What Era Are We Living In? (Continued) – Let's Talk About Blockchain

The reason I wanted to write a sequel is to continue discussing the topic from last time. Previous post link:What kind of era do we live in?。

In my previous article, I discussed my views on the current tech industry, which can be summarized as follows: 1. Most of the internet sector is engaged in aimless experimentation, and after overheating, the industry is now moving towards contraction and stabilization. 2. Artificial intelligence is very popular, but there is still a long way to go, and no substantial breakthroughs have been achieved.

A few days ago, I chatted with an old friend and suddenly realized that my previous industry analyses had been largely accurate. For example, the early decline of Renren.com, the overheating of O2O, the recent rise of Fengchao and Cainiao, and the price increases and difficulties faced by Uber and Didi. This gave me the courage to share another prediction for the future: blockchain.

I've been back and exchanged various opinions with many people, but I've found that people don't really understand blockchain as an emerging technology. In my opinion, it could very well be the next major revolutionary turning point, or at least it's a new platform.

I myself only have a superficial understanding of blockchain. If you count from when I first got involved with Bitcoin in 2012, it's been about five years, but I wouldn't call myself an expert. I really started paying attention to it last year, partly because I was bored, and partly because some of my friends were working in this industry. Recently, I've had some time, so I've read some books and materials, and enrolled in a "smart contract" course to see if I can gain a deeper understanding and potentially enter this field.

In this article, I will briefly introduce what blockchain is, and then talk about why I think it is the next revolution. Since I have not yet deeply entered the industry, some of the content may be biased. I welcome everyone to discuss and correct me.

For those interested in blockchain, I recommend the book "Blockchain Explained in Plain Language." It's a book of just over 200 pages, easily read on a plane or high-speed train. It covers the basic knowledge and common sense of blockchain in a simple and easy-to-understand way. Moreover, it was published in November 2017, so the knowledge points are still relatively recent.

——————Now, my performance will officially begin—————–

As we all know, Bitcoin surged from ,000 to nearly ,000 in 2017, attracting a growing number of investors. Although governments intervened and banned it, the situation seemed uncontrollable. Some saw it as another tulip mania, while others saw it as a new opportunity; opinions varied widely. For speculators, opinions and ideas were irrelevant, as long as they could profit. Therefore, any analysis or theory was ineffective for them. Moreover, the technology behind Bitcoin is extremely complex, making it impossible for most people to fully understand it.

In my view, Bitcoin itself has no intrinsic value. Its current value is a result of widespread hype; market acceptance creates value, while lack of acceptance negates it, much like the religious notion of "if you believe, it exists; if you don't, it doesn't." However, Bitcoin's popularity has brought more attention to the blockchain technology behind it, which is something very important. Bitcoin itself has no intrinsic value, but the blockchain technology behind it possesses a revolutionary potential similar to that of the early "internet."

From my current observations, more and more people are entering the blockchain field, but the situation is quite mixed. Some are thinking of getting in early to make a quick buck when the trend picks up; some are genuinely optimistic and committed to solid investment; and then there are those who have only a superficial understanding and are just jumping in to see what's going on. The first group is currently the largest. Most of them don't have much basic knowledge, but they've started working on a particular direction, hoping to profit when the trend takes off. The second group mostly focuses on underlying technology. The number of people working on this is roughly the same in the US and China. Due to the US's technological advantage, they are currently doing slightly better than China, but China's development is also progressing well. The third group is like mine. I think this is a very good opportunity to participate in my spare time, and once the underlying technology matures, I can have a ticket to enter the market.

The reason I want to get in early and secure a ticket is because blockchain technology has a high barrier to entry. Unlike the internet, where you can just have an idea and start doing it, most people can't even explain what blockchain is. Even if they can understand it from simple examples, the underlying technologies require a lot of experience. So, this ticket requires prior knowledge preparation.

What stage is blockchain currently at?

To put it simply, it's somewhat like the internet in the 1990s. Bitcoin introduced everyone to blockchain, and everyone is working on improving the underlying technology, just like back then everyone was busy getting every household connected to the internet. Even now, those who can "go online" are still in the dial-up stage. But after the internet became widespread, everyone saw what happened. Some people made their fortunes with a yellow pages business, some went public with a news portal, some became the most valuable chat tool, some made so much money with a trading platform they regretted their lives… and so on.

The internet has little chance left, much like the manufacturing industry was monopolized by a few oligopolies after the Industrial Revolution. Although the internet is only thirty years old, it has already entered an era of oligopolies. If we want to "change the world" again, we can only wait for the next revolution. Many people have seen this and have begun to take action.

What exactly is blockchain?

This is a question many people have asked, and I've explained it many times. Simply put, it's something used to solve trust issues. Everyone knows that the anonymity of the internet brings great convenience, but it also creates many problems. Blockchain, while maintaining anonymity, solves this problem, thus allowing it to be applied to all walks of life. Everything on the internet is just a matter of time; as long as you're connected to the network, you can use blockchain technology to solve real-world problems.

Why is it so amazing? Because it uses distributed technology to eliminate the possibility of cheating. Previously, hackers only needed to hack into the database to tamper with their own data. But what if this database existed on everyone's computer? A hacker would need to tamper with every single computer, which is impossible. Once discovered, the entire internet would know that the source was untrustworthy, and the cost would be extremely high.

Let's consider another application scenario. Many people use dating apps to achieve certain goals. But how can you trust that the person on a dating app is the one you want? Don't you need to chat and get to know them gradually? How do you confirm they're a good person? Do you still need to continue chatting and getting to know them better? If someone doesn't want others to know they're using a dating app, they'll try their best not to reveal their real information. This makes others even more suspicious of their authenticity when they contact them. This is a deadlock that the internet can't solve. But blockchain can. Imagine everyone has access to everyone's information and behavioral data, of course, the data is encrypted, and only the system's private key can access it. When you find someone, or when the system recommends someone, it will tell you "their purpose aligns with yours" and, based on previous behavior and feedback from others, this person isn't a bad person. Doesn't that save you a lot of trouble? You can even calculate whether your personalities and backgrounds match from the behavioral data, but that's an algorithmic issue and won't be discussed here.

In this model, everyone must remain authentic. Bad actors will gradually disappear from the software; any wrongdoing will be known across the entire network, influencing future actions. Privacy is also thoroughly protected, as you may not know a person's personal information before meeting them, only that you share the same goal and have a very high success rate. If a bad actor tries to change their data to become a good person, they will only become worse, as the failure rate is almost 100%.

To summarize, blockchain is essentially a ledger stored on all participating nodes. Since storing the entire ledger by everyone would be too costly, it's divided into blocks. Each person stores only their own block, and these blocks are linked by a hash. Knowing one block allows you to access all the others. When there's an update, it's broadcast across the network, and updates are made only after verification.

Of course, the actual operation is not that simple. It involves a lot of technology and various operational costs. For specific details, you can read the book I recommended.

Why is blockchain the future?

The use cases have already been mentioned above; this is just one example I've imagined, but it could permeate various industries. Currently, everyone is researching its applications in finance, including virtual currencies themselves. The emergence of smart contracts opens up even more possibilities. With the continuous improvement of underlying technologies and the emergence of various underlying application foundations, in the near future, it will be able to combine with various internet services, not only solving internet problems but also many social issues.

"As the train speeds along, we will soon reach our final destination..." Well, the high-speed rail is really fast, so I'll stop here for today. I'll share more after I've studied it more deeply.