OKCoin - What's now?
We live in extraordinary times. Technology has transformed many facets of our lives.
The Apollo mission landed the first man on the moon. The Viking 1 made it to Mars.
We can use Amazon to buy milk powder for our children from the comforts of our own bed.
We can use a smartphone to hail an Uber driver to take us anywhere we want.
However, despite such advances in technology and despite its improvements every day, we are still reliant on the same outdated financial system built nearly half a century ago.
Today, in many countries, the cost of financial access surpasses that of basic education and medical care.
Several prominent figures, including Netscape co-founder and Venture Capitalist Marc Andreessen, have said that the Bitcoin protocol is TCP/IP for transactions.
However, since its inception in 2009, Bitcoin has mostly been a speculative asset.
The message of eliminating governments, decentralization of everything, and promoting the limited supply of bitcoins has indeed lured some investors into the fold.
Nonetheless, with the passing of time, it became apparent that within the Bitcoin ecosystem, there seemingly only existed investors and traders.
On the matter of people’s everyday financial transactions, Bitcoin has thus far had little impact.
Since the bursting of the latest Bitcoin price bubble more than a year ago, the mainstream public’s faith and acceptance of Bitcoin has deteriorated further and further.
OKLink, the first Superwallet utilizing the Bitcoin protocol, is attempting to upgrade our shared financial system.
The concept of Superwallets connected through an open network can have a significant and enduring impact.
The OKLink Superwallet is not just a new product of our company. It is indeed setting a standard for integrating the Bitcoin protocol with the traditional financial system.
We believe it will have a positive impact on today’s financial landscape.
What is a Superwallet?
A Superwallet 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.
Let us tell two stories to illustrate. In our stories, we make the assumption that in addition to OKLink, Coinbase and Circle – two other FinTech companies – also launch Superwallets.
Consumer to Consumer: 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 US 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.
Consumer to Merchant: A Chinese woman named Grace is visiting New York from China and is looking to buy a $100 USD dress from a New York retailer.
The merchant takes out the Coinbase Superwallet, and via NFC sends a request to Grace’s OKLink Superwallet for $100 USD.
Grace accepts on her OKLink CNY wallet.
In that instant, OKLink Superwallet sells enough CNY on a Chinese Bitcoin exchange to buy $100 USD worth of bitcoins and delivers the bitcoins through the Bitcoin network to the merchant’s Coinbase Superwallet.
As the New York based merchant would like to receive USD, the Coinbase Superwallet proceeds to sell the received bitcoins on a USD Bitcoin exchange and delivers the merchant $100 USD.
In the two stories above, notice that neither the SWIFT network nor the VISA network was used to process the transactions.
Only the Bitcoin protocol and Bitcoin exchanges were necessary.
This is a more efficient payment, settlement, and clearing system.
In addition, in these stories, Paul, Tom, Grace, and the merchant did not know of the existence of bitcoins on the Bitcoin network or the Bitcoin exchanges.
However, they more freely used their own currency and at the same time did not use the established monopoly networks that are VISA and SWIFT.
The benefits of the open Bitcoin network are clear and the Bitcoin exchanges served to enable the use of national currencies.
What are the core attributes of a Superwallet?
- The Superwallet is not a proprietary product of any one company. It is a payment, settlement, and clearing system established using the Bitcoin protocol.
- Users of the Superwallet need not necessarily know about Bitcoin. Users are free to use the currency of their choice. The Superwallet in the back-end utilizes the Bitcoin protocol and Bitcoin exchanges to facilitate the transfer.
- The Superwallet is open and any company is free to build and operate their own Superwallet.
- There exists no possibility of establishing a monopoly position on the network. Consumers can freely switch to a different Superwallet at any time without causing disruption to payments.
- Merchants using a Superwallet are able to receive payments from all currencies. In addition, merchants can freely switch to a different Superwallet at any time without causing disruption to payment processing.
What are attributes of the VISA and SWIFT network?
Let us summarize in short the state of the VISA, MasterCard and SWIFT network.
They have over the years achieved the advantages of a monopoly.
VISA (1975) and MasterCard (1966) incorporated into the traditional financial system the use of vast amounts of Point of Sale terminals, ATM machines, and achieved near ubiquitous levels of merchant adoption.
At the same time VISA and MasterCard issued credit cards to consumers through their banking partners.
Today, a large population of the world has a VISA or MasterCard.
Given this situation, both companies are able to levy significant charges on merchants – in some cases extracting in excess of 20% of merchant profits. This is a closed network.
Merchants have no ability to select other payment networks because consumers do not have cards of other companies.
Consumers also have no ability to use a different credit card because merchants only support VISA and MasterCard for payments.
This is a classic example of a monopoly without any sign of an end.
It is a monopoly that has only grown more powerful over the past few decades with the proliferation of e-commerce to the detriment of consumers and merchants.
SWIFT, established in 1973 with the support of 15 countries and 239 banks is the primary network for facilitating cross border payments between financial institutions.
It operates through an electronic communication network and every time a transfer is made, it takes on average 3-7 days for funds to arrive.
Today, as most of the world’s financial institutions are members of the SWIFT network, SWIFT has become in effect, the only network through which cross-border transfer payments are processed.
The technology of SWIFT is in reality quite outdated and past its time.
However, it is hard to establish a new transfer and settlement network due to the inability to coordinate and gain acceptance from the established financial entities.
Consumers making international transfers through the SWIFT network likewise need to suffer from astronomical fees and accept a snail speed for delivery.
The Superwallet system uses the decentralized peer-to-peer Bitcoin protocol.
This is an open network with no counterparty risk and no party able to build an entrenched monopoly.
Consumers and merchants can use national currencies over the Bitcoin protocol.
Superwallet operators on the back-end use the liquidity of Bitcoin exchanges in respective countries and the Bitcoin network for settlement and clearing.
Superwallets together with the Bitcoin network form a system superior to VISA and SWIFT in that consumers and merchants will benefit from choice and a step function drop in fees charged.
Merchants are empowered to discontinue use of Superwallets that are providing inferior service without any disruption to receiving payments from consumers.
Consumers are empowered to switch Superwallet providers without any disruption to sending transfers or making payments.
In such an open system, every creator and operator of a Superwallet can only through the delivery of superior value, attract and keep customers.
The State of the Bitcoin Industry
After many booms and busts in the Bitcoin price, the stories of no government, non-inflationary money supply, and decentralization are no longer attracting new users.
Bitcoin companies working in the ecosystem have their own views on Bitcoin’s development however, and some of their working efforts are summarized below:
1. Bitcoin the currency.
Continue to advocate Bitcoin as a currency though this is often viewed by the mainstream public as a hoax similar to Pyramid schemes / Ponzi schemes.
Some companies view Bitcoin as a currency and are building platforms for applications to be built on top of it.
They say things to the effect of “We have built the worlds best developer platform and we suggest developers build applications A, B, C, D, E, F, G … on our company platform.”
We find it strange that if these suggested applications are indeed amazing ideas, why would you not want to develop them in-house?
3. Developing world.
Some companies believe that the United States, Europe and other developed countries’ currencies and payment networks are stable and mature with a strict legal apparatus.
This leads to a conclusion that developed economies are not suitable or easy for Bitcoin adoption in the near term.
Instead they believe in a boomerang effect of going to Africa, Latin America and other underdeveloped markets to increase Bitcoin adoption.
There is a famous Chinese saying, “Never do to others what you would not like them to do to you.” If you cannot succeed in your own land, entering the Africa market will be even more difficult.
You do not understand the local political, military, and economic ways of the land. It would be a mistake to think it is an easy thing to do.
4. Wall Street.
Some companies believe Wall Street will save Bitcoin if regulatory clarity is achieved. Their stance is that due to current regulatory uncertainty, Wall Street cannot buy or trade Bitcoin.
For those with this view, we can only say you are underestimating the abilities of Wall Street. If Wall Street really wanted to trade bitcoins, they have a myriad of ways to handle the set up and compliance issues. Wall Street trades oil because the whole world needs to use oil in their car every day. Wall Street trades gold because governments all over the world have gold reserves. There are few good reasons for them at the moment to trade Bitcoin. Wall Street will never go out of their way to help Bitcoin.
Some companies believe that we are in the early stages of Bitcoin and that volatility in the currency unit is to be expected.
The reasoning goes that if more and more people just buy Bitcoin and hold Bitcoin as a store of value, the future price of Bitcoin will rise many times.
When the price reaches $10,000 USD per Bitcoin or $100,000 USD per Bitcoin, volatility will decline, and people will then begin to use Bitcoin as a currency in their everyday life.
This theory has no logical basis at its foundation. Price stability is not dependent on whether it is early or late in Bitcoin’s development but rather on whether there are enough price stabilizing transactions.
In the traditional foreign exchange market, the largest pairs are stable because trading volume by speculators pale in comparison to real world commerce taking place.
Contrast that to the current Bitcoin economy where most of the trading volume comes from speculation.
Looking forward, as more people use Superwallets, the number of transactions for Bitcoin payments and settlement will grow.
When this volume is far in excess of investment and speculative volume, Bitcoin prices will become relatively stable.
The Real Purpose of Bitcoin
Bitcoin the protocol is an incredible technology that can better the lives of billions of people. Benefiting from the technology should not require one to have certain political or economic views or tolerance for risk.
With Superwallets, consumers will not be required to know Bitcoin nor will they need to care about Bitcoin price changes.
We can all leverage the Bitcoin network and local Bitcoin exchanges to make payments and value transfers in the currency of our choice.
Adopting the Bitcoin protocol as the financial underpinning for payments, settlement, and clearing will reduce counterparty risk, lower fees, and improve the lives of everyone accessing the network.
Following today’s beta launch of OKLink, the world’s first Superwallet, we are confident and encouraging of more and more Bitcoin companies, FinTech Companies, and traditional financial institutions creating their own Superwallets.
Perhaps they will label it by a different name, but nonetheless, the Bitcoin protocol will realize its purpose as the TCP/IP for transactions. Satoshi Nakamoto’s whitepaper will finally become reality.
We can make better use of the money that is ours.
Your money. Your control.
Please click "Introduction of OKCoin", if you want to know the details and the company information of OKCoin.