Alibaba Founder Jack Ma Says Bitcoin Is a Bubble, Blockchain Isn’t

  • Alibaba founder Jack Ma argued bitcoin is in a bubble, while defending blockchian technology isn't.
  • Per his words, most people are looking at it like it's a gold mine, and fail to see its true potential. His company leads the race for blockchian patents, but has been staying away from cryptos.

Jack Ma, a Chinese business magnate who founded e-commerce giant Alibaba, has recently joined the “bitcoin is a bubble” bandwagon, while arguing that blockchain technology isn’t. Ma’s words came during a speech at the Second World Intelligence Conference in Tianjin, according to local news outlet 8BTC.

During the event, Ma revealed he’s been researching blockchain technology for years, and that he believes it can help solve some data-related problems our society currently deals with, on governmental, corporate, and individual levels.

Per 8BTC’s report, Ma stated he’s been eyeing blockchain technology ever since he found out it could solve privacy and security-related issued, as security “is the top priority of Alibaba.” Reportedly, the e-commerce revealed its full-year revenue was of $39.9 billion last year, after seeing “trillions of transactions” go through its platform.

Ma noted most pay attention to blockchain technology because of bitcoin, and argued the cryptocurrency was in a bubble, not the technology itself. 8BTC’s report reads:

“He said people with superficial understanding of blockchain think it is a huge gold mine. We should seek solutions for data and privacy security from blockchain, in a bid to create values for the society. While for the moment, many see it as a money-maker, it’s screwed.”

8BTC

Notably this isn’t the first time Jack Ma addresses the flagship cryptocurrency. Back in November 2017, he was asked about bitcoin and claimed that while it was “very powerful,” he wasn’t interested in it, but in how it could help society.

Later on, in December, the businessman was still wary of the cryptocurrency, despite its then $15,000 price tag. He was quoted as saying:

"I don't know about bitcoin at all. I'm particularly puzzled. Even if it can really work, the rules of global trade and the financial system will be completely changed. I don't think we are ready. So I'm still paying attention to Alipay... to the US dollar, and the euro. We have a team that studies blockchain, but bitcoin is not something that I want to pursue. We don't care about bitcoin."

Jack Ma

Reportedly, Alibaba is the organization holding the largest amount of blockchain-related patents in the world, but has been avoiding cryptocurrencies. Earlier this year Alibaba Cloud denied rumors suggesting its “P2P Nodes” network was cryptocurrency-related. Last month Taobao, an Alibaba subsidiary, blocked cryptocurrency and ICO-related ads from its platform.

 

Featured image by JD Lasica, Flickr, CC by 2.0

Advantages of Securing IoT Devices with Blockchain, Explained By Andreas Antonopoulos

Andreas Antonopoulos, a widely-followed Bitcoin (BTC) specialist, has argued that using blockchain to solve internet of things (IoT)-related security issues may not have any significant benefits.

Antonopoulos, whose comments came during a recent Q&A session, published on May 17, 2019, said it’s possible that a traditional database management system could work just as well (as a blockchain) when it comes to securing IoT-based applications.

Logging Information From IoT Devices Using Blockchain-based Systems Could Be Beneficial

However, Antonopoulos acknowledged that distributed ledger technology (DLT)-based systems could be useful in cases where “information is logged from IoT devices in a way that it maintains that information so that it can be changed in the future … so this [would be] an immutability benefit.”

He added that many people use the term blockchain to refer to databases that are able to register digital signatures (PKIs). Antonopoulos clarified:

I think that it’s important to clarify that the purpose of a blockchain is more than recording digital signatures, [or digital timestamping]. We’ve had PKI for 25 years. There’s nothing new there and it’s not particularly interesting to take a PKI database and make it public - unless you do something with it like … building a decentralized consensus system so you can have immutability.

He continued:

And then again, what problem are you solving? What are the problems in IoT security [that you’re trying to address?] A lot of people are trying to mash these two terms (IoT and blockchain) together.

According to him, there are great security risks involved when implementing IoT-based systems.

Solar Energy Trading On Blockchains

Responding to a question about the potential benefits of using an ERC-20 compliant token, instead of just using ether (ETH), when conducting solar energy trading on the blockchain, Antonopoulos first clarified that ETH is generated by mining on the Ethereum network.

He further noted that “if you have an ERC-20 token that’s related to solar energy, then perhaps you can mine, or mint, or issue that token in response to people generating energy. So, they can earn that token directly when producing energy. But the only way you can really measure how much energy somebody is producing in order to issue a token is to buy and use that energy. And in that case, [you] could just pay in ether.”

Antonopoulos also argued that tokens are not required in all cases and that users should exercise caution when new projects are trying to offer a native token.

“Markets Are Just Human Behavior”

The data communications and distributed systems graduate from the University College London also pointed out that blockchains “operate as markets” and they operate by “using markets.” For example, there’s a market for cryptocurrency mining which is based on a blockchain network, Antonopoulos explained.

There are also markets, Antonopoulos noted, for proof-of-work (PoW)-related mining profitability and “there are currency markets within the cryptocurrency space.”

He added:

All of these markets exist because of blockchains. [Therefore,] markets are a critical application of blockchain technology. Blockchains will create better, more fair, more transparent, more open markets...wherever markets are needed. Interestingly enough, even in places where markets are needed but not wanted….[For instance,] drug markets...Why? Because drug markets are [just] markets...Markets require two things in order to happen: supply and demand....Markets are just human behavior.