Bitcorati was able to interview Changpeng Zhao while he was still the CTO of Chinese Bitcoin exchange OKCoin. OKCoin is one of the largest Chinese Bitcoin exchanges and has also expanded to open an international Bitcoin exchange. OKCoin currently operates bitcoin.com, and Changpeng Zhao”CZ” was kind enough to speak up about Bitcoin in China, OKCoin, and the future of Bitcoin.
Bitcorati Interview with Changpeng Zhao
So, here are the questions!
What is OKCoin? What exactly do you guys do ? What is your key service and products?
OKCoin is an bitcoin exchange, or more precisely a crypto-currency exchange. We are a place where people can buy and sell bitcoins and litecoins. We welcome simple buyers and sellers as well as advanced institutional traders. OKCoin also provides a Futures trading platform for bitcoin and litecoins, and a number of advanced algorithmic trading, as well as REST, WebSocket and FIX APIs.
Mr. Zhao, how did you get into bitcoins ? How did you get into OKCoin?
I got into bitcoins from a friend, Ron Cao, from Lightspeed Ventures. He said it is interesting and I started reading about it. The next thing I know, I left my previous job and got involved full time.
Mr.Zhao, can tell us little about yourself?
I was born in China and finished elementary school there. I went to Canada as a teenager and went to high school in Vancouver, University in Montreal. I worked in Tokyo for 4 years in a financial IT start up after university. Then I went to New York and worked in Bloomberg for 4 years, as the head of Development for Bloomberg Tradebook Futures. I then returned to Shanghai to run my own startup in 2005. After 7 years in that startup, I left in 2013 to pursue bitcoins full time.
If USA goes through with excessive regulations on bitcoin and cryptocurrency companies, do you feel a shift for innovation in this industry will move to another country, say China?
Absolutely. Innovation will happen where it is embraced, not where it is regulated. If USA wants to maintain its leadership and dominance in the financial market, then it must embrace financial innovation. Same goes for other countries who wants to be financial leaders in the future world.
What makes OKCoin so unique compared to other bitcoin startups out there ? What’s your advantage against Chinese competiton and other global exchanges?
There are a number of factors. I won’t go into all of them, but just a few on top of my head.
OKCoin has a strong team, with exceptional execution capabilities. Star (CEO) and I are both programmers to begin with. We know technology fairly well. This compared with other bitcoin exchanges in China, many of their senior management come from a business background and not technology. A bitcoin exchange is an internet/software business after all. In-depth technical knowledge helps with decision making and execution.
Our senior team also have very complimentary skills. Star is a serial entrepreneur in China and understands the China landscape very well. I have more western exposure. Heyi, our marketing partner, has a lot of media influence in China. These give us a lot of credibility in China. We are hoping to expand this to the international market.
Another important factor is funding. OKCoin got funding very early on in the game, at a good valuation (Dec 2013 prices). Even though we actually have not spent much of that money, having it gives us confidence to aggressively invest in technology, marketing and building an strong team. Growth naturally follows.
There is also the factor of positioning. OKCoin wants to be the monumental company in the bitcoin space 5, 10,20 years from now. We are not interested in short term gains here and there. Having this long vision allows us to focus on building a better product than short term promotions. I think users appreciate that.
So what is the Chinese bitcoin scene like these days? Lots of interests still?
Interest level is high. Compared to a year ago, almost everyone in China know about bitcoin now, including taxi drivers, farmers, etc.
The “bitcoin scene” in China is a little different from the west. Unlike the US or Europe, where there are more merchants accepting bitcoins, China’s e-commerce is dominated by Taobao (Alibaba) and they are too high profile to adopt bitcoins just yet. So in the west, you see many bitcoin wallet and payment services; in China, users are still treating it more as a digital commodity and simply buy and selling it. This is probably why bitcoin exchanges flourished in China and wallets have not, and vice versa.
What’s a typical day or week for OKCoin like in terms of tasks and goals?
Busy, very busy. There are just tons of stuff to do. We don’t even need to think, our users will tell us what we need to do. I typically start my work day at 9AM and will still be in the office at 12 midnight. I rarely leave the office before 11PM. Our short term goals are somewhat fluid, we just need to push out what our users want, to them, as fast as possible. It’s a simple business.
What’s your viewpoint on Beijing’s present stance on the regulation of Bitcoins?
Since last Dec 5’s memo (we call it the 125 memo), there have been no further announcements from the regulatory bodies in China. In that memo, it clearly stated that individuals owning and buying bitcoins is perfect legal. That’s good enough for us.
Do you believe the bitcoin industry can survive going forward in China?
I certainly hope so. I am pretty positive on that front. China wants to be the next world leader in finance. In order to achieve that, it cannot ignore or ban bitcoins. In fact, the bitcoin innovation provides an unique opportunity and turning point for countries to overtake each other. Any country who manages to adopt bitcoins properly will have a huge advantage over other countries in terms of financial and commercial advancement. So, the race is on. I am pretty confident about China. Their leaders are very smart and sophisticated.
The community in China is very active as well. Early in Sept, we decided to organized an event in Beijing, within 10 days, we ramped up 1200 attendees. It was a pleasant surprise.
Who are the team members now at this stage ? How did the team form or meet?
Star Xu is the founder and CEO. Heyi is Head of Marketing in China. I am the CTO and Head of International. That’s the three core members of the company.
Heyi is a famous TV anchor for the travel channel previously. She was introduced to Star by the early angel investor Mark Mai, who also actively help out with the company.
I joined a little bit later. I bumped into Heyi and Star at a bitcoin forum in Hangzhou University early this year. I was still with Blockchain.info then. After a couple months of discussions, I decided to join them.
So can you guess what is OKCoin’s valuation at moment ? What stage is OKCoin at in terms of investment?
My biased guess is it is worth a lot of money, of course. 😉 We closed our Series A in Jan 2013, a $10 million USD investment. We are still trying hard to spend that money. We have grown from a team of 20 in Jan to 130+ now. In addition to being the largest China exchange, we launched our International exchange, Futures, algorithmic trading, mobile apps, API, etc. Our international user base is growing nicely. Even with that growth, we are still trying to expand faster (i.e., spend money faster). It’s a good position to be in for a startup. We may look at a Series B sometime next year, but there is no hurry.
Who has been helpful or instrumental in terms of mentorship , guidance , investing , or evanlegcial fan promoting OKCoin?
There have been a lot of helpers along the way. I couldn’t recount them all. Our investors certainly did more than their share. I mentioned Mark Mai. There is Adam/Tim Draper as well. Roger Ver has introduced a few friends to us. CoinDesk, CryptoCoinNews, CoinTelegraph, and now you guys! And a lot of guys in China, some of them are less known outside of China. Almost everyone in the community, inside or outside of China, helped us to some extent. The bitcoin community is nice in that way.
One I would like to single out, CCTV (China Central TV) rans a few news episodes on us last year, that certainly helped us get off the ground nicely.
Tell Bitcorati members what you hope to accomplish with OKCoin; what are your short and long term goals?
It’s very simple. We hope to become “the” place for people to buy and sell bitcoins, everywhere in the world.
Breaking that further down, we want to provide a secure, safe and convenient place for users to purchase bitcoins. We want to provide sophisticated tools for advanced traders to establish market price.
Any plans for USA or overseas expansion ?
Yes, in fact, overseas expansion is the main focus right now.
USA though, we are in the wait-and-see mode. BitLicense will definitely have an impact. For the moment, we will settle for 2nd place in the USA. We want someone else to spearhead the US market, hopefully someone more familiar with the US regulatory system. We will follow other people’s lead there.
Tell us about some of your fantastic products and services ?
OKCoin offers the best suite of products for bitcoin trading at the moment. We are the first ones to provide algorithmic trading, this makes life much easier for serious traders. We are the first Chinese exchanges to launch an international site. We are the first major bitcoin exchange to provide futures trading. We are the first ones to offer mobile apps with trading and charting capabilities. We are the first and still the only (as of this writing) one to support Futures trading on a mobile app. Our mobile app is pretty good. We are one of the first to offer FIX APIs. Our systems has been very stable, with no pricing irregularities whatsoever. We have never had any security issues such as lost of coins, etc. We have one of the most secure and safe trading platforms.
On service, we offer 24×7 phone hotline support. Very few exchanges have that. We have internal SLA’s in place so that every question is answered in minutes, instead of days where it often took on other exchanges.
I can go on bragging for a while, but that will do for now.
Tell us about some difficulties or headaches you had with OKCoin ?
I just wish I had more time to sleep. It was very nice of Star to give me a nice office with a sofa in it. It’s just a shame that I haven’t had any chance to use it.
More seriously, making the product truly international is tough. We constantly battle mis-translated text, etc. It just drives me nuts that simple things like that can slow you down. But it just happens I guess, and we have to deal with it.
Tell us about some of your happiness and joy with OKCoin ?
It’s a young and energetic team. Working at OKCoin is like living inside a video game. It’s challenging, but it is also fun, to the point that it is somewhat addictive.
What have been some very difficult choices OKCoin had to make for business ?
Expanding from a Chinese company to a truly international company is challenging sometimes. I will give a couple simple examples.
One, the company name. OKCoin is called OKCoin, as in English, in Chinese. As a Chinese company, we have no Chinese name. That was a tough choice! But we wanted to be an international company from the gecko. The name shows that.
Two, coloring. US and international markets use green for up, red for down, the buy button is green. In China, it’s the reverse, red is the positive color. Red is up and green is down. In every Chinese trading software, the buy button is red, and sell is green. Every other Chinese bitcoin exchange did it the Chinese way. OKCoin choose to go with the international color scheme, even for the Chinese bitcoin exchange. That wasn’t easy either. Again international focus.
Third, China tends to like naughty, controversial marketing which attracts eye balls. The market is so used to it that it doesn’t matter. When we did that recently, we have had a few complains from international users. We had to change our marketing approach, even in China.
What are some smart and innovated business choices that OKCoin has made?
Bitcoin futures is a very innovative product. I won’t go into the details. It is actually futures on the US dollar, based and settled with bitcoins (or litecoins). It took a while to design.
Designing the mobile trading app also was very innovative. No other app have a vertical split like we do. It was not easy, but I think in the end, our app is one of the most easy-to-use trading apps, ever.
Does OKCoin have a mobile app?
Yes, and a very good one (in my biased opinion).
What’s OKCoin thoughts on the New York City bitlicense and possible more global govt. regulations for crypto-currencies ? Would the Chinese government institute a bitlicense type of regulation ?
We thought the BitLicense draft was overly strict and publicly commented on it. It’s online somewhere I am sure. I can’t comment on what the Chinese (or any) government will or will not do.
How do you feel about IBM and Samsung teaming up and creating their own blockchain?
I think the more people who get involved in blockchain technology, the better. If for nothing else, they will help educating more users about blockchain. How good is their product or design, honestly, I am not too sure. I haven’t looked deeply into it yet. But I am sure, if it is good, it will be welcomed by the community. If it is not, it won’t be adopted.
Good generally equals open and fair in the bitcoin community. Closed, centralized systems usually don’t get much fanfare these days.
What is bitcoin 2.0 technology going to look like?
I can’t speculate. I am not authoritative enough in this area. There are a lot of people more involved in this area than myself. Vitalik’s etherium is very cool. So, is Shawn’s Storj. BitShares is very cool, SideChain, and a plethora of others… It’s hard to just keep up with them sometimes.
Lastly , free say whatever you want .. Go!
Look past this short term dip, and to da moon! Thanks!