Lin Han, Marketing Director of Bitmain: PoW Ecosystem Construction Accumulates Power for the Next Bull Market

On August 8, the offline Web3 industry exchange event, Golden Salon, hosted by Golden Finance, kicked off. The theme of this Golden Salon is "New Trends in the Narrative of the New Cycle of Crypto". Lin Han, Marketing Director of Bitmain, gave a speech entitled "PoW Ecosystem Construction, Accumulating Power for the Next Bull Market". The following is the content of the speech:

( Lin Han, Marketing Director of Bitmain )

I am from Bitmain, and below I will use the term “blockchain server” instead of “mining machine”.

What is PoW? PoW is to calculate random numbers. After calculating the answer, you can grab the right to record. This is a probability problem. In order to make the probability higher, you have to keep calculating, use better machines and greater computing power to calculate. What is PoS? In the blockchain network, the more people hold coins, the greater the computing power. Ethereum has many accounting nodes, and some early PoS currencies have more than a dozen nodes to record. This leads to the interest on deposits, so PoS has more financial attributes.

The debate over the two mechanisms of PoW and PoS has been going on for a long time. Some people are staunch PoS advocates, such as Vitalik Buterin. When Vitalik first designed Ethereum, he reflected PoS in the Ethereum vision. He believes that PoS is safer and more in line with the spirit of blockchain. There are people who insist on PoS and there are people who insist on PoW in this world - I believe in the Pow mechanism.

Next, let's think about the value anchoring of Bitcoin. All currencies in human history started with the gold standard - the price of the US dollar was anchored to gold, and then the gold standard system collapsed. The current world monetary system is based on the consensus of the US dollar, which is the US dollar standard. Some people also propose to use oil as the value anchor behind the currency. Correspondingly, Bitcoin is energy-based, and the basic value of Bitcoin is strongly bound to electric energy. I think this is a very genius design because it binds energy and currency value together.

We will enter the era of the metaverse and virtual world, and energy can run through the real and virtual worlds. When I first read the Bitcoin white paper, I was shocked by this, which is one of the important reasons that drove me to join the blockchain industry.

We all call Bitcoin digital gold, not digital diamonds. Because there is an essential difference between the two: "Gold" is a chemical element that originated from the Big Bang, and its scarcity is determined by its production mechanism. Now the synthetic technology of artificial diamonds is very advanced, and there is almost no difference between them and natural diamonds. Therefore, from this perspective, we call Bitcoin digital gold. We also need this digital currency as a communication currency in the future era of human civilization, and it is as precious as gold.

Many people are arguing: Why can Ethereum issue NFTs, but Bitcoin cannot? Because some daily NFTs do not need to have too high a price, and not all NFTs have to become works of art and have scarce value. Of course, there are already many Bitcoin NFT projects on the market.

Next, let's discuss Bitcoin halving. This mechanism was written into Bitcoin when it was first created. Halving every four years can ensure that Bitcoin is a deflationary model. At the beginning of creation in 2009, the block reward was 50, which became 6.25 in 2020 and 3 next year. Such a deflationary mechanism can increase the long-term value of Bitcoin.

The Bitcoin halving narrative that will take place in April next year will become a milestone event in the industry reshuffle. From the perspective of Bitcoin halving expectations, Bitcoin prices will definitely rise after the halving. Since the foundation of the blockchain industry is consensus, once everyone believes that Bitcoin halving will lead to an increase in Bitcoin prices, then Bitcoin prices will really rise.

It just so happens that the current crypto market is in a bear market, which is in line with the expectations of the halving cycle. Everyone believes that there is a bear market before the halving, and the market will take off after the halving. Looking back at the previous market data, such expectations have indeed been realized, but whether it will be the case in the future, no one can make a conclusion.

The Bitcoin halving event has a more profound impact on blockchain servers, because some low-end servers will not be able to run and will eventually shut down. For mining companies, this is an important time to reshuffle. If you have a blockchain server with good performance before the halving, you will have an unparalleled advantage during the halving cycle. What we have to do is to prepare before the halving and welcome the arrival of the bull market. After the real bull market arrives, it will be impossible to buy blockchain servers because demand will exceed supply at that time.