Old Cat: It’s just the beginning

What is blockchain?

Our previous view is that it is a ledger, an industry, a new Internet technology, and even an investment opportunity.

Is this all there is to blockchain?

In recent months, I have paid more attention to the macro-level perspective on technological trends, so that I have a new understanding of the value of blockchain. Today, I will share this understanding with you, and I hope that my new understanding can also help you.

Let’s start from a different angle…

On the Internet we are using, if there is no BAT providing payment functions, no UnionPay, and no other payment companies, wouldn’t this be a very unfamiliar network?

The Internet was like this many years ago. At that time, people could chat, download MP3s, upload pictures via QQ, and even play some games, but that was it. The Internet without the function of transferring money and making payments is now just a toy.

Because of Alipay, Tenpay, and a large number of professional payment companies, the Internet became different overnight. The entire Internet ecosystem began to flourish, and countless new industries that emerged because of online payments suddenly broke into our lives. We have Didi Taxi, are used to ordering meals with Ele.me, and pay for restaurant meals with Dianping. Even supermarkets and grocery stores are accustomed to paying with WeChat scans. You don’t even need cash to buy a pancake because of online payments. The value of the Internet has truly been discovered.

However, this may be an illusion.

All the money you have on the Internet is not actually money, but IOUs issued to you by online payment companies. Fortunately, the IOUs between most companies are still based on a common standard, so it seems that your money is still safe.

However, there is a problem that may be overlooked. The time period of the Internet, starting from the day it was invented, is likely to be synchronized with the future human civilization. The probability of human civilization completely losing the Internet again is so small that it is incalculable. So, the question is, will the current online payment method be as long-lasting as the life of the Internet?

Another problem is that the Internet is a global information network that has no national borders. However, the current online payment method based on "payment companies" does have national borders. Especially in countries with strong sovereign currencies, the flow of funds is more strictly regulated, and it is almost impossible to make smooth global payments.

This creates a paradox: is it logical that a global information system that will exist permanently in the future has its value transmission rely on a payment system that can only be used in specific time periods and specific areas and is carried out using IOUs?

Blockchain is a brand new network value logic!

Blockchain itself is a value transmission system based on the Internet. Although the value of blockchain was discovered due to the development of Bitcoin, from a more macro perspective, blockchain is inseparable from the Internet, and Bitcoin is just an outstanding application of blockchain technology.

The core of blockchain technology lies in the data management system of distributed nodes, and the Internet itself has the technical and infrastructure foundation for distributed computing. Blockchain can naturally be embedded in the Internet and become a part of the Internet infrastructure.

The development of blockchain is a gradual process. In the initial stage, it will appear as a "new concept", but as the development of blockchain improves, more and more blockchain systems will become an important part of the Internet and form an inseparable relationship. At this stage, the blockchain itself can contain huge value, and the value in the real world will gradually be transferred to this more secure system.

Due to the seamless symbiosis between blockchain technology and the Internet, in theory, blockchain can permanently store value on the Internet. At the same time, due to the borderless nature of blockchain itself, the value stored on the blockchain naturally has a borderless nature.

So-called wealth can only be called wealth if it is liquid. Even if it is a mountain of gold, if it is not tradable, has no liquidity, and has no way to securitize it, it is essentially no different from a pile of dirt. After the assets are blockchained, they immediately have global liquidity and become real wealth with global circulation significance.

The third major revolution that changed the world

The Internet has only been around for more than 30 years, but it has already brought incredible changes to human life.

There have been three great changes in modern human history.

The first time was between 1760 and 1840, which is the so-called Industrial Revolution. This process replaced human and animal power with machinery. Human beings bid farewell to the primitive way of production that relied entirely on natural forces, and true modern civilization began to emerge.

The second time was between 1870 and 1914, the so-called electric revolution. During this process, electricity completely changed human production and lifestyle. Human technology made great progress in this stage, and the global civilization pattern also underwent tremendous changes in this stage.

The third is the information revolution that began in 1980. This stage is still in its early stages, and blockchain will play an extremely important role in this process. The emergence of blockchain technology may allow the information technology revolution to truly bring about another major change in the pattern of human civilization.

Everything is migrating to the Internet!

Whether you notice it or not, this process has actually been and is happening. Human beings are migrating to the Internet as naturally as they migrate to a new continent after discovering it.

The first thing to migrate is the information flow

What the Internet brought to people at the beginning was the convenience of information exchange, from music sharing to news information. This process eliminated record players, tape recorders, CDs, radio, and media, and the Internet embraced all information flows.

The second thing to migrate is lifestyle.

From online games to social networking and shopping, and then to hailing a taxi and ordering food, the Internet has met the vast majority of service needs in life. For people in large and medium-sized cities, when a need arises, searching for it online has become a habit for most people, and every part of life has become inseparable from the Internet.

The third migration is the value assets

More and more people are storing their assets online. From Alipay to WeChat, there are many people who put their cash assets in them. Using the Internet like a bank has become a "habit" for many people.
However, since the "legal currency assets" on the Internet are essentially IOUs, for most people, they are not much different from bank deposits.

Knock on the blackboard, here comes the key point:

Because blockchain assets are "open and transparent", "non-indiscriminate", and "non-plunderable", blockchain assets have become a new form of "Internet assets". The same dollar is on the IOU and the blockchain at the same moment. Due to the above characteristics of blockchain assets, after a period of time, the price will be greatly different. One dollar on the IOU is still one dollar, but one dollar on the blockchain may increase by hundreds or thousands of times. (Please refer to Ethereum and Bitcoin).

For most people, it is still a huge secret that assets can be transferred to the blockchain system to gain value!

Exchanging fiat currency assets for valuable blockchain assets is equivalent to exchanging all your US dollars for gold at the moment before the collapse of the Bretton Woods system. At that time, 35 US dollars could buy 1 ounce of gold. Although the price of gold has been fluctuating since then, its long-term upward trend relative to the US dollar is unstoppable.

If more people know that assets on the blockchain are comparable to "gold" and that the money in circulation in legal tender is just IOUs from the central bank, it almost means that for a long time to come, it is correct to transfer assets to the blockchain at any time. The only thing to consider is whether the blockchain assets you transfer will still be accepted by many people in the future and whether there is a good enough network effect. (To some extent, it explains the importance of "configuration")

We must clearly realize that any government, institution, or organization has a life cycle, but wealth exists forever. With blockchain, as an individual, we finally have "perpetual" wealth. This is the biggest wealth opportunity since humans began to use "national currency", nothing else! Ultimately, the vast majority of human wealth exists on the network in the form of blockchain, which is an unstoppable trend. How many valuable assets you have on the blockchain must be more important than how many school district houses you have in Beijing.

As of the moment I wrote this article, I calculated the total market value of the top 40 assets on the website https://coinmarketcap.com that include Bitcoin, and it is only 26.7 billion US dollars. This number is very small. It is only equivalent to the market value of Sina stock, or equivalent to Wang Jianlin’s family assets. Blockchain is so important to the digitization of global assets, but the market value is so low. What does this mean?

Everything has just begun!!!

In the future, humans themselves will migrate to the Internet

I am a little nervous when writing this. For those who see this statement for the first time, being sneered at may be a better outcome. But for those who have read "Sapiens: A Brief History of Humankind" (author: Yuval Noah Harari), what I said may just be a basic fact of the future.

According to Moore's Law, it will take no more than 30 years for the Internet and chips to develop to the point where they can store human consciousness information. When assets completely belong to the Internet, there will be nothing surprising about migrating consciousness to the Internet, just as you have migrated your wealth to another country and it is natural for you to move to this country. You will certainly face many challenges in this process, but for individuals, the choice between accepting your conscious self and letting your consciousness disappear completely is no more difficult than choosing which country to settle in. The transition of human beings from the current real world to existing in the form of the Internet is an inevitable way for them to evolve from a carbon-based civilization to a silicon-based civilization.

When should you sell the blockchain assets you hold?

Today's article actually answers a question that many friends have always wanted to ask but are embarrassed to ask: You said that you can hold blockchain assets for a long time, but when is the right time to sell them?

If you only regard RMB as cash, holding blockchain assets is just a way of investment. When the profit is large enough, you can sell it for cash at any time.

For me and some people around me, we regard blockchain assets as cash, and fiat currency is just IOU. We will cash out whenever we have the chance, but our cashing out is to exchange IOU for cash. Therefore, for us, there is no question of when to sell cash, even if the assets we hold have increased 100 times! For assets with such good global liquidity, why do we need to exchange them for IOU?

Original article published in: Cat Says