Block Guardian: An Open Letter to Taiwan's Crypto Community

Block Guardian: An Open Letter to Taiwan's Crypto Community
Why you need to know

Block Guardian is a bi-weekly column from The News Lens and Blockcamp offering news and insight on crypto and token economics from Taiwan.

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“There are almost 200 currencies of the world, but there’s only one international currency. There are almost 200 currencies controlled by central banks and governments, but there is only one mathematical currency today, and that is bitcoin. We are going to build more of them. Cryptographic currencies are going to be a mainstay of our financial future. They are going to be a part of the future of this planet because they have been invented. It’s as simple as that. You cannot un-invent this technology. You cannot turn this omelette back into eggs.”

– Andreas M. Antonopoulos, The Internet of Money

By Block Guardian

Welcome to Block Guardian! The purpose of this bi-weekly column is to spread awareness of the positive impact blockchain and cryptocurrencies are having on Taiwan, while making a fair attempt at addressing issues of local and regional interest, the challenges the industry faces and the solutions on the table.

I’m here to state, share, and promote the idea that despite some obvious concerns, blockchain and cryptocurrencies have a place here in Taiwan, and one that has the potential to reach to the moon, or at least to develop strongly.

It is an honor to be leading this column, which will feature thoughts and insights on topics of the day and the wider questions of conscience and science that make this such a fascinating space, as well as guest writers speaking on their fields of expertise.

Readers’ feedback, suggestions and questions would be greatly appreciated – this column is as much yours as mine – so please send them over to my email and I will try to answer them in the column.

Who am I?

I am not a professional writer, I am an industry insider. Early in 2017, my friend Jon Jones and I founded a small company called Blockcamp – a blockchain accelerator based in Taiwan. To be more specific, we are becoming an accelerator.

I view myself as an active member of the blockchain and crypto community, having held 24 blockchain events in the past eight months, as well as participating in the forefront of all things crypto, including legislative hearings and regulatory initiatives. In the process, I have been lucky enough to get to know a lot of smart people in the industry and surrounding fields both in Taiwan and globally.

Jeremy
Credit: Blockcamp
Jeremy Firster poses outside a blockchain networking event hosted in Taipei.
The global ICO market

What is all the fuss about? In large part it is the emergence of initial coins offerings (ICOs) as a new form of crowdfunding. In total, US$23 billion (US$23,472,021,262 to be exact) was raised via ICOs from Jan. 2014 – Mar. 2018, according to data sourced from the Elementus protocol, a project to unite the world’s blockchain transactions in a standardized database.

By way of comparison, PricewaterhouseCoopers and CB Insights' 2017 MoneyTree report estimated that annual funding to venture capital-backed companies in the U.S.-backed in 2017 was US$71.9 billion.

Yet the ongoing surge in ICO investment only began in May 2017; of the 10 largest ICOs, seven of them have only been up and running since October 2017. The ICO model is here to stay, and we are only in the nascent stage of widespread adoption.

This Elementus video is an excellent visual representation of the progression of the ICO market since Jan 2014.

tokensales2
Credit: Elementus
A still from the Elementus video showing the bewildering proliferation of Initial Coin Offerings and their fundraising totals.
A Taiwan snapshot

When it comes to ICOs, the Elementus data shows Taiwan so far accounts for just US$13,620,000, or approximately 0.06 percent of global fundraising activity.

That is not to say the community here is insignificant. We will go over who the major players are and some of the people behind those companies next time, but for the time being, a quick glance at Meetup serves to track the evolution and growth of Taiwan's blockchain and crypto movement. Events began here back in 2013, a developer-focused group came into being in 2015, and a professional group was started in 2016.

In 2018, several industry groups have come together, including the Taiwan Blockchain Self-Regulation Organization and the Crypto Policy Work Groups, slotting into place alongside a growing ecosystem of investors, entrepreneurs and large companies related to blockchain.

Here are some takeaways on how that community has developed and expanded over the last five years:

Community-driven – Events range from educational to business- and investment-focused, to general “how do I do this” type of events.

Loose structure – Pretty much anyone who wanted to could host an event and attract an interest. On the blockchain development side, everything remained developer-focused. On the investment/business side, quality control was lacking.

Popularity with prices – Group memberships have fluctuated in line with crypto prices: the higher the price, the more members poured in. As of now, Taiwan has about 200,000 open crypto accounts, according to Taiwan-based digital asset exchanges MaiCoin and BitoEX. A major surge in account openings occurred in late 2017, when Bitcoin hit nearly US$20,000.

Popularity with development – Innovations in blockchain attracted more members in Taiwan, particularly the implementation of smart contracts on ethereum. Once it became clear that blockchain was more than “internet magic money” and instead was a form of “distributed ledger technology” (DLT), this new way of thinking attracted interest from a more diverse group of people.

Popularity with novelty – Many people I know have entered the industry just because it is new. If LinkedIn is any indicator, many are already “experts”, but there is great debate on how to measure and define this term.

Opportunities for blockchain

Amid the hype surrounding the crypto markets, it is worth asking, “What is the global revenue for the blockchain industry?” In 2017, it was only US$706 million. Half of that revenue was generated by three companies – IBM, Microsoft, and Accenture.

So, is all the market buzz and excitement simply hype? No!

We are only at the beginning stages of market penetration and use. Often the tech industry is two-speed: fast investment and slow development.

Currently, adoption is slow: the recently released "2018 Gartner CIO Survey" suggested that only 1 percent of some 3,000 organizations polled indicated they had adopted blockchain within their companies, while 77 percent said they had no plans to get the ball rolling.

This is in part because ongoing investments focus on creating the necessary digital infrastructure. Just like the construction of a new building, laying the foundation takes the longest. Once in place, it is a relatively rapid and easy process to add new features.

Worldwide spending on blockchain solutions is forecast to reach US$2.1 billion in 2018, more than double the US$945 million spent in 2017, according to the inaugural Worldwide Semiannual Blockchain Spending Guide from International Data Corporation (IDC). IDC expects blockchain spending to grow at a robust pace over the 2016-2021 forecast period with a five-year compound annual growth rate (CAGR) of 81.2 percent, amounting to total spending of US$9.7 billion in 2021.

And according to the Accenture Technology Vision 2018 report, 60 percent of executives surveyed said that blockchain and smart contracts will be critical to their organizations over the next three years, indicating just how pervasive the near-term technological upheaval could be.

The opportunity for Taiwan

Blockchain talent is highly sought after. On LinkedIn, blockchain-related job posts, mostly for developers, expanded four times from 2016 to 2017. And on Toptal, a marketplace for tech talent, the demand for blockchain engineers rose by 700 percent from January 2017 to January 2018.

This demand for manpower gets to the heart of Taiwan’s opportunity. The country has the perfect blend of successful tech companies and highly trained, affordable engineers needed to fuel the industry's growth and capture revenue share. MIT.jobs shows 20 blockchain-related jobs in Taiwan, 19 of them for engineering talent.

How to make that number grow, and with it Taiwan's share of the industry's revenue, is a topic to which we shall return on Block Guardian. With that in mind, I look forward to hearing your thoughts and ideas on what to cover in this column going forward.

Yours,

Jeremy Firster

Read Next: Taiwan Shapes Self-regulating Future for Crypto and Blockchain

Editor: David Green

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