Tony Tao: Blockchain for ten years, from cryptography community to big country game

Editor's note: On November 9th, invited by the blockchain media Babbitt, X-Order founder Tony Tao gave a speech at the Wuzhen World Blockchain Conference.

In this speech, Tony systematically compared the development and similarities between China and the US blockchain industry through self-developed knowledge mapping tools, and shared his future China blockchain advantage.

The following is a speech finishing, enjoy:

From 2009 to 2019, the blockchain has gone through ten years.

In 2009, the first block of Bitcoin was dug up and the history of the blockchain officially opened.

• Wuzhen·NEO founder Da Hongfei: The next generation of the Internet uses a hierarchical structure
• Wuzhen Hu Jie: Libra vs DCEP, one is a new bottle of new wine, and the other is a new bottle of old wine.
• Bella Fang: The exchange is at the top of the food chain. How can small and medium-sized projects seize this channel?

In 2019, the world's influential governments, such as the United States, China, and Germany, vigorously promoted the blockchain.

Next, let's take a look at what happened in the blockchain industry over the past decade.

2009-2013

Awkward teenager

Wuling young gold city east, silver saddle white horse spring breeze

Theme: Grassroots Community Against US Hegemony

Protagonist: Bitcoin

Participant: Minority Geek

Keywords: encrypted digital currency

Application area: financial innovation

The root of the blockchain: Bitcoin

In 2009, under the background of the global financial crisis caused by the US subprime mortgage crisis, Nakamoto took over. The discussion and application of Bitcoin has gradually spread from the niche cryptography community to the world.

Even so, the participants are still niche geeks, and the discussion of Bitcoin is still spreading on a small scale. At this time, people have not separated the blockchain technology from Bitcoin. The keywords discussed in the community are mostly CryptoCurrency.

We can find that during this period, the community's application of blockchain technology and Bitcoin are highly overlapping, that is, currency. The crypto-digital currency community at the time was full of experimentation, romance, grassroots, geeks and even idealistic colors. In order to innovate the financial system at the time, the global blockchain of the Internet (where the blockchain is more suitable for Crypto) is brought together.

Key events:

• In 2009, the Bitcoin Creation Zone was dug up by Nakamoto.
• Silk Road accepts Bitcoin as payment method in 2010
• MtGox, the first bitcoin exchange in 2010, started operations
• The emergence of LTC in 2011 using bitcoin open source code evolution
• The first ICO in 2013: Mastercoin appeared on bitcointalk

The Bitcointalk community known as "Second Gift of Nakamoto"

Key words for the above events can be found, including: mining, payment, exchange, Altcoin, open source, ICO, community . These keywords have influenced the development of the entire blockchain for ten years.

When we talk about blockchain technology and the future, we should not forget these root causes. We should thank the open source community, thank the pioneers, not the one-size-fits-all saying that "coins are bad, blockchain technology is good."

2014-2017

Fenghua Zhengmao

Jiangshan is so beautiful, attracting countless heroes

Theme: Blockchain is everything

Leading role: Ethereum

Participant: Capital / Entrepreneur

Keywords: blockchain technology

Application area: general technology

Leading the protagonist of the great era: Ethereum

In the second half of 2015, the term blockchain was frequently appeared on the media. The most representative event was the cover article "Economic Machine" by the Economist on October 31 of this year. Since then, the new concept of blockchain has blossomed everywhere and rushed to the world.

The reason why the protagonist of this period changed from Bitcoin to Ethereum was simple: Ethereum Turing's complete smart contract directly extracted the "blockchain" attribute from bitcoin.

As a result, not only is the encrypted digital currency community using Ethereum to achieve the infinite possibilities of blockchains, but more importantly, everyone has found that the cost and threshold for researching and utilizing blockchains has plummeted. Financial institutions, research institutions and even governments have begun to join the blockchain research and pilot teams.

October 31, 2015 Economist cover article "The Machine of Trust"

For research institutions and enterprises, it is more desirable to use blockchain technology to transform or upgrade their existing business models. Therefore, in 2016, the division of public and alliance chains began to emerge , and blockchains also emerged from the concept of financial technology. Expand to more advanced data technologies.

The concept of blockchain has rapidly expanded from the financial sector to more. The global blockchain carnival has followed.

Now let's review this period, we can find that this is the typical Hype Curve peak stage: the irrational fanaticism caused by the over-pursuit of a new technology.

A network of knowledge maps dotted with Ethereum

Key events:

• 2014 Ethereum ICO
• 2015 USDT appeared
• 2015 Ethereum online
• IBM launched HyperLedger in 2016
• In 2016, Vitalik proposed alliance chain and public chain
• The 2016 DAO project on the Ethereum was smashed after being highly launched.
• 2016 NEO (small ant) ​​online

As the protagonist of Ethereum, the key events of this period are basically related to it, including not only IBM, which began to study the Ethereum test chain in 14 years, but also NEO, which is called "China Ethereum."

But there is one exception – USDT.

In fact, until now, the importance and impact of USDT on the blockchain world is still underestimated. According to CMC data, USDT has increased its market value by 16500 times since March 2015. As a comparison, Ethereum's market value growth is “only” less than 500 times. It can be said that since 14 years ago, the most acceptable way to reflect the acceptance of the blockchain financial market is the stable coin originator: USDT.

Even in the opaque operation, people are often criticized, and the social experiment of stabilizing the coin is successful, and this directly affects the later Libra.

USDT market value curve

2018

Capital is gone, supervision is coming

Flowing water, spring, spring, heaven and earth

Theme: Compliance

Protagonist: SEC

Rule maker: SEC

2019

new player

When the wind and the waves break, there will be time when the clouds sail to the sea.

Theme: Big country game

Leading role: Libra

Participant: Government / Large Enterprise

Keywords: stable currency

Application area: Back to finance

Libra that makes it difficult for everyone

In 2018 and 2019, it is more suitable from the perspective of length, keywords, etc., but for me in the blockchain industry, I prefer to separate them.

From the mentality point of view, 18 years is the end of the past fanaticism, and in 19 years it blew the horn of the new era. Almost every practitioner has experienced the baptism of falling from heaven to the world in 18 years. Most speculators suddenly find that technology is good in the future. If there is no landing support, it is useless.

The tides receded, and the banknotes that blindfolded people suddenly fell, and the value of the project was good. It was true and false, and it was clear at a glance.

Key events:

1. STO is getting more and more attention in 2018
2. Staking direction in the community in 2019
3. DeFi developed rapidly in Ethereum in 2019
4. In 2019, the mainstream exchanges’ compliance/licensing process was obvious
5. BTC prices dominated by Coinbase in 2019
6. 2019 Facebook launches digital currency project Libra
7. The first SEC Reg A+ STO project was launched in 2019
8. In 2019, China, the United States, and Germany promoted the development of blockchain from the national level.

In 2018, ICO evolved into a variety of IXOs. But even so, this form of free fundraising cannot be avoided.

This is because: SEC is coming.

Since 2018, equity financing has become more and more common, and people are waiting for the official supervision of the SEC. Finally in 2019, the first pass that met the SEC Reg A+ financing specification appeared: BlockStack. This represents the formalization of blockchain securities from the grassroots community to regulatory norms.

Speaking of the protagonist of 2019, non-Libra is none other than. Libra makes everyone feel overwhelmed: communities, governments, businesses and even Facebook itself, because:

1. For the country and the government, Libra’s initial basket of currencies and node alliance strategies seem to challenge the authority of sovereign currencies;
2. For big companies, Facebook does it, do it or not, how to do it;
3. For the community, Libra threatens the original rules of the game and faces the danger of being marginalized;
4. For Facebook itself, the use of blockchain technology for financialization attempts is not as simple as imagined. Libra-level finance is essentially a political choice rather than a commercial choice.

The emergence of Libra made people realize that from the perspective of stable currency, it is meaningless to discuss the coin-rich and non-coin blockchain. You can say that it is coin-rich, or it can be said to be coin-free . This important stable currency Which country's currency is supported by the back.

As a result, the blockchain discussion around the world has once again returned to finance itself – not that other areas of application are not important, simply because the national financial strategy is too important.

Libra has made countries aware that the blockchain does have the key to future global national-level financial competition.

Ten years summary

Looking back at the development of the blockchain in the past decade, what can we see from these four protagonists?

Three important conclusions:

1. Open communities are the foundation for the development of blockchains.

During the development of this decade, the protagonists of the first eight years, "Bitcoin" and "Ethernet", came from the community. It can be said that if there is no open community, there is no blockchain today.

2. Finance is the most important application of the blockchain in the past decade.

The key word between Bitcoin, Ethereum, SEC and Libra is finance. The internationally recognized mainstream blockchain application direction is also finance. Although other application directions are also worth looking forward to, the most important blockchain application area is only one, that is, finance.

Beginning in 3.2018, the United States became the protagonist of blockchain and open finance.

The protagonists of Bitcoin and Ethereum in 2009-2017 will give way to SEC and Libra after entering 2018. The SEC has developed US securities regulations, and Libra is increasingly inclined to become the channel and tentacles of the US dollar in the future to open the financial world.

American rule

It can be clearly seen from the table below that the US's dominance in the blockchain and open finance sectors not only stays at the SEC and Libra, but is a comprehensive layout that has gained global dominance at multiple levels. There are SECs for supervision; Wall Street for financial support; Silicon Valley for entrepreneurship and technology; Coinbase and Bakkt for pricing rights; US dollars for pricing rights; and Libra for multi-party games.

Among them, pricing power and pricing power are unfamiliar to most people, but this is the key to the financial system. Generally speaking, the most traded platform in the trading market is Huobi and Binance, which represent China and Asia. In fact, in 2019, the price of Bitcoin was determined by the US exchange Coinbase. At the same time, Wall Street's darling Bakkt has been ranked second in the world in the field of bitcoin derivatives in just two months.

There is also the fact that the price of most blockchain passes, including Bitcoin and Ethereum, is denominated in US dollars – even within Huobi, the largest exchange in the country. This means that the hegemony of the dollar has spread to the domestic blockchain financial system through pricing power.

In contrast, China's past advantages in the blockchain sector include having the world's largest mine community, more than 60% of global blockchain technology patents, and the world's top three Huobi and Binance exchanges. It is a pity that the above three advantages gradually fade in the new era:

1. The computing power embodied in the mining industry is in a secondary position in the blockchain, and it is increasingly impossible to determine the direction of industry development;
2. A large number of patents require market verification and landing, especially in the blockchain industry, which is rooted in the concept of open source community. Therefore, Europe and the United States, as the source of the blockchain, do not pay attention to patents. On the contrary, the open source community speaks with code.
3. As for the exchange, in addition to the above mentioned pricing power and the loss of pricing power, the more direct reason is the lack of domestic supervision.

Comparison of blockchains between China and the United States in more fields

First, the company

 

Let's take a look at the comparison of other aspects of the Sino-US blockchain. According to Crunchbase data, there are more than 1,300 blockchain companies in the United States and 230 in China. If this number is acceptable, then the next fact: Singapore’s registered blockchain companies surpass China, which will make many people different. .

The reason is very simple. Many domestic blockchain companies are afraid to register in China for policy reasons and can only be forced to go to Singapore. On the one hand, the openness and advancement of the Singapore government is amazing, on the other hand, I feel deeply regretted for the domestic blockchain entrepreneurial environment.

The above picture shows X-Order's knowledge map showing the number and importance of blockchain companies between China and the United States. Larger representations are more important and more influential in the network structure. It can be easily found that the area representing the United States has a larger area than the number of nodes in the United States, indicating that the blockchain companies in the United States are not only superior in quantity but also better in quality and influence.

Second, the fund

 

The following are the top blockchain funds that we have used to score multiple dimensions. The top ten funds only distributed capital and NGC Ventures grabbed 1.5 positions for China. On the one hand, this is related to China's immature financial and capital fields. On the other hand, the previous policy environment has also led to such a result.

The following is a network of knowledge maps based on the Ethereum ecological project, people and capital, which can be found that the US elements dominate.

The prototype of open finance: BlockStack listed

Through the above comparison between China and the United States, it can be found that Libra, which is concerned by the government and large enterprises, is important in the open financial system based on the blockchain technology, but its importance is mainly reflected in the monetary base dimension. The future of open finance is a combination of systems and a system of global collaboration.

Taking BlockStack as a prototype of an open financial system, let's take a look at how this global system works.

It can be found that in the case of BlockStack's listing, as a carrier, it adopts the industry standard Ethereum ERC-20 specification to issue its certificate; it meets the SEC Reg A+ standard at the compliance level, and also provides credit recognition for more mainstream institutions to participate. Binance and Hashkey provide financing services and are listed on Binance.

Such financial industry operations are spontaneously formed. Ethereum, SEC, exchanges, brokerages, US dollars, bitcoins, and investment institutions all actively or passively participate in the division of labor, as if there is an invisible hand in coordination. It can be imagined that in the near future, with the promotion and recognition of countries around the world, the system of open finance will become more and more mature.

China's future advantage

Faced with the future of open finance, I deeply believe that China can catch up and occupy an important position. The biggest reason is that the national level attaches importance to the blockchain and attaches importance to finance.

Open finance is a game between the state and the state, and it can only be successful if it is valued at the national level. Among them, adopting a more comprehensive perspective and tools, such as graph network research and open financial world , is one of the effective means to gain advantage in this open financial game between countries.

As the world's first sovereign digital currency, DCEP has already demonstrated China's accumulation and execution in the field of open finance. In addition, as the leading country in the Internet era, the open source and openness of our Internet generation and blockchain communities also reflect their integration advantages.

Finally, I believe that people at the venue can work together to develop China's blockchain and open finance together.

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Written in the back

X-Order is an investment research organization dedicated to discovering the order of financial expansion. It hopes to use machine learning, blockchain and the certificate economy to discover the most cutting-edge open financial innovation.

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