Sunday, February 5, 2023

DMM: Mining Is a Means to an End, We’re Building a Token Economy in Japan

DMM: Mining Is a Means to an End, We’re Building a Token Economy in Japan

Japanese online media giant DMM says its goal is to build a “token economy”, where cryptocurrencies actually get used — not just hoarded for speculation. The mining facilities it’s building in the country are “a means to an end, but not the end itself” in creating an ecosystem made of real products and services.

Also see: Twitter Is Banning Real Crypto Personalities Thanks to Scam Bot Impersonators

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DMM’s overall vision of its role in the industry is to “become a vanguard for crypto adoption in Japan”. It plans to do this by leveraging its vast digital media production resources and B2C strengths — building an economy with smart contract and cryptocurrency technology where consumers can spend and creators get paid.

Bitsonline visited DMM’s scifi-esque head office in a skyscraper in the center of Tokyo (see end of article) with its digital waterfall windows, real tropical forests, a menagerie of animated floral wildlife and secret Japanese tea ceremony room. There we spoke to Eisuke Kawamoto, general manager of the Crypto Mining and Smart Contract Division, about what DMM is doing in the space, and why.

Watching Us Mine Helps People Understand Crypto and How It Works

Eisuke Kawamoto, General Manager DMM Crypto Mining and Smart Contract Division
Eisuke Kawamoto, General Manager DMM Crypto Mining and Smart Contract Division

So far, the news (at least internationally) has been mostly about DMM’s mining operation. What’s that all about?

The company began building its first large-scale mining facility in February 2018 in Kanazawa, a provincial city on Japan’s west coast. But DMM has no desire to be a “mining company” per se — the facility, and any others like it, are simply a funnel to help both the company and the general public to understand cryptocurrencies better.

It’s a symbol of DMM’s intentions in the space, and its desire to be open and transparent. The whole topic of cryptos, and particularly the mining aspect, remains esoteric for most people and is often the point where they resist joining in.

For the record, in its Kanazawa facility DMM is assembling its own mining hardware using market-ready ASIC chips supplied by Bitmain, and GPUs from NVIDIA. It will mine bitcoin, litecoin, ether, and bitcoin cash. It isn’t considering other currencies for now, Kawamoto said, since they haven’t demonstrated an acceptable level of price stability.

While DMM won’t be offering the hardware it builds for sale, its mining facility will be open to the public by appointment, and will welcome overseas visitors. It will open in mid April.

Also launching late spring 2018 are DMM’s mining pools, which will be available for anyone in the world to join. It’s also planning a cloud mining platform.

DMM to Focus on Japanese Consumer Market

Most of DMM’s other products will likely target the Japanese consumer market, which is still unique and huge enough for local companies to focus on exclusively.

DMM launched its first product, an exchange, in January. It trades seven cryptocurrencies against the Japanese yen (JPY) — BTC, ETH, XEM, XRP, ETC and BCH — similar to its large competitors like bitFlyer.

Its billboards, featuring one of Japan’s most popular idols Rola painted gold and holding a bitcoin coin, look over some of Tokyo’s busiest intersections and are the subject of hundreds of social media posts.

DMM Bitcoin Billboard Rola
DMM Bitcoin billboard with Rola

Kawamoto referred to “Blockchain Revolution”, the book by Don and Alex Tapscott that introduced many to the technology. He sees potential for blockchain solutions to Japan’s chronic hotel and guest lodging shortages, similar to the Airbnb model.

But DMM is primarily a content production company, so its focus is on online media products. Right now that covers everything from games, education and books, to video and even successful pop groups like AKB48.

The Smart Contract Division is also looking at ways for creators to use blockchain tech to crowdsource their projects.

Despite the need for consumers to use cryptocurrencies as money in the real world, actual adoption is still quite low — even in Japan. “It’s like the order has been reversed,” Kawamoto lamented, with interest in cryptos based mainly on the belief that holding them will deliver massive profits, either in the short or longer term.

DMM head office Tokyo

People everywhere seem less interested in using their cryptos as money, and that’s mainly because real products and services that show off what the technology can do aren’t available yet.

Discovering what the best ones are, and then building them, will be DMM’s main job.

“The key term is ‘token economy’,” he said. DMM wants to play a big part in it and is prepared to try many different options to find where it works best.

DMM Has Plenty of Resources and Will Use Them to Build a Real Token Economy

DMM, he added, is a well-resourced company that’s able to extend its reach into several fields beyond those it’s best-known for. It isn’t reluctant to invest even more resources to attract the right partners, high quality designers, and engineers to create its vision.

Kawamoto’s Smart Contract Division will serve as a kind of incubation unit for promising ideas in the token economy. DMM and the token economy, he said, offer “a future everyone can be involved in”.

For a taste of DMM’s creativity, check out what things look like inside their headquarters:

What do you think of the token economy vision, and will it succeed? Let’s hear your thoughts.

Images via Jon Southurst

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