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Haipo is a senior blockchain entrepreneur whose businesses cover mining pools, wallets, exchanges, etc. At the same time, Haipo is also an important participant in the BTC fork and BCH computing power war. Its mining pool brand ViaBTC has long been at the forefront of the industry. The theme of this event is "Mining Pools, Exchanges and Public Chains - Yang Haipo's Ambition and Idealism" . It will be conducted in the form of a one-on-one interview with Ye Zi, the founder of Yehuashuo, and the entire process will be broadcast live. Yehuashuo: Yehuashuo is the first active crypto media community in China that focuses on overseas blockchain information, KOL opinions and market analysis. It is committed to becoming a link between the overseas and Chinese crypto worlds and the wildest and most incisive Bitcoin KOL community in China. Our slogan is: Wild and incisive! This issue shares the core ideas:
1. The blockchain industry is essentially centered around the secondary market. Exchanges provide asset issuance and value discovery functions and are the core of the entire industry. CoinEx chose the exchange track because of the exchange's industry status. The exchange oligopoly effect is obvious, and it is difficult to make money if you are not at the top. In my opinion, most exchanges are not qualified and will inevitably die. 2. Bitcoin's computing power follows price changes, not the other way around. There is a widespread fallacy in the Bitcoin market that the miner's cost price is the floor price of Bitcoin. This is actually wrong, but there is a saying in the financial market called self-realization. If more people believe in it, they will buy at the bottom price, and the price will naturally go to the bottom.
3. In the cycle of rising coin prices, in theory, buying coins directly is more profitable than mining, because rising coin prices will attract more people to participate in mining, lowering mining income. But in reality, few people can hold coins to the end, and mining is a disguised form of lock-up, so mining is generally more profitable than buying coins. 4. POW and POS are the main consensus algorithms of blockchain. Their main purposes are: 1. Maintaining the decentralization and security of blockchain network; 2. The issuance method of digital currency. The POS protocol has developed very rapidly in the past few years. In terms of decentralization, security , cost, efficiency, etc., POS is superior to POW in all aspects. 5. The ultimate form of DEX is to replace the vast majority of current exchanges, achieve unification, and even surpass Nasdaq to become the first choice for future corporate listings. DEX will become the underlying driving force of the entire blockchain industry. 6. Yang Haipo: We are one of the main supporters of BSV. Our mining pool has supported BSV mining for a long time. We have the best BSV browser with the most comprehensive data. CoinEx also has the only BSV/BCH trading pair in the entire network. Regarding the BCH and BSV forks, our team's attitude is neutral. We support the diversified development of blockchain. 7. At present, the overall market has reached the end of the bottom, and the market is expected to usher in a reversal in the next few months. Now is a good time to participate. As the biggest competitor of Bitcoin and the originator of the concept of large blocks, BCH has great investment value.
The detailed interview content is as follows:
Ye Zi: 1. We know that you have been involved in mining pool and exchange businesses. Can you share with us the opportunities and original intentions for the establishment of ViaBTC and CoinEx?
Yang Haipo: When I first registered ViaBTC, I didn’t know what to do. The name came from a book called “Hackers and Painters”, written by a Silicon Valley startup godfather whose company is called ViaWeb. So I registered ViaBTC by chance. The original intention of starting a business was quite simple at first. I just wanted to do some side business to make some money so that I could focus on cryptocurrency trading. Later, the side business became my main business, and I had no time to trade in cryptocurrency. Entrepreneurship is actually a process of continuous growth, continuous thinking, and continuous improvement. We entered the exchange track because we value the industry status of exchanges. The entire industry is essentially centered around the secondary market. Exchanges provide asset issuance and value discovery functions and are the core of the entire industry. In the process of our exchange business, we have a deep understanding of the problems faced by centralized exchanges, such as security issues, management issues, and regulatory issues. Therefore, we began to lay out decentralized exchanges. I believe that DEX will be the future of the exchange industry.
Ye Zi: ViaBTC has always been a mining pool ranked at the top in terms of computing power. You have also been deeply involved in the mining industry for many years. Can you tell us specifically how you entered the mining industry and chose to build your own mining pool? Yang Haipo: In 2014, I left Tencent and joined a team that made Litecoin mining machines. At that time, I did a lot of things, including mining plant construction and maintenance, mining plant monitoring system development, mining pool construction, cloud computing platform, etc. It can be said that I participated in all aspects related to mining. At that time, I used an open source software to build a mining pool, which had poor performance and functions. But soon the team disbanded with the arrival of the bear market, and I didn't do it in depth. Later, I used my spare time to develop a Bitcoin mining pool from scratch, preparing to make some money as a side job. I chose this direction because my technology was advantageous. But it still required funds and computing power to actually do it, so I posted a post online looking for partners, and later many people contacted me. Li Kuang from Bitmain was the first to contact me. He reported to Mr. Xiaohan, and they made a decision very quickly, so it started like this.
Ye Zi: 2. Hundreds of new exchanges have emerged in the market this year. There is a saying that "there will be no bull market unless the exchange collapses". What do you think of the current competitive landscape of exchanges? What are the advantages of CoinEx Exchange?
Yang Haipo: Since 2017, with the rise of ICO and the development of the Token economy, there are thousands of Tokens in circulation on the market, but exchanges are essentially unable to bear the demand for so many Tokens to circulate, which is the most fundamental reason why there are so many exchanges in the market. Another reason is that the top exchanges are very profitable, and many people choose to work in the exchange industry. Exchanges are a typical business with low barriers to entry but high difficulty. In my opinion, the vast majority of exchanges are unqualified and there are actually not many qualified competitors. The oligopoly effect of exchanges is also very obvious. It is difficult to make money if you are not at the top. To be a first-tier exchange, both the human cost and the market cost are very high, so it is inevitable that most exchanges will die. However, there are still opportunities for emerging exchanges, because this industry is still in its early stages and the industry is constantly changing. Changes also mean opportunities. What we have to do is wait for our opportunities. CoinEx's advantages are first-class background, first-class team, and first-class products. Our team has been working in the exchange track for more than two years and has deep experience. For exchanges, longevity itself is one of the most important advantages. CoinEx is one of the few exchanges with a full ecosystem layout, with comprehensive currency support and globalization, rich derivatives support, and is about to launch a DEX public chain, which is specially built for decentralized exchanges. Ye Zi: Among the top three exchanges in China, OKEX/Binance/Huobi, which one do you think is the best? What is the reason? Yang Haipo: These three exchanges are all excellent and have their own advantages. If I have to choose one, I prefer Huobi because Huobi truly puts customers first. Huobi has the strongest comprehensive operational capabilities and has trained a large number of talents for the industry. Many backbones of companies have worked at Huobi before. Huobi can be said to be the Huangpu Military Academy of the currency circle . In addition, Huobi's technical strength is also rapidly increasing. Ye Zi: Martial arts emphasize special moves. What do you think is the special move that will allow CoinEx to have a chance to become a first-tier exchange? Yang Haipo: Becoming a first-tier exchange does not rely on a killer skill, but rather on solid product, technology, market, and business capabilities. Otherwise, even if you have a killer skill, it is likely to be short-lived. To become a first-tier exchange, it must be good in all aspects. Non-first-tier exchanges have their own shortcomings. In essence , the competition is about the team. CoinEx has also focused on building a team in the past year. The company has grown from more than 20 people to more than 70 people now. The essential consideration is to build an excellent team. On the premise of laying a good foundation, I think the ability to predict the market and grasp market opportunities will be the most important.
Ye Zi: 3. Recently, several major exchanges including Binance and Huobi have introduced relevant policies for key customers, and CoinEx has also recently launched a key customer rights system. It seems that they are all starting to compete for key customers. Is the market in a stage of competing for stock? Talk about your considerations behind this, and also give us a detailed introduction to the key customer rights of CoinEx?
Yang Haipo: On the one hand, this is the result of the current market stock competition. On the other hand, it also improves the service level of the entire industry and reduces transaction fee costs, which is beneficial to the future development of the industry because it is the result of full competition. CoinEx launched key customer service to provide better services to customers. We have been preparing to launch a key customer service rights and interests system for a long time, but it has been postponed until now due to the team's operational capabilities. Our key customer service has just started and is constantly improving. We strive to provide key customers with the best service and the best trading experience. Our key customer rights system is actually very simple in nature. We have everything that our competitors have, and the threshold is lower and the service is better. Ye Zi: Binance recently acquired the options exchange JEX, and CoinEx also has options products. Are you optimistic about options trading as a new competitive track? Yang Haipo: Of course, options are very mature financial products in the traditional financial market. The digital currency market is just starting out and there is still a lot of room for development. Compared with financial derivatives such as futures, options have the advantages of high leverage and no liquidation. For customers, the risk is lower and the income will not decrease.
Ye Zi: 4. Some time ago, there were media reports that the computing power of Bitcoin dropped by 40% in one day, but the actual situation does not seem to be the case. Can you give us some knowledge about computing power? Is there any intrinsic correlation between computing power and price?
Yang Haipo: There is no actual value for the total computing power of the Bitcoin network. The data published on many websites are calculated based on the number of blocks and difficulty in the past period of time. Mining is similar to rolling dice, which is a probabilistic event and has a large variance from the expected value. In addition, since Bitcoin produces blocks very slowly, with an average of one block every 10 minutes, and there are too few daily samples, the total computing power calculated based on the number of blocks produced in the past 24 hours has a large error compared to the actual computing power, and is actually not of much reference value. The computing power of Bitcoin follows the price changes, not the other way around. Mining can be seen as the primary market of Bitcoin, that is, the issuance market of Bitcoin; miners make profits from the price difference between the primary market and the secondary market, so the rise in the price of the secondary market will drive the increase in computing power, while the decline in the secondary market will cause high-cost miners to exit the market. We were able to observe this very clearly at the end of 2018. There is a widespread fallacy in the Bitcoin market that the miner's cost price is the bottom price of Bitcoin. This statement is actually wrong. We have seen that this did not happen after the Litecoin halving. In fact, most miners stopped mining and withdrew from the market. Only those miners with extremely low electricity costs are still mining. But there is a saying in the financial market called self-realization. If more people believe in it, they will buy at the bottom price, and the price will naturally reach the bottom.
Ye Zi: 5. The logic behind making money from mining and buying coins is that the price of coins will rise. Is mining really more profitable than directly buying coins?
Yang Haipo: In theory, in the cycle of rising coin prices, buying coins is more profitable than mining, because as the coin price rises, the difficulty of mining will also increase as more people participate in mining, which will reduce the income from mining. But in reality, few people can hold coins to the end, and mining is a disguised form of lock-up, so mining is generally more profitable than buying coins. I would also like to give you a suggestion. The best strategy for investing in Bitcoin or other digital currencies is to buy and then hold on to them until you get a reasonable return. Avoid short-term trading, especially leveraged futures trading.
Ye Zi: 6. In addition to POW mining, many mining pools have tried and made plans for POS mining and Staking this year. What is the progress of ViaBTC in this area?
Yang Haipo: I am very optimistic about the future of PoS. The POS protocol has developed very rapidly in the past few years. In terms of decentralization, security, cost, efficiency, etc., POS is superior to POW in all aspects. In recent years, many new public chains have adopted the POS protocol. A few months ago, we launched ViaWallet, a multi-currency decentralized wallet. We will carry out POS mining and node services around ViaWallet, and CET will be our first POS project. POS mining pools seem to have a lower threshold, but in fact, it is very difficult to do well and requires deep participation. We will deeply participate in some POS projects from the aspects of nodes, wallets, block browsers, etc. Ye Zi: Is it also better than PoW in terms of decentralization and security? Can you explain it in detail? Yang Haipo: POW and POS are the main consensus algorithms of blockchain, and their main purposes are: 1. Maintaining the decentralization and security of the blockchain network; 2. The method of issuing digital currency. Personally, I think POS is superior to POW in both areas.
- POS is generally more decentralized than POW. POW tends to be centralized due to production efficiency. Many people laugh at the 21 centralized nodes of EOS, but they don’t know that the number of active mining pools in BTC is far less than that. Many small mining coins only have one or two mining pools.
- POS has lower costs in maintaining network security. The security of POS is endogenous, while POW relies on external miners and requires high economic incentives. These costs will be transmitted to the secondary market. Once the incentives are insufficient, the security of the entire system will be greatly reduced.
- POW decision-making is inefficient. The so-called longest chain principle adopted by POW has been proven to be meaningless by the market many times. Miners do not have a suitable and effective decision-making method, resulting in the decision-making power actually falling into the hands of developers. This is particularly evident in the debate over Bitcoin expansion.
- ICO, which is generally adopted by POS, is a more reasonable and efficient issuance method. Through ICO, funds can be quickly raised for research and development and marketing activities, which is more conducive to the development of the project. However, the development and market of POW coins have generally fallen into the tragedy of the commons and rely entirely on volunteers for support.
Ye Zi: 7. We know that CoinEx has invested a lot of effort in CoinEx Chain this year. Can you tell us why you want to build a public chain and what is the latest progress?
Yang Haipo: On the one hand, in order to realize a truly decentralized exchange, a real DEX requires sufficient decentralization, high enough performance and simple enough user experience. Currently, there is no public chain that can meet our needs, so we developed our own public chain. On the other hand, the public chain is the most important infrastructure of the blockchain. We hope that better public chains will bring greater value to this industry. Bitcoin, Ethereum and other public chains have their inherent limitations. We want to build the next generation of programmable public chains. CoinEx Chain started in March this year, published a white paper and released a test network in early July, and is currently preparing for the main network launch. The node election of CoinEx Chain will be officially launched on October 16. To become a verification node, you need to hold more than 5 million CETs. After the main network is launched, voting will be conducted on the chain, and the top 42 will become verification nodes. We will start simulated voting in advance on the CoinEx platform.
Ye Zi: 8. Regarding the future of DEX decentralized exchanges, what is the ultimate form in your mind?
Yang Haipo: First of all, we need to have a consensus on decentralized exchanges. Decentralized exchanges are not intended to replace centralized exchanges, but to solve the defects of public chains. Blockchain has been developed for more than 10 years. The issuance and trading of tokens are the most proven implementation scenarios of blockchain. Tokens are not just a single currency, they can be securities, bonds, bills, etc. Traditional public chains, such as Ethereum, only implement the issuance of tokens, and transactions rely on centralized exchanges. The ecosystem is incomplete, and centralized exchanges also have many defects. The core function of CoinEx DEX is to implement the issuance and trading of tokens, and to issue and trade tokens without permission, which greatly reduces the threshold and cost of listing coins. In my opinion, the ultimate form of DEX is that it will replace most of the current blockchain exchanges, achieve unity, and even surpass Nasdaq, becoming the first choice for future corporate listings. DEX will become the underlying driving force of the entire blockchain industry. In the future, the number of tokens circulating on DEX will be tens of thousands, which is also something that centralized exchanges cannot do. In the future, most wallets, market conditions, and media apps will become the entrance to DEX. At present, most exchanges and token funds will become brokers of DEX, providing token issuance and financing services around DEX.
Ye Zi: 9. DeFi is considered to be the best application scenario of blockchain. What actions will CoinEx take in DeFi in the future?
Yang Haipo: There is no clear definition of DeFi at present. In a broad sense, blockchain exists for DeFi. The DEX we are working on is actually the largest DeFi application. In essence, coin issuance and financing needs are the core application scenarios of blockchain. In the future, we will implement more complex DeFi products on the smart contract chain of CoinEx Chain.
Ye Zi: 10. I have read your article "The History of Bitcoin Forks" before. As an eyewitness and important participant, can you tell us about the BTC fork and BCH fork events? Are there any lessons you can share with us?
Yang Haipo: The specific details have been clearly stated in the article. If you are interested, you can take a look at it. Speaking of lessons learned, first of all, the market consensus formed by Bitcoin is still very huge and not easy to break. BCH must firmly grasp the market positioning of the large-block version of Bitcoin. It still has great opportunities in the future market, especially when Bitcoin is congested, it will receive great attention from the market. Secondly, when participating in the Bitcoin fork, there were still great historical limitations. The blockchain was not as well understood as it is now, and the fork was too hasty, so there were many regrets, especially the issue of decentralized community governance. This also led to the subsequent split of BCH. This is why I am currently focusing on CoinEx Chain.
Ye Zi: 11. What do you think about BCH and BSV? If BSV develops a wide range of application scenarios in the future, will you support it?
Yang Haipo: In fact, we are already one of the main supporters of BSV. Our mining pool has supported BSV mining for a long time. Our BSV browser is probably the most user-friendly and comprehensive one. CoinEx has the only BSV/BCH trading pair in the entire network. Regarding the BCH and BSV forks, our team's attitude is neutral, and we support the diversified development of blockchain. Ye Zi: Is the current price of BCH very cheap? Is it worth buying? Yang Haipo: Whether it is a bargain depends on the market trend. What I can confirm is that the market has reached the bottom, which is a good opportunity to participate . Secondly, we need to look at the BCH token itself. BCH is listed on almost all exchanges and has wide popularity and liquidity. In addition, BCH development and community are very active, new applications are constantly emerging, and there are many supporters at home and abroad. In the future bull market, BTC will inevitably face more serious congestion, and the issue of capacity expansion will be raised again. As Bitcoin's biggest competitor and big block concept, BCH will also have great investment value.
Ye Zi: 12. What do you think of the current market situation? What do you think of the market situation before the halving? Do you have any investment advice for retail investors?
Yang Haipo: I have just briefly said that I think the current market is approaching the end of the bear market, and the entire market is expected to reverse in the next few months. The concept of a must-rise before halving has become a consensus in the cryptocurrency market. I think it is still valid this time . Although this statement is not correct in theory, it has become a consensus. As a digital currency investor, the most important thing at present is to get on board.
Ye Zi: 13. Bakkt’s trading volume was dismal after its launch, which is also considered the fuse of this sharp drop. What do you think of Bakkt’s launch? Is physical delivery really that important?
Yang Haipo: There are two reasons for the dismal trading volume of Bakkt. The first is the current sluggish market. Judging from data from all aspects, the current cryptocurrency circle should be the coldest in the past two years, and the dismal trading volume is normal. Secondly, Bakkt focuses on compliant futures, but it already has a competitor in CME. For traditional investors, physical delivery is not important because the vast majority of market participants are speculators.
Ye Zi: 14. What is the relationship between CoinEx and Bitmain? What is your personal relationship with Wu Jihan? Someone close to you said that you two are quite similar. Do you agree?
Yang Haipo: Bitmain is an angel investor of ViaBTC, and CoinEx is a business under the ViaBTC Group, so CoinEx and Bitmain are in an investment relationship, but Bitmain does not interfere in the specific business decisions of ViaBTC and CoinEx, it is only a financial investor. Xiaohan and I are both teachers and friends. He gave me great support in the early stage of my entrepreneurship and also helped me a lot when I was in the most difficult time. During the Bitcoin fork incident, we became allies because of the same ideals. We are both somewhat introverted and idealistic. The difference is that he has a financial background, so his knowledge of the industry is more advanced than mine. I have learned a lot from him.
Ye Zi: 15. In [A letter from Yang Haipo to users], you mentioned that "changing the world is my original intention of starting a business." You have been in this circle for so many years. At this stage, do you think you are a very ambitious person? What do you want to accomplish most in the cryptocurrency circle?
Yang Haipo: When I was in high school, I set the goal of changing the world. At that time, I was interested in aerospace, so I entered Northwestern Polytechnical University. After I came into contact with the Internet and open source software, I was deeply touched, so I began to seriously learn programming as a tool to change the world. The blockchain industry undoubtedly gave me a stage to change the world. Blockchain is a financial revolution, and I am very excited to be in such an industry. At the beginning of my business, I mentioned that mining pools were just a beginning, and I chose mining pools because they have a very clear business model. Later, I chose to build exchanges and public chains, which are constantly attacking the upstream of the industry. We are positioned as the infrastructure of the blockchain industry and hope to become the Google of the blockchain industry. The public chain is the most important infrastructure in the industry and also our most strategic direction. We hope to bring truly open and free financial technology to the world through CoinEx Chain. Ye Zi: Okay, today’s sharing ends here. Thanks to our partners Mars Finance, Bikan, Golden Finance, Planet Daily, Deepchain Finance, Lianxiang Finance, Milin Finance, Wuya Community, Zhenbencong, HashBang, Wuliu Finance, and Midu for their strong support for this event , and also thanks to Haipo for his wonderful sharing.
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