Huobi CEO: “In the Bitcoin Industry, Centralization and Decentralization will complement Each Other”
Leon Li is the CEO and founder of Huobi (“Fire Currency” in Mandarin), one of the largest Bitcoin exchanges in the world.
At the start of 2014, the previously unheard of exchange outside of China became the largest trading venue by volume in the digital currency, creating rumors and speculations of fraud. “Having large volumes is related to our no-exchange fee strategy,” said Li in an interview with forexmagnates. Thus, it is largely speculated that the no trading fee policy resulted in the influx of micro-transactions, bot trading etc. raising trading volume.
With Huobi making some big moves recently, including the acquisition of China’s leading blockchain explorer Qukuai.com, we got the chance to catch up with Leon and ask him some questions regarding his company’s growth strategy and plans for the future.
Cointelegraph: Could you tell me how you started the Huobi exchange and why?
Leon Li: I heard about Bitcoin from a friend at dinner in 2011, but at that time it did not attract my attention. But in March 2013, I listened to some business friends talk about it again, and this time began an in-depth study of it. After a short time, I recognized the potential of Bitcoin to bring about revolutionary change in internet payments, international commerce, and other important areas.
Before founding Huobi, I was already a serial entrepreneur. My previous company was a group search business, similar to Groupon. So I had the right background and experience to start a new company in the Bitcoin industry.
Huobi was formally established in May 2013, and the trading platform was launched in September, and the company has grown very rapidly since then. As an entrepreneur and a person who loves technology, I am excited to be involved in promoting this historic change.
CT: You recently launched BitVC, which provided margin trading and interest accounts for international users. Why did you decide to establish a separate brand unlike your competitors OKCoin and Bitfinex?
LL: We are positioning BitVC to be a comprehensive digital currency investment platform. Margin trading and interest-bearing savings accounts are only the first features. We will soon launch futures trading, wealth management products, and other digital currency derivatives. This will not be just another trading platform; it will be something totally unique in the Bitcoin industry.
An important difference between BitVC and OKCoin and Bitfinex is that BitVC does not touch fiat currency. Users can only deposit and withdraw digital currencies. Thus, the legal and regulatory risks are lower, for both Huobi and BitVC.
CT: Your Company also just acquired multi-signature wallet Quickwallet and China’s leading BTC/LTC block explorer Qukuai.com. What are your plans for this acquisition and how will it fit in your international expansion plans?
LL: Bitcoin wallets are a critical part of the ecosystem and infrastructure. After the MtGox bankruptcy, everyone is aware of the need for a secure way to store their funds, and multi-signature wallets have become the industry standard for large enterprises.
We acquired Quickwallet to enhance Huobi's product line, and provide our users with professional, secure, one-stop service. We also got the benefit of having the talented Quickwallet developers join our team. Quickwallet will continue to operate as an independent brand and will play a large part in our international expansion strategy.
CT: Given your plans for vertical industry integration within the Bitcoin industry, can you describe some of the challenges you are currently facing? How are you planning to overcome not only the language and cultural barriers with the West but also the dubious regulatory climate across different countries?
LL: Bitcoin is an emerging industry where all the companies are entrepreneurial companies rather than large, established companies. There are many areas that are still not mature and established companies have not yet gotten involved.
For example, compared to internet cloud storage industry, the Bitcoin mining industry is in a very early stage. That is just one example, but this situation is similar in many areas of the industry. So there is a lot of work that needs to be done, which is an opportunity.
The regulatory environment is a global problem, a challenge for everyone in the industry, but something that can be overcome. For Huobi to have a successful international strategy, we will build a more international and specialized team, and continue to develop close cooperation with financial and legal service providers which have international experience in the Bitcoin industry.
- Leon Li, Huobi CEO
CT: How difficult is it to operate in China and have you experienced any legal setbacks in light of Beijing’s stance on cryptocurrencies and the endless rumors of a looming government crackdown?
LL: Looking at the issue objectively, China actually has one of the more relaxed policies toward digital currency trading platforms. Although the government has introduced some constraints and limitations, overall, there is still enough room for these businesses to operate. The government has been concerned about the use of Bitcoin for money laundering and violating foreign exchange rules, but Huobi has taken steps to prevent these legal risks.
CT: Bitcoin debit cards are the latest rage. Do you have any plans to issue your own debit cards that can be used with cryptocurrencies?
LL: Debit cards are one of the basic services provided by banks. Bitcoin debit cards will greatly increase the use of Bitcoin in economic transactions and will accelerate the growth of Bitcoin. Huobi also has plans in this area.
CT: Many Bitcoin-enthusiasts are ardent proponents of the decentralized nature of cryptocurrencies and believe that centralized exchanges will be obsolete in the future as better methods of buying, selling and trading coins are sure to appear. Do you think these predictions hold any merit? And does this fall in line with your ideology of offering no-fee trading and instead focusing on value added services?
LL: On a technical level, decentralization is what makes Bitcoin unique from any other payment system in history, and that is its key advantage. In the Bitcoin industry, centralization and decentralization will complement each other. Bitcoin provides a global, decentralized architecture on which will operate many independent, centralized services. These will co-exist with decentralized services.
Huobi zero transaction fees, GHASH mining pool zero fees, BitPay zero payment processing fees, these are all the result of business competition. There are many free services on the Internet, such as email, chat, search, news, and so on.
Whether transactions can remain free depends on the costs of maintaining the network infrastructure and business operating costs, and whether the value-added services profits can cover those costs.
Did you enjoy this article? You may also be interested in reading these ones:
- “Bitcoin will make the Internet much more Secure and Robust” - Michal Wendrowski, Rublon
- “In Twenty Years we will use Bitcoin as Naturally as We Use the Internet Today” - Aaron Koenig
Coin HR - the best way to find a perfect bitcoin job or an applicant for your vacancy. We connect talent with opportunity!