Silicon Valley Wang Chuan: The horn that has entered the smart contract has been blown

1. The launch of Facebook's Libra blockchain white paper blew the horn of the smart contract. Prior to Facebook, the total installed base of all types of wallet software in the blockchain industry was estimated to be only 35 million worldwide (data source statista website), and now such technology will be popularized on Facebook, close to three billion users. It is a difference of two orders of magnitude, and quantitative change will inevitably lead to qualitative change.

2. All the agreements and ideas in the white paper can be changed later. It is a waste of time to make predictions about the words and paragraphs in the white paper. With more than $40 billion in cash on Facebook, the Libra Alliance has 28 partners including Visa, Mastercard, Paypal, Uber and other business giants. In the communication and coordination with global regulators and legislators, there is reason to believe that this organization has the strength and wisdom to find a solution that is accepted by the majority.

3. Libra will provide nearly a billion people on the Facebook platform with a very simple interface to directly use blockchain technology, and force other competitors to catch up. This is bound to force Microsoft and other companies such as Google Amazon to launch a system that competes with it, which in turn will promote Europe and Japan to launch a system that competes with it. The following evolution cannot be analyzed in isolation alone. One or two companies can predict, and may exceed everyone’s imagination. .

4. In the traditional business model, the friction in the entire value chain is too large, and the transaction cost is too high. The cost from credit investigation, lawyer, accounting, payment/receipt, how to deal with default disputes, etc. is very high. This has led to a lot of hidden, unimaginable market demands that are not worth a single transaction. Once the transaction costs are low enough, and everyone in the world can easily trade directly through smart contracts, the huge productivity that is released will exceed everyone's imagination.

5. Several perspectives on smart contracts to reduce business costs:

a) Because the payment fee is close to zero, the frequency of payment by the buyer and the seller increases, and a small payment can be made every other day, every few hours, or even every few minutes, so that even if one party defaults, because the amount of default is small, the risk of the other party is also It will be small enough to be negligible.

b) A series of complex objective parameters can emerge on the blockchain, which can be directly referenced by the participants of the smart contract to determine whether a certain condition is met and whether a certain regulation of the smart contract can be executed. This eliminates the need for manual intervention for manual judgment, greatly reduces business costs, and delays contract performance without time. Many commercial transactions often require third-party custodians (escrow), and their labor services often cost hundreds, thousands of dollars or more. The development of smart contracts will continue to reduce the need for manual intervention, compress and automate such services.

c) Because the risk of default is reduced, the account period is greatly shortened, the service provider can reduce the fee, and the buyer and the seller win together.

d) Because of the greatly reduced business costs, various active tests and explorations can be carried out at low cost to discover new market demands and models.

e) When investing, the employer can automatically set the procedures, limit the way funds are used, quotas, etc., and reduce the need and cost of accounting audits.

f) A new and highly efficient commercial combination may emerge, similar to the symbiotic relationship between mitochondria and chloroplasts in the evolutionary history of paleontology, which combine to produce more complex cells and organisms.

g) Some standard smart contracts can be securitized, arranged, resold, mortgaged, etc. at near cost, which may be abused by some people at an early stage, but in the long run will greatly enhance the business of a complex system. vitality.

6. There will be multiple blockchain systems with different degrees of decentralization competing with each other. The two or three systems that will eventually win will be the largest and most open, the most ecologically complete, the lowest comprehensive transaction cost and the most efficient. platform. It is still too early to predict who will be the ultimate winner. But when a certain set of specific structural features of a player emerges, the thoughtful person will see it very early: it is!

7. Sooner or later, this will have a major impact on all businesses such as traditional commercial banks, investment banks, asset management, and insurance. The impact will start with the simplest and marginal business. Now studying finance majors who want to go to Wall Street investment bank job seekers, like a student in the 1990s, would like to apply to the New York Times/Times Weekly to be a reporter who looks sleek and looks like a tall man.

8. It is very difficult to imagine and understand the new demands and new organizational methods emerging under a new paradigm. It is difficult for the ancients to understand that a live star that has been packaged with low-level makeup can get huge rewards. It is difficult to understand the secondary market and derivatives of stocks. It is difficult to understand why traders who stare at computer screens in small offices will compare The peasants who work hard in the fields are richer. It is difficult to understand why some commercial organizations have been given a very high valuation in the capital market due to a lot of money.

9. In the same way, it is difficult for today to imagine a lifestyle of people who work in real time with billions of people around the world through various complex smart contracts. The future of wealth will not only be the deposits, houses, and gold in the bank, but will become between billions of people, or between people and machines, without permission, with high liquidity, 24 hours of uninterrupted trading. A variety of smart contracts and a variety of derivatives after they are arranged. You can use your smart contract to trade your workforce, intelligence or brand with the outside world in a way that is now unimaginable. You may even find that the concept of “realizing” becomes a false proposition. It is better to leave wealth in smart contracts. in. This is similar to the modern people's wealth preservation methods are mostly bank deposits and securities in the stock market (rather than being realized into gold, silver, pork and beef), but the future smart contract is one more high than this one.

10. Usually if you care about something, it means that it is a clear challenge to you. The ideal state is that you don't realize that there is something happening. For example, when I was a teenager, I was crazy and hysterically jumping, and I didn’t realize that my waist or knees might not be able to stand it. When I was older, I realized that certain sports, such as climbing a mountain, should be controlled to avoid hurting the knee. I think deeper, when there are many parts of the body, there are more "health redundancy" in the body. Even if a part of the local temporary loss is large, it can be quickly restored, or it can be compensated by other muscle groups, so I don't care about my health. The brain didn't even feel the existence of a certain part, and wanted to use it indiscriminately. Until one day, the wear was excessive, the redundancy was exhausted, and the illness was caused, and it was realized that there were still these problems.

11. This is back to the strategic point of view. The correct strategy should be to build multiple redundancy in all dimensions, rather than pursuing the extremes of an isolated indicator. In this way, if you encounter difficulties in any dimension, you can easily go around from another dimension, so that you don't even realize the existence of such difficulties. And this kind of difficulty is often stretched for others who don't actively build redundancy, like daily illness and torture.

12. When people talk about struggle to succeed every day, it actually means that the redundancy of the source of wealth in their subconscious is still very low, so the heart is seriously insecure. In the future, when the complexity of smart contracts, popularity and transaction costs have passed a critical point, the diversification of wealth acquisition and storage methods has increased greatly. For a considerable number of people, because of the high redundancy of wealth sources and storage, Too many ways to make money are so easy that there is no fear of poverty, and money is as common as the air, not a scarce resource worthy of chasing the competition. Many people don't even have the concept of lack of money, (what, me worry?), but like a jumping teenager, indulging in the resources of various inexhaustible smart contracts on the blockchain.

13. It is also possible that some people, because they were previously scared (as in patients with hypoglycemia), have instinctively focused on the overeating of various types of smart contracts and the hoarding of various resources locally without planning. Limit the burden of excessive redundancy generated after excessive local hoarding to maintain balance between body and mind. These people may have some kind of diabetes-like disease, a chronic rich disease for wealth (here, high blood sugar is equivalent to too much wealth, insulin is better than some reasonable allocation of resources, fat is similar to a poorly valued storage of liquidity Media). Diabetic patients will have symptoms of weight loss, frequent urination, and hunger and thirst. Patients with wealth diabetes will have similar demons and problems. After the popularization of smart contracts leads to a huge amount of resources, this will be an inevitable subject.

14. It can be regarded as a classical version of the intelligent contract between today's social people, but the return period is long, the transaction cost is high (and the default rate is high), and the scalability is poor (only a few can be kept at the same time) Smart contract relationship), low degree of automation (many links require manual intervention). In the future, people will be faced with low transaction costs and high scalability (thousands of people around the world are freely connected), and the two or three platforms with the highest automation are close together. The extremely high degree of scalability and automation may lead to a very small number of people quickly gaining unprecedented wealth and resources on such a platform, so that the super rich in the classical economic model is also awkward. The rapid growth of Bitcoin over the past decade may be just a preview of this megatrend.

15. Ultimately, our wealth depends on the scale and effectiveness of our cooperation with the outside world (rather than the possession of an isolated physical object). There is no doubt that the scale and benefits of future cooperation between humans will be orders of magnitude higher than they are today and will continue to grow. The development of smart contracts will completely change the mode of cooperation among individuals, redefining and harnessing wealth at the bottom, allowing us to open up and create a whole new world.

About the author: Wang Chuan, an investor, currently lives in Silicon Valley, California. Personal micro-signal 9935070, public number investguru, Sina Weibo "Silicon Valley Wangchuan". All articles express the author's personal opinion for reference only, does not constitute investment advice for the asset, investment is risky, the market must be cautious.