In fact, the emergence of any hot new concept is inevitably accompanied by opportunities and risks, such as “O2O entrepreneurship”, “P2P financing” and so on. Interest, value and prospect are the reasons that drive people of different social levels to enjoy it. So, apparently, is blockchain.

Blockchain on the sunny side: gold and eyes

Although the current blockchain technology is in the early stage of development, but different from the early development of Internet technology, blockchain is based on the emergence of cryptocurrencies such as Bitcoin, and these cryptocurrencies have the style of the stock market, which greatly arouses the greed of human nature. Although people’s understanding of blockchain technology is still in the infant stage, it is an indisputable fact that various trends set off by blockchain have been unstoppable. Then what is the charm of blockchain technology?

First, technological features can solve some old problems in the economy or business and prevent new ones. Blockchain has the characteristics of consensus mechanism, decentralization, openness and so on, which can solve the mistrust, opacity and fair business mechanism left in the current society. The chain timestamp design, based on hashing, ensures that data is hard to tamper with, and the consensus principle, based on comparison of computing power, ensures that transaction information is agreed. When these two basic technologies are applied to different scenarios, a relatively fair and objective regulatory system can be formed. For example, in December 2017, Wal-Mart, IBM, JINGdong established a safe food blockchain traceability alliance, relying on blockchain to combine the food industry, to solve the problem of food safety traceability.

Second, “blockchain plus” has the ability to disrupt business logic and create new barriers. Internet-based blockchain technology is trying to subvert existing business logic. Not only enterprises from all walks of life have announced to join blockchain, but also Internet giants such as Tencent, Alibaba and Baidu have been explicitly or implicitly laying out blockchain +.

Recently, Netease and Baidu interactive game companies have launched blockchain + games, such as netease Fortune Cat and Baidu Laicigou blockchain games, which have achieved good results. Just like the early Internet +, even if the advantages of blockchain are slightly combined with the industry, it may overturn the existing industry pattern, such as the typical case of advertising effect measurement. Advertising effect has always been the contradiction between advertisers and advertisers, advertisers always suspect that their advertising is not proportional to product sales, and advertising + blockchain technology has a third-party fair mechanism, can resolve this contradiction, change the existing business logic of the advertising industry.

Third, blockchain technology is a brand new investment opportunity. In terms of pure profit-driven investment, the explosion of Bitcoin and ICOs last year caught many players off guard and allowed many investors and speculators to find new directions and battlefields.

Regardless of the benefits, the investment opportunities of blockchain lie in new entrepreneurial fields and new technological iterative directions. On the premise that cloud computing, big data, artificial intelligence and other technologies have made great achievements, blockchain is also expected, it is a key for entrepreneurs to invest in the future track, can also be said to be a psychological comfort in the wind and rain of social development law.

It is understood that the global demand for blockchain talents increased by nearly 19 times between 2015 and 2017, which also proves that the blockchain industry is in a period of rapid development. The potential of blockchain to change corporate organization, business cooperation, and social governance is attracting more and more players to invest in blockchain with technology, money, time, and more to win a better future.

Obviously, the blockchain industry has become a battlefield pursued by various forces. However, history has proved that without the support of the real economy and supported by market expectations of speculative activities, the industry is more likely to lose its sustainable development ability in the crazy pursuit of capital, resulting in the bursting of bubbles. However, the blockchain wave, which has not been applied on a large scale and is supported by speculators’ expectations, seems to be a bubble.

The dark side of blockchain: The human bubble of digital currency

The atmosphere in the blockchain industry today is that everyone is talking passionately about blockchain, but behind the huge amount of money invested in the industry, few people seem to really care about the technology, and we see more dry endorsement. For the average investor, more people may not care about cutting-edge technology, but with the idea of making a quick buck. Such speculators have spawned a digital currency market dominated by the issuance of digital currencies, supplemented by casinos and mining machines. The digital cryptocurrency based on blockchain technology is the most likely place to burst bubble.

First of all, blockchain cryptocurrency is easy to violate the financial red line, resulting in illegal. Due to the decentralized characteristics of blockchain digital currency, it is not easy to be controlled and often difficult to track the circulation track. As a symbol of the sovereignty of a government, it is obviously impossible for decentralized digital currency to perform the monetary function on its behalf. Although there are not many countries with strong regulatory attitudes towards cryptocurrencies, we will see more countries exercise strong regulatory policies towards digital currencies as the cryptocurrency turmoil penetrates and impacts the existing financial system.

Secondly, bitcoin, dogecoin and other digital currencies are limited in number and obviously not suitable for everyday transactions. The logic of the gold standard’s demise, as we all know, was that gold backed paper money was unsuitable for today’s high rates of money circulation. A similar logic applies to today’s peek at blockchain virtual currencies. Moreover, this kind of virtual currency relies on the transaction price of virtual currency piled up by public credit, which is easy to lead to credit collapse, and the risk is grafted to individuals. This is clearly different from a national monetary system.

Moreover, the mining cost of blockchain virtual currency is not low and is greatly affected by price fluctuations. Let’s say 10 bitcoins are issued today. Then, based on the price movement of bitcoin, there will be millions of computers coming in, and that will ultimately determine your probability of winning. In the mining market, where electricity consumption, graphics card costs and network speed costs remain high, the ultimate decision is the price of Bitcoin. Therefore, in such a large-scale bitcoin mining activity, in fact, for the original miners, loss is a high probability event. Then there is the question of whether the value and price of bitcoin will be enough to offset the outlays already made.

Finally, the transaction price of bitcoin, Dogecoin and other digital currencies is set up so that some people buy them when they think they are valuable, and then many people follow suit, which is obviously prone to the formation of spontaneous Ponzi schemes. There have been angel coin, Telegram, dark coin, good heart coin, Mimi coin, Dragon coin, Baichuan money and other blockchain coins, but the bubble is not big enough, once the market is not happy, it may face the danger of being pierced.

In addition, the current blockchain bubble may also exist in the stock industry. According to Tongxun.com, at the beginning of the concept hype, there were only about 10 stocks in the blockchain concept. However, as of January 18, the block chain sector has rapidly expanded to 58 stocks. At present, the number of blockchain enterprises listed shows an increasing trend, but the stock gains are different, and the listed stocks are not a small number of people interviewed by the regulatory authorities. With blockchain technology in its early stages, profitability is unclear and most listed companies remain at a purely conceptual stage.

In this regard, investors should be extremely careful when dealing with bubble-prone areas described above. Try to understand the blockchain policy trend, should not blindly follow the trend, do not invest in the gray area. In addition to the investment company’s chief innovation team, specific plans, financing goals and other information to pay more attention to. At the same time, regular channels should be selected to obtain information and transactions. In a word, blockchain is still in its early stages, so we need to take a down-to-earth and rational view of the development of the industry, so as to avoid becoming the victim of the industry bubble before the technology matures.

Under the guidance of policy and the constraint of red line, blockchain may gradually move towards standardization

Blockchain is a great new technology. In the next few years, policy will lead the way, and the imbalance of blockchain’s money and bubble may get better. But until then, there will be pain.

In September 2017, the People’s Bank of China and other seven ministries and commissions jointly issued the Notice on Preventing the risk of token offering Financing, which clearly pointed out that token offering financing (ICO) is suspected of illegal fundraising, illegal issuance of securities and illegal sale of tokens and other criminal activities, which can be seen that ICO is still a red line. In the future, projects involving digital currency will have less and less room to survive under supervision, and policies will also affect the development of blockchain for a long time.

In terms of block chain financing, the block chain stock with a relatively large increase has been repeatedly interviewed by the regulatory party, which can obviously restrain irrational financing behavior. In fact, the bottom line of financing depends on whether there is fraud in the stock. On the one hand, due to the low threshold of block chain technology, creating a large number of followers, speculators, coupled with the trading platform to their own original code is very little, a set of source code quickly built, means that the ability to resist hacker invasion is very low; On the other hand, the value of blockchain application scenarios lies in the process of trust and data transaction, and today’s business model, there are fewer and fewer industries suffering from credit, transparency and safe transaction mode.

In addition, many provinces began to issue industrial policies supporting blockchain, which increased the track of benign development of blockchain. It is understood that zhejiang, Jiangsu, Guizhou, Shandong and other nine provinces, autonomous regions, municipalities directly under the central government issued blockchain guidance, some provinces even put blockchain into the “13th Five-Year” development plan. Among them, the policies mainly involve the political field, including government data sharing and development, Internet financial supervision and so on. For industries that have not yet made a profit, going with the policy means that they can rub off on policy benefits.

But for now, there are two views of blockchain. The first is the belief of the bigwigs in these circles that technology will change the world. Second, the currency circle overnight rich, earn hundreds of billions of unreasonable dream. It is these two views that indirectly lead to the long-term coexistence of gold absorption and bubble phenomenon in the blockchain industry.

However, with the introduction of a large number of normative policies, the involvement of media professionals and experts in the blockchain industry, the bubble formed by the block chain may be less and less, and various digital currencies will be relatively standardized.

In short, the rise of any disruptive technology is bound to be accompanied by bubbles and money, such as AI has a similar phenomenon up to now. In the future in the policy under the guidance of, on the one hand, through regulatory policy control block chain financing, on the other hand, by policy intervention block chain industry layout, industry standards, regulators, under the influence of factors such as capital chain competitive blocks may usher in integration platform, and block chain will become more valuable technology, like the Internet and artificial intelligence, Benefit mankind.

Article/Liu Kuang public account, ID: Liukuang110