Wuzhen·Coco Finance Li Lao: When we are investing in digital assets, what are we investing in?

On November 8th, the “2019 World Blockchain Conference·Wuzhen” hosted by Babbitt was officially opened. The conference gathered more than 100 global blockchains, digital assets, AI, 5G experts and scholars, and technical geeks. Opinion leaders and founders of popular projects, with the theme of “application unbounded”, explored the application of blockchain, technology frontiers, industry trends and hot issues, and promoted blockchain technology and industrial innovation.

On the afternoon of November 9, in the theme forum of "Opportunities and Challenges of Digital Asset Trading", Coco Financial COO Li Lao delivered a speech entitled "Quality Digital Assets in the Enlightenment Period".

In the speech, Li Lao divided the digital assets into three categories: primary assets, certificate assets and securities Tokens, and analyzed them separately, and shared the experience of reducing risks when investing in digital asset projects.

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The following is the full text of the speech by Babbitt:

Hello everyone, Coco Finance has just been established for two or three months, and the exchange and trading platform will be launched on October 24. We did a lot of meticulous research during the research process of the previous period, including sharing and thinking with many industry predecessors. The first time we are in what period, in a big logic, if there is no place to stand, this battle is not to win.

First of all, I explain digital assets. Everyone generally talks about encrypted assets, but I prefer to talk about digital assets. It has been ten years since the encryption of digital assets represented by bitcoin, but from the entire human society, from the Chinese society, we are actually in an enlightenment time. The so-called enlightenment, what is the "digital assets", the evaluation of digital assets, the development of digital assets, the total value of digital assets in society in the future, and the number of shares in each family, standing on this node today is Without concept, these things are to be confirmed afterwards. We define this period as the "Enlightenment Period". In the so-called Enlightenment period, our definition of these things is still in a very vague stage. We hope that Cocoa and our friends here will become part of history and become part of the development of encryption assets.

Here is a review of what happened in the past decade. On the left is the volume of the BTC, and the BTC is not on the right. Why is it called Enlightenment? We are standing at 6 o'clock in the morning. There is no fundamental change in this market. Their proportions and figures are still very close. Of course, some changes have already begun. In the first half of this year, we know that many people in the circle have been vacated during the BTC rise. why? Because the logic failed, the participants changed because of changes in the market. If we don't figure this out, there will be a lot of changes, and we will pay a heavy price.

This is the basic CMC data, there are only 3053 cryptocurrencies and Tokens, and all 20,000 are traded. It seems ridiculous, but the market is in the enlightenment period and needs a lot of enlightenment institutions. In fact, today's digital asset trading platform is playing this role. Of course, organizations including the media are playing this role, spreading the concept in the world and introducing more funds. What changes have occurred in different curves, and BTC has had a very strong rebound this year after a sharp drop last year. But we see that there are many currencies left behind, why? I will be able to share with you why I will fall behind. As an investor in digital assets, if we don't know what is going on behind us, we must have failed.

What are we investing when we are investing in digital assets?

After doing enough research, we believe that there are three types of crypto assets available today. If different currencies use the same set of investment logic, they will die very badly. This is a problem that ordinary investors often encounter during the participation process. The fundamental reason is that they are different species, some are primitive assets, some are securities, some are general-based, each asset undergoes different things during this period, and the incoming money and capital are also different. These capital operations are also different. If you treat it with the same logic, you will lose it.

One of my common metaphors is to participate in the competition, just as you enter a trading platform and buy some coins. But do you know what competition you are participating in? Are you playing table tennis or playing football? The gameplay is completely different. Some people played football by playing table tennis and lost. Because at the cognitive level, you don't realize what kind of things you are involved in at the beginning.

Below, I will talk about the changes we are observing about these three types of assets.

Native assets

This is an invaluable two satellite photos. On the left is the map of Beijing in 1979. At that time, China was just beginning to reform and open. At that time, Beijing's greenery was particularly good. In fact, the Beijing city at that time was very small. The same is true of Beijing today. When I talk about native assets, I like to use this picture to illustrate many things. We buy original assets today, BTC or Ethereum, other public chains, we call them native assets, which are used within the system. .

What are we actually investing in when investing in such assets? What was the investment when I invested in a property in Beijing? The investment is the prosperity of the economy. When I bought this house in 2000, the gambling was that the city added hundreds of thousands of people every year, and the gambling was the prosperity of the city, which is very difficult to gamble. If the bet wins, you can have excess income. The personal effort is not so big. Your efforts are to understand the city, understand the city's planning, and understand the country's planning and development. Let's go to see BTC, ETH, EOS. When we look at these things, we are observing whether there is a future in a city, and whether its economic ecology can be built. Its currency is the pass in it, flowing inside, this is what we are betting.

When we invest in public chain projects, we ask ourselves, do we really need a public chain in the future? If not, then most of them will die. If so, is there a public chain in all areas? Or do each region have its own public chain? This determines our investment strategy and which ones we should choose. There are many classifications of native assets. Sometimes the mission set by the founder does not necessarily follow it through the whole process, and the user will change it.

This is the historical trend of ETH on BTC. ETH and BTC are two kinds of original assets. Originally BTC was doing digital currency, which is a great desire for some technical punk. Today we already know that Nakamoto's vision has completely failed. In fact, when it began to be traded by Bakkt and introduced mainstream funds, it has become a target similar to gold investment. In my opinion, BTC is gold in the future digital assets, that is, reserves, no other functions, no other functions.

How many companies in the United States support Ethereum and try to build something on it? If its future direction is like this, we will know how to evaluate Ethereum, and finally it must be grounded. Now everyone is watching the performance of things, it is because there is no actual landing, and the landing is a long time. After the BTC changed its target, it changed its value from the payment currency to the stored value. It has already landed, which is why there are so many funds to support it, including the currency circle itself. I think after last year, many people have transferred funds to BTC. Up to now, from the high point to the present, Ethereum has fallen 90% against BTC. The fundamental reason is here. Because of its landing, the way people evaluate it has changed radically. If Ethereum wants to revive, it must wait for 2.0 to achieve. The BTC no longer needs this, and this is a big change in the two native assets.

Looking at EOS and Ethereum, I can also prove my analysis. EOS is a global distributed computer system that provides another standard. This result is very interesting, waiting for it to be the highest on the main online line in April 2018, with a ratio of 7:1. There is no change in the two public chain evaluation systems of Ethereum and EOS. There are few applications for landing. It is also the most outstanding in the POW and POS paradigms, so they have not changed, and the valuation is like this. Their trading valuations have basically not changed in the past year or so. The way people judge the public chain is different, so their valuation methods are different.

2. Passing assets

What is a pass, which is defined as a token based on blockchain technology, condenses the rights, labor, and work into a Token carrier. Think of this as a unit that can be circulated, and call this the general economy. In fact, the CIS economy is not as magical as it is imagined. Its value lies in the use of blockchain technology, which reduces the cost of its value unit to very low, and then the circulation cost is very low. Blockchain technology or blockchain Token mechanisms can operate here, the root cause is a significant cost reduction.

Here is a project BAT to see how it works. I believe that the value of all CIS economies is based on efficiency and value optimization, redistributing benefits and diversifying interests. It can be seen that in the past Internet advertising system, basically this is the case: Google assigns advertisements and then distributes some advertising revenue to a website. In the BAT system, this model has completely changed, and the interests are distributed among advertisers, content providers, and users. That is to say, when I go to visit a website and browse through the BAT browser, I choose not to open the privacy. If you open your privacy, if the information after desensitization is open to it, the website or advertisement will mainly release the Token from BAT to me, and the money will come from the advertiser. Why do advertisers add such a fee? Because I got your privacy, got more data, and optimized the delivery, which formed a new model in Internet advertising. This model has an impact on the original Google and Facebook advertising models. Whether this model can grab a certain share depends on the degree of optimization. Because there are technologies, such as privacy technology and data mining technology, many technologies here not only use blockchain, but also achieve the optimization of advertisers' delivery efficiency.

If the optimization reaches a certain level, this thing will run completely. In fact, this project is still developing very well. Many websites in the United States have begun to intervene in their advertising system outside of Google. This is in the general economics. At present, I have seen a good idea and a good project on the ground. The current well-conceived projects in the general economics are still quite a lot, but the implementation is not so good, this is a good project.

BAT's architecture for BTC is still a very good project. As more and more such projects come to the fore, the reputation of the industry will get better and better, because it deserves to bring value and value to a specific business. At the same time, he also gained his own living space.

3. Securities Token

Many of the current ecosystems are based on the Security Token infrastructure. Do you have a clear definition of asset circulation? Before the establishment of the New China Stock Market in the 1980s or 1990s, asset circulation efficiency was very low. With stocks, buying and selling a company and participating in the company's performance is very efficient. We know that stocks, or the Shanghai Stock Exchange, Shenzhen Stock Exchange, and the New York Stock Exchange, are all amazingly efficient. How much money a company has to go public, its time efficiency is also very much. A shell can be sold for 1.6 billion, the root cause is here. In the era of a large asset circulation, can a hotel be circulated, and the entire Wuzhen and Xizha scenic spots can be circulated. Is it necessary to go public? No, this is a lot of space for Security Token.

The first two types of assets are risk investment to some extent. In the early projects of Jingwei Investment, most of the projects will die. This is the problem we will realize on the first day of entering the market. But unlike Security Token, Security Token is much more likely to survive. It is nothing more than a revenue problem. It will not die, it will not run, it will not become an air. This future has a huge space for development. Of course it is subject to infrastructure, including auditing, because it is compliant, and this asset is expected to become a very large asset circulation category using blockchain technology in the coming years.

There is currently no particularly good Security Token, let's take a look at a similar project. The property of the platform currency is very clear, corresponding to the proportion of income, it is already a security when repurchasing in the blockchain market, which is why some big companies in the United States can not get to the ground, because it is a securities category. Since 2018, the money in the currency circle has also required the project to land. At that time, they generally used securities. Just like when we invested in ETH in the first half of the year, we earned 3 times of BTC. When BTC rose 3 times, many high-quality currencies have increased by 9 times. This is a good project in the normal market. It is not controlled by small ones. Too high a project. This is the general-purpose asset, and the Security asset is currently undergoing the same changes in this circle.

How to reduce project investment risk?

Based on the above perceptions of the three types of assets, each type of asset has its support, and it has its problems. We must have points to participate when we participate, as well as risks that may need to be prevented. Cocoa Finance identified these 6 points when selecting assets, and how to minimize risks in high-risk projects:

1. Have actual technical support, or have actual application support; 2. The project direction has certain originality, or the existing solution has been greatly improved; 3. Enough team or community background, sufficient development resources. If there is only a good plan and no ability to land, it is worthless. 4. At least a white paper has been released. Today, the project is required to reach a certain stage, requiring certainty; 5. Have good community or user support; 6 There is no policy risk and basically meets compliance requirements, which is necessary for doing business in any country or region.

This is the full consideration of Cocoa Finance in the past period of time. These thoughts we have made are shared with you today. On the one hand, we are asking for your opinions. On the other hand, I hope that everyone can fully realize that in the very high-risk market, the only way to survive is to improve their own knowledge and find a reliable trading platform.

thank you all!

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