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The role of Bitcoins in the world monetary system – with Jason Hsu



The role of Bitcoins in the world monetary system - with Jason Hsu

We have Jason Hsu, one of the leader expert on the Crypto worlds. Jason co-founded KryptoGO USA, a Saas provider for affordable and lightweight KYC/AML solutions. Attended multiple accelerator programs – notably Berkeley Blockchain Xcelerator, Draper University, Plug N Play Tech Center, etc. He run also Bincentive’s user based from the ground up. Bincentive is an advanced platform that offers trading bots, lowered barrier to entry on the crypto hedge funds, fixed income products, and DeFI/CeFI services.

Jason, first to speak about Bitcoins, tell us something about you

I started doing web development in college, just to see if this could become something I’d like to continue doing as a job. After I graduated from USC with a degree in computer science and business administration, I got to meet a lot of other dreamers like me who had a very solid business foundation. Some of them wanted to recruit me for their businesses and ventures, but I had my own ideas and I wasn’t very confident that I could execute them.

So I started going my own way. I got ideas of the costs , tools to work with, marketing budgets etc that a Saas provider in Canada was facing that served almost all of the US customers including startups and tech sector.

Then I pounced on the latest blockchain projects of the moment, met with seniors, went to multiple conferences, and met with the cofounder.

Throughout the pitching and fundraising , I realized that the most important varabilie is people. I met with many of those who have knowledge that is esoteric to me. I enjoyed interfacing with them even if there was no idea or business together.

We went through five accelerator programs.  But I was spreading myself too thin by running 2 startups. I thought about joining the other side – joining venture capital or accelerator. At the time, I didn’t think about exchanges until BitMart reached out to me. Since then I’ve talked to several projects on a daily basis and provided the support they need to take their projects to the next stage.

Let’s start with the basics. If you had to define bitcoins, how would you explain them?

Bitcoins are an example of the invention of online scarcity. It’s something we don’t pay attention to in our everyday lives, even though scarcity is everywhere: if I have this table, you don’t. The online world doesn’t work like that. The online world doesn’t work like that: you own a file, but copies of that file can be produced at a negligible cost, and those copies can be owned by everyone. But this argument is not always profitable. Take for example the games, Risk or Monopoly, but also online platforms like Fortnite: these realities work only if they have limitations (only one territory, only one property, only one weapon), otherwise they are not fun. Creating online limitations is not easy, precisely because of the simplicity with which data can be replicated. Satoshi Nakamoto (the inventor of the cryptocurrency Bitcoin, ed.) did it though, and he did it by inventing scarcity.

How do you invent scarcity?

You get it by generating a registry that keeps track of who owns what (going back to the games, John has that sword, Mark that territory) and this registry, so far, has always been centralized. This solution works very well, and not for nothing is the same as the one used by banks, which must keep track of the passage of money between customers. The fact is that this system also poses problems.

Which ones?

Whoever owns the registry has enormous power, because he can modify its values, or is anyway subject to a high risk of attacks that can damage, delete or steal data. It was the same danger that Napster faced (file sharing program created by Shawn Fanning and Sean Parker and active from June 1999 until July 2001, ed) that, despite the distribution of information among users, had a unique registry that kept track of each path. Eventually, it was attacked, received a large fine and deflated like the phenomenon it was. Over the years, we’ve come to BitTorrent, a truly decentralized file sharing system. This can already teach us one thing: that centralized systems, when attacked, collapse, while decentralized ones survive.

So the more decentralization increases, the more security increases.

Exactly, there’s kind of a dialectic between decentralization and security. Decentralization protects information because of the fact that it can be copied, and therefore is not scarce.

How is this system related to the production of Bitcoin?

To explain it we have to take a step back: between 1990 and 2008 a series of experiments proliferated regarding the creation of a currency on the internet. Users felt the need to make online payments faster and more immediate, and banks (at first less, today more) could not meet this demand, given the long time it took even for a transfer. Many of these experiments have failed, others have been closed due to the intervention of central governments, since creating money is forbidden.

And how was it possible to produce a currency that could not be produced?

Because Satoshi Nakamoto invented and explained (in his White Paper) how to do it, and many people helped build this system. Think about that around 2009, Gavin Andreesen, chief programmer of Bitcoin, was invited to have a chat in the offices of the CIA. The agents had him explain how cryptocurrencies work, then asked him what would happen if they arrested him. And the answer was that basically nothing would happen. Andresen would remain in jail, but Bitcoins, which are open source software, would go on anyway.

Thanks to Jason, remember to follow him on Instagram