Beyond Blocks Summit Bangkok
Beyond Blocks Summit Bangkok 2018, the second edition of the blockchain conference in the capital of Thailand, was held in Intercontinental Bangkok hotel on November 26–27.
“Death of An ICO — Prove Us Wrong”, the first panel discussion focuses on a hot topic: the current status of ICOs and the future development of this distributed crowdfunding system that took venture capital funds, institutional investors and financial authorities off guard in 2017.
Cryptocurrency and blockchain are common terms for most people attending Beyond Blocks, but if we move outside of the ecochamber we can still see, that every NY Times and FT article mentioning it has to also explain what is blockchain. The ICO craze of 2017 and 2018 seems to be over and the bear market makes a lot of people question the future of crypto. Welcome to this fierce debate between the real blockchain believers and the crypto skeptic. Two against two will put forth their arguments and convince the audience that they are right about cryptocurrency, ICOs, and the blockchain use cases, to name a few. Come and vote in this sobering debate that puts things into perspective.
The four panelists were divided in two sides, pro and skeptical, to have a more focused debate. “The ICO (Initial Coin Offering) acronym is extremely misleading” says Roland Yau (CoCoon Ignite Ventures, Managing Partner), adding that it was probably chosen in Switzerland to sound like an IPO (Initial Public Offering). Participants in blockchain do not only seek utility, but also value. ICOs are outside of regulations for market transparency and minority investors protection. They are a fraudolent way to raise capital. “ICOs are sort of blockchain Kickstarter” replies Abasa Philips (Zilla, Founder). They are an unique way for blockchain projects to get funded when/where regulations are lagging behind technology advances. “Is there a pain or real problem to solve?” asks Moaffak Ahmed (Slush Director, serial entrepreneur and investor). If not, there is no basis for investing in startups, where vision and ability to execute are also not ready. “There is a bubble in value, but the technology seems solid” he continues. “Public funding is regulated, private funding is unregulated, because there is no framework” says Justin Chow (Asia Cumberland, Head of Business Development). For millennials, who graduated after 2008, buying or investing in a fraction of real estate in Hong Kong is a very attractive proposition. Blockchain ICO projects are more direct, innovative and alternative ways to invest. “ICOs should die, while TGEs (Token Generation Event), a more proper acronym, should be developed further” says Roland Yau. ICO was thought to be the death of venture capital: however the main role of VCs is not about funding, but filtering the ideas, teams, visions, missions, strategies, executions behind projects. In this respect ICOs are a distraction, adding more noise and making funding more difficult. “The power of VCs is too strong, are ICOs really trying to rebalance that power? Money is fuel, like going to petrol station. More interesting is solving real problems” says Moaffak Ahmed, recalling that his first venture had already ten million EUR revenues, before being funded five years after the foundation. VCs are not much in control, they are not in the drivers’ seat, for example they cannot prevent just funded startups to go buying Ferraris after seed investment round. Towards the end the speakers are asked to switch sides for the final remarks of the session. Abasa Philips mentions that blockchain currently lack education, legal frameowrk, while advisory can be performed by anyone without any specific requirements or certifications. “Sometimes too much money can be bad for startups, because it makes them lazy” concludes Moaffak Ahmed, adding that “it is better to be frugal at the early stage and in this respect ICO may be better” than other alternative. The audience is invited to vote by raising their hands, if ICOs are dead/will die or still have a role in funding blockchain projects. Gabriel Yang, the moderator of the panel, declares the result of the voting and discussion a draw.
The first panel discussion on the second day of Beyond Blocks illustrates the points of view of governmental and financial regulators and authorities with Bhume Bhumiratana (SEC Thailand, Technology Consultant), Prinn Panitchpakdi (Stock Exchange of Thailand, Governor), Thammarak Moenjak (Bank Of Thailand, Director of Financial Institutions Strategy Department).
While this technology has the potential to revolutionize the world, the ecosystem is still very much in its infancy. To allow innovation to thrive, it’s important to set the right environment. The lack of regulation and — on the flip-side — over-regulations caused disruption and false-starts in the space. How do we find balance between regulation and innovation? How much regulation is necessary until it becomes an outright hindrance? We discuss all of this in comparison with other ecosystems, while particularly focusing on South East Asia.
On Nov 26 the “Death of An ICO — Prove Us Wrong” panel left the audience divided about the future of ICOs. On Nov 27 during the second day of Beyond Blocks, Bonnie Cheung (500 Startups, Partner) Sompoat Chansomboon (dtac Accelerate, Managing Director), Moaffak Ahmed (Slush, Director and serial entrepreneur) and Roland Yau (CoCoon Ignite Ventures, Managing Partner) discuss the role of venture capital, accelerators and incubators in blockchain.
Venture capital and accelerators are two of the most important ingredients for a booming ecosystem. Silicon Valley is what it is because everyone flocks there knowing that they can get a check and a powerful supporting network unparalleled to any other place in the world. With the onset of the blockchain technology the paradigm has changed. Suddenly we all saw tens and hundreds of millions of dollars pouring into their portfolio startups, other startups that used to pitch to them suddenly were publishing white papers and doing ICOs. How did they adapt? Will they evolve or did the token issuance make them obsolete? Most importantly, how can blockchain projects learn and leverage them?
ICOs were thought to be an improvement from crowdfunding, where backers are early adopter customers investing directly to see new products or solutions developed and delivered. ICOs were thought also to be a decentralized alternative to traditional equity funding, bypassing the middle layer of venture capital funds and seed investors, allowing users to invest P2P (people to peer) in projects they can contribute to in several ways. Although the coins or tokens do not represent ownership of these projects, they reward the ICO investors, because if the ecosystem of the coins and tokens grow successfully the value of the coins and tokens increase. Taxi driver licenses could be an example of analog coins/tokens: the value of these licenses is very high in higly populated metropolitan areas, even more if obtaining them is difficult or strictly regulated. Recently however in some countries, where car sharing or shares mobility services have become popular from Uber or Lift to Car2Go, the value of the taxi licenses are stalling or decreasing. There are several blockchain startups that are runned in a fully decentralized way, like orchestra without director, only lead by charismatic primus inter pares core developers. Can these organizations with no proper legal framework, no single jurisdiction, no formal headquarters, retributing contributors with digital coins/tokens be funded as the tech startups have been so far?