The winter of the cryptocurrency world this year is a bit cold

Maybe it's a habit I developed when I was in school, my New Year always starts in September. I like to summarize the gains and losses of the past year and plan for the new year at the beginning of September. Last September, I decided to stop the weekly review and column of Caiyunbit and devote my time and energy to things other than Bitcoin. In the blink of an eye, the year has passed. Looking back, I just happened to avoid this Bitcoin winter.

Some people say that one year of Bitcoin is equivalent to ten years of other industries. This is true! Although Bitcoin is still the same Bitcoin this year, the cryptocurrency world has undergone tremendous changes. Looking back, the development of many things has completely exceeded my expectations.

The most surprising thing

If there is one thing that is most surprising, it is that someone has completed an IPO this winter. Martian has realized his dream, "Bitcoin Group is about to be listed on the Australian Stock Exchange", which is really a miracle. I have never met Martian before. The few things I know about him come from an interview in March last year, "New Bitcoin Observation (5): Interview with jsdtxzj", which may be the earliest interview with Martian. At that time, he ran the website Marsbit (marsbit.net), and I have always been his loyal reader, accepting all-round brainwashing. Later, Martian seemed to lose interest in writing, and we gradually lost contact. I only heard that he was working on the IPO. To be honest, I felt that this was unreliable from the bottom of my heart. Later, I saw him fighting with his partners and making a lot of noise. I even guessed that the IPO was almost a failure. Unexpectedly, it really happened in the end. I have to sigh that choosing to hibernate in winter may be a wise choice, but there are still people who ignore the existence of winter and continue to struggle as always. Where there is a will, there is a way!

Here, I would also like to congratulate the Martian and wish him greater success in the future.

This cruel winter

When it comes to Bitcoin, people are most concerned about its price. When the price is high, it is sought after by people, and the voices of Tu Da Mu are endless. When the price is low, it is criticized and has been forcibly declared dead several times. This year, the price of Bitcoin has fallen from about $500 to $230 today.

The long-term low prices tested people's psychological endurance. People who could not bear it gradually left the market, and the entire Bitcoin-related industry entered a period of depression. In the first few months, some people shouted that winter was coming and called on everyone to stick together for warmth. However, no one shouted like that later, because the cruelty of this winter was beyond everyone's imagination. Why stick together? Let's withdraw quickly.

To this day, this winter still shows no signs of ending. Block expansion hangs like a sword over Bitcoin’s head, and mining competition is becoming increasingly fierce, which will strongly suppress the price of the currency. Bitcoin-related companies have adopted two completely opposite strategies: accelerating expansion or playing it safe. This is not contradictory, because winter also means opportunities. Just like the Martians, if you are firmly optimistic about the future of Bitcoin, choosing to expand now will make it easier to occupy the market.

Looking back at the changes in the cryptocurrency world this winter, it is easy to identify which companies are the true Bitcoin diehards. No matter how cruel the current situation is, they remain steadfast in moving forward for this industry and for their own dreams.

Bitcoin Exchange

Exchanges are the biggest application of Bitcoin. In theory, if Bitcoin exchanges are spread all over the world, Bitcoin can replace some of the functions of the US dollar. Because we no longer need to bring US dollars when we go abroad, but only need to bring Bitcoin and then exchange it for legal currency in the local area. Due to the huge trading demand and profits, the competition among exchanges is very fierce. On the surface, the pattern of domestic Bitcoin exchanges seems to have not changed, and the three major ones are still the same three major ones. In fact, it is not the case. Let us first start with another exchange, which is the pioneer of Bitcoin futures - 796.

796 Exchange

It was very popular at this time last year, but now it seems to be in a bad situation. A few days ago, its boss Zhu Rong published an article titled "Some Thoughts from the Heart - Bitcoin and 796 Exchange". Boss Zhu is a very cool person and has always regarded himself as "a major contributor to the Bitcoin industry", but unfortunately, it seems that others do not think so. In the past year, in the futures competition with OK and Huobi, 796 gradually lost. Therefore, Boss Zhu does not want to "invest energy in innovation in Bitcoin futures" anymore, because "when others learn your ideas, they will not say thank you, and may even be DDOSed, haha, so let everything go with the wind, go with the wind".

Mr. Zhu attributed the shrinkage of futures to others' plagiarism, but from the perspective of the entire industry, the shrinkage of futures is inevitable and has little to do with others' plagiarism. The reason is simple, there are only so many leeks, and they are even decreasing. The harvesting speed is too fast, which will inevitably lead to shrinkage.

In addition, accusations of plagiarism are meaningless. Tencent has been copied so much, but it is still alive and well. Internet thinking, good ideas are certainly important, but what is more important is to be able to provide good services, otherwise you will be eliminated sooner or later.

Finally, Bitcoin futures are not a great innovation. Whether it is a positive or negative contribution to the Bitcoin industry is still controversial. Leveraged trading can also achieve profits in both rising and falling prices. Why do we need futures? The most important function of futures is hedging, which has not been achieved in Bitcoin futures. In the end, Bitcoin futures have evolved into a pure gambling tool.

This is very ironic. Boss Zhu claimed that he had invented a tool that could make profits whether the price went up or down. However, after the price of the currency fell, he found that he was the first one to give up.

OK and Huobi

Located in Beijing and both founded in 2013, OK and Huobi are like a pair of enemies, always entangled with each other in the past year. If you open leverage, I will open leverage; if you open futures, I will open futures; even if you have a meeting, I will have to prepare a meeting temporarily to disrupt you. At the peak, the two exchanges quarreled almost every day. Unfortunately, the two exchanges no longer quarrel. The reason for less quarreling is not because of winter, but because the relationship between the two is no longer equal and no longer a competitive relationship.

OK has been entangled in various problems since the beginning of the year, first the resignation of Chang Peng and others, then the quarrel with Roger Ver, and finally the quiet resignation of He Yi, etc. As an outsider, I don’t know what happened to OK, but as a coin holder, I don’t dare to trade on OK anymore.

Players who have been able to play until now no longer care about the rise and fall of the currency price, but care more about safety. After Bitstamp currency was stolen, the trading volume dropped rapidly, so bitfinex became the leader. And when Bitfinex was exposed to slow withdrawals, the trading volume also dropped rapidly. No one cares whether you were the leader in the past, everyone only cares whether you are safe.

On the other hand, Huobi has not experienced any major changes, but is undergoing industry-wide integration. The interface has also been revamped, and the speed of deposits and withdrawals has also been greatly improved.

Sometimes, I miss the days when the two companies were fighting, because when they were fighting, they would give all kinds of benefits to the players, but unfortunately, some things may never go back to the past.

Bitcoin China

BTCChina has lost ground in the competition with OK and Huobi in the past two years, but it is the earliest exchange in China and has accumulated a strong brand and reputation. It recently changed its domain name, which is said to have cost a lot of money. This move at least shows that it is firmly optimistic about the future of Bitcoin and is focusing on long-term development.

The Bitcoin Era and Bitcoinr

As the only exchange that insists on charging spot transaction fees, BitTimes has the highest website traffic, far exceeding other domestic exchanges. This is obviously due to the altcoin trading. Although the transaction volume of the entire website is not large, it has a large number of trading users, which shows that the essence of the altcoin market is that many people hope to realize the dream of getting rich overnight with very little investment. Such a large website traffic can be used for many things. BitTimes launched a mall this year, and it seems to have good returns.

On the contrary, another altcoin exchange, Bitcoin, has been in a slump since the coin theft incident, which is basically equivalent to bankruptcy, which is a tragic loss of a good opportunity.

Bitcoin Mining

Bitcoin mining is the first industry chain formed in the field of Bitcoin. For details, please refer to "A Brief Discussion on the Industry Chain of Virtual Currency Mining Machines". Although the industry is in a recession, Bitcoin mining has made great progress in the past year. The chip process has reached 16 nm and has created a real financial innovation - mining machine financial management.

Mining machine financial management

In the past year, the Bitcoin mining machine industry has completed the transformation from selling physical mining machines to selling cloud computing power and financial management. At this time last year, mining machine financial management was just emerging, and because Bitcoin futures could not achieve arbitrage and hedging functions, mining machine financial management was born.

One thing that must be mentioned here is bitbank , which was originally established by龙矿科技and中国比特币. It quickly became the largest bank in the Bitcoin field. In the one year of operation, it earned coins for many users.

Although some people criticize financial management, it is undeniable that this idea is very good and can achieve a win-win situation. For mining machine manufacturers, due to the large fluctuations in Bitcoin prices, the returns from investing in mining machines have a cycle, and during this cycle, it is likely to cause losses due to the decline in the price of the currency. However, by borrowing Bitcoin, selling in advance to lock in the profits, and then repaying the currency through mining in the future, the fluctuation of the currency price can be avoided. For users, why not deposit coins to earn interest?

Of course, I personally don’t play with financial management because I want to keep my private keys in my own hands, but I don’t object to others playing with financial management because I understand others’ pursuit of interests.

Other good financial management options include比特大陆and好比特. There are some differences in the returns, but the principles are the same.

However, financial management is also risky. Since the future coins are sold in advance, if the future can guarantee the collection of coins to repay the loan, it is naturally good, but who can guarantee the future? If the future is not as expected, it will be difficult to recover the investment at best, and even go bankrupt and run away. For example: the disappearance of烤猫is still a mystery, and no one is willing to come out to give an explanation.

Mining competition

When the innovation of mining machine financial management appeared, it greatly stimulated the development of China's Bitcoin mining industry. In June last year, the world's largest mining pool was still Ghash , which accounted for 50% of the computing power. Since then, Chinese mining machine manufacturers have launched mining machine financial management and started to build their own mining pools (since they have a large amount of computing power, building their own mining pools is safer and more cost-effective). Soon, the total computing power of Chinese mining pools exceeded 50%, and it has been maintained until now, which also shows that at this stage, Chinese mining machine manufacturers have deployed a large number of mining machines.

However, the fundamental problem of financial management is that it can only raise money from the circle. The circle is so small that it keeps borrowing and selling. Without fresh blood coming in, the 3,600 coins produced every day are all digested within the circle. One day, it will be difficult to sustain. After a year and a half of tossing, it has become extremely difficult to raise coins within the circle. The reason is very simple. There are no coins in the circle. The only people who have coins are the diehards who hoard coins and do not lend them out at all.

Things are changing, and foreign mining machine manufacturers are gradually starting to make efforts. Why? They actually raised money from outside the circle. KnCMiner received $15 million in Series B financing at the beginning of the year, and BitFury recently received another $20 million in financing. Both companies have already developed 16 nm chips. It is very uneconomical to still put mining machines online at this time. It seems that it is difficult to make a profit even with free electricity. However, the computing power of the entire Bitcoin network has continued to rise in the past 1-2 months. It is obvious that foreigners are deploying mining machines. The idea of ​​foreigners is a bit like Internet thinking. First, lose money and burn money to seize the market. Wait until all competitors are burned out before considering profitability. The competition in the mining industry is very cruel. Once you are out, it is very difficult to re-enter the game. Because of the R&D cycle and threshold, currency price fluctuations and other factors, latecomers will face more uncertainties, making it more difficult to seize opportunities.

The good news is that Bitcoin mining has its own particularity, that is, if one party controls too much computing power, the final result is a sharp drop in the price of the currency, because everyone is afraid of being attacked by 51%. Although domestic mining machine manufacturers are facing some difficulties now, I still believe that when it comes to manufacturing, we still have to look to China.

Bitcoin Information

Exchanges and mining are both profitable businesses, but Bitcoin information is a money-burning business. From the perspective of the entire industry, Bitcoin information is crucial. It provides an introduction and guide for newcomers, it provides players with timely industry information, and it also provides a place for communication and discussion. In fact, Bitcoin is still misunderstood by many people, which is related to the fact that the entire currency circle does not attach importance to publicity.

A large amount of information in the domestic cryptocurrency circle comes from translations, and there is very little original content. Even many things that happen in China need to be reported by Coindesk first, then translated into Chinese, and then exported and sold domestically before Chinese people can see them.

Original site

After a winter of precipitation, in my opinion, there is only one original website left in the cryptocurrency circle:巴比特. (In fact, our Caiyun Bit is also original, but the content is relatively small.)

I personally have to thank Babbitt. When I first came into contact with Bitcoin, I read almost all of Babbitt's documents. I did not look for English materials, not because I could not read English, but if I wanted to get started as quickly as possible, it was more convenient to read Chinese.

At this time last year,壹比特and比特帮could still compete with Babbitt, but now they are no longer comparable. I personally think that 1Bit’s decline is largely related to Sister V’s defection. As the editor-in-chief of a cryptocurrency information website, she suddenly turned from a fan to a hater, which was really surprising.

As far as I know, the reasons for supporting and opposing Bitcoin are often due to differences in values. This is basically not about right or wrong. Some people like to eat carrots, while others don’t. This is not the fault of carrots, nor are those who like carrots stupid. When the industry enters winter, those who can stay in the cryptocurrency circle until now are basically die-hard fans. If you cannot agree with their values, why would they visit your website? So, when Sister V cursed carrots, all the carrot fans left.

I won't talk about BitBang. I haven't been on it since it had several plagiarism incidents. I'm not sure about its current situation, but I don't think it will be any better. I'm obsessed with people's character and rarely give people who make mistakes a chance to make a fresh start. Because I don't have that much time and patience.

Finally, we have to mention Baidu Tieba, which has completely fallen. In fact, Baidu Tieba is the most direct place for newcomers to get started. Many people search for Bitcoin through Baidu. However, Babbitt is ranked several pages behind, and newcomers can't see it at all. However, everyone has seen the ending of Tieba. This is a typical example of human nature. In order to fight for a little bit of petty profit, everyone will suffer in the end. Human nature is actually the biggest risk of Bitcoin experiment. Bitcoin does not have any technical risks at all. The one who killed Bitcoin must not be an outsider, nor a technical problem, but an insider.

Information Platform

At present, such platforms can be divided into two categories: one is the web-based platform represented by BTC123 , and the other is the APP mobile platform represented by币看.

BTC123 is the earliest and most famous navigation site in China. It is very useful for newcomers, but old users rarely use it. For example, I rarely use it. It is also for newcomers that BTC123 has recently started to deploy franchisees and conduct offline promotion. Whether it is feasible still needs to be verified in practice. In fact, promoting Bitcoin is a thankless task. Not only will you not get any benefits, but once the other party loses money, you will be scolded. Generally, old players are unwilling to promote Bitcoin. However, there must always be someone to do this kind of publicity and promotion, otherwise Bitcoin will always be misunderstood by most people.

On the contrary, Bikan is an app that I must use every day. Although all its information is reprinted, it is comprehensive, timely and convenient. In fact, Bikan has not changed much this year. However, Bikan has just received financing, and it is said that the first step is to go beyond China and go global.

Bitcoin Wallet

There are so many Bitcoin wallets that I can’t possibly try every one of them. However, over the past year, the wallet software I use has also changed, from Multibit + Blockchain on my computer and mobile phone to Electrum + Bither.

In fact, Bitcoin wallet clients are not profitable either. For security reasons, the Bitcoin wallet code must be open source, and open source means free. Multibit has stopped updating since last year, and Blockchain has been plagued by accidents, so I had no choice but to change my wallet.

Bitai is a wallet made by Wenhao team. This team not only develops wallet software, but also often popularizes knowledge about safe use of Bitcoin in forums and groups, such as: Bitai open class. For a period of time, the price of Bitcoin fell too sharply, and almost no one talked in all the Bitcoin groups I joined, except in Bitai group, where people were still discussing various security issues. Security is indeed a big deal. No matter how much it falls, there will be a day when it will take off, but once you lose your coins, you will never be able to recover.

Electrum's interface is very simple and friendly, and it can also realize cold storage. In addition, there is a team in China that makes hardware wallets -币定行. The hardware wallets it produces can be used with Electrum, which is both safe and convenient.

Conclusion

This winter is a bit cold. I have witnessed many people leaving the market, but at the same time I have also felt the efforts of many people. In sharp contrast to the price of the currency, the computing power is still rising, ensuring the security of the Bitcoin network; the number of daily transactions is steadily increasing, and Bitcoin is being more widely used; while ensuring security, the wallet client is becoming easier to use, making Bitcoin more acceptable.

When will this winter end? I don't know.

Will the price of the currency go up? I don’t know.

All I know is that Bitcoin's spring is not something that can be waited for, but something that can be created. Let us remember those who have persisted in their struggles in these cold winters, and be grateful!

Note: I wrote this article only because I can smell the breath of spring. When spring comes, I will look at this article again, hoping that everyone can still remember who created spring.