The triple value of blockchain industry that outsiders can never see

What is the core value of the blockchain industry for society?

The triple value of blockchain industry that outsiders can never see

Whether you are a cryptocurrency insider or a traditional outsider, if you have been following the blockchain industry for a long time, you will be tortured by the soul again and again: What is the core value of the blockchain industry to the society?

On the one hand, the battle over the mining arithmetic of blockchain projects such as Bitcoin, Ether, FIL and CHIA is intensifying, and the energy consumption and environmental protection problems cannot be underestimated.

On the other hand, various projects in the blockchain industry have emerged, and it seems that the value projects with real technical background are in a “silent period” of development for a long time after they have been financed with huge capital, while some cryptocurrency air coins with no technical content are being promoted in turn and become the focus of everyone’s attention.

In this way, the “values” of the whole blockchain industry have become abnormally distorted and disordered.

When people outside the circle look at the circle, they cannot see the charm behind the explosive growth of various DeFi technology protocols under the idea of “decentralization” of blockchain, and all they see is a group of young people who are not doing their jobs and their stories of playing with contracts to blow up their positions; on the contrary, people inside the circle are getting more and more impatient and confused on the way to get rich, and they cannot quietly feel the gradual feathering of blockchain infrastructure in various fields.

In recent times, Dogcoin (dog coin) SHIB (shit coin) and all kinds of animal coins were wildly speculated, and some people even went so far as to change their hands of the value coins they kept in their hands into these animal coins that everyone knew were air, and the market entered a state of extreme irrational prosperity, so much so that on 5.19 there was once again a huge shock market with a one-day waist cut, and the bull market braked midway, and the market was bullish or bearish without The direction.

As a preacher of positive values in the industry, I am actually afraid that the crazy bullish sentiment will swallow the potential technical value of the blockchain industry. Imagine, how can outsiders quietly think about its intrinsic value when they see all kinds of aircoin hype?

So, putting aside speculation and hype, where is the underlying value of the blockchain industry?

In my opinion, the blockchain industry has three layers of value: consensus value, technical value and application value.

The first value of the blockchain industry is called “consensus value”.
“Consensus” is a “time value” that is superimposed through time accumulation, historical inheritance and market exchange, which has many characteristics such as irreversibility, irreplaceability and non-elimination.

For example, Bitcoin is a peer-to-peer electronic payment experiment made by Satoshi Nakamoto in 2008, which was intended to replace the traditional bank payment system as a brand new monetary payment system, but it didn’t take long to realize that Bitcoin’s block speed and block processing volume were far from enough to support the huge payment needs of the traditional financial system.

But over the next 10 years or so, Bitcoin has undergone a natural evolution of its functionality and value after many life and death struggles. Bitcoin is now a cryptocurrency with store-of-value characteristics, somewhat analogous to the social characteristics of gold. This bull market like grayscale funds, mobile payment giant Square, asset management company MicroStrategy, Tesla and other institutions or companies are laying out bitcoin because of its risk aversion and value storage characteristics.

There are certain community barriers and cognitive barriers to “consensus value”, and consensus does not grow overnight from establishment to consolidation. But the beauty of consensus value is this. As long as some people are willing to believe in it, and the market has a certain rate of change, its value will find support, and as long as it is not wiped out, it will expand, evolve, grow, and gain a larger and broader market over time.

The value of bitcoin is supported by its “consensus” value accumulated over 10 years, from the beginning of the miners’ recognition, to the recognition of a small number of investors in the cryptocurrency circle, to the recognition of mainstream investment institutions, and perhaps more national strategic layout in the future. The value precipitated on bitcoin is this invisible and untouchable “consensus value”.

Many people outside the circle who are lying flat can’t understand the significance of this “consensus value”, and still wrongly identify bitcoin and other virtual currencies as pure hype out of the tulip bubble, but can’t see the socio-economic value of the blockchain industry behind bitcoin such as mining circle and chain circle in supply chain, finance, employment and other issues, as well as the decentralization behind bitcoin. The significance of the innovative value of the centralized idea behind Bitcoin in distributed finance, decentralized storage, data assetization, etc. In fact, doubts have always existed, but the consensus circle of blockchain has also been developing and expanding since the birth of Bitcoin, and is not dictated by the will of any individual, organization or even country.

Of course, there are also some artificially concocted air projects that have not changed hands sufficiently in the market at all, nor have they been accumulated and tested over time, claiming to be consensus-worthy coins based on the mere holding of a small group of people. In a sense, this is also a “truth”, after all, the consensus of silly x is also a consensus, but do not forget that the consensus value is fundamentally the value of time, and all the consensus for short-term interests hype up is unable to withstand the test of time.

The second layer of value of blockchain industry is called “technical value”
The traditional Internet communication infrastructure solves the problem of efficient access to the Internet and finding people, but at the same time, it generates the problem of information explosion pollution and the lack of trust caused by information finding people. Blockchain technology achieves “decentralization” through distributed storage and node verification, and achieves transparency and traceability of information by making all data traceable on the chain, which solves the trust problem to a certain extent.

However, in the early stage of blockchain technology development, due to the impossible triangle of decentralization, efficiency and security, many outsiders think that the blockchain sacrifices efficiency to pursue decentralization is very chicken-hearted, so they do not really see the value of blockchain technology level innovation.

In my opinion, this is the “technical value” of the blockchain industry that outsiders who lie flat and roll inside do not understand. The fundamental difference between blockchain technology and traditional technology lies in the combinability of its technology and the convertibility of the market. This is the height of ascension that cannot be touched by the closed nature of traditional Internet technology.

As we all know, Ethernet pioneered decentralized finance (DeFi) with smart contracts, and combinable infrastructure suites such as stable coins, lending protocols, DEX, NFT, prophecy machines, and L2 have emerged within its ecology. However, while the DeFi ecology of Ether continues to be hot, we find that the high GAS fees and transaction congestion of Ether are becoming more and more serious, how can we effectively circumvent the congestion problem of Ether? It’s like we want to experience a Jingdong logistics while enjoying cheap shopping in Jindo, what should we do? Obviously, this is almost impossible in the traditional Internet world with serious involution, but in the blockchain world where technology dominates everything, everything is possible.

To solve the congestion problem of Ether, a new public chain called NEAR has emerged. NEAR protocol public chain focuses on the dynamic fragmentation technology of night shadow protocol, which can expand the TPS of Ether by more than 1000 times, and at the same time, the Gas fee will be cheaper by more than 1000 times, which can significantly improve the efficiency of transactions. However, NEAR and Ether are competing products in the public chain track, each with its own advantages and disadvantages, and each is developing its own ecology. Although Ether is congested, its ecology is mature and rich, while NEAR has a large capacity and fast speed, but its ecology is still in the early stage. For users, if they can use the highway provided by NEAR to run the mature applications on Ether, that is the best solution at the moment. But can this really be the case?

Here is where the fascination of the world of blockchain technology becomes apparent. In fact, NEAR does not choose to fight hard with Ethernet, but fully integrate the advantageous ecology of Ethernet. NEAR has launched the core technology component Rainbow Bridge, which supports Ethernet Virtual Machine (EVM) and its peripheral trap tool components, which makes NEAR’s native ecology can be built directly on top of the mature financial infrastructure of Ethernet. Users and DApp developers can conveniently enjoy the asset interaction experience between the two different ecologies of Ether and NEAR.

As you can see, blockchain technology has demonstrated its combinability and market integration at the cross-community ecological level, which is a development form that the traditional monopolistic Internet world can never imagine. The blockchain technology pattern view is incomparable to the traditional Internet world. It is the open, inclusive and combinable nature of this ecology that is the technological innovation base of the blockchain industry and drives the continuous development and evolution of blockchain technology.

The third layer of value of blockchain industry is called “application value”.
Many traditional Internet audiences have crossed over to the application stage from the very beginning of their knowledge of the Internet. We are familiar with various portals, social networking platforms, search tools, mailboxes, mobile Internet apps such as WeChat and Jitterbug, etc., which are all products of the application layer, while the earlier Internet communication infrastructure layer such as ICP/IP communication protocol, HTTP web browser request protocol, FTP computer file transfer protocol, etc., must be unfamiliar to everyone.

We are now in the blockchain industry at the time when the various infrastructure layers are in full swing, and it is also the early stage of technology protocol architecture that is relatively unfamiliar to all of us. For example, Dfinity is building a super blockchain computing floor; public chains such as Ether and NEAR are building a smart contract open platform floor; and Filecoin is building a blockchain distributed storage system. These technologies themselves have certain cognitive barriers, and it is difficult and unnecessary for ordinary users to understand these, but only to experience the development of blockchain application layer.

The current round of bull market is exactly what the Ethernet DeFi application ecology has triggered. Since the birth of the ethereum DeFi ecology in its embryonic form in 2017, the lock value has exceeded $55 billion as of now, and a series of excellent DeFi application services such as Compound, AAVE, Uniswap and Curve have emerged, plus further market penetration in DeFi applications by the Coinan smart chain BSC and the Firecoin ecological chain HECO afterwards. Compared to, the EOS and wave field spinach type game application ecology that died soon after the wave of fire in 19, DeFi applications are already considered quite mature. Many people have also enjoyed the convenience of blockchain open financial applications through various liquidity mining, pledge mining, lending services, etc.

Since many young people are “lying flat”, many Internet applications have weak innovation, high cost of attracting new customers, low retention rate, lack of business model and many “internalization” problems such as big data killing and invasion of user privacy behind. In contrast, the application development threshold on the blockchain public chain is low, the innovation portfolio is rich, the user pulling cost is low (airdrop), and the user stickiness is high, so the opportunity to do application innovation in the blockchain field is quite large.

However, the DeFi application is still in the early stage, and most of those who use Compound and other platforms for pledging and lending are miners, while those who use the lightning loan service are only some geeks who are proficient in the program, and the depth of ordinary users’ participation in the DeFi application is not enough. There is a certain amount of speculation in the “liquidity mining” behavior that feeds the primary market. However, we can’t be too harsh on a market that is rapidly nurturing energy early on, but we should see that a single “liquidity mining” mechanism has brought prosperity to the DeFi market for almost a year, and has made the entire industry prosperous. What kind of boom will it bring?

Anyway, the effectiveness of blockchain in the application side has just begun, and the DeFi decentralized financial application is just the tip of the iceberg of blockchain technology applied to various vertical industries. As traditional financial institutions start to layout DeFi applications, and DeFi on-chain protocols and off-chain assets continue to be bound, blockchain DeFi applications and other diverse application plays will have the possibility of further explosion.

Above.

This is an article for outsiders to preach the core value perception of blockchain, and an article for insiders to self-examine the industry values. Right now, the bull market is nearing the end, and it is even likely to have crossed into the bear market. I hope everyone can ignore the ups and downs of book assets and ask themselves from the bottom of their hearts why they care about the blockchain industry and what are the technical values of the blockchain industry that are meaningful to society? What kind of starry sea will the blockchain industry lead us to?

No matter what, you have to remember that this is still a continent of innovation that has not been fully developed, and time will give every adventurer the gift he deserves.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/the-triple-value-of-blockchain-industry-that-outsiders-can-never-see/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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