Coinlive Talk: Baby Steps Towards a Crypto Dream

• Despite Crypto’s growth, there remains barriers to its uptake: public misconceptions and asset volatility
• Cooperation between private entities and intuitions are required to dispel these misconceptions meaningfully
• Be wary of narratives and tread carefully in the crypto space
• A nurturing environment is required for the successful development of the crypto space

Picture this – travelling to a foreign country with no need to exchange any of your currency. Gone are the days where we would trawl around dodgy money changers glancing feverishly at numbers in red, and forgotten are the fears of not carrying enough money in a foreign land.

Truthfully, such a reality may be challenging for some of us to fathom for now, but these possibilities may not be as far-flung as one might assume. Indeed, standardised payments and trustless crypto wallets are a very real possibility as we move forward into a future of decentralised finance. Smart contracts, decentralised IDs, and e-commerce integration on an unprecedented scale are just a few of the many possibilities that a properly developed and structured DeFi ecosystem promises for the world.

Yet this is hardly the world we are experiencing right now. Amidst the current crypto winter that saw crashes, exploits, and hacks taking place on an unprecedented scale, the fog of skepticism and doubt shrouding the crypto world has never been thicker. Indeed, despite being touted as “Asia’s Crypto Hub”, Singapore has been treating the nascent sector with trepidation and caution, leading to the departure of both Binance and FTX in recent times, together with 80% of global market share of the total market that’s gone over to the Middle East.

Many at home still doubt the veracity and legitimacy of crypto and blockchain technology, especially during such turbulent times.

To find out more about what the future holds for crypto in Singapore, I spoke to Kelvin See, the Head Trader of Coinhako.

Kelvin See, Head Trader of Coinhako

“There's still a lot of misunderstanding about crypto and the majority still thinks it is a scam and the recent episodes have not helped either”, Kelvin begins firmly. “So, educating the people about not just the retail, but institutional space itself is very important to dispel a lot of these misconceptions.”

A firm advocate for education for the masses, the battle-hardened trader is right that misconceptions plague those within and outside the crypto community. Take anonymity for instance.

Many, especially those outside the crypto community, believe in anonymity and identity protection as one of the main selling points for blockchain technology. The reality could not be farther from the truth, however. The inherent security of Blockchain technology finds itself in a global transparency of transaction data, unique IDs, and purchase history from all users – where a communal consensus on veracity serves as a check and balance against fraud and malicious users.

Herein lies the problem. There is no immediate panacea towards dispelling the common myths and assumptions surrounding the crypto sphere, as a working understanding of an otherwise thoroughly complex and technologically nascent system requires effective and targeted educational policies. Placed against the greater context of events such as the collapse of 3 Arrows Capital and the grounding of Terra-Luna, one can hardly blame the uninitiated for holding such concerns. Such a package is likely to take not only time, but also cooperation from the institution.

As Kelvin tells me: “Crypto cannot exist in silo outside the macro environment,” he says sternly. “Natives of the crypto industry cannot ignore what's going on outside of the crypto landscape.” Indeed, the enigmatic world of crypto and institutional or regulatory entities share an inextricable symbiotic relationship, for now at least.

“This has actually been proven, with the Federal Reserve hikes - when asset prices go down, crypto was affected as well,” Kelvin surmises.

The bond shared between both realms however, go far beyond just economic concerns. Assuming education to be the solution towards misconceptions, there has to be a concerted and cooperative effort between both realms. Educational content that originates exclusively from private entities such as crypto payment firms or exchanges run the risk of being viewed as biased and cash-grabbing.

On the other hand, education run solely by state-run institutions may potentially face a challenge keeping up with industry trends in a rapidly-evolving environment. Indeed, while education may likely go a long way in dispelling the common misconceptions of the public regarding crypto, it has to still be run in an effective way such that they may appear both neutral and up-to-date.

In fact, Coinhako would be in agreement with me on this cooperative framework. “I think the next stage of crypto will be driven by institutional investors,” Kelvin suggests. “The next phase of adoption will come from the institutional space”.

Beyond cooperation between both parties however, there also has to be some much-needed clarity on the undeniable volatility behind crypto that has held many investors and companies back from dipping their toes into this decentralized space of finance.

While crypto does indeed have the potential to lower transaction fees and friction immensely by cutting out intermediaries, benefitting both consumers and businesses alike, its unpredictable volatility certainly has come into the spotlight especially in recent times.

“It is still relatively new as compared to other more mature asset classes,” Kelvin explains. “So, it is highly volatile. And when [crypto] assets can sell down like 50%, for example, a lot of these people who may once be very interested will get scared away.”

Definitely, cooperative education alone will not be enough to convince more to adopt crypto as a payment method or viable opportunity – it’s underlying volatility will surely have to be addressed before it can substantially be applied on a functioning commercial scale, especially for smaller firms who may likely be slightly be more conservative and risk-adverse.

“A lot of the real-life use cases like crypto payments or stock value will be difficult to implement because there will be a fear of these drawdowns,” Kelvin wearily tells me. “But once this volatility stabilizes, merchants can start planning their business models reliably”.

It would indeed be cause for celebration should the crypto industry find a solution to its inherent underlying volatility of asset. For better or for worse, its constant evolutions and developments due to its nascency may unrefutably be responsible for the current levels of volatility. With Ethereum’s supposed merge set for September for instance, there seems to be an unstoppable wave of industry-breaking changes taking place at a breakneck speed that will not be stopped for the foreseeable future.

“What could we do in the interim then?” I ask Kelvin, exasperated and desperate for a solution to this conundrum. “There should not be any more to the moon kind of stuff,” he advises. “There needs to be a concentration on real value that can be applied using crypto to the world.” He quotes the collapse of 3 Arrows Capital to underscore his point: “This is a period of time to reflect on what has been done and what went wrong”.

Interview with Kelvin See, Head Trader of Coinhako

Indeed, as we await the eventuality for a stable industry that is accompanied by concerted and cooperative educational policies, the burden lies on ourselves and the community to be discerning and careful about how we engage with the crypto space. Popular narratives like “to the moon”, and blindly investing in meme coins upon the slightest Reddit spur may very well contribute to the high volatility levels faced by the crypto industry while generating greater risk overall for everyone. Enter Coinhako – the firm seeks to provide convenient and secure access to the crypto economy while extending its “compliance and safety first” approach to its consumers.

Crypto and blockchain technology are both still in their nascent stages, and ought to be treated with caution. A survey conducted by Blockware Solutions, an infrastructure provider for blockchain technologies, concluded that while Bitcoin is likely to outpace the growth of other disruptive technologies such as the Internet and social media, the study estimated that a 10% global adoption of Bitcoin would only take place by 2030.

“I like to think that crypto is like a little child that's learning how to walk,” Kelvin concludes.

Just as a child heralds hope and growth, so will crypto promise unprecedented benefits and unfathomable convenience to the world. Until then however, a nurturing environment is necessary to safely induct the next evolution of the digital space – the next few years will truly be a test on our mettle, conscience, and society’s potential for cooperation, a gauntlet of the ages as we establish the best environment for crypto to develop in safely.

“Sometimes a little child falls, it doesn't matter. We learn and let the little child learn, and that's what fostering means as we grow stronger and stronger”.

This is an Op-ed article. The opinions expressed in this article are the author’s own. Readers should take the utmost precaution before making decisions in the crypto market. Coinlive is not responsible or liable for any content, accuracy or quality within the article or for any damage or loss to be caused by and in connection to it.

Written by: [Coinlive] Darren