The 30-year-old CEO of Melcoin, a crypto asset and blockchain business in the Mercari Group, talks about the company's past and future.
--Mercari, which has been involved in flea market apps and payment services, why did you decide to get involved in the crypto asset business?
Keita Nakamura (Nakamura): Because we saw great potential in technologies such as crypto assets and blockchain. At the same time, I also had a sense of crisis that these technologies might be disruptive to the business that Mercari had built up.
--What were the potentials you sensed?
NAKAMURA: Firstly, there was the expectation that cryptographic assets such as Bitcoin (BTC) would come to be handled as the native currency of the Internet in the future, and that the financial world would undergo major changes. If this happens, the Mercari Group, which is involved in payment and financial businesses centred on Melpay, will not be able to remain unaffected by this change.
Another is that the decentralised worldview of blockchain will give rise to new ecosystems and business models.
As you know, Mercari is a marketplace for customers to buy and sell things, so we are in the middle of a centralised business model. That's why we had a sense of crisis that our business would one day be shaken to its foundations if we didn't follow the paradigm shift of a decentralised worldview expanding in the future.
So, at the time when we set up an internal research and development organisation called mercari R4D in 2017, we began to treat as a major theme how the Mercari Group handles and can utilise technologies such as crypto assets and blockchain.
▶︎ Decentralised.
Decentralized, meaning de-centralised, decentralised or distributed, is one of the characteristics of blockchain. Opposite of ‘centralised’, which means centralised.
--So you were paying attention to crypto assets a little before the ‘crypto asset boom’ in Japan?
NAKAMURA: I was also involved in blockchain research within the company as an intern around that time, and we released a product called ‘mercari’, which is a Mercari-like transaction protocol on the blockchain, on an experimental basis within the company.
Until now, the Mercari Group has provided services for circulating the value of goods, but we believe that blockchain will change the concept of ‘value exchange’ significantly.
In February 2023, Mercari announced a new group mission: ‘Circulate all value and expand the possibilities for all people’. In order to realise this group mission, crypto-assets and blockchain are naturally an area that should be addressed.
The first step in this direction was the release of a service that allows users to buy and sell Bitcoin within the Mercari app in March 2023.
--The Bitcoin trading service of Mercari appears to be very simple. What was the aim behind the decision to focus solely on bitcoin trading?
Nakamura: Crypto assets often focus on price fluctuations and speculative aspects, but we are focusing on the concept of new value exchange brought about by crypto assets and the blockchain, and we want as many people as possible to experience this first-hand.
However, with a typical exchange service, you have to go through the process of registering with the exchange and selecting from a large number of currencies to buy. This is a very high hurdle for beginners.
In fact, when we conducted a survey, the majority of impressions about crypto assets were negative, such as ‘I don't know’, ‘It's difficult’ and ‘I might lose money’. So we have designed the service to remove those fears one by one.
--With Bitcoin alone, there is only ‘one to buy and one to sell’, so it's easy for beginners to understand.
NAKAMURA: Since you can use sales proceeds from Mercari to buy Bitcoin, I think people feel that it is even less of a hurdle than depositing their own money to buy Bitcoin.
Also, if you have already completed the identity verification process on Mercari or Melpay, you can buy bitcoins immediately, which saves you a lot of trouble. We packed the product with our desire to lower the hurdles for people to come into contact with crypto assets and to let as many people as possible experience crypto assets.
--As a result, the number of users exceeded 500,000 in the first three months after Mercari's bitcoin trading service was launched. Moreover, 79% of those users are first-time crypto asset traders; according to 2022 data, the number of new crypto asset accounts opened in Japan is around 60,000 per month, so this must be a phenomenal figure.
Nakamura: First of all, we are very happy to hear that the service has been positively accepted.
Continuing from when we started offering the service, about 80% of the customers who have opened accounts have experienced bitcoin trading for the first time with us, and we are happy that so many people are participating in the world of crypto assets through our service.
We have been providing the service for just over three months now, and we feel that we are gradually contributing to expanding the base of crypto asset use in Japan.
However, the total number of accounts opened on Japanese exchanges is currently around 7 million, which is only 5.5% of the total population. This may seem like a lot, but in fact this percentage is about 30th in the world ranking, which means that Japan is one of the least developed countries where crypto assets are not widespread.
Therefore, we believe it is important to continue to make a series of proposals through our services so that people can experience and learn about crypto assets and blockchain.
▶︎Melcari sales proceeds
--Various services that utilise blockchain have already been created in the world, such as DeFi, NFT and GameFi. What kind of services do you plan to provide in the future?
NAKAMURA: There are many services that utilise blockchain, but it is not easy to create your own wallet and send crypto assets to use them.
It is our wish that many people can experience the so-called Web 3.0 world, and in the future we would like to distribute crypto assets other than Bitcoin and NFTs in our marketplace.
However, there are still many steps to be taken before we get there. First of all, we have provided the functionality to ‘buy and hold bitcoins’, and now we want to provide the next step to ‘pay using bitcoins’. This way, people who buy bitcoins for the first time on Mercari will be able to experience the utility of the crypto asset, which can be used like a currency.
▶ Web 3.0.
This term refers to all decentralised systems and services based on blockchain and cryptographic assets; in contrast to Web 3.0, systems and services operated by specific companies are called Web 2.0.
--So first you want people to have bitcoins, and next you want them to experience ‘using bitcoins’?
NAKAMURA: Crypto assets such as Bitcoin have a clear utility of being used as currency, but until now, only the speculative aspect has attracted attention. In fact, bitcoin payments are not widespread at all in Japan, so there are almost no places where people realise that they can be used as currency.
On the other hand, crypto asset payments are already much more widespread in the US and other countries than in Japan, with bitcoin payments being accepted at major chain shops such as Starbucks, and the payment app ‘PayPal’ accepting bitcoin.
While there is a global trend towards the use of bitcoin as a means of payment, Japan has been left behind.
-- In Japan, I feel that the majority of people still have the image that crypto assets are just speculation.
NAKAMURA: If you actually experience Bitcoin payment, you will realise how useful crypto assets can be.
Not only crypto assets, but also Web 3.0 products such as NFT, dApps, DeFi and GameFi tend to focus on the speculative aspect, but even if you remove that, they have many attractions and there are experiences and values that can only be obtained through Web 3.0.
However, if you can't actually experience them, most people won't get the message, will they? We want to provide these attractive aspects of Web 3.0 in a form that allows people to actually experience them.
-With regard to NFT, the very ‘availability of utility’ is beginning to be seen as important. Recently, the prices of many NFTs, including generative art, have fallen, and some say that the NFT boom is over.
NAKAMURA: Many people have come to realise that NFTs without utilities are mainly traded based on speculative speculation, so prices inevitably rise and fall like a bubble.
Essentially, NFT is a technology that allows for things like ‘proof of uniqueness’ and ‘proof of existence’, which in turn allows for the exchange of digital data values, among other attractions.
If NFTs with utility do not emerge in the future to utilise such aspects of the technology, there will be no point in using this technology and it will not be viable as a business. We are currently in a transitional period, and it is not yet clear what method is the correct way to utilise NFT.
The industry as a whole is still searching for a breakthrough, so we are keeping a close eye on these developments and hope to develop a new NFT business when the time is right.
▶ Generative art NFT
NFT of images automatically generated by programmes, e.g.
--Lastly, please tell us about your future prospects: what kind of presence will the Mercari Group have in the future when you have expanded the range of Web 3.0 services? How do you plan to tackle the Web 3.0 business, given that some people say that Web 3.0 is the enemy of Web 2.0?
Nakamura: Web 3.0 and Web 2.0 are not necessarily in an adversarial relationship, and we believe that a world where both exist simultaneously will arrive in the future. For example, many people may feel uneasy about using a Web 3.0 system for personal transactions when buying and selling luxury goods.
In such cases, it would be more convenient and secure to use a Web 2.0 service such as Mercari as a reliable platform to act as an intermediary. On the other hand, some people may feel that when buying and selling inexpensive items such as second-hand clothes, it is acceptable to communicate directly without using an intermediary service.
When the future in which Web 2.0 and Web 3.0 coexist as described above arrives, the most important thing will be to make the transition between Web 2.0 and Web 3.0 easy and seamless. To this end, Mercari, whose main battlefield is Web 2.0, is currently taking on the challenge of connecting customers to Web 3.0.
Our main goal is to become a gateway between Web 2.0 and Web 3.0 in this way. I envisage a future in which people buy bitcoin through Mercari, then use bitcoin, and so on, and the world of Web 3.0 gradually comes into view, and before you know it, everyone is using Web 3.0 services with ease.
Keita Nakamura
Keita Nakamura was an intern at CyberAgent, where he launched a programming education service, and at DeNA, where he introduced a sentiment analysis platform for a video service. He then joined Mercari's research institute R4D as an intern, and after joining the company as a new graduate in 2018, he was involved in the ‘mercariX’ project being promoted within R4D as a blockchain engineer. He then moved to the group company Melpay, where he was in charge of distributed ledger development, AML SYSTEM team and PM in the new financial business (Credit Design).He joined Melcoin in April 2021, where he worked as Director of the Product department and CPO before taking his current position in April 2023. Currently 30 years old.
◉ Melcoin.
Established in April 2021 (100% subsidiary of Mercari Inc.). Responsible for planning and developing services related to crypto assets and blockchain for the Mercari Group.
Mercari's Web 3.0 strategy - the steps to buy bitcoin on Mercari.
Mercari to introduce bitcoin payments for purchasing items on its flea market app.
Interview Iolite FACE vol.10 David Schwartz, Hirata Roi PHOTO & INTERVIEW "Yukos" Special feature "Trends in the cryptocurrency industry in Japan", "Trump vs. Harris: What will happen to the cryptocurrency industry?", "Was the reputation economy a prophecy?" Interview: Simon Gerovich, Metaplanet Co., Ltd., Kim Dong-Gyu, CALIVERSE Series Tech and Future Sasaki Toshinao...etc.
