We had the opportunity to interview the co-founder of CoinGecko, Bobby Ong, and hear about cryptocurrency data collection and analysis from different angles of the Crypto market.
Bobby Ong(Co-Founder at CoinGecko)
Interview Date :25th February 2020
2019 The Year of Bitcoin
In 2019, we saw the market had increased by 40% and it was a year that was mainly lead by Bitcoin. Bitcoin had nearly a 95% increase, and everyone else did not do too well-meaning that dominance for Bitcoin increased. If we look at exchange tokens, they did pretty well as well. If we look at some of the key events for 2020, Ethereum launching ETH 2.0 is a big one, we have seen that China is now launching their central bank digital currency, etc. Looking at all this, we can for sure say that money is constantly being redefined, and it’s very fluid; it’s defined not only by crypto but by central banks, banks, tech companies, etc. Everyone wants to have a say on how the money will look like in the future, and everyone has got their own perspective on it as well as their own levels of decentralization. So, we don’t know how it will turn out in the end, but it is really interesting to see that all these experiments are being tried out in all levels of society.
I think that the number of tokens that will be around in the crypto space will increase over time. If you think about a future where anything and everything that can be tokenized will be tokenized, it’s not far fetched from reality to say that we are just at the starting off at a multi-decade revolution in how we reorganize finance. I think that what we are seeing now, are a lot of experiments being tried out, and a lot of projects that are getting started. Some of these get funded and sometimes funded with too much money maybe, but obviously a lot of these projects will die off just like any other startups. The only difference from the conventional market is that these tokens are traded in a public manner, and some people will earn a lot of money and some people will lose a lot of money. Nevertheless, as we grow as an industry, I think that more tokens will be created and more things will come out from the market.
Younger generation prefers Bitcoin over Stocks
The banks did not understand it in the beginning. They don’t want to be involved because Bitcoin started out with some pretty bad press in the sense that the early users of Bitcoin were almost all drug traffickers and money launderers. Every article that you find in the early days was a silk road for criminals to buy drugs on the dark web. So bankers read the headlines and they had and still have the perception that crypto is bad, so they just cut it off, and that stigma stayed on for a few years. I think lately their perception has changed as bankers have come to understand the potential of blockchain technology and Bitcoin’s potential. I think that it is just a matter of time in the future when the banks will collaborate with Bitcoin and blockchain technology and be its custody provider.
If you already are storing your fiat currency with a bank, why not also store your cryptocurrencies with a bank? Banks are said to be the most trusted entity that can store everything safely, and I think banks just started looking for a new form of revenue models, for example how all the crypto exchanges are making a lot of revenue by fees that they earn from all the trade. Looking at young people in general, they don’t trade with stocks that much, and for many young people, trading Bitcoin is so much easier compared to setting up and trading stock. So, banks will have no choice in the future but to buy exchange or to get into the crypto space. We already are starting to see the early movements of this movement as well. If you look at Germany, the central banks have already given a green light to provide custody solutions for cryptocurrency and start selling Bitcoin directly to the customers. So, I think it is a matter of time when it becomes a more globalized function at banks. At the end of the day, if banks are offering their users gold for sale, I don’t see why they cannot sell Bitcoin as well. Also, if the consumers want to trade Bitcoin, it would only make sense for the banks to accept it because it is just another form of revenue for them.
If hacked, there is no one to go crying to
Like with any new technology, of course, there are risks involved with Bitcoin. If you don’t implement your wallets safely, you will get hacked and that’s the biggest risk of it. So you will need to find the right windows to ensure security because of the difference between Bitcoin transactions to traditional ones are that transactions are non reversible. If someone hacks your wallet and takes your coins from you, there is no one to go crying to or no one to go complains to. You will lose your coins and capital completely, and that’s obviously the biggest risk that also the banks are afraid of.
They need to know what they are dealing with, and have the right providers to secure the safety of their system. All transactions are recorded on the blockchain. And you may not get caught now, but the transactions conducted will be a permanent record of your transaction and you’ll never know that sometime in the future, maybe in 5 or 10 years, technology will catch up and you will be caught. It’s not a good case for money laundering. Neither is it a good idea to buy in drugs in the dark web – I would be worried for those guys.
Transparency is very important and many exchanges have created their own foundations in order to be the most transparent; Ethereum has the Ethereum foundation for example and many more are out there. How decisions shall be internally, and how transparent things shall be conducted, everything should be made transparent for the benefit of the community. You cannot just create something without discussing it with the community, because that wouldn’t build trust and the ecosystem will die out.
Clogged systems decrease Scalability
I think that side chains for sure are a great invention. Because if your system, let’ say Ethereum, is fully clogged, it will only be able to process a certain number of TPS at a time. So, they need to increase the number of TPS that can be processed of Ethereum otherwise the network cannot scale it. Ethereum is stating claiming that they want to be world computer to process everyone’s transactions at a very fast rate, so we will need to scale that in one way or another. You need to use side chains to scale that, and it is one of the many ways of scaling Ethereum system to handle a lot of transactions per second at a very speedy rate.
If you look at coins like Ethereum or Bitcoin, Bitcoin can only process around 7 transactions per second, and Ethereum around 15 transactions. If one decentralized application becomes really popular, users will increase and your whole network gets congested. For instance, if you to make one transaction on the Ethereum blockchain, you will have to wait 5 min or more and is you are waiting for confirmations on Bitcoin, you might have to wait up to 1 hour or more. Basically, you would want to have as fast of a clearance possible one a chain for payment or transaction. Scalability aims to increase the number of transactions that a blockchain can handle per second, and there are several methods to do that.
Everyday is a day full of drama
It’s very hard to predict what will happen in the next coming years in the crypto industry, because it moves really quickly, and I think from what we have found in is that; every 6 month the narrative shifts completely in crypto, and something new comes out that creates some kind of change. 1.5 years ago it was NFT that was in the focus, now it has taken off and will probably stay low for the next couple of years. Maybe in a few years of time, it will get hot again. At another incident, everybody was talking about the lightning network on Bitcoin.
As it is growing, not a lot of people are talking about it at the moment. That may change, making lightning network popular again, and once again become the coolest thing in town. So I would say that things do shift and change very rapidly. It’s really hard to say what’s going to happen. Things in crypto change every 6 months, and we at CoinGecko have to just go along with it and aggregate the coming data. However, the two things that we are paying extra attention to are DeFi and derivatives. we spend a lot of time in 2019 on these topics.
We are looking into the DeFi space, and we are looking actively to see how we can implant it in our system. We believe it will grow quite rapidly as it did in 2019, and I think will continue in 2020 as well. I think that things will get more complex so it’s better to look at them before it gets too complex. It’s sort of like Bitcoin, back in those days you just had to learn about Bitcoin, but now you have to learn about Bitcoin, Ethereum, and many other coins. It’s crazy trying to catch up on all the things that are happening.
Everyday is a day full of drama in the crypto ecosystem. There always are too many different things going on, everyone is so convinced that their insight, thought and ideas are the best, so they start fighting among each other. Nothing really shocks me anymore, and it’s kind of become normal to me now. On the contrary, if there is no fighting and no drama, it gets very boring.
A cute Gecko lizard as our Logo
Gecko is a small and adorable lizard, so we just chose the head of the gecko as our logo. We wanted something cute, in contrast to the industry being full of serious names and platforms. Finance doesn’t always have to be very serious filled with serious-sounding names. It can be fun as well so that was our aim. Having a cute mascot doesn’t mean the data is not credible. I think that it appeals to Japanese culture as well in the sense that all Japanese companies have their own cute mascot. And our motto was and still is; to be the most accurate data provider, and to give a 360-degree overview of the cryptocurrency market.
Message to the reader from Bobby
Hi, everyone. Please go and check out CoinGecko. If there is something that we are not doing at CoinGecko, send us an email and we will make sure to look at it.
Interviewer , Editor : Lina Kamada
【Disclaimer】
The Article published on this our Homepage are only for the purpose of providing information. This is not intended as a solicitation for cryptocurrency trading. Also, this article is the author’s personal opinions, and this does not represent opinion for the Company BTCBOX co.,Ltd.