December 21, 2017 Shenzhen-The “China Blockchain Innovation Summit (Shenzhen)” co-sponsored by 8btc, Bytom and the Dream-seeker Fund was held successfully. Representatives of VC, financial institutions, law firms and blockchain entrepreneurs are invited to share their insights on “Ecology Outlooks and Industrial Value Linking Based On Blockchain Technology”. The forum features keynote speeches and roundtable sessions. In-depth discussions are conducted on blockchain VC at home and abroad, legal regulation, frontier exploration of blockchain technology and practical applications.

Mai Gang, Co-founder of OKCoin and angel investor, delivered a keynote speech on blockchain investment. Below is the transcript of his speech.

Thank you for your invitation, I notice that there are many old friends and new faces in the audiences? Are you still HODLING? The host just delivered a brief introduction of my previous experience. For each speech I presented, I remind the audience 2 words: Think Independently. Each speaker has his background with his merits and limits. Independent thinking is very important for entrepreneurs and investor alike. There are all kinds of voices in the crypto world and everyone has his own perspective.

Blockchain NOW: the greatest investment also the craziest speculation

I have been working with many identities. I am the first batch of China’s venture capitalist both in China and the United States. I founded five companies, including the earliest Chinese social network. I invested in blockchain, back then when it is called bitcoin. Of course, I am still a member of the China Securities Regulatory Commission. Therefore my speech should be legally viable under the regulatory environment of China. I used to be some of the earliest people in China who preached bitcoin. Some ideas that I have said in 2013 should be taken in a new perspective. Now in the new ICO wave, I basically did not endorse any ICO. Therefore, I hope everyone will understand my attitude behind these two different behaviors. What is the thing that I understand and support and what is not. There are too many topics today. To be honest, bitcoin sparked a wild fire like blockchain, ICO, IFO and a bunch of chaos. The blockchain industry that we are experiencing now is the greatest investment opportunity for all mankind, coupled with the craziest speculation of all mankind. There are exposures of human weakness and I would like to share some of my feelings with you. I would like to share my own standard on asset categories, which is called stock map if it is mentioned in the stock sector, now bitcoin map. I rarely post contents on my Wechat moment, not even when the exchange was shut down. As for market game, the first level is between individuals like you and me. The second level is between institutions like the futures market in CME, CBOE. The third level is between countries. You may find my speech in 2013 when I was talking about that bitcoin should become a form of stored currency in the global financial reserve. This is happening. 30 years from now I have this more crazy idea, which is probably between the Internet and the country’s game. I have to contain myself as this is a public occasion.

The transformation of the financial system brought about by the blockchain is incredible

This is my view on the digital assets represented by bitcoin. Some of the perspectives on the evolution of a globalized civilization are still to be seen. I think this must be the greatest game I have ever seen in my life. In the past we all said that the great game happened in Wall Street. Today’s the change is not just about bitcoin but the entire financial system. Changes brought by Blockchain to financial assets are incredible. A lot of mistakes, blood and tears will happen. Some professionals are ignoring this potential intentionally and its not a irresponsible or even a fraudulent behavior.

Four categories of digital assets

Digitized assets are divided into four categories, the first is a currency-oriented represented by bitcoin; The second category is represented by the smart contract, or the underlying protocols, or infrastructure. This type of asset is the group of smart contract. I am not in a position to say specifically. This is not an occasion for recommendation. I don’t have a technical background, therefore I have no way to judge from technical perspective. But I know some of its principles and directions. The third category should be fall within the application layer. We will see lots of applications in terms of content distribution and incentives. There will be more.

In my opinion, the fourth one is quite controversial. I put it down as equity assets. Your company equities, proceeds, dividends, mortgages and repurchase rights are standard, classic securities. Such business must undergo strict regulation from legal perspective, which I fully agree with. Therefore, I think it ‘s right for the Chinese government thinks to crack down ICO at this moment because there is very little credible projects. The vast majority of ICO projects are semi-fraudulent. In short, the logic, principles and supply-demand relations behind these four categories are all different. I can give you some ways to distinguish them. Speaking of ICO and IFO, my personal standing is that equity issuance like ICO must be subject to legal supervision. Maybe the regulation still requires perfection. But it is necessary because this is the most classic fraud in human history, that is securities fraud. I am not saying all the ICO project are frauds. But for now a lot of them are not reliable. IFO is a technology deviation. We should give applaud to those projects without pre-mine. I believe such team deserve appreciation. I also advise everyone to think what is the reasons behind each IFO?

Bitcoin Futures: Absence of China Factor

I’ll go back and talk about the Bitcoin futures. I personally have a financial background. Let me explain why I was so keen and interested in Bitcoin many years ago. When I was studying in the United States, I found that the absolute value of family income between USA and China was the same, which was like 30,000, 50,000 and 100,000. But the price composition was different. It cost 10 or 20 bucks for Americans to buy a pair but the Chinese need a few hundred bucks. Judging from current price of Bitcoin, we made the right decision. Whoever is holding or has sold out their coins here deserve some applause.

I do not mean that after futures market out, we must go shorting. No one knows the outcome. Futures market is just a game of tools. But one very important thing is that the index of bitcoin futures consist no exchanges from China. We do not have influence on bitcoin pricing. I think the absence of Chinese pricing should be reflected by every inancial industry professionals, including regulators. Trading, in its essence, is the greatest game. What’s position of China’s authority, China’s financial institution and general public? Everyone has their own position and everyone votes with money. All in all, I think we are in middle of the greatest innovation of all mankind and the greatest investment opportunity. At the same time, I would like to stress what comes along with the wave is the craziest investment bubble and frauds. Everyone who wants to get involved should have such a clear understanding.

Create new markets or new demands

Lastly, let me add that everyone in this is changing. We have been investing and running start-up for many years. When we look at the rise of traditional corporate and industry, their key to success is to create new business and new demands, or use new technology to create new demands, or use new technology to entertain unchanged demands. That’s where value is generated. Google creates new markets in itself but also invade the traditional mode of advertising. I think blockchain technology and a lot of decentralized technologies will evolve in the two directions. The new technology will impact traditional business in 4 different ways.

Blockchain changes the relationship in production