If you get close to the Chinese Bitcoin trading platform circle, you will find that most of the founding teams are technical men from prestigious universities such as Tsinghua University and Peking University, as well as expensive companies such as Oracle and Yahoo. More than half of Huobi.com's management team is from Tsinghua University.

When the global financial crisis broke out in 2008, someone using the name "Satoshi Nakamoto" published a paper titled "A Peer-to-Peer Electronic Cash System" on the Internet, which detailed the issuance and operation principles of Bitcoin. A year later, Bitcoin was officially launched, and experts and regulators in the global technology and financial fields began a long-lasting debate and discussion. In the six years since its birth, Bitcoin has gone from being worthless to a trading price of nearly $1,200, which once exceeded the price of gold.

A year ago, this magazine talked with Li Lin, the founder of Huobi.com, about the past and present of Bitcoin. At that time, this technical man with a slightly "Ivy League" feeling welcomed the central bank's definition of Bitcoin as a commodity, but the profit of trading intermediary still kept him in this circle. But what was unexpected was that a year later, they also cooperated with Tsinghua University PBC School of Finance and other institutions to launch the "2014-2016 Global Bitcoin Development Research Report", which was called by peers as "a relatively comprehensive view of the current status and development trends of the Bitcoin industry".

To be precise, Huobi.com received tens of millions of dollars in investment from multiple funds and companies, including Wall Street venture capital firm Sequoia Capital, angel investment fund ZhenFund, and angel investor Dai Zhikang in 2013 and 2014. When asked, "What attracted the attention of capital to Huobi?", Li Lin said, "The logic of capital is the same, but there is a difference between angel and A rounds. Angels, as Professor Xu Xiaoping said, may look more at the team and the people. We only talked for half an hour, and he probably thought that Li Lin and his friends were reliable, so he invested in us. At that time, he didn't know much about Bitcoin. Sequoia's A round was a little different. First, they felt that this industry needed investment, and then they looked at your industry status. We have advantages in these points."

As the price of Bitcoin fluctuates, the underlying technology blockchain has attracted the attention of financial institutions and venture capitalists. Huobi.com co-founder Du Jun gave us a set of data, "In the past year, governments in the United States, the European Union, Japan, and Singapore have extended olive branches to Bitcoin and issued relevant qualifications and licenses. Blockchain technology has become a catchphrase for central banks and financial institutions in various countries, and related entrepreneurial projects are also popular in the eyes of investment institutions. Currently, there are more than 1,000 entrepreneurial projects related to Bitcoin in the world, and the cumulative investment amount has exceeded 1 billion US dollars."

Bitcoin also has an ecological chain

If we simply understand Bitcoin as "a coin" with a constant total amount, a production reduction every four years, and being hyped up by people, then this concept is a bit low.

Huobi COO Zhu Jiawei is the project executor of the report. He told us that Bitcoin is not only able to be traded and transferred, but also has its own ecological industrial chain. This "chain" can be divided into four parts: production, circulation, application and storage.

Zhu Jiawei compares Bitcoin production to "mining". The Bitcoin issuance mechanism simulates gold, and the total amount is constant. When the total amount reaches 21 million in 2140, the "resources will be exhausted". In addition, the difficulty of gold mining will become more and more difficult over time, and the difficulty of Bitcoin opening will also increase over time.

Bitcoin circulation is also called Bitcoin trading. There are different exchanges in various places around the world. The function of this exchange is to allow the circulation of legal currency and Bitcoin, so that some people buy and some people sell.

After the blockchain technology became popular, the application of Bitcoin seems to have become more practical, especially in the process of financial payment and settlement. "What can you do with Bitcoin? Many people want to buy things with it. You can also exchange it for some points or some travel products. Now there are many second applications. But most of the companies that have made the most successful applications are concentrated in the United States. The more famous application is BitPay, a Bitcoin payment platform jointly invested by Jerry Yang and Richard Branson, chairman of Virgin Group." Zhu Jiawei explained.

As for the storage of Bitcoin, some investors want to sell Bitcoin in the short term after buying it. The elderly who bought gold can lock it in their own safes, but where can Bitcoin be stored safely? "As an electronic currency, it exists in electronic form. You can simply compare it to a file on a computer. However, there are various risks, such as hard disk failure or forgotten passwords, so many companies specializing in storage are born, and this kind of storage will also have interest. You can remember it in a simple way, and it will help you control the security risk."

Bitcoin was born not long ago, but it has grown from a "coin" to an "ecosystem", which is closely related to the capital market's support for these startups or companies that dare to try new things.

Huobi COO Zhu Jiawei found that in the ecosystem, the largest amount of investment comes from the United States, and most of it is invested in applications and production. China, on the other hand, invests more in exchanges and some applications. In terms of investment amount and number of rounds of financing, 21ink is currently the largest case in the Bitcoin field, with a C round of financing of US$116 million.

Can we overcome the hurdle of “controversy”?

Since the concept of blockchain became popular, there has been a voice in the regulatory authorities, hoping to use it to "transform" the previous Bitcoin companies into technology service providers. At the discussion meetings of the blockchain group established by the central bank, Li Lin, the founder of the domestic Bitcoin trading platform Huobi, is often seen. When blockchain technology has received market attention, why are there voices of "bullish blockchain and bearish Bitcoin"? Why can't the two be a concept of coexistence and prosperity? "

To be precise, Bitcoin has three "thresholds" - price volatility, security issues and criminal use, which is the biggest source of its controversy.

The price fluctuation of Bitcoin itself makes many people afraid of this special "investment product". Zhu Jiawei, who works on the trading platform, confirmed this statement, "Its fluctuation is indeed quite large, and Bitcoin is currently traded 24 hours a day, 7 days a week on exchanges around the world, and there is no limit on the rise and fall, so the fluctuation is relatively fast and relatively large. Currently, there is no way to effectively control the price of Bitcoin, because it is too difficult. It is globally linked, and it is useless to raise or lower the price on one exchange, because other exchanges will not follow up on this matter. If more and more coins are in circulation, the price balance of supply and demand will also be reflected in the dynamic change process."

February 28, 2014, is a dark memory for Bitcoin investors around the world. Mark Kalple, CEO of Mt.Gox, the world's largest Bitcoin exchange operator, bowed and apologized. All 850,000 Bitcoins on his platform were stolen. Bitcoin, especially trading platforms, must prove that the company has security management and repayment capabilities. Taking Huobi as an example, it currently mainly adopts a multi-signature wallet security mechanism and promotes a security strategy of separating asset reorganization and asset transactions.

Since Bitcoin has a certain anonymity, criminals may use Bitcoin to conduct illegal activities. Therefore, its criminal use has become a point of criticism. "A typical example is Silk Road, which was previously shut down by the FBI. Although it has been shut down by the FBI, there are still multiple charges. In fact, it is unfair to attribute this crime to Bitcoin. If there is a risk of money laundering through Bitcoin, it is most likely to happen through cash. The largest way of money laundering in the world now should be US dollar cash transactions."

It seems a bit heavy, but the industry is still full of confidence in the future development of Bitcoin. "If we compare the development of the Internet 20 years ago and Bitcoin today, we will find a surprising similarity. The revolution brought by the Internet in the past 20 years has made it very convenient for everyone to transfer information. We believe that Bitcoin and blockchain will make it more and more convenient for everyone to transfer value in the next period of time." said Zhu Jiawei of Huobi.com.

(The article is from the author Huang Xinyu's "Chief Financial Officer", the article has been adjusted)