OKCoin's Xu Mingxing: The prospects of the Bitcoin industry have nothing to do with its price

After I quit Docin.com, I was ready to start my own business. I also observed it for a long time after I quit. I first learned about Bitcoin in 2011, and in 2012, I also did some Bitcoin transactions myself. Although I was just speculating on it for fun at the time, I felt that Bitcoin was a very attractive thing.

Bitcoin is a way to build credit. It is very close to gold. Its mathematical design refers to many characteristics of gold, such as unforgeability. Many new coins can also say that they are as unforgeable as gold, but if you don't have computing power, it's nonsense. You say you are the same as gold, why can I forge 10,000 of them? Bitcoin's credit is not based on centralized power, but at the beginning, only a few people believed in it, maybe ten people, and then 100 people. Later, a pizza shop owner said, "I'll give him a pizza in exchange for 10,000 bitcoins, just for fun." So this kind of credit expanded in this way, until 2013 and 2014, it entered the field of vision of the media. After accumulating to a certain extent, it entered the field of vision of a wider group of people, so it developed to millions of people around the world.

In the long run, if you want to expand this credit to a wider range of people, then you must truly solve the customer's problem. For example, have you lowered their cost of living, made them earn money, made their lives easier, etc. If you always stay at the stage of hyping up this concept, it will be difficult for you to sustain in the long run. So the first thing we want to do is to make Bitcoin very easy to use, so that ordinary people can use it, without any mathematical concepts, as long as they have a mobile phone and a QR code. Second, we make it very safe, because Bitcoin will be lost if it is not stored properly, so we have made a safe Bitcoin safe. In addition, we have made a lot of payment interfaces, which makes it easy for merchants to support it, which is easy to use. Another thing is that we have made a lot of specific Bitcoin usage scenarios, such as cooperating with enterprises to do Bitcoin recharge phone bills, Bitcoin lottery purchases, Bitcoin games, etc. Then these applications allow ordinary people to truly experience the value of Bitcoin and whether they really need Bitcoin. This is our original intention for doing Bitcoin. We have two businesses, one is our trading platform business OKCoin, which is for buying and selling Bitcoin, and the other OKLink is for wallets, payments, use cases, etc. Basically, we have two teams working on it, and we are working on it at the same time, both of which are Bitcoin infrastructure.

As for the price fluctuations, Bitcoin is a new global credit, and it is very stable. However, once hot money enters the industry , its price may change, because you cannot prevent speculators from entering any market. But from the perspective of Bitcoin itself, even if it is only worth one cent, it is still a global credit. Ultimately, the Bitcoin economy relies on the GDP generated by circulation, not the price of a single Bitcoin. From the perspective of its design purpose and core value, it has nothing to do with the price of Bitcoin. If people have low recognition of it as the price drops, then they are not real Bitcoin users. They just want to invest 100,000 yuan today and get 200,000 yuan tomorrow. One day, he found that Bitcoin could not be speculated to make money, and Pu'er tea could make more money, so he went to speculate Pu'er tea. The prospects of this industry are actually unrelated to the price of Bitcoin.

Even if Bitcoin is not successful, even if there are 1 million or 2 million people using it around the world, I think it is a very satisfying thing. We can make some applications for these 1 million or 2 million people, which is also OK, so we entered this industry. When it was first established, there were only three or five people in the company, who were my former friends and colleagues. We set up this company together, and we did not expect Bitcoin to develop so quickly. Later, due to the follow-up of the media and the special economic situation in China, a lot of money came in to buy Bitcoin, which led to a surge in the price of Bitcoin, and also led to a surge in the number of users and operating data of our platform, which almost doubled every few days. Engineers did not sleep every day and were busy upgrading the software system. From a very ordinary and ordinary startup company, it suddenly entered a high state. We completed a US$10 million Series A financing at the end of 2013, and now the company has more than 140 people.

Recently, two Bitcoin companies in the United States have raised 70 to 80 million US dollars, and their valuations are around 500 million US dollars. It should be said that Bitcoin is a new thing. There are some funds around the world that like Bitcoin, and some funds do not understand Bitcoin and do not invest in Bitcoin. There are several main promoters of Bitcoin in the United States. One is the two founders of the Andreessen-Horowitz Fund, one is Marc Andreessen and the other is Ben Horowitz. Marc Andreessen is very famous. He has invested in almost all successful companies in the United States, such as Facebook and Google. He likes Bitcoin very much. At first, many media in the United States reported that they did not understand Bitcoin, such as Bitcoin can lead to drug trafficking, drug use, and drug purchases. In fact, the US dollar can also buy drugs. Marc Andreessen called the 100 richest and most socially prominent people in the United States and told them what Bitcoin is. Later, the reporting trends of many media changed. When Coinbase, which recently raised $75 million, first started its Bitcoin business in the United States, banks did not support it. Marc Andreessen called Silicon Valley Bank at the time and said, "We have invested in many companies. If you don't support Coinbase, we will suggest that the companies we invest in stop using Silicon Valley Bank." So Silicon Valley Bank supported Coinbase's business. Other people in the United States also support Bitcoin, such as Peter Thiel, who recently wrote a book called "Zero to One." This person is the founder of Paypal. Paypal is also a large company in the United States.

As for the regulation mentioned by many people, in fact, regulation is not the main direction that capital considers when investing today. For example, Didi Taxi , even though the regulation does not allow it, they still invest crazily, and the same is true for private cars. Anyway, the top VCs in China that I know believe that the power of user demand is huge in the end, and regulation should conform to the requirements of users. Just like Didi Taxi, I just can't get a taxi, but I can get a taxi with this, why don't you let me use it? Now no one has announced that Didi Taxi is not allowed to be used. The development of private cars is also inevitable. Today, if we can't get a taxi on the roadside, I take a private car, and they also prepare mineral water for me. They are never late. It's a little more expensive, but I'm willing to spend the money. You say it's not safe. Is it safe to take a black car? You say this taxi, all kinds of fake taxis, this taxi spray paint, who can't do it? This private car, at least it is transparent, and there are ratings and stars below. After verification by netizens, I think it is safer. I think today's mature VCs will not regard regulation as the first factor. Of course, they will consider it, but more people will regard whether the thing itself has a future as the primary factor. Many top VCs have also invested in Bitcoin, but many VCs don’t understand it.

Of course, since it is a startup, it is possible that the previous wave will die on the beach, but this is not just in the Bitcoin industry, in fact, it is possible for all Internet startups. There should be thousands of companies in China that are invested in by VCs in the A round every year. For VCs, there are only two ways to exit, one is IPO and the other is merger and acquisition. There may be only dozens of companies in China that are acquired or IPOed every year, which is a probability of one percent. The vast majority of them are the previous waves that die on the beach. But this is also the charm of technology. There are successive generations, 99 failures, and occasionally one success. 99 failures have created such a bright and beautiful