ASIAN WEEKLY FEATURES YADAV JANI & HAMID RASHID ON CRYPTOCURRENCIES AND BLOCKCHAINS

1. TETE-A-Tete
amid and davOn New Blockchoin OCrgpto Frontiers
BY SIMON MULI
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I ove them or looth them, crgpto-currencA sensotions such os Bilcoin ond Ethe-
I rium hove token the world bg storm, sooring to morket highs ond feeding in
I on the buging frenzg of the osset closs which exists onlg in the caberspoce.
I Despite operoting in the shodows of finonciolsgstems ond wornings bg regu-
lotors, the digitolcurrencA monio oppeors to show no signs of letting up. But where
is this gold rush leoding to? We speok to the Founder ond CEO of Finterro, Homid
Roshid. The blockchoin-powered crowd-funding plotform recentlg estoblished o
presence in Kengo through Vitol Stotistics Holding Limited, whose porlner, Director,
Yodov Joni, olso weighed in on the Kengon perspective.
*
Homid, let's cut stroighl to the chose; whot sporked
gour interest for technologg ond ultimolely, gour
encounter with crgpto-currencA?
It storted during mg educotion dogs. I discovered I per-
formed better in lT-reloted courses, even though I spent
less time studging it compored to others. Therefore,
I emborked on o degree in lnf ormotion Sgstems
(bock in the .]990s,
there wos no lT). I f urthered
it with o post-groduote degree in lnformo-
tion Sgstems. I olso hove o second Mqster's
degree in lT ond Monogement. I stuck to
lT during mg emplogment period - f irst ot
Helwett Pockord (HP) ond thereofter. I hqve
been exposed to lT for the lost 15 geors
in softwore development, networking ond
other oreos. Mg encounter with crgpto-
currencg come two geors ogo through RtD
(Reseqrch ond Development) in mining
Bitcoins qnd Etheriums. This led into block-
choin; developing blockchoin solutions ond
opplicotions. I worked with multiple teoms
from Ukroine, lndio, US, South Koreq ond
Singopore omong others.
Given gour insider's perspective of the
workings of crgplo-currencies ond block-
choin, how do gou breok thot down to
somebodg who doesn't understqnd whot
it is oll obout?
A crgpto-currencA is jusl o piece of
code which is encrgpted using crgp-
togrophg. The most common crgptog-
rophg used is the SHA-256. Since it is
verg secure, gou con trqde it. lt hos o
privote ond public keg. The privote
keg will be with gou, while the pub-
lic keg is whot gou con octuollg sell.
Once gou sell thqt keg to someone
else ond theg trg to unlock ii, gou
too need to unlock it f rom end with
gour privote ke9. lt is the crgpto-
grophic code thot is now known
os the token or coin. lt ¡s impor-
tont to olso note thot crgpto-
currencV is the bgproduct of the
blockchoin. There ore so mong
different blockchoins. Bitcons,
for exomple, come from o block-
choin known os blockchoin.info,
ethers come from the Etherium
blockchoin while Ripples come
out of the Ripple blockchoin
ond so on. Differeni crgpto-cur-
rencies con come from o single
blockchoin. For instonce, Ripple or
Etherium ollow users to develop their
own privote choins on top of their block-
choin. Thqt is whot hos creoted so mong
c rg pt o-c u r ren c ies.
Despite them goining o lot of ottention,
centrol bonks ocross the world hove
distonced themselves from crypto-curren-
cies. Whot do gou moke of this officiol
disdqin for virtuolcurrencies ond does il
worrg gou?
You hove to look of the fundomentol reosons
behind regulotors not being hoppg with this
trode. First of oll, centrol bonks qnd securi-
ties commissions do not like people onong-
mouslg tronsferring or troding in things. You
must moke gourself known; thot is in compli-
once with the low of Know Your Customer
(KYC). But crgptos breok thot rule bg ollow-
ing gou to onongmouslg tronsfer funds or
credit ocross the network. Thot ollows for
moneg loundering ond wrong proceeds to
be tronsferred. Secondlg, blockchoin does
not ollow f or o single point of oudit. Everg
bonk in the countrg must report bqck to the
centrol bonk on their trqnsoctions. But in the
blockchoin environment, centrol bonks hove
no oversight role to plog. Theg ore worried
thot if gou ore oble to bgposs them, whot
kind of tronsoctions con gou do? lt's not onlg
moneg loundering, but there is the element
of terrorism f inoncing ond olso notionol
securitg, os gou could bring moneg into the
countrg to f inqnce wrong things. lt's not thot
regulolors ore ogoinst the technologg.
One mo jor weqkness wilh cryptos is thot
there's no underlging osset to them, which is
where Finterro comes in. How ore Uou trging
to qddress thot?
Yes, whot gives Bitcoin ond some other crgp-
to its volue is just speculotion. To overcome
this, there is o new trend in blockchoin ond
crgpto-currenca, which is to tie it to under-
lging ossets; it could be reol estote, minerol
or some other ossels. Thot gives reol volue
to ihe token itself. ln our cqse, becouse we
ore Ìrging to be reguloted, we will distonce
ourself f rom speculotion ond noncomplionce.
We will iie the voluotion of everg token to
o reol estote or osset. And the osset will be
oudited bg on independent ouditor. Building
someihing thot hos such o globol impoct is
verg exciting, especiollg when it hos certoin
sociol elements. On mg lost visit to Kengo, I
hod q lot of NGOs coming io me, expressing
inierest in roising copitolfor their couse; so,
we ore working with them.
I
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18 | luNEl22-28lzo1s

2. Yodov, gou ore hondling the representotive
office for Finterro in Noirobi. Whot is gour
ossessment of the oppetite for crgpto-
currencU Kengo?
Personollg, idon't like the word crgpto-
currencg. lt mokes it sound mgsterious ond
olmost illegitimote, due to the connoto-
tions. I prefer the word digitol currencg.
To onswer gour question - bigl lt is much
bigger thon the logmon reolises. However,
it is moinlg with the gouth, the techies ond
people who hove followed the digitol storg
f or some time - but others will soon cotch
up.
Whg then should someone invest in Fin-
terro?
Finterro is o blockchoin with o verg good
business model running underneoth it. lt
will ollow o former in Kengo with Kshs
30,000 to invest into ihe lotest new tower
in New York, through their blockchoin ond
thousonds of other legitimote businesses
oround the globe.
There is no low in Kengo thot prohibits or
ollows the buging ond selling of crgpto-cur-
rencg in the countrg. Whot do gou think this
meons for those who wqnt to engoge in it?
It simplg meons thot people mog investl
The reoson there is no low of present, os I
understond it, is becouse the morket is still
too goung ond not lorge enough, in com-
por¡son to the fiot currencA morket (US
Dollor, Shilling ond Euro). Regulotors such
os the Centrol Bonk ond perhops Cl'4A ore
still looking into the potentiol impoct thol
digitol currencies mog hove towords regu-
lor currencies ond the economg of lorge.
So, the opportunitg is good, bui investors
need to understond whoi theg ore invest-
ing into.
Mong people don't underslond the differ-
ence between crgpto-currencU ond block-
choin. Con gou further expound on this
d ispo ritg?
The blockchoin technologg wos q genius
creotion bg o group of people under the
nome'Sotoshi Nokomoto.' The purpose wos
to volidote the tronsoction of the fomous
'BlTCOlN.' However, the technologicol vi-
obilitg of the blockchoin wos so good thot
people reolised it could be used for mong
other purposes, other thon just running
o digitol currencU on it. The potentiol of
the blockchoin is to moke the world cor-
ruption-free ond tronsporent. Right now,
in neorlg oìl businesses oround ihe world,
there is o server which feeds informo-
tion to oll individuql computer units. The
server is the onlg entitg holding the power
to moke o chonge ìn the dotobose. The
problem with this is thot such informo-
tìon is chongeoble, without consensus ond
hockoble. A blockchoin chonges this b9
moking oll stokeholders ìn o tronsoction or
controct, the servers themselves. Informo-
tion connot be chonged without ogreement
or consensus from oll the porties involved.
In essence, o blockchoin is on incorrupiible
public ledger of ong voluoble economic
tronsoction, involvrng mutuol ogreement of
oll stokeholders. lt does not relg on one sin-
gle portg. ln Kengo, mong londowners hove
suffered from forged titles being produced
in court. Rother thon developing their lond,
theg hove insteod spent five Ueors or more
bottling with such crooks in court. lf the en-
tire lond deportment put oll lond titles on o
blockchoin, it would end such forgeries for-
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ever. So, in this respect, monU governments
globollg, including our o./n, ore embrocing
this lechnologg. Digitolcurrencies on the
other hond ore on off-shoot of blockchoins.
Not oll blockchoins hove o crgpto-currencg
running on it. Crgpto-currencies ore simplg
there to provide qn ollernotive medium of
storing vo lue or focilitote lhe trqnsoctions
within o porticulor blockchoin or digitol
business. We con look of o blockchoin like
o shopping moll, which simplg provides
spqce for independent business to sell their
goods ond conduct tronsqctions ond o digi-
tolcurrenca like o token, which ollows gou
to bug oll goods within lhot porticulor
shopping moll. The loken is nol
necessorg, but on option.
When gou heor people express-
ing opprehension obout crgplo-
currencies, do gou see it os o
noturol prejudice to somelhing
new or o deniol of the foct lhot
the world is of the cusp of o cur-
rencg revolution?
You're right. People ore skep-
ticol obout digitol currencies
becouse it is new ond verg volo-
tile, thus, perceived os riskg. Bit-
coin went from oround US$ 7ô0 in
I
I don't like the
word crUPto-cur-
rencA. lt mokes it
sound mgster¡-
ous ond olmost
illegitimote, due
to the connoto-
tions. I Prefer
the word digitol
cu rrenca'
mid-December 2016 to US$ 19,200 in
mid-Decem ber 2017, before dropping
to obout US$ 6,600 in April 2018. These
ore huge fluctuolions. On top of this,
there ore mong block spots on crgpto-
currencies becouse o lot of block
moneu hos gone through them.
To odd 'solt to the wound,'
mong digitol currencies
hove been scoms, result-
ing in o lot of moneg being
lost. But we hqve lo olso
recognise thot the current
totol morket copiloliso-
tion of crgpto-currencies
is oround US$ 520 billion.
So, I don'l think people ore
in deniol. Theg jusl don't
understond. But given time,
like the internet, it will be-
come moinstreom; ofter oll,
gou con'l ignore o tsunomi.
Finollg, how conf ident ore
Uou lhot crgptocurrencies
will eventuollg be occepted
in the moinstreom of the fi-
nonciolsgstems in the neor
fut u re?
Theg ore olreodg being
occepted. The porent
componU of lhe New York
Stock Exchonge, known
os lntercontinentol Ex-
chonge, is olreodg work-
ing on o plotform to
focililole the trode of
d ig itol currencA. Gold-
mon Sochs is onother
compong looking to
incorporote Bitcoin
troding unit ond
this is becouse of
cuslomer demond.
So, it is coming,
ond coming verg
fost. Whot the
regulotors need
to do ot this
stoge is simplg
i
TETE -A- Tete
hold oll polentiol digitolcurrencg holders
occountoble. This simplg meons, KYC ond
onti-moneg loundering (AML) need to be
provided before o tronsoction tokes ploce
And componies like Finterro, wont this.
Theg ore olreodg reguloted, but wont to
be globollg reguloted. Theg do not ollow
customers on their blockchoin technol-
ogg unless AML ond KYC documents hove
f ullg vetted someone. So, I om conf ident!
Customers on the other hond need to
opprooch eoch investment sensìblg ond
studg the business model.
]e I JUNE / 22-28 l2O't8
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