Overly-hyped sentiments have begun to give way to skepticism toward a flurry of promises made by founders of distributed ledger systems like blockchain and the digital currencies encrypted and traded on them.
Fanning such cynicism was the global race to place cryptocurrency transactions into regulatory frameworks to deter speculation and prevent crimes like money laundering. Such moves have resulted in noticeable declines in prices of cryptocurrencies.
The volatility in the cryptocurrency market over the past few months would have been lowered, if more investors had approached cryptocurrency trading with a deeper understanding of the underlying technology, said Samson Mow, chief strategy officer at Blockstream, in an interview with The Korea Herald. He was in Seoul to speak at Deconomy 2018 held in April.
“People just treat (cryptocurrency trade market) like a stock market,” said the Canadian-Chinese entrepreneur and game developer.
“It looks like a stock market, (investors) know what the stock market is, and they know stock listings. ... but a lot of those (listed) coins are very illiquid and a lot of them are not stable either.”
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Blockstream CSO Samson Mow (Park Hyun-koo/The Korea Herald) |
The biggest concern Mow had was the retail investors’ tendency to be talked into assertions by pseudo-technicians in the blockchain industry.
“All those development teams (in the blockchain industry) are really doing something, or they just try to mislead people with techno speak that people don‘t understand,” he said.
Confidence in Mow’s remarks come from the way his company Blockstream works. It is a company designed to tackle systemic flaws in financial uses of Bitcoin, referring to both an open-source software enabling peer-to-peer money transactions and the digital currency trading on the software network.
Founded in 2014, Blockstream has come up with a solution to create a separate, independent blockchain -- called sidechain -- that can be pegged to the main Bitcoin blockchain, so that it “relieves pressure on Bitcoin,” Mow said.
Doubts regarding the decentralized cryptocurrency have recently been amplified by Bitcoin-powered financial system.
For instance, limits in block size on the existing Bitcoin platform created bottlenecks in financial transactions. Moreover, the decentralized system required a validation from every participant of the network for a settlement to be made, often causing delays in progress.
Blockstream says sidechains can minimize validation time, because the confirmations are made merely among participants in the sidechain network to remove counterparty risk and enable rapid financial transactions, Mow explained.
Mow joined Blockstream in April 2017, two months after leaving Chinese cryptocurrency exchange BTC China amid increasing regulatory pressure in the market. He had served as a chief operating officer of the exchange for two years.
As someone who experienced regulations in China, Mow said Korea has “favorable regulations for cryptocurrency exchanges in general.”
Korea has allowed retail investors’ cryptocurrency trades only through verified bank accounts since early this year, following a guideline by financial authorities.
“Sometimes (the regulation) could be stifling, but the goal is to protect people,” he said.
While expressing regrets about alleged cryptocurrency-related scams in Korea, including a Korean exchange Coinnest executives‘ allegation of fraud and embezzlement, he said the world cannot stop such adversaries from happening.
“It’s a natural evolution,” he said. “There are always going to be bad actors in every system.”
During the interview, Mow expressed regret about the high-profile clash during a panel debate session at Deconomy 2018 in Seoul between himself and Roger Ver, an American entrepreneur known to have invested in the technologies of Bitcoin Cash that was hard-forked off from Bitcoin in August 2017.
Ver during panel discussion accused the businessmen on Bitcoin side, including Mow, of “shattering the Bitcoin ecosystem” and said Bitcoin’s sidechain developments have “negative merchant adoption.” Ver said the only alternative to tackle financial constraint on Bitcoin is Bitcoin Cash that plans to scale up blocks several times this year.
Mow claimed Ver derailed from what was supposed to be a “civil discussion” to talk about technologies about scaling Bitcoin.
By Son Ji-hyoung
(
consnow@heraldcorp.com)
