Author: Tang Han, Founder of SeeDAO; Original article link: https://s.foresightnews.pro/article/detail/65745
Recently, crypto nihilism has been prevalent in the industry. But this is not surprising at all. For some experienced practitioners, doubts about the current industry path have been lingering since last year or even the year before.
In my opinion, the biggest reason for the current crypto nihilism is the influx of funds and builders into a pile of artificially conceived pseudo-demands. This pseudo-demand does not bring real users, does not solve real problems, but instead triggers more and smaller pseudo-problems, and makes funds and people busy in these fragmented pseudo-problems. Because the problem is artificially constructed, the result is naturally meaningless. It's like creating an enemy and ending up fighting against oneself. This game cannot continue.
I don't want to attribute this trend to the Ethereum ecosystem, as it would be unfair to say so. After all, the trend of dApps was popular on many public chains such as EOS, Polkadot, SOL (SOL in this round). GameFi and Meme are not designs promoted by Vitalik either. However, today, this financial game orchestrated by concept creators, VCs, relationship-based project parties, exchanges, market makers, and advertising companies has made more and more people disgusted and confused. It does not solve real problems, has low capital utilization (at least Nasdaq's money will be used to build the world to a certain extent), and cannot be used to change the world, so it has degenerated into a worse version of Wall Street. People distrust each other, view dreams as excuses for financial harvesting, lack passion, and become more and more boring. This is contrary to the original intention of people entering the crypto world with the desire for change.
Looking back at history, there are three points worth reflecting on:
Cleaning up the existing financial system#
The crypto financial market controlled by ICOs and VCs is worth reflecting on. In 2017-2018, people could no longer tolerate the chaos of ICOs that allowed everyone to issue coins, so they transferred the identification rights of market targets to VCs (especially Western VCs with seemingly glamorous backgrounds). However, after going through a cycle, we found that VCs did not bring better order to the industry. They created projects with long lock-up periods and sky-high valuations, and conspired with exchanges, market makers, and advertising companies to let retail investors take over. In this bull market, people obviously no longer trust these VCs in the industry as much as they did in 2019.
As the market becomes more and more meaningless and the return on investment is not guaranteed, some VCs even start to "chase money" from project parties. It is obviously not a good idea for new project parties that want to raise funds to seek funding from VCs. Looking back at this bull market, most successful projects are meme coins, which bypass the VC coin model and rely on communities with fully circulating tokens. There was a wave on SOL of leaving messages on Twitter to send money to meme coin bloggers, which is actually more like an ICO that does not rely on smart contracts.
From ICOs to VCs, and then from VCs to ICOs, the return of this trend is worth noting. If insiders see through the true face of VCs and lose confidence in them, I think it is actually a good thing. This industry did not start with VCs, and Binance did not start with the US government. At first, people in the crypto circle resisted the financial order dominated by Silicon Valley elites and Wall Street. However, at that time, people in the crypto circle were too naive and inexperienced, and quickly handed over the dominant power of the market under the chaos of ICOs. Today, the top centralized exchanges worldwide are accepting rectification and incorporation by the US government, Wall Street controls the chips of Bitcoin, and the cryptocurrency market has become more like the US stock market or even the Shanghai Stock Exchange, which is expected.
But I dare to say that the financial innovation of cryptocurrencies will not stop because the US government incorporates Binance. Not only will it not stop, but when people's ideas completely reverse, it will usher in even greater innovation. The drama of resistance-incorporation-rebellion will continue to play out. Because of the aversion to the financial order dominated by VCs and Wall Street (controlling licenses, creating concepts, media conspiracies, market makers harvesting retail investors, and having a country to make them too big to fail), that is why there is blockchain. Our current nihilism and aversion signify that we are still the same as before, aversion to those things that we originally aversion to but had fantasies about along the way.
Cleaning up language and concepts#
"Do not endlessly magnify blockchain, create concepts for it, and create unrealistic expectations for blockchain." The bitter fruit we bear today is actually self-inflicted. We first established the ideology of "decentralization" and then based on this ideology, we created the term "dApp" and tried to move the computation of applications onto the blockchain. Then we found that the computational resources on the chain were not enough, so we started to scale the chain, leading to numerous scaling solutions and Layer 2 solutions. We also invented the term "Web3", and the ambiguity of this term is maddening. Even now, no one can clearly explain what this term actually refers to. Sometimes it is used to refer to the blockchain industry, sometimes it is related to the Web3 Foundation of Polkadot, and sometimes it is compared with Web1 and Web2, saying that "Web1 is readable, Web2 is writable, and Web3 is ownable." However, in practice, Web3 is often associated with dApps, that is, moving the computation of applications onto the chain.
The confusion of language is often a sign of nihilism, which confuses people about what they are fighting for. In the end, we find that we are fighting for a technology stack that "decentralizes the computation of network applications". Its core consciousness is "decentralization", but even this decentralization is not clearly defined. If it were "courage", "love", or "freedom", we could have a good discussion. But how do we talk about "decentralization"? "Love" may be considered a purpose, but "decentralization" sounds more like a means that has not reached the end, and why it is also raised as the purpose of ideology?
If our goal is a technology stack that "decentralizes the computation of network applications", then we should resort to technical discussions, discussing its feasibility, technical advantages and disadvantages, and the costs we need to pay. If we cannot point out the ultimate goal of this technology stack that "decentralizes the computation of network applications" and its relationship with this ultimate goal, then our actions will inevitably contradict our minds and feel frustrated. When we cannot argue these things clearly, we create words through marketing methods, and even magnify it to the extent of Web3, which involves the entire Internet revolution, and conspire with VCs to promote it. The result is what we see today: people used to believe, but now they don't.
Once words are created, they are difficult to clean up. In this regard, I admire Satoshi Nakamoto even more. As the founder of Bitcoin, he understands technology, has his own position, and never wavers in these matters. Ideologically, he chose to engrave "UK Chancellor on brink of second bailout for banks" into the genesis block of Bitcoin, and chose to remain anonymous for life. Firm stance, consistent words and actions, not playing politics, these are virtues of a political leader. Technologically, he does not mention "decentralization", but directly says P2P. Without ambiguously hijacking the technology stack with ideology, and not allowing those who do not understand technology to romanticize technically infeasible routes to trigger more misconceptions, he directly calls out the name of the technology stack he wants. This is the virtue of a technical leader.
Cleaning up the real problems#
Cleaning up the existing financial system and language system is just helping us peel away the expectations and interest structures imposed on the blockchain. Now, it's time to face the real problems.
To clean up the real problems, I have a personal stance, which is to return to Bitcoin, not Ethereum. This is not only because Bitcoin has a much higher market value than Ethereum, but also because Satoshi Nakamoto has a more revolutionary and mature vision in terms of the technology stack. In fact, when we remove the "ineffective words" of the Ethereum ecosystem conspired with VCs, what we finally get is a technology stack that "decentralizes the computation of network applications". And Bitcoin points to a P2P technology stack. The former tends to put everything on the blockchain as much as possible, that is, infinitely expanding the use cases of the blockchain, while the latter exercises restraint and only puts what should be on the chain, while combining with the P2P (now more commonly known as the DWeb) technology circle to build a new network.
In my opinion, the P2P technology stack that Bitcoin points to can truly be called Web3 — if we still want to retain the term Web3. Putting all the computation of applications on the chain is not only difficult to achieve and resource-consuming, but also foolish. This idea is like the source of problems, constantly creating more problems; the most fatal thing is that it does not bring real users. The demands of users are monetary freedom, market freedom, content freedom, social freedom, and association freedom, not decentralization. Decentralization is just a means. Decentralization is only meaningful when it can serve our real purposes.
A real problem: Bitcoin#
Even if I say this, some people may think it is too abstract. They will ask: Why don't you just directly state a problem that you think is a real problem? Besides Bitcoin (digital gold, which may be included in the Federal Reserve's balance sheet) and stablecoins (daily means of payment, which can already be seen with a large number of use cases), what else is a real problem? What else is necessary? Is it enough for the entire cryptocurrency market to have only Bitcoin, as its market share continues to grow?
So, there is a real problem right now, which is the economic mechanism problem of Bitcoin that prevents Bitcoin from existing independently. Not only can Bitcoin not exist independently, but it must form a huge ecosystem around it. In my eyes, currently, only this problem is not a pseudo-proposition.
This is because the reason why Bitcoin is digital gold is that it is fixed at 21 million coins in quantity. This constitutes a basic belief. Shaking this number will shake this basic belief. At the same time, Bitcoin halves every 4 years. If we analyze Bitcoin as a country, the military spending of this country will halve every four years relative to its GDP. After the previous 4 halvings, this ratio may progress to a worrying number.
The social consensus carried by Bitcoin is getting bigger and bigger, but the relative cost to protect it is getting smaller and smaller, which is inevitably unsustainable in the long run. (The price of Bitcoin cannot rise indefinitely, but the amount of Bitcoin that miners can mine will decrease indefinitely.) When Satoshi Nakamoto wrote the Bitcoin whitepaper, he implied a strong assumption, that is, if we do not consider increasing the issuance of Bitcoin, then Bitcoin needs to become a chain of strong transactions in the future to subsidize miners and maintain network security. In the past, people regarded this assumption as an irreparable flaw. Today, with the iteration of Bitcoin's own code, we can see such a structure from this flaw: a Bitcoin main chain and a huge Bitcoin ecosystem cooperate with each other to provide a long-term security plan for Bitcoin without shaking the fundamental of modifying the upper limit of Bitcoin quantity.
This assumption will not be realized automatically, it can only be achieved through the efforts of future generations. If there is something worth doing for entrepreneurs right now, this is something worth doing for us. Because it is difficult and it is worth it. Most importantly, this is not an official topic designated by a philosopher king, not a license issued by a national government, and not a personal preference of a VC or exchange boss. This problem is here. It exists here fairly and opens to everyone with digital certainty. The entire industry has to face it, and even in the future, every government that includes Bitcoin in its central bank's balance sheet will face it.
Let's get motivated and do something real.