Written by Marc Howard.
Image credit: Crypto Currencies’ Red Sea by Jim Makos /Flickr, license: CC BY-ND 2.0
Imagine living on an island that is not only advancing the adoption of crypto currency and block-chain technology, but is actually pumping millions of dollars into this nascent industry. Welcome to Taiwan, a nation state in Asia that will soon be the crypto capital of the world.
Taiwan is a hotbed for tech start-ups focusing on block-chain, Artificial Intelligence (AI) and the Internet of Things. It hosts a proliferation of major start-up accelerators and incubators, including start-up super-hubs like Taiwan Tech Arena, which will spawn 100 start-ups per year and expedite the overseas expansion of 300 start-ups over the next three years.
Block-chain and AI alone are growing at such a fast pace in Taiwan that AppWorks, one of the largest tech accelerators in Asia, recently announced that it will now focus solely on these two game-changing technologies. With a total network valuation of US$ 3.6 billion and a US$ 61 million fund devoted to investing in these start-ups, there has never been a better time to launch a start-up in Taiwan.
Taiwan is Entrepreneur Friendly
I didn’t expect that becoming an entrepreneur in Taiwan would be so rewarding. I thought that it would take years until I got to the point where I was comfortable becoming a resident. Little did I know that less than a year later I would learn to speak basic Chinese, get awarded the Taiwanese entrepreneur visa and launch a start-up based on my passion for merging AI and cryptocurrency.
After exiting my last start-up in the United States, I decided to throw a dart on a map of the world, so-to-speak. I wanted to live in a city that ranked high in terms of people-friendliness, open-mindedness, great food, non-extreme climate, transportation, bike-friendly, environment, hi-tech and relatively low cost of living. I ran the numbers and Taipei, although not the top in every category, came out at the top overall based on my main criteria:
I Decided To Meet Taiwan’s “Crypto Congressman”
Jason Hsu, a parliamentary congressman here in Taiwan, was dubbed the “Crypto Congressman” by Vitalik Buterin, founder of Ethereum. Jason is an outspoken proponent of blockchain and crypto, particularity on self-regulatory organisations (SRO). His SRO guidelines are basically a set of principles explaining how cryptocurrency exchanges should regulate themselves.
I had the opportunity to speak with Jason at the Taiwan Tech Arena, one of Asia’s largest start-up hubs. Unlike a typical politician who attempts to dictate what we can and cannot do, Jason practices what he preaches and has an entrepreneurial mindset.
Jason recently launched the “One Crypto World” (OCW) initiative — digital tokens to be distributed among global thought leaders in the blockchain space. The supply of OCW is limited to only 1,000 tokens, is issued via ERC-20 and contains no value and will not be traded on exchanges.
“One Crypto World is more of a badge than a token, acting as a proof of support to policies, initiatives and legislations that I am pushing forward”. -Jason Hsu
Several world leaders have received this token, including the mayor of Seoul, and blockchain pioneers such Vitalik Buterin are expected to receive it too.
Jason is leading the effort to transform Taiwan into a “Blockchain Island” through initiatives such as a “Special Economic Zone” bringing 200 global blockchain companies to be headquartered in Taiwan. He is also working with local blockchain start-ups to develop a digital identity solution called “Taiwan Global ID,” which will let citizens have their visas on the blockchain.
Blockchain has an immense opportunity to disrupt the FinTech industry. The combination of machine learning, blockchain and investment opens the door to many new products and start-ups, from crowdsourced prediction algorithms to decentralized exchanges to emerging new crypto asset classes, like fractional ownership tokens that the visionary Gauthier Zuppinger and I are proposing.
Taiwan’s Innovative Virtual Currency Trading Rules
Like stock markets, cryptocurrency trading is made possible by exchanges. Taiwan’s digital currency exchanges are in their infancy and its daily turnover currently pales in comparison to its neighbour South Korea: NT$12.5 billion (US$406 million) versus Taiwan’s NT$100 million (US$3.25 million).
However, Taiwan’s average daily stock exchange trading value is around NT$140 billion ($US4.5 billion), similar to South Korea’s. This means that as Taiwan adopts crypto-friendly policies, the growing asset imbalance will provide an opportunity for wealth to be diversified from traditional stocks to virtual currency.
Speaking at the Global Blockchain Smart Application Forum held recently in Taipei, David Pan (CEO of ACE Exchange) reported that the Taiwan government regards digital currencies as a kind of commercial merchandise and allows Initial Coin Offering (ICO) launches. The government actively pushes for self-regulated practices by operators of digital token trading houses and is building related supervision mechanisms. This means that Taiwan is on-track to becoming a global leader in cryptocurrency governance.
The Future of Cryptocurrency and Blockchain in Taiwan
Many challenges still stand in the way of greater blockchain and cryptocurrency adoption in Taiwan. Issues such as crypto price volatility, nefarious ICOs, crypto exchange hacking and frivolous blockchain use-cases are difficulties yet to be overcome. But greater adoption can render benefits like increased transparency, security, privacy and decentralisation.
The following are few initiatives that Jason and other blockchain industry leaders are currently exploring for Taiwan:
- Decentralised prediction platform for share market, politics, etc.
- Decentralised patient record management.
- Proof of ownership for digital content.
- Digitalising assets: improvement of anti-counterfeit measures.
- Providing digital identity that protects consumer privacy.
- Decentralised internet and computing resources to every home and business.
- Digitalising company incorporations, transfer of equality/ownership and governance.
- Digital security trading: ownership and transfer
- Digitalisation of documents/contracts and proof of ownership for transfer.
- Smart contract IT portal executing order fulfilment in e-commerce and manufacturing.
- Proof of ownership and marketplace for sales and purchases of digital assets.
To pursue these initiatives, we need to first demystify block-chain and crypto-currency by changing the narrative from geeky tech-talk to concepts to which that most people can relate. This means falling in love with the problem and not the solution: we need to ask ourselves what real-world problems could block-chain technology solve? What are the advantages of a digital currency compared to traditional assets like fiat money, gold or stocks?
The good news is that many smart minds are working tirelessly to answer these questions. Once a society learns how it can benefit from a new technology by improving lives, adoption will follow. Let’s help make that happen.
Marc Howard is Chief Strategy Officer (CSO) at BizPayO.
Your story gives me hope. I am 3 weeks in Taiwan and looking to team up/be mentored by Entrepreneurs. I am hoping to change mine, and my people’s economics status. I don’t want to be given fish, I want to be taught how to fish.