Babbitt column | Bitcoin has no financing, what financing do you use?

First, Bitcoin has not been financed.

Bitcoin, we may all be so familiar, that we rarely mention or notice the fact that bitcoin has grown from 0 to the market value of more than $200 billion today, and the whole process is not financed .

Don't you think this is a magical phenomenon? Bitcoin claims to be the head of digital currency. It has a huge market capitalization and a large amount of transactions on the chain. Users are all over the world, but its entire development process has not raised a penny to the outside world.

Then the question comes: most digital currencies are directly or indirectly affected by Bitcoin. Many projects are simple imitations of Bitcoin. Some projects even directly copy the bitcoin code, even if it is not the original copy. They also use more or less one or more of the underlying technologies of Bitcoin . If Bitcoin is not financed, what are the financing of these projects?

Second, why is there no financing for Bitcoin?

Let's first take a look at why Bitcoin is not financing? From the results, Bitcoin has not grown as much as it has grown to today, indicating that financing is not necessary for it .

In addition, Bitcoin is an inter-generational product. When it was proposed, few people could understand the technology and ideas behind Bitcoin. After Nakamoto took the idea of ​​the Bitcoin white paper on the forum, he was also criticized and questioned by many contemporary geeks, including the founder of EOS, BM. Genius, such as BM, had so many questions about Bitcoin at the time, let alone our ordinary people? Even today, there are many people, including some mainstream investment institutions, who cannot understand the value of Bitcoin. Therefore, if there is some difficulty in finding foreign currency financing at the time.

Of course, with Nakamoto's ability, if he wants to raise money, there should be no problem. After all, many projects than Bitcoin garbage can be financed. But he still has no choice of financing, so a more reasonable explanation is: either Nakamoto believes that Bitcoin does not need financing, or that he thinks Bitcoin is not suitable for financing.

The facts now have proved that Bitcoin can do well without financing. So the question worth considering is: Is Bitcoin unsuitable for financing? If Bitcoin had financing at the time, would it develop faster and better now?

3. Will Bitcoin financing be better?

Bitcoin has developed into problems today, such as transaction speed, block size, handling fee, network congestion, fork, etc., and bitcoin has appeared in 2008, and has been developing for more than 10 years, only 10 years. There is today's world currency status, and it is still suffering from the incomprehension and exclusion of the mainstream world.

Then, if Bitcoin had external financing at the time, on the one hand, the development funds would be supplemented, on the other hand, everyone would brainstorm, and the development speed of Bitcoin would be faster? Will the iteration efficiency be higher? Will the initial design concept be more perfect? Will the fork problem be prevented in advance? Will these issues be further considered in the specialization of mining machines?

Although the old saying that people are more powerful, but in terms of Bitcoin, it is really not necessarily. The great products of the times can only come from the hands of genius. Ordinary investors can't understand it at all. Even the traditional investment stock god Buffett, isn't it still not accepting Bitcoin today?

I personally think that Bitcoin is more suitable for independent creation like genius Satoshi. They have all the knowledge they should have, and they also have the ability to complete projects independently. The bitcoin they created with their own power is more perfect. If there are really many people involved in the discussion, or if there are multiple partners who have the right to speak, then the project is likely to be delayed, or it will not be like it.

Of course, although Bitcoin is currently considered to be the design of Nakamoto Satoshi, he also refers to the work of other predecessors in the design process. In the design process, he is also often on the forum with Harfini. The communication of the top gods, in a sense, bitcoin is also the wisdom of many people.

Ok, let's think that Bitcoin is more suitable for genius design alone. So, in terms of operational promotion, would it be better if the funds were more? Like the Internet projects, they are widely publicized, get traffic, quickly seize the market, and achieve leapfrog development?

Fourth, bitcoin is not suitable for financing

A. The direct reason for the disappearance of Ben Cong from the operational point of view is that Wikipedia began accepting donations from Bitcoin, using Nakamoto’s own words:

Wikipedia has smashed the horse's nest, and now a large group of wasps are flying to us. If we can get such attention on other occasions.

Why did Nakamoto shrink after Wikipedia accepts bitcoin donations? On the one hand, bitcoin has been developed at this time, and the first batch of seed users are in normal use. More importantly, when Bitcoin Wikipedia accepts bitcoin payment, the US government will begin to develop its attention. Putting it on Bitcoin has a strong strangulation effect on Bitcoin. Even Nakamoto's personal security will not be guaranteed, so he will choose to leave at this time.

That is to say, for Bitcoin, a product that can have a great impact on government power, it is not a good thing to cause too much attention before the project is mature, so financing is not necessary for publicity.

B. From a technical point of view, we are discussing from the operational propaganda that Bitcoin is not suitable for financing. From a technical point of view, if Bitcoin has financing, a development team will develop bitcoin faster and save more. How much time?

The current data shows that the original version of the Bitcoin client, the first version of the source code released by Nakamoto, the client includes about 16,000 lines of code, I am not programming professional, but it is said that 16,000 lines of code can only be considered a small project .

Moreover, although the production of Bitcoin took a lot of effort from Nakamoto, in his own words:

The process of writing code is not very complicated, the most difficult thing is design and thinking.

In order to design the prototype of Bitcoin, Nakamoto took a long time to accumulate. He needs to have enough computer knowledge, enough cryptography knowledge, and money, macroeconomics, and game theory. knowledge. Moreover, he is also standing on the shoulders of his predecessors. Some generations of people have developed a lot of prototypes of electronic money. Although they eventually failed, they have proposed many feasible theoretical support such as POW.

The idea of ​​this thing is that others can't do it for you. You are a group of N technical teams, and you may not be able to make bitcoin one day ahead of schedule .

C, bitcoin itself is money

In addition to operational and technical issues, there is a very special problem: Bitcoin itself is money, then what is the financing method?

Since you are money yourself, if you still need to develop with legal currency, then others will question the significance of the existence of Bitcoin?

This problem is not unique to Bitcoin. There are now many projects that use the banner of digital currency to finance. They also need to think about this issue. On the other hand, many project tokens are highly suitable for financing because of their good liquidity, rich ecology, and wide range of uses. In fact, they also have currency attributes to some extent. This is a very interesting question.

5. Do other projects really need financing?

Well, the problem is coming. Since Bitcoin does not require financing, do other projects really need financing?

This issue is easy to cause controversy, especially those who have invested in the project may have a lot of opinions, so I would rather say my conclusion: the project is different from the project, some projects do not need financing, some projects need financing, Or it can be developed faster and better after financing .

It is difficult to study which projects are suitable for financing. We are not as good as to study which projects are not suitable for financing.

Financing is not only a superficial phenomenon, but there is a deeper reason behind it. Blockchain is an industry that emphasizes distributed consensus and decentralization. Distributed consensus means multi-party participation. Decentralization means no one. The decisive role and impact of the project .

But financing this matter is equivalent to giving money to others. I sell some of the power to the other party, and most of the time it is the right to speak and decide.

Therefore, the real reason is that financing is contradictory to decentralization in some respects .

6. The contradiction between financing and going to Sinochem

Decentralization pays attention to consensus. What is consensus? Technically speaking, it is the consistency of data in a distributed environment.

Taking Bitcoin as an example, it can be seen from practice that the real decision on the bitcoin consensus in terms of technology is the computing power, and the mining machine and mine behind the computing power. Whoever has strong computing power, whoever has the right to speak will have a strong influence on the consensus. Among the consensus values ​​of Bitcoin, computing power is the most important thing. The currency itself does not have any power .

However, in the traditional financing system, financing corresponds to the logic of equity and shares. Who has more stocks, who has a larger share of equity, and who has a greater voice.

Then, if there is a decentralized project that has been funded, who should listen to it, who is in charge? This is a problem, and it is also the contradiction between decentralization and financing .

Of course, this problem is not without solution. With the development of the blockchain, with the improvement of the consensus mechanism, as the definition of the rights behind Token becomes more standardized, this question will be well answered. Only in the early days of the industry, Bitcoin chose a relatively simple approach, which is completely non-financing.

7. What projects can be financed?

The times are developing, and the project is advancing with the times. Not all projects need to have such a strong degree of decentralization of Bitcoin, and not all projects need to have such strong anti-censorship as Bitcoin, and the social demand is high. Diverse, and our ultimate goal is to meet market demand.

Moreover, the function of Bitcoin is relatively simple, it is a point-to-point electronic currency, and the function of currency is relatively simple, mainly trading, transfer, so the workload of development may not be large, one can cope with it. .

On the one hand, the function is simple. On the one hand, due to the decentralization requirement, Bitcoin is more suitable for “ cold start ”—that is, no financing, no publicity, and whether it is operational or technically based on its own accumulation. In addition to Bitcoin, there are still many projects in the blockchain industry that require relatively high decentralization. In fact, they do not need financing, and are more suitable for “cold start”, slowly developing and slowly accumulating.

However, in addition to this, there are many blockchain projects that have to be more complex to implement, so they need to develop more docking and more work.

For these projects, if you want to develop rapidly and quickly, it may be better to accept financing.

Just need to think clearly before each financing, is it really necessary to finance? What did we get for each financing? What did you pay for? What impact will these efforts have on the development of our projects, such as how it affects the degree of decentralization and what is the impact on the interests of the various players in the ecology?

Eight, first value, or first price?

Financing or not financing? Hot start or cold start? Still not the essence of this problem. The essence of the problem is: the token of the blockchain project, is it worthwhile? Still have to have a price first?

Liu Chang used the teacher to say: "The essence of blockchain is distributed consensus." The reason why distributed consensus is useful is because it integrates the wisdom, talents and abilities of the whole society in the form of open source to promote the completion of the project. Even if it does not rely on financing, it has accumulated the wisdom, talents and capabilities. I can also slowly start the project .

Of course, their participation is not completely free, and we will also have token distribution for them, just as Bitcoin will be involved in mining in the early days. However, the BTC issued at this time has no price. Strictly speaking, there is only value and no price.

Although there is only value but no price at this time, the early developers rely on interest, love and vision to participate in the project, but with the development of the project, as the wisdom, ability, function and ecology accumulated on the project become more and more The richer the value, the more the value accumulates beyond a certain critical point. At this time, the token will generate the price .

The price at this time is naturally generated, rather than being forced by the secondary market by the exchange. With the price, the incentive effect is more obvious, the value of the project will be more and more condensed, and the development will be accelerated, thus forming such an organic cycle.

For a long time before, the developers and participants who did not get the benefit of the value of the obligation, only then got the incentives that can be realized. The value they paid before was given feedback. They took the risks, paid the labor, and now they get The harvest.

There is a very essential difference here. We call it the difference between the blockchain project and the traditional project development concept. We believe that the blockchain project is more inclined to give the project value first, and then give the project price instead of Just like the present, the opposite is to give the project a price and then give the project value.

First value, then price! Value drives prices, not funds to drive prices!

That is to say, a true decentralization project must be driven by intrinsic value to make the project have a price. The initial intrinsic value comes from the contribution of each ecological party, not from the incentive of the currency price. This kind of project that takes the traditional investment by the price driven by the exchange needs to reflect on this.

Nine, bitcoin has no financing, what financing do you rely on?

Nowadays, many projects are not taking such a path. They have an idea first, then write a white paper, and then start financing with white papers. Some projects and even white papers are not going to start financing.

Nowadays, there are so many blockchain projects that have a huge blockchain technology team, which claims how much code is updated on github every month, but even the products have not been made yet, and some prototypes are also very good. The use of few people is simply the so-called "air coin."

These projects are too hurried, and once you enter the financing model, you actually enter the traditional financial model. At this time, you need to assume the responsibility of financing, the obligation to implement financing, and at some point, the risk of illegal fund-raising. And whether you are financing with a point card or a pass or other form, no matter how clear you are in the contract.

For these companies, you really need to think about this question: "Bitcoin has no financing, what financing do you use?"