Although the Bitcoin market in Vietnam is virtually non-existent today, Dominik Weil, co-founder of Bitcoin Vietnam, is confident that “Bitcoin and Blockchain technology will play a crucial role here in the future”.
Bitcoin Vietnam became the first bitcoin exchange registered broker in the south-east Asian country, following some doubts, and even objection from the local government since its establishment in late 2013. Bitcoin Vietnam relaunched the VBTC exchange, which allows users to deposit and withdraw cash from more than 9,200 banking locations without a bank account, and developed a Bitcoin remittance platform called Cash2vn.com.
Weil, a tech enthusiast, is also co-founder of Bitcoin Frankfurt. In an interview with DEALSTREETASIA, Weil shared his thoughts on developing Bitcoin in Vietnam. Edited excerpts:
Why did you launch Bitcoin Vietnam? Are there lots of businesses accepting Bitcoin payment? How do you see adoption of Bitcoin in Vietnam?
We started exploring the state of the Bitcoin economy in Vietnam by summer 2013 – this research took us a couple of months until the decision was made to move ahead with our venture; set up the company and build and launch our first product.
The reason why we are currently focused on the Bitcoin exchange business is, in order to develop a domestic Bitcoin ecosystem with all the other advanced use cases of the Blockchain technology, you need to have the very first infrastructure layer in place, which is fast and easy access to Bitcoin liquidity.
Talking theoretically about how Bitcoin and the Blockchain will change the world as we know it may be an interesting thought exercise for developers and other tech enthusiasts, but without the chance to participate in the Bitcoin economy without major hurdles, it will be hard to convert these ideas in actual use cases for a broader audience.
Therefore the decision was made to focus initially on building a reliable and easily accessible exchange platform, in order to allow the implementation of further applications and use cases on top of this crucial part of infrastructure.
Currently the adoption rate in Vietnam is still quite low. Apart from the Saigon-based future.travel travel agency, no business accepts Bitcoin in a “professional way”, while you may have luck though with some companies, if you mail them about possibly paying items you ordered via Bitcoin.
We are working on offering more professional solutions to the market in 2016, when we have other pieces of the puzzle in place, since the lack of secure online payment methods is still a great concern for merchants in the e-commerce space.
Even if general adoption in Vietnam is currently still quite low, regions like South East Asia are poised to profit the most from adopting this kind of technology and basically leapfrogging into an age where decentralized, digital currency and the blockchain are powering the advancement of the domestic commerce and finance industry into the global markets.
How does bitcoin transaction work here in the country? Is it associated with any risks, and how do you minimize the risks?
While Bitcoin transactions and the Bitcoin network itself are inherently secure and immutable, the biggest concerns for the end user are of course their device security.
One has to understand, that the way Bitcoin works is like cash – digital cash. It allows people to have control over their own money (unlike other forms of “digital money” like Paypal etc., which are basically just database entries at a third party), but this also comes with more responsibility.
If you look at the general cultural environment in Vietnam in regard of storing wealth, one can say that, people here are more willing to take that responsibility than the average person in the West. People here generally dismiss the idea of storing their wealth with third parties, they will hold cash, buy gold, buy real estate etc.
Much more education is necessary since it’s a completely new concept of storing wealth. People have been trained since thousands of years to take care of their physical properties, but the experience of humanity to take care of non-physical items like data (or in this case: the special form of data which your Bitcoin wallet represents) is just a very recent one and the absolute majority of the people don’t really have a good grasp on how to do it.
Nevertheless, this is mostly relevant when you are talking about Bitcoin as a part of your life savings, where the risk profile and necessary dedication to security is inherently different from just actually using Bitcoin as a payment mechanism, with usually relatively moderate amounts.
Here the security can, in general, be outsourced to trusted third party providers, since the amount of time you hold your coins with them is pretty limited, as well as the amount of money which is at counter-party risk.
Using Bitcoin also reduces massively the risk of identity theft, since it is not necessary to submit your data to the merchant in order to pay for the goods you are ordering. Paying for goods online becomes therefore much more convenient and secure for the customer as well as the merchant, while the costs are reduced tremendously. Neither is there a need to have large data centres to scan for suspicious transactions which may be hinting to a possible theft of your credit card (data), nor does the merchant need to invest in PCI compliance programmes etc. to keep your data safe from hackers.
Bitcoin as “the money of the Internet” and its derived technologies will play an ever bigger role in how e-commerce is done globally.
Did you encounter any difficulties doing bitcoin business in this market? What will you do to accelerate the use of bitcoin?
It has not been an easy walk, but we also did not expect it to be when we started our venture. Especially in the beginning we were also facing a lot of skepticism by the authorities and the media when we launched our business But that has changed now.
Vietnam is currently doing the next steps to elevate the local fintech industry, and we are convinced that Bitcoin and the Blockchain technology will play a crucial role here in the future.
Adoption-wise, as I have stated above, we are now looking forward to building and offering more on-top solutions based on our existing infrastructure, which will actually help to boost economic efficiency for the average person/business. This is our roadmap for 2016.
Otherwise, we are looking forward to continuing our work in the local non-profit Bitcoin Saigon community and hope that this community can serve as a “melting pot” in the crypto-landscape to launch new Blockchain-based initiatives based out of Vietnam.
What is the impact of Bitcoin on e-commerce and the economy in general?
If we are talking about the general impact of Bitcoin on the domestic e-commerce, then we need to be honest here and say: They are as of now basically non-existent.
If we are talking about the future promise which Bitcoin delivers, then they are, potentially tremendous. We are very happy to have now with David Watson, the general director of future.travel – who explained why (online) merchants definitely should take a look into Bitcoin; therefore I think once we have the right tools in place here in Vietnam, Bitcoin adoption is a no-brainer for e-commerce business; especially when they are aiming for a global customer base.
Things take time to evolve, but given how fast Vietnam’s society and economy is changing on all levels in a very short time pattern, once things start to take off, it will probably spread much quicker than we may anticipate.
Is bitcoin more popular in Saigon (the old name of Ho Chi Minh City) than in Hanoi?
This is not an easy question to answer, since a lot of the larger Bitcoin activities are happening behind scenes here in Vietnam (mining and trading). From what we heard from insiders in this sector, the mining community in Saigon is operating much more large-scale efforts, while Hanoi seems to be more compartmentalised.
If we are talking about the strength of the local community, then I think our local community in Saigon is by now more organized than the one in Hanoi; probably also caused by the circumstances that we have more expats actively participating in the community in Saigon – which brings a very healthy mix of people from all around the world as well as the local Bitcoiners together.
We are working with the community in Hanoi, and hope to work with them also on the establishment of a nationwide Bitcoin advocacy group to spread knowledge and improve the connectivity between the fragmented groups of Bitcoin and Blockchain enthusiasts in the country, while pointing out the advantages of this innovation to media and regulators alike.
How about market penetration? Beside Bitcoin Vietnam, who are the other players?
Currently there are no other players in the market when it comes to registered companies.
What you have of course is a large informal sector of P2P-Transactions (Localbitcoins or via forums) as well as some unregistered Proxy-Exchanges for trading BTCe codes.
Despite the absence of direct competitors in our market, we are working relentlessly to improve our product line, the customer experience while building applications which will be able to have a direct impact on improving the efficiency and competitiveness of the domestic economy.