“A Formula 1 virtual car auctioned for $110,000.”
Yat Siu is one of Hong Kong’s most famous entrepreneurs and technology pioneers. He’s already sold successful companies to buyers such as IBM. So for this Block Kong breakfast, we do not meet at a hidden dai pai dongselling HK$29 noodles. Yat Siu does not need to pretend. He suggests we meet at the Aberdeen Marina Club.
I am early, so I sip a black coffee while looking across the channel at the Jumbo Floating Restaurant.
The Jumbo remains a Hong Kong icon, despite its having long ago become a tourist trap. It has featured in Bruce Lee’s “Enter the Dragon” and in a James Bond film, “The Man With the Golden Gun”.
The Aberdeen Marina Club has not, but the coffee here is better.
Yat arrives in a fighting mood. But unlike Bruce Lee or James Bond, he is not fighting villains set on world domination: he is fighting jet lag. He just arrived from San Francisco, although an early morning tennis session has helped, he says, ordering an ice tea.
The surroundings may be genteel, but Yat is also fighting a battle for entrepreneurialism in Hong Kong. It is an old conflict. Yat is a success story but in many ways what he’s doing today with digital assets is just as challenging as his pioneering work in the 1990s. It’s still about trying to get a conservative culture to embrace something new.
Yat still sees himself as an outsider, too. He was born in Vienna. His Chinese parents wanted him to be a musician but he liked math and computers – the exact opposite of the stereotypical Hong Kong family values.
“It’s not easy to build a startup in a city where you have few relationships – and long hair,” he tells me. His hair, with its rakish bangs, doesn’t seem rebellious anymore – not in a world of founders with tattoos and nose piercings. But back in the 1990s the floppy locks would have caused ripples of consternation among the city’s suit-and-tie business leaders.
A computer whiz, Yat was part of a generation of entrepreneurs who first brought internet access to Hong Kong. His peers from that era include Charles Mok (who became the first chairman of the Hong Kong Internet Service Providers Association in 1996, and is now a Legco member representing the tech industry – short hair) and Pindar Wong (who co-founded the city’s first licensed internet service provider in 1993 and is today a bitcoin and blockchain advocate – very short hair).
Tat’s angle has always been gaming. An early Atari freak, he landed a programming job with the company in the U.S. and then developed businesses catering former Atari users with multi-media software. Various consulting gigs got him to Asia, and he saw the opportunity to launch one of Hong Kong’s first internet service providers. He was surprised by how hard it was to introduced spoiled tycoon heirs to newfangled ideas such as email.
The ISP morphed into a website development business, which then got sold, giving him the money to start Outblaze in 1998, which remains a going concern. Outblaze offered companies, particularly in the media space, hosting, email and other services.
But when the Asian financial crisis began to hurt Hong Kong (followed by a property crash and then the SARS outbreak), Yat found it hard to find local investors willing to back a tech venture – a problem that has not gotten that much better today. Eventually he sold the business to IBM, in 2009.
The proceeds went to founding Anomica, a company to develop gaming and other apps. Intel Capital is a backer. The company is now listed in Australia, with teams across the world: in Hong Kong, Canada, Argentina and Finland.
“For companies to be centralized in one location is a thing of the past,” he says.
I suggest we order breakfast. Yat takes another iced tea and the muesli bowl.
Although the eggs, bacon and hollandaise sauce are there for the taking, I go for a bowl combining muesli, avocado, apple, and quinoa. This Block Kong Breakfast series is turning me into a hipster with a French accent. I worry that by the end of this series I might have a tattoo.
Let’s talk about blockchain, I suggest. Yat says he grew curious about bitcoin in 2016. But his Wow moment was with CryptoKitties and the concept of a non-fungible token.
This makes sense for a techpreneur with a strong gaming background. A non-fungible token, or NFT, is a cryptographic hash related to a specific asset or object. It’s the opposite of bitcoin, which is fungible: one bitcoin is worth as much as another.
In 2017, CryptoKitties went viral. It was an Ethereum blockchain-based game letting users collect, breed and sell virtual cats. To function it required tying those “cats” with specific hashes, that is, transactions happened via NFTs. These NFTs then became assets that could be traded on exchanges, outside of the purview of the CryptoKitties game itself.
It was the beginning of a financial market for digital assets that represented things that were not financial instruments.
“It still surprises me how many people in the gaming industry don’t get blockchain,” Tat says. “Digital assets are not just for finance.”
Indeed, it is in decentralized apps for games where the real building blocks of blockchain financial markets are being built. Tokens representing game items can be bought or traded by games’ users outside of the games, as status symbols or investments.
Animoca is now making big bets on mobile gaming and blockchain. “In the late 1990s, people came to the internet through games,” Yat says. “Gamers are the first and easiest frontier for blockchain adoption.”
Today Anomica owns an impressive portfolio of licenses, including the rights to Atari, Doraemon, and Astroboy. And Animoca Brands is now the licensed distributor for CryptoKitties into Greater China – it has recently brokered a deal to offer the game over HTC mobile phones.
Anomica is also a direct participant in digital assets: the company has so far executed swap deals to own tokens from 17 startup blockchain companies. Many of these are bets on apps and services that will support the expansion of decentralizing gaming. “Ecosystem building today is something different,” Yat says.
I can’t help but be a little skeptical. CryptoKitties was a fad and its token value has since crashed.
Yat just smiles. A few weeks before our breakfast, one of Animoca’s new games, Delta Time, made a huge sale to a customer. “A Formula 1 virtual car auctioned for $110,000,” he tells me.
Conceding the argument, I ask him what he teaches his children. After all, growing up in the household of a successful videogame entrepreneur must be pretty…nice.
“I teach them grit, struggle, and empathy,” Yat says. He acknowledges the challenge. “We grow up privileged here.”
This is not just casual talk of a parent trying not to look too lucky. Yat is a passionate backer of education and the arts. He is a director of the Asian Youth Orchestra, for example.
Today he is also backing a new venture called the Dalton Learning Lab: a Cyberport-based education company that provides students with online courses in digital music, artificial intelligence – and blockchain programming. Over six weeks, the course teaches the basics in distributed ledger systems, the Ethereum network, how to set up a digital wallet, NFTs and other concepts.
Yat’s focus may be on digital assets for the gaming world, but he’s plugged into the purely financial side too, as I discover when I ask for the bill.
As per custom, we gently argue over who pays. This is Block Kong Breakfast so I am meant to foot the bill. But the club membership is his. So we agree I will reimburse him in crypto, which leads Yat to pitch yet another of his experiments: “We wanted to design a crypto wallet that doesn’t look like a crypto wallet, and see if Apple would accept it. They did.”
Voila. Apply Pay for ethereum it is.
Aberdeen Marina Club
- 8 Shum Wan Road, Aberdeen
- 2x ice tea
- 2x coffee
- 1x Muesli bowl
- 1x Quinoa, Muesli, Avo & Apple bowl
- 0.085ETH (HK$225 or US$28.85, as of June 24)