Some interesting effects associated with Bitcoin

I have been busy with the trivialities of work and unknowingly forgot to update the “Effect Series” of Bitcoin. I wonder if you miss the feeling of updating your knowledge.

The price of Bitcoin has been fluctuating during this period, and finally fell to about 1,500 yuan today, but the core figures in the circle are still holding on as always, and the diehards are still holding on to their own coins. No matter the wind and rain, spring and winter, whether the central bank prints more money, whether the Federal Reserve raises interest rates...

Without further ado, let Yi Ke lead everyone into today's "Effect Series".

1. Davido Effect

Oh my god, when I heard the name, it seemed a bit high-end, what the hell is it?

Davidow's Law was proposed and named after William H Davidow H Davidow, who was a senior marketing executive and vice president at Intel Corporation. It is actually just a transliteration.

Davido believes that any company in the industry must constantly update its products. If a company wants to dominate the market, it must be the first to develop a new generation of products.

This principle is easy to understand, but there are very few people who can really do this. However, the most typical example in the cryptocurrency circle is the mining machine R&D industry, and the most prominent one is naturally a mining machine manufacturer with a relatively large market share. The manufacturer's update speed is simply outrageous. Since the S series mining machine, it has been constantly innovating. Now it has even been updated to the seventh generation, named S7, and the computing power has soared to 7T per unit. You know, all this happened in less than two years from the end of 2013 to today!

The brutal pressure in the Bitcoin mining industry must be one of the main driving forces for its update. The three major domestic mining machine manufacturers are actually making continuous efforts. Unfortunately, one of the other two manufacturers was paralyzed due to the absconding of its leader, and the other mining machine factory always had some problems with its capital chain, so now the market share is basically under a certain mining machine manufacturer. However, it is not enough to just occupy the market. In the face of brutal competitive pressure, we must continue to innovate. Otherwise, in the Bitcoin market with huge price fluctuations, a slight mistake in decision-making may lead to serious losses.

Because Davido's law tells us that only by constantly creating new products, timely eliminating old products, and allowing successful new products to enter the market as soon as possible can new market and product standards be formed, thereby mastering the right to set the rules of the game. To achieve this, the premise is to always be ahead in technology. Enterprises can only rely on the short-term advantages brought by innovation to obtain high "innovation" profits, rather than trying to maintain the original technology or product advantages, in order to achieve greater development.

The development of Bitcoin is difficult, but the mining industry is still developing rapidly. This fundamental industry of Bitcoin determines the continuous growth of the computing power of the entire network. I hope there will be no more problems. I also hope that all miners and miners can make steady profits under the established rules and lay a solid foundation for the Bitcoin building.

2. Bernard Effect

I believe that friends who have read "The Three-Body Problem" are all impressed by the character of "The Wall-Facing Man". Premier Zhou Enlai also wrote such a poem: "After singing by the river, I turn my head eastward, and use my profound knowledge to help the poor. I have faced the wall for ten years to break through it, and it is difficult to reward a hero who jumps into the sea." However, there is such a rather unlucky person in reality. Let me briefly talk about him.

British scholar Bernard is a famous scientific genius, but Bernard never won the Nobel Prize in his lifetime. A generally accepted answer is "He always likes to propose a topic and throw out an idea. He first gets involved in it himself, and then leaves it to others to create the final results. There are many papers in the world whose original ideas should be attributed to Bernard, all of which have been published under the name of others... Unfortunately, he has always suffered losses due to his lack of perseverance to "face the wall for ten years." Later generations called this phenomenon the Bernard effect.

Of course, Bernard has become a tragedy that cannot be solved...

How many Bernards are there in the cryptocurrency world? Bitcoin is a new product, and various ideas are colliding fiercely under the shining light of Bitcoin. From a business perspective, how to use Bitcoin for payment, how to use Bitcoin for cross-border exchange, how to use Bitcoin for tax avoidance... all of these can be discussed in depth, and then various industry innovations can be carried out, thus promoting the continuous innovation of the cryptocurrency world.

Unfortunately, there are always more "big mouths" than doers in the cryptocurrency circle. It is always easier to talk about "I have a dream" than "how to do this thing", so... many wonderful ideas in the cryptocurrency circle are put on the table and discussed repeatedly, and even cause a lot of quarrels due to disagreements, but in the end they end up with nothing. Or some things are finally made famous by those who are full of practical spirit, but some people say that the grapes are sour because they can't eat them, and mutter in a corner, "Huh... What's the big deal, I said several months ago that we can do this and that" and so on.

Of course, this is not to criticize ideas. A wonderful idea is certainly worthy of praise, especially the development of Bitcoin needs all kinds of ideas to enrich it. But in addition to ideas, the current sluggish cryptocurrency market needs more real hard work. Just shouting can't bring "hundreds of thousands of dollars".

All human and material resources should be combined into one, and everyone's abilities should be fully utilized for the development of Bitcoin. Only in this way can Bitcoin be brought into glory.

Hopefully there will be more Edisons of Bitcoin rather than Bernardus.

3. Flea Effect

Biologists once threw a flea randomly onto the ground, and it could jump up to more than one meter high. But if a lid is placed one meter high, the flea will jump up and hit the lid, and it will hit the lid again and again. After a while, when the lid is removed, it will be found that although the flea continues to jump, it can no longer jump more than one meter, and it will be like this until the end of its life. Why? The reason is simple, they have adjusted their jumping height, and have adapted to this situation and will not change.

The flea effect refers to the flea adjusting the height of its jump target, adapting to it and no longer changing. Many people dare not pursue their dreams, not because they cannot achieve them, but because they have a "height" in their minds. This "height" often limits them and makes them unable to see the exact direction of their efforts in the future. As human beings, what kind of goals we have will determine what kind of life we ​​have.

Isn't it the same with people's attitude towards Bitcoin? People originally had great hopes for Bitcoin, believing that it would reach $100,000 before their eyes. Therefore, even when the price reached a peak of 8,000 points, they continued to buy with full confidence. But later, as the price of the currency continued to fall, people's expectations gradually decreased, and there were often statements such as "It will be difficult to reach XX price in the future..." Many people simply defected from the team, turning from fans to haters, and began to criticize and say that "Bitcoin is nothing special" and "Bitcoin's future is just like that"... They thought they were wise and powerful, but in fact, they just set many restrictions for Bitcoin.

Is this any different from those blind fleas? When cars appeared, people thought they were too slow and not as convenient and comfortable as horse carriages! Some companies even thought email was "ridiculous and useless"; even when Jack Ma started Internet e-commerce, he was regarded as a liar by countless people...

But looking at the cars running all over the streets now, the email addresses printed on everyone's business card, and Taobao, which makes countless young women want to shop every day, who dares to laugh at those pioneers?
There are no limits in this world. As long as you can do something, you can even fly out of the atmosphere and land on the moon. Those limits are just reasons and excuses people find for themselves. The future of Bitcoin may still be far away, but it may be tomorrow.

4. Bullwhip Effect

The "bullwhip effect" is a vivid description of the distortion of demand information in the supply chain. The basic idea is that when each node enterprise in the supply chain makes production or supply decisions based only on the demand information from its adjacent lower-level enterprises, the unreality of demand information will flow upstream along the supply chain, resulting in a phenomenon of step-by-step amplification. When the information reaches the supplier at the source, the demand information obtained is greatly deviated from the customer demand information in the actual consumer market. Due to the influence of this demand amplification effect, the supplier often maintains a higher inventory level or production preparation plan than the demand side.

What is the biggest demand in the cryptocurrency circle? Forget about payment applications. Although there are many Bitcoin payments at present, for China, most applications are either tasteless and "useless" (because most of them are foreign applications and need to climb over the firewall), or they require various IQ taxes, and Bitcoin is used as an intermediary to toss and turn to get benefits. So it is undeniable that "cryptocurrency speculation" and "mining" are the two major applications that deserve it. Then the question is... In such an ecosystem, what kind of demand is the real "rigid demand"? Of course, it becomes "cryptocurrency speculation guidance", "insider information", "cheap mining machines" and so on. And these messages, in the process of transmission, go upstream along the supply chain, and actually create a momentum for Bitcoin to "to the moon", which causes great trouble to Bitcoin practitioners and participants in cryptocurrency speculation.

For example, from the end of 2013 to mid-2014, many people misjudged the market size and trend of Bitcoin development. Under the excitement, many people started their own businesses, which led to the establishment of many trading platforms. Mining machine manufacturers were also blindly encouraged to produce chips desperately, but the results were not satisfactory and ended up in a mess. Many exchanges simply ran away, and some mining machine manufacturers produced tens of thousands of mining machine chips but ultimately could not sell them and could only produce and sell them by themselves.

It is very difficult to correctly predict the market, and this is the watershed between success and failure. This is especially true for the Bitcoin market. How to accurately identify various messages and not be misled by the noisy voices in the Bitcoin ecosystem is a question that everyone should seriously consider.

Well, I have talked about four effects today without realizing it. I hope everyone can examine themselves and learn something from them.