Sentence | Dan Asahi
Editor | Cheng Manqi
For most of the last year, Changpeng Zhao will stay in a small room less than 10 square meters in Singapore and communicate with the outside world online.
In the narrow space of this small country, the 44-year-old Chinese Canadian remotely controls a company valued at 100 billion US dollars . In the online virtual world, Changpeng Zhao is better known as CZ, the founder and CEO of Binance, the world’s largest cryptocurrency exchange.
Before the epidemic, Changpeng Zhao was remotely controlling Binance while migrating around. From Japan, Malta, Uganda to Singapore, he traveled in countries and regions with relatively loose cryptocurrency policies. He met with local practitioners and government officials, such as the President of Uganda and the Prime Minister of Malta.
After the epidemic, he stopped in Singapore and used online meetings to connect nearly 3,000 Binance members in more than 60 countries and regions around the world. He added a “large equipment” to this new state-a green screen. When there is a formal online event, he will stand in front of the green screen, erase the real environment of the room, and replace it with a virtual background with a bright yellow Binance logo.
Changpeng Zhao, who founded Binance in one hand and has tremendous energy in the cryptocurrency world, does not have the typical personality of entrepreneurs in this field. He is not a firm believer or a fanatical preacher.
His characteristic is “lack of characteristics.” Zhao Changpeng kept an inch, and was neither tall nor short, nor fat nor thin. The same is true for his thinking and way of doing things. In the blockchain industry, he is the one who walks in the middle.
He was initially attracted by the freedom of cryptocurrency. Since he sold his house in Shanghai and bought Bitcoin in 2014, he has gradually transferred most of his personal assets to cryptocurrency. According to him, the ratio of cryptocurrency assets to his personal wealth is now 99%. He never bought a house or other fixed assets again because of “poor liquidity.”
On the other hand, Changpeng Zhao, who values freedom and liquidity, also actively views the government’s supervision of cryptocurrencies. He claims that he is by no means an extreme anarchist. He cannot imagine how society would function without the government and police, and how the crowd would protect themselves.
Binance, founded by Changpeng Zhao, is also an intermediate product.
Binance is not a typical company. It has no headquarters and no office. Nearly 3,000 members all over the world work from home. A Binance employee said that his onboarding procedures are all done by flying to the city where HR is located and done at HR’s home.
But Binance is not a typical decentralized community organization. It still has CEO Zhao Changpeng, senior management positions and reporting relationships. It uses both OKR and KPI task evaluation systems. When determining the OKR, Changpeng Zhao will first set his own OKR, and others will dismantle Zhao Changpeng’s OKR-the same as most Internet companies that use OKR.
Behind the middle line and the compatibility of contradictory things, there is Zhao Changpeng’s pragmatism. Centralization or decentralization, firmness or swaying-he doesn’t pay much attention to these evaluation dimensions with blockchain characteristics. His criteria for judging many things are: whether it is reasonable, beneficial, and necessary.
For example, on social media, Changpeng Zhao is very active, although it is contrary to his nature of “not to show up” because it can help him communicate with users. He has 2.6 million followers on Twitter, 700,000 more than Ethereum founder Vitalik Buterin.
In order to promote Binance’s key layout on Decentralized Finance (Decentralized Finance, hereinafter referred to as DeFi), BSC (Binance Smart Chain, hereinafter referred to as BSC), Changpeng Zhao sometimes even deliberately went to Ethereum— -The outside world believes that BSC is benchmarking Ethereum. “BSC is smaller than Ethereum, which is good for BSC.”
Acting with reasonable, pragmatic and useful standards, Changpeng Zhao is not so obsessed with blockchain and cryptocurrency itself. He entered the industry in 2014 by selling a house and buying currency, and he looks determined. However, during the market downturn from 2015 to 2017, he once left the cryptocurrency field and entered the cultural goods trading industry, which was very popular at the time, as a company that provided trading systems for postal currency cards (collectibles such as stamps, coins, and telephone cards). the company.
From the results, the incomplete determination of cryptocurrency does not affect the success of Zhao Changpeng and Binance in this field. Changpeng Zhao believes that the core competitiveness of cryptocurrency exchanges is the same as that of similar products in the past, and it is to serve users well. Pragmatic, compatible, and diverse styles can help them serve as many global users as possible.
In the context of the new round of bull market and shocks in cryptocurrency, we talked with Changpeng Zhao about the market and value of Bitcoin, Binance’s business transformation and organizational management, his observation of industry supervision, and his own state in a complex environment.
In 1989, 12-year-old Zhao Changpeng left Jiangsu, China, where he was born, and immigrated to Vancouver, Canada with his family. Many things laid the groundwork at the time. In middle school, Changpeng Zhao was the captain of the school volleyball team for 4 years. He said that he was more like a binder on the court-he was not the tallest, and his attacking power was not the strongest. He was “not the one who killed the ball.” He was responsible for coordinating the whole court. .
“Bitcoin is a new technology platform, not an asset”
“Late”: Since mid-April, Bitcoin has fallen from a high of close to $65,000, and it was once as low as $30,000. What do you think of this huge volatility?
Zhao Changpeng: If the market has a big increase, there will be a big decrease, which is normal. Neither I nor the people around me particularly care.
“Late”: After the price of Bitcoin exceeded $50,000 in February this year, you once said on Twitter: “Bitcoin’s $50,000 is the new $10,000. If you don’t buy it now, you will regret it.” Why is so optimistic. Bitcoin?
Changpeng Zhao: I have never predicted the price of Bitcoin on Twitter. But the industry is still very early, and only 1%~2% of people in the world have digital currencies. From this perspective, there should be 50 times to 100 times more room for development.
“Late”: A common view is that the US dollar over-issue is an important thrust of the bull market launched in the second half of last year. Bitcoin’s rise is not because of how good it is, but because the outside world is too bad. What do you think of the reasons for this bull market?
Zhao Changpeng: The cryptocurrency US money printing does make a big contribution to . 42% of the U.S. dollar was printed last year, and holding the U.S. dollar is greatly depreciated, so many institutions in the United States have begun to buy Bitcoin.
There are also some factors within the industry. Last year’s DeFi (decentralized finance) and this year’s NFT (non-homogeneous tokens)  are relatively hot, and there are many innovations. In addition, Bitcoin mining was halved last year, and new Bitcoins came out much slower. No one can say exactly which impact is greater.
“Late”: Before the bull market in 2017, Bitcoin accounted for more than 80% of the total market value of cryptocurrencies. After 2018, this value began to fluctuate between 30% and 70%, and is currently slightly more than 40%. How do you think the proportion of Bitcoin will change next?
Zhao Changpeng: In the long run, the proportion of Bitcoin will decrease. Bitcoin is the first digital currency. It has a network effect, just like the global reserve currency in digital currencies. But the innovation speed of Bitcoin is not as good as that of new projects. Sooner or later, something else will eat into Bitcoin’s share, but I haven’t seen what it is.
“Late”: Does it include Ethereum and Binance’s own BNB (Binance Coin, the name of the token issued by Binance)?
Zhao Changpeng: Including them. Ethereum used to have opportunities, because Bitcoin can do everything it can do, and there are many innovations, and the community is very active. But Ethereum quickly ran into a performance bottleneck. It is quite difficult for current cryptocurrencies to surpass Bitcoin in market value. Bitcoin is the most decentralized because its founder is not there.
“Late”: The value of Bitcoin depends largely on how people define it. What do you think is the essence of Bitcoin? A currency, an asset, or something else?
Changpeng Zhao: I think Bitcoin is a new technology rather than something. When the Internet first came out, people would think that the Internet was another communication channel. We had telephones, radios, TVs, and now there is the Internet. But the Internet is actually a new technology platform. There will be Internet radio, video and social media on the Internet. Social media is not traditional, and television and radio are traditional. So the Internet is not parallel to them at the specific application level, the Internet is the underlying architecture.
Blockchain and Bitcoin are also the underlying architecture. There will be digital currency currencies, assets, securities, bonds, and various other things in digital currency. This is a new platform rather than an asset. Many people don’t understand how big this is. After a new platform appears, there will be a new version of everything traditional, plus more traditional things.
“Late”: But “various” things seem to have not yet appeared, and there is no killer application in the blockchain field. Why is this?
Changpeng Zhao: First, the entire digital currency industry is still very niche, so there is no popular killer application.
There are actually very good applications in the second cryptocurrency market, such as the “Initial Coin Offering” in 2017 (that is, the public issuance of tradable tokens, similar to the issuance of stocks). I call it “Initial Coin Offering” Blockchain global financing”, this is a killer application. In the past, entrepreneurs did not have the tools to raise funds globally. If you are a small retail investor in China, you can’t invest in early American projects, such as Uber and Tesla. But the “first public development coin” is ok, it is still in use, and of course there are many scammers. The recent NFT is another new model that allows artists or content creators to better realize their works. These applications are not supported by traditional finance.
“Do something, do a good job, that’s it”
“Late”: How did you move from the traditional financial industry to cryptocurrency?
Changpeng Zhao: I read the Bitcoin white paper about mid-2013. After understanding this technology, I think it may work (operation), but decentralization requires a community. I need to see if this community exists and what kind of people are people. So at the end of 2013, I went to a summit in Las Vegas, USA. Now the big names in the industry, including Vitalik, were all at the summit.
After I went there, I found that this group of children were very sincere and very hardworking. At that time, a person transferred some coins to me in order to teach me how to use a wallet. After learning, I said I would transfer the coins back to you. He said no, you can keep it. You can use this coin to teach the next person. . I took a look and it was about three hundred US dollars, several thousand yuan, not a lot, but not a lot. They really didn’t come out to swindle money, they weren’t the bosses of drug trafficking mentioned in the newspapers, they were just a bunch of technical kids.
When the meeting was over and I was about to leave at the airport, I said that I would sell my house to buy bitcoins, and I would resign, and 100% join the industry, no matter what I do, I can write code.
“Late”: I am interested in a new opportunity, do I need to sell the house?
Zhao Changpeng: I just had this little money at that time, so I don’t want to be scattered anymore, young, and put it all in one place. I never tell others that you are all in, but I can take the risk myself. The worst-case scenario is to do it for two years, the bitcoins will be zeroed, and I can go back to the bank to work.
“Late”: Did the Bitcoin I bought in 2014 hold it later? Cryptocurrencies entered a bear market shortly after that.
Zhao Changpeng: Fortunately, I have been holding it. I remember that less than a year after I sold the house, the house price in Shanghai doubled, and Bitcoin fell to one-third, which is six times worse. At that time, there was pressure inside, was everyone wrong, or was I alone? There is a high probability that I was wrong alone. But I can’t understand why it was wrong, because I think this is the future. Looking back, when the Internet bubble burst in 2001, Amazon, eBay, and Google also fell 98%. Everyone has gone through that stage.
“Late”: Did you have this idea of comparing the blockchain to the Internet, or did you summarize it afterwards?
Zhao Changpeng: To be honest, I thought of it later, and people can’t see it clearly in the authorities. I was just thinking, how long will this thing last, five or ten years? But fortunately, it took more than two years.
“Late”: How do you allocate personal assets now? Have you bought another house and other fixed assets?
Zhao Changpeng: cryptocurrencies Basically 99% of me are , which should be all on BNB, and only a small part is Bitcoin. I have not bought a house now, and the liquidity of the house is too poor.
“Late”: When you entered the industry in 2014, your attitude was very determined, but between 2015 and 2017 before the founding of Binance, you left the cryptocurrency industry and made money cards (collectibles such as stamps, coins and phone cards). ) Bijie Technology, which provides trading systems, why did it do this halfway through?
Changpeng Zhao: Bijie originally wanted to do a digital currency exchange in Japan, but found it difficult to do it only by knowing technology but not Japanese. The post-money cards in China were very popular in the back, and someone came to ask if they could provide them. We said that you would pay and we would sell them. Until May 2017, we had never thought of being an exchange.
“Late”: What happened in May 2017 and why did you come back again?
Zhao Changpeng: The specialty most direct thing is that I feel that a wave of market is coming, the industry needs this, and the trading platform is my .
Looking at it in the longer term, I think civilization has made great progress at any time in human history when we can increase the degree of freedom of something without reducing its safety and ease of use. I think in the next few decades, the degree of freedom of money will become higher, while security and ease of use can be maintained or even higher. This is what Binance wants to do. We want to provide some infrastructure services for this industry.
“Late”: An important reason why blockchain technology can make money flow more freely and more securely is its decentralized nature. From 2014 to the founding of Binance, you have been a centralized company in the wallet, exchange and other industries. Why not directly do decentralized projects based on the blockchain network?
Zhao Changpeng: I think people are looking for a combination of three things, one is what they know, the other is what they like, and the third is whether this thing is valuable to others. Not everyone knows chips in particular, knows how to mine, and is familiar with mathematical algorithm blockchain. My experience has always been on the trading system side, and the most reasonable thing for me is to continue to be a trading platform.
“Late”: The trading platform can also be made into a decentralized form. You said recently that in the next five to ten years, decentralized exchanges will defeat centralized exchanges. Looks like your thinking has changed again?
Changpeng Zhao: Decentralized exchanges have indeed developed rapidly, but until now, their trading volume and safety factor are still different from those of centralized exchanges, which impose barriers for most novice users.
Of course, you can feel the direction of the waves in the water. DeFi did put pressure on the main Binance website. I am more optimistic about the direction of decentralization than I was earlier, and I think this is the future.
“Late”: Many people in the blockchain industry have consistent values and direction choices. For example, some people are obsessed with decentralization, some are obsessed with using Bitcoin for payment, and some are concerned with improving efficiency; you seem to be more pragmatic , The choice changes with the situation. This will be considered by some people as not firm enough, how do you see this characteristic of yourself?
Zhao Changpeng: An industry should allow people with different ideas and different qualities to coexist. I think no matter what the choice is, just do something for the industry and do a good job.
“If it continues to rise in 2018, there may not necessarily be today’s Binance”
“Late”: Binance has been the world’s largest cryptocurrency transaction by volume since its establishment 6 months ago. What do you think is the core competitiveness of Binance?
Zhao Changpeng: It’s because we have always insisted on focusing on users. This is reflected in some long-term and short-term interest games, such as the choice of listing and product function design.
We also put 10% of all transaction fee income into SAFU (Secure Asset Fund for Users, Investor Protection Fund) to protect the interests of users and deal with extreme situations.
“Late”: Now that the market fluctuates sharply, exchanges such as Binance, Coinbase, and Huobi will still experience stalls, downtime, and “suspended withdrawals due to a surge in traffic”. Some people believe that the exchange is manipulating behind the apparent failure.
Changpeng Zhao: Judging from Binance the current transaction volume of , there is a lot of fee income, and there is no need to manipulate anything to make short-term money. Smart people will protect long-term trust.
“Late”: You don’t lack people and money. Why haven’t you solved the problems of downtime and stuttering?
Zhao Changpeng: It’s not that simple. Ordinary retail investors who don’t know much about the system often say, won’t you just buy more servers? We spent money on the problems that can be solved by spending money.
Traditional exchanges, such as the Shanghai Stock Exchange and the New York Stock Exchange, are retail investors who hand over their orders to brokers, and the brokers then combine the orders to the exchanges. The exchanges only serve a few hundred brokers. We are millions of users all over the world who go directly to the exchange. I think we are the largest financial matching market in the history of mankind, and the structural pressure is completely different. This cannot be solved by adding servers in parallel. What we have to do is to make the Boeing 838 ten times larger, but it is still a single plane that can fly, which is more difficult.
The growth at this stage has completely exceeded our expectations in 2018. We are still doing a variety of optimizations, but if we continue to rise, we may encounter some bumps.
“Late”: What specific aspects exceeded expectations?
Zhao Changpeng: Mainly the number of users, which far exceeded expectations. In 2017, the peak value of Bitcoin was 20,000 U.S. dollars. Some time ago, it reached more than 50,000 U.S. dollars, an increase of 2.5 times, but the number of active users has increased by 20 times. At that time, it had been expanded five times or ten times, but it still couldn’t hold it.
“Late”: You mentioned earlier that institutional admissions are a characteristic of this bull market. What is the growth of your institutional users? Can you observe the entrance of Chinese institutional forces?
Zhao Changpeng: The overall institutional data has grown exponentially, especially in the past six months. In the entire market, Chinese institutions account for a small proportion. American institutions account for about 80% to 90% of the market. In China, in turn, retail accounts account for 80% to 90%. People with hundreds of millions of people in China operate an account by themselves.
“Late”: How do you attract institutional users?
Changpeng Zhao: Institutional transactions have completely different requirements for API and transaction speed from retail investors. For example, organizations are all team operations. There are bosses, group leaders, and small teams. Each person has different permissions. We call the sub-account function. Few transactions in 2017 had these features, nor did we have them, and now we have them all.
“Late”: When did you start making these preparations?
Zhao Changpeng: The sub-account was around the end of 2018, which was a bear market. In fact, I was mainly practicing internal skills at that time. Our core matching was relatively fast at that time, but the peripheral system was not enough. The growth in 2017 was too fast to keep up. At that time, I was worried that if there was a very bull market in 2018, Binance would be very stuck, and we might lose our leading position instead.
So in 2018, my internal communication is to improve performance and expand the system. The bull market will come, so don’t worry. I personally experienced a bear market before, and my psychological quality at that time was already very good.
“Late”: So the bear market that started in early 2018 is actually a favorable external environment for Binance?
Changpeng Zhao: Binance Yes, if it continues to rise at that time, we will not be able to hold it, and there may not necessarily be today.
“Late”: What is your forecast for future growth? What preparations will be made in advance?
Zhao Changpeng: We can’t predict the future at all. However, we judge that the number of users will increase with a high probability, and we must at least be prepared for scalability first. It may not happen, then we waste some money, the problem is not big; but when it happens, we cannot waste the opportunity.
“Late”: Now many new users are flooding into the cryptocurrency market. Their risk awareness and trading skills may not be good, but exchanges such as Binance and Huobi can easily increase leverage, and leverage can easily lose money. How do you deal with this problem?
Changpeng Zhao: Binance should be the only one with a “responsible trading program” in all digital currency exchanges. We call it a responsible trading program. First, if a retail investor comes to play our futures or options, we will ask him two questions: First, how likely do you think you will lose money? If he writes less than 50% and we don’t let him play, your mentality is wrong; second, if he loses money, whose responsibility does he feel? If he feels that it is the responsibility of other people and Binance, then don’t play, you go play spot.
Second, if it is a new retail account, when he loses money to a certain extent, our system will tell him not to trade anymore and prevent him from trading for 48 hours. I believe we are the only trading platform that prevents users from trading.
“Late”: How many people have you stopped? What is the cost of stopping?
Zhao Changpeng: I don’t have any data. There should be many people, but this will not cause much loss to our income. Because of this kind of user, he will only hurt himself, and will not help us in particular. After the injury, he will still stop, just stop early and stop late. We let him stop one day early, he loses a little bit less money, it doesn’t matter if we earn dozens of yuan less handling fee, we retain long-term users. He learned how to make money, and our income will be more.
“Late”: Exchange users are particularly concerned about the safety of the assets under your custody. When Xu Mingxing, who is in charge of OKEx exchange wallet keys, was investigated, it caused users to panic and flee on a large scale. How do you manage the wallet key?
Changpeng Zhao: Binance now uses a multi-signature mechanism entirely, and it didn’t rely on a single person for a long time. Our largest wallet requires 7 out of 15 signatures. Who these people are, they don’t know each other, besides, very few people know who all of them are. And all the people who are publicly known to Binance and I are not on the signature list. Binance has nothing to do with me at all, I can’t steal it even if I want to steal it.
“Late”: But this mechanism still needs someone to coordinate in the middle, right? Will this bring some risks?
Zhao Changpeng: All tools are used. Tasks that need to be processed will pop up in the software of the wallet holder. The person in charge of operations does not know who is in charge of the wallet.
“Late”: How to ensure that the people in the multi-signature list are not connected to each other?
Changpeng Zhao: Binance is The treatment they get from relatively high. Let’s get rid of his willingness to steal first. And he can’t steal it by himself, he has to collude with about 8 or 9 people. When he went to find out who other people were, it was very easy to reveal. It’s okay if someone has an accident. Software can remove people and add new people in.
We will choose someone who has a certain degree of familiarity, is stable and reliable, has a family with children, and feels less stable when being single. The location is globally distributed, as long as there is Internet, but not all in one country or region to prevent earthquakes, floods, and disconnection. Now there is probably only one country in the world without the Internet.
“You said I copied the Mercedes-Benz, but my speed is 10 times faster than him”
“Late”: In addition to the current centralized exchanges, your new direction is decentralized finance. What is the overall progress of this area?
Changpeng Zhao: Ethereum The daily transaction volume of BSC is now about four or five times higher than that of . There are hundreds of ecological projects, but BSC has only been launched for more than 9 months, and it rises faster than we thought. In addition to BSC, we are still doing DEX (Decentralized Exchange), and we have also invested in many Ethereum and Polkadot ecological projects.
“Late”: In fact, decentralized finance can also be done on Ethereum. For example, Uniswap, the decentralized exchange with the largest transaction volume, is the Ethereum ecological project. Why don’t you use ready-made things, but launched BSC last September ?
Zhao Changpeng: Let me explain, BSC is not made by us. When we did BNB ourselves, we gradually had a lot of cooperation with the community. So when I arrived at BSC, a bunch of people in the community came up and said that they want to make a smart contract chain, close to Ethereum, and hope that we will give a sum of money. They are willing to use BNB as the main currency of this chain, and any transactions on this chain will use BNB. This is good for Binance because we are the largest holder of BNB.
So my participation in BSC is very low. This is a community project, but the developers are not willing to show up. In fact, I didn’t do anything. I don’t have the ability.
“Late”: Does Binance’s centralized holding of BNB conflict with the direction of the decentralized community declared by BSC?
Zhao Changpeng: There are two parts to this. Is BNB very concentrated? Yes it is. But this is the fee we earn through our services. When we first issued BNB, we left 40% for the team, but because Binance quickly reached the profitability point, we never spent or sold this part of the currency, and promised to destroy all of this part afterwards. This is different from other currency issuance mechanisms. You can consider whether we are too centralized.
Second, after BSC is completely decentralized, the value will be greater, the market value of the entire BNB will be higher, and the network effect of attracting users will be greater. So from the point of interest-driven, we want to decentralize, and we are also doing it.
In addition, if there is a centralized organization holding a lot of coins, this is not a bad thing. We will not harm the community or smash the market. This requires a huge cost and will not do us any good.
“Late”: Some people think that Ethereum is a more ideal state of blockchain projects. It is relatively decentralized, and its founder Vitalik does not hold too much Ethereum. Is this the direction BSC wants to develop?
Zhao Changpeng: Our understanding is not like this. Many people may think that in this coin, everyone is a little bit more fair. But if only small fish come in and no whales come in, there may be only one reason, and big institutions are not optimistic about it.
Around 2017, Vitalik sold a portion of Ethereum for US$30 million. This may mean that he was particularly fair, or it may mean that he valued US dollars at that time.
Why are we not willing to take U.S. dollars, but BNB? This means that we have confidence.
“Late”: The outside world believes that BSC is a benchmark against Ethereum. What do you think of the competition between the two?
Changpeng Zhao: Ethereum I don’t think BSC competes with . Now the people who use Ethereum and BSC are different.
Some people prefer Ethereum because Vitalik takes less coins, is more decentralized, and so on. But their handling fees are more expensive, to be honest, they are very expensive. It costs 10 US dollars to transfer an account, and it costs hundreds of US dollars to use a more complicated contract. Unless you do a million-level transaction at a time, you can’t pay the handling fee.
In Southeast Asia, India, and Africa, there are many users at the bottom of the pyramid. There are a lot of them. We provide them with a cheaper network that allows more people to use and access the blockchain.
After the rise of BSC, Ethereum’s transaction volume has not decreased, but it is no longer growing. This is because it has encountered a technical bottleneck. The maximum network capacity is 15 to 20 transactions per second. We slowly increase because we have not yet reached the upper limit. So there is no competition, but we can now serve users they cannot serve.
“Late”: Can the Ethereum community not let the technology evolve?
Zhao Changpeng: Certainly, but it will take time. Their positioning is different from that of BSC. It needs to be able to fully synchronize on millions of ledgers and process millions of orders per second. This technical threshold is quite high and it will be difficult to solve within a few years.
Recently, I see Vitalik tweeting less, he should be in retreat. I really hope that he can solve this problem, so that the entire industry will become bigger again.
“Late”: BSC is faster and cheaper than Ethereum because there are much fewer nodes that need to synchronize the ledger, right?
Changpeng Zhao: This is one aspect, we have 21 nodes. In addition, our nodes are relatively large, the machine performance is relatively high, and some changes have been made in the architecture.
Many people say that BSC did not innovate, but just copied Ethereum. In fact, the performance improvement by tens or hundreds of times is an innovation. You said I copied the Mercedes-Benz, but my speed is ten times faster than it. Is that an innovation?
“Decentralization is grayscale, not black and white”
“Late”: Recently, governments of various countries have expressed different opinions on cryptocurrencies-some governments are very open to cryptocurrencies; some governments are more strict; some governments are incorporating cryptocurrencies into the existing regulatory system. The Office of the Comptroller of the Currency (OCC), the Federal Reserve and the Federal Deposit Insurance Corporation are considering the establishment of an “interagency team” for cryptocurrency regulation. How do you think the attitudes of countries will affect the global blockchain industry pattern?
Changpeng Zhao: Binance Sorry, I will not comment publicly on specific regulators and their policies, but must be actively communicating with global regulators. At present, the terms of each country are different. This is a good thing. You can see which terms are more conducive to development, and there can be multiple references.
“Late”: Judging from your contacts, what are the common concerns of all countries? What are the common thoughts and perceptions of the government?
Zhao Changpeng: When we communicated two or three years ago, everyone asked if this thing was used by terrorists. It would be embarrassing to say so now, as if there is no common sense. Now they are more concerned about how to prevent money laundering and crime. In fact, the data on the blockchain is transparent, but it is better to analyze and track. Supervision in some places is pushing this thing instead. They suddenly understand that blockchain and cryptocurrency are not making you more out of control, but making you more controllable.
“Late”: How will the government’s compliance demands affect cryptocurrency? Freedom is considered a major new value of cryptocurrency.
Zhao Changpeng: Degree of freedom and compliance have a certain relationship, but they do not conflict.
I think compliance is still very important. There is a group of people in the blockchain and digital currency industries who are extremely liberal. They hope that they don’t want the government or the police, and just a group of people live on their own. I don’t think human beings can be civilized to that level. In a society where there is no government or police, how can everyone protect themselves and hire private security?
We still need some rules. To put it bluntly, we still need some supervision.
But if you wait for someone to set all the rules before you start working in this industry, it may not be right, because the rules are worked out for a period of time. Supervision requires cases. In an industry that does not yet exist, it is impossible to tell you that you can do this, but you can’t do this. Let this industry develop.
“Late”: What type of government is more active on cryptocurrency, is it related to the size of the country or the type of economy?
Zhao Changpeng: I personally feel that in the past few years it was a small country because large countries were more complicated. In a big country like China and the United States, if the rules are not detailed enough, many people will take advantage of the loopholes. However, in the early days of the industry, it is difficult for you to be particularly detailed. But in Bermuda, for example, the entire country has 70,000 people, which is about the same as a community in Shanghai. He doesn’t need regulations. He can see one case by case. Moreover, small countries don’t need to protect their currencies. They don’t care about shocks. Instead, they think this thing can help them lead in new areas, such as financial technology.
Now it’s a bit the other way around, and several big countries are competing. If China wants the renminbi to become the global base currency, it may be very helpful if you send a central bank digital currency and this thing is accepted.
“Late”: Do you think the digital currencies issued by central banks are real blockchain applications?
Zhao Changpeng: This is very subtle. At present, the first version of digital currency issued by most central banks is relatively centralized. It has an issuer, which can issue additional, control the entire network, or reject some transactions. It does use blockchain technology, but most of its nodes are not public. You say it is a blockchain, so you say it is not, and it is not. But I think there is no need to be so entangled in definitions. Decentralization itself is also grayscale, not black and white. For example, you are particularly decentralized, but the handling fee is particularly expensive, which is not so easy to use. There are very detailed trade-offs.
Finally, it depends on whether it is sufficiently safe, easy to use and free. If these numbers are high, they will be used by many people; if they are low, unless they are forced to use, it is too difficult to force them.
“Late”: What impact will the central bank’s digital currency have on digital currencies that are not endorsed by the government, such as Bitcoin?
Zhao Changpeng: At present, these are two systems, which have little influence on each other. However, if there is an opportunity for mutual compatibility in the future, it should give rise to magical reactions.
“I’m not the one who killed the ball”
“Late”: Binance does not have a headquarters, and all employees work from home. How do you ensure that it operates?
Zhao Changpeng: We now have fewer than 3,000 people, distributed in more than 60 countries and regions around the world. Daily remote collaboration with various office software, such as Google Docs, Google Meet, etc.
“Late”: Will anyone ask to use digital currency to pay wages?
Zhao Changpeng: More recently. Because BNB has risen relatively high this year.
“Late”: How do you pay taxes?
Zhao Changpeng: Binance Everyone pays the personal income tax that he should pay, and then all companies ( has different registered entities in many countries) need to pay the tax at the place where the company is registered. If you are a community, you don’t have to pay taxes. The Ethereum community does not have the concept of paying taxes, but the company does.
“Late”: When describing Binance, you used the word “company”, so you are still a company?
Zhao Changpeng: We basically never use the word company internally, but I use this word when I talk to you because it is easier to understand. We use “organization” internally. We generally don’t use the term “employees” too much, called team members.
Many of the company’s traditional Binances do not. We don’t need a headquarters or an office, and we don’t need to register in a certain place. But we can let a group of people do things together. There is trust and reward mechanism between us.
“Late”: As far as we know, Binance is using OKR and KPI at the same time, which is the most commonly used management method for centralized companies.
Zhao Changpeng: Having goals does not mean centralization.
“Late”: How has your role changed since the development of Binance?
Zhao Changpeng: Nowadays, I don’t know how to do many things by myself, and my own efficiency is very low. For example, in the past, marketing activities sometimes asked me for approval, but now I basically don’t need to intervene in marketing expenses below US$3 million.
My biggest value in Binance now is to gather the team, attract the strong, and bring in the external elite. So recently I just call all day and spend a lot of time chatting.
“Late”: You also spend a lot of time on social media. You post on Twitter quite often.
Changpeng Zhao: Twitter is a tool for me to interact with the community. Talking on Twitter will help us do some promotion, and it will also help me understand the complaints or sentiments of the community.
In fact, I don’t like to show up, but in order to promote BNB and BSC, I sometimes confuse the people of Ethereum and deliberately mix it up. This kind of trick is also used. It is not necessarily a bad thing for them to come back from cursing. The two of them looked at people in a circle of cursing. When BSC was smaller than Ethereum, it was good for us.
“Late”: Your judgment on what to do and how to do it seems to be based on rationality and interest considerations, and you will do it if you feel it is beneficial.
Zhao Changpeng: I have several responsibilities: I lead a team to do the job well and make the whole thing bigger. This is not necessarily a responsibility. This is my mission. I live now to do things.
Although I don’t like every job in the subdivision, I especially like the overall sense of mission. Based on this consideration, I can abstract myself to a certain level. I can do whatever I should. I feel very calm, and there is no time when I am particularly excited or when I am particularly sad.
“Late”: How did this calm state come into being?
Zhao Changpeng: This has been the case since I was relatively young. My personality has always been very stable and I don’t know how to form it. I have never yelled at anyone, including one time when Binance was stolen and lost coins.
“Late”: Before founding Binance, you changed many places. You stayed in Jiangsu until you were 12 years old. Later, you went to Vancouver with your family, worked in Tokyo and New York, and started a business in Shanghai. What impact?
Changpeng Zhao: helps Binance I really like the mixing of many different cultures. This to be more global.
I was attracted to Bitcoin in the first place, which is also related to this. When I went to New York from Tokyo after work, I found it was troublesome to transfer money and the handling fee was very expensive. Bitcoin does not have this problem. I can easily understand that the degree of freedom has increased and the cost has been reduced.
“Late”: In the places you have stayed, where has the most influence on your character and thoughts?
Zhao Changpeng: My most important adolescence is in Canada. Canada is a country of immigrants, with people of various nationalities and nationalities. In fact, the group of children who went out from the mainland usually played with mainland children. I was an exception. I had been playing volleyball for 5 years in middle school, and I was the captain of the school team for 4 years. There are all kinds of people on the school team. I have good white friends, Korean friends, Indian friends and black friends. Some of my Chinese friends complain about racial discrimination, but I never feel it.
“Late”: What was your style on the court before? Victorious and sharp, or take everyone to fight together?
Zhao Changpeng: In fact, the volleyball team leader is a concept of glue. He is generally a setter, responsible for organizing and coordinating the entire field, not necessarily the person with the strongest attacking power. There are several people in our team who are taller than me, stronger than me, jump taller than me, and kill the ball harder. I am not the one who kills the ball.
– END –
 Binance’s daily spot trading volume is now close to 30 billion U.S. dollars, which is more than 5 times that of Coinbase, which was listed a month and a half ago. The current market value of Coinbase is close to 50 billion U.S. dollars. Based on this calculation, Binance’s valuation should have far exceeded 100 billion U.S. dollars.
 DeFi, Decentralized Finance, decentralized finance, that is, financial applications built on a decentralized blockchain network, such as decentralized exchanges, decentralized lending, and so on. The security and credit of decentralized finance is not guaranteed by an institution, but by smart contracts and community mechanisms.
 NFT, non-fungible token, non-fungible token, is an indivisible and irreplaceable digital currency for each token, which can be bound to paintings, music and other content. It is currently used in the trading of digital assets.
 Halving, according to the design of Bitcoin inventor Satoshi Nakamoto, the number of bitcoins mined in a single block is halved every four years, which means that the return for the same computing power will be reduced by 50%.