Hong Kong News: Why Hong Kong has little chance of becoming a "global crypto hub"

After all the noise and bustle, we need to stop and calm down. The premise of how we can seize the policy opportunities in Hong Kong is that "Hong Kong can grasp the situation in the crypto market" to achieve Hong Kong's position as a global crypto center.

But we judge that it is "almost impossible" for Hong Kong to become a global encryption center.

This is not us "blackmailing" Hong Kong's efforts in the crypto economy. We also fully expect Hong Kong to seize this historical opportunity to establish itself as a global crypto center, so we did not make an "impossible" judgment.

Where that slight possibility lies will be unfolded in the narrative of "Why we judge that it is almost impossible for Hong Kong to become a global encryption center."

Against the backdrop of the Americans’ misfortune over the past period of time, Hong Kong will become the main narrative of this round of bull market. This is the common perception of the entire crypto market, and it is also the fundamental motivation for the surge in Hong Kong’s enthusiasm.

However, this is not a good phenomenon and will also lead to a bad result. If the virtual asset policy conditions in Hong Kong, China bring together old cryptocurrency players who have scattered around the country to continue speculating in cryptocurrencies, even if it is beneficial to this round of bull market, it will be a gap from the central government's expectations for Hong Kong.

Then, the Hong Kong government must be aware of this, so the Web3 policy led by the Hong Kong government is largely inclined towards traditional technology and traditional finance. Just look at the members of the Hong Kong government's web3 association to make it clear.

Obviously, for the native web3 industry, the current bad phenomenon is obvious - Hong Kong is not on the right side of the favorable side. Therefore, Web3 builders gather in Hong Kong, Web3 activities are overwhelming, resources, capital, and talents are gathering and allocating to Hong Kong, and to a large extent, it is mainly the spontaneous power of the market. But this is obviously not enough to build Hong Kong into a global encryption center.

The event overview is based on Hong Kong’s virtual asset policy, Web3 policy, official public statements by key department heads, and the resulting industry response. We were disappointed to find that Hong Kong did not integrate the role of a “financial center” into the web3/cryptoeconomic narrative.

All of this is the basis for our judgment that "Hong Kong has little chance of becoming a global crypto hub". The key to solving this problem lies in how to play the role of financial capital allocation - a more specific description is "how to transform the capital of cryptocurrency speculation into funds to support the development of the web3 application market".

In the traditional economic world, the main narrative of finance is not a zero-sum game of speculation, but a hub for the effective allocation of capital. For example, in the past two or three decades, the role of finance in capital allocation and the shaping of the leading position of the commercial technology industry have been fully demonstrated in New York/Wall Street. Therefore, compared with the financial empowerment technology in the United States, in the last round of the role of finance in capital allocation and the evolution of the commercial technology industry, the Hong Kong financial center does not have an advantage in this regard. Take Alibaba as an example. Hong Kong stocks were once the first choice, and Jack Ma turned to the US stock market after being rejected by Hong Kong.

This is not an easy thing to do. In the current crypto-economic world, DeFi has not played a role in capital allocation.

But this seems to be the only glimmer of hope for Hong Kong to become a global crypto hub. If Hong Kong wants to become a global crypto hub, it must resolve the contradiction and unity between financial speculation and capital allocation in the crypto economy.

Regarding the opposition and unity of "financial speculation and capital allocation", ThePrimediaDAO once selected DeFi samples to jointly research and create investment research and analysis articles.

Simply talking about the topic of "financial speculation and capital allocation" is a bit abrupt in the narrative of Hong Kong's web3. We can further extend the matter of Hong Kong resolving the contradiction and unity between "financial speculation and capital allocation" in the crypto-economy field in the current central policy attitude expectations and the global crypto-economy landscape - with "financial speculation and capital allocation" as the core, give full play to the role of DeFi and currency circle capital in empowering the web3 industry, realize the development of the native web3 technology application market, and promote the integration of crypto-economy virtual assets with the real-world financial system.

But the current hustle and bustle is far from this. As mentioned at the beginning, it is time to think calmly, otherwise, after this hustle and bustle, there will be a mess, and the overall loss of Chinese web3 and Hong Kong's encryption center will also endanger each of us practitioners.

This article is just a starting point, and we hope that some powerful and insightful industry professionals will push the narrative of Hong Kong's crypto hub in a positive direction while developing their own careers.

Thanks to friends at the Hong Kong Web3 Carnival for sharing their thoughts and for the discussions on different opinions, which played a necessary role in promoting the topic of this article from a vague stage to a clear written document.

We have selected a few "Thoughts from the Hong Kong web3 Tour" and also picked out some interesting moments from the discussion:

DIDhub.com Angel Investor Xiaoba

From a macro perspective, the situation of Web3 in Hong Kong is very good. Whether from the policy level, capital level, media level, or project level, it has attracted the participation and attention of Chinese people all over the world. The main theme is positive, open, and international. However, from various signs, we feel that the entire industry is still in a bear market. There are very few institutions that are really willing to support the development of projects. Most of them are still waiting and watching. For project parties, survival must still be put first. If there is an opportunity, you can consider settling in the Hong Kong Science Park or Cyberport to obtain some basic support, but once you settle in, you may be constrained by policies in the future. This is worth thinking about for project parties, because there is no free lunch in the world.

The quality of web3 projects exhibited this year has generally improved. Many industry OGs have started their own businesses. This type of project is relatively more worthy of attention from Web3 investors. I have seen many entrepreneurial teams from famous universities and companies such as Tsinghua University, Peking University, Tencent, and Alibaba. They went bankrupt with huge funds. They have no shortage of technology, talents, or endorsements. Why did they fail? Because they lack a deep understanding of the Web3 industry, lack insight into the web3 market, and lack a Crypto Native mindset. In the Web3 field, except for those projects endorsed by large institutions that have achieved success from top to bottom, the breakthroughs of other small projects are almost all bottom-up, and they are co-built and win-win with the community. Web3 has never wanted high-cold entrepreneurs, but down-to-earth entrepreneurs. For Web3 entrepreneurs who want to develop in Hong Kong, the competition this year will be extremely fierce. Why do I say that? Because Hong Kong, a small place, will almost pull in all Web3 practitioners from the East. If you walk into a conference venue casually, you may meet your competitors. Of course, this also has its advantages. If we can actively embrace competition and actively integrate various Web3 ecological resources, it will be possible to expand the entire industry together with our competitors, and everyone will benefit from it.

Peng SUN, Researcher at Foresight News

Looking left and right, accelerating on the curve: the speed and passion of Hong Kong Web3

I stayed in Hong Kong for a week and was deeply impressed by the taxi drivers. They drive very aggressively, often going 60-80 mph or even 100 mph on city roads. They turn without braking and accelerate on bends as if they were playing go-karts. Every time I sit in a taxi, I have to hold the upper handle for fear of being thrown out.

Hong Kong taxi drivers are racing against time. They don't rest, and they are not wandering Jews, but they are always on the road, always accelerating. They pay great attention to safety. Just like the signs on the sidewalks that say "Look Left" and "Look Right", taxi drivers always look at the left and right mirrors to observe the road conditions, trying to control the acceleration within the safe range that humans can control. The brakes of taxis are only used when necessary and in emergency situations. Apart from "traffic jams" during non-peak working hours, they keep going non-stop. Perhaps it is the rhythm and pressure of Hong Kong, an international city, that we actively and passively enter this speed and passion.

Web3 in Hong Kong is also accelerating while looking left and right. The Hong Kong government is trying to achieve a curve overtaking through Web3 between stability and regulation, and recover the years lost in the field of technology in Hong Kong as an international financial center. More than 100 surrounding events, dinners, cocktail parties, yacht treasure hunts, graffiti mountain climbing, hackathons, hotel prices have soared to more than 2000 or 3000. Public opinion + Web3 activities + Web3 practitioners + Hong Kong government + service industry acumen jointly directed a Hong Kong Web3 speed and passion drama.

The 2023 Hong Kong Web3 Carnival has come to an end, and the short-lived craze will also fade away. Hong Kong taxi drivers will continue to race, but Web3 is just getting started. It is still unknown how long this speed and passion will last in Hong Kong, but in any case, please hold on to the handlebars and don't get thrown off the car.

NonceGeekDAO founder Li Dagou

Views on Hong Kong (Developer Type DAO perspective)

• Builders, especially young builders, need to step out of their social comfort zone, not just hang out with people of the same age and type - "breaking social circles" is a scarce skill for young people;

• Moderate social interaction is very important for a Developer Type DAO. Many Builders are overly social, under-socialized, or both:

* Oversocializing - participating in all kinds of activities

* Lack of social interaction - obsessed with realizing the ideas in their minds, not verifying the matching degree between their ideas and the market through communication with the outside world

* Over-socializing + Under-socializing - Participating in all kinds of activities, but the communication is superficial, without in-depth communication, especially one-on-one in-depth communication, resulting in socializing being just exchanging contact information

In short, "how to socialize correctly" is a key topic for developers in mainland China, because the education system is lacking in this aspect. "Real social skills" are often not established during the long student career, so it is necessary to "actively and deliberately learn real social skills."

Rebecca Lee, Ecological Designer at PicaPica

The week-long Hong Kong Web3 Carnival started with Wanxiang Xiaofeng’s “A successful Web3 project requires NFT+Token+STO” and ended with the “three tokens” model that was widely disseminated at the closing ceremony. During this period, we saw various builders working with various capitals using various models to cultivate various tracks. Most of the directions were thinking about how the entrance to Web3 should be made, how to let Web2 users enter Web3 without feeling, and how to better use Web3, NFT, Token, AIGC and other tools to serve the real economy.

What emerged in just seven days is that this group of early Web3 co-builders are not only acting, but also thinking, or in other words, acting with awareness and thinking. They are the most vital explorers of this era. In a brand new world, they are building a blueprint based on imagination and theoretical models from 0 to 1, which is an art full of divinity.

The emergence of AIGC has improved productivity, and Web3 and blockchain will reshape production relations. From establishing foundations to providing incubators, the Hong Kong government is striving to create good conditions for Web3 pioneers. In the context of the future Cold War between China and the United States, Hong Kong's sandbox experiment provides us with a very imaginative space.

PicaPica, which has just established an operating entity in Hong Kong, focuses on exploring the application model of NFT in business life. In addition to issuing business cards, advertisements, membership cards, physical objects, rights and interests for personal IP (industry leaders and professional workers), community IP, and corporate IP, it also links NFT issuers and holders in the form of a Web3 Blog social homepage, and uses application tools such as chain games, pledges, and physical exchange to deepen the co-construction relationship between brands and fans. Projects like this that directly focus on Web3 empowering the real economy are the Web3 applications that are easiest for "outsiders" to understand at this week's carnival.

Judging from the Hong Kong government's declaration and the composition of Web3 Association members, the development direction of the projects supported by Hong Kong this time also tends to upgrade and transform traditional technology finance, which means that Web3 will become the mainstream of traditional financial technology development in the next few years. It also means that the popularization of Web3 still has a long way to go. In this process, very powerful industry evangelists and industry promoters are needed. The Magpie Ecology will try to create an "NFT broker" system that benchmarks insurance brokers and promote the co-prosperity of the entire ecology from the perspective of professional certification training.

Tony, Founder of NFTChina.hk

I think this is a very good start, but a good start is only half of the success, we need to achieve the ultimate success. After the excitement, there must be landing. Now long China, long Hong Kong, long capital has become a consensus, but how to long this specific entry posture, I hope everyone can think about it after this event and find the best posture for themselves to enter the industry.

InVar Finance Founder Kenji

If FTX is a watershed moment for the industry to accelerate compliance, then this HK Web3 event is a watershed moment for the industry to begin to integrate.

The most special thing this time is probably that we have seen many Web2 funds and companies begin to understand Crypto and Web3. In the future, we will see more levels of virtual-real integration and the fusion of the old and the new.

With the rise of Eastern power, the previously conservative Asia has begun to actively embrace the new world. The implementation and expansion of Web3 applications in Asia has just begun!

CrossSpace and Type V DAO Founder 0x Leon

During this Hong Kong conference, many builders gathered in Hong Kong, and there were too many activities to attend. Resources, capital, and talents were all gathering in Hong Kong, which is a good thing. However, builders need to calm down and think clearly about what is most important, where their customers are, and how to polish their products to meet market needs. The more lively it is, the more they should avoid being impetuous.

Oasis Capital Iris

Compliance and transactions are eternal themes, and I don’t see many energetic developers; sorry, Sui is very energetic.

CryptoAllocators

The meditation activity at Mid-Levels is one of the highlights at the end of Web3 Week; in the high-density, high-intensity Web3 industry, meditation can relieve stress and anxiety.

Afflux-Founder-Jor & Lucas-NewLand

The activities held by several institutions were good. The quality of AC capital and Youbi was very good; Zhichun’s was also good.

Topia Keran

After coming out of the greenfield, people are finally paying attention to the storage track. This time I came to the WEB3 festival to see more products in the decentralized storage track, which is a good thing. When capital and builders focus on the track, I believe that this track can develop rapidly.

RE:DREAMER Lab /CEO Jason

I feel like time has been frozen and then thawed. Although there was joy right after it was frozen and it may still be adjusting to the new era, I believe that it will be able to accelerate the adjustment and create a brighter future!