Vietnam has seen exciting new developments in the crypto space over the past several years, with BitcoinVN at the forefront of this transformation. In addition to being Vietnam’s first Bitcoin exchange, BitcoinVN also introduced the country’s first Bitcoin ATMs. Asia Blockchain Review recently spoke with Dominik Weil, Co-founder and COO of BitcoinVN, getting his thoughts on the evolving crypto landscape in Vietnam and his involvement in efforts to implement blockchain-based remittance payments, as well as organizing the country’s first fintech and blockchain conference. We also discussed how corporate giants like Facebook are shaking up the industry.
Asia Blockchain Review: To start things off, what made Vietnam an attractive location for founding a Bitcoin exchange? There’s always uncertainty when attempting to be the first at anything, so what were the key factors guiding this decision?
Dominik Weil: Vietnam is a strongly ascending market in Asia. Besides India, it had the fastest-growing economy in the world over the past decade, is politically stable, and has a very young population eager to adopt new technologies fast and willing to take risks.
We believed in the opportunity in Vietnam from very early on — since we can see how Vietnam can possibly replicate the success stories of other war-torn countries like Japan or Korea, who managed to rise out of the rubble to become some of the world’s economically leading nations.
Certainly, operating in Vietnam — especially in an environment where no clear regulation exists yet — comes with its own challenges, and we certainly also had to deal with a series of setbacks. But if you are paving the way as a pioneer, that is something you need to be able to handle.
ABR: Please tell us about some of your activities at Bitcoin Saigon as well as the Original Bitcoin Meetup in Frankfurt. How did your experiences in these cities compare with one another?
DW: When I started my journey down the Bitcoin rabbit hole, I was still living in my hometown Frankfurt, the financial center of mainland Europe.
That was a time when nobody in your normal circle of family and friends had even heard anything about Bitcoin.
So back then, you had to go to Bitcointalk and try to find out if there is anybody living in your area who wants to meet up and talk about Bitcoin in real life — which is exactly what we did back in the summer of 2013.
The early community in Frankfurt was a pretty typical Bitcoin early adopter audience: hackers, nerds, anarchists, and generally a high percentage of very interesting, ‘not normal’ fringe people. To be into Bitcoin that early — learning about it, taking the risks — you had to be somewhat ‘abnormal’.
I truly, truly enjoyed the early Bitcoin meetups and conferences back in the day — the energy and hope you had in these places was something I had never experienced in this form in my life before. Being together with a few dozen people — who all knew that we have a rising technology that has the potential to fundamentally reshape society for the better — the excitement of these days is hard to put into words.
Of course, a lot of things have changed over the past couple of years from these very early adopter days. Almost everybody is now at least aware that Bitcoin exists, even if the level of understanding on a grand scale might still be in its infancy. Hell, even I and many other early guys are still learning each day the limitations and opportunities of this technology. But just the other week, I attended a meetup in Frankfurt, and I have to say that the focus is certainly quite different than what we see at many meetups in Asia (including Saigon).
People in the West in general, and in Frankfurt in specific, seem to take a much more wholesome, long-term view of Bitcoin and its implications on society. Concerns debated here are the current financial and monetary crisis in Europe (with EUR at ever more negative interest rates and the ECB desperate to keep the whole show going a bit longer) and which role Bitcoin will play there in the future to rebuild society after the inevitable collapse. Also, ideological and philosophical views play a huge role in the debates over there. It is a very inspiring and energizing place; you leave the meetups wanting to get to work to make things happen.
In Asia, the focus is much more pragmatic and focused on how to make money with Bitcoin and, unfortunately, a lot of other shady so-called cryptocurrency projects that swim in the tail waves of Bitcoin. Ideology or lengthy philosophical debates play almost no role here and also don’t attract an audience. People are more interested in what Bitcoin can do here and now for them and their families; society-wide implications are not really a part of the debate.
While I like the focus on business and pragmatism — which is very useful in order “to get things done” and certainly is a major factor in Asia’s rise to the global economic powerhouse of the 21st century — the lack of distinction between Bitcoin and some random sh*tcoin projects is, in my honest opinion, harmful to the reputation of the industry as a whole, which has been overrun by Ponzi promoters and other shady hucksters who are coming up with all kinds of schemes to get their hands on your Bitcoins.
A lot more education is needed (the real kind — not paid promotions disguised as “education” in the same way Ponzi promoters offer you “educational seminars on investment”), and we are trying our best in our small community here in Saigon to bring some high-quality content to the scene.
The Bitcoin Saigon community was initially created by Diana Ngo, Khoa Tran, and myself back in 2014 (the five year anniversary is coming up — watch out for some special announcements!) and, to this day, is purely driven and operated by volunteers and Bitcoin enthusiasts.
We had with our work the chance over the years to bring some illustrious names to Saigon, with folks like Andreas Antonopoulos, Simon Dixon, Tone Vays, Roger Ver, Eric Voskuil, Tai Zen, and many more.
At one of the most recent meetups, we also had a tech demonstration of the relatively new Lightning Network, and while it has a long way to go until being ready for mass adoption, it was pretty cool to test out the current state of the technology with fellow Bitcoin enthusiasts in town.
ABR: The Bitcoin trade has been thriving in Vietnam as evidenced by the Bitcoin ATMs you’ve introduced. How would you describe the overall sentiment of the Vietnamese people towards Bitcoin and crypto in general?
DW: As mentioned previously, the Vietnamese population, in general, has a much more pragmatic view on Bitcoin/cryptocurrency than people in the West — with all the up- and downsides that come with it.
First and foremost, it is seen as a tool for speculation — which, in itself, is not necessarily a bad thing. Without speculators and active traders, you would not have much liquidity in the markets, which in turn, helps to make the asset more valuable since it is relatively simple to buy/sell large amounts of Bitcoin, translating into higher utility. People in Vietnam are generally very open to taking risks with their investments in the hopes of striking it big — which on the one side, helps to make the economy very dynamic, but on the other side (which is not specific to cryptocurrency), also makes it easy for less-than-reputable projects to collect a lot of money on lofty promises with a severe lack of fundamentals and solid execution.
Overall, Vietnam — also driven, of course, by the very young population in general — is fast and eager to adopt new technologies, which will serve the country very well on its way to becoming a major economic player by mid-century. This is also reflected in a surprisingly high number (for outsiders) of cryptocurrency traders/speculators/investors in Vietnam, which is almost always ranked in the Top 10 globally on all major websites/exchanges etc.
ABR: Although the Vietnamese government has been very much in favor of blockchain adoption, cryptocurrency itself is still banned in the country. Have you faced any challenges as a result of this official stance?
DW: We should probably clarify that cryptocurrency is not banned in Vietnam as often wrongly suggested by the media. You can own it; you can trade it. The only thing you are not supposed to do is use it for conducting payments (similar to how you are not supposed to use foreign currency or gold for this purpose).
However, the otherwise uncertain, “grey” legal status of cryptocurrency in the country has certainly made it difficult for business like ours to really scale, since the risk due to the uncertain regulatory environment is extremely high for possible investors.
We hope that with the current progress being made by efforts led by the Ministry of Justice, a more clarified regulatory environment will soon allow local startups in the space to take full advantage of the great environment and talent pool we have here.
Unfortunately, Vietnam still doesn’t have a very good reputation, globally, when it comes to technology products/startups. But with the interest here and the pool of talent in terms of human resources, Vietnam has a great opportunity to make an impact.
Let’s all work together and hope that the outcome of the regulatory draft process is going to be a positive one for the industry as a whole.
I have seen how Germany slaughtered its own cryptocurrency industry with a quite hostile approach (to the benefit of neighboring countries like the UK, Netherlands, and Switzerland, which happily welcomed the talent leaving Germany for greener pastures) so I hope that Vietnam is taking all the time it needs to avoid such mistakes.
ABR: In 2016, you were involved in the organization of “BlockFin Asia” — Vietnam’s very first fintech and blockchain conference. What are the most significant changes you’ve observed regarding the blockchain and crypto space in the three years since then? Have you considered organizing a similar international conference in the near future?
DW: BlockFin Asia was born out of the Bitcoin Saigon community in late 2015, when we all felt that we were somewhat stuck in Vietnam with still no dialogue taking place with the authorities on the matter.
We felt the need to open up the dialogue by bringing various reputable industry voices who had been involved in the space for years together with representatives from the State Bank of Vietnam which, at the time, was the only ministry concerned with cryptocurrencies at all.
At the time, nobody wanted to address the topic in public, since they felt it was too sensitive to talk about it at all. On the other hand, we felt that Vietnam is letting a big opportunity slip away if there is no dialogue taking place.
The work required to pull this off proved to be tremendous, with very little resources and very little backing. Nonetheless, we managed to bring in over a dozen speakers from across four continents, as well as top decision-making personnel from the State Bank of Vietnam. It proved to be a crazy idea, but somehow, some way, we made it happen.
In the end, the conference proved to be a big success, and many participants have asked since then if we plan to do another one. It’s just that it takes *a lot* of work, time, and dedication to make an event like that happen, and my commitments at our company simply do not allow me at this point in time to put that much focus into pulling off BlockFin Asia 2.
The difference between BlockFin Asia and many of the “blockchain” events you have these days in Vietnam was that BFA was wholly targeted on education and ‘lobbying’ if you want to put it that way. The objective of the conference was not to make money (we tried, of course, to cover the costs as much as possible, which we almost achieved), which certainly helped to elevate the quality of the talks and discussions taking place.
I really wish we had more such conferences taking place in Vietnam/Asia. I see a couple of them, mostly in Europe or North America, which follow a similar, more community-oriented path. But right now, there are simply no resources left to commit myself to doing so.
Let’s see what the future brings; I think there is definitely a chance nowadays to make something similar happen. There is more support and more money in the space, as well as more people who have a really deep understanding of the various aspects of Bitcoin and its surrounding technologies and implications.
ABR: Price volatility has long been considered a “bottleneck” of sorts when it comes to utilizing Bitcoin as a payment tool. With Facebook’s Libra injecting fresh speculation and buzz around the crypto space of late, how do you see the future of payments from the perspective of what Cash2vn has been trying to achieve in the way of blockchain-based remittance payments?
DW: Well, Bitcoin volatility has generally been declining over the years as the market cap grew larger and larger. However, we still see here and there pretty violent moves of 10% a day (which are now the exception — when I got into Bitcoin, 10% daily movement and more was pretty standard).
As for payments/remittances:
The way it is now and will remain for quite some time is that service providers like cash2vn and other players in the payments/remittance space will settle the transactions in the local fiat currencies for the most part.
Bitcoin is, of course, leading the pack here due to its deep liquidity — beyond that, a bunch of stablecoins and possibly Ethereum also have some decent liquidity. But after that, it starts to get very thin. The truth is that there is just not much of a point to enabling payments/remittances with some random illiquid sh*tcoin; there are no benefits over using them vs. the ‘big guys’.
As for Bitcoin: scalability of Layer 1, of course, proved to be an issue (we saw this in extreme in late 2017 during the peak of the last bull run) and will remain an issue for the foreseeable future.
Bitcoin’s Layer 1 is simply not made for payments on a mass scale.
Currently, various scaling solutions are being developed that leave the robustness of Layer 1 intact and move more transaction volume onto solutions like sidechains or Layer 2 solutions such as the Lightning Network. However, none of them are ready yet for large-scale adoption.
I fear that if we see a new bull run come too soon, we will again run into similar trouble like in late 2017. Even if some scaling progress has been made, the awareness is now much larger and the next bubble is going to be much bigger than what we saw in 2017.
Other alternatives that are focusing more on onchain scaling, like Bitcoin Cash, are trying to avoid such scenarios by allowing a higher throughput on Layer 1. However, there is always a trade-off involved between the amount of data your blockchain consumes on Layer 1 versus some core security/decentralization pillars which hold the system together.
Beyond that, I don’t see much hope for “Multi-Purpose” blockchains like Ethereum to be really competitive in this area. Well, Ethereum might be “money” as the new meme goes, which is currently pushed by the Ethereum community, but it is worse money than its competitors. So why would I want to have it when there is better money out there with very little friction to obtain it? The clear focus on transferring value and doing this one task right gives Bitcoin an edge over the blockchain projects that try to be a ‘World Computer’ (or some other freshly made-up futuristic-sounding buzzword mumbo jumbo) in this regard.
ABR: What can you tell us about BitcoinVN’s targets for the remainder of 2019, and what we can expect heading into 2020, as well as your ongoing work with the Bitcoin Saigon community?
DW: We very much remain on our mission to provide an easy and trusted environment for an on- and offramp into Bitcoin and other digital assets in Vietnam; there is always more work to do to improve and expand your service offerings.
I am not a fan of the often loudmouthed, hyperbolic pre-announcements in this industry, so for now I will just say follow us on our social media channels to get updated as new developments actually get implemented.
As for the Bitcoin Saigon community, the main focus will certainly be our five year anniversary. Here as well, social media channels should keep interested parties up to date on what is going on. Otherwise, you can simply join the weekly meetups in person and possibly even contribute yourself to make things happen and grow the community further.
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