1. What are the three strategies for investing in blockchain?
An investment strategy is a strategic deployment and plan that guides investors' overall investment. As the saying goes, “the outline of the project” is our overall strategy and framework. With this framework, we can clarify our thinking, rationally allocate our funds and find suitable investment targets.
When we do anything, we pay attention to "time, place, and peace."
So is investment. We must be clear about the three macro strategic elements of the current industry: "time, location , and harmony" .
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Among these three strategies, "Tiny" ranks first, and Tianshi is the current stage of development of the blockchain industry.
Second, the "time" of the blockchain industry
1. Enlightenment from the early development history of the Internet .
The same goes for the development of Internet technology. In the 1980s and 1990s, when Internet technology first began to rise in the United States, then US President Clinton began to build a large-scale "information highway" plan. This plan is supported by the US government and provides a large amount of funds for the large-scale development of the Internet-related infrastructure industry.
In this context, the United States has created an Internet hardware giant-Cisco, which provides hardware facilities for the development of the Internet, and an Internet service provider-AOL. This company provides network access services (similar to China Broadband service provider). This allowed the United States to begin to have extensive access to the Internet. Then there will be subsequent Internet application giants such as Amazon and Google.
Therefore, the development stage of the Internet at that time determined that companies that could provide investors with high returns must provide infrastructure. In terms of hardware, there are a large number of Internet equipment companies, and in terms of software, they are Internet service providers.
Have you heard of companies like "pets.com" and "etoys.com"? I estimate that 99% of investors do not. Their businesses were similar to online pet stores and online toy stores at the time. They are Internet companies that have similarly emerged in the 1990s and Cisco and AOL.
In the past, they longed for the ambitious ideals of the Internet to change their lives, but all failed. Except for seeing their names in history books, most people have long forgotten their former glory.
We now look back and find that their ideals have all been realized today. But unfortunately: not at the time they were, but after years of implementation by another group of companies; it was only after the Internet infrastructure was completed.
Therefore, if you invested in application- related Internet ".com" companies in that era, the chances of losing money were quite high, and the investment and infrastructure-related companies were quite successful.
This is the strategic significance of "sky" to the investment framework.
2. The current development stage of the blockchain industry .
The blockchain industry is still in the early stages of development and is not closely integrated with our lives. At least in our daily lives, we don't see too many applications and scenarios. This is not that the blockchain industry itself has no future and meaning, but that the development of blockchain technology has not matured to a stage where it can carry large-scale, high-frequency applications.
Therefore, at this early stage, our investment framework must be laid out around infrastructure.
The three major mining machine manufacturers occupying a monopoly position: Didn't Bitmain, Jianan Yunzhi, and Ebon International rise rapidly at this stage? why? Because Bitcoin and many digital currencies need miners to participate in development and survival, miners must have miners to participate. Therefore, miners are the current rigidly needed facilities in this industry.
Does this look like the hardware role Cisco played in the early days of the Internet?
Why do all kinds of digital currency exchanges develop rapidly and there are also exchanges such as Binance, Huobi and OK that can generate rich profits? Because at this stage, the buying and selling of digital currency is the industry's rigid demand, and it is the service required by participants at this stage.
Does this look like the Internet service provider role that AOL played in the early days of the Internet?
In addition to mining machines and exchanges, there are still a lot of infrastructure and services of the blockchain industry to be improved and developed at this stage , so this is why " the areas worth investing in at this stage are concentrated in the blockchain ecosystem Scenarios , not the realm of combining blockchain with the real economy and life . "
Third, the "geographical advantage" of blockchain industry investment
When we say "geographically," we mean finding a circuit that is good for ourselves, and fighting where we are familiar with and can use our advantages. Otherwise, no matter how good the day is, if you choose the wrong battlefield and fight in a place where you have absolutely no advantage, then you must lose.
Since 2019, the division of the track in the blockchain field has become more and more obvious. There are mainly two tracks. One is the territory controlled by traditional institutions and Internet giants. The main reason is that they are platforms that combine blockchain technology with actual application scenarios.
The most typical in China are a series of applications such as blockchain platforms, logistics tracking systems, and blockchain invoices developed by giants such as Alibaba, Tencent, and Jingdong. Overseas, there are blockchain applications developed by giants such as IBM and Microsoft, and industry alliance applications they have formed: such as super ledger.
However, these do not have any interest relationship with our ordinary people, and they have nothing to do with the interests of ordinary investors. So if our ordinary investors focus on tracking these applications and progress, they are choosing the wrong track.
What really has a close interest with our ordinary investors is that only open-source projects that have issued tokens can participate without threshold. This is what I said, "The truly valuable projects of the blockchain are all open source and open-source projects such as open source public chains, open source protocols, open source applications, and issued tokens.
Only these projects will produce unicorns in the future. The so-called alliance chains, private chains and other traditional institutions or Internet giants using blockchain technology to build platforms have little significance and have nothing to do with ordinary investors. "
Fourth, the "renhe" of the blockchain industry investment
What we call "people and harmony" in the blockchain industry investment refers to the possible application fields that meet the needs of the public.
In order to develop in any field, it must ultimately be implemented, and the need for applications must be found, otherwise it is just mirages, hype and bubbles.
Earlier we talked about "timeliness" and "location". The goal is to target various application scenarios in the blockchain ecosystem, so we need to find projects developed for these application scenarios, and such projects must have issued tokens and Open source projects on the exchange . Therefore, "people and" is to find out which of these application scenarios may be just needed and which may land .
There are three types of fields in any industry in any development period.
We divide the scenarios within the blockchain ecosystem into three categories:
1. Mature areas
2. Just-needed but immature areas
3. It is unknown whether it is just needed but worth exploring boldly .
1) Mature fields: These fields are the hard-to-reach fields of the blockchain, and monopolies and oligarchs have emerged in these fields. It is almost impossible for existing followers and latecomers to catch up with oligarchs. As the situation develops, oligarchs will gradually monopolize all markets, and other competitors will gradually disappear .
2) Just-needed but not yet mature: These areas are also just-needed areas of the blockchain. Although they are just-needed, oligarchs have not yet emerged. Therefore, in this period of time, this field will present a multi-headed competition situation . This situation will develop to the emergence of several oligarchs, resulting in this area gradually evolved into the first category.
3) It is unknown whether this area is just needed but worthy of bold exploration: this type of field is currently the product of the project, but it is not known whether such products have application scenarios, or the application scenarios are currently very controversial . Once this field of application is confirmed, it will evolve into the second type of field.
The proportion of these three fields in the industry will change continuously with the development of the industry.
An industry is a rising industry in the early stages of development. The first type of "mature areas" must be a minority. As the industry grows, there will be more and more "mature fields". After the industry has developed for a long time, the "mature fields" will occupy all aspects, and the overall investment space of this industry will be very small, and the latecomers will not have many opportunities for outbreaks.
If these three categories are analogized according to the stock market:
The first type has the lowest risks and the most stable returns, and is blue chip stocks;
The second category is medium risk, objective returns are growth stocks;
The third type of risk is the largest and the returns are astonishing. They are small-cap stocks.
Fortunately, for the blockchain industry, it is still a rising industry, and its development is still in the absolute early stage, so the first type of "mature fields" is still very few, so we can still grasp this field relatively easily now. .
And because the industry as a whole is still in its early stages of development, even "blue chip stocks", the returns from stable positions are amazing. Buying big blue chips in the stock market, a year of income may be a dozen percent is quite good, and in the currency market, to buy the largest market value of Bitcoin, Ethereum, the annual income of tens of percent is not exaggerated. Bitcoin, Ethereum have increased more than 50% since the bear market in the first half of 2019.