Compilation: Wu said blockchain
Shenyu: Co-founder and CEO of Cobo
Colin Wu: Founder of Wu Shuo Blockchain
Colin Wu : Because there are many readers outside the circle, I would like to trouble Shenyu to introduce myself briefly.
Shenyu : I am an old leek and an old miner. In 2011, I officially participated in the early construction of the Chinese blockchain. In 2013, I launched the first mining pool in the Chinese world, which once became the largest Bitcoin in the world. , Ethereum mining pool. At the peak, there were more than one-third of Bitcoin's computing power, and we are also the only team in the world that has successfully carried out a double-spend attack on Bitcoin.
After 2017, it was found that the blockchain began to have a large number of applications, but a lot of risk exposure was exposed around security and private key management. As a company that is better at building infrastructure, we established Cobo, a company that specializes in private key management. key management and its derivative risks. At present, the company has been doing it for more than six years, mainly around the underlying security and wallet custody, from fully centralized and semi-centralized MPC co-management to fully decentralized multi-signature product forms of smart contracts on the chain. .
Colin Wu : Shenyu is the most willing to share in the Crypto Chinese circle. You can also search for some of his past opinions online. To some extent, he should be the early boss in the Chinese industry who is most willing to share with you.
The currency circle can be divided into several stages. In the early stage, those who joined the industry before 2015 were mainly miners in China. Please share with us what kind of opportunity you had when you first entered the industry, and what was the atmosphere of the circle at that time Sample.
Shenyu : I entered this circle because of a chance. I was in college at the time, and when I was reading a book in the library and surfing the Internet in a boring afternoon, I suddenly saw two news articles about Bitcoin, which may be news about Bitcoin breaking through $1 . Out of curiosity, I googled "Bitcoin" and found the Satoshi Nakamoto Whitepaper. After reading the Whitepaper, I was deeply shocked. I spent the next three months mostly lying in bed, concentrating on browsing Bitcoin forums and community discussions, and otherwise barely leaving my bed. Even the meals were brought back by the students in the dormitory for me.
After browsing the forum for more than three months, I found that the Crypto world at that time was still a group of encryption geeks, and everyone had various unconstrained ideas. It seemed impossible at the time, but the underlying logic seemed to be logical. Cryptocurrency The core issue is that after the currency is digitized, it can circulate freely around the world without being double spent. Although they are all very mature technologies, they are very well combined.
As an engineering student, I was deeply attracted by these technologies and discussions, so I didn't go to school after college, and did construction and exploration in the Bitcoin community. The first is to translate foreign technical articles to China, and also made a lot of domestic friends. The earliest domestic community is around the QQ group as a means of communication, for example, some groups that you can still see and hear, such as "peace Hotel" and some very mysterious groups, in my impression there are about 40,000 to 50,000 people. On the one hand, there are a group of encryption geeks, and on the other hand, a group of people who happen to have a lot of graphics card resources. This group of people first cracked Nokia parallel phones, but suddenly the iPhone became popular, and the market for these parallel phones disappeared. , They have a lot of idle graphics cards in their hands, and they just discovered Bitcoin, and they cut in and used the graphics cards to mine. Basically, during the period from 2011 to 2013, China’s encryption ecology consisted of these two groups of people, one group was full of ideal cypherpunks, and the other group were down-to-earth miners secretly mining with graphics cards.
Fortunately, China has hit the very core mining field in the encryption track very early. At that time, there were not many things that could be done in the encryption ecology. There were only two things: trading and mining. After 2013, many began to emerge Exchanges with a Chinese background, because after everyone experienced a round of group buying wars in the Web2 world, some companies switched to the Crypto encryption exchange track and became the predecessor of the encryption exchange that everyone is familiar with. At that time, it was basically in this state. Everyone is discussing various exciting ideas and ideas every day. But more than ten years have passed, and many ideas and ideas have now become reality. For example, the ideas of Stablecoin discussed at that time and the ideas of early decentralized exchanges have now been realized.
Looking back at the past from the present, it seemed that many incredible innovations and ideas could be realized at that time. Today, it has reached a better stage, and there are already a lot of infrastructure and applications on the chain, so the future is becoming clearer and clearer.
Colin Wu : Thank you Shenyu for sharing his earliest status, including the QQ group where he mentioned "Peace Hotel". If you are interested, you can go to Baidu and Google to search. There is information about how the early Chinese Bitcoin world community was formed. There are a lot of interesting things, and there are also a lot of video interviews, including the familiar Bao Erye, the president, etc., and you can find a lot of information in the search engine.
2017 ushered in the biggest bull market in the industry, and now many celebrities have become more dazzling at that time, such as Sun Ge, who has become popular these days, such as CZ (Changpeng Zhao), including many Chinese-related public chains, regardless of It is NEO and Quantum Chain, but many people think that 2017 is full of ICO chaos.
Looking back on 2017, what do you think is impressive, or something worth reviewing and sharing?
Shenyu : The wave of ICO frenzy in 2017 is of great significance and is ignored by everyone. Although there were many ICO bubbles in 2017, and many speculative and even direct fraud projects emerged, looking back at 2020 and 2021, it has brought a large number of on-chain assets to the Ethereum ecosystem. One of the reasons for the explosion of DeFi is that there are enough assets. According to incomplete statistics, 200,000 to 300,000 ICO projects were born in 2017. Compared with ICOs and IPOs, it is unimaginable in the real world that there will be such a large number of IPOs, even in ten years. large order of magnitude. Although there were a lot of fraud incidents at that time, after a round of cyclical precipitation, good projects and good agreements still survived, and they were constantly iterated, and new innovations emerged from the ruins. The entire industry is basically a process of rounds of bubbles, bursts, and reconstructions. On the bottom layer is the process of the two scenarios of the public chain infrastructure and the application layer driving each other. Once there is a large number of bubbles and a large number of application explosions, it will force the underlying blockchain infrastructure to improve itself. But at the apex of the bubble, it was found that the underlying infrastructure of the blockchain could not support the technological development of the application. At this time, the bubble burst and entered a precipitation period. There are many various geeks who will iterate the underlying infrastructure to prepare for the next outbreak in the future. Doing a good job of laying the groundwork for infrastructure is also the internal driving factor for the industry to continue to iterate so quickly. The bubble is a good thing, but every individual in the bubble needs to maintain a certain level of calmness and do logical things, which is a good thing in the long-term industry cycle.
Colin Wu : Ordinary people may think that 2017 was full of bubbles, and the entire ICO industry was in a very chaotic state, but looking at it now, the projects that will emerge in 2020 and 2021 were also started in 2017 and 2018, whether it is Uniswap or DeFi-related protocols, as well as some public chains, such as Polkadot and Filecoin, all started at that time. Because the protocol level itself is not as efficient as the centralized organization, it still takes a while to do things better. Some people have discovered that the thousand-fold coins and ten-thousand-fold coins that appeared in 2020 and 2021 turned out to be so-called high-quality projects invested in 2017 and 2018.
You also mentioned DeFi just now. The most important thing in 2020 and 2021 is the rise of DeFi, including yourself as the most famous DeFi miner at the time, from physical miners to DeFi miners. When did you become interested in DeFi? After several years of precipitation in DeFi, what is your new view on the DeFi industry?
Shenyu : I personally came into contact with DeFi at the end of the bull market and the beginning of the bear market in 2018 and 2019. At that time, some DeFi protocols began to emerge, and there were early protocols on UIS and Ethereum. At that time, DeFi could not be applied on a large scale and lacked driving factors. I spent some time exploring on it, and found that it was almost lost, so I didn't continue. From 2020 and 2021, DeFi has clearly seen an inflection point, and a new wave of Liquidity incentives represented by Compound has emerged.
I have a good habit. I will spend some time, energy, and cost on trial and error, observation, and set an indicator at the forefront of trial and error in the industry. When the inflection point of the indicator arrives, I will spend time and energy for further research. In 2020 and 2021, I found that there was an improvement in DeFi data and an influx of users. I spent some more time. After two or three days of watching, the market was completely different, and it grew spontaneously. Later, I invested a lot of energy and put a lot of assets in Do a series of operations in DeFi, and call on friends and people in the group to take a look at the qualitative changes that have taken place in DeFi. They are also lucky to catch this wave of DeFi and complete the transition of miners.
From the miners in the original physical world to the DeFi miners on the chain, there are fewer constraints on the real world, because in the past, it has been a long time to find electricity, mine, and various physical Dealing with the world, this is quite a pressure on students who are more technical. Afterwards, DeFi found that the entire industry has experienced a lot of early technology accumulation and has many advantages. The ultimate pursuit of private key management and underlying security can be better played in the chain world, so it will be built in DeFi all the way later. Various infrastructures for internal use, perfect efficiency. In the near future, internal self-use tools will be gradually opened up for everyone to use, and everyone is welcome to experience it.
Colin Wu : 2020 is the "Summer of DeFi", and 2021 has entered the era of NFT explosion, revolving around NFT, various small pictures, and games. To some extent, its momentum is better than that of DeFi, because DeFi faces various regulatory factors, especially the problems that exist after Terra exploded, but NFT seems to be more clearly integrated with the mainstream.
I remember Vitalik said that what surprised him the most was the explosion of NFT. He never thought that NFT would have such a big explosion, especially the completion of the confirmation, transaction, and circulation of digital collectibles, which really changed the world. Just-needed needs.
Shenyu has a characteristic. He loves to play with everything. There is basically nothing he does not play. He also plays a lot of NFT. From the current point of view, does NFT have a very good prospect? There are also many entrepreneurs on site, do you have any suggestions or ideas for them?
Shenyu: Although I personally play a lot of NFTs, I also lose a lot. In the NFT world, I am a famous counterpointer. This is a very interesting and interesting market. It has great characteristics, relatively decentralized, and is different from other blockchain tracks. The head effect of DeFi is very strong, and the chain carries high-value transactions. , after all, blockchain space is precious. But the NFT market is different. There are a large number of fragmented communities. Each community has its own original characteristics and cultural characteristics. It is easy to find a sense of identity in such a community.
When NFT first emerged in 2021, many friends couldn’t sleep at 3 or 5 in the middle of the night and were very happy. They called us to talk about NFT, saying how good this agreement is, how relevant it is, and what kind of cultural value it has. one night. We have seen the emergence of a lot of values that can meet the inner emotional needs of various cultural groups, including social capital and other values. From this dimension, the success and existence of NFT has certain value and significance.
For the vast number of young friends, compared with the Crypto world, the entry threshold for the NFT field is very low. You don’t need to know a lot of cryptography knowledge, and you don’t need a lot of money. As long as you have a certain art appreciation ability and humanistic spirit, you can see What is different is the scene and experiment. There are a lot of post-00s in the NFT world. In the early stage of NFT, in order to make IP and build a community, the cost of entry is basically very low. We have also seen that the NFT market is full of stories of getting rich overnight, bringing a lot of fresh blood.
Looking at it now, the NFT cycle may be very short, that is, an emotional cycle of about 3 months, and may also have experienced a rapid cycle of 3 or 4 rounds. Standing in today's relatively bearish market, NFT is combined with many IPs and traffic. It is especially important to make the world of Crypt o more diverse, because the future belongs to the younger generation. Under such conditions, NFT has brought many new forces in the industry. Although I personally lost a lot of money, I am still very optimistic about the fresh blood that the NFT market will bring to the future of Crypto.
In addition, it can be seen that many assets in the real world are non-standardized. It is difficult to express these assets through standardized tokens on the chain. NFT is a good asset category that can carry many real-world assets. From this perspective If so, the future NFT market is still promising, not only the collection value of PFP seen now, but also a lot of value combined with the real world, but more efforts are needed to promote a better integration of the industry with the real world, and the road will be long A little, but it should become a reality in the not-too-distant future.
Colin Wu : Let’s continue to talk along the history. 2022 is a very painful year for the Crypto industry, and even the year with the largest amount of thunderstorms in history. From the beginning, small Chinese exchanges such as Hufu, AEX to Terra caused There was a huge shock, and then Terra detonated the best-ranked capital in Crypto venture capital——Three Arrows Capital, and then Three Arrows Capital detonated DCG, the largest conglomerate giant in the industry, and everyone discovered that such a glamorous giant is so fragile. When everyone thought that this matter was coming to an end, SBF, the founder of FTX, who was at the top of the industry and the most glittering, donated to politicians and religious leaders, and attended various excellent conferences every day, actually misappropriated the assets of users, and the assets were not Foreclosed, and made a ton of ridiculous deals. With a simple news report and a tweet by Changpeng Zhao, an empire of tens of billions can collapse in one breath.
2022 must be a very painful but very exciting year in the history of cryptocurrency, and it will also leave you with a lot of lessons. Including the mining circle, many familiar companies have closed down, and many problems have not been dealt with. Of course, God Fish is still relatively stable in 2022. From your perspective, are there any impressive lessons for 2022, or do you think the industry needs to learn any lessons?
Shenyu : 2022 is indeed very cruel. There are many old friends around me who can't eat together because of various things. In the past year, the industry as a whole fluctuated greatly, and various accidents emerged one after another. But looking back, in the 10-plus years since the birth of Bitcoin, the underlying logic of various security incidents is the same, and they are essentially human problems. Although the industry is widely criticized for its high volatility and various uncertainties, the industry has been very certain in the past two years because a large number of friends with very good resumes and a lot of Wall Street capital have come. The industry has begun to have native applications, with DeFi, NFT, and GameFi, and it is no longer air. In such a thriving environment, a big hole suddenly fell, the bubble burst, and many things were disillusioned.
A long time ago, we also experienced round after round of such things. The bottom line is that everyone is more and more inflated about themselves, individuals, and companies. After reaching a certain psychological state, many decisions are no longer so rational. We firmly believe that the price may not It will fall below a range, the leverage can be higher, and the income can be higher, which deviates from the original intention of the blockchain. The blockchain has given us a lot of freedom, allowing us to have technical means and tools to provide a more transparent and open world.
But on the contrary, because the power is transferred to the owner of the centralized organization by the end user, although it looks very bright on the surface and participates in various political events, in the process, every user has not mastered the technology given to us by the bottom of the industry. The ability to transfer the strongest sword to a third party to keep it for us is a very big challenge facing the industry. It is difficult for the person who helps us manage this key to resist his inner greed.
Thinking in another way, as a manager, he easily used everyone’s keys. When many people don’t know it, the volatility of the industry is high, and there is a lot of high-quality information, it is easy to make a lot of money. When the industry In a state of rapid expansion and prosperity, there is more or less a certain probability that people can't resist the temptation in their hearts, and secretly use this key. It may be profitable once they use it, and their hearts will further expand and they will use it more and more. , the final state is an extreme black swan, where a sudden accident causes assets to be wiped out.
So I think 2022 is a year of disenchantment, and I have learned a very important lesson. Everyone must deeply realize that even companies can go bankrupt. What can we believe? You should not believe in human nature, you should believe in mathematics, and you should believe in the underlying technical principles. Everyone must master the technical means that the blockchain gives us in the new era, and master the key in your own hands.
After the industry has experienced extreme events throughout last year, everyone is also discussing and actively thinking about how to make everyone use blockchain technology better in the future, increase industry transparency, and avoid those things that are against human nature. Now that the private keyless technology based on MPC multi-party computing is developing rapidly, I believe that in the future, everyone can have a key out of the box, but your counterparty and server may only have one A key to help you manage, all transaction processes and assets will not be in the hands of any party, are open and transparent, and can fully use the underlying characteristics of the blockchain and mathematics as a basic guarantee. Although we may have learned a very painful lesson in 2022. Basically, 40% or 50% of the centralized institutions in the industry will be wiped out and affected due to various reasons, but this also makes us determined on the side of decentralization. Going more resolutely, it can be clearly felt that the industry has basically reached a consensus. The MPC-based private key-free solution has gone a long way in terms of decentralization and transparency.
We can see a more obvious example. Large hedge fund teams have actively requested to use MPC technology to assist in the management of assets, rather than placing assets on centralized exchanges with confidence. In addition, we have also seen the rapid development of the decentralized and transparent trading volume of DEXs and Derivatives on the chain. From this dimension, we have learned a lot in 2022, but industry practitioners, these encryption geeks have already taken the lesson, we are getting out of the trough, and it is bound to bring us more in the next 2-5 years. Multiple technical means allow us to have more freedom.
Colin Wu : I would like to add that 2022 is indeed very painful, but the industry has made many improvements. For example, centralized exchanges have also begun to have on-chain reserves to prove POR. Although everyone has a lot of criticism and it also has many problems, this Still very important. To put it simply, if there are noob users, and the exchange where your currency is located has not announced the POR certificate, please take out your currency decisively. If an exchange dare not even publish the POR certificate, why should he be an exchange? Where did the user's money go? This has become a very easy choice.
Looking briefly into the future, next year will be the next halving of Bitcoin, and the market will generally change with the halving. Now many people think that the price of Bitcoin may have a deeper relationship with the Federal Reserve, and will no longer be affected by the halving of Bitcoin. cycle impact. Please repeat the old tune of Shenyu to talk about your halving of Bitcoin next year and the impact of halving on the price and market. Of course, this is your personal judgment and it is not a financial investment suggestion.
Shenyu: First of all, I would like to declare that I am not suitable for secondary investment. I discovered this matter 3 months before I entered the industry, so I embarked on the path of mining, otherwise I would just speculate in coins. After 2017, the correlation between cryptocurrencies and the macro has been very high, especially since the interest rate hike this year, the correlation has been even higher, although there may be event-driven results brought about by some industry-native factors.
From this year's short-term perspective, there are two major core driving factors: one is the macro, we are a small pond, and one factor depends on the water level of the pond is whether the macro will release water. At present, the macro may be improving. In addition, a large number of U.S. banks exploded in March, making everyone regard Bitcoin as a safe-haven asset. From this perspective, the macro is improving, which is at least a neutral factor.
Second, the endogenous driving factors of the industry. From an economic point of view, halving does not play a big role at present, but it is a good narrative logic, and everyone also believes that in this narrative framework, there is a high probability that there will be another round of halving from Q4 this year to next year Quotes. Simply calculate, the mainstream mining machine in the world is still the S19 mining machine. If the price of the currency is less than 30,000 US dollars after the halving next year, these mining machines will have to be shut down. This rarely happens in history. Happened very briefly. So I personally think that the halving market from Q4 to next year is still worth looking forward to.
Colin Wu: Shenyu is the founder of Cobo, which is mainly engaged in custody business. The custody business is a very long-term business with a very large investment. I would like to ask Shenyu to introduce the future development direction of Cobo and how to compete with mainstream Western custody institutions. How can it become more advantageous?
Shenyu: I just talked about the development path of many industries in the early stage. I can see that there are two core problems in this industry: one is the TPS problem and the performance problem. Every round of industry development is application-driven, and finally brings applications. Can't keep up, the bubble burst, continue to iterate the infrastructure, the core is the problem of TPS; the second is to provide a set of solutions for end users, which can make users very simple and easy to use, while ensuring user security Under such circumstances, allowing users to access the blockchain so that users will not transfer their rights to own keys to third parties are two major problems in the industry. The current performance problem should be solved in the near future. After 7 or 8 years of exploration in the industry, the solution revolves around the two-layer network and three-layer network.
The next problem is the security of the underlying private key. Since 2017, Cobo has discovered that there have been endless security incidents in the encryption world. Exposed to hackers, we try to build a set of solutions around the security of underlying assets, private keys and their risk management. The underlying logic is to find its core application scenarios around different stages of the industry, and provide a Set of solutions around private keys.
The first stage is represented by Bitcoin. The core blockchain application is sending and receiving, storage, transfer, plus transactions. At this stage, Cobo Custody is a purely centralized custody solution. As a SaaS product, Wallet as a service is made into Wallet as a service, so that users who need to send, receive, store, and transfer can use the API to adjust the API. It is very suitable for the current state of Hong Kong. There are a large number of compliant funds and emerging transactions that need to find compliance, security, and A set of products with easy-to-use and Web2 experience, this is the set of services of Cobo Custody and Wallet as a service.
In the second stage, we found that everyone began to interact a lot with the chain. At this time, it is necessary to have on-chain interaction capabilities and contract status management capabilities, and encapsulate a large amount of capabilities accumulated in the DeFi field into Cobo Argus products. The ability to interact with various blockchain DeFi protocols, as well as a series of risk management modules and automation programs, better support 7×24-hour response on the chain and handle extreme situations.
In the third stage, in the post-FTX era, everyone is becoming more and more aware of the importance of mastering the Key. Many large institutions have begun to ask whether we can have a transparent and separately isolated asset pool. All assets need to be authorized by me before they can be used. Therefore, on the basis of the earliest centralized hosting, the underlying technology is iterated to MPC technology. End users have a key, and we have a key to help manage assets. Our key is mainly used for risk control, and there is a key for The cold storage is placed in a third party, which may be managed by a security company or an insurance company. Later, many companies found that this solution was very good, and they iterated on the basis of our solution to provide products for end users. When end users only have account passwords, they can quickly enter the blockchain. Gaming companies use our solutions to allow end users to enter the Crypto world with a Web2 experience. When the end user grows to a certain level, there may be high-priced assets on the chain. For example, the scarce NFT is suddenly obtained in the game. At this time, the account can be upgraded and the third key can be granted to the user. The user already has the will, The motivation is to learn and understand some basic concepts, so that you can use it better after you get this key.
We basically provide three different products around these three stages, a purely centralized encryption machine-based custody solution, a multi-signature solution for smart contracts on the chain, and an MPC solution for decentralized coordination plan. Basically, these three solutions are aimed at different scenarios, and the core is to solve everyone's asset security and private keys, as well as risk management around the use of various scenarios on private keys. We also expect that through the company's efforts and iterations, more users will be able to flood into the blockchain in a safer, easier-to-use, and more secure way, and explore the wonderful on-chain ecology on the chain.
