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Blockchain, the 5 most deadly pits
Blockchain, the 5 most deadly pits

Blockchain, the 5 most deadly pits

What is the hottest concept these days? It is undoubtedly “blockchain”. If you have a meal, four out of five tables will be talking about blockchain. However, most people are curious about “blockchain”, and even hungry for it, but they are mostly in the stage of ignorance without understanding much. The island recently concentrated on research, but also asked a few people in the circle, limited to personal understanding, will share this information with you, if you encounter experts to correct the face, but also very grateful.

At the beginning of 2018, blockchain quickly became the first “windfall” with a gesture that baffled people, of course, with quotation marks.

“Twenty years from now, people will be talking about Bitcoin the way they talk about the internet today, and 100% of transactions will be done on the blockchain.”

Similar optimistic predictions spread like a virus and became popular in the investment community, creating an unanticipated frenzy.

Some even commented that “blockchain is the ninth wonder of the world”. There is no technology currently available that will bring such a vast array of possibilities for future social change as blockchain.

The capital markets are clearly not lonely.

On the U.S. stock market, Kodak, a film manufacturer that has been dormant for years, recently announced the release of Kodak Coin, and its share price has risen 245.16% since 2018; Chinese stocks Xunlei, Ninth City, Renren, and Online have also soared because they are involved in the blockchain business.

The Hong Kong stock market has even seen a laughable news: a company named “Pingshan Tea” announced that it had changed its name to Blockchain Group, and in the context of the A-share blockchain concept hype, it rose by 23%.

However, this wildly popular capital feast is not empty.”

However, this wildly popular capital feast is not empty.

According to the blockchain utility roadmap released by McKinsey, 2017-2020 will be the shaping phase of blockchain technology infrastructure. Currently the world’s major investment banks and technology companies have accelerated their layout in the blockchain.

The mainstream view is that the core of the blockchain economy is not in the technology, but in the reconfiguration of the business logic.

Therefore, this is not only a technical revolution, but also a cognitive revolution.


Blockchain is not a new concept

The concept of blockchain can be traced back to the end of 2008, when a mysterious person under the pseudonym “Satoshi Nakamoto” published a paper in a forum The concept of blockchain was first introduced in late 2008, when a mysterious man named “Satoshi Nakamoto” published a paper in a forum called “Bitcoin: A Peer-to-Peer Electronic Cash System”.

On January 3, 2009, the first block of the blockchain was created, and this block was called the “founding block.

Almost along with the birth of blockchain technology, bitcoin became the first thing that came into play. In the following years, bitcoin gradually took the world by storm, and in 2017 its crazy market made blockchain technology known to everyone.


The essence of blockchain: everyone is a “database”

Blockchain is essentially a distributed public ledger that connects individual blocks into a chain. We can define it as a system that allows a group of interconnected computers to securely work together to maintain a ledger, with each computer being a database (server) without the need for a third party server in between.

So blockchain is not a specific software, as the word “database” suggests, it is a design idea for a specific technology.”

“So blockchain is not a specific software, as the word “database” suggests, it is a design idea for a specific technology.

Just like the relationship between TCP/IP protocol and ordinary people, ordinary people do not need to know what is the underlying TCP/IP protocol of the Internet at all, as long as they can enjoy the services provided by the Internet.”

Ordinary people basically have nothing to do with blockchain, unless they are ready to engage in this aspect of entrepreneurship.


3 major features of blockchain

Compared to traditional centralized schemes, blockchain technology has the following three main features:

The core idea of blockchain is decentralization

In the blockchain system, the rights and obligations between any nodes are equal, and all nodes have the ability to vote with their computing power, thus ensuring that the recognized result is the result recognized by more than half of the nodes. Even if it suffers a serious hacking attack, as long as the number of nodes controlled by the hacker does not exceed half of the total number of nodes worldwide, the system will still operate normally and the data will not be tampered with.

The biggest disruption of blockchain is the establishment of credit.

Theoretically, blockchain technology could make WeChat Pay and Alipay no longer valuable. The Economist made an analogy with blockchain: simply put, it is “a machine that creates trust”. Blockchain allows people to collaborate with each other when they don’t trust each other and there is no neutral central authority. Fighting counterfeit money and financial fraud won’t be necessary in the future.

Blockchain’s collective maintenance can reduce costs

Under the centralized network system, the maintenance and operation of the system depends on the operation and operation of platforms such as data centers, and the cost cannot be omitted. Blockchain nodes are available to anyone, and each node participates in the record while also verifying the correctness of the results recorded by other nodes, which improves maintenance efficiency and reduces costs.

In a nutshell, blockchain touches money, trust and power, the fundamental foundations of human existence.”

In a nutshell, blockchain touches money, trust and power, the fundamental foundations of human existence.


Its development has gone through 3 phases.

1. Gestation period: 2009-2012, the economic form was dominated by bitcoin and its industrial ecology.

2. Germination period: the period was 2012-2015, blockchain entered the public eye with bitcoin, nascent wallet payment and remittance companies emerged, and the blockchain economy spread to the financial sector. Blockchain underlying technology innovation continues. Blockchain technology was spun off from the Bitcoin system.

3. Development period: 2016 saw the exploration of industry applications and the emergence of a large number of blockchain startups. 2017’s ICO boom has put blockchain in the spotlight like never before.


“Blockchain 2.0 era” is coming

The application service layer is the driving force behind the continued development of blockchain, which is divided into three phases of applications: 1.0, 2.0, and 3.0.

programmable currency: blockchain 1.0 application

programmable currency, i.e. digital currency represented by bitcoin, but it is not legal tender in any country or region, and there is no government authority to guarantee it.

programmable currency: blockchain 1.0 application

Programmable Finance: Blockchain 2.0 Applications

Blockchain 2.0 applications incorporate the concept of “smart contracts” (using program algorithms to execute contracts instead of people). This allows blockchain to expand from the initial cryptocurrency system to the registration and transfer of equity, debt and property rights, the trading and execution of securities and financial contracts, and even the financial sector such as gaming and anti-counterfeiting.

Programmable Society: Blockchain 3.0 Applications

Blockchain is the kernel of the Internet of Value, capable of recognizing, measuring and storing property rights for every information and byte representing value in the Internet. It can record not just financial transactions, but almost anything of value that can be expressed in code. Its applications can be extended to any area where there is a need, and thus to society as a whole.

Blockchain applications are now beginning to move beyond Bitcoin (Blockchain 1.0) to the Blockchain 1.5 era and are transitioning to the financial sector (Blockchain 2.0).

In the next 3-5 years, blockchain may go beyond the financial field and enter the social notary and intelligent field (blockchain 3.0), including the fields of identity authentication, notary, arbitration, audit, domain name, logistics, medical care, mail, visa, voting, etc. The scope of application is expanded to the whole society, and blockchain technology may become a kind of bottom protocol for the “Internet of Everything”. .


Disadvantages of blockchain

In fact, as an emerging technology, the value of blockchain certainly exists, but it also shows some disadvantages.

One is the low efficiency

data written to the blockchain, at least ten minutes to wait, all nodes are synchronized data, it will take more time. Take bitcoin as an example, the validity of current transactions is affected by the network transmission, and the actual time of each bitcoin transaction is about 10 minutes, and it takes an hour for 6 confirmations. Thus blockchain transaction data is delayed.

Governor Zhou Xiaochuan of the central bank said in an exclusive interview in early 2016 that so far, the blockchain is still taking up too many resources, whether they are computing resources or storage resources, to cope with the current scale of transactions.

The second is the problem of energy consumption

The generation of blocks requires miners to perform countless meaningless calculations, which is very energy-intensive. A UK-based power information network, POWER-COMPARE, has provided predicted data showing that according to the current growth rate of bitcoin mining and trading power consumption, by 2020 bitcoin power consumption will be on par with current global electricity consumption.

Its third is privacy protection

In the blockchain public chain, every participant has access to a full backup of data, and all transaction data is public and transparent. If you want to know the account and transaction information of some business organizations, you can know all his wealth and also important assets and trade secrets, etc. It is difficult to guarantee privacy.

Its fourth is the problem of gaming

The decentralized and autonomous characteristics of blockchain dilute the concept of state regulation. In the case of regulatory inaccessibility some, the profit-seeking nature of the market and other characteristics can lead to the application of blockchain technology in illegal areas, providing a refuge for the black industry.


5 “big pits” for investing in blockchain

On the road of blockchain investment, you will encounter five big pits, and stepping on each one of them may make you lose your money. The islander feels the need to cool everyone down, we encourage new things, but also hope that we can be rational.

The first big pit: indiscriminate investment ICO

The late bull market, a variety of cattle ghosts and snakes you side singing I made an appearance. We all know that the people who launched the ICO saw a wonderful way to finance (quan). The actual application value of the project is not important, the marketing hype is most important, as long as the tokens are traded on the line there is a taker on the line.

[avoiding pit guide]

1, don’t vote if you don’t understand

For the secondary market (exchange), short and long term can be done. For the primary market (ICO), I insist on taking the long term. Once you decide to hold for the long term, you look at a project differently, if the project is not even visible to you and you don’t want to hold it for more than a year, then don’t get involved.

2. Don’t be in a hurry, the good show is at the back end

Now the blockchain investment market is like the Internet bubble in 1999, in addition to Amazon, Google, Facebook, the domestic BAT and other excellent Internet companies are the bubble after the emergence of the bubble. When this round of ICO bubble bursts, the truly valuable blockchain projects will gradually emerge. In order to catch the future blockchain unicorn companies or organizations, leave yourself some more bullets.

The second big pit: buy any coin

As long as which coin goes up, I will buy which one, this is the mentality of the majority of participants in the blockchain investment market. This is the mentality of most participants in the blockchain investment market. So, which coin starts to rise, a swarm of people rush to buy it, which coin falls, rush to throw away to find another coin that is rising.

[avoiding pit guide]

1, don’t buy if you don’t understand

What is the project behind the tokens? What problems can this project solve with blockchain? What is the role of tokens in the blockchain system …… You need to examine multiple factors to roughly understand the value of a token. If you don’t even want to delve into it before buying a token, then your investment or speculation is purely dependent on luck, yet who can be the lucky one all the time?

2. Only buy digital tokens

that are truly backed by blockchain applications. Because of the nature of the blockchain market, valuable digital tokens can also skyrocket and plummet. However, valuable coins will most likely rise back after falling, and the value of the tokens will get bigger and bigger with quality projects held for a long time. The vast majority of junk coins, on the other hand, have only one high tide, after which they gradually return to zero.

The third big pit: stepping into the cottage exchange

For investors, the risk of the exchange is mainly in three areas: the exchange is stolen coins (or guarded by the theft); the exchange runs away with the money; the exchange itself controls the disk. Here is not accusing any futures exchange of cheating, just stating the fact that they currently have no way to prove themselves fair, and there is so much of a loophole in the current futures exchange mechanism, i.e., they have the opportunity to cheat without cost or trace.

[Avoidance Guide]

Centralized exchanges, no matter how well they do, are unable to prove themselves. For investors, at this stage, you can only choose a reliable first-tier exchange, decentralized exchange although already (bit stock BTS), but feel a little complicated to use, look forward to the future of a more reliable and easy to use decentralized exchange.

The fourth big pit: listening to the “bricklayer”

Most people are not self-learning ability, there is always a large group of sheep waiting to be pointed out, the bull market always abounds in a variety of bricklayer, the reason is this. The investors who have just entered the market are inevitably charged with IQ tax, the loss of a few hundred yuan circle fee is a small matter, follow the bricklayer chaotic operation, was instilled with toxic ideas that is really a big mistake.

[avoid pit guide]

1, learn professional knowledge

Even if the blockchain investment market is now mostly in the “fried air”, you have to exercise your ability to identify in this chaotic market. Only by understanding the underlying expertise will you be able to identify the truly valuable information, opinions and projects.

2, with a longer cycle to judge a person

Why is the IQ tax so well collected? Because many people’s beliefs come and go quickly. If you can take a person as a god in a week’s time, think about yourself is not too good to cheat. Stretching the time period to judge a person will save you a lot of IQ tax.

3. Whenever you make decisions by yourself

Other people’s information and advice are just references, and you can make decisions only after you have discerned and thought about them. Always wait for others to tell you how to invest, which is different from being manipulated by the puppet. Investors don’t learn or think, they can only be harvested repeatedly.

The fifth big pit: controlled by emotions

1, chasing up and killing down

Investment is to buy low and sell high, and the reality is that the vast majority of people will only chase up and kill down. The actual fact is that the majority of people will only chase after the market, and once the emotions are manipulated, you will not be able to resist staring at the disk, a disk is easy to trade frequently, a transaction may encounter a shortage or plunge.

2, complaining every day

Many people believe that this is a casino, but do not want to bet to lose. Up will cheer, down will complain and curse. In the face of market fluctuations, many people are reduced to emotional slaves.

[avoid pit guide]

1, the investment as a practice

do not be controlled by emotions, easier said than done, it is a long-term practice process. Follow the footsteps of masters such as Charlie Munger, continue to learn interdisciplinary knowledge, master multiple thinking models, and improve their mental strength.

2. Focus on your work or life

When you want to stare at the market or complain, ask yourself: will staring at the market and complaining sway the market? Will it double your earnings? Will it empower you personally? The answer is neither. In that case, to borrow a phrase from Al Pacino in “The Godfather,” admonish yourself: what doesn’t work, we don’t do.



Finally, there are some issues that must be accounted for.

First, the blockchain is neither mysterious nor mysterious, it is still in the primary stage of development, the important underlying technology has not completely broken through, there are still very many limitations. It is undeniable that at this stage the blockchain has more problems than advantages.

Secondly, every rational person will maintain a moderate pessimistic attitude, do not casually “presume” the future, so in this article about the future of inference, please automatically add “if”, “may “, “hypothetical”…

On the whole, blockchain technology is still in its infancy, and many projects have not yet landed, just like infants in infancy, they cannot afford to be unrealistically pursued or killed, nor can they withstand all kinds of unproven hype and labeling.

Only on the premise of respecting the law of growth step by step, step by step cultivation can make it gradually mature.

Technology is neutral, but it is human nature that determines the direction and end of technology. How the blockchain and digital currency will develop in the future depends on the values and civilization of those who control it.

Editor: Ye Kaifu

Source: Zhenghedao (ID: zhenghedao)


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