Tokens, Tuvalu and FATF: Bitcoin SV Virtual Meetup APAC talks about all the hot issues in Bitcoin

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The Asia-Pacific region is home to some of the most interesting projects in Bitcoin, and Bitcoin Association was there to give updates on some of them in the latest Bitcoin SV Virtual Meetup APAC.

Tokens remain the first word on most people’s lips, but there was also news on Tuvalu, blockchain compliance measures and smart contracts.

The 1.5 hour-long meetup was hosted by Bitcoin Association regional manager for Southeast Asia Ella Qiang, who introduced several key figures from the APAC region to discuss what’s happening. Guests included Mempool’s Lin Zheming, Bitcoin Association technical outreach specialist Aaron Zhou, Merkle Science’s Ian Lee, and RelayX’s Jack Liu. Faia’s George Siosi Samuels and Elas Digital’s Brendan Lee also joined the event to give updates on the Tuvalu national digital ledger project.

Tokens and Bitcoin-as-a-Service

Aaron Zhou gave the China update, noting that the six-day Bitcoin SV Bootcamp for developers is about to kick off in Zhuhai City (starting April 11). An all-too-rare occurrence these days, it’s an in-person get-together where Chinese developers can learn technical topics and interact with each other to share ideas.

Zhou also gave his two cents on Bitcoin tokens, since it’s the topic of the moment. He noted that there are many protocols out there, but in the end what will matter most is how easily people can use them. The situation where different wallets use different token protocols, but which don’t interact, “needs to change,” he said.

Lin Zheming added to those thoughts, saying also that (at present) the Bitcoin SV ecosystem is still “too small.” There needs to be a focus on bringing in users who’ve never heard of or used Bitcoin before, and make blockchain more friendly overall to “normal people.”

He referred to Mempool’s own Badge protocol, and the notion of Bitcoin as a Service (BaaS). This involves selling Bitcoin’s data capabilities by developing systems that interface between external data and the blockchain, without non-Bitcoin users having to worry about things like UTXOs, exchange rates, and the like. As a public ledger, Zheming said Bitcoin has several advantages over the more complicated “permissioned” blockchains some companies had looked at, and has a serious cost-saving advantage over most public blockchains as well.

FATF and decentralized services

Next was Ian Lee of the Singapore-based blockchain analytics firm Merkle Science, who talked about changing the way potentially suspicious transactions could be identified by using a more behavioral approach, similar to that used by banks on the SWIFT network. Other forensics firms worked by building large databases of suspect addresses, which didn’t work so well in a system where users can create new addresses at will.

Qiang asked about the international Financial Action Task Force (FATF) and the “travel rule” that could have a large impact on virtual asset service providers (VASPs). This is the rule that covers transactions between different services, mandating that those services communicate with each other and identify the transacting parties.

There are several challenges with the travel rule, according to Lee, such as the language barriers and of countries being siloed off, “which goes against the whole idea of blockchain.” Other compliance issues concerned whether FATF rules would (or could) cover decentralized trading platforms, and whether they might eventually expand to cover apps that “facilitate transactions” without actually taking custody of users’ funds. He also mentioned the need for a standardized messaging platform (like SWIFT’s) that would enable easier interaction between services, and the possibility of a smart contract-based automation of suspicious transaction reporting.

Being realistic about Tuvalu

George Siosi Samuels and Brendan Lee gave an update on the Tuvalu national digital ledger project, adding a dose of realism to everyone’s expectations. It’s not about upending current systems and making new rules, but more about transferring the country’s existing records and services to the digital world, Samuels said.

In December 2020, the Pacific nation of Tuvalu announced that it is going fully digital and paperless, and it will manage its important operations on the BSV ledger. At the moment, the project is conducting interviews with locals and other stakeholders, and both Lee and Samuels said there are many things to learn. The project’s goal, according to the two, is to give everyone a much better understanding of how Bitcoin works and how it’s best utilized—both in the public and private sectors. Learning about how blockchain handles public and private data, developing better non-consumer use cases, and simply showing that BSV can perform on a nation-scale level would all create momentum that others would notice. And, Samuels added, they already are starting to notice.

The REX DEX and protocol agnosticism

The final speaker was Jack Liu of RelayX, adding some of his trademark frankness to the Bitcoin discussion. Tokens and decentralized exchanges were also foremost on his mind, and he agreed that experimenting with protocols and capabilities would be a learning experience for BSV project leaders as much as the public.

“You can’t dress up a pig,” Liu said of novelty token airdrops, and wondered how they could be more effective. Loyalty points, tokens that had to be redeemed before they had any value, event tickets, and conditional payments like food stamps and medical services, are all possibilities. Tokens are “a fad” at the moment because most people don’t yet understand what they could do.

“Where it’s going is a very beautiful world … I think the Bitcoin blockchain will last hundreds of years, or forever,” he said.

He also discussed RelayX’s own decentralized REX exchange, Bitcoin’s first (“or eighth if you count the ones that were only screenshots”), and what his team had learned from the experience. He said the platform is designed to be “protocol agnostic,” and said there should be more competition for liquidity rather than over token systems.

He still has high expectations for tokens overall, and said that if they can thrive on blockchains where transaction fees were $30-50, BSV could offer huge momentum. All it took was for people to try creating one or two tokens, which could eventually lead to thousands per year.

Bitcoin Association holds regular meetups for BSV community members to hear the latest information directly from those involved in active projects. Whether virtual or in-person, they offer important opportunities to catch up and educate yourself—and most importantly, anyone can attend and ask questions.