Regarding cryptocurrency, these 11 points are the truth, but they are also very controversial

Written in front: The author of this article is the chief marketing officer of LTO Network. In his article, he wrote 11 big truths about cryptocurrencies and blockchain. For example, Ethereum and Bitcoin are irreplaceable. No one cares about privacy, etc. What points do you agree with?


I have been working full time in the cryptocurrency field since the end of 2017. For more than 2 years, I have contacted developers, communities, and media organizations, and more of them are venture capital and projects. I want to do something appealing and opinionated, so here I try to do something that might spark discussion.

1. Ethereum killer is good for both Ethereum and Bitcoin

During 2017-2019, a large number of projects were born with slogans of stronger scalability (you can manually enter TPS here, how much you want to write, and how much) and Ethereum alternatives. Most haven't even gone live, or proved to be scams, and some have actually gone live-but that hasn't changed much. But will it have any impact?

Some DApps tried EOS and other options, but eventually returned to Ethereum. This is because chasing influence and "rewarding for apps" have no lasting value. The end result is that events sponsored by Ethereum killers and hackathons have spawned more Ethereum developers. So when people's attention is removed from Ethereum, this is only temporary.

Cosmos does grasp what most developers like to do, and that's a great point. But in general, what some people call "ICO scams destroying the purity of Ethereum" actually led to more research on Ethereum, increasing the global exposure of Ethereum, and also bringing bitcoin More cash flow.

Other than Ethereum and Cosmos, I don't believe in fast, cheap, cool smart contract platforms, and other similar universal layer 1 solutions. They may get some applications, but it will be 1,000 times less than they expected. There is absolutely nothing unique about them that makes them stand out.

You can't pay for the community, you have to make one yourself.

2. Now DeFi is just BitMex on the chain

There is no doubt that DeFi has become the theme of all public chains in 2019. The idea of ​​a programmable currency and its re-interaction is the primary function of a smart contract. In fact, there is no reason for smart contracts to answer your love life, that is not the original intention of technology (maybe the concept of smart contracts is just the opposite).

There is an error in the description of DeFi, which is still the case today, which is not a good thing:

The huge interest rate (×) is only because the interest rate of MKR itself is very high, because no one actually borrows money from the lender, because it requires excessive mortgage. With the disappearance of huge interest rates, this kind of "wow, higher than bank interest" slang no longer exists.

Serving people without a bank account (×) does not exist at all, all relevant entrances need to buy Dai in advance. So these are just marketing words.

Bank alternatives (×) No, if all you do is non-compliant, even if the interest rate is a little higher, you will still lose more on the fiat currency conversion rate. Don't expect the entire world to magically migrate to the blockchain.

Excess mortgages hinder development and value creation:

Without "borrowing money from the future," you can't promote new projects, borrow at low interest rates, and more. Don't hate me for preaching capitalism here, otherwise, this is the zero-sum game. So far, the development speed of DeFi is indeed very fast, but mainly due to the earlier founding of rich founders and projects of Ethereum. This is acceptable, but it is far from reality.

Currently, borrowers are almost zero because of the need for over-collateralization. The huge interest rate is realized by the selling point of MakerDao, and people use Ethereum as leverage. If your idea is to duplicate traditional financial instruments and make them better, you can't take away the basic premise of its operation.

3. Strangely, no one needs a privacy DApp

Facebook was stolen by hackers. Users don't care about the data, and they won't care about it in the future. If we think that everyone is worried about their data privacy, it's just because we are in a blockchain or IT bubble. Less than one percent of the world's population values ​​privacy.

I don't like articles in large publications because they tend to be very biased, but the New York Times has a good article … people don't need apps to protect privacy at all. There will be no such applications in the future. The database has been hacked for years, and users don't care. And those who mind, the number is small. When any product or service is abused, there are always alternatives, but on a small scale.

4. Media platforms don't just need simple tokenization

This does not require much explanation.

If you want to tokenize youtube, you will end up with a huge token holder. Throughout the world, the media will only be influenced by its owners-there is an additional dimension: the credibility of journalists.

If you only apply economics to the content distribution and popularity of media platforms, it will be a disaster. Governance issues have not been resolved for a reason , and the impact will be worse.

5. The spring of competing coins will not come again

"People will never learn, they will continue to be desperate!"-Although this is true, its impact will be much smaller. This is actually a question of supply and demand. In the past, people invested in ICOs and wanted to get a return of 100. This is a brand new industry, so it has done wonders.

The ICO market rose because no one was selling. But since the market turned, everyone has been hurt: including venture capital, ordinary people like me and you, every investor. It is also difficult for large households to clear their positions and leave the market, so the first investment will be reduced. No secondary market> No primary market.

Therefore, when the next time it rises, people's expectations will become 10 times, and when they are sold 5 times … At most, the competitive currency season will be very small and the liquidity will be very poor. Don't expect magicians to save your wealth and take responsibility for your choices.

6. "Li Gui" DAO resurrected in 2020

If a company is useless in itself, the structure of the company is not important.

DAOs can match incentives and achieve transparent governance, but they still have no cash flow or method of generating revenue. "Staking as a service" is one of them, but it is gradually becoming saturated and being taken over by the exchange. Growth here is very limited.

However, MetaCartel and MolochDAO are leading a cool movement, and many are interested. Of course, it promotes the development of wallet and application layer tools, but this does not mean that DAO investors will be happy … after all, there must be buyers for sellers. Right now, there are only sellers, who doesn't know who the buyer is.

7. STO & Market Driven Discourse

STO-the new version of ICO, the savior of cryptocurrency … but there are actually many legal issues and logistical issues, and it will take several years to get started. It's as difficult as breeding a lion with a hamster … the market says that, as long as you see the sun, you can even believe that Putin or an alien is buying BTC.

This is absolutely stupid, because once the upward momentum stops-is it "Bitcoin is dead"? My suggestion is to ignore all of these things unless you try to use emotions (it's too late at this point) and instead focus on users and value creation stories.

In the end, value drives prices.

If there is value, it will eventually drive prices. Otherwise, you are betting. It's an art that aligns markets and value narratives.

8. Think about what your DApp can do before you consider the user experience

First decentralized social media applications, then blockchain games, then other things … none of these attract users. Some people blame the speed of the blockchain, so some chains have high TPS. But still not. Maybe we can try marketing methods to get more funds? Still useless. Oh! I see, we need a better user experience!

This does not solve the problem. When people want what they need, they can endure the worst UX. DApps that are only used for privacy, games and other applications have not created any value for users. If you make the user experience very appealing, it's useless, and what you make is still useless.

One product: My app allows you to use your Ethereum to get more Twitter tokens, so you can lock them in a working capital pool and measure your coffee intake through reward .

This is really not what a startup should do, don't do it.

9. Please stop talking about Bitcoin and World War III

"If there is a war, there will be no dollar-denominated value flow, so a sovereign currency like Bitcoin will win, and then Tumu …"

First of all, from a certain perspective, this makes sense. But what you need to keep in mind is that very few people pursue data privacy. In a compliant market, the potential to fight alongside traditional finance is much greater.

I know this is not anarchism, and I don't like that. However, if you support "Bitcoin Rise", you better not go through a huge economic crisis, in which all wealth will be cut back, decades back, and even the price of your house will fall 2 Times more.

If it's not easy to get started, and it's all illegal-there won't be a lot of people coming into the industry. The new money is gone, and the money is spent. Don't fool yourself with revolutionary ideas.

10. Don't think of airdrops as staking anymore

The word staking in 2019 is too busy. Listen, if you send coins to a contract, you get more tokens in a few weeks-this is not staking at all! That's the airdrop.

This happened before 2017. However, as staking has gained legitimacy through Cosmos and other networks as a term, it is now being abused to dump to unknown people. Be careful, staking has a stronger economic purpose, a stronger community sentiment, and a higher retention rate.

11. M & A-not the same in the cryptocurrency world

Enterprise projects are growing and growing, while community-funded projects are mostly on their way to zero-despite a lot of innovation! But they have no funds. So what usually happens? Richer organizations will buy them.

I'm not sure if this makes sense in the cryptocurrency space. Because most things are open source, you can use them directly. In addition, how expensive would it be to acquire a bankrupt company? We have also researched some of these options ourselves, but so far nothing seems to be really worth the time and money to do it.

On the other hand, we see exchanges merging other smaller exchanges because these transactions are all users because they are "centralized" companies. This makes sense. Then, the key may not be technology, but audience.

The value of the audience is already much higher than the product. If you have users, you can transform, change, and market anything.

That's it for here. I hope I haven't offended anyone. After all, the industry is still in its infancy and all predictions and criticisms can be overturned by actual results.