What exactly blockchain, Token and the BTC

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Many people use “metaphysical” answers to circumvent specific questions. For example, the blockchain is a distributed ledger, decentralized, changing the relationship of production. Blockchain is an automatically executed consensus, which is a trusted machine. Behind the blockchain is anarchism, the Austrian school, and the Hayek spirit. I have to say that an ordinary person may feel unclear and severe after listening, but the confusion is deeper. And the “preacher” himself is not completely aware of what he is talking about.

Blockchain has developed to a point where even dazzling technological innovation cannot rationalize the absence of application scenarios. Yes, the current public chain is still the industry’s most focused and resource-invested direction, but the problem is that there is no need for so many public chains in this world, let alone the need for each public chain to solve expansion, consensus, and security in isolation Each item is still in the academic innovation stage. Our hope is not to increase TPS infinitely or change the impossible triangle, but to solve real problems.

Btc failed to become a currency, but became electronic gold. Why Bitcoin has not become a currency? Many people think that it is a performance problem, a usage scenario problem, or a problem of no natural inflation, and many other solutions such as Bitcoin Cash and stable currency have been proposed. But in fact, currency is naturally divided into two types, commodity currency and credit currency. Commodity currency can be generated at any time along with the transaction scenario, but it is difficult to maintain a long-term stable existence. What is the value support behind the credit currency? It is the perpetual taxation right of a country. It is the debt of a country or the issuer, and it is a discount of forward liquidity.

The central bank is the settlement of commercial banks, and what is the settlement system between central banks? gold. Of course, this meaning was significantly different before and after the disintegration of the Breton system. Bitcoin can become gold in part because this settlement system is easier to achieve through “faith” rather than sovereign credit, because they do not require an issuer. What Bitcoin breaks is the monopoly of settlement currency, that is, the reserve system. And because it is not physical, it is better than gold. For example, if humans now conquer Mars and find that there is gold everywhere on Mars, then gold will suddenly depreciate and lose its value storage and final settlement status.

But where is Bitcoin where it has not succeeded yet? Although the Bitcoin settlement system is decentralized, it still needs many “centers” or “intermediaries” to undertake other tasks. The transfer between nodes can be done through UTXO without intermediaries and without a center, but when it comes to time lag and collection and payment issues, people still need to complete transactions, payment and settlement through intermediaries (dealers) , such as Clearing alliance, central banking system, KYC/AML, legal governance framework. Unfortunately, the most likely solution for these links is centralized, and the best result is multiple centers under market competition. Decentralized solutions are far away. We will continue the discussion below.

The second application is the Token (through certificates) , it is an interest on behalf of mode of operation of capital markets. But it is neither pure currency nor pure stock. The market divides Tokens into functions, assets, equity, payment and other types, but in essence there are only two differences between debt and equity. The currency is essentially the issuer’s creditor’s rights, and the circulating equity is the issuer’s equity.

The main problem with Token is that whether it is debt or equity, there is a prerequisite for “non-bankruptcy”, which is the “usefulness” of the issuing economic entity. It is not scarcity (such as total amount limitation, capital control) that determines the value of Token, but scarcity only after value. Most projects just hope to issue tokens for the first time as seigniorage to maintain their monetary system operations. However, the first hypothesis, that is, the future circulation scenario, probably does not exist. There is no liquidity, how can the value of seigniorage come from?

Through certificates economy (Token Economy) went on to say we’ll see later, not repeat them here. Just briefly explain why I still affirm the application innovation of Token. First, the circulation or use of Token itself is restricted by the development of blockchain technology, so it is not a problem that will never be solved. Second, the final form of a Token Money Programmable (programmable money) , which is defined by intelligent multi-dimensional agreement, the rules of the game and automatically performs the distribution process. So the Token we see at present is only because it cannot achieve complex performance, and it is still not much different from real-life currencies or financial instruments. Therefore, the form of ICO with Token is also very primitive, and the technical advantages of Token over traditional currencies have not been used yet.

The last half is a crypto cat, a virtual asset. Especially non-fungible assets, but because the form is a game, it has not been combined with other scenes in reality, nor has it completely changed the game market, so I call it half. This direction will be mentioned again below.

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Digital Nomad

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