How long will this evil wind of “blockchain” continue to blow?

An evil wind suddenly rose

Recently, the quarrel between Zhu Xiaohu, Chen Weixing and other bigwigs about blockchain has once again aroused public attention to blockchain. Originally, it was thought that with the publication of the Internet Finance Association naming Xunlei Chain, the blockchain craze that started at the end of 2017 would quickly die out. Unexpectedly, this evil wind not only continues to this day, but has become even more lively.

Why is it called evil wind?

In the article " What should the real blockchain trend look like? ", the author mentioned two values ​​of blockchain for enterprises: "One is the reshaping of business processes, resource savings, or efficiency improvements brought about by the introduction of blockchain technology; the other is the hype space after the tokens in the blockchain evolve into virtual currencies." These two values, one positive and one negative, determine whether the blockchain trend is a good thing or a bad thing.

The first value of blockchain is undeniable, and it has become the focus of governments and major giants. However, given that there are still many limitations on the technical level and it needs to proceed step by step, there is no room for speculation in the short term. The second value focuses on tokens, which have the attributes of financial instruments and naturally have room for speculation.

The blockchain craze in 2016 was participated by financial institutions and giants, promoted by government organizations and experts and scholars, and focused on establishing a blockchain alliance to promote the implementation of blockchain at the industrial level. The focus was on the first value of blockchain, which is to create a clear stream.

The recent blockchain craze has participants such as ICO entrepreneurs and various companies that are trying to jump on the bandwagon, and is promoted by cryptocurrency moguls and investors. The focus is on issuing tokens and chasing the wealth effect behind the blockchain concept, which is essentially a way of cutting leeks and collecting IQ tax, and is an evil trend.

This trend started with the beneficial effects brought by the surge in the prices of various virtual tokens in 2017. Subsequently, more and more entrepreneurs and bigwigs rushed in to try to get a piece of the pie. Many people held high the banner of "blockchain reshaping the world" and engaged in the business of "issuing/hyping tokens to get rich quickly".  

Bookmakers, speculators and broilers

In a typical ICO project, there are three types of players: bankers, speculators, and chickens.

The market makers are the token issuers and their stakeholders, such as the bigwigs who support various ICO projects;

Speculators are early participants and self-proclaimed senior investors. They usually have many years of investment and speculation experience and think they are experienced. Some of them were once senior stock investors, some have survived the long night of early virtual currency investment, and some may be lucky enough to have successfully escaped from a Ponzi scheme.

Broilers are novice investors who are purely confused by the dream of getting rich and high-sounding concepts. They have only a vague understanding of investment risks but are full of desire for wealth. They can be seen everywhere.

If it is just a game between the banker and the speculator, the two are fighting wits and courage, just like Zhou Yu fighting Huang Gai, one is willing to fight and the other is willing to be beaten, which is fine. What is really hateful is that they use the public's belief in blockchain to lure the spectators in and become chickens. In this game, the banker takes everything, and the speculators eat the chickens. The wallets of the chickens are the common objects of covetousness for both.

How to distinguish between speculators and bots? Generally speaking, those who see through the scam but still participate in it are speculators; the rest are bots.

The key to the problem is to lure broilers into the game. What is lure? To paint a bright prospect of getting rich is to lure; to vigorously promote the prospect knowing that it is a slim hope is to deceive.

In the case of Ezubao, the platform was operating a Ponzi scheme under the guise of "financial leasing, inclusive finance, and Internet finance." Packaging Ezubao as a new star in Internet finance and a pioneer in inclusive finance was a scam; stimulating investors' desire to get rich by offering higher yields was an inducement.

Many people who watched the show at that time did not understand inclusive finance or Internet finance, but they believed that inclusive finance and Internet finance were the direction of the future, because this could be supported by many authoritative channels, and government documents encouraged the development of inclusive finance twice a day. Therefore, when they equated Ezubao with inclusive finance and Internet finance, they successfully entered the game and became chickens. At this time, the more they believed in inclusive finance and Internet finance, the more confident they were in Ezubao, and the more hurt they were when it collapsed.

In many current ICO cases, issuers package themselves as trendsetters embracing blockchain, and use a white paper and a “hello world” to give themselves a strong sense of technology. This is a deception; they loudly announce the innovative advantages and “epoch-making” significance of their own projects compared to Ethereum and Bitcoin, and explicitly or implicitly use the increase in the price of Bitcoin and Ethereum as examples. This is a lure.

Many participants do not understand blockchain, nor do they understand why the country prohibits ICOs, but they believe that blockchain is the direction of the future, which can also be confirmed by many authoritative channels. Similarly, when they equate token issuance with blockchain innovation, they successfully enter the game and become chickens. At this point, the more they believe in blockchain, the more confident they are in various virtual tokens.

Pointless arguments and debates

If the road is not smooth, someone will clear it; if things are not fair, someone will take care of them. After strict supervision, various disguised ICO projects are still raising money, and the evil wind is flourishing, so many people have come out to criticize, such as Zhu Xiaohu who publicly declared, " Don't pull me into the 3 o'clock group. Some opportunities are better to be missed, and some money is better not to be earned. Take care of your dignity ."

However, this debate never has a conclusion. Facing accusations, bookmakers and speculators have a self-consistent logic: they claim that they are participating in the great practice of blockchain, and token issuance is just a tool for them to change the world. As for the huge wealth earned after the token appreciation, it is nothing more than a reward for courage and innovation.

Unless the project collapses, no one can logically disprove this argument, so it is meaningless to argue with each other. In many cases, it is just to curse the liar for being shameless. Once the argument goes from reasoning to personal abuse, once the other party talks back, it becomes a group fight, which is just a lot of fun and meaningless.

Yin alone cannot produce anything, and Yang alone cannot grow. Any new thing has both advantages and disadvantages, and it is difficult to fully purify it. The speculation wave caused by the token system is a drawback of blockchain technology in the process of penetration and promotion, which is also difficult to cure.

On the one hand, the tokens themselves are polarized, with both fraudulent virtual coins and Bitcoin and Ethereum. The former are condemned by everyone, and it is easy to reach a consensus to ban and suppress them; the latter are supported by blockchain scenarios and have many supporters, so there is no consensus to ban and suppress them. The problem is that as long as the flags of Bitcoin and Ethereum are still flying, virtual coins will emerge in an endless stream and cannot be stopped.

On the other hand, the token system operates on the blockchain, is cross-border and decentralized, and the restrictions of a single country have limited effect. The facts are also in front of us. The regulatory authorities have taken iron-fisted measures, and the central media has repeatedly criticized them. In addition, the bigwigs in the blockchain circle have warned of risks, and giant institutions have publicly issued articles to distance themselves from them. Various disguised ICO projects are still going overseas, and their influence and penetration have not decreased but increased.

The oriole is behind

Human greed is the fundamental factor that triggers the token speculation craze. Cutting off the wealth effect can fundamentally cure greed. If no one benefits from something, it will naturally stop.

Speculation is a zero-sum game. At the beginning, the dealer and the speculators make money from the broiler chickens. When the broiler chickens are insufficient, the speculators who think they are smart become the broiler chickens. The dealer starts to make money from the speculators. When the speculators lose all their money, the trading activity tends to zero and the market collapses. It seems that the dealer has become the ultimate winner and has a huge fortune.

However, as Fan Zhongyan said in his poem, " A stretch of green mountains and a secluded scenery, the fields of the previous generation are harvested by the next generation; the later generation should not be too happy about the harvest, for there are still future generations to come ."

The banker can catch the cicada, but how can he know that there may be a oriole behind it?

The pursuit of profit is rampant and can only be curbed with heavy blows.