BEIJING, June 10, 2014 /PRNewswire/ -- The year of 2013-2014 is the year when Bitcoin has realized high-speed development. OKCoin, a China-based Bitcoin exchange, has acquired Series A financing in tens of millions of dollars, becoming a leader in China's Bitcoin industry. As the CEO of this company, Star Xu has also caught wide public attention. He is an internet technology ace, a serial entrepreneur and a Bitcoin expert, who is also very witty and smart. At the end of 2011, Star Xu bumped into a new concept called "Bitcoin" when he was following season 3 of The Good Wife. The line, "Bitcoin is the future, real is gonna change," kept ringing in his mind. In 2012, Star Xu left the entrepreneurial program where he had been involved for six years, and founded OKCoin after careful evaluation on a number of innovation programs.
Through detailed research on the ecology of Bitcoin, instead of looking at it from the perspective of speculation or game, Star Xu held that Bitcoin is a universal democratic currency, hence named a "perfect currency". In his opinion, even in the era of the gold standard, the value of currency remained unstable due to its association with many historical factors, while the issuance of Bitcoin is determined by mathematics rather than human control, and is thus relatively reliable, making it an ideal way of currency issuance. "If you own 1% now, you will always have the share of 1%. It's more reliable than gold or silver, with no conflict with currencies of sovereign states, and such corresponding business models as payments, banks and funds are under construction. The earlier you are in, the more promising your business prospect will be." To this end, he decided to focus his entrepreneurial direction on the field of Bitcoin.
Now, as Bitcoin becomes increasingly popular worldwide, all forms of enterprises emerge endlessly, and many people think of these relevant companies as "black swan-type" enterprises. Views on Bitcoin are highly polarized. Some take an optimistic attitude and believe they are betting on an increasingly multi-polarized future - with the intensified instability and chaos of global politics and economy, a currency that doesn't need support from an independent country will be widely sought after in the market, while naysayers warn that this is nothing but another Ponzi scheme. Most governments and giant enterprises are pessimistic, not very supportive or even utterly hostile towards it. At the present stage, the Bitcoin industry is filled with risks, as it lacks a legal basis and a regulatory system, and moreover it has no clear business model or purpose.
Star Xu said, "I'm willing to take this risk. Bitcoin is like a social experiment; even if I fail, I still contribute to the experiment to some extent." Nevertheless, he doesn't agree with the radical view that Bitcoin will replace sovereign currencies. "It is impossible within 100 years."
Currently, okcoin.com has 100,000 registered users, with its 24h trading volume having reached RMB 3 billion. When it was first launched, Star Xu asked his friends from the circle of Bitcoin dealings to help boost website traffic and trading volume, and gradually, by virtue of word-of-mouth, the website had plenty of organic traffic. Based on his experience in currency dealings, Star Xu focused on improving user experience from three aspects: accounting speed after recharging, liquidity in transactions and withdrawal speed of the transaction platform. "We have invested lots of resources and manpower in related technologies, and now we're basically fastest in the domestic market," said Star Xu. Presently, the okcoin.com team has a total of 70-plusmembers, half of whom work on technology and product development.
In the stock market, the default handling charge for each transaction is three thousandths; however, as a result of fierce industry competition, no one collects such a charge in practice, and the transaction platform of OKCoin is also free of charge. Star Xu has designed many innovative profitability modes, such as VIP member service charges, Bitcoin credit guarantee loans, etc.
As far as the current Bitcoin market is concerned, he commented that as there is no legal regulation in the field of Bitcoin, and that many people have introduced speculative instruments from the stock market into transactions, like futures transactions which seem all right but can lead to high volatility in price. Since Bitcoin itself is much smaller in volume and liquidity compared with the stock market, many Bitcoin futures holders actually having the ability to manipulate the spot price. For example, when approaching the delivery time, those big accounts may seek profits by manipulating the spot price, while many players unaware of the situation will suffer heavy losses. "Presently, a large number of financial instruments have entered the field of Bitcoin, bringing bigger risks," said Star Xu.
In the meantime, Star Xu disclosed that, due to savage industry competition, many transaction platforms fail to make profits themselves, so they resort to other indirect means, such as using Bitcoin for disguised fund raising. "Different kinds of social forces, even those from pyramid selling, are rushing into this field with tricky rules, and it will take quite a long time to figure them out."
In spite of such chaos, Star Xu's enthusiasm remains high. "As the industry is in its puberty, savage growth is somewhat necessary, because without such chaos, no rules will come out at all."
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