Block Kong Breakfast is a series of interviews with blockchain-related entrepreneurs and financiers in Hong Kong, brought to you by Charles d’Haussy.
A morning in San Po Kong is peaceful. The area, situated south of Wong Tai Sin, famous for its Daoist temple, and Diamond Hill consists of gritty industrial buildings intermixed with residences. Yet it keeps its historical village feeling. For the moment I am getting lost. I pass by some soon-to-be-Peking ducks straight out of the smoking-room, but they can’t help me with directions. Perhaps I need Hong Kong ducks instead.
My guests understood the Block Kong Breakfast concept right away and invited me to a place called Kam Bo Cafe. “It’s a classic Hong Kong-style diner, which is managed by a family of three generations,” is how Terence Lam described it to me.
Lam studied business and finance and City University, while his business partner, Kwun Yeung, is a computer engineer trained at Hong Kong University of Science and Technology. They have been working side by side since 2009, but only founded Forbole as a blockchain company in 2017 in a kind of accident.
Forbole is a validator on the Cosmos blockchain network. This critical piece of infrastructure manages over $5 million worth of digital assets, and their company was valued at $7.5 million earlier this year. Their long-term goal is to build a decentralized social network, a sort of Facebook based on blockchain.
When we meet at the café, Yeung looks tired. He has been working all night. He is based in Hong Kong, but he lives European hours, in order to remain in touch with Forbole’s globally distributed team.
I ask if he’s hungry and he says yes, but I am a little intimidated by the menu, which unfortunately for me is in Chinese. Lam picks something for me. The bistro is very busy and the staff friendly, with decorative posters showing what look like grand masters of tea pouring. Grandpa, perhaps once a grand master himself, mans the cash register. I assume the waitress taking our orders is a family member, perhaps a granddaughter.
With Lam’s help I order milk tea – a true Hong Kong specialty – egg, ham, and toast. Kwun opts for noodles. My tea is served in a typical cup decorated with an ubiquitous cartoon cow. Everthing is crammed together on a table the size of an ironing board. Like I said, as local as you can get.
As we tuck in, I ask, what is a validator?
“It’s a critical component of modern blockchains,” Lam says. “It represents you during governance votes and secures the network by bonding your utility tokens.”
He is talking about the evolution of blockchain technology and its rules. The first cryptocurrencies like bitcoin were based on the idea of “proof of work”, with miners rewarded for creating new blocks with some bitcoin after running their computers through mathematical hurdles.
Proof of work has been a success – no one has ever hacked the bitcoin network – but it has its drawbacks, not least that it requires miners to expend increasingly massive amounts of electricity (“gas”, in the industry jargon) to run the computers required to generate new blocks. Proof of work is also slow and hard to scale.
New blockchain protocols now favor “proof of stake”, in which anyone can mine or validate block transactions according to the number of coins he or she holds. It’s a crypto version of proving you have skin in the game.
Ethereum began existence as a proof-of-work protocol, and its developer community has been focused for several years on migrating to proof of stake. Newer protocols such as Cosmos have the luxury of starting there from scratch.
From my bench, huddled over our breakfasts, I enjoy a view of the open kitchen where the cook handles a wok a meter wide atop a whoosing gas fire. Blockchains are like kitchens and cooking styles. Some operate on wood fires, others on gas stoves, and others go in a microwave oven. Technology evolves and some versions die, others change, and a few endure as they find their value and the right user base.
I digress. I am ordering a coffee.
Yeung and Lam were not always in the crypto space. They were running a digital-transformation business called Creativeworks, helping clients exploit platforms like Google to do things like digital marketing. They were not happy with the monopolistic practices of centralized tech giants, but that seemed to be the nature of the world.
“We were not aware of bitcoin or crypto until a customer asked us to explore something related to the Internet of Things,” Yeung says. He bought a book, Introducing Etherem and Solidity, by Chris Dannen. (Solidity is the programming language often used for Ethereum-based projects.)
The duo absorbed its implications and decided first, they would rather go down the harder route of trying to decentralize the internet; and second, they did not want to build solutions on someone else’s chain: they would build their own.
Now they were falling down the rabbit hole. They discovered a consensus mechanism called Tendermint and its related project, Cosmos, which bills itself as “the internet of blockchains” (founded by Jae Kwon and Ethan Buchman). They created a new venture to become a validator and called it Forbole, which in Cantonese is a term for people good at discovering talent.
Yeung and Lam signed up for the startup journey: global blockchain conferences, meeting tech idols and fellow entrepreneurs; hackathons; angel fundraising. They focused on building a reputation and a track record. Today they are a rare early-stage blockchain startup from Hong Kong.
Their validator business brings in daily revenue and now includes more than 400 delegators from around the world. They launched a blockchain browser they called “Big Dipper”, a nod to being part of the Cosmos community. It now generates traffic from 2,000 cities in 120 countries: its source code is open-sourced, so any developer is welcome to copy and improve it.
Lam says that, beyond the validator business, the project they are really excited about is Desmos, a public blockchain for social media applications.
This surprises me. How can you decentralize a social network? I ask. Thinking about current news involving Facebook and Twitter, the industry looks like it’s in a real mess.
Desmos, I learn, is introducing programs for designing social networking that is based around user reputation, rather than a central platform that sets all the rules. Yeung says there is already one such network live on Desmos. It’s called Mooncake, although Yeung describes it as a “decentralized Twitter”.
We have been talking for quite a bit. The breakfast crush has subsided, and now the family running the bistro are grabbing a quick meal before the lunchtime rush.
The boss has already prepared my bill, which comes with a warm, friendly smile. We have made a lovely, peer-to-peer social connection right here.
Kam Bo Café
- G/F, 53 Hong Keung Street, San Po Kong
- Milk tea x3
- Beef Noodles x1
- Veg noodles x1
- Egg Ham & toast x1
- Total HK$99