The thought of the world into the encryption maze: basically encryption and serious problem in the world are mentioned

Editor’s note: This article from the blue fox notes (ID:lanhubiji), realthinkbit translator; from the original, author JonChoi; authorized reprint by Odaily daily planet.

This is the time from the myth of technology coming out. Block chain to succeed to the mainstream crowd, eventually cannot do without the real needs of users. Then, we block chain project, whether you are male chain, or DApp, or other, ultimately, in the real needs of network users, is the foundation of value. This paper puts forward some thoughts deeply, do the project should start from the basic logic, to return to what the world really needs, rather than purely technical superiority or powerful game mechanism. The author of this article by JonChoi, “blue fox notes” public community “realthinkbit” Chinese translation.

All about timing

The long term: different arguments and are not in competition

In a long enough time range, these arguments will eventually merge. Do a quick review:

1. reliable money: “money is the software.”

2. Web3: “you have the data with data and data; money is money. “

3.: “financial services is the opening of the financial software.”

There is no doubt that the software will continue to engulf the world in the coming decades.

Medium: a game of musical chairs

Of course, go to the center of the spirit can be created to promote the beachhead, the beachhead has more adaptability of user base (“I like privacy, so despite the lack of function I will still use Signal instead of iMessage”, “I like the local businesses, so I will be more in the local bookstore to buy books rather than buy on Amazon”) , but in order to get used to the mainstream, beachhead traction must promote the technology and product innovation, these the spirit of innovation can be neutral in the mainstream audience.

Early case product market fit will occupy most of the early, in turn, will receive the most customers, sharing ideas and resources. With the next wave of the middle of the effectiveness of vital infrastructure sharing early victory will be a strong existing enterprises (for example, Coinbase construction to the center of the exchange or hosting solutions) . The winner of the whole industry early feedback mode (for example, Binance harvest considerable amount of funds available, in turn in the ecosystem re investment) will be repeated until the mainstream.

Because the ultimate goal of the user can change in crossing the chasm, this is like the repeated game of musical chairs, the first round winners have the advantage, but in the realization of the ultimate usefulness before won’t win any awards.

Short time: embrace uncertainty

In view of the path entropy, black and white is full of moral sense of questioning does not solve the problem: “don’t you think bitcoin is better than money?” , “don’t you think Web3 is more trustworthy than Google?” Don’t you think, “to the center of the financial ratio of JP Morgan better?”. Challenge such questions to seek truth not what.

Therefore, instead of asking what will realize what happen, instead of thinking which path may be catalyzed by other paths? This may be just a matter of time. 1 years and 4 years, or 10 years and 25 years, different time will bring different results and investment. This is the name of the game problem.

What is the next step of evaluation

The conceptual framework helps us evaluate the value proposition, and customer demand. From there, we all need to explain the potential size of each market, and their striking. I want to see more analysis, but the following is my intuitive view:

In Code We reliable currency: Trust

The money is reliable:

(1) only money ledger records of a person with many things. Strangely, it fundamentally requires that other people are willing to use it to exchange goods and services, and hold it.

(2) perhaps more importantly, we have established a very efficient and borderless information sharing and consumption platform in the past twenty years (such as search, social media and instant messaging).

The above two together, now is a unique opportunity, the concept of digital currency can try to go to the center of the. Now more than ever faster, cheaper to create an idea, and spread to the world. Now, the above mentioned can be monetary currency. For me, it is incredible.

With the opening of the financial Web3 or different currency use cases only need faith and reasonable scalability can be successful. Therefore, the factors of success is within reach. How the rest depends on consumer decisions, regulatory decisions, and community decided to convey the product concept.

This is why one of the few high beliefs available today is the concept of non sovereign digital currency, whether bitcoin, Ethernet or other workshop. Compared with the expansion of the core needs of customers here around the following obstacle seems reasonable: scalability, regulatory framework, distribution of wealth, consciousness.

If the hypothesis is correct, then support encryption currency business is the high value of the business support to the center of the store of value related business. For example, insurance, trust, security, core agreement on any other UI and managed services based on.

This article is about a lot about the distribution of wealth (surprisingly I most of the opposition). Because the monetary value in the entire cycle by changing the distribution of wealth, I think it is actually a evolution of any currency. The distribution of wealth is one of the biggest source of any long-term monetary system vulnerability. The converse is also true: when the correct guidance, it is unstoppable growth and anti vulnerability source. I believe this will be the future of one of the most effective encryption experiment in the field.

Web3: user experience and trust

Web3 confronted with high threshold.

Although must be aware of a demand for the Internet is not the center of abuse, but the framework of customer centered on the path is today a challenge. It has a very important small customer base, strong demand, but trying to win has been satisfied with the existing platform of the audience is very difficult. It is very difficult to achieve, especially those of the Web3 principle of passionate people.

Similar in function, people will choose authentic products, but most people are unlikely to sacrifice their convenience products at present (unless there is a high-profile event to change public opinion). The fundamental challenge here is to review the target audience and cost / benefit asymmetry. Most people used to smooth, fast and management experience, can easily get the information they love (i.e., secrete dopamine, in line with the world view of information).

Although people say they love the spirit of “good” and “health”, but the behavior is often not the case (habit and impulse dominated Internet service). So people want to bundle Web3, but without bundle people have on web2 — despite potential problems (false news, irresponsible data hosting) – in fact, most people work well in most days.

In addition, due to the success of the atomic units of participants in the network properties, in which Web3 may be more difficult to achieve intermediate utility. One to one interaction by independent monetary transactions, and data exchange (network, Internet) is usually composed of many concurrent data flow of consumption.

More specifically, the currency (reliable currency / open financial exchange) mainly concentrated in the write operation (transaction change state) and the business model with the “write” (the number of percentage or transaction value) together with the expansion, and the Internet / interactive data are concentrated in the read operation (Instagram photos or articles to the user). The business model with the “reading” (eye, advertising, subscription or equivalent) with extension.

Web3 is worth considering whether and why the spirit must be combined with block chain technology; no matter how a person views on this topic, a clear expression of this point will help. For example, see (a) Blockstack “bring your own data” method and Secure (b) Scuttlebutt free block chain and pure gossip protocol by Ethernet than less attention is a very interesting workshop. Another question is whether the compensation in suspense, participants generated in the network economic value chain need to block, or whether the existing enterprises to meet the needs of users in the use of public blockchain cases (will give more consideration to this point).

From the social / public product point of view, this is an incredible movement, should continue to try to support different communication architecture and information organization. There may exist a can with today’s “fullstack” method of competing alternative architecture (to the center of all layers, applications, infrastructure). For example, reliable service in the center of the currency + technology is possible, the center of the service to a non block chain Web3 using P2P gossip protocol solutions are compatible.

All this said, I believe that the work in the field of Web3 company is fighting for an important spirit, this spirit gives users the power utilities and building services for all. There is no doubt that this is a worth fighting for the spirit, I hope this task will help the team thought of maze navigation to the right place, even if the path is not very clear today. No matter how the future, in the important infrastructure of R & D team will always work hard in the broader ecosystem plays an important role.

Open finance: bearer holding vs holding register

In the maze, a maze. Welcome to the recursive version of the maze encryption.

Bearer holding and holding register

The key of the opening of the financial value proposition and the challenge is to understand the concept of holding the bearer and registered holding.

The bearer of this hold assets held by anyone in the assets of the assets provided by the right (voting rights, income rights etc.). The registered assets held by the legal claims by a trusted intermediary agency on behalf of the management, legal holder asset management rights (and those registered owners only need to hold a certificate).

The use of a hold, you do not need to trust anyone, use of the registered holding, you need to believe that they will be in good times and bad times will support your interests. On the other hand, the use of anonymous hold, if you lose it, then you will not ask for help. The use of Registered Holders, lost certificate simply means that you need to find an intermediary to help, and get another.


Bitcoin is a digital irreversible bearer of assets, basically just like cash; who hold, even if the who.

Bitcoin ingenious design, because its priority function makes it suitable as a digital asset held by the bearer. No identity, no refund. Immediate settlement. No case of digital assets held by a unique quality, that is all part of the emergence of the transaction at the same time (no future commitment can be fulfilled).

The debt, equity and financial openness

The debt and equity capital is the impetus of economy.

With credit, reputation can be used to obtain today’s resources and pay to sb in tomorrow. If we are successful and honest, we will pay interest to the stakeholders. However, if we don’t succeed or dishonest, we will need to be in charge of day.

Have a stake, we can give / sell part of the ownership of enterprises to obtain today’s resources, in return, we promise it will become more valuable assets tomorrow. If we fail and honest, no harm, no foul. However, if we do not act as a trustee of the good role, we will need to take responsibility in the day after.

Most of these securities are registered holders, rather than holding the bearer.

Money and securities

Because of the credit and equity retained the specific scene value in a period of time, so the reputation and status than cash or coins and other immediate settlement is more important, they can be used for all the terms of the transaction and any time.

The value of the currency does not depend on the previous holder or transaction behavior (i.e., a $100 note once in your hand, before the holder can somehow affect the value of the notes), and only depends on the management behavior, they are in charge of the economy. Therefore, money is a kind of unique bearer bearer assets, only rely on one thing: to maintain the value of trust money managers.

On the contrary, a registered securities (stock, credit, property) requires not only the legal belief (property rights, guarantee law issue of jurisdiction etc.), but also for the counterparty’s sincerity. This is probably the reason why users will continue to require a registered registered registered registered assets, assets for equity owners to provide protection as a service. Therefore, although the money does not need to actively participate in the rational government, but most forms of block chain on the real assets need to integrate reliable law enforcement (e.g., including binding legal contracts, currency tokens representing ERC20 reference dyeing property ownership etc.).

Looking for the right market

Here is another consideration is that the meaning is most likely to occur first at the edge of the market rather than in developed markets. The market has developed quite mature financial infrastructure, which makes the change to the higher threshold. The opening of the financial case to attract people will support the basic form of commercial lending, and lack of identity system marginal market status, and has the use of foreign currency as a store of value.

Compared with the existing alliance

As a thought exercise on alternative results can be obtained by Visa had happened to. Visa is the first non profit organization is owned by the bank, the union credit card infrastructure, now it is more valuable than all other banks, except one (Visa $323B, JPMorgan, 385B). Therefore, by various banks and Internet giants (with any distribution and regulatory advantage subject) led open financial alliance will become a reliable financial vision of open competition participants.

From the “original encryption” point of view, this is not an ideal solution. However, we cannot ignore the bank and the Internet giant to raise the minimum availability may be enough to make emerging enterprises less attractive in the relative basis (American financial technology threshold is more and more high, because we are discussing the ACH automatic liquidation by Goldman, provides the high income savings accounting, the various bank mobile priority strategy. In fact, some of the giants are considering direct competition with blockchain Technology (Facebook, Goldman) or by the spirit (the Airbnb proposal can be issued shares to the hostel owner). This argument also extends to a sovereign state, and trying to do not have the country (Southeast Asia and Africa) to create an open standard identity and financial infrastructure.

Therefore, the opening of the financial representative of some of the most complex part of today’s encryption maze. This section is not to argue a point higher than another argument, but a clear idea of practice. I want to know what you think, but before you get too excited or offended before, let us discuss (1) can significantly change the intuitive assumption, and (2) how do we make a contribution from here.

To explore the hypothesis and refute

It is worth discussing is what assumptions can change, and change the meaning of the above discussion of cognitive dissonance.

1. “with the passage of time, technology to achieve the function / SLA equilibrium.” This shows that, due to technical breakthrough, the underlying trade-off may become cheaper. As research continues, this is the right most of the time in certain direction; effective data replication, node discovery cost and time, and data routing will decrease over time. However, the more important question is whether it can and when to drop, in order to make up the gap of the user experience, even if there is the dynamic user experience (especially for ordinary users).

2. “service and balances modular for participants to provide value.” For example, if all three government departments in the United States is concentrated in the hands of one person, then certainly more efficient than today’s balance of power, but the more important question is, it is a delicate balance. Provides a way to the center of the bottom may be as trusted intermediary services, to weigh, resulting in a net improvement for users. At present this ambiguity, but with the infrastructure and mature products, I think maybe we can rethink the concept.

3. reduce compliance and manpower cost. The technology itself may be less efficient than the counterpart of the heart, but may reduce the operating cost of intermediary often (various backstage function compliance and back-end bank), which will provide net savings. Cloud infrastructure is to improve efficiency and reduce cost, thus reducing the total cost of the main method is the use of underused hardware (zero capital expenditure, the minimum operation cost) or reduce the non core / support service repeated labor management costs. This is an interesting point of concern; there is not enough data to confirm, but it is possible, if be verified to be true, so it is very important to return.

How can we make a contribution today?

Look at the above mentioned challenges, and not inspiring, is like saying it will not work in 1990 and write down the internet.” Productive reaction is to “become a surrealist, and close to today can resolve the problem. For example:

Experiment 1. Continue to try different trade-offs (decentralization, scalability, security), the level of abstraction of user interaction, different markets, as well as the mainstream use required niche distribution channels.

Construction of 2. can obtain the user product neutral spirit. The first step is to sacrifice the user experience and is willing to promote the construction of user products, but the bigger goal should be to build products for the spirit of neutral users. People don’t use Google because of the algorithm; they just use it to quickly retrieve the information they are looking for. That is to say, we must start from the function of privacy concern privacy, to the center of technology requires extensive support to the existing business and meaningful competition.

3. experiments were carried out on the “physical world”. Pure digital assets and experience can be used as a experimental early beachhead well. They have the advantage of not requiring physical or legal enforcement. For example, the virtual building built on SimCity you can build a digital currency borrowed, another digital building the digital currency by you in the game world with other parts of the mortgage. Although this example is purely digital, but this may be a path to provide infrastructure power may be an early test platform for the future of the real estate transaction for the economy.

4. experiments were conducted in a friendly regulatory environment. Singapore and Malta have more friendly regulatory environment than other countries. Another example, some jurisdictions may be in the tax on encrypted currency related gains / losses are different, this may inadvertently result in favorable jurisdiction in the user has more advantages.

5. / the edge of developing markets. Nigeria, Indonesia, Malaysian, Argentine etc. has attracted the attention of core potential customers. Some signs include: daily use on a cash basis, the financial infrastructure is not very mature and are difficult to obtain, the stability of using non local currency to get better. To find these basic indicators of key customers.

6. more research. For privacy, to the center of the calculation of construction is the most effective and powerful primitives, in order to make the right balance. For example:

  • Data storage. Down to the center of the architecture of the copy / computation overhead.

  • Retrieve data. To improve the data availability and routing scheme.

7. good communication. To minimize the speculation, the ideology of attention (unless you are in the creation of the base layer of currency, in this case, faith is more important), to pay more attention to products. Sure you are using the technology function. This function is what new content? To achieve this new function of technology trade or innovation is what? This function can be uniquely support what products? Why this product is better than the next best alternative? Compared with the Facebook data center storage data, distributed data encryption and how to more secure? Excellent communication today is greatly underestimated.

8. better identify customers and market. The market is king, so to find out how a product to meet customer demand patterns (2017 is ideology, curiosity, speculation and psychological riches). How to clarify the new features provide new services to users, the service is better than current customers the next best alternative. Now try to recommend it to a skeptical friend. If it is meaningful to them, is the time to build it and attack the market.

The correct values and uncertainty = opportunity

The encryption community is very hard to be the radian of openness, economic steering mobility, as well as the participant services network.

I think this technology: (1) to reduce dependence on the data value of intermediary and the intermediary, and (2) to increase the availability of financial products, these products can create wealth and bring global social and economic mobility, this is undoubtedly good, is also valuable for the whole world. When the public value was created, it became the adventurer (i.e. technical experts, entrepreneurs or investors) without time. With these assumptions, it will be an interesting ten years or twenty years.

No one knows what will happen, but these are some framework, to help think about how the future will start. The uncertainty and lack of consensus can be frustrating or confused, but this is our chance to contribute. I hope the above idea the maze can help you decide where to concentrate, to create the most promising opportunities for the mainstream.

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