The disconnect between the hype and reality of Thailand’s world-class bureaucracy hit new lows Friday when telecom DTAC, the new Digital Economy and Society Ministry, and our friends at The Nation hosted a talk on cryptocurrency and the blockchain revolution.
The guest of honor? Alex Tapscott, one of the authors of the event’s eponymous book, “Blockchain Revolution.”
Economic innovation was the topic, but while one side talked about a money that is open, borderless and free from government, the other spoke of a centralized government project tying payments to our phone and ID numbers.
Yes, on the same stage, on the same day, we had both Bitcoin and PromptPay, two systems with radically different philosophies.
The event was supposed to be opened by acting Digital Economy Minister ACM Prajin Juntong, but he didn’t show and it was left to a senior civil servant.
Back when I was a speechwriter at the former ICT Ministry (yes, I was!) the chain of seniority for keynotes was usually, in descending order: minister, vice-minister, permanent secretary, deputy permanent secretaries or whoever was free that day.
In this case, Whoever-was-free-that-day, aka Whoever, described PromptPay as Thailand’s latest and greatest miracle of innovation that was so much like Bitcoin and the Blockchain Revolution.
Never mind the tiny detail that PromptPay is the antithesis of Bitcoin. While the new tech ministry is promoting centralized, government control of money, Bitcoin offers financial freedom in a totally decentralized network where nobody needs to be trusted because nobody can censor or exclude others.
It’s like going to church to hear the Antichrist praised only because it’s mentioned in the same book.
That said, Whoever did ask Tapscott for advice on how blockchain can be used in government. Whoever was even decent to stay until the talk was over and then some. This is something ministers or permanent secretaries rarely do once the photo-op is over, so credit due for trying.
Tapscott spoke of how Blockchain is akin to the parable of the Blind Men and the Elephant – it is different things depending on which part you touch. It is an asset class – one of the best-performing of 2016 – it is also a settlement network, digital cash, and the ability to tokenize and transfer assets securely between total strangers using untrusted parties across the internet without fear of repudiation.
Music and images can be copied at will over the Internet. While that has its benefits, the same is not true of digital cash or other tokens – such as electoral votes – which must never be copied.
That’s where blockchain comes in, as the answer to making uncopyable digital tokens a reality.
Blockchain is the technology behind Bitcoin. The “chain” is the linkage between all accounts which get finalized using immense computing power. Changing any part of the chain – like by trying to add or remove some value – in the past would require recomputation of all subsequent transactions, making for an immutable ledger (more on that later).
Tapscott noted that India’s ongoing mess with demonetization has seen Bitcoin use rise 300 percent as people struggle to find alternatives that are safe from simple confiscation or invalidation on government whim.
But Blockchain is more than just Bitcoin. Tapscott spoke highly of Ethereum, a nascent Bitcoin successor, that takes decentralization further with DAO – distributed, autonomous organizations – where everything is decentralized on a pseudonymous yet public ledger.
Everything that happens to the funds, from investment decision votes all the way to imbursement of funds, happens transparently on a blockchain. Never mind that the first DAO imploded spectacularly due to a coding error, the idea of a new type of autonomous organization is here.
Trust is a commodity around which financial systems are built, and the possibility of establishing trust at no cost opens up new doors where organizations can do away with borders, banks and lawyers.
Things became interesting when Tapscott made a glowing reference to Hernando De Soto’s book “The Mystery of Capital,” and how Blockchain completed the Peruvian economist’s line of thinking toward the creation of more effective and fair governments and societies.
Those here in 2003, when the ICT Ministry was established, may remember talk about digitization of assets for farmers to enter the formal economy. That was one of Thaksin Shinawatra’s most positive messages in his early years before he turned to the Dark Side. De Soto’s book was the bible Thaksin and his chief advisor, Pansak Vinyaratn, swore by. Ministries were ordered to make De Soto’s vision a reality. Indeed, much of the early ICT policy was derived from De Soto.
The supreme irony is that his talk comments happened on the same day Thailand’s interim legislature voted unanimously to kill freedom and innovation with the new Computer Crime Act.
That gets back to the question, as another interlocutor tried to raise later, of possible conflict between the technology’s “immutable ledger” and censorship.
How could the unchangeable be changed to comply with a court order?
Not that Bitcoin ever stood a chance in Thailand’s world-class bureaucracy. I asked Tapscott how Thailand could adopt Bitcoin, given the Bank of Thailand essentially criminalized its use.
Does that mean Thailand would deny itself all the benefits of Bitcoin to protect its status quo?
“I’m not going anywhere near that question,” was his public response, though he did encourage everyone to open a Bitcoin wallet and try it out.
Understandable given that Tapscott probably didn’t want to be hauled out by the men in fatigues for pointing out that the Bank of Thailand says it embraces openness while remaining a control freak.
One of my Fintech guru friends claims an estimated USD$526 million in cryptocurrency flowed through Thailand during the past 18 months without the BOT any the wiser.
Then there’s Poor Lars Norling. Despite being introduced as a pioneer in blockchain and the internet, the DTAC CEO spoke more about Thai internet penetration and the importance of network investment before getting to blockchain.
“Blockchain has the potential to transform all kinds of businesses in Thailand and contribute to the country’s growth through disruptive technology, aligning with the government’s Thailand 4.0 development model,” he said.
He said developing a sustainable digital economy requires the wide embrace of new tech such as Blockchain by all sectors.
“The government plays a key role in setting policy and strategy, focusing on promoting and developing business creation and eliminating obstacles in order to maximize benefits to the people and establish a digital infrastructure and spectrum development strategy, leading to sustainable development of Thailand.”
Ending on an optimistic note, Norling did say that Thailand had this chance to become a leader in blockchain technology. If only, Lars, if only.