Why Bitcoin is Important

Most have now heard of Bitcoin because there is so much coverage of people getting ‘rich’ from Bitcoin. But the more I research, the more I realize: Not that many people know exactly what it is, how it applies to them, and why ‘Bitcoin’ is so valuable.

I put Bitcoin in quotes because Bitcoin only represents a sliver of the possibilities behind the fundamental reason Bitcoin, or cryptocurrency, digital assets, alt coins, and blockchain are so important. That said, disclaimer: If you’re here to learn how to instantly make money from ICOs, this post isn’t for you.

Let me back up a bit.

The rapid growth of the middle-class is the reason I choose to live in SEA but it also should be worrisome to the world for one reason: by 2030, it is projected that 2/3 of the world’s middle class population will be living in Asia.

I use the term Asia broadly, but these countries include, but not limited to: Asia-Pacific (Southeast Asia ie: Indonesia, Malaysia, Thailand, Vietnam, Singapore, Philippines, Myanmar, Cambodia, Laos, Brunei), and of course, China, and India. (Sources: 1, 2, 3, 4)

What this implies is if 2/3 of the middle class population is based in Asia, the economic power will start shifting, new problems and solutions for these problems come alive. Or, as we commonly hear: disruption and innovation.

My interest in Bitcoin (or crypotcurrency and blockchain technology) simply started as a curious, technologically savvy person residing in this region, as crypoto is only one of the ‘disruptive’ or ‘innovative’ technologies deriving from quick change. Within the short 4.5 years I’ve moved from the States to ‘Asia’, I’ve seen with my own eyes, massive advances.

What does this mean?

I’ve been obsessed with messaging apps, anything mobile, and SEA — specifically how technology is changing economies in high-growth nations, driving innovation from need, reducing socio-economic inequalities, and the failures of first world nations to keep up. (This sounds like a bunch of jargon but whatever. Deal with it.)

Messaging apps that started as communication utilities are now full-blown ecosystems where billions of micro-transactions from communication (messaging), payments (cashless), to things that make daily life easier (food delivery, share economy, etc.) take place on a daily basis. And this is just the beginning.

In a region where things change on close to a daily basis, conversations about currency are naturally floating about because

  1. according to the World Bank’s Global Financial Inclusion Database, over 2.5B adults in developing economies do not own bank accounts
  2. and only 20% of those living in extreme poverty own bank accounts

Source

And by 2020, there will be 1 billion new smartphone subscribers only in SEA. (source)

With the mobile penetration changes, our daily lives are impacted, as daily necessities are physically met through mobile technology. If you live in a first world, it may be hard to imagine a world where getting from point A to point B can take an entire day, since city infrastructures in developing nations aren’t designed to handle traffic and congestion. Imagine taking a day off to run simple errands, such as shopping, banking, and paying bills. Now, imagine not having a bank account because you can’t afford to pay banking fees or you don’t have a valid I.D., or worse: the nearest bank to your home requires a day trip.

Enter Bitcoin.

In regions with pain points such as the above, the notion of currency that doesn’t require the middleman (banks) is the reason investors, bankers, and smart people in fin-tech find Bitcoin so alluring.

Put it this way: If we can make free calls between San Francisco and Beijing, why do we have to pay to transfer money from San Francisco to Beijing? If it takes all day to take out cash from my bank account, why won’t I leave it in a safe under my bed unless there’s a better option? In a world where middlemen can potentially take six paychecks worth of fees, why wouldn’t I find a way to cut out the middleman and directly transact?

These are only a few problems ‘Bitcoin’ or more accurately, cryptocurrency and blockchain technology can solve. 

Do note, these are examples in high-growth nations to simply illustrate the promise of cryptocurrency, but there are a ton of first-world scenarios where the blockchain can innovate and disrupt that I’m looking to share in the upcoming months.

In the meantime, hope this post clarified what the fuss about Bitcoin is about.

Stay tuned for Part II: An Explanation of Blockchain for Non-Tech People
Edit: published! You can read it here.

Southeast Asia

Quickly: I joined Dave and Geeks on a Plane in Manila last minute. Justin Hall of GG Ventures best sums up my take away of Manila:

Screen Shot 2014-07-27 at 8.21.24 PM

 

…which further enforces what I’ve been thinking about since coming back from Singapore and Bangkok. “Is a country’s GDP an accurate indicator of potential when it comes to startups from emerging nations?”

Manila particularly stands out to me, as the community is healthy and enthusiastic. Founders work together, there is a pay it forward type culture I haven’t seen elsewhere. This type of camaraderie is reminiscent of Silicon Valley around 2006-07ish, before the startup ecosystem blew-up.

Potential capital is of course, first and foremost the thing investors look at. But as someone who believes in the power of mentorship and how entrepreneurs nurturing other entrepreneurs is one of the main reasons why Silicon Valley is Silicon Valley, GDP shouldn’t be the only thing people focus on when it comes to building products. This is why to me, the Philippines is the country I am the most excited about in Southeast Asia.

Either which way, now is the best time to be in Southeast Asia, as the ecosystem is still in its infancy.

Added: just came across the blog of Oliver Segovia, founder of an eCommerce company AVA.
Aside from building a great platform, turns out he is an author of several books and blogs as well. He has an essay on the Philippines’ ecosystem and his vision of the innovation economy there. If you are the slightest bit interested in SEA, this insightful piece lays out the Philippines: “A Vision for the Philippines’ Innovation Economy, & a 4-Point Plan to Achieve It (and why it does NOT include Venture Capital)

Indonesia 101

Indonesia 101

A huge part of me is kicking myself for not participating in the Jakarta leg of GOAP SEA 2014 — what a fascinating market.

Quick rundown:
– Indonesia is the number one GDP country in Southeast Asia
GDP (PPP): $878 billion USD
Thailand is second in SEA with GDP of $643 billion USD

– Indonesia is the fourth country with highest GDP in Asia
China is first in APAC with $8.2 trillion USD
Japan is second with $6 trillion USD
South Korea is third with $1.2 trillion USD
Indonesia $878 billion USD

– Indonesia is the 4th most populated country in the world
population: 252 million people
the US has a population of 318 million people

– Indonesians spend a lot of time on the Internet, mainly on desktop / laptops. Mobile is still at its infancy.

Screen Shot 2014-07-22 at 4.04.19 PM

– eCommerce transactions are completed by bank transfers. No cash is exchanged. The interbank transfers are free because of the Bank Indonesia Act (BI Act) *if you’re interested, there is a legal document here explaining detailed legalities.

– GS predicts eCommerce will grow the most in SEA in the upcoming years

Screenshot_7_22_14_3_35_PM

– Under a revised law, Indonesia just increased foreign VC money allowed from 80% to 85% source

I was at first a little puzzled by Justin’s assessment that Singapore and Indonesia is where a majority of the VC funds in SEA would be focused, but I think I get it now. There are parts of me that wonders if Indonesia’s market could still be premature, with such low Internet / mobile penetration rates. And Singapore is too small but I still have so much to learn. Wishing I discovered this region sooner and I can’t wait to see Indonesia for myself.

*above sources not linked in post: 1, 2, 3, 4, 5

SEAsia Messaging App Share

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LOTS of opportunities in SEAsia.
To recap on LINE:

  • 60% of LINE’s revenue came from the mobile games
  • LINE was the world’s top app publisher by monthly revenue
  • LINE Posts $143 Million In Revenue, Up 123% Year-Over-Year
  • $1.5mm USD revenue for user generated sticker marketplace

Granted, we may not see the same sorts of revenues from SEAsian countries, as most are developing nations and notorious for not spending (ex Path is Indonesia’s largest market, yet they never boast revenues or lack thereof).

The next few years will be fun to watch as chat apps mature and become more dominant.
(Sources 1,2,3, image via here)