- September 17, 2018
- Posted by: Mor Hazen
- Category: carats blog posts
We sat down with Avishai Shoushan, the CEO of Carats.io, an ambitious start-up developing technological solutions to establish the world’s first financial market for diamonds, as he returned from yet another trip to China, to hear all about the crypto scene in East Asia.
Welcome to the Crypto Garden of Eden
“Coming from the West, I was simply stunned by the crypto buzz in East Asia,” Shoushan exclaims, his eyes widening at the question, “You see it all around you. Taking the metro from the airport in Seoul, I looked around me to see people glued to their mobile screens, not playing candy-crush or watching the news, but checking out the latest Bitcoin and Alt-Coin prices and graphs. You can practically feel the excitement in the air, at every restaurant, bar and meeting – the East Asia is a paradise for crypto”.
Shoushan continued, explaining that while the excitement over digital currencies in the West has been relatively limited to the confines of the crypto community, in China, South Korea, and Japan, they are a topic for mainstream discussion by all. This popularity has global implications as well, as these countries wield overwhelming influence on the direction of these innovative financial structures worldwide. Some estimates put around half of all alt-coins being traded, as being held by South Koreans alone – an impressive statistic for a country of only 50 million people. “We may never know who actually invented the bitcoin,” muses Shoushan, “but don’t think for a minute that it’s a coincidence he or she chose ‘Satoshi Nakamoto’ – a Japanese name. You can take that as a sign for the direction the blockchain winds are blowing”.
Beyond the staggering numbers, the story of cryptocurrencies in East Asia is also about how they are perceived and how they are being used. Shoushan explained that in Japan, for example, the government has decided to define Bitcoin as a currency, and not as an asset (as is the case in many other countries). What does this mean? While Bitcoin owners in Europe or the U.S. must declare their tokens and pay taxes on them as they appreciate, in Japan the state treats them as simply another form of currency – one which can inflate or deflate without any taxation significance. This change in perception of the coin has real-world effects. With the issue of taxation out of the way, Japan has seen widespread adoption of Bitcoin as a real-world currency. Shoushan smiled as he remembered buying noodles and drinks with bitcoin – a rare opportunity in Western countries (and not just because of the authenticity of the ramen).
Hard-Earned Advice for the entrepreneur ready to dive into the East Asian Crypto Scene
“First thing, forget what you know about doing business in Europe or the U.S.,” Shoushan explains purposefully, “If you want to do business in East Asia, you have to do so humbly, ready to learn about the local cultures and mindsets”.
We asked Shoushan to list his tips for any entrepreneur looking to do business with East Asian counterparts. He provided the following:
1. Doing business in the East Asia takes time – and plenty of it. You can’t close deals in the matter of days. Instead, be ready to build a working relationship over months before signing anything formal.
2. Don’t think you can handle things from afar – If you’re not willing or able to have a local representative who is physically there (for meetings and presentations), you won’t get anything done. You can’t have a Skype-only relationship.
3. The importance of building trust – The two aforementioned points point to the importance of trust in Asia. People will not do business with someone they cannot trust on a personal level – and building trust takes time. If you want to do business in Asia, you have to be prepared to put in the time and travel efforts to be there and nurture close relationships slowly.
4. With the importance of trust in mind, I can’t stress enough the importance of relying on local connections to help you get your foot in the door. Our partnership with the Chinese blockchain IOT and commerce project – Newton Project – was only possible because I was brought into the office (physically) by one of their investors. Once I came with him, things began to open up immediately.
While these may sound like challenges, I must stress that working in East Asia is simply amazing. I am always overwhelmed by the hospitality of our hosts, and enjoy the strong working relationship we develop. All the time and effort is absolutely worth it. The future of crypto is in the East, and anyone interested in staying on top of this exciting technology would be advised to get a taste of the local scene.
Have any additional questions or comments? Feel free to contact Avishai Shoushan at his Telegram.