"Impression 1475": Anxiety and Choice of a Traditional Investor

The Internet, Internet of Things, big data, and artificial intelligence seem to be cutting-edge industries, but in fact, there are very few opportunities for entrepreneurship and investment. It’s not that the industry is bad, but that there are too many players who have been playing for too long. After more than ten years, the entrances are occupied, the traffic is divided, and the pattern is set. This is the inherent law of industry development, which is determined by cycles and stages. This is the case for the Internet industry, not to mention other industries. It is not an exaggeration to say that all industries are in decline, not to mention that China’s equity fund industry is restricted by special capital market regulations, and it is difficult to raise funds, invest, manage, and withdraw. But the main reason why I chose to abandon stocks and start chaining is because I am optimistic about the revolutionary value and huge potential of blockchain technology. I have a judgment that blockchain will be the most important theme of the times and investment opportunity in the next decade.

Therefore, the investment idea at this stage is very clear: if the road is not good, then build it.

The investment strategy and ecological layout are also very simple:

1 A simple application that can run even on a small broken road;

2. Infrastructure Construction

3. Improvement of ecological supporting facilities

The most promising ones are of course IPFS and Filecoin. Why? Because they have touched all three points mentioned above: decentralized storage is not only the most basic storage application, but also the infrastructure and ecological support. It is absolutely amazing!

I can summarize it in two sentences: horizontally, four-in-one, both virtual and real; vertically, it is a link between the past and the future, with layered progression;

What does it mean? Let me use two pictures to express it:

There is too much content in these two pictures. Let me explain briefly:

1. Pure public chain projects are very risky. On the one hand, there are too many links and too long cycles from public chain → developers → popular applications → user traffic accumulation → ecological prosperity, and there is a lot of uncertainty. On the other hand, there are too many public chains, which are similar. Even the top public chains, such as Algorand, Polkadot, and Nervos, have worrying market capitalizations and uncertain futures, not to mention other second-rate public chains and quack projects. However, Filecoin is a storage sharing and file sharing application, which is the most basic, simplest, and almost everyone needs to use it. The ecological risk of the project is much lower.

2 IPFS takes the lead, with years of accumulation and good preparation, and has a good technical community foundation; IPFS not only fixes the defects of the traditional Internet HTTP protocol, but also unifies the logical structure and interactive interface of big data. It has the potential to become the basic platform for big data rights confirmation, transaction, and interaction, and provide the most natural and broadest data source for artificial intelligence (the part about big data infrastructure in the middle of the first page is actually an extension of my Internet investment ideas, and it is also the pain point of big data and artificial intelligence. It has a lot of connotations, and it can be discussed in a separate class, so I won’t go into it today).

3 The most promising application of blockchain is smart contracts. The key to the closed-loop implementation of smart contracts is triggering events. The key to triggering event oracles lies in the availability of data and the credibility of data sources. Filecoin's decentralized and tamper-proof characteristics have the potential to become an oracle, authoritative evidence, credible data, the best storage warehouse and data source.

4 It has two meanings: virtual and real. On the one hand, Filecoin has both use value and transaction value; on the other hand, investing in mining machines involves both physical hardware and virtual currency.

5 The second picture, as the most promising project in the decentralized storage track, I don’t know to what extent Filecoin can eventually achieve. If it can reach the fourth step, it will be amazing, and almost all applications of the Internet and big data can be migrated here; but at least climbing to the third step, or at least the second step, there should be no problem; the ecology and application promotion of this project can be carried out in stages and implemented in layers. No matter what level is achieved, there are corresponding support platforms and application outlets, which can be used for offense or defense. Unlike many other projects, failure will mean death.

There are also a few pictures for your reference:

A large number of top star funds, including Sequoia Capital and YC Incubator, are betting on this project.

The IPFS solution has been supported and adopted by hundreds of projects, including Google's Chrome browser, Sohu browser, Netflix, and even JD Cloud.

If we look at the underlying logic of this track, there are five questions listed in the figure. It seems that there are only five questions, but in fact, there are questions within questions, and the questions can be asked endlessly. Through constant communication, repeated research, and vertical and horizontal comparisons, the style of each team, the depth of industry understanding, the in-depth outlook on the ecology, the ability to implement strategies, the level of risk control, including the founders' technical background, business sense, communication temperament, pattern and sense of rules, are becoming clearer and clearer. We are already completely inclined towards the Starry Sky ecosystem.

It’s not that Starry Sky Ecology 1475 is so good. In the eyes of investors, there is no perfect project or perfect team. This team has a heavy technical background, so we are not too worried about the technical implementation, but its marketing ability and channel resources are a little worse (compared to the other companies). However, we are more pragmatic investors, and we are also worried about risks and loss of control. Weak marketing ability is not a bad thing.

I guess everyone has seen what happened later, which is the amazing performance of 1475 nodes in the test network stage. In fact, in the multiple tests of the open network, we know their strength, and the performance of the test network is just the tip of the iceberg;

Let me elaborate here. Many people think that 1475 relies on bug attacks to attract attention, which is actually a big misunderstanding. On the one hand, Starry Sky Ecology is not a marketing-driven company. It has never done media PR or public appearances before, so the motivation for dominating the charts for promotions is not valid. Taking a step back, we just want to mine quietly. It is impossible for these bugs to remain after the mainnet is launched. If the stability and security of the system are not guaranteed, it is meaningless to mine more coins. We are eating from this pot but smashing it. This is not what we want!

Second, choose the right partners. Don’t be fooled by the hundreds of mining machine brands that are now clamoring for the best. When the mainnet is launched and the results are clear, there will be no more than 10 left. Moreover, at least 50% of the mining machines may not be able to mine at all. Even if they can mine, the profit gap may be huge.

Third, why did I choose the Starry Sky Ecosystem 1475 team? Why did I emphasize the input-output ratio? It is not the top spot on the test network, nor the cost-comparison model of how much money per T is; technology serves the economy, and all of 1475's strategies, algorithms, and even hardware configurations are based on the input-output ratio. This is the indicator that investors really care about and should care about the most!

(1) Climbing up the third or second step is the most likely, with a probability of more than 70% and a return of about 5-10 times;

(2) Climb up the first step, 20%, and recover the investment as soon as possible;

(3) The probability of climbing to the fourth step is 10%, but the probability is not certain, even 100, 1,000, or 10,000 times.

(4) Failure to produce, delay in launching, indefinite delay, <1%, hardware residual value or mining the next storage coin;

Therefore, this is a high-quality project that only comes once in a decade, with acceptable risks and high returns, and perfect investment attributes.

Regarding liquidity and currency price risks, there is basically no need to worry within 1-12 months. The logic is as follows:

Supply side: From January to June to December, the circulating supply is limited, and 70% is in the hands of miners, who also have to pledge a considerable portion;

Demand side: Global mining machine sales are 5-10 billion, and more than 300 domestic mining machine brands continue to promote, covering 3-5 million people;

Ecosystem popularity: Top three blockchain financing scales, top three developer attention, and a full community of users and believers

After the 12.12 test network was launched, my advice is: when you should wait, you should wait well, and don’t act without seeing the rabbit; when you shouldn’t wait, don’t worry about the gap of 1-2 months, because the opportunity cost is too high, and grasp the main contradiction, which is not a big deal.

In just one month, the returns and risks may differ by more than 3-5 times. At this point in time, either don’t invest, or if you want to invest, don’t wait!

There are three reasons:

1 At this point in time, the risk is very small (from the perspective of functional implementation, code completion and project progress);

2. By the time you confirm that you want to shoot, others have already confirmed it, and there may be no bullets left. The supply chain can no longer keep up. The delay is not just 1-2 months, and the profit gap is not just 3-5 times;

3. The income of the second phase of the test network may not be lower than that of the main network. On the one hand, there are fewer participants, the participation cost is low, and the distribution ratio is high. On the other hand, the rewards of the second phase of the test network may not only be tokens, but also computing power and ecological privileges.