Despite the dramatic and prolonged demise of Mt Gox, digital currencies are still relatively unknown in the bitcoin exchange’s birthplace, Japan.
This week, one of the country’s pioneering VC firms aims to change that, with a Tokyo event gathering the sector’s brightest minds to discuss how businesses can harness the emerging technology.
Over 400 attendees arrived in the Toranomon Hills skyscraper yesterday for a day of demos, briefings and Q&A sessions led by Digital Garage co-founder and MIT Media Lab director Joichi Ito.
The aim was to provide a formal introduction to bitcoin technology in order to help quash misinformation and guide discussion around its future.
Speaking to CoinDesk, a Digital Garage spokesperson said large-scale events like this had been “almost nonexistent” in Japan until now, however, the tide is turning. He added:
“We hope that this event will catalyse the Japan business and investment community to strive to more fully understand digital currencies – attracting more human, financial and political capital to this area.”
The New Context Conference, founded over a decade ago by Digital Garage, aims to foster a technological and cultural exchange between East and West. Previous speakers, drawn from Ito’s expansive US network, include LinkedIn’s Reid Hoffman and Twitter co-founder Biz Stone.
Besides digital currencies, the two-day affair – which comes to a close today – also shone a light on virtual reality (VR) technology. While the latter has been legitimised in Japan’s public imagination by ventures like Project Morpheus, according to the Digital Garage spokesperson, bitcoin still has a long way to go to escape its association with illicit activities.
The event’s emphasis on “leadership” aims to challenge this, with the spokesperson adding:
“We will be focusing heavily on inviting financial industry players to join and learn about how digital currency businesses are affecting their counterpart businesses in the West so that they may better understand how these changes will ultimately affect them in the years to come.”
Jimmy Homma, director of the Japan Digital Money Association, which helps international firms find their first employees in the country, told CoinDesk he remains optimistic that thought leadership events like this will have a trickle-down effect to the general population.
While many people believe bitcoin was over with Mt Gox, both Ito and the MIT Media Lab are a “strong brand” for the country’s educated elite, he said, adding: “[With] big companies like DoCoMo, GMO and J-Trust joining or investing in bitcoin related startups, the situation is slightly improving.”
Digital Garage’s spokesperson says his firm has made a “number of small investments” in the country, but would not expand on further details. He described Japan’s bitcoin startup community as “very tight-knit”, going on to say:
“Given the very open and collaborative nature of the digital currency ecosystem, companies outside of Silicon Valley benefit from advances that are made by their Silicon Valley-based peers that are blazing the trail (at a much higher cost to investors).”
For this reason, Japan has so far seen a “derisking” approach towards digital currency businesses, Digital Garage said. Meaning business models have been proved to fail or succeed in other geographies before they reach the island.
“Having said all this, we’re still in the first inning of the digital currency ballgame in Japan,” the company spokesperson added.
Digital Garage’s history dovetails with that of the early Internet in Japan. The firm helped establish the country’s first commercial ISP, PSINet, and subsequent layers of Internet infrastructure in the areas of e-commerce and search.
Ito heads up MIT’s Media Lab, which now houses three of bitcoin’s core developers, Gavin Andresen, Cory Fields and Wladimir van der Laan, as part of its digital currency initiative.
The investor has written at length on the similarities and differences between bitcoin and the early days of the Internet. He believes the blockchain has the potential to disrupt the professions of banking, law and accountancy in the same way the Internet impacted media and advertising. It will also lower costs, disintermediate many layers of business and reduce friction, he said. “As we know, one person’s friction is another person’s revenue.”
For Digital Garage, bitcoin’s application as money – just like email for the Internet – is the first in a string of use cases, including privacy, security and authentication.
“Looking at bitcoin solely through the lens of the Internet is also potentially limiting, as the digital currency ecosystem will almost certainly develop in a manner different from that by which the Internet did.”