Alex Sudadze: The Main Problem Today Is The Lack Of Crypto Education
Alex Sudadze, the founder of the Bitcoin Embassy of Georgia and a member of the Blockchain Georgia Association, told Blockspoint about the mining boom in Georgia and explained why it is necessary to educate investors in the field of cryptocurrency.
Please tell us about the Bitcoin Embassy. How did you establish it?
Bitcoin Embassy is a non-governmental organization that supports and promotes donor and non-commercial projects. Our goal is to provide people with educational programs focused on innovations. We cooperate with governmental organizations to integrate blockchain into various services. We have already got a large local community which is always open for new participants engaged in the cryptocurrency or blockchain development.
We also strive to develop the legal sphere as the current governmental regulation is weak. Right now, I work as an advisor of several ICOs, and I hope that in the future we will see an increase in the number of ICOs in Georgia and neighboring countries. We have an investment fund, and our consultants advise the best strategy for the distribution of raised funds, and also suggest how to minimize risks when investing in ICOs.
How did you get into the cryptocurrency world?
I found out about cryptocurrencies long before the world got highly interested in it. For the first time, I heard the word “bitcoin” back in 2011. I literally could not sleep for three days! I read tons of information on different crypto forums and websites to learn more about the technical side. When I got acquainted with the document of Satoshi Nakamoto, I realized that this was exactly what humanity needed. And I started mining. My friends and I decided to sell miners, mostly video cards. Later, we founded the first investment fund. We managed to attract a fabulous sum. And of course, we made a lot of mistakes and had to pay for them. Over the last year and a half, I've been studying ICO, the crypto market and blockchain technology to protect people from such failures.
How can you characterize the cryptocurrency sphere in Georgia?
Several governmental structures in Georgia have already got interest in blockchain. A year and a half ago, one of the first state projects on blockchain appeared in Georgia. It was a decentralized land register system. Georgia has an incredible potential. We have many good advanced projects that have no analogues in the world. For example, we have cash registers on blockchain, which accept cryptocurrencies as payment. Cryptocurrencies are getting popular here, in Georgia. People are interested in this sphere. Our people could overcome a basic barrier of misunderstanding of how this works. We have cheap electricity, so now every tenth Georgian is a miner.
How are you going to solve main problems of the industry?
We are negotiating with restaurants, hotels, stores and other places, and show them all advantages of using cryptocurrency. It is more difficult for us to work with banks, because they have not yet decided how to treat this industry. They try to stay neutral, but their position simply does not work because the sphere grows too fast. In addition, they lose a significant part of the profits, refusing to work with crypto exchanges. The volatility of cryptocurrency will exist as long as it is used by people who are not good at it. It is important to determine why we need cryptocurrency: as a means of payment, as a tool of accumulation or as an element of exchange trades.
Can you give advice to people who want to run an ICO?
The most important thing is the product. You have to prove your product is useful and has a real value. People choose more suitable and understandable services. Therefore, startups need to have a ready product or at least its test version before starting ICO. The team has to understand what it develops and why in order to clearly explain this to other people. It is also important for the team to have employees who have done something significant before. Nobody will trust you if you just come to the market out of the blue and start making promises to everyone. Another point is marketing. You may have a good product and a strong team, but this does not mean that people will know about it. Therefore, you need to properly promote the product. It is also important to carefully choose a country to start your business. It is unlikely that your ICO will be successful in Egypt or North Korea. Though, there are many countries that tend to help startups and invest in the development of blockchain technology.
Do you agree that most ICO projects do not deserve financing?
I agree that 90% of ICO projects are scams. Perhaps, many companies themselves do not know about it. But very few projects are real breakthrough. Most of them will soon disappear. But still, ICO is a good way to start. You can imagine how much paperwork was required to raise $30 million a few decades ago. Now teams can collect this sum in just a few hours. Each ICO has its expiry date. Some projects may become useless if they are not implemented in time. This applies to a technological and a software parts, as the world is changing very rapidly and many developments become outdated at the stage of partial implementation.
Do you support the idea of creating national cryptocurrencies?
In Georgia, it is possible to create a national cryptocurrency, because the population is small. But in the US or another large country, it is not profitable. It will be extremely difficult to control the turnover, which requires additional resources. Basically, stablecoins or other national-backed currencies make no sense, since the main advantage of cryptocurrency is that it has no borders. Moreover, 90% of money now is in a digital form.