Jack Ma, executive chairman and founder of Chinese tech juggernaut Alibaba, stated while he’s bullish about blockchain technology, Bitcoin is in a bubble.
Speaking at a forum at the second World Intelligence Congress held in Tianjin on the 16th of May, the Alibaba Group Holding Ltd founder — who holds a personal fortune estimated at over $42 billion — emphasized the importance of the underlying distributed ledger technology that drives Bitcoin, rather than the currency itself:
“Blockchain is now a hot word. First, blockchain is not a bubble, but Bitcoin is a bubble. Bitcoin is just a tiny application of blockchain. Blockchain is not a huge gold mine. At least inside Alibaba, blockchain must be a solution that addresses the privacy and security issues in the digital era.”
Alibaba Invests in Blockchain Technology
Ma expressed dissatisfaction with the manner in which the blockchain technology behind Bitcoin is being used, joining the ranks of blockchain maximalists such as Vitalik Buterin, recently stated he believes most altcoins are overvalued.
Ma’s latest comments on the utility of blockchain technology mirror similar statements made in November 2017, when the Alibaba founder discussed cryptocurrencies at the “Dialogue with Jack Ma” event in Shanghai.
“We should be cautious about Bitcoin. Its underlying technology, however, is really powerful. I pay more attention to a cashless society and the blockchain technology. And I am not shameful that I don’t know about Bitcoin.”
While Ma may be disappointed that blockchain technology is being used primarily in the pursuit of profits, Alibaba is not averse to leveraging the benefits it offers. In January this year, Alibaba was rumored to have invested in a new cryptocurrency mining platform called “P2P Nodes,” with the tech giant registering a number of trademarks for a new blockchain venture referred to as “‘Ether Lock” and “Ethernet Lock.”
The announcement of the platform, however, was swiftly followed by a post by the company on Weibo — a highly popular Twitter alternative in China — that Alibaba would not “create virtual currencies,” and will not provide “mining platforms.” The P2P Nodes website was subsequently shut down in a move attributed to the ongoing crackdown on cryptocurrency mining by the Chinese government.
The apparent cancellation of the Alibaba crypto mining project appears to be at least partly driven by Ma’s position on cryptocurrencies:
“Alibaba has been working on blockchain for several years, and when Alibaba first started investing in the blockchain, I didn’t understand what blockchain was at that time, but I heard that it can solve data security and privacy issues, therefore Alibaba began to invest in blockchain”
Alibaba Holds Record for Blockchain Patents
The Alibaba cryptocurrency mining project appears to be on hold indefinitely, but mining isn’t the only aspect of the blockchain ecosystem Alibaba has been investing in. Alibaba ranked first internationally for blockchain-based patent applications over the last year and holds the most patents for blockchain technology globally, according to a joint report issued by IPRDaily and the incoPat Research Center for Innovation Index.
Ma stated he views blockchain technology as a security and privacy solution first, and considered the use of distributed ledger technology in order to create a means of value transfer or storage — but integrating blockchain technology into the world of online finance, according to Ma, is critical:
“Social networks may not need blockchain, but we are doing internet finance in which we process trillions of trading volume. We have to turn to blockchain, otherwise it would be fatal.”