Binance CEO Changpeng Zhao, more commonly known as “CZ,” stopped to talk backstage on the first day of The Capital conference by CoinMarketCap. He spoke about the problem of fake volumes on crypto exchanges, the importance of openness and transparency in the crypto space and the key to mass adoption in the future. View the full speech here.

Changpeng Zhao: I think that’s definitely one step in the right direction. That’s a tough problem they’re facing. It’s really not an easy problem to solve. 

Basically, there are two trains of thought. On one extreme, you want to not be subjective and not interfere, but just to report whatever data you get and be — in a sense — as objective as possible. But the problem is very rampant, because it’s very easy for exchanges to report fake volumes, and it’s very hard to determine what is fake. 

But once you start to interfere, how you interfere is very tricky as well. Those exchanges who were just reporting fake numbers — that’s easy [to deal with]. Then there are exchanges that have two accounts that trade against each other all the time, and it can get very sophisticated in terms of wash trading; some of the more sophisticated methods are very hard to detect from our side, so this really becomes a judgment call.

Does CMC want to be in a position to make judgment calls, [to decide] which [exchanges] essentially rank highest? I think they are very objective, they resisted getting into that position. 

That’s a really tough decision for CMC to make and I think they’re making steps towards solving that problem. The problem is not solved. The problem is still very rampant. Binance is often ranked 20+ on the rankings, and we should be near the top five, top three, top one, usually.

A lot of people complain about CMC not taking a stronger hand. But there’s a trade-off between intervening over interfering and having all these fake volume issues. It’s a very tricky balance, it’s very hard, there’s no resolution.

CZ: I think that’s definitely a step forward, the fact that they are organizing a conference is also a big step forward. Brandon is a kind of a shy guy, actually. He’s an introvert, so he doesn’t really like to go out there, and he doesn’t have a Twitter account that he puts his face on. He’s a different personality, that’s OK, that’s a personal choice. 

But they [CMC] are definitely more public, more engaged with the community. They are the landing site for crypto, so everybody lands on CoinMarketCap somehow, and they funnel a lot of traffic to other people. I think they are doing much better in terms of openness and communication.

CZ: That’s a different personal choice. I would actually prefer to stay private, but I don’t think we can. I just thought that extra bit of help, that attribute of transparency — people seeing a face attached to a company is going to help Binance grow quicker.

The business model [for Binance] is a little bit different as well. We hold custody of people’s funds, so there needs to be a much higher degree of trust. If you go on CoinMarketCap and click the exchange ranking a little bit wrong, it’s not the end of the world. You may end up on a different exchange for a couple of seconds, then come back. But for people to deposit their life savings to an exchange, having that face really helps establish credibility, especially in our early days. 

But when you do it [be public] in the early days, you can’t stop, you can’t delete all your tweets. It takes some adjusting to be the public face: you go to conferences, everybody recognizes who you are. 

CZ: I think education is really important, and we would love to work with CMC on that. We have Binance Academy, which focuses on education as a free portal. But in general, the key is ease of use. 

Right now, crypto is too hard to use. You have to think about backing up your seed phrase, not letting other people see it encrypted — all of that is just too hard. If you don’t do that well, and you lose your phone or your computer gets damaged, you lose your coin. 

And there are always hackers trying to steal money as well: most people cannot keep a computer safe from viruses.

The ease of use while maintaining security — I think we have to crack that problem to increase adoption. Everything else helps, like China pushing for blockchain helps. 

Today, centralized exchanges probably on average are safer for most people than wholly-owned private keys. Fundamentally, I think the ease of use on the product still needs to increase — I think that’s the key to mass adoption.

You can watch the live stream of the conference here.

This interview has been edited and condensed.

The post [Updated] Binance’s CZ on the Key to Crypto Mass Adoption: Backstage at The Capital appeared first on CoinMarketCap Blog.

135 +