SEC Driving Cryptocurrency To China: Interview With DECENT

ValueWalk’s interview with Matej Michalko, CEO and Founder of DECENT. In this interview, Matej discusses his and his company’s background, their newest subsidiary DECENT Crypto Services, trends in blockchain industry, how he values cryptos, the adaption of forked coins, his thoughts on Facebook’s Libra, Fed’s realtime payment system, and SEC’s approach to crypto regulation.

DECENT Crypto Services

geralt / Pixabay

Can you tell us about your background?

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I studied IT in Switzerland and suddenly became interested in how bank systems work during Greece’s financial crisis. Through my research, I discovered Bitcoin and saw the vast potential of the technology behind it, a technology called blockchain. As I looked further into this new and innovative technology, I became more and more interested in it. I even became a Bitcoin miner for a little while, exploring how all of it works from the inside out. My significant interest in blockchain’s wide-range of uses and it’s undiscovered potential led me to create DECENT.

When did you start your firm and what does it do?

I founded DECENT in 2015, and with the help of my team of blockchain developers, architects and innovative technology specialists, we created our proprietary blockchain platform, DCore. My company, DECENT, prides itself on driving blockchain adoption and making DCore as easy-to-use as possible.

What services do you offer?

Except for DCore, DECENT currently has a few different services of our own. One of the newest subsidiaries is called DECENT Crypto Services (DCS) and it provides a cost-effective and simple solution for exchanges to onboard new coins or manage existing ones. We’ve created a Universal API which blends with exchanges pre-existing tech stack and adapts to any blockchain, giving the exchange access to the token of their choice. Additionally, DCS offers a Market Making services which help sustain liquidity of the coins listed and a Wallet Security and Management service that protects wallets without compromising their security.

Another service we offer is Digital Proof. We’ve just launched a web application that allows individuals or companies to upload any document and receive a timestamped “Proof of Existence” certificate which is recorded on DCore. The certificate is verifiable on the DCore blockchain and can even be used as evidence in court if warranted.

What trends are you seeing with blockchain is it just a hype word or does it solve any pain points businesses have?

Blockchain has tons of valuable use-cases. The technology has the potential to disrupt multiple industries due to the intrinsic properties of transparency and immutability. We can already see an impact in the financial industry with major banks looking into Ripple’s XRapid technology which allows cross-border payments to take place in seconds, rather than days like the traditional banking systems. Beyond finance, industries that utilize supply chains are finding blockchain extremely useful for track and trace systems, due to the transparency of the recorded information and the fact that this data can’t be tampered with. We also see huge potential for the technology in digital content distribution. That’s actually why we set up DECENT. Indeed, blockchain has its place in today’s society and it’s just a matter of time before we see which other innovative uses it’ll impact.

How do you value a new currency or asset like bitcoin - how do you decide if you want to buy, sell or hold it?

I want to start by saying, this is not investment advice nor should it be taken as such. In my experience, it is vastly important to do thorough research on the companies that come out with new currencies. Look into the team members, are they credible? Do they have experience? What other successes or failures have then had in the past? How did they manage those successes or failures? Another aspect, just as important in my opinion, is the use of the coin or token itself. Do you think its use case is valuable? Does it reach the target demographic well and does it have a good chance to grow? Are there a lot of others out there serving the same purpose? These questions have always helped me assess if the project is worth my time.

What about Bitcoin alternatives like gold and cash?

Bitcoin has forked several times, leading to new coins like Bitcoin Cash and Bitcoin Gold. These forked coins retain some of the principles of Bitcoin original but allow for new adaptations and adjustments to their own blockchain. This can bring forward new and innovative changes that can potentially drive growth within the blockchain industry.

Why about ether and other big cryptos?

For investment advice, I suggest going to an expert on cryptocurrency market analysis. As far as the companies themselves, the most known ones like Ethereum, Ripple, Litecoin, etc. are all expanding the adoption of blockchain technology and bringing awareness to an innovative technology. So in that respect, I’m an advocate for all things blockchain.

Big talk about libra many saying its just a PR stunt what do you think?

Libra can massively contribute to blockchain adoption. With such a prominent company as Facebook making the technology legit, we hope it will bring awareness and trustworthiness to the blockchain space. Cryptocurrency users are in fact a very small community and Libra will expand this market exponentially.

Is it really a crypto or more like a money market account?

I don’t expect the crypto community getting too excited about Libra, as it, in its essence, isn’t a real cryptocurrency. It’s not really decentralized. However, the majority of its users will not care about the philosophical roots of establishing the first cryptocurrency and will just enjoy digital money that can easily be transferred around without borders.

How would Facebook make money off of it?

Facebook claims the user data from using Calibra will not be disclosed to Facebook so they won’t be used for ad targeting. Given the company’s history, I’m not going to suggest to you whether to believe it or not. However, even without a direct revenue stream from using Libra, Facebook will be able to reach new markets and attract far more business to use the platform for advertising.

What is the Fed realtime payment system it plans to develop is this competition to any of the cryptos?

Cryptos have two very important advantages compared to FED’s initiative: they are decentralized, meaning not dependant on the shape of the banks and they can transfer money in few seconds to anywhere in the world.

Do you think the SEC is taking the right approach to crypto regulation?

SEC has a bit too cautious approach to blockchain regulation and it’s slowing down the blockchain adoption in the US. China is far more open to blockchain and I’d say the USA missed the train a bit. 25% of everything blockchain-related is in China right now. The US has a lot of catching up to do.

What could they do better?

Eventually, the SEC and regulating authority will come around and make a decision on how they will regulate crypto, but continuous delays are slowing down progress. Other countries, like China, are already way ahead.

How do crypto regulations impact those managing money like yourself?

It really depends on which country we are talking about. Some countries are far ahead of others in regulations. In general, regulations are good because they mean that the governing bodies trust and accept something new, which correlates into availability and trust of the public. Those are good things for blockchain adoption.

What about FINRA and the CFTC?

I support reasonable crypto assets regulation. However, it’s important to properly consider all of the pros and cons so you don’t unnecessarily slow down innovation.

If you could pass one crypto related piece of legislation what would it be?

To make all blockchain projects in the world, use DCT!




About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver