Prospects for Bitcoin in China 8:33 PM EDT October 4, 2015 Jack Liu, head of international at OKCoin, discusses bitcoin in China and as an alternative payment system.He speaks to Bloomberg's Angie Lau on "First Up."(Source: Bloomberg) Most Recent VideosThese efforts have spanned the launches of the world’s ‘easiest Bitcoin web wallet’, ‘easiest Bitcoin mobile wallet’, ‘consumer multi-sig wallets’ and ‘easiest way to buy bitcoins’.The user interface has improved by leaps and bounds.We as a community even spent more than a year debating ‘bits’ vs.‘bitcoin’ in an effort to make new Bitcoin owners feel wealthier.Startups who act as custodians of customer’s bitcoins began advertising ‘we are fully insured’, ‘we have proof of reserves’, ‘we have the world’s most secure vault’ and ‘we are fully licensed’.One could argue that instead of mainstreaming Bitcoin as a payment network, we’ve instead encouraged the speculation on Bitcoin prices.In the past couple of years, as volatility became an issue in light of a more than 70% drop in Bitcoin prices, merchant services offered retailers the ability to accept fiat over the bitcoin network.

The way it works is that consumer bitcoins would be sent to the merchant processor, who then settles with the merchant in the desired fiat currency.However, the benchmark of success for these services have included statistics such as what % of revenues did merchants keep as bitcoin.It begs the question: Why does that even matter?This spring, on the consumer side, services such as OKLink, Coinbase, and Circle have solved the volatility issue for consumers by adding or pre-announcing fiat wallets linked to the Bitcoin network.CNY (OKLink) and USD (Coinbase & Circle).This will let users pay and receive in their local currency, while the transfer is made using bitcoins in the background and without any currency exchange risk.Thus far, this is being offered as somewhat of a side feature.These services are maintaining the dual mode of allowing users the choice to use Bitcoin as the front end (bitcoin wallet over the bitcoin network) or the back end (fiat wallet over the bitcoin network).This is akin to a gas station offering you a core service of buying and storing oil, while giving you the optional side service of filling your car.

In no way am I disparaging Bitcoin’s long term value and the promise it holds as the best money the world has ever seen.A different approach towards mainstreaming adoption of the network won’t weaken this function, and could in fact strengthen it.1.bitcoin xmOpting out of the system, Be your own bankServices range from Blockchain.info, Mycelium, Breadwallet, Ledger Nano, Local Bitcoins, etc.2.bitcoin wealth distribution 2017Investing in bitcoin the asset Services range from Bitcoin exchanges such as OKCoin, to investment vehicles including GBTC, NASDAQ ETN, to paper wallets.3.bitcoin to pkr historyUsing Bitcoin as the open payment network What’s magical about Bitcoin is that it can be all three.dogecoin future

It can even be a hundred more things.However, if we are to accelerate the process of Bitcoin becoming mainstream, there is good reason to focus on strengthening the third function - the universal payment network.litecoin ltc chartThe opting out lifestyle is currently a choice made by a minority of people.bitcoin foundation arrestBitcoin as an investment is largely for those looking to diversity their portfolio or those with excess funds to spare.Bitcoin as an open payment network however, is something that the entire planet can use.That is mainstream by definition.As long as the currency used for store of value (bitcoin) and the currency used for unit of account (fiat) are different, the short-term balance sheet risk is something the majority will not accept even if Bitcoin generally appreciates in value.To suggest otherwise, one would come across as being out of touch with the lives of most people who live paycheck to paycheck.

We can’t sit around waiting for a financial crises or a massive inflation in fiat currencies to help Bitcoin take off.The mark of a superior technology is that it never relies on failures of its predecessor.Bitcoin is not for the unbanked just as e-mail was not for those without access to the post office.E-mail did not wait for postage stamps to become more expensive or mail to be lost to gain adoption.Sure, Bitcoin may eventually have the greatest impact on the lives of the unbanked just as $25 Android phones have proven to.However, it should be noted that smartphones did not start in those markets.Taking all this into consideration, it is my thought that perhaps companies should consider fiat wallets as the sole option for consumers and merchants or at least the default option.Imagine making micro-payments to anyone using any service instantly for free, in your preferred currency without any systemic counter-party risk.That’s something we could all use.The more the Bitcoin payment rails are accepted, the more those who live on bitcoin and those who invest in bitcoin the asset will benefit.

OKCoin's new superwallet allows bitcoin as a background method of money transfers not only across borders, but across currencies as well.Jack Liu, head of international at OKCoin, recently discussed bitcoin in China and as an alternative payment system in an interview with Bloomberg Business.Liu referred to the dramatic price crash of bitcoin in 2013 as a good thing, because it forced developers and entrepreneurs to think of creative applications of bitcoin and its underlying blockchain technology instead of focusing uniquely on the price of bitcoin.As a result, there are now large venture capital investments and lots of startups building infrastructure.“The people behind the industry used to be very libertarian, very political in nature, and wanted to push an alternative currency and an alternative lifestyle,” said Liu.“You are now seeing the bitcoin players receive venture capital and work with banks closely, trying to create a more harmonious financial system integrating the traditional financial system with the Bitcoin network, and that’s going to be much more powerful.” OKCoin.cn , two separate companies owned by the same investors and focused respectively on Chinese and worldwide digital currency trading, were founded in 2013 with a $1 million angel investment from Ventures Lab and Silicon Valley venture capitalist Tim Draper, and received a $10 million series A funding round in March 2014.

OKCoin is perhaps the largest exchange in the world with 20 percent of daily trading volume, said Liu.“As a native speaker of both English and Chinese, and as someone who has worked in traditional finance and at a U.S.-based bitcoin exchange, I hope to bring both international and institutional perspective to OKCoin and to shed more light on the Chinese market with the global Bitcoin community,” said Liu when he joined OKCoin as Director of institutional strategy and sales in November 2014.“I view OKCoin now as an international company, not as a Chinese one.” According to Liu, the most interesting applications use bitcoin and the blockchain as a transparent intermediate step for fund transfers in fiat currencies, making sending and receiving money as easy as sending and receiving email.“We can hide bitcoin technology in the background, and that’s what we have launched with a product called OKLink, in the spring, that was the first ‘superwallet’ in the world,” said Liu.

“A superwallet is really a mobile wallet that allows you to hold a more comfortable type of value, like the USD or the CNY, but transact over the Bitcoin network.” Liu added that OKLink transactions aren’t affected by the volatility of bitcoin.“Because you are doing instant buy of bitcoin and sell of bitcoin, you are not affected by the bitcoin price,” he said.OKCoin launched the OKLink “superwallet” in April.OKLink is an open digital wallet, which allows national and digital currencies to transact cross company, cross border, and cross currency in an instantaneous and free manner.OKCoin gives an example of consumer-to-consumer transaction in fiat currencies channeled transparently through the blockchain: “Paul, an American, and Tom, a Canadian, are good friends.Paul is a Circle user while Tom uses OKLink.Tom would like to borrow from Paul $100 USD worth of Canadian dollars (CAD).Tom opens his OKLink Superwallet and shows his QR Code to Paul.Paul through scanning the QR code with his Circle Superwallet, sends Tom $100 USD.

The Circle Superwallet buys exactly $100 USD worth of bitcoins from a U.S.dollar Bitcoin exchange and then via the Bitcoin network sends the bitcoins to Tom’s OKLink account.Tom has instructed as default that incoming funds should be received as CAD.OKLink Superwallet takes the received bitcoins and sells it on a CAD Bitcoin exchange for CAD.In the end, Paul sent $100 USD to Tom, and Tom received it as CAD to use.” Besides consumer-to-consumer transactions, OKLink can be used for business-to-business, consumer-to-business, and business-to consumer transactions.“This is a huge market, especially in China,” continued Liu.China already owns around 50 percent of bitcoin mining hashpower and 60 percent of exchange volume, and Chinese people – especially students – are frequently abroad and need efficient cross-border payments.Chinese consumers are already used to “a beautiful payment experience” with WeChat and Alipay for domestic payments, and they expect the same for cross border payments.