Chen Lei, a big boss in the mining industry: Keep moving forward in the Bitcoin mining industry where confidence is more valuable than gold

Author: Wang Danyang

As a "veteran" in the blockchain industry, Chen Lei, Secretary General of Peking University Blockchain Club and Founding Partner of BitBlue Whale, does not look like a fanatical and radical believer, but more like a profound thinker. He has his own views on blockchain and digital currency.

Chen Lei thinks that the definition of "blockchain stickler" given by Shiliu Finance is a bit too "high-sounding": "I just went through a few rounds of bull and bear markets because I can see the value of Bitcoin." He has been emphasizing "value": "This is why I stick with it."

01Confidence is more valuable than gold

Chen Lei went all in on blockchain in 2015, but he started paying attention to Bitcoin in 2011. Why did he go all in on blockchain so late? It’s because time is not necessarily proportional to experience. In the early days, due to various coincidences, the “reckless people” who rushed into this industry often couldn’t withstand the ups and downs of Bitcoin in the early stages of blockchain development. They made a fortune and lost money, and finally came and went with nothing, which was meaningless. From 2011 to 2013, the entire industry was very small, with all kinds of extreme emotions mixed in. When Bitcoin soared dozens of times and quickly fell 90%, Chen Lei was still a bystander, and made an objective judgment as an outsider: “I don’t know where the basic foundation of this industry is, and where the value of blockchain is. ”

Chen Lei found that from the perspective of the actual effective cash flow of the industry ecosystem, mining is the fundamental of the entire blockchain industry. When the mining accident occurred in 2014, the price of coins had fallen below the bottom line of electricity costs, and many miners frantically sold their coins and mining machines and left the market in a hurry. This was an avalanche; if even the mining industry could not persist, the entire blockchain would collapse. "It's just that I don't believe it anymore," Chen Lei concluded, confidence is more valuable than gold.

Chen Lei believes that blindly "sticking to the old ways" is not faith, but foolish courage. A truly wise person sees through the essence of the industry, can distinguish a normal bear market, and firmly believes that there will not really be a dead end.

"In 2018, many people panicked when they saw Bitcoin plummeting, and voices of pessimism were heard one after another. But those who really understand the industry can see that there has not been a large-scale exodus of miners, the giants are still there, the basic market of Bitcoin is stable, and a large number of teams based on blockchain applications are still working hard. Although there are good and bad people, it must be seen that the cognitive foundation of blockchain is constantly expanding and deepening, and the number of people participating and holding is only increasing. The value of blockchain has reached a high degree of consensus in the theoretical community, which is the reason for the rebound from the bear market."

Therefore, when Chen Lei first entered the market, his long-term understanding of the industry was immediately apparent: he first laid out the upper mining industry of the blockchain industry and accumulated sufficient capital when the entire industry was developing rapidly. At the same time, Chen Lei has always attached great importance to his self-knowledge: "In 2018, I also invested in a number of projects on a whim, but soon lost almost everything. At this time, I deeply realized that when hot spots appear, bubbles will follow, but in many cases, these projects cannot represent the true value of blockchain." He believes that the real passion for the industry is actually to stay calm when the public is enthusiastic.

"You can make quick money in the blockchain industry quickly, but it's not yours to keep. In the short term, it's these opportunities that determine how much money you can make, but for this industry, what determines how long the money can last is the persistence of values ​​and continuous learning."

"Opportunity determines how much money you can make, but wisdom determines how long the money can last. "

02

The project that provides timely assistance is the way out for blockchain

" The biggest problem in the development of the blockchain industry at present is that most of the so-called application cases are just icing on the cake, blockchain for the sake of blockchain, rather than providing timely assistance and finding the real value. " Chen Lei expressed his own views on the industry.

Chen Lei declined to comment on decentralized applications such as IPFS: "Many decentralized applications are just the icing on the cake. For example, distributed storage. People's demand for storage is fast extraction and large memory. In fact, the cloud services of various centralized servers have done a good job. Another example is the current blockchain traceability. In fact, we cannot exclude the process of human participation, so we cannot guarantee that there will be no fraud. After the production and transportation process is fully automated and only machines participate, blockchain traceability may have its authenticity significance." As for the underlying public chain, Chen Lei believes that blindly pursuing technology and TPS is also wishful thinking. " These public chains are used by very few people, which is the biggest problem.

As for the technical development platform, Ethereum has done a good job, and it will be difficult to surpass it in a short time. Not to mention that some public chains have poor development capabilities and are directly copied. " Chen Lei believes that at the current stage, the application of blockchain is mainly in the financial field, and at most it is a quasi-financial product for financial speculation, which is reflected in the high-risk two-level market of currency-to-currency transactions, and a large number of bad projects are mixed in it.

The second is the demand for payment and transfer. Apart from the cross-border and anonymous payment needs in the gray area and the hedging needs of a very small number of countries whose sovereign currencies have lost credibility, the throughput and security requirements of mainstream payments cannot be met by the blockchain system, and it will not become mainstream in the short term.

The third is the full-system financial application starting from the bottom-level accounting. In this regard, mainstream institutions have participated more, but the voices are loud but the results are few. It is just the beginning of exploration, and it is still a long way to go to replace the mainstream channels such as traditional finance such as banking, insurance, lending and investment.

As for the application of blockchain in non-financial fields, that is, moving from virtual to real and empowering entities, we can see the efforts of many practitioners this year. Generally speaking, there are two paths. One is to start from the technology of serving finance and play an indirect role through innovative financial accounting tools. The other path is to give full play to the basic trust and intelligent instruction set functions based on the automation of the entire process. This direction is more reflected in the innovative development of software and hardware such as the Internet of Things, artificial intelligence, and edge computing. Blockchain cannot play a leading role in the early stage, but the greatest hope should be here.

"The key reason why Bitcoin's base price has been able to remain at $4,000 is that its value in anonymous payments has been proven," Chen Lei said. "In the payment process, its anonymity, security, near-instantaneity, and relative stability are all proven values."

“Everyone sees this value, and also knows that this value has room for appreciation once there is innovation and breakthrough. Many people have confidence in Bitcoin, the largest and most stable application of blockchain so far. Therefore, when the price of Bitcoin falls to $4,000, there will be a large amount of buying and a large amount of investment in the currency, which will continue to promote the participation of other forces and maintain the basic income of accounting miners. There is a complex dynamic model that is difficult to determine. Although it is difficult to see a new bull market in the short term, the basic market of $4,000-6,000 guarantees the income of miners and further guarantees the stability of Bitcoin.”

"If blockchain wants to develop further, it needs more direct pain points , improve cost-effectiveness, increase application demand and paid revenue." As the saying goes, giving timely assistance is always better than icing on the cake.

03Be cautious and optimistic

After many years in the industry, Chen Lei has always maintained a consistent sobriety and calmness for every trend that sweeps the industry : "You need to find the pain points that this project really solves in the publicity, and you also need to have a certain ability to distinguish." Therefore, he has always maintained a cold-eyed attitude towards the popular IEO. The fanatical pursuit of wealth in the "currency circle" seems to have never affected him. Compared with the prospects of listening to the propaganda, Chen Lei is more willing to judge the ecology of the industry through the details he has seen with his own eyes. As a "miner" who mainly engages in mining, Chen Lei has always had an in-depth study of mining machine chips. From the perspective of the speed of chip research and development, he believes that blockchain has entered the ranks of advanced technologies : "Now the size (7nm) and update speed of mining machine chips are basically equivalent to the development level of the entire semiconductor industry." The whole society's attention and understanding of blockchain are also rapidly increasing: "In the past, when making mining machine chips at TSMC, we were always ranked behind, but now chip manufacturers have also realized the profits of this industry, and the demand for mining machine manufacturers will be ranked higher than before."

Chen Lei is always optimistic about the future of blockchain: " From the law of each market fluctuation, we can see that this is a spiral upward trend, especially for Bitcoin. The fluctuation range of each bull and bear market is gradually shrinking, and the value tends to be stable ." Regarding himself, Chen Lei commented: "Don't write that I am a big boss. There are many people in the industry who are better than me." His indifference and calmness remind people of a saying, "A true hero is someone who still loves life after seeing through the essence of life. "