OKCoin’s Bitcoin Developer Grant Program

Hi and welcome to Stephan Livera podcast. Today for episode two hundred and twenty-eight, have you wondered what goes into the decision around why and how a Bitcoin exchange comes to support Bitcoin development? Hong Fang, CEO of OKCoin, joins me to discuss. This show is brought to you by Swan Bitcoin. In their effort to spread Bitcoin knowledge and awareness, Swan is giving away a free book, Inventing Bitcoin, rated four point nine stars by Swan co-founder Jan Pritzker. To get your free e-book or audiobook version of Inventing Bitcoin, Inventing Bitcoin, go to swanbitcoin dot com slash free book. All Swan asks is that you pay it forward, share it with at least three family and friends, and if you join the Swan Force at swanbitcoin dot com slash enlist, you'll get a special link to the free copy of Inventing Bitcoin that will help you recruit new bitcoiners. You can share the book with anyone, and if they eventually start stacking with Swan, you will get credit for that referral. Spread Bitcoin knowledge and Swan Bitcoin, the best and safest way to start accumulating Bitcoin, go to swanbitcoin dot com slash free Unchained Capital is building Bitcoin native financial services on a foundation of multi-signature. Their multisig vaults are designed for ultra secure long term storage and there's no setup or storage fees if you build it on your own. Now, if you want the white glove treatment, their team will teach you all about multi-signature, ship you two hardware wallets, and answer all your questions and deposit one thousand dollars of Bitcoin in your vault through their concierge service. You can also buy Bitcoin through their OTC desk for purchases fifty thousand dollars or higher Straight into your new vault, which is great for self-directed Bitcoin retirement accounts and for companies moving Bitcoin to treasury. Their advanced business accounts, OTC desk, and concierge service can also help move your corporate treasury to Bitcoin where your team controls the private keys. Check them out and enter code LIVERA when ordering a concierge onboarding service to get fifty dollars off. Go to Unchained Dash Capital dot com. November 27th is coming up, go and check out BitcoinBlackFriday dot com. This is a project from my friends over at the Bitcoin Magazine and also behind the Bitcoin 2021 conference. It's a celebration of the growing Bitcoin economy. On the site, you can find active deals up to fifty percent off on your favorite Bitcoin gear and other merchants that accept BTC. It doesn't stop with spending Bitcoins though, the Fold team has teamed up with Bitcoin Black Friday to bring you a special promo for the much awaited Bitcoin Back Card. Spend fiat and earn Earn Bitcoin. Now, if you sign up for early access for the Fold Card on Bitcoin Black Friday, you will be entered into a raffle to win a whole Bitcoin. That's right. Go to bitcoinblackfriday dot com right now, sign up for the Fold Bitcoin Rewards Card to enter and get a chance to win an entire Bitcoin. Hong, welcome to the show.

Thank you for having me, Stephan.

So, Hong, can you tell us a little bit about yourself? I know you had a career, before all this Bitcoin stuff.

Yeah, I, I've spent ten years Investment banker at Goldman, within financial institutions and fintech, and then after that, I, I switched onto the investment side, mostly doing growth equity investment. and it was during that investment, life when I came across OKCoin, and kind of, started to, really seriously take a look at it and then fall in love with, with Bitcoin and everything related to crypto. so that's really how the whole journey started.

So when you first heard of Bitcoin, were you like most of us, you disregarded it? Like, what was your experience like?

Yeah, I, I first heard about Bitcoin in two thousand and, I think third, twelve or thirteen, when I was at Goldman. And there was this, there was a MD, on the structured finance side who was really brilliant. And he's, he's Jewish, and, he, she talked about Bitcoin and, you know, how, how brilliant Bitcoin Bitcoin, is and, and the price, you know, is, is, is going to go up, I, I totally disregard. Hahaha. yeah, with, with everything going on, I was, you know, I wasn't even having a life as an investment banker, so I didn't even have an opportunity to, to really dig into it, but, but, but then in 2016, when I was, talking to, Star and, and, the team looking at OKCoin and the business So I started to really look at, Bitcoin and what it is about, and I realized that it is a, is a, it's an innovation, it's a, it's an experiment, it's a marvelous experiment, and it's beautiful. and back then it was a lot of speculation, trading, going on within crypto, within Bitcoin, and, actually a lot of the, trading volume came from China. And, and from an investment perspective, you know, I was also debating, whether it makes sense to do the investment, if it is a speculative trading, does it last? Right? Will it last or will it just go away? And ultimately, I think what, Helped me make the decision is the, is the conviction I found in, in Bitcoin, I think that it, you know, back then it is a lot of, it was driven by a lot of speculation, but I think ultimately there's a beauty in it that sometime down the road, people, more and more people will realize that Bitcoin is here to stay.

And also, I think the Thinking in the space, there were, some people who were writing from a very, you know, intelligent perspective even in, you know, twenty twelve and twenty thirteen, in those days, but I would say, at least in my experience, a lot of the people who were around in twenty sixteen were, it was just kind of seen like a gambling toy sort of thing. And I think in re- in more recent years, we've started to see more of a mature understanding around, you know, sound money and things like that. So at what point did some of those aspects of

It was really around sixteen and seventeen, because I think it's, it's hard, right? Because, we grew up, the-- we grew up in an environment where we, you know, if we go to school, learn about economics, about finance, and also, you know, for me, I, I went to Chicago for business school and then later on joined Goldman on investment banking side, a lot of the, drive- Enforces my belief in, in free markets. but it was ironical that it wasn't until I left Goldman and, and then I realized, okay, actually the free market that we're seeing today is actually not totally free because the, the market, all the prices we're seeing is reflected in, you know, USD and money, whatever, whatever other fiat currency that we have, and that fiat currency is not free. It's, it's actually, you know, central planning. but that was generally, that's generally invisible to every one of us, and it's, it's taken for granted. And also the inflation concept is also taken for granted, that the concept that inflation, a moderate and controlled inflation is good for economy is taken for granted, with all the, economic training, training that we receive. so, so yeah, I think it's really hard, right, to chal-challenge that assumption and challenge that money is probably something that doesn't have to be created by government. because ultimately what, creates money is the trust, is, is people's trust that this is something that can actually hold value over time, across different spaces and, and over, in, in different scale, and, and historically, that money format doesn't come in a format of, government backed, paper. it was only very recent that we see, large scale of, money printing by government that's not actually linked to, to gold or any other, physical, thing that has a actual, supply, that is somehow limited. so, so I think challenging that assumption is really hard, so it, it naturally takes some time. And, and I think it makes sense that, you know, Bitcoin was created in two thousand Eight, two thousand nine, during the crisis, financial crisis, period. and then the, the first wave of, almost like institutional, endorsement and kind of semi-mainstream momentum also, You know, doesn't occur until two thousand twenty when we see that money printing again at large scale. so I think that, that is really what's going on. people start to see what's going on with, with the, the fiat system, with the current financial system, and then when they see Bitcoin over the last, you know, ten, eleven, twelve years, when everybody was saying Bitcoin is going to die, it's, it's just a speculative trading, vehicle, and it, it's just, you know, stay around and- And there are a lot of price volatilities, but it, you know, it went down and go up again. There's a steady trend line of going up, and there's also a steady improvement in the underlying protocol level, that is really pushing continu- that's continuously pushing Bitcoin toward that goal of being a, a reliable, secure and, and scarce,

store of value, and that ultimately can become that, global money. I think that, that takes time, but I think that ultimately will play out.

When you speak to other people who came from the banking world, oftentimes they're, they're stuck in a certain way of thinking, right? So they're thinking, "Oh, the world needs inflation," or, or they're thinking it's just natural and it's just a, it's just like this kind of phenomenon that just happens, and they're not assessing, "Well, hang on, exactly why is that happening?" What was it that led to you kind of challenging that view? And was it just a, was it just a matter of being exposed to the right resources or reading the Bitcoin standard

I think it also takes a little bit of reflection. you know, I joined banking in 2008, which was the probably the most volatile, timing to, to join investment banking, and, and I literally, you know, sat there with, seeing my, a lot of, quote unquote classmates in my class at Goldman, who are, are, you know, either, let go or- I moved around, and, and some of my other classmates at, at Chicago, they went to, you know, Bear Stearns, Lehman Brothers, or, and some of the other investment banks, a-and their jobs just went, went out of the window, overnight. But that was only just on the investment banking side, right? there's a lot, a larger story out there, and, and you see, all the distress throughout the financial system. And I worked on many different deals, spin-offs, you know, M&A transactions, go, you know, IPOs, secondary offerings, warrant offerings, and particularly around two thousand eight, two thousand nine, and two thousand ten, there was a lot of banks who were undercapitalized and, and then a lot of bad assets come, that came out of the, securization, and- And, you know, banks were just undercapitalized, and then there was a lot of, government coming out to, to save those, banks that cannot fail, to save Fannie Mae, Freddie Mac, and put money, put taxpayers' money out there to, to save them. at, at that point, I think it was quite confusing and, you know, something was wrong, but I couldn't really tell what was really wrong. Obviously there was liquidity crisis, but what it really is going on, it was kind of a- A little bit hard to, unpack. but I think over time, and particularly after I, you know, dive into what Bitcoin is about, i- it occurred to me that actually what was going on back then is because the, the system was built on top of a, a quote-unquote, inflation first system, and you just print money. So basically, back in two thousand and eight, when we had that situation, it wasn't because totally just a liquidity issue, right? It is actually all- Also a sovereignty issue, and the roots of the, issue also went back to two thousand, the, the, the internet bubble, and to, to quote-unquote save the economy, dig, dig the economy out of that hole, the, the government led by Greenspan, the Fed, led by Greenspan, ended up printing a lot of money, so that kind of seemed to solve the problem, but actually planted, seed for larger problems later on. And I think we're kind of in that cycle again, and it, it's just hard to see how we can actually get out of it, in the current setting, Without fixing the money itself, because the government will continue to print, and, and when there's, conservancy issue plus liquidity issue, and when you have the government printing money, that money printing activity, is, is almost just a, money, wealth transfer activity, right? So basically those with, financial, resources, they have the capability to wait for that investment opportunity when there's a lot of, distress in the market, they have free money sitting aside and they can grab, cheap assets that where the risks are b-borne by the government, by the taxpayer money. But those who are the middle classes who, who are lower, you know, struggling, day in and day out for their everyday life, they don't really have any, way to, to get out of it. and, and, and, you know, we-- this year we see the, all the global uncertainty brought about by, the, the pandemic. we, we all know that something is wrong, the society, you know, is undergoing a lot of distress, econom-- economy is not doing well, but then we see all the confusing, signals, economic signals where, you know, it seems like, the, the equity market is going up, all time high. so I think those, does reflect, what we currently have in the financial system where when the, the government print money, those money goes, not, doesn't go flow into the real economy. It doesn't really flow to where it should flow through, right? It goes to the, the capital markets and the financial assets, form bubble, which is, you know, it, it is what it is because that's, that's, you know, that's what human nature is about, you know, hu-human people when- And when you have financial resources, you, you seek to maximize those. that's what market is about, and, and I don't think we should blame market for it, because that's what market is about, that's what human nature is about. but, but it's really because the incentive, that's built into the system, that's not directing the resources to the right place. The price isn't giving us the right signal. The price we're seeing isn't the real price. It is, it is the nominal price. It's not the real price. Without the, the real price reflecting the real, you know, demand and supply, and, and when you have all the, the return, being maximal in the capital markets where people can just put money into the equity market and then, you know, when the, the price go up to the certain level, you take the chips off the table and the bubble burst and the, the, the rest of the, the market, hurt. It is that's, that's what the system is built And, and again, you will see, like for this cycle, again, you, we see, banks coming out with very low interest rate, you know, there are a lot of, real estate buying activities, mortgage, you know, take, take, people taking on loans, that's, again, encouraged by the inflation, assumption in the monetary system, and, and the, the system rewards, debt taker-takers, doesn't reward- savers. but, but there's, you know, there's always a rainy day when the economy, really suffers and people start to, see the divergence between the equity market and the, the labor market. Sometime, at some point, the, the music will stop and when everything crumbles down, you know, the banks who are, you know, putting out loans out there may suffer again. People who are putting their hard-earned money into equity market, you know, which ended up being a bubble was Suffer again. So it's just a vicious circle, so again, you know, it's, it's not a, I, I don't think it's any kind of, one, single moment that kind of bring light to it, but, but it does, take time for me to realize that actually, it is the system itself, that, that need to be fixed. and Bitcoin represents a, a, a very unique opportunity, as a potential solution to that. but, but- Again, I'm, I'm not, I don't think, you know, it, it is an easy path forward because there's a lot of, there are a lot of, cultural and, and political elements in it, but I think, this is actually the first time in human society that we see a, a digital and, and sound money, that is global, that is, you know, verifiable and censorship resis-resistant, that can actually grow into a, a global reserve currency. I think that is really beautiful. you know, time will tell, but, but, but I think as, as, as time passes, as As more and more people start to,

ask, question our own assumptions and, and look at what Bitcoin potentially can present, I think that chance of Bitcoin emerging as a, more superior sound money can, can really grow

So, as Bitcoin moves through these phases, as people talk about, right, collectible and so on, where do you see Bitcoin right now in terms of, its current development and what kinds of, I guess upside do you see over the next year or so?

I'm happy to talk about it, but I will just caveat by saying that this is just my personal take, 'cause I think there's no science in saying, you know, exactly where Bitcoin is, because we are in, in today's environment, it's, it's hard for us to look into the crystal ball and see how the future actually will evolve. but my personal take is that, Bitcoin has come, to the point where it, it has passed its first collectible phase, where, you know, only a small, a group of people really believe in it as Future sound money, but most of the demand are speculative trading demand. I think right now, we are at, at this, a phase where more and more people start to actually realize that Bitcoin can be a solid and superior store of value. More and more people start to, want to put some of their money into it as a hedging, tool and hold for longer term. and this is when I think we start to see a lot more, thoughtful adoption happens, both on the institutional side as well as on the, retail side. I'm actually more, I, there's, I think, I know that there's a lot of excitement in the industry about institutional development and institutional adoption, which I think is going to be critical and important, for the continued growth of Bitcoin, but I also believe I believe that, it is going to, the retail side of the adoption is go-- has been what's been driving Bitcoin's growth and will continue to, be an important, factor, in its evolution and should be an important factor as in its evolution. when, when I think about, the Bitcoin itself, the, the reason I'm thinking of it as this, in kind of coming into the second phase, there are two folds. one obviously Is all the, institutional endorsement that we're starting to see, particularly in this year, right? there are so many names out there that kind of start to, collect, mainstream attention, focus mainstream attention on Bitcoin. We see, the OCC allowing US banks to offer crypto asset custody earlier this year. we've got, a lot of the heavyweight In the public company, domain like Square and MicroStrategy, officially allocating their treasury cash into Bitcoin, we see PayPal coming up, allowing, Americans buy and, and sell crypto, on directly on their app, although I personally, you know, would want to see more out of them instead of, what they're currently offering, but we'll see, I, I'm, I'm sure things will evolve. And also Fidelity has always- Bitcoin Gold or Shambhala Coin, and, and they come out with, you know, a five percent allocation case recently too, or that, that less continued. So I think that's one side of it, and a lot of the Wall Street investors, hedge fund, heavyweights, they seriously look at it and, and started kind of really, support, the idea of Bitcoin as a long-term, inflation hedging tool. I think the other side of the story, again Coming back from, to, to, to my investment, roots, is that when I think about investment, it's always important to go back to the Foundational question of what it is, right? What, what it is for, is where are the fundamentals? How strong are the fundamentals? Is it, something that Can ultimately bring value to the table, utility. By value, I mean utility, versus just some potential short-term speculation. I think from that perspective, you know, that's also why we, at OKCoin, we have been recently doing a lot of, a developer grant, supporting, Bitcoin developer community. that's really the reason why I think, it's, it's You know, it's a, a very encouraging thing to see over the last few years on the developer side, because, the developer community has, hasn't been as visible, to the larger audience as, say, Bitcoin price or other crypto asset price. However, that is, that is really what, You know, has, has anchored the, the, healthiness, and feasibility of Bitcoin as a future sound money, right? Without, because Bitcoin ultimately the network is a open source network. It's a software, it's an open source software. It's digital, and for this, and it's not a, it's not a dead, thing, it's a living thing. It, and it's a continuously evolving thing. It's a continuously evolving creature. For, for the network to continue to, to evolve, to grow, you actually need developers to take care of it. and I think, In the, in Bitcoin's first, say, ten years, there are still a lot of kind of, debates, within the community about, you know, for example, particularly around two thousand and seventeen, where Bitcoin, should go, how, how to make it, is it a, a sound mon- sound money? Is it a payment? what's the right next step? so that's when we see, the, the, a lot of the, Controversy within the community, right? We see the BCH, and BSV, coming, hardforking out of, B-BTC. but, but we've been past that and, and we've been able to see, Three successful harvestings, since inception, the, the third one being the one that happened this year, which is, which is great, with all everything else uncertain going on, this is actually something certain, and, it, it happened as predicted, which is again beautiful. and, and also there are a lot of, development, level, protocol level progress that has been, happening steadily, over these, these years. One, some of, some of Some of those that are, I think, most, interesting and, critical are the merge of Signet and the Schnorr and Taproot, and also, the increased focus on fuzz testing. All these are really designed to enhance the, the privacy and the scalability of the network, which is again crucial to the, the characteristics of Bitcoin as a, store of value, as, as a, A potential future, reserve currency. So, so I think it's really down to whether we have a healthy, developer community that, that continue to work on the, the underlying protocol, continue to develop, the protocol, and continue to, to, to quote-unquote, nurture and guide, the network to, in the right direction. so I think, you know, with, with everything we see in, in the developer community, what's happening on the protocol level, what's happening on the, at the application level, and also, in twenty twenty, we've seen not just us coming out to support the sponsors on a no-string, basis, but also a lot, a lot more other, parties and institutions coming out to support it, which is again gai- great. It gave, gave me personally a lot of confidence in, keeping this, live creature, you know, live and, and steady, and, you know, the, the Bitcoin as the fundamental layer of money It has to have, be in very steady hands, and, and I think we are right now, going in the right direction. so that's really why, you know, I feel like we are in the second phase where, and it's still, still early stage because the, the, the mainstream adoption is just getting started. We haven't even, you know, I think the people must have seen a lot of the Google trend charts, floating out there. We haven't even get started on the retail side. but, but I think we're, we're starting to, to, to head in that direction. there's still a long way to go, a-and the, the developer, community also need to continue to, to need a lot of, support from, from the, ecosystem to keep it, Decentralized and, and, and, and also, independent. I think those are really important. but, but I think we're going in the right direction.

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Yeah, sure. so, the way we think about our sponsorship, there are a lot of different ways to provide sponsorship to, developers. the reason we started with independent grant, To developers is that, we think that those are most direct, they're probably not scalable because it's very much, developer- Based or project based, but we think it's very direct, and we, and it's also an easier way to keep it independent and decentralized. when we think about, grant recipients and how we allocate those resources, we're looking, really looking at, basically three main areas for our quote-unquote long-term investment. the first one is again around the protocol level We want to really see, the developers who are passionate about and also have shown track record in working on the, Bitcoin core, protocol to improve security, to improve privacy, and also, so that, that's really the, the number one, investment area that we're looking at. number two is about adoption, from, from where I'm- I'm looking at right now, I think the fir-the second phase as an investment, as the store of value, the payment side of things is not going to be,

as widespread as we would like, what we would like, and if we have to choose, again, this is my personal perspective, we have to choose for Bitcoin, to function as a, store of value versus as a medium of payment, medium of exchange or as a payment, I'd probably choose the former versus the latter, if, if I have to give and take. However, I think over time it will be, very important and helpful. To make sure that there's that utility side of Bitcoin, not just as a store of value, but also can be used as a payment, in the reality, in real life, to buy and sell. So I see, I think any projects, that can help create, increase that, that payment and adoption of Bitcoin is, what we are interested in, support, supporting, and that's where BTC Pay comes in. And I think the third area that we're, we're, particularly interested in, particularly after spending, year, working with the developer community is to figure out how we can better support the developer ecosystem, i.e., help, onboarding new developers, raising awareness, in, in the importance of, a Bitcoin core developer, community, and also testing frameworks, because testing, review and testing has been, one of the, bottleneck, in Bitcoin core development, not as As high profile and as, visible, again, as the, the coin price fluctuation, but I think it's actually pretty critical. So these three areas are where we have been really focused on, and if you look at how, the, the, the four recipients that we've got so far, all of them actually are pretty strong in, either, you know, two or, or three of these, areas, and, they, they're all pretty big Big on, providing that mentorship and, and onboarding, support, to new developers. They either work on privacy or security, and/or, working on improving the testing, bottleneck, and the BTC pay again is around the adoption, side of things.

So when it comes to doing the developer grants program, if, if you aren't a developer yourself, sometimes it can be difficult to know who, you know, who's good and who's not, who's, you know, who's a charlatan and who's actually genuinely a good developer or doing some interesting, and valuable projects and, and work in the space. So can you share some insight into how you select developers and projects to support there?

Yeah, absolutely. it, it is where we need help from other people, to, to be totally upfront. and, and that's also where we are happy to share, what we've learned with, other exchanges who, who are exploring, The possibility of being a participant as well. so we, we have got a lot of help from, you know, people like Steve, like John. basically, you know, they, sometime they came ac-across candidates, they would refer those candidates to us. they would, help us understand, what those developers do, why their work is relevant, how relevant, it is, and they would also, make introduction, to other, people in the industry who can help us, who can give us perspectives on, on that level of, re-relevance, and, and how that fit into our developer program. So we've got a lot of help, just in, in, in short terms, we've got a lot of help from the community in, in evaluating that. That's also- Also why initially I was, when I was talking about how we approach this, our program is, you know, we, we, we do it in the, in a format of, independent developer grant, i.e. grant, provided to individuals, individual developers or individual projects, it is direct, but it's not scalable because there's definitely a, a, a, a pretty big threshold, entry barrier, if you will, in terms of knowledge, to be able to, assess, you know "Quote unquote, who, who deserve it. Doesn't mean that, you know, those who haven't got our grant doesn't de- deserve it. It's just how some of the parameters, of the, of the, the grants, recipients or prospects fit into our program. But there's definitely a lot of the soft qualities and, you know, conversation, and, and evaluation going on, and without help from all these, friends." Friends and, and community, participants, we wouldn't have been able to do it. And also, I think that's also why, for example, if you look at, what Coinbase recently announced that they are trying to do something similar, they have assembled a advisor board, I believe, who, the members of, of that board basically are, developers, themselves, so they would be able to, to provide their perspective. on what makes sense, for the long-term development of Bitcoin from their own perspective, and then,

the decision is, up to them or up to us, right? So, so that, that format is, you know, it's not scalable, but it's, you know, it's probably more direct than other ones. Yeah,

I see. Yeah, and, yeah, acknowledging that it's not necessarily the most super scalable approach, also, I presume you're also considering, well, when we fund a, a developer or a certain project Project, is it tied to a certain outcome or is it more like, you know, we want you to do some testing and review and we're, we're like, how, how do you sort of assess? what's, you know, whether that developer is actually doing what you've asked them and that kind of thing.

Yeah, we don't ask the developers to do anything. We, we, we don't ask them to do anything, that's kind of tied to the, to the grant itself. we would ask what they do, what they have done, before making our decision to see whether, whether the, the, their passion and their work, are in line with how- How we want to structure our program. but, but once granted, our grant is totally no, no string attached. we pick our developers because, on a couple of, kind of, I would say very s-soft, standards. again, we, we go with recipients who are very articulated and have a very demonstrated vision for advancing the ecosystem. we- We, we like, developers who are very passionate, about what they're doing, share the, the, the vision that we have about Bitcoin. it's, again, free of obligation, so they can go ahead and do whatever they want, and it's not exclusive either. If they feel like they need other, support, they can go ahead and get that. and, the same thing goes for project-based, BTC Pay as well. We- We, we never really tell them, hey, this is what we want you to work on. They work on whatever they wanna work on.

and, and that assessment happens before the grant is, is, is- Given, basically, if we feel like there is an alignment in emission and passion of, of the recipient and what we are looking for, we, we are happy to, to do it, because ultimately, you know, we believe that, Bitcoin fund, developer funding should continue to be diversified, should continue to be, to be de-independent and give developers a lot of option, and ideally, we can provide a, lifetime career path for developer For particularly, high quality developers to join, and, and contribute, to build Bitcoin, network. However, ultimately, I think, you know, the-- in line with the open source ethos, it has to be the passion and personal conviction that drive the, the decision on the developer side. It's not-- it has, it doesn't, it shouldn't be anything related to the monetary incentive. Monetary incentive is only there To remove the, the uncertainty, but, but it shouldn't be that incentive. So we don't, intend to, to be that economic incentive, binding in whatever sense.

I see, yeah. And, it's an interesting thing in the space because, well, just about with anything, you need, you have to be able to present or get some level of attention on what you're doing, and there needs to be value seen in what you're doing. And so what I have seen in practice is people start doing something for free, and then if there's enough people who value it, then someone might fund you for that. And so that's maybe in practice what happens with, some developers as well, if they're working on a certain project or

That really, is seen as like a high value project, well then that's where, there, there's more of a, it's easier to make a case there for that person to get sponsored, to continue doing that work and to keep that project running. Also Wondering, in terms of, you mentioned earlier that, the individual grant funding model may not be as scalable, so does that mean potentially in future you would look for other ways to try to achieve the developer funding grants program or what are you thinking there?

Yeah, we're definitely reflecting upon that and, and, and trying to explore, different ways to, to make it more scalable. we haven't, we haven't got to the point where we got tangible action points there yet, if we do, we, will definitely let you know and let the community know. but we are exploring ways where, we can provide a more scalable ongoing support to, to Yeah, both, raise awareness and also, help, onboarding new developers, make it easier to, to onboarding new developers and nurture new developers. but, but, you know, it's a very, it's a very difficult, it's a very difficult, task To be honest, yeah. I don't,

I, we don't presume that we can do it ourselves, by ourselves. I think it probably takes industry-wide efforts to, try different things and see what works, because we, you know, on the one hand, we wanna make it scalable, but on the other hand, I think we don't want to have any central point of failure, and we don't want to, distorted, the, the, you know, take away the, the, the, the fun of the, the fun of working for, for Bitcoin itself from the developers. so I think that has to be carefully designed, yeah.

And, I guess, yeah, there's probably different ways it could be done. As one example, you might need someone on staff at, you know, at, at OKCoin who can assess contributions themselves and then guide you in terms of, "Oh, okay, I think this is a good project." to fund and that kind of thing, or otherwise you are, I guess, reliant on, you know, calling on other individuals in the space, people like Steve Lee and John Newbery, as you mentioned, to sort of give you some sort of a steer there.

Yeah, that's definitely also, on our roadmap. w-we would like to, at some point, have some in-house capability as well to, to, to, help with that assessment. we'll continue to evolve our developer program And our practice as well, as, as our, you know, understanding of the, the space, continue to evolve. but, but again, I think the, the, the goal is really to make sure that we are investing in this space long term, and we hope that, other participants, also see the importance of this and also, invest in it, because particularly when the, the adoption of Bitcoin continues to grow, it, it will be increasingly important to make sure that the underlying network, is sound and safe and private and, and scalable, and that won't happen By itself, it takes, it takes a lot of efforts actually. so, so, yeah, I think it's a very important thing for the whole industry.

Of course, yeah, and, definitely, I'm very happy to see that, and, I think, many of my listeners, like to see, Bitcoin, exchanges and companies supporting Bitcoin development and technology that is, you know, Bitcoin adjacent, let's say. so are, are there any other kind of areas where you think- You'd like to see, you know, further development happen? I mean, things like Lightning or perhaps things like in relation to Bitcoin mining infrastructure or- maybe, oh, maybe another example would be stuff like, some of these more infrastructure sort of things like Blockstream Satellite and, some of these ideas around ways that people can transact In, in under more adversarial circumstances, you know, maybe an example there might be mesh networking, yeah, or, or perhaps around security, are, are there any other kind of focus areas that are, that come to your mind?

Yeah. look, I'm, I don't have the engineering background, so I feel like I'm getting out of my comfort zone as I get into the technical side of things. but, but Lightning is definitely something that we have been, following closely. I think it will be a very important- Interesting, it, it's not, it's, it's been steadily growing, I think the ecosystem has been steadily growing. The, the size of it is still very small, the size of transaction that happen, at the second layer is still very small, but I think as the adoption, grows, for Bitcoin, as the transaction volume overall at the network continue to grow at Bitcoin And I think at some point we may start to see a turning point, for second layer solutions like Lightning, because, you know, people will, will, you know, the people will need, faster payments, of Bitcoin, smaller amount Bitcoin, right? The, the larger amount Bitcoin happen on the first layer, like what we see today in the traditional financial market with wire transfer, it takes longer. It- It's a little bit more expensive, but some of the everyday transactions has, has to happen, with, faster speed and, less costly. so I, I think, I think there will be, a turning point when we get to a critical mass, down there. So, so that is, an area that we, we have and will continue to follow. definitely mining, I know that, Steve, and And his team have been working closely, on that front, we've talked about, supporting developers on that front as well, that's on our radar, we just haven't got to, got to it yet, but, but we will continue to, to, to follow that and, and, and support as we see fit and as our own resources allow, we will also step in there and, and help, And I, and, and I think generally, you know, raising awareness, working with the developer community to discuss some of those and, and also, you know, bring the, a larger audience, to the space is going to be helpful and interesting. ultimately, we can't bank on a handful of, entities, corporate entities to, to provide that financial support. I think ultimately, if we can build a, a larger, wider- Base, for, providing that type of economic incentive, is going to be, longer term healthy.

Right. And as I'm sure you're, you've probably seen, and, you know, I think many people in the space comment on this as well, it's just basically everything in this space is indexed to the price, right? So as number go up, we see, you know, more exchange sign-ups, more wallet downloads, more podcast downloads, more developers, more projects, more everything, right? so I think that is perhaps one way where as number goes up, we start to see more people interested to fund different development projects and things. actually another interesting point that might be worthwhile is around political risks. I know in one of the pieces you wrote, just recently, you, you touched on this idea of political risk. What kinds of political risks do you see with Bitcoin?

obviously, you know, with Bitcoin being positioned as future money, there's always the possibility that the sovereign governments, can come out and ban it, because that threaten fiat currency and potentially can take away the ability of the governments to, basically, quote unquote, tax, without taxing, But I, I think those risks are high in probably certain areas and also in earlier years, but as the Bitcoin continue to build, its momentum of adoption, the, worldwide ban is going to be harder and harder, and it actually has never been,

It, it, we have never really seen a world, world, worldwide ban, and, and, and I, I think it's probably not doable either, just because there's no, there's no one single global government. If we have one single global government who has vision, enough vision to see the future threat of Bitcoin and just kill it in the first, you know, maybe ten or seven or eight years, then, you know, probably the game was over. but there would- Luckily there was no one global government, there are so many governments out there. Some governments, maybe feel the threat earlier than others and will ban them, either, enforce them or partially, and that has already happened with several, in several cases, but as long as there are areas where Bitcoin is allowed, You know, human nature will, will, will play the card, Bitcoin represents human nature, and it brings better, store of value to people, it, it brings, wealth preservation to people, and with the, the right sound, money system, actually, that can encourage saving, it can, a lot of good things can happen, right? The, the market can, can actually function well in the future. So in a, in a, I think, I think over time, we will always have that Political risk here and there in pockets, where, you know, the threat to Bitcoin will exist, but there's no way, I, I don't see the risk of Bitcoin being banned out of existence today. I don't, I just don't think that is realistic. that being said, I do think that there's still risk in, because banning, Bitcoin have two layers. One is the banning of Bitcoin as a- Store value as an investment vehicle. the second is the banning of Bitcoin as a payment, method, as, as a u-payment utility. I think the The second risk is still, there. I don't think that is completely out of the window, particularly because the there will be a pretty long runway where the fiat currencies, will coexist with Bitcoin, and I don't think that adoption of Bitcoin as the single payment, currency will happen anytime soon. So, in, in that window, you know, there's always a chance that, The government can allow Bitcoin as a investment vehicle, but doesn't allow it or put very strict, requirements, on Bitcoin being used as a payment medium, a medium of exchange. So I think that risk still exists, but, but I think over time, that risk will also, be reduced over time. time, time shall tell, but I think the, that, that level of volatility will- will always, will always be around with us. that's just, I think that's probably part of Bitcoin as an experiment and as a, quote unquote movement, what that means, you know, it, it's basically challenging the status quo, and that status quo unfortunately is government.

Right. And, yeah, as you mentioned, I think, the chances of a, of an outright worldwide ban are vanishingly slim, but maybe, a more likely or possible- Full scenario is one where it, it sort of gets captured and, you know, maybe things, so, so some of these ideas are more like speculation or what's, or what's possible, but, you know, there, there, there's chatter about Self custody eventually being banned, and I think that kind of thing is a, i-is an interesting vector to consider, and it, and perhaps it also highlights the importance of having open source software and tooling as well. what's your view on that?

I think that will be really hard. I mean, there have been a period when in US there was a ban on, holding gold, as an individual. was that ban successful? Obviously not. Government ban on, holding guns or, you know, some of the other stuff, and it never has been successful, as a whole. It may be successful in pockets of areas, but, you know, there are always, ways for people to, to figure out how to actually go around it. so yeah, I think it would be really hard, you know, particularly when it comes to self-custody. It, it, yeah, Bitcoin is censorship-resistant, as long as, as- As long as the, there, there is that level of, global network that's still out there, i-it's really hard for the government to make an effective ban on self-custody without seeing large flee of capital. because people vote with their money, right? Yeah. so, so, so ultimately, I think that, that economy, economic power, human nature will speak for itself. so, so I think time is our friend. time is, time is the friend to Bitcoin. and, and as long as there's sound development, steady development at the protocol level and the industry work together to really promote, Long-term adoption. and, and, I think, yeah, I think we're, we're going to, to, to go in the right direction. There's al-w- obviously, it's, it's hard to tell, when that ultimate,

Situation will, will happen? I think that's a million dollar question, but I, I think, I think at some point we'll, we'll see, a, a glimpse of it, hopefully. but I think short term it will be interesting to see how the, this current institutional, wave of adoption will affect Bitcoin short term. as we've seen recently, the price is going up, as you mentioned, Stephan. I think the Bitcoin's price volatility itself is a great self- Marketing tool as the Bitcoin price continue to go up, and, and, and, you know, pull back obviously from time to time, but have a upward trend, over time, there will be a lot more newcomers, starting to notice it and, and starting to look into what it is about, you know, started, starting as a speculative trading or maybe just, you know, give it a try kind of investment, mentality, but over time, if they really think about what it is about, You know, hopefully there's a chance of a conversion.

So what do you think, the next few years offers us in terms of, people coming to understand the significance of Bitcoin? What sorts of, I guess, narratives and, messaging do you think will resonate with the people coming in over the next few years?

I think Bitcoin really represents human nature, right? It, it g- empowers people, it empowers individuals, it's give the, the money back to people, I think that's going to be really, powerful. The, the internet that waves that we've seen over the last, two decades has always been, how we are using technology Use the internet to empower individuals, starting from commerce, from information sharing, from, how we live our social lives, going to media, we, we've seen how that changed the music industry, we've seen how that changed the, the social, community, recent, Rise of TikTok, all these, and, and also a lot of more people, like yourself, having your own podcast, that hasn't really been possible before, but with today's internet tools, individuals are empowered to be their own, entrepreneur. but the, the previous tools of internet, can enable P2P transfer of information, but what it doesn't, what it cannot do is that P2P transfer of value. And I think Bitcoin is that enablement, the P2P transfer of value. And when you combine the P2P transfer of information with the P2P transfer of money, of value, that's also where for the- First time in a human society, we can actually see a possibility of us building a digital life, that we actually control ourselves. We can actually control our own data. t-in today's internet world, if you're on the investment side, what, what matters the most, when you look at investment targets, it's those platform that actually control data, right? It's those big retail, giant, platforms that control retail data. Data is the gold, gold mine today. and, and those data are, are yours and mine, but we don't own those data. but I, I think over time with the possibility of Bitcoin, which gives the money back to, to people, and when you combine that with, potential other technology development in blockchain and new projects coming up that enable- That I think that will be really, powerful, giving, giving people back that ownership of their own assets, giving people back the ownership of their own data, that would be really powerful. That can actually, I think, lead to totally different,

Business formats and, social dynamics that we haven't seen today. I mean, there are a lot of, a lot of, disbelievers always say, "You know, this hasn't happened before," right? But a lot of things actually we see today haven't happened before. That, that's how we make progress. and I think this is going to be extremely interesting to see. but back, sorry, back to your point, what is mo- what is probably the most powerful- Powerful, marketing line, for example, for Bitcoin, I think it's really kind of, you know, be your own owner, be, own your own asset, own your own financial asset, I think that would be really powerful.

Excellent, Hong, where can listeners find you online?

My Twitter account, it's at h fang c a, on Twitter. You can also find me or OKCoin at OKCoin dot com and, I would also particularly say if, any of you are interested in learning more about developer, how to, you know, understand what is going on with the developer community and understand what we are seeing, doing here, and also give us feedback on how you want us to do to support developer, community, come to, our developer page, we have www at a dot developer grant dot okcoin dot com. And, come back, you know, drop us a, a line, tell us what you think. happy to, happy to, explore what we can do together, in that, on that front better.

Excellent. And listeners, you can find those links in the show notes at stephanlivera dot com slash two two eight for this episode. And, Hong, thanks very much for the work you're doing and supporting Bitcoin development, and thank you for joining me on the show today.

Thank you, Stephan. My pleasure. Thank you for inviting

Make sure you are subscribed to the podcast with your podcast application. I've got an episode coming out with John Newbery, Bitcoin Core developer, next week, so keep an eye out for that one. Thanks, and I'll see you in the citadels.