Vincent Gu is the co-founder and chief technology officer of BitMart, a digital asset trading platform. Recently, he has shifted his focus to Mimos, a digital wallet for cryptocurrencies. Here, he discusses the crypto hype bubble, market predictions and developments in the cryptocurrency space.
How did you get started in the crypto space?
I started in the crypto field in August 2017 and my first company was Mimos, actually. I was thinking of starting small, and I thought a wallet was a lightweight application that can attract customers without spending too much time on technology. In November 2017 the Chinese government prohibited [crypto] exchanges to use fiat money, so a lot of exchanges were forced to shut down. During that time there was a shining star: Binance. Binance was started that year and it had a new mode of exchange that was token to token. When I saw that mode I started thinking it might be the future … So I changed my mind, and thought maybe we can build an exchange first then do a wallet later.
What made you focus on Mimos?
It’s a crypto wallet that’s focussed on payments. In 2018 we found that there is actually a strong need for fiat to crypto. Since 2017 a lot of exchanges were transformed to crypto to crypto exchanges, but a lot of needs of the exchange users were abandoned. They need to buy coins or sell coins to fiat, and if this kind of channel is more convenient, then people will use that exchange, like Coinbase or Huobi. To the Chinese, they have very convenient OTCs and attracts lots of people to use their exchange. And in America, Coinbase has regulated accounts that can receive money from electrical payments, so this was actually a very strong need that was abandoned in 2017.
In 2018, BitMart started to integrate with banks, open a bank account, and provide wire transfers for foreigners to deposit fiat money and buy crypto. So since that time, the fiat and the payment will be much bigger. Maybe not too quickly, maybe not in one or two years, but in three to five years I think this market will be booming and at that time maybe a lot of people will have crypto in their wallets and they may want to use that crypto to do shopping. So I started to work on Mimos and we do payments. We started in countries near South Asia at this stage because regulations in these countries may give us a chance to open this market.
One-click payments are a strong feature of Mimos wallet. Another is crypto-pay. You have crypto you can pay in certain shops and payment gateways will accept crypto. We integrate with payment gateways so that we receive crypto from customers and transform into fiat, and finally settle with payment gateways. And in the end, the buyer will get items from those merchants.
How have you seen crypto markets change and develop over the years?
Since I went into this space in 2017, what I’ve seen is the hype of the initial coin offerings. In 2017 and 2018 the ICO was very hyped and I think that’s another wave of crypto development. In the crypto space, each mode to earn money hasn’t lasted very long. ICOs lasted about half a year; the marginal trading maybe lasted one year; mining and stacking lasted not longer than half a year. So from my view, in the crypto space a lot of people were bringing some traditional trade and economic modes into this new place. [They] earn some money and it ends, and another mode begins. It’s a cycle.
Do you think this cycle has changed? How is the space different now from what it was in 2017 or 2018 at the peak of hype?
I think in 2017, lot of people from other spaces who didn’t know about Bitcoin were brought into this room, and the price increased most in those three cycles. Also, we need to mention the ICO, because Ethereum made this happen. 2017 is like a mode that we can’t repeat. It was composed of a lot of different elements that were happening at the same time. There was news that some hackers had hacked into the desktops of many government offices and required Bitcoin to unlock them. This was a very big event and almost every single country on Earth was affected by this virus, and it made a lot of people aware of Bitcoin. I think this was a big catalyst, and also the ICO, along with the decline of the traditional stock markets. Lots of elements came together.
Do you see that hype bubble having burst now?
This year, most people in the crypto space know how ICOs work, and a lot of not-so-good projects tried to earn money from this mode – I don’t think they will work. People in this space already know about this and there won’t be much money if you do ICOs at this stage. Only some quality projects will survive this bear market that will still have the chance to be in hype mode in the next cycle.
What predictions do you have for the next cycle?
Predictions are kind of hard, but I think the next cycle will be Bitcoin of course. But I don’t know about Ethereum. I think the technology is very good, but there are too many projects that did ICOs on Ethereum. They need to sell. I think only a few shining projects will survive this cycle and their marketcap will grow much larger than the [all time high] (ATH) of 2017. I kind of like the ZRX project – I think this kind of project will survive and the market cap will be much bigger next cycle.
Do you see stablecoins like Libra, or cryptocurrencies in general, challenging fiat currencies as a standard?
It’s kind of challenging, but the challenging part is not the technology – it’s the policy. It’s how you cut into business. I think big countries like America may not use [Libra] for real use because they already have very strong fiat systems. And in very small countries, the country will fear this kind of token because it may have the chance to replace their countries’ national tokens.
But in the middle like China, China also published its national token called the Digital Currency Electronic Payment (DCEP) and it’s kind of like a Libra issued by a government. I think in the middle those kinds of countries will welcome this kind of token. I think Libra will boom in this kind of country if Facebook can make things right.
Whitepapers
Related reading
Travel industry must keep up with consumers’ payments demands
Payments providers must keep up with the fast-paced change of consumer demands in the travel sector, according to Kevin White, Mastercard’s director ... read more
Suburbia founder: Startup or corporate, you’re doing data wrong
This article was originally published on our sister site, bobsguide. The world’s biggest banks and corporations still rely on archaic data sources ... read more
Emerging Payments Winners 2018 | video
On the 10th of October, the Emerging Payments Association held their annual Emerging Payments Awards at the Hilton on Park Lane, London. ... read more
SWIFT reacts: fintech endorsement proves value of gpi
As Ebury becomes first fintech to go live on gpi, Vikesh Patel, head of SWIFT UK, Ireland and Nordics, has his say ... read more
