Author: Tang Han, founder of SeeDAO
Crypto nihilism has been prevalent in the industry recently. But this is not surprising at all. For some experienced practitioners, as early as last year or even the year before, they had doubts about the current industry path.
In my opinion, the biggest reason for the current crypto nihilism is that a large number of funds and builders have poured into a bunch of artificially conceived pseudo-demands. This pseudo-demand cannot bring real users, nor can it solve real problems. Instead, it has caused more and more smaller pseudo-problems, and has caused funds and people to run around in the split pseudo-problems. Because the problem is artificially constructed, the result is naturally nihilistic. It's like a person has created an enemy, and after a long time, he is actually fighting himself. This game cannot continue.
I don't want to attribute this trend to the Ethereum ecosystem, as it's not fair to say so. After all, the trend of Dapp has been popular in many public chains such as EOS, Polkadot, SOL (SOL in this round). GameFi and Meme are not Vitalik's main designs. However, to this day, this financial game conspired by concept makers, VCs, project parties with connections, exchanges, market makers and advertising companies has made more and more people disgusted and confused. It does not solve real problems, the utilization rate of funds is low (at least a certain proportion of Nasdaq's money will really be used to build the world), and it cannot be used to change the world, so it has degenerated into a worse version of Wall Street. People don't trust each other, regard dreams as an excuse for financial harvesting, lack passion, and become increasingly boring. This runs counter to the original intention of people entering the crypto world with a heart of change.
Looking back at history, there are three points worth reflecting on:
Cleaning up the existing financial system
The crypto-financial market controlled by VCs from ICOs is worth reflecting on. From 2017 to 2018, people were fed up with the chaos of ICOs where everyone could issue coins, so they transferred the right to identify market targets to VCs (especially Western VCs with glamorous backgrounds). But after a cycle, we found that VCs did not bring better order to the industry. They created projects with unlocking periods and sky-high valuations for several years, and conspired with exchanges, market makers, and advertising companies to get retail investors to take over. In this round of bull market, people obviously no longer trust these VCs in the market as much as they trusted a16z in 2019.
As the market becomes increasingly nihilistic and the rate of return is not guaranteed, some VCs have even begun to "chase money" from the project parties. For new project parties that want to raise funds, it is obviously not a good idea to raise funds from VCs. Looking back at this round of bull market, most successful projects are Meme coins. They bypassed the VC coin model, relied on the community, and fully circulated the chips. There was a wave of people on SOL who sent money to Meme coin bloggers for leaving messages on Twitter, which is actually more like an ICO that does not rely on smart contracts.
From ICO to VC, and then from VC to ICO, the return of this wave is worth noting. If insiders see through the true face of VC and feel nihilistic because of the loss of confidence in VC, then I think it is a good thing. This industry did not start with VC, and Binance was not originally opened by the US government. At first, people in the crypto resisted the financial order dominated by Silicon Valley elites and Wall Street. But the people in the crypto at that time were too naive and inexperienced, and quickly surrendered the market dominance under the chaos of ICO. Today, the world's top centralized exchanges are accepting rectification and incorporation by the US government, Wall Street controls the chips of Bitcoin, and it is expected that the cryptocurrency market will become more like US stocks or even the Shanghai Stock Exchange.
But I dare say that the financial innovation of cryptocurrency will not stop because the US government has incorporated Binance. Not only will it not stop, but when people's ideas are completely reversed, it will also open up greater innovation. The drama of resistance-incorporation-rebellion will continue. Because the antipathy to the financial order dominated by VC and Wall Street (control of licenses, manufacturing of concepts, media collusion, market makers cutting leeks, and the country allowing them to be big and not fall) is the reason why there is blockchain. Our current nihilism and disgust indicate that we are still the same as before, disgusted with those things that we originally disliked but only had fantasies about halfway.
Cleaning up words and concepts
Don't infinitely magnify the blockchain, create concepts for it, and let people have unrealistic expectations of the blockchain. The bitter fruit we bear today is actually created by ourselves. We first established the ideology of "decentralization", and then created the term Dapp based on this ideology, trying to move the application's computing to the chain; then we found that the computing resources on the chain were insufficient, so we began to expand the chain, which triggered many expansion plans and L2 plans. We also invented the term "Web3", and the meaning of this term is so vague that no one can clearly say what this term refers to until now. It is sometimes used to refer to the blockchain industry, sometimes related to Polkadot's Web3 Foundation, and sometimes 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 Dapp, that is, moving the application's computing to the chain.
Confusion of words is often a sign of nihilism, which makes people confused about what they are fighting for. In the end, we find ourselves fighting for a technology stack that "decentralizes computing for network applications." Its core concept is "decentralization," but even this decentralization no one can clearly explain its true meaning. If it were "courage," "love," and "freedom," we could have a good talk about it. But how do we talk about "decentralization"? "Love" may be seen as a purpose, but "decentralization" sounds more like a means without an end. Why is it also held up as an ideological purpose?
If our goal is a technology stack that "decentralizes the computing of network applications", then we should resort to technical discussions to discuss its feasibility, technical pros and cons, and the price we have to pay. If we cannot point out the ultimate goal of this technology stack that "decentralizes the computing of network applications" and its relationship with this ultimate goal, then our behavior will inevitably go against our heads and be frustrated. When we cannot explain these things clearly, we use marketing means to create words, and even magnify it to the grand level of Web3 that involves the transformation of the entire Internet, and conspire with VCs to fuel the flames. The final result is what we have today: people believed it, but people no longer believe it.
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 stance, and is never ambiguous about these things. In terms of ideology, he chose to engrave "British government aid" into the Genesis Block of Bitcoin, and also chose not to show up for life, completely anonymous. A firm stance, consistent words and deeds, and no Tai Chi are the virtues of a political leader. In terms of technology, he does not mention "decentralization", but directly says P2P. Not using vague ideologies to hijack the technology stack, not letting those who do not understand technology romanticize technical routes that are actually not feasible to cause more fallacies, and directly calling out the name of the technology stack he wants is the virtue of a technical leader.
Clearing up the real problem
Cleaning up the existing financial system and vocabulary only helps us unravel the expectations and interest structures that are imposed on the blockchain. Now, it’s time to face the real problem.
To clear up the real problem, I have a personal position, which is to return to Bitcoin, not Ethereum. This is not only because Bitcoin is much higher than Ethereum in market value, but also because Satoshi Nakamoto is more revolutionary in technology stack and has more mature foresight for the future world. In fact, when we delete many "invalid words" of the Ethereum ecosystem and VC conspiracy, what we finally get is a technology stack that "decentralizes the computing of network applications." Bitcoin points to a set of P2P technology stacks. The former tends to put as many things as possible on the blockchain, that is, to infinitely expand the use scenarios of the blockchain, while the latter is to remain restrained and only put what should be put on the chain, and at the same time combine with the P2P (now we call it 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 keep the term Web3. Putting all the computations of all applications on the chain is not only difficult to implement and a waste of resources, but also stupid. This idea is like the source of problems, constantly creating more problems; the most fatal thing is that it does not bring real users. Users' demands are monetary freedom, market freedom, content freedom, social freedom, and freedom of association, not decentralization. Decentralization is just a means. Decentralization is only meaningful if it can serve our real purpose well.
A Real Problem: Bitcoin
Even so, some people may think it is too abstract. They will ask: Why don't you just say what you think is the real problem? In addition to Bitcoin (digital gold, which may be included in the Fed's balance sheet) and stablecoins (daily means of payment, which can already see a large number of use cases), what else is the real problem? What else is necessary? Bitcoin's market value is increasing. Is it better if it is the only one in the entire cryptocurrency market?
Well, there is a real problem right now, that is the economic mechanism of Bitcoin, which makes Bitcoin unable to exist alone. Not only can Bitcoin not exist alone, but a huge ecosystem must be formed around Bitcoin. In my opinion, this is the only problem that is not a false proposition.
This is because Bitcoin is digital gold because its number is set at 21 million. This constitutes a basic belief. Shaking this number will shake this basic belief. At the same time, Bitcoin is halved every 4 years. If Bitcoin is analyzed as a country, the military expenditure of this country is halved every four years relative to the GDP of this country. After the first four halvings, this ratio may progress to a worrying number next.
The social consensus carried by Bitcoin is growing, but the relative cost of protecting it is decreasing, which is bound to be 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 white paper, he implied a strong assumption that if the issuance of additional Bitcoins is not considered, Bitcoin will need to become a strong transaction chain in the future, using handling fees to subsidize miners and maintain network security. In the past, people regarded this assumption as an unfixable defect. Today, with the iteration of Bitcoin's own code, we can see such a structure from this defect: a Bitcoin main chain and a huge Bitcoin ecosystem cooperate with each other to provide long-term security for Bitcoin without shaking the fundamental modification of the upper limit of the number of Bitcoins.
This assumption will not be realized automatically, it can only be realized by the efforts of future generations. If there is anything worth doing for entrepreneurs now, it is worth doing. Because it is difficult, and it is worth it. Most importantly, this is not an official topic designated by a philosopher king, nor is it a license issued by a national government, nor is it the personal preference of a VC or exchange owner. This problem is here. It exists here fairly, open to everyone with digital certainty. The entire industry has to face it, and even in the future, every national government that includes Bitcoin in the balance sheet of the central bank will face it.
Let’s pull ourselves together and actually do something.
