Analysis of the pain points of China's cryptocurrency industry: the huge risks hidden behind the rise of Bitcoin

In recent days, the price of Bitcoin has been rising continuously, and Bitcoin holders are very happy. The industry is also naturally jubilant. People cheered that the future has come, and shouted "It will be too late if you don't get on the train now", and then they continued to distribute various "important news" related to Bitcoin. In short, it can be said in one word: good! The rise of Bitcoin is certainly a good thing, which makes all Bitcoin holders feel proud, but the huge risks hidden behind the rise of Bitcoin cannot be ignored.

The development of the Bitcoin industry in China is inseparable from the hard work of practitioners in the cryptocurrency industry. After the rise of Bitcoin, the salaries of practitioners in the cryptocurrency industry naturally rise, becoming the object of envy for everyone. Many people are restless and want to participate in the cryptocurrency industry, or simply start their own business in the Bitcoin field. However, from the perspective of the duality of things, Yike still insists that working in the cryptocurrency industry is not really as beautiful as heaven, but rather there are considerable hidden worries.

Maybe some viewers will jump out to refute, "Fuck, foreigner, are you kidding me? Are you jealous of others who make more money?"

The stranger smiled slightly and could only answer "No, no".

You can eat whatever you want, but you can't say whatever you want. I will explain to you some of my views on the industry for your reference only.

Dear readers, please pay attention.

1. Currency industry solidification

People hate the class stratification in China. Any article about "wealth stratification" is "forwarded ten thousand times." But what can we do about it? China is still running fast on the road of class stratification. Even if we are extremely reluctant, we cannot stop the arrival of class stratification.

The same is true in the cryptocurrency circle. The cryptocurrency industry in China has gradually calmed down from the "competition among heroes" in its grassroots period. The reshuffle has been completed, the dead have left quietly, and the survivors have occupied the market.

For example, there are only a few exchanges; there are only a few mining bosses; for example, information media, well, in fact, there is basically no comparison, only Babbitt is left in the currency circle; for example, mobile phone viewing software, only Bikan is firmly strong. To put it bluntly, even the scammers who speculate in coins are dying out in waves, but surprisingly, Mr. Yang has not been killed by his followers? Still active in the front line of cryptocurrency speculation? It is really amazing, amazing... I don’t know whether to cry or laugh.

Whenever a cryptocurrency gathering was organized, I would shamelessly go to get some food and listen to the latest news. But when I walked into the venue, I was surprised to see that this was someone else. After eating and drinking, I went to the next gathering. But when I walked in, I saw that it was still someone else. A month later, there was another gathering. I was eager to listen to new ideas. But when I walked in, I saw that it was still someone else. I met the same person several times and heard the same ideas three or five times. Although the wine and the banquet were good, I was afraid that I would become a "spectator" who only got food for free.

Every time I see the big guys sitting side by side, I can't help but have bad associations in my mind. Suppose a bomb explodes at this time, I'm afraid that the great cause of China's cryptocurrency circle will be destroyed, if not completely, at least two-thirds of it, right?

It is only natural that the top positions in the cryptocurrency circle belong to the capable ones, and any industry abides by this principle. However, the problem is that there is basically no change at the moment. No change means solidification, and if an industry has no fresh changes, it actually means that the industry is maturing, which means that it is particularly difficult for new entrants to plan new profit points. As the saying goes: If there is no money to be made, what is the point of doing it? The loss of fresh blood in the subsequent industry has to become a thought-provoking issue.

The big guys used to be dragon slayers who cut through all obstacles. They were brave, resolute, and tenacious, and they managed to carve out a Bitcoin field in the dangerous fiat currency world, which is really admirable. However, after killing the dragon, the dragon slayers lie prone on the wealth that the dragon had previously occupied, and they grow scales and become new dragons. This situation is also something that no one wants to see.

The Bitcoin industry should be an emerging industry. It is amazing that it has clearly divided various interest sectors in just a few years. The Bitcoin industry should not be limited to just a few fields, but should have a broader space for development.

The bigwigs in the cryptocurrency circle who sincerely hope to make money should invest in more new "seemingly unrelated" cryptocurrency projects instead of sticking to their own little piece of land and dividing the money.

For an industry, the transition from a mixed bag to a gradually clear-cut division among various factions is a qualitative leap. The transition from division among various factions to the changing of the flags on the city walls, with new industry leaders and competitors emerging one after another, is an even more upward spiral.

I hope that this current solidification can be broken, although it seems difficult at the moment.

2. Difficulties in Financing in the Cryptocurrency Circle

By writing this topic, I am taking a huge risk...

Because maybe some coin people will come and smash the foreigner’s head with a stick: What the hell is the difficulty in raising funds! Look at the early IPOs in the coin circle, they were crying for money; now what is the popular ICO, they are still crying for money, how can the coin circle still have difficulty in raising funds? Don’t you bully me because I am not well educated and lie to me! Haven’t you eaten pork and seen pigs run? Foreigner, you can’t talk nonsense like this...

Alas, I am not talking nonsense. Is that what you call financing? That is called cheating, right? Financing in the cryptocurrency circle is really difficult. The financing I am talking about is financing that goes through legal procedures in the normal sense.

In fact, at the beginning, there was no shortage of such investment. For example, some exchanges had received a lot of large-scale venture capital, which had normal legal structures and equity distribution. However, with the introduction of the "Five-Ministry Regulation" at the end of 2013, there has been no large-scale venture capital in the country to enter the Bitcoin field.

Why? Isn't it obvious? How can a company raise funds when it can't even open a bank account? How can it raise funds? Can you help me raise funds?

In my impression, except for the Bikan mobile app which received some venture capital in the later period, all other cryptocurrency industries are in a self-operated state. Of course, I am not saying that the self-operated state is not good here, because if it is managed properly, it is actually very good. However, the situation of financing difficulties cannot be broken, which has always prevented the industry from expanding normally, especially forming a great obstacle to the Bitcoin mining industry. Mining machine research and development urgently need money, mining equipment update also urgently need money, and new industry innovation directions naturally need to recruit more people.

This situation forces cryptocurrency practitioners to find ways to bypass regulation and conduct private financing through self-financing of Bitcoin... Early FC stocks and numerous ICOs in the previous stage are such products. The currently popular computing power securitization also obtains private funding support through alternative financial means.

Traditional industries can obtain working capital through venture capital in the early stage, and through bank loans, asset mortgages, etc. in the middle and late stages to realize asset turnover and realize profits. Many industries in the cryptocurrency industry cannot take the traditional route at all. Venture capital cannot be operated due to the nature of Bitcoin and company accounts. It is natural that banks are opposed to Bitcoin. Mining machines and other products cannot be considered as asset collateral at all. All routes are blocked, so the cryptocurrency industry has to turn to the private sector. In this case, whether the financing is successful or not depends on whether the publicity is in place and whether the financing returns will be distributed to investors. It basically depends on the character... But character is the least reliable thing... It is not ruled out that some guys with ulterior motives take advantage of the chaos in the industry and specifically use the name of the second token smart contract to cheat money.

Maybe someone will argue that this is caused by policy issues, and you are putting the blame on the cryptocurrency industry. I have lost my conscience. I don't want to argue, I am just stating a current situation. The cryptocurrency industry is facing difficulties in financing, so it can only turn to private financing. This direction is like a vast ocean, but the vast ocean can carry a boat or overturn it, so I hope you will treat it with caution.

The current policy situation is a dilemma. How to break through it through legal means is something that everyone should work together on.

3. Insufficient protection for cryptocurrency practitioners

As the cryptocurrency industry has developed to this day, practitioners are still not adequately protected.

Because there are no normal legal regulations in the cryptocurrency circle, most of the companies are small, and many companies have problems such as chaotic equity structure and high staff turnover.

It can be said that practitioners in the cryptocurrency circle are in an awkward situation of "some are too full to eat, some are too hungry to die". The high-ranking ones are all at the top or employees of some better companies, and many of the dirty and tiring work are done by the bottom-level support.

There is a very bad trend in the cryptocurrency circle. Many practitioners are proud of "not paying social security", believing that social security is a national Ponzi scheme and that those who pay social security are idiots. Although this logic cannot be completely denied, the national labor law clearly stipulates that it is absolutely illegal for an enterprise not to pay social security for its employees. Moreover, social security is mandatory, and employees cannot be exempted by voluntarily declaring that they do not accept social security. Therefore, some bosses blatantly claim that they will pay more wages by not paying social security. This behavior has violated the labor law and should be firmly resisted.

In addition, there are quite a lot of verbal agreements in the cryptocurrency circle, and many things are not implemented in the contract, or even if they are implemented in the contract, they will not be executed according to the original situation. Therefore, sometimes entrepreneurs fight among themselves, accusing each other and tearing each other's underwear. You say how much wages you owe and he says you stole user data to open a branch, and sometimes you pull out some hackers to take the blame. War of words is simply the norm in the industry.

On the other hand, the career options for practitioners are also very limited. After careful selection, there are only a few companies that are hiring, because there are only a few profitable industries in the cryptocurrency circle. If you are not happy working in the cryptocurrency circle, you will find that many of your resumes in the cryptocurrency circle will not have room for appreciation in society... This is a bit embarrassing.

An industry should provide practitioners with a stable salary and other reliable guarantees. As the saying goes: Who doesn't eat dumplings on New Year's Eve? But it's hard to eat dumplings every day. The cryptocurrency industry seems to be profitable, but compared with companies with real foundation, the upward space and career development path it can provide to practitioners are not sufficient.

At present, there are no long-term applications built on Bitcoin. We can place our hopes on the future, but we should be cautious about the present. After all, in this industry, those who can become rich overnight are always legendary, and more people are hard-working employees who do basic jobs conscientiously. How to make everyone who joins the cryptocurrency circle worry-free and concentrate on work requires the development and progress of the entire industry. Only in this way can we support a longer-term future.

Okay, I have said all that I need to say. I certainly hope that the cryptocurrency world will get better and better, but many people are blindly optimistic because of the rising cryptocurrency prices, so I will say some "weird things". Where there is light, there must be darkness. This is an inevitable iron law. I hope to give you some alternative inspiration, and at the same time, rely on the joint efforts of all colleagues to properly solve these pain points in the future.