Aether United’s mission is to create an esports brand by using blockchain, which provides our fans with the power to help manage their favorite teams. Li XiangJun explains why blockchain was the correct choice for Aether United and why it is the best choice in the world of finance.
What is so unique about the blockchain revolution and its long term implications for our economy?
Right now, blockchain is quite a hot topic but to really understand blockchain is not an easy task. So in my opinion, what the blockchain revolution holds are mainly two aspects. The first one is the monetary flow and the second one is the information flow. So the monetary flow might be obvious because it manifests in Bitcoin, the very role of Bitcoin is to facilitate monetary transactions across borders: peer to peer transactions without intermediations, say, in the banks or the financial institutions.
The flow about information is more subtle and is more on the philosophical standpoint of view. What blockchain has changed about information flow has long term implications for the economy. Let’s start with the monetary flow first. One of the 21st century examples of how blockchain has changed the monetary flow would be Bitcoin. Instead of going through financial institutions, say Paypal or the banks, I can send money to you. That’s what Bitcoin allows us to do, and with this, a lot of the startups right now are oriented with the concept of cross border admittance about building Bitcoin to fiat exchange. That is what a lot of people are doing right now because Bitcoin has fundamentally provided a new way for the monetary flow in the economy.
With that, there are some implications for the GDP. With the old modes offerende where we use banks, it’s very slow. It takes days for cross border transfer. And for company to company transfer, not only do they charge a very high commission at times, they also delay the payment. For cross border payment to some less developed countries where the political situation is much more volatile, there’s always a risk of down payment, so the insurance risk is very high. With blockchain, everything is certain and set so once I pay you you will the amount and it is non reversible. So with that, we can facilitate the monetary flow within our huge world economy and the whole monetary capacity is determined by the amount of currency you have but also by the rate and flow of the currency.
With Bitcoin and its associated cryptocurrency technology when it comes to payment, the rate of monetary flow will be a lot faster than it is now. So projects can get funded very easily and more money can be transferred very easily so there is not much shortage on cash and stuff like that. So that is going to help our economy grow down the road in the long run.
Our talk about the information flow which is more subtle, it’s quite difficult to realize that Bitcoin and blockchain in general has brought us a revolution in the net worth topology. How we do business. How human beings organize themselves. Let’s take a look at the very ancient times where we have peer to peer trading. How do I trade my goods with your goods? Say I produce silk and you produce apple, you grow trees right? So I’ll go to the market and find you and we will exchange the goods.
You see how people and society organize themselves, around peer to peer and if I want to buy a stock, I need to find someone who has a stock and we exchange the entitlement to that stock which would come in the form of paper. But right now with the advancement in information flow, we have a centralized trading system where everything is digital. Instead of talking to the stakeholders, talking to people who have entitlement to that stock, to that company, we talk to a centralized system and everyone is talking to one party’s communications system and one party is sitting in the middle facilitating all the transactions. That is the current model we have.
With the blockchain revolution, what it promises is a different model. We have, what I call, a mediated peer to peer; It is not entirely peer to peer like the thing we saw in the past, it’s mediated peer to peer with the blockchain. It’s mediated by blockchain, which connects us together. The very downside of the model that we are trying to use in Asian parts is that it is not efficient so that’s why we have moved on to a more efficient model right now. But with the blockchain revolution, we have solved the connectivity issue so we can connect to parties and peers easily on the network.
We are going back to the mediated peer to peer network. That’s why you see a lot of business models have changed. Right now we have ICOs, in the past we go to investors. Right now we have crowdfunding for events, which can be done more easily. Of course we can now use the internet and get commissioners out of it but the reach is limited. In summary, what the blockchain revolution has changed fundamentally is first monetary flow and information flow.
How is blockchain superior to traditional financial methods for startups like banking?
As for the traditional financing method, basically people go to investors. If they want to start a project, I either go to investors who invest in my startup or I got to banks to borrow money. As small/medium enterprises, when I encounter cash shortage, I go to the banks for borrowing as well. What blockchain has fundamentally changed is that now I have a wider reach. Why I don’t want to go to the public for money is because I cannot go to all of them at the same time. I must approach one at a time and that is very time consuming.
The same for start ups who have an idea but have no money. I can go to a lot of the general public, I can ask my mom, I can ask people like my friends. The thing is it’s very hard to raise money that way, it’s not efficient. What blockchain has solved is the efficiency issue. If you look at the ICO space right now, recently Bancor has created its ICO. They have raised $153 million in just 3 hours. That is some financing record we have never seen before.
With that kind of reach, startups don’t have to go to institution for financing. We can go to the public. This is also good on the other side for the general public who had no ways of investing in startups because of the efficiency issues. Right now, I can invest in things I want instead of putting money in the bank so that is a much better model for both people who deposit money in the bank but it’s also for startups who make the money.
Why is this relevant?
This is relevant in the larger context of what we’re trying to do in world transactions. If you see the sharing economy model that has been taking place right now, what we observe is that it is not really a sharing model, it is still a centralized model, it’s called internet-enabled centralized model. They have a wider reach, but fundamentally they are still sitting in the center, charging a very high commission fee. The whole thing is not as distributed, is not as decentralized as it should be.
That is what the blockchain promises and what blockchain wants the world to achieve. What I mean is that individual players who are maybe in the AirBnB or Über network do not really have the power to switch and do not really have the power to take their past transactions onto somewhere else and to demonstrate to others that they have the history of taking passengers. AirBnB and Über, those centralized agencies are still controlling those transactional data.
Whereas if we move everything onto the blockchain, individual participants in the network say Aether United or be some other Über equivalent on the blockchain network will have much greater control when it comes to information and when they want to switch to the exit option, that extra cost is much lower. That is one advantage of using blockchain.
Another thing is that right now in the world, there is very intense robotization and automation. The job aspect is not very good, in fact a lot of jobs are in peril because they’re being replaced by robots and in these cases, the ideal situation is that people own part of what he’s going to consume. People also own part of what he is going to produce. We are all individual producers and we are all individual sellers and we’re entitled to what we have. We have a steady stream of income from the factory production that we own. That is the ideal situation we are trying to achieve and we can only get there with the use of the blockchain.
With the issuance of tokens and stuff like that. I have a stake in whatever I have, somebody else has a stake in my things as well so everything is delineated and everything is decentralized. I don’t have to rely on a centralized agency always because it will be very messy, I’m going to have some centralized agency engage in this business because it’s a lot of accounting to do and stuff like that. Whereas blockchain by its very nature solves this issue seamlessly. So there’s my take on it.
Are there any drawbacks to blockchain? You say a lot of good things but..
Yes certainly, there’ll be drawbacks to anything. First of all, there are a lot of high profile hacking cases recently. This can be seen in many ways, but first of all some of the wallets in the past are hacked and a lot of Bitcoins are stolen and we know that there is no reversibility about Bitcoin. Once the Bitcoins are stolen, the transaction can’t be reversed unlike what happens in a centralized agency, you can just reverse the database.
There’s a finality to it, so that’s both a good thing and a bad thing. We’re saying that Bitcoin is a tool, we’re not saying that it’s the best thing that we are trying to achieve. Bitcoin is just a tool for us to use when it is necessary and the second thing, this is more subtle but is much more important, is that what underplays the Bitcoin operation is cryptography, is cryptographic key management. The key management becomes very important, can you access your wallet and can you access your account. Those keys are very hard to manage, it is not like the password and username I set. It is a long alphanumerical string which is known as a private key. So how does an average user know and manage the key themselves? There must be some sort of wallet providers and stuff like that but with wallet providers, there is another layer of risk so how are we going to deal with that risk.
From the company side who’s starting the ICO, how are they going to manage the wallet, multi-signature wallet, and what if one of the signatures are lost and stuff like that because you are going to be held responsible for the funds raised so I think those are the potential issues that using blockchain might face. But with careful planning, those things can be solved, that’s how I feel. So as of right now, the ecosystem is in a very positive direction. We have wallet providers and we also have quite convenient access to our wallets and for the ICOs, I have not heard of ICO people losing people’s funds and stuff like that because we have quite established a set of protocol of how to manage ICOs on a cryptocurrency network.
You said that the community was doing some things to prevent these drawbacks, what are some of these solutions?
When it comes to the security aspect, when it comes to how we manage the keys and how do we manage the wallets there’s a solution called hardware wallets so those things are being invented. Also a lot of the servers right now run by the big exchanges are very distributed and they control access to the servers very strictly. Some of them don’t even use the conventional authentication methods of username and password because they were not secure as mentioned by several articles in the past.
The security practice is being advanced right now and these are some of the practices that people use to mitigate the drawbacks. Another way to mitigate the drawbacks is to have a portfolio balancing the crypto assets and my fiat assets so there is a hedging over that.
Aether United, my company, is creating a token called Rune and its the token for fans to interact with our teams that we purchase and manage. How does the use of tokens help Aether United?
I want to mention something about Aether United. I think it’s a very innovative model when it comes to the esports industry. In the past, what people do is that people sit in front of their laptop and they go to streaming channels and they watch teams playing video games and they often have complaints about why the team managers do things this way and why their owners do things that way. Why they hire these kinds of people but not that kind of people because they think it’s not the best pick.
What Aether United have created is a channel for people who are sitting in front of their laptop with their team who is playing the game. Aether United is trying to use blockchain and also the token to engage people who are esports fans and have them control a team themselves.
With respect to tokens, the reason we adopt the tokenized method is because it is very expensive, admittedly, to purchase a team and sometimes it might cost millions of dollars and to manage the team it probably costs a lot. For individuals to invest that much, it is not something quite feasible.
What tokens have in store for us is that we break the ownership into different parts. Its tokenized asset is entitlement to part of the collective ownership. If you break down the ownership into parts, you can sell to people very easily. In the past you couldn’t really do that because it involves a lot of contract work, but with blockchain you can. That is something that is really promising about blockchain. Aether United has come to the right platform to do this venture.
You talk about transparency a lot, how does blockchain ensure transparency towards its users?
Transparency is the key when you want to engage the crowd because people do want to know that you are being responsible, you are being accountable, and you are doing whatever they wish you to do. You are not misappropriating the funds and stuff like that. What blockchain essentially does is it allows the crowd to have direct access to what the voting results is.
Right now, we are adopting a democracy based model when it comes to our team management for esports. We need people to vote and in the past if we take it offline, it is very hard because it involves identity verification, whether you are a true stakeholder of our Aether United token teams, and it involves a lot of manpower and we also have to consider the difficulty of setting up voting booths, worldwide.
The main thing is about scalability, there is no scalability if you take everything you are doing offline. But if you take everything you’re doing right now online onto the blockchain platform which is exactly what you are trying to do. You can adopt the democracy based model in a scalable way so we have scalability. With the use of blockchain, this is transparent because whenever people vote, the results will be made public. Your side will have accountability so people know what the decision is and people expect you to carry out the decisions. There is a light exchange of the managerial decisions to be made.
That really engages the fans, they do not see it as an asset they have, but it’s much more an active investment they want to put themselves into because they are all very passionate about esports. At some point in time in the future this sort of thing can be integrated into the esports channels so they can make real time decisions. I think there’s a lot of bright prospects, a bright future for Aether United.
Last question, how does blockchain ensure safety? With transparency, how does it also ensure safety?
Safety, as I mentioned, can be put in the context of the fund management for a team. Whether the fund is appropriately managed and used by Aether United and safety when put in the context of hardware wallet management. I’m sure Aether United has followed the established protocols so I can understand safety in those two aspects and Aether United is managing it very well.
You also said that transparency is good for Aether United, could you elaborate on that?
Transparency is good because it gives people confidence in the organization. With confidence, they want to engage themselves, they want to involve themselves in what Aether United is trying to achieve. There’s a synergy between the fans and also the team and also Aether United. Secondly, we have accountability. These are the things that people want to see as well.
XiangJun later also asks questions related to our project. At Aether United, we believe it’s important to see all sides of an idea. It is not so far-fetched we believe the same about ourselves. To all the readers out there, if you have any inquiries, please search us up and ask on our social medias (posted below). On behalf of Aether United, I thank you in advance. Remember that with your help, we will be #BetterTogether.