his father, he is familiar with Cryptocurrency and joined us to share his experience under the topic: Introduction to Cryptocurrency (Bitcoin, Ethereum, ALT-Coins/Token).

  • Blockchain & Bitcoin

Basically Blockchain is like a road (Infrastructure) and Bitcoin is like a car.

  • Opportunity or Underestimation

He cited various news showing that Bitcoin and Ethereum are in decline. In his opinion, the situation is viewed as an opportunity, while most people still underestimate the impact of digital money.

  • Experience from his childhood

Mr. Piriya learned from his childhood that he could gain money from games, e.g. Ragnarok. Handsome profit can also be gained from trading, but this potential is later diminished. The money tends to have less value when money is oversupplied. Hyperinflation can happen in both the digital and the physical world (including even the fiat money system controlled by central government). Continuous deficit can result in the attempt to issue more banknotes, which can cause hyperinflation, which quickly erodes the real value of money. It’s like what happened in Zimbabwe, Venezuela and Germany in the turbulent years when prices were soaring, until people had to carry a bunch of banknotes just to buy small thing like bread.

  • Cryptocurrencies

According to masterthecrypto.com, cryptocurrencies are digital currencies that are encrypted using cryptography, which refers to the use of encryption techniques to secure and verify the transfer of transactions. All coins and token are regarded as cryptocurrencies.

  • Bitcoin – the 1st private decentralized permission less digital cryptocurrency.

Before Bitcoin’s time, there were other cryptocurrency e.g. Digicash (in 1990), Hashcash (in 1997), B-Money and Bit Gold (in 1998). However Bitcoin is the world’s first private decentralized permission less digital crytocurrency. It does not have to be owned by a government or any central institution.

  • Altcoins

Altcoins are the alternative cryptocurrencies that have emerged with the attempt to imitate the success of the better-known Bitcoin. They all seek to improve upon Bitcoin in various ways. There are 2-types of Altcoins:

1. Bitcoin-Derived Blockchain: The majority of altcoins are a variant of Bitcoin, using Bitcoin’s open-source. They are entirely new coin with a different set of features for example Namecoin, Peercoin, Litecoin and Dogecoin.
2. Native Blockchain: The other altcoins that aren’t derived from Bitcoin’s open-source protocol. Rather, they have created their own Blockchain and protocol that supports their native currency. Examples include Ethereum, Ripple, Omni, Nxt, Waves and Counterparty.

  • Token

Tokens are a representation of utility or a particular assets that are tradeable e.g. commodities and loyalty points. Tokens are created and distributed to the public through an Initial Coin Offering (ICO). There are 2 types, utility tokens and security tokens.

1) Security tokens entitle their holders to ownership rights of a company.
2)Utility tokens provide their holders with future access to the company’s services/product.

Photo Source: ICORA

Part #5

Director of the LL.M (Business Law) from Chulalongkorn University, Dr. Piti Eiamchamroonlarp, provided us with some background about Digital Assets under Thai law: The Emergency Decree, and then shared his legal experience about the legal risk and how to write Terms & Conditions for ICO projects.

  • Digital Assets

Digital Assets under Thai law: The Emergency Decree includes

o “Cryptocurrency” means an electronic data unit built on the electronic system or network which is created for the purpose of being a medium of exchange for the acquisition of goods, services or other rights, including the exchange between digital assets.
o “Digital Token” means an electronic data unit built on the electronic system or network which is created for the purpose of specifying the right of a person to participate in an investment in any project or business, or to acquire specific goods, services, or other rights under an agreement between the issuer and the holder.

  • The Emergency Decree: Aims & function

1. The SEC becomes a regulator of the offering of digital assets and digital assets business.
2. The SEC is responsible for regulating public offer of digital tokens
3. A digital assets business undertaking must obtain a license.
4. Restrictions on unfair practice (related to sales of digital assets)
It is subjected to liquidation, revocation of license, a ban (on any action affecting to country’s economy) and criminal penalties (in case of non-compliance).

  • Other key remark:
    • The TOU (Term of Usage) is no longer valid/ enforceable in case that
      a. an agreement having an objective that is expressly prohibited by law or
      b. Fraud (declaring false information on capability to issue the coins).

Photo Source: ICORA

Part #6

During the evening party, it’s supposed to be relaxed after long hours of lectures. We might feel sleepy when talking about security but surprisingly we listened attentively until the end. The stage was controlled by the well-known security expert, Ajarn Parinya Hom-anek, President & Founder of ACIS Professional Center Co. Ltd, presenting under the topic: How secure is blockchain? How to keep your digital wallet safe.

  • Secure by design

Security & Privacy are foundations for not only normal infrastructure but also Blockchain. Blockchain, Bitcoin, Exchange and Wallet can be hacked, thus the basic security practices are recommended to be applied e.g. smart contract auditing, penetration testing, ISO27001 based controls and security privacy policies, etc. To explore more about cyber security, he recommend to research more in useful link https://topp9nk.weforum.org/knowledge/explore

  • Digital Economy is not a new word

Ajarn Prinya mentioned that Don Tapscott wrote “The Digital Economy” in 1995, thus in his opinion the digital economy is not new but used for over 20 years already. “Digital Economy” is regarded as the 1st generation and the 2nd one is “Data Economy.” Today we enjoy using social media for free but it’s in fact not really free. Unknowingly we are making a payment in the form of our privacy. Our info is given away to providers e.g. Facebook and foriegn platforms, once we accept the terms & conditions. Thus “Data Sovereignty” does not exist in Thailand. Lastly the 3rd upcoming generation is the “Crypto Economy” or “Blockchain Economy”
Additional source: https://www.acisonline.net/?p=5537〈=th

  • Wallet

As Hot Wallets are connected to internet thus they may be vulnerable to attack. His recommendation is to keep a small portion in our hot wallet. The majority of our wealth should be kept in Cold Storage until specific transactions are needed. In this case, we can keep an eye on overall security, betting that hackers will not break into our hot wallets for a small number of coins or tokens.

  • Blockchain – one of top five digital disruption trend

The five digital disruption trends include 1) Blockchain, 2) Big data analytics, 3) AI/ Machine Learning, 4) Internet of things, 5) Cyber security. In his opinion, Blockchain will have major impact, and his concentration will be in 2 of these areas, on blockchain & cyber security.

  • Internet of information vs Blockchain:

In the Internet of information: we transfer only information e.g. photo, powerpoint slides, documents, and email, while blockchain is the 2nd era Through blockchain we can also transfer digital assets, e.g. money, votes, IP, Contracts (Loyalty points, deeds, coupon) and other financial assets (bond , stock, futures) without a requirement for any middleman or clearing house. To gain more insightful detail, he recommend 2 books: Digital Economy and Blockchain Revolution by Don Tapscott, and some other useful links for investors, e.g. www.coinmarketcap.com; www.etherscan.io; www.icobench.com, www.crytocompare.com. For trading purpose, only username and password identities protections are not enough. He also suggests using Two Factor Authentification (2FA).

  • E-wallet – no need to be Blockchain

He cited some examples of eWallet by DTAC, Mpay, and Truemoney wallets, which don’t have to use blockchain as a digital wallet has digital currency inside.

  • How to store our private key securely

1) don’t lose or share the key to anyone.
2) don’t share or keep on mobile/ computer/ cloud.
3) print out the paper wallet key and keep in secured place.

  • Violate security rules

Most of us like to use a Facebook password to log in to other websites. Sometimes we access some application on Facebook to change our face or costume. After we listened to Ajarn Parinya, we realize that we should change our behavior to avoid security risk.

Photo Source: ICORA

Part #7

In the 1st night that we attended the class, we had an opportunity to listen to Mr. Prinn Panitchpakdi, CLSA Thailand Country Head and a Governor of The Stock Exchange of Thailand (SET), and on the Board of Directors of the New Economy Academy (NEA,) and the Association of Thai Securities Companies (ASCO). The talk by K Prinn was entertaining and fruitful. Without any script or presentation material, he could tell a variety of stories about interesting issues that happened in many countries around the world. Some thoughts he shared from his session include:

  • Government Role

He believes that government has a well developed plan for the country, considering the direction to be identified as Thailand 4.0. The problem is the execution stage. Some resources are still at version 0.4, given the mindset of some civil servants who were in the Tom Yum Kung era, who tend to be concern primarily with stability. Others may need help from government to supply the tools to help them move forward.

  • Blockchain Ecosystem

Foreign investors e.g. from the Taiwan visited the Eastern Economics Corridor (EEC) area with the aim to build Blockchain Ecosystem. Blockchain could become the focused area used by many multinational companies presently.

  • Blockchain in various areas

We could consider to apply blockchain in various areas e.g. hospital, medical, agriculture, etc.

-Hospital: Patients’ record could be kept securely and released to save people’s lives when emergencies happened anywhere in Thailand
-Medical: Once medicine is authorized, its active ingredient should not be changed. The medicine development can be transparent and fake substances can be avoided.
-Agricultural: It’s nice if we can track back to the origins of agricultural products and can add the value on top of the product.

  • Ending of Middleman Era

Blockchain will disrupt various industries including Financial Institutions. He cited the sample of the winner from Fintech Challenge held by SEC. The winner invented the system on blockchain which aims to replace Stock Exchange of Thailand.

  • Investment in Cryptoasset

He shared some thoughts regarding his investment perspective, and the question that made the audiences laugh so much is if you used to be “on top of the hill”. Not many people admitted when they made wrong decision (“wrong term” instead of “long-term”). He mentioned his experiences in the crypto market. The interesting point is that there are Funds of Funds and this is another choice to mitigate the investment risk.

In sum

  • Blockchain shouldn’t be applied in all cases. Blockchain may not be hacked but one should be aware that wallets or even financial institutes sometimes can be hacked.
  • Challenge: DQ (Digital Quotient)

IQ (Intelligence Quotient) and EQ (Emotional Quotient) are not enough in today’s world; DQ (Digital Quotient) is also required. DQ is the Digital Intelligence, in understanding digital concerns from various angles such as digital security, digital privacy and digital risk.

  • Challenge: People Mindset

In Thailand, we tend to favor the smart students, King/ Queen Rooms and give less opportunity for naughty ones or the ones who fail. He called for those mindsets to be changed to accept more “failure” to give chances for startups to grow.

  • Challenge: Inequality Policy

He feels that the government should have a policy to support startups and small companies. We should allow some room for them to grow in Thailand. If the law is too rigidly imposed on startups since the beginning, they will have to ways to raise funds in other countries. He would rather see higher taxation on large multinational corporates and advertising companies rather than on small players.

More and more to come: excited to attend the next session. Let’s stay tuned!

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