Jon Matonis is the Founding Director of the Bitcoin Foundation, and the CEO of Globitex, a Bitcoin exchange based in Luxembourg City. Matonis has been part of the Bitcoin Foundation since 2012. He also worked at CoinDesk from September 2013 until January 2016.
BitNovosti approached Jon Matonis with a few questions about dos and don’ts in blockchain and crypto industry, and his attitudes towards the blockchain community in Russia and abroad.
BN: Please, name 3 tokens you believe in right now.
JM: Bitcoin, bitcoin and Monero. There are only two, because you have to follow the proof of work on the blockchain. It is all about computation and hashrate. People don’t look at that. They look at media, at marketing. But if you follow the hashrate, it tells you what really computational power is and that’s the most secure in blockchain. Nobody wants to use insecure blockchain. And the reason I picked Monero is they are one of the most private ones. So, they are considered the leading privacy token right now.
BN: What’s the difference for you, besides the value?
JM: The difference is that if you are focused on becoming money, the most important thing is the network effect. Network effect is when you start something and it spreads. So, you have a dominant userbreaks. For example, WhatsApp. Everybody needs to have WhatsApp, so that is why they become a leader – because of the network effect. It was also an original market, very low barriers to entry. So, anybody can get it. What is important to me besides the value – that the currency has network effect. It has lots of users, spreads all around the world, and has high number of developers, that are contributing to be a part of it. Obviously, the Bitcoin has the most of developers and contributors.
BN: What is the successful project for you?
JM: What is important for me is not so much about the token. The token is important, it has to have real activity and some purpose for being a protocol / utility token. But the most important thing for a project is that you are removing an entity or authority, or a process that is set in the middle. So, anything that disrupts the center is important, because what’s happening in the world is removing the central points. And that is why it is called decentralization. Because any of the gateways or authorities that are set in the middle – they are all under attack.
And there is a perfect example in Russia. This came out at the CryptoFriends conference that I spoke at and made a good meeting with company from Moscow – True Flip. I am advisor on their board now. What they do: they challenge the national state wallets.
For government the lottery business is important. So, they don’t want to be challenged. But when you look at the blockchain fully disrupting lottery business, it makes a lot of sense. Because it is transparent, you can actually make sure that the winnings are going to the person, where it should be. And it is just much cleaner to earn by lottery in blockchain. So, that totally disrupts the central lottery people. And you can find examples like that throughout every industry: health care, stacks – the obvious one because this is made with Swift – that’s my favorite.
BN: Do you consider Russian cryptocommunity useful for the whole world of crypto?
JM: Absolutely! Because there are strong developer talents coming from that community. What we saw around the community growing up in the United States? We always think that it is more about capitalism and so on. So, then you go to St. Petersburg and you have Soviet statues of Lenin. Even at CryptoFriends conference there was a statue of Lenin. But Russians make ICOs more than we do in the US. In 2017 Russia showed the rest of the world how to do it. And I think that they still enjoy more freedoms from launching projects in Russia. I haven’t checked recently about what the government is doing about cryptocurrency in Russia. They are still waiting for a decision – how to cope with it. And I think that’s a good environment. What I have noticed is that the projects that start in Russia, they are technically fine, but when they want to get into the business and sales, they redo ICOs in other jurisdictions like Malta or Cyprus – just to have an access to the European and North American common ways. And that’s a trend.
BN: Please, name 3 steps that are important to follow in order to enter the blockchain community nowadays.
JM: The first thing they have to do is they should download several wallets. Because you have to play and that’s the best way to learn. Pick five and choose your favourites and learn about the way they work, how the tokens work. So, that’s the first way to get involved into the blockchain community.
The other way would be to pick a skill set and just dive in and start working with one of the companies. Because you don’t have to be a computer developer. Anybody can participate. You can be from marketing side, from financial side – there’s a role for everyone. One thing that blockchain projects have in common, is that anybody who works there does many, many values and is doing everything. And you learn everything, and you learn so much.
The third thing would be – read, read and read. You have to get a wider search from your reading. If you are on Twitter, I would suggest going to the people who you consider Twitter influencers. Like my account. And then click on whom they follow – because I only follow 300 people – and then follow all the people I follow. Go to somebody else and do the same thing. And then you will be getting the same newsfeed that I am getting.
BN: What are your greatest expectations and fears because of the blockchain?
My greatest expectation is that we will be a real challenge to central banks. Central banks have the most fear from bitcoin and decentralization, because they represent that centre I was talking about. So, that is my greatest hope, and I hope I would see it in my lifetime.
I think it’s a great time to be alive now because this generation is the same generation that would be like around 500 BC when the first gold coins were made. Because coins were non-political money – they went political when the king started stamping his face on coins. So, this generation now is like generation of 500 BC, when was the first time of gold coins. And we haven’t had that for 2500 years.
And my biggest fear is that we will see government manipulation in the bitcoin markets. It can happen through the exchanges. Now the government can manipulate gold and silver markets. They do it because the gold and silver markets are set up in their own jurisdictions. And it can regulate the exchange.
So, the rules are a little bit unfair. And they can potentially manipulate the market because they have unlimited amount of currency: they can sell, sell, sell and finally crush the market.
The solution to that is to have exchanges in many jurisdictions. So, don’t just have the big crypto exchanges in New York and London – have them in all the little countries everywhere around the world. And when they start manipulating one, we still have the other ones, which are protected. So, the solution is multi-jurisdiction.