"8 Questions" Shenyu: The road from "the number one mining pool player" to "the big wallet player"

Shenyu, whose real name is Mao Shixing, is known as the "Seven-Colored Angelfish" in the circle. He was born in the 1990s. He entered the field of digital currency in 2011, dropped out of graduate school in 2013 (at the age of 23), established the earliest Bitcoin\Litecoin mining pool F2POOL in China, and gradually developed it into the world's largest comprehensive mining pool.

8 years in the industry, never left

Shenyu, who was born in 1990, said that he has always envied people born in the 1980s because they were lucky enough to catch up with the early days of the Internet and create the glorious era of the Internet. Fortunately, Bitcoin gave him such an opportunity when he was very young.

“It was a coincidence that I entered this industry. If I hadn’t seen reports about Bitcoin twice that afternoon, I would have missed this industry. Then I finished reading the Bitcoin white paper, and I was shocked during the two hours after reading it.”

In the early days of his hobby, Shenyu tried to invest in Bitcoin and GPU mining, and wrote a large number of mining tutorials, leading many domestic early miners to participate in Bitcoin and Litecoin mining. Later, he realized that in an era of rapid technological iteration, if you encounter such a thing, you should resolutely leave school and start a business. "

Shenyu entered the industry in 2011, and it has been nearly 8 years since then. He has never left the industry in these 8 years. In addition to financial freedom, this industry has also brought Shenyu a complete change in his way of thinking and more knowledge.

"In the past, many ways of thinking were static, but after entering this industry, I found that blockchain technology was iterating at an incredible speed. If I continued to use static thinking to observe and make decisions, it would not work. So I was forced to look at things with dynamic thinking." Shenyu said.

For example, in the early days, people thought that Ethereum's code was poorly written, but it is also alive. Two months later, it has fixed many bugs and introduced new solutions. It is a dynamic development process. So when making decisions or making judgments, we should look at its long-term development with a dynamic perspective, rather than just looking at what it looks like now or only looking at the past. If you kill Ethereum with one stick at the time and fail to see its dynamic development, you will have a lot of lessons to learn.

"Secondly, blockchain technology has brought me a great impact. Blockchain technology is very cross-border. For me personally, my knowledge structure is not that comprehensive. So I can only force myself to study and learn a lot of things, which is actually a great gain."

From the birth of Bitcoin to 2013, blockchain was in its infancy. The main participants were technology geeks who pursued the iteration of blockchain technology and the transformation of their thinking.

2013 to 2017 was the first phase of blockchain development. At this time, many blockchain native entrepreneurs participated in it. They set up companies and built the blockchain ecosystem, which promoted the better implementation and application of the blockchain ecosystem in the future.

After 2016-2017, many traditional Internet and Wall Street elites poured into the industry, and the industry entered a period of rapid development. They are committed to the vertical application of blockchain. In addition, there are many investors who are also promoting the development of the entire blockchain ecosystem. Although the proportion of people with a strong geek spirit is decreasing in the early days, the entire ecosystem is gradually integrating.

The bubble bursts, waiting for the turning point

From the perspective of the mining industry, 20-30% of mining machines have chosen to shut down in the past two months, which has a great impact on the stability of the entire ecological computing power. In 2018, the value of new coins produced by the mining industry was about 10 billion US dollars, but the average loss of the top miners this year was more than 10 million US dollars. Due to the mismatch between the marginal cost and marginal income of mining, many miners were forced to shut down and sell their mining machines. This caused the price of mining machines to fall sharply, and finally the price was basically the price of scrap recycling.

Of course, some miners with resources will migrate to places with cheaper electricity prices, just like in 2015. In the past, they went to Sichuan, Xinjiang, and Inner Mongolia, but now they choose to go overseas. They go overseas to find lower electricity costs and lower energy costs, which may iterate new regional advantages in energy in the mining industry.

From the perspective of the mentality of industry practitioners and the adjustment of company personnel, a large number of companies have been laying off employees and optimizing their personnel structure. Many companies have also begun bankruptcy liquidation. Therefore, the entire industry is indeed in a cold winter period and in a state of bubble bursting.

As an old man in the industry, Shenyu said: From a logical or cyclical perspective, the market will be at the bottom of the industry cycle for a period of time in the future. But for practitioners, investors, and miners, if there are sufficient resources and survival capabilities, it will be a good growth period. This will allow everyone to calm down, iterate better products, and obtain more resources.

As for when the cold winter will end, Shenyu did not give a definite answer.

“We need an inflection point. This inflection point may be the emergence of a revolutionary technology, which will bring a new round of development to blockchain. It may also be some changes at the policy level, which will allow traditional funds, more entrepreneurs and practitioners to flow into this ecosystem and bring more practical applications... These may all be inflection points. So when will this inflection point appear in the future? I think it may be a cycle of 1-2 years, or even longer, because the future cannot be accurately predicted.”

From the No.1 mining pool owner to the wallet tycoon

Perhaps many people still think of Shenyu as the "number one mining pool". However, Shenyu has been engaged in digital wallet business for more than a year.

“Looking back on my previous entrepreneurial experience, I can actually find a commonality: I like to do the most hardcore things, and these technologies can lay a solid foundation for the entire industry.”

In 2013, due to the performance and allocation issues of the mining pool, many miners were in a passive state. It was during that time window that F2Pool provided mining software services, which were recognized by many miners and F2Pool became the world's largest mining pool.

In 2017, the well-known "Ethereum Valentine's Day Attack" incident on the F2Pool made Shenyu realize that the blockchain has actually been closely watched by hackers. Later, statistics showed that about 300,000 hackers were attacking the blockchain, which posed a great threat to the security of the industry. At that time, most digital currency wallets on the market did not lower the threshold for using wallets to the lowest level. For example, it was necessary to manage a large number of complex private keys, which was not only difficult to manage, but also vulnerable to security attacks.

“In 2017, we did some business thinking. We wanted to create a business model that would bring a win-win situation to both users and us based on our native mining ecosystem. If we were to make a wallet, our team had the technical capabilities and historical accumulation to make it easier for many novice users to accept and use it. So we formed a team and moved towards the wallet direction.”

Shenyu feels that running a mining pool is a very simple software and hardware service. He has been focusing on the mining field before, and now he is very familiar with it and it is a natural thing.

However, the idea of ​​making a wallet is very different from that of making a mining pool. Making a wallet requires focusing on security, which is extremely challenging, so the company must first position itself as a security company that combines the underlying logic of blockchain.

"We have developed a set of encryption solutions, basically reconstructing each public chain, and then deconstructing the wallet part. All core private keys and some user private keys are stored in our customized encryption machine. We have done a lot of security optimization and security audits in the development of our entire internal risk control system, IT infrastructure architecture, and network environment. We have devoted a lot of effort to security and have done a lot of software and hardware upgrades. In fact, this is the biggest difference from the previous wallet company."

In November 2017, Cobo was officially established and completed its seed round of financing at the same time; in December 2017, Cobo completed a pre-A round of financing of tens of millions of US dollars, with investors including Linear Capital and Frees Capital; in July 2018, Cobo announced the completion of a US$13 million Series A financing, led by Danhua Capital, Shuanghu Capital and others, and followed by many well-known institutions in the industry.

According to Shenyu, Cobo Wallet currently has 500,000 users and 10,000 daily active users. In the cold winter, such daily active users are actually quite good.

Wallet is the entrance to the blockchain world

I believe many people have heard that "wallets are a gateway to the blockchain world in the future". Shenyu interprets this as:

If blockchain and current Internet technologies are combined in 5 or 10 years, a value Internet will be formed. By then, there will be a scenario like this: a newborn child will first get his or her own digital identity, and his or her DNA information, diet information, education information, medical information, etc. will be stored on the blockchain, and he or she will manage the digital identity on the chain through a private key.

If a pharmaceutical group needs to develop drugs for a rare disease, it can quickly collect information about people with rare diseases from the public, and obtain massive data on the symptoms while fully protecting the privacy of patients. This will greatly speed up the development of new drugs and bring great changes to society. Of course, the premise is that technology needs to develop to be able to support these application scenarios. Just like in the early 1990s, we couldn't imagine that the Internet could bring about the current taxi and food delivery scenarios. But with the development of software and hardware systems, these have now been realized.

With the advent of the era of value Internet, the storage, authorization, and use of a person's information all require a private key management solution, and smart contracts are needed to confirm the rights before use. In such a scenario, a wallet is similar to the function of a current browser, which is a way for users to authorize their core information. In such a scenario, wallets will indeed become a core entrance to the blockchain world.

If we compare the data storage and evidence storage of digital currency wallets with the current functions of Alipay or WeChat Pay, what would be the biggest difference?

Shenyu replied that your data in some apps is not yours, but provided by the app supplier. The barriers between these suppliers cannot be broken, for example, the data in WeChat and the data in Alipay cannot be connected, which greatly reduces the value of your data. If your data is owned by the supplier, it will make it difficult to implement your data. If these scenarios can be presented and implemented in the end, it will actually be the most effective for the efficiency of the entire society and the utilization of everyone's resources.

At present, it is still difficult to judge the future business model of digital wallets. Whether it is taking the traditional financial route, doing cross-border exchange, or combining social networking with blockchain... In fact, there are many directions, but at this point in time, for most wallet entrepreneurs, the business model is not clear. Everyone can see that wallets exist as the entry level of the future blockchain world, but what is the path to achieve it, and what win-win value can it bring to users? In fact, it is still in the early stages of exploration.

The wallet is the last toss

So, can Shenyu, which is now attacking digital wallets, achieve the same success as it did in its previous attack on mining pools?

Shenyu said that they are all growing. There is not much overlap between the two fields, and the time of entry is also different. Constantly digging holes for yourself and then solving problems is also a way to learn and grow quickly. To be honest, I set a goal very early, which is to retire at the age of 30. The wallet may be the last product of my last struggle and iteration in the blockchain field.

Many of Shenyu's stories are well known in the industry. In view of this, the "8 Questions" interview did not repeat the previous stories. The interview with Shenyu lasted 50 minutes. During the 50 minutes, Shenyu left me with the impression of being rational, cautious, and smart. In the interviews of the second season of "8 Questions", I usually ask the guests to describe themselves in 5 words. Shenyu thinks that one word is enough to describe himself, no more. That word is "stable."

“Whether it’s psychological fluctuations, emotional control, or observation and cognition of things, they are all quite stable. In fact, my psychological age is completely inconsistent with my actual age. Some time ago, I met many old friends who said that the blockchain industry is too destructive. We are all “kids” born in the 1990s, but we look thirty-something, and our psychological age may be older... Some people say that seven years is a lifetime. I feel that in the past seven years, the breadth of my life may have been greatly broadened, because I have experienced so many incredible things.”

"In the early days of my business, I was too young and had to run blindly. After going through the ups and downs, my mentality became more stable. Many seemingly turbulent personnel and events are actually not a big deal. From a longer-term perspective, it is just a very small fluctuation. This is because I am mentally stable and can still accept these things. But when it is time to break through, there will be a breakthrough. When starting a business, I will consider its positive aspects as well as the corresponding risk exposure. Then I will try my best to use what I have learned or resources to shield myself from these risk exposures and do things better, so I will be more stable in doing things." Shenyu said.