The addition of new exchanges attests to the growth of cryptocurrency users in Indonesia. Most cryptocurrency users are young people who are more open to innovation and new technology. However, most Indonesians still misunderstand what cryptocurrency is.
Indodax is a cryptocurrency exchange which is a pioneer in Indonesia. It now has several competitors including https://tpro.co.id/, https://www.tokocrypto.com/, https://zipmex.co.id/ and Luno Indonesia.
Cryptocurrency is growing very fast in Indonesia. This can be seen from the increase in cryptocurrency exchanges that were launched in the last two years.
The following are some of the general public’s misconceptions about cryptocurrency in Indonesia.
- Cryptocurrency is only Bitcoin
Most of the people still think that digital currency is Bitcoin. The name of Bitcoin is indeed the brand image that represents cryptocurrency to most Indonesians. The public still does not understand that there are various types of cryptos and the number is hundreds or thousands.
2. Cryptocurrency is like gambling and money games
Indonesian society is majority Muslim. They are very strict against all forms of gambling and money games because in Islamic teachings they are prohibited. The public still thinks that Bitcoin is only a gambling tool and money games in the form of fake investments such as Ponzi schemes.
3. Cryptocurrency is used as a tool of crime
The amount of information in the mainstream media and social media that reports on the use of Bitcoin for crimes adds to the long list of people’s lack of understanding of digital currency.
The motive of Leopard Wisnu Kumala, the perpetrator of the bomb detonation at Alam Sutera Mall, was extortion. Leopard threatened mall management and demanded a fee of 100 BTC.
The crime above was one example of a crime that demands payment in Bitcoin. This news was widely spread both on television and in social media.
4. Cryptocurrency is a fake investment
The public still thinks that cryptocurrency investment is a fake investment. Investments that have no real value because they are not backed up by products and services. This results in people reluctant to buy crypto for fear of losing money. The community prefers to shift their investment to property or mutual funds.
5. Cryptocurrency is illegal
The understanding that digital currency is illegal is widespread in society, both young and old. They consider that owning, buying, selling or mining Bitcoin are illegal activities that can result in being imprisoned. In the territory of Indonesia, it is illegal to use Bitcoin or any crypto alongside foreign fiat (such as dollars, yuan, euros and others) as a means of payment for buying and selling goods and services. However buying, selling or trading Bitcoin, cryptocurrency and foreign currency is legal and permissible. The institution that protects and oversees foreign and digital currency exchange activities is Bappepti.
Indonesia is a large country with a population of more than 250 million. The opportunity for blockchain technology or crypto is huge. Most Indonesian people are regular users of digital currency, however few developers or startups take advantage of blockchain technology. There are several startups that have started to buck this trend, including Vexanium, Pundi-x, Ten-X, Indodax, Triv.id and Luno Indonesia. This is still far behind other countries in Asia such as South Korea, Japan, China and Singapore.
There are several notes that I have observed why the development of blockchain technology is less attractive to young developers in Indonesia.
- Blockchain technology programming language is not taught in universities or technical schools in Indonesia.
Although the Vexanium team often conducts seminars on campuses, these seminars are limited to introductions so that students only know what crypto and blockchain are. Education about blockchain programming languages and cryptocurrency does not continue in classrooms so that university graduates still do not really understand how to develop blockchain technology to make useful applications for economic progress and other jobs.
- Companies are reluctant to use blockchain technology and cryptocurrency for their products and services.
This problem is related to the regulations in law and enforcement in Indonesia, regarding the prohibition of using cryptocurrency for transactions. Many startups managed by young people still don’t want to use blockchain technology in their applications, for example Gojek, Ovo and several other fintech companies.
- Bitcoin and cryptocurrency forums are still discussing how to acquire cryptocurrency, mining and trading.
Much of the discussion on cryptocurrency forums is still about faucets, mining, ponzi investment, HYIPs, and gambling. There is very little technical discussion about blockchain technology so that the knowledge of the developers is very limited. Do blockchain developers have a chance of being successful in Indonesia?
Law of Supply and Demand
Although there are still many misconceptions about it, digital currency users and traders continue to increase in Indonesia. In 2019, Indodax recorded that its users reached 1.5 million people. https://teknologi.bisnis.com/read/20190218/84/890328/5-tahun-beroperasi-member-indodax-capai-15-juta-
In 2020, I believe Indodax users will have more than 2 million members. Indodax, which has been operating for more than five years, can reach around 0.8% of Indonesia’s population.
The director of Indodax said daily transactions on Indodax moved on average in the range of US $ 3 million to US $ 20 million, or around 42 billion IDR to 280 billion IDR per day (assuming US $ 1 = 14,000 IDR).
Transactions from trading on Indodax are quite high. Transactions on other crypto exchanges have not been recorded. So the sky’s the limit for the digital currency market in Indonesia. My question? Are young Indonesian developers ready to embrace this huge potential? Time will tell.
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