Highlights From CZ’s May 17 AMA on Twitter Spaces
Changpeng Zhao (CZ), Binance’s CEO, spent an hour on Twitter Spaces answering a slew of questions from users on May 17, 2023.
CZ shed light on Binance’s efforts in the areas of compliance, education, and regulatory collaboration to help promote crypto adoption.
Community trust and user focus remain top priorities at Binance.
What follows is a summary of CZ’s answers to some of the questions he received during a Twitter AMA on May 17, 2023. Please note that this transcript has been edited for length and clarity.
Binance and Africa
What plans does Binance have to help make onboarding seamless in Africa and Nigeria, more specifically? How are you looking to increase accessibility in the region?
CZ: The main challenge many people face today is how to get banking access for crypto businesses in those countries. In Nigeria, my understanding is that none of the banks work with crypto businesses, so that’s something that needs to be developed. From our side, we work hard on areas such as compliance, education, and regulatory collaboration.
This is a process that is not necessarily successful in every country. Sometimes, it requires the mindset of countries to change. It may also require traditional financial services to see that they’re missing the boat on the future of finance. In these cases, they are more likely to want to work with us. We’re seeing that in many other countries.
Additionally, in Africa and Nigeria, the banking penetration is quite low. Working with banks is important, but our focus is actually more on providing financial access for the majority of people who don’t have access to the system. They can use crypto easily with devices such as a smartphone, but it does require a huge amount of educational effort.
The other aspect that’s interesting about Africa is that the GDP per capita is lower, and our African users don’t trade very much. They use Binance more as a wallet for payments. While the revenue from Binance Africa users is much lower than in other places, we feel that the value we provide to users is much higher because we can provide financial access. We have a continued focus on Africa, unlike many other crypto players who are not in the region.
What do you think about BRC-20 and NFTs on Bitcoin?
CZ: BRC-20 seems to be causing a lot of congestion for Bitcoin. I’m not an expert on what the protocol is, its quality, or the impact it will have. Nobody knows. We just have to wait and see.
I don’t collect NFTs. I’m not an art collector, but that doesn’t mean they don’t have value. If only one person in the world collects something or buys something, then that thing has that much value. I do think that we are just scratching the surface of NFT technology.
There are so many other use cases we could develop for NFTs, so there’s a lot to do. It’s great to see that NFTs are now part of the Bitcoin blockchain, as it’s the most secure blockchain.
Other than that, we let the market develop. I wouldn’t be able to say whether this is a good or bad thing, but I do think any technological development is positive.
Bitcoin Network Congestion
Is Binance putting anything in place so that network congestion doesn’t happen again?
CZ: Frankly, there’s not much any one entity, company, or team can do.
At times, network congestion can be a positive thing, as we know that innovation is happening. People are coming in droves. It’s like having a super popular restaurant. You see a long line of people and groan about the wait, but it could be a good thing because you know the food is good.
Network congestion is part of decentralized systems. No one controls the Bitcoin network. We run nodes and contribute to it, but we’re just one part of it. Additionally, in the longer term, being able to fund development for both Bitcoin and other crypto projects is an indirect way to help.
There are no magic bullets here, but we do try to do our bit.
The Innovator’s Dilemma
The innovator’s dilemma describes the need to move forward through innovation despite the possibility that it could end problematically for your target group. How do you feel about this?
CZ: This is a tough situation that perhaps every entrepreneur and every business must deal with. We want to continue to innovate and try new things – try to fail fast, and so on.
There’s a balance you want to achieve, but some things may still be very negative. In these cases, we have to reverse the course quickly.
Having that flexibility and balance is crucial. Even as Binance is evolving, we face some of these challenges. It’s just something that we’ve got to deal with.
Can you share your thoughts on community trust, given how important it is in Web3?
CZ: I think there are a few different types of trust.
For one, we are supposed to be operating in a trustless industry. We can rely on technology to streamline certain parts of these processes. “Don’t trust, verify.” We hear this a lot, and I think it’s important. Having more transparency and using blockchain technology, with things like proof of reserves, etc., is important. These are good, but they only go so far.
Then there’s the question of how to gain people’s trust in a new project. That’s got to be earned over time. Trust must be earned through your actions over time. You must be extremely consistent, and you must be clear about what your ethos is. Also, you must be credible in the actions you take.
Look at Binance, for example. One of our core values is user protection. This is reflected in the dozens of decisions we make every day. There are some larger decisions that cost us millions of dollars, but we make them to protect our users. Building trust takes time. I think you must be clear and consistent about it. There’s no shortcut to building trust.
I believe that Binance got here today because we have strong community trust. Many people miss the subtleties of how powerful community trust is and how Web3 can amplify it. If non-crypto businesses can learn to leverage this, they could greatly improve their businesses.
I hope that more of them will explore that in the future.