In 2013, Huobi co-founder Jun Du registered the domain name Huobi -- which means literally "hot currency" -- as a website for trading cryptocurrency. Bitcoin prices were fast rising to surpass $1,000 that year. The founding members felt they had found something special. There was no going back. Besides, they didn't have enough money to register another website for a different name.
Today, five years later, Huobi is a business group with multiple operations and the world's third-largest cryptocurrency trading platform by trading volume. At its peak, it was the largest cryptocurrency exchange in China before the government ban last year, and it has since moved its headquarters from Beijing to Singapore.
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It still boasts a daily trading volume of between $1 billion and $2 billion a day. It has diversified its portfolio to include over-the-counter trading, institutional trading, mining pools, market researches, and the decentralised exchange HADAX, among others. Basically, it offers all services provided by conventional financial institutions.
Advisors include Randi Zuckerberg, the elder sister of Facebook founder Mark Zuckerberg; bitcoin evangelist and investor Jeffrey Wernick; and Don Tapscott, an early proponent of cryptocurrency known for his book Blockchain Revolution and his TEDGlobal conference.
The blockchain industry has also changed dramatically since the introduction of bitcoin. In 2015, ethereum, considered the "second generation" after bitcoin, was launched, significantly reducing the time it takes to process a block and smart contract to boot. Hundreds of exchanges and tokens listed on them spawned. Prices soared.
It hasn't been all good news, however; numerous countries announced regulations -- China outright banned trading -- and earlier this year, bitcoin prices peaked at $20,000 and fell dramatically, losing nearly two-thirds of value and not recovering since. There are also worries of a blockchain "fatigue" and search for a viable business model besides trading.
In Asia, and especially in China, none of the bad news has dampened the high interest and the debate over what's next continues passionately. Among the most passionately discussed is what will be the next big public chain after bitcoin and ethereum.
Bitcoin, founded by the mysterious Satoshi Nakamoto, started it all in 2009. Ethereum launched in 2015, and added smart contracts. The next blockchain, or blockchain 3.0, must be scalable, fast, interoperable, and more secure, and capital-strapped trading platforms like Huobi and Binance -- the current top exchange -- are gearing up to launch their own public chains.
"We want it to become the world's top public chain in terms of technology sophistication," said Hubery Yuan, director of Huobi Research of Blockchain Application, the top researcher in the group, in an interview with ZDNet.
"And a highly competent public chain coupled with strong operations, ecosystem, and communities can bring out great synergy."
Public blockchain and DAO
A public blockchain has absolutely no access restrictions. Anyone with an internet connection can commence a transaction or become a validator of them, done in consensus with peers on the network.
Public chains like bitcoin and ethereum led the growth of the crypto market and introduced initial coin offerings (ICO), a new way to raise capital for startups that brought dynamism for entrepreneurs, and the danger of scams to regulators. Blockchain services developed by larger corporations like Samsung SDS are mostly private blockchains, meaning users need permission for access, and are being applied to areas like supply chain management.
Huobi, which calls itself a digital asset service provider, in June announced that it was investing 30 million of its Huobi Token -- worth $100 million at the time -- to develop its own public chain called the Huobi Chain Project. Once this 18-month project is complete, the goal is to transfer all of its operations onto the public chain to become a so-called decentralised autonomous organisation (DAO), where traditional hierarchical management will be replaced with codes and communities making decision votes without a central or third-party verifying transaction or membership.
Voting for the leader of the project is under way. The community -- from more than 20 countries including China, the United States, and Australia -- decide who will lead the project.
"Two things will be crucial for a public chain project to succeed: Technology and ecosystem. Technology is the basis so that use will be flawless. Many exchanges can have their own chains. But no one will use it unless there is a healthy ecosystem in place. We offer news, pool, wallet, IM, and communities, and so on. Our blockchain partners will also use their applications on our chain," said the dean.
"We are mainly focused on financial services, but we will not reject our blockchain partners working in other industries using our chain. I feel different public chains will service different vertical industries; look at the internet. You have your Amazons and Googles."
Huobi was certain that public chains applied to different industries is the next big thing in blockchain. Then the organisation revolution will come, though Yuan is unsure what form it will take.
"Of course, it's hard to predict the future. But in China, the saying goes, 'a day in the blockchain world is a year in the human world'," Yuan said. "In Huobi, we can say with confidence that blockchain technology is growing at an incredible rate. Oversight policies will mature, and we expect applications in large-scale industries. We have high expectation and trust in a future with blockchain.
"After the launch of public chains, I feel decentralised organisations will be next, though conceptually, I am less certain of what it will actually look like. It will be brand new kind of organisation led by communities," said Yuan. "For certain industries, DAO will be the more efficient way. DAO may not be the best way for all industries, but in many industries, decentralised will be better.
"For Huobi, in time, maybe in the future, we will not use the Huobi name everywhere and this organisation will be dominated by the communities. Customers will truly be the owners. That is the revolution," he added.
Is Huobi doing a public service like the legendary Roman dictator Cincinnatus giving up his power back to the Roman people and returning as a humble farmer? Not necessarily. Wider participation will bring up the value of the Huobi Token, which will benefit the participating users and communities but also Huobi itself.
Huobi Token's market capitalisation is at $100 million as of August, peaking at near $300 million in early June, according to CoinMarketCap.
"When we are dominated by communities, the value will go up and our fortune will be much higher than now," he said.
But the goal of shared wealth is still intact.
Merging chains with industries
The City of Nanjing recently announced a $1.5 billion industrial public chain fund and there are efforts to merge blockchain with real-asset businesses.
"Personally, I think one of the first places blockchain will be applied is the travel business," said Yuan. "Travel business, fundamentally, is a data asset business where exchange of information from top to bottom happens fast. It's a type of business that will expand quickly in the communities as well.
"Another will be businesses involving celebrities or sports stars; they already have dedicated fan communities that can adopt blockchain quickly."
For example, FansTime is a company focused on adopting blockchain to the celebrity-fan economy. It is working on a public chain where celebrities can promote their own copyrighted material -- fans can purchase this material as well as time with the stars they adore. The vision is to not have celebrities rely on agencies, allowing fans to communicate directly with them.
"A true public chain must have a low-entry barrier," said Ken Huang, a technology advisor to FansTime and the chief technical specialist of World Blockchain Organization (WBO) under the UN.
"That is why we are using Java as our design language for the public chain. In China, all developers learn Java first. It's a mature technology that is easy to use. We also are developing UI and UX so that not just the developers but the celebrities and fans who are not experts in technology can easily take part in the chain."
Then there is also the gaming industry. For analogue and internet, games and gamers have always been at the forefront of revolution; they are also more open to the concept of virtual items such as cryptocurrency.
Financial industries will not necessarily be the first to be innovated by blockchain, but it will be a bigger change.
"Finance demands safety," said Yuan. "So people will be more cautious in changing to blockchain from fiat currency. The current ecosystem of blockchain and the traditional finance ecosystem are very similar. There are exchanges, securities, asset managers, and investors; it's a parallel existence.
"So I think digital finance, led by blockchain, and traditional finance will need to converge and the ledger will play a key role in connecting oversight, law, and data."
Huobi's research head believes that the basic infrastructure for public chains will steadily but surely mature within one to two years, and by 2020 there will be many commercially applied blockchain projects.
Global expansion and policy
This is not to say that there aren't obstacles. Public chain needs wide support from communities globally, and each country has a different blockchain policy set in place. Huobi operates multiple cryptocurrency exchanges in various countries, from its flagships Huobi Pro and HADAX in Hong Kong.
Last month, it launched exchanges for the US, and in May this year, the company launched Huobi Korea, which was well received locally, as the company offers access to the bigger Asian market for local traders. The goals of these expansions are about building local communities, as the exchanges themselves, to lure more participants to its chain.
"South Korea has many potential in technology and infrastructure, and along with US and Japan, the biggest influencer in the global cryptocurrency market," said Zhao Guofeng, CEO of Huobi Korea.
Huobi Korea has invested in a joint fund created by local capital firm Kiwoon Investment and Chinese counterpart NewMargin Capital that aims to help South Korean startups expand to China.
Huobi has been one of the most vocal among exchanges to highlight that it complies with local regulations. South Korea bans ICOs but allows cryptocurrency trading, but is yet to publish a clear guideline on whether they are assets or commodities.
"Each country has different approaches to regulation. Each of Huobi's subsidiaries in South Korea and other major countries have compliance departments that work closely to follow that country's rules," said Zhao.
"We have millions of users in 130 countries, and we won't unless we follow regulations closely. That being said, South Korea's government doesn't have a clear direction or regulatory framework for us to follow. It is difficult, but we are complying in the best way possible."
This is a different strategy track from rival Binance. In March, Huobi's US office, HBUS, registered itself as a money services business. The licence allows the company to undertake cryptocurrency trading there. Binance, shunning following the rules, has moved its headquarters to Malta.
Six months on, as more and more countries move to adopt a similar licence rule, it seems Huobi has strategically positioned itself better to continue business.
"We may need policy tailor-made for blockchain," said Yuan. "Nowadays, policies are aimed at the whole financial industry. Some things in blockchain you cannot explain with the current policy framework."
"We hope for more coordination among governments. In finance, Visa and Mastercard works cross-country. We hope this can be realised in the future for blockchain."