Silicon Valley Live / Field Visit / Hotspot Quest / In- depth Discussion
Yuan Yuming: Former assistant to the director of Industrial Securities Research Institute, chief analyst of the computer industry; has been listed as the best analyst of New Fortune for 5 consecutive years, and has written many in-depth reports with huge industry influence.
In early March, Yuan Yuming officially joined Huobi China as the dean of the Blockchain Research Institute, responsible for the research and regulation of the blockchain industry.
The Silicon Valley spy made an exclusive interview with President Yuan to explain in detail his basic research on the blockchain industry and the proposed macro business system.
The most important principle is that there is no God's perspective, only continuous trial and error iterations
Detective : You were an opinion leader in the securities analysis industry before. What is your initial impression of joining the blockchain industry in the stage of reclamation?
In fact, it has only been more than a month since he was the dean of the Huobi Blockchain Research Institute, but a lot of things happened. The overall rhythm of this circle is very fast, and the atmosphere is in full swing.
There is a very special feeling: I have been in contact with many other industries, some of which are very glamorous to outsiders, but the people inside are very famous. The blockchain is the opposite. I see many people in the industry are more enthusiastic than outsiders. A lot of people are very idealistic and want to do something meaningful.
Now there is a popular term called "Buddha", and people in the blockchain industry are the exact opposite of "Buddha". Because the overall situation is undecided, everyone feels that time is pressing and races against time. Every day, we see many blockchain professionals share inspiring research findings. However, in the early stage of the industry, everything is inconclusive; the existing conclusions may also be overturned in the future.
Our research institute is also fast-paced and has diverse backgrounds, including former university associate professors, multiple blockchain project directors, Ph.D.s in cryptography, serial entrepreneurs, data analysts, and more.
One of the most important principles in the study of blockchain is that there is no ultimate form, no God's perspective, only continuous trial and error iterations.
We don't have an almighty God's perspective
The essence of blockchain is win-win
Unlike steam engines, electricity, computers, and future artificial intelligence and quantum computing, blockchain is not a productivity revolution. Similar to him are printing/papermaking, joint-stock system, and the Internet. Maybe there are no major breakthroughs in technology, but they can liberate productivity.
Back in the 16th century, in the era of great sailing, everyone had to pool money to build a big ship in order to set sail and take risks, and then share the profits according to the proportion of the money, and the prototype of the shareholding system was born.
However, the shareholding structure is outdated today. The reason is: it forces enterprises to take profit as their main purpose, and the market regards profit as a benchmark for evaluating the success or failure of the company, thus causing deformity. Therefore, we have seen that the large-scale military enterprises that have made important contributions to the country and the people have a combined market value that is not as good as three bottles of wine (Moutai Wuliangye plus Yanghe); many Internet companies have to work hard to make money from users in order to make profits. What I hated at first (such as Facebook); some listed companies in A-share companies can’t afford to buy a 10-square-meter house in Shanghai with one year’s profit, but as long as 1% of the shares are sold, they can immediately buy a whole villa...etc. It's called magic realism.
In fact, modern enterprises have become very complex systems that can affect all aspects of society. A good mechanism should be able to mobilize the forces of all parties and achieve a win-win situation.
And through the blockchain, through the certificate (that is, token), we can design a win-win mechanism that binds all employees, users, suppliers, advertisers, etc. Stimulate the vitality of enterprises. An example is given below.
We know that if the computing power of a single mining pool exceeds 51%, it can control blocks and do whatever they want. But after so many years of Bitcoin's birth, why hasn't this happened? Satoshi Nakamoto is missing, why did no one choose to manipulate Bitcoin?
Because once the computing power of the mining pool approaches or even exceeds 51%, the masses begin to worry that the price of the currency will fall, and miners will withdraw from the mining pool one after another. Finally, the mining pool itself will actively limit the growth of computing power.
Why is everyone so cohesive? Is it because miners and mining pools have lofty feelings and love for Bitcoin?
There may be some, but most miners are ordinary people, mainly because Bitcoin is designed to be a win-win mechanism - to keep everyone in the same boat.
Detective : Don't the blockchain projects under the win-win mechanism need to pursue profitability?
It is only under the thinking of shareholding that it is necessary to pursue profit. Under the blockchain model, an ecosystem will be formed in the end —to generate, acquire and use tokens, and form a circular system, as long as this system can run.
The purpose of a system is not necessarily profit. For example, Ethereum, it is not profitable, but it has made an ecosystem of generating, acquiring and using Ethereum, and circulating circulation. As a result, the price of ETH has risen sharply, and everyone who holds ETH can benefit from it.
Detective's Note: We recently learned that Huobi launched the mining pool business, connecting the mining pool platform with the trading platform, becoming the world's first digital trading platform integrating digital asset mining and trading.
In doing so, it is precisely to establish a complete ecosystem from mining to trading. After miners obtain mining income, they must cash out through the trading platform. The integration of mining and trading in the Huobi mining pool determines that most miners will still trade on the platform after earning profits. In this way, the number of users, activity of Huobi and the liquidity of the platform will be further improved. The value of the tokens issued by Huobi will also increase. We can continue to observe: whether this is a win-win ecosystem.
Industry has a learning effect
People in the blockchain industry are very nervous and diligent. Because the industry has a learning effect, the evolution of the blockchain may be much faster than the Internet.
Agent: What is the learning effect?
In fact, it is based on history . I give an example. There was one thing I didn't understand: Why did Facebook's Zuckerberg buy WhatsApp for $19 billion in 2014. WhatsApp’s 2013 revenue was only $10.2 million, so the premium for the acquisition fee is too much, right?
In fact, I figured it out later: this is how Zuckerberg knows to learn from history. There were two opportunities for Yahoo to acquire Google. The first time was when Google took the initiative to acquire it. Later, the famous web page ranking algorithm offered only $1 million, but was rejected by Yahoo. The end result we all know, Yahoo search was completely defeated by Google. In view of historical experience, Zuckerberg understands: when a competitor emerges, it is necessary to immediately eliminate it or incorporate it, and the price is less important than that.
Although every piece of history will not simply repeat, it does have a cyclical nature. For example, the rise-fall-rise-fall-rise of artificial intelligence from the 1950s and 1960s to the present is a cyclical development. The blockchain is inherited from the Internet. In this industry, some applicable laws can be summarized from the development history of the Internet and applied to the context of blockchain for thinking and decision-making.
Detective's Note: Cryptocurrency exchanges may have learned from the previous "history" of Uber's development and the shared bicycle industry war, realizing that "building a city high and accumulating grain" is a must for success. Therefore, under the background of stricter central bank supervision, They have moved to overseas markets to seek expansion. Continuing to take Huobi as an example, Huobi America just announced on March 24 that it has completed the MSB license registration under the guidance of US regulators, and can conduct currency transactions in most states in the United States. After less than a week, I continued to talk on the 30th: officially entered the Korean market on the 30th, and will provide Korean users with compliant Korean won digital asset trading services.
A system with fully standardized products and no bottlenecks in supply does not require blockchain
The main problem of the blockchain industry at present is that some speculators have poured into the industry. Many people just improvise, forcibly combine the blockchain with an existing business, and then issue coins to cut leeks.
But not all industries and all businesses need blockchain. Don't blockchain for blockchain's sake.
At present, completely standardized products and systems with no bottlenecks in supply do not require blockchain.
There are two meanings here. One is a completely standardized product, such as making a rag, socks, or printing paper. This does not require blockchain at all, and does not need to stimulate people's creativity. It is enough to do basic production management. (Of course, it would be great if someone could be creative on these commodities.)
One is that there is no bottleneck in supply. If there is a bottleneck in supply, for example, even if it is to make socks, but it is a limited edition of 1,000 pairs of idol-signed socks, it can also be adjusted with the blockchain. In our recent research, we pointed out that "probabilistic priority" is one of the higher-order rights of a token (ie, token) . For example, if you listen to an idol's class or concert, buy his books or figurines, make suggestions for him, and make calls for him, you can get tokens. The more tokens you have, the higher the chance you will be drawn. These limited-edition Idol signature socks.
High-level rights are combined and conditional rights, which require high complexity and flexibility. You cannot use traditional financial instruments or ordinary points to realize them, but you must use smart contracts. If the certificate does not have high-level rights, then this blockchain project may not necessarily have the need to issue tokens.
SMART elements to judge the reliability of the project
Detective: You also mentioned that there are various strange and unreliable projects in the blockchain. Has Huobi Blockchain Research Institute done any methodological research on how to judge whether a project is reliable?
Overall, I think most investors can judge the reliability of a project from five dimensions, which we summarize as SMART elements.
S (strategy): strategy. This depends on three points: the first is which category of application assets belong to, the potential of the industry is not large, how necessary is the application of blockchain, the same assets are application assets, in different industries, the expected valuation is definitely different . The second point is to look at the direction of the project or how many similar projects there are already in the industry; the third point is to see whether the industry has a qualification access system.
M (Management): Management. On the one hand, it depends on the mechanism design of blockchain projects; on the other hand, it depends on their project progress and execution.
A (Activity): Market activity. For example, the total number of existing users and user activity, community activity, potential user groups, etc.
R (Reliability): Team reliability. This is the most basic measure of a blockchain project. When everyone does not know the future of a project, you have to adjust your confidence in the project by observing the technical strength, past experience, network and operation level of the team.
T (Technology): Technology. Including the operability, substitutability, dependence, and degree of innovation and open source of technology.
We believe that it is more comprehensive to judge whether a project is reliable by combining these five elements.
Secret Agent: Last question, what was the original intention of Huobi to set up a blockchain research institute?
Our original intention is to promote the development of the industry. There are many industries in the world, some have theory first and then practice, and some have practice and then develop theory. However, I think: the two should complement each other and support each other. However, the blockchain is now in many practices, and it is springing up like mushrooms after a rain. In contrast, since Satoshi Nakamoto published the paper "Bitcoin White Paper: A Peer-to-Peer Electronic Cash System", there have not been many breakthroughs in theory. , mainly through practice and exploration, crossing the river by feeling the stones. The establishment of the research institute is to hope that to a certain extent, the theory will lead to the development of practice. Even a little push is gratifying.
It is worth mentioning that in terms of promoting the development of the industry, Huobi.com goes hand in hand with theory and practice - in addition to setting up a blockchain research institute to guide practice with theory; and in the internal customer appreciation meeting held at the end of last month, announced that it will Launched a global ecological fund with a scale of 200 million US dollars, using the platform token HT as the circulation medium, and striving to help the development of blockchain technology in three aspects: expanding the blockchain industry, improving user experience in the blockchain industry, and sharing Huobi ecological resources. innovation.
The spy believes: No matter who it is, whether it is Huobi or other platforms, it is extremely necessary to establish an ecosystem that allows the blockchain industry to enter a healthy development, which can help the entire industry gradually get rid of criticism,” Liang said. Coins drive out bad coins", so as to enter a future where hundreds of flowers bloom and flourish.
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