Without issuing digital currency, Nanhua Group participates in blockchain in an alternative way. Does it want to be the guardian of the "cryptocurrency circle"?

When it comes to blockchain, it is not a new concept. This year's blockchain has made great progress compared to last year: various Internet giants and even physical giants have begun to turn blockchain technology from concept to application. I believe that in the near future, people will be able to experience the convenience of life brought by technological progress.

At the end of last year, Nanhua Group announced that it would enter the blockchain market. Regarding this decision, many analysts believe that "Nanhua should focus on the token settlement system, and through the issuance and promotion of tokens, form an independent settlement system to break the bottleneck of capital flow restrictions, so as to develop mainland and global businesses." This is also a direction that industry insiders are generally optimistic about: issuing tokens will not only help expand existing businesses, but if the total amount and circulation of tokens increase, it may even become one of the world's mainstream digital currencies. The subsequent economic benefits are unpredictable and may even promote the overall transformation of the enterprise.

At the beginning of this year, Nanhua announced that the system had begun internal testing. Industry insiders were amazed at Nanhua's high efficiency, but the token was not released for a long time. Even until many companies launched their own token systems, there was still no movement from Nanhua. The outside world once speculated that Nanhua's technical development had problems that delayed the progress of token development, and there was even a rumor that "Nanhua's development had capsized" circulating in some development circles.

The earliest action but no results, this is completely inconsistent with the Nanhua team's style of doing things. With all kinds of questions, the editor visited Lei Sheng, the chief technical consultant of the Nanhua team, but his answer completely shocked the editor! "The team has not developed a token system and does not plan to issue digital currency."

What?! When I heard the news, I was extremely shocked. I can imagine the same expressions on other people in the industry’s faces when they heard the news… However, in the following detailed discussion, Mr. Lei explained to me their understanding of the direction of the digital currency market, which completely overturned my perception of the token market.

The Nanhua team believes:

1. The development of token systems is too hot, and the issuance of digital currencies has reached the point of flooding, with air coins emerging in endlessly. At this time, if you calm down and make a token system, by the time your own digital currency is made and launched, the competition of the same kind must have reached a white-hot stage, and the market has not had many opportunities. It is almost impossible to achieve the expectations at the time of planning. The original intention of many companies to develop tokens is to build a convenient settlement system, but it takes a long time for the tokens issued by themselves to gain market recognition, and they may not be widely recognized by the market in the end, which is a bit of a waste of time. It is better to incorporate the mainstream digital currency with stable value in the market into Nanhua's settlement system and settle directly with digital currency.

2. There will definitely be a lot of junk coins in the end. The typical feature of junk coins is that they continue to rise and increase greatly during the promotion stage, and then start to plummet wildly after attracting a lot of funds. The currency value shrinks by more than 90% from the high level. After shrinking, there is almost no trading volume, and it is extremely difficult to change hands. The currency holders suffer heavy losses. In the end, there are only two digital currencies left in the market: mainstream coins and junk coins, and most participants are "cut off". If we consider the long-term, it is better to develop into a currency rating organization than to issue and operate a currency, and use a professional operation team to judge the digital currencies circulating in the market, serve users, and guide currency holders to return to rationality. By stretching the time and space of the project in exchange for more profits, it may not be as profitable as issuing coins, but it is sustainable and stable, and the influence and benefits will increase year by year, which is more conducive to the long-term development of the company.

3. Mainstream currencies can not only be used for settlement. Since the current digital currency market is not yet fully mature, all mainstream currencies still have great fluctuations. The fluctuations are opportunities and risks for currency holders. Since the digital currency market has just become popular, there are naturally not many derivatives. Derivatives are precisely the most familiar areas for futures companies: you can use capital allocation to lower the investment threshold of digital currency and increase the flexibility of transactions; you can use capital allocation and financing to help some users hedge at a lower cost, and you can also provide some speculators with opportunities to short. At the same time, as a capital provider and a builder of the capital allocation and financing system, Nanhua can also obtain high interest and transaction fee returns. Financing means that you must hold a large amount of currency. As the digital currency market matures, if the Nanhua team accurately evaluates the mainstream currency, it will get excess returns on holding currency.

4. Theoretically, the token system can accumulate users and eventually form a huge pool of funds and cash flow, but this is only in theory. There is only one BAT in China, and there will be only a few oligarchs in the token system in the future. After all, there will be a day when a hundred flowers bloom and a hundred flowers bloom. Only these remaining oligarchs can finally accumulate users, and these token systems that died halfway are nothing more than temporarily saving users for the oligarchs. Rating agencies, combined with the financing and currency system, stand on the same side as users, which makes it easier to accumulate users. Although the speed of accumulating users may be a little slow, there will be continuous increments, and there will be no large-scale loss of users in the middle due to any external environment. The final result may not be much less than that accumulated by the oligarchs. Moreover, the market is still in its initial stage in this regard, and there are no potential competitors. It is the best time for Nanhua to accumulate and accumulate users.

Lei Sheng finally said that it was precisely because of these four predictions about the token market that the Nanhua team decisively abandoned the plan to develop a token system and issue digital currency when making decisions at the end of last year, and instead chose to set up an evaluation team to develop a token financing system.

Lei Sheng's words made me think for a long time, and finally I had to sigh at the foresight of the Nanhua team: they did not catch up with the first wave of digital currency craze. When everyone was scrambling to rush forward, they were able to calm down and analyze the possible direction of the future market, and finally chose the most suitable and least risky way to enter the blockchain market. I believe that Nanhua can go further on this road. It's not just because of the direction, but also the quality of the team: in this era when everyone wants to "cut leeks", the Nanhua team did not choose to "cut leeks" like most companies when they had the first opportunity, but became the opposite, which fully demonstrated their industry conscience. With the direction and people's hearts, the editor thinks that the success or failure of the Nanhua project depends on the level of their technical development team. I am looking forward to the day when Nanhua Wealth is officially launched!

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