What is the Nature of Blockchain?

What is the Nature of Blockchain?

Since stumbling into the blockchain space in June 2017, I have witnessed myriads of industrial cycles, the prevalent price surge, blockades of exchanges in September 4, 2017, the unexpected bull market at the end of 2017, and the protracted bear market through the year.

The boom of altcoins, the explosion of ICOs, the rivalry among the public blockchains, the frantic forks of Bitcoin, and the subsequent burst of hypes and bubbles are all brutal expressions of the blockchain space.

Just a year and a half has gone by, but it seems we have lived many years in a blink. As the saying goes: one day in the blockchain space, one year in the world.

During the days, I have been preoccupied with one question:what is the nature of blockchain?

What is the first and foremost thing to do when you study the nature?

As for me, I am convinced that we should gather and analyze the basic and objective facts in regards to the very thing as best as possible, including its history and the status quo.

A Short History of Blockchain

It is universally known that the word "blockchain" originates from Bitcoin. It was invented by the anonymous Satoshi Nakamoto who published the Bitcoin whitepaper in P2P FOUNDATION in 2008. The whitepaper is short enough, but it does not mention the concept of blockchain at all.

It is well acknowledged that Satoshi has become the cult of personality in the years after the whitepaper thanks to his brilliance. However, the world is blind to the truth that one organization and a multitude of computer geniuses have laid the foundation for the creation of Bitcoin for more than two decades.

Anyone who gets a smattering of Bitcoin is aware of the three predominant technologies that lies in the infrastructure of Bitcoin:asymmetric encryption, peer-to-peer system and Hashcash. However, none of the three technologies is accredited to Satoshi.

Asymmetric Encryption：

Whitfield Diffie and Marty Hellman invented the asymmetric encryption algorithm in 1976. The following year, Ron Rivest, Adi Shamir, and Leonard Adelman pioneered the first commercially available asymmetric RSA encryption algorithms that established modern asymmetric encryption. The foundation of the theory has been widely used in the field of network communication, and it has created the first major premise for the future creation of Bitcoin.

But, it is interesting enough that these encryption technologies were closely supervised by the National Security Agency (NSA), which the NSA initially deemed as a threat to national security and regarded it as a military technology. It was not until the end of the 1990s that the NSA broke the barrier of these technologies, rendering asymmetric cryptography much popularity in the public life.

By the way, as early as 1990, David Chaum created a private and untrackable payment system, which was later dubbed as e-currency. But the currency was not decentralized, and it was not self-consistent. In 1998, Chinese American Crypherpunk member Dai Wei (As a tribute to predecessors, the smallest unit of Ethereum is Wei), proposed an anonymous, distributed electronic cryptocurrency system: B-monney. It was the spiritual mentor of the later Bitcoin, but due to its limitations and design flaws at that time, it was a lost cause. In 2005, Nick Szabo finally put forward the idea of Bitkin where users can solve the math problem and use the encryption algorithm to verify the published ledgers to construct a property certification system. It is very close to the idea of Bitcoin. Szabo also published a lot academic papers on the realization of the law in the network security. He can be described as the pioneer of the blockchain smart contract. However, ... it was quite costly to solve the math problem. What's worse, Szabo was not capable of programming so there was no programmers who believed him and were willing to cooperate. Consequently, Bitkin was stuck in the theoretical stage.

From Ecash, B-monney to Bitkin theory, generations of Cypherpunks are eager for free currency with all kinds of experiments and efforts, but they ultimately failed...

Peer-to-Peer Technology and Hashcash Technology

Despite the fact that the pioneers failed one after another on the road to free currency, the technology itself had been constantly evolving. Later, Shawn Parker finally invented peer-to-peer network technology. The aforementioned asymmetric encryption technology made it possible to create Bitcoin. The last remaining question was the “double spending”. To put it simply, it concerns the ledger-keeping right to be accepted by the system.

In 1997, Adam Back created the Hashcash algorithm. In 2004, Hal Finney improved the "reusable work verification" algorithm based on Hashcash. At this point, the perfect solution to the "double spending" and "Byzantine Generals problems" has laid a solid foundation for Bitcoin's POW consensus algorithm. Everything was ready.

The prerequisites to invent Bitcoin, apart from the integration of the three basic theories, are as follows: first, deep understanding of the currency; second, proficient programming skills; third, remarkable eloquence to drive the initial community development. The chosen one did not appear until 2008. His name isSatoshi Nakamoto.

In fact, Satoshi Nakamoto, together with the above predecessors, comes from the same mysterious organization:Cypherpunks.

In 1993, Eric Hughes and a few others created a "Cypherpunks mailing list" encrypted email system, referred to as "Cypherpunks". The goal was to fight against Internet emails that were monitored by the government. Eric Hughes advocated its mission and goals of Cypherpunks in A Cypherpunk's Manifesto: "Privacy is necessary for an open society in the electronic age.We the Cypherpunks are dedicated to building anonymous systems. We are defending our privacy with cryptography, with anonymous mail forwarding systems, with digital signatures, and with electronic money...We cannot expect governments, corporations, or other large, faceless organizations to grant us privacy out of their beneficence."

Yes, you are not mistaken. It began in 1993, the last century. Cypherpunks were very active, including hackers, cryptographers, and fanatics who pursued privacy and property security. Most of the technical theories that Bitcoin relies on, and the inventors of these theories, all come from this organization. Some of the Internet typoons that are familiar to everyone are also members of this organization, such as Julian Assange (founder of Wikipedia) , Sean Parker (Founder of Facebook), Bram Cohen (Founder of BT download) ,Tim Berners-Lee (inventor of the World Wide Web) and many others.

You may be surprised to realize that we have been focusing on Bitcoin and Cypherpunks for a long time, but we hardly mention blockchain. Aren't we going to talk about the history of blockchain development?

The truth is that the concept of blockchain emerges quite late, however, all of the technologies are the premise that the blockchain concept can originate from. It can even be concluded that they are the genes of the blockchain. If we only squabble blockchain without grasping the history , it is difficult to understand the spiritual nature of the blockchain.

Due to the length, I will not elaborate the technical terms that have been mentioned. If you are interested, please refer to “Blockchain Science” at the bottom of the article. I believe even if you don’t understand technology, you can still know the blockchain and its core technical principles.

So when was the concept of “blockchain” proposed and who proposed? I checked some information and it seems there is no authoritative statement. As I dive into the sources, it can be clearly seen that the concept of the blockchain is gradually spread around 2013. Previously, there were only cryptocurrency, free currency, electronic money, Bitcoin and altcoin.

I don't have a clue whether it is a coincidence that the previous cryptocurrency climax occurred in 2013, and at that time the cryptocurrency industry began to develop in China.

In 2013, a large number of current industry tycoons came to the fore in China. Many of them have written articles of evangelism. They mainly introduced Bitcoin at the beginning, and later promoted the idea of “decentralization” and finally spread the concept of "blockchain".

Around 2014, Ethereum stood out in the world. With the gradual popularity of smart contracts, many people started to release tokens based on Ethereum. At this time, blockchains are frequently mentioned while Bitcoin and cryptocurrencies are losing their luster. It is especially the case in China as there are almost no voices on cryptocurrency in 2017 bull market.

Everyone is talking about the blockchain. Everyone is talking about the transformation that the blockchain will lead to the traditional industry. Everyone is talking about decentralization. Everyone is talking about the store of value. Everyone is talking about the revolution of production relations.

Nevertheless, after experiencing the ups-and-downs in 2018, we have nothing left but bubbles now. Can we find a large-scale project based on blockchain that has practical business model in the bubbles of trillions? It seems there is no one left.

Therefore, it set me to revisit the question: what is the nature of blockchain? Is it the same reason like the 2000 Internet bubble and the VR game five years ago where hardware and the market can't keep up with the capitals. Or is it like the video game that went wrong in the past few years and ran on the road of fake demands?

Status Quo of Blockchains

When we have done the research on the history of blockchain, let's take another look at the status quo of the blockchains. In this section, I will try to only state facts not opinions. I will leave my opinions to the last section after the history and facts.

No matter how much blockchain is intertwined with money, finance, game and social attributes, they all rely on the Internet and encryption technology. As a professional with ten years of experiences, I may have deeper understanding of the blockchain than the average.

Technically, the security of the blockchain is based on three backbones:

First, asymmetric encryption technology ensures the security during communication.

Second, it only allows insertion and query and do not allow modification and deletion of data storage which tackles data security, transparency and traceability.

Third, peer-to-peer technology and consensus mechanism can solve the data consistency under the distributed architecture, and data consistency is one of the basic requirements of any Internet application.

Whether you understand the technology or not, you should be able to see from the literal description that these three core technologies are centered on "safety". It corresponds to the security requirements of data privacy, data integrity and data consistency. At the same time, under the distributed architecture of peer-to-peer, it can naturally avoid the catastrophic damage of data.

Are these three technologies amazing? Asymmetric encryption and consensus mechanisms are indeed magical, however asymmetric encryption is not intended for blockchain. The earliest application lies in the US military communication encryption technology, which was created for information confidentiality. It was introduced into the blockchain after the military released. Only the consensus mechanism can be said to be specifically for the blockchain, but in fact it only solves a traditional problem of distributed credibility with Internet characteristics. The West calls it the "Byzantine General Problem."

The addition, deletion and change of peer-to-peer technology and data are also the basic technologies of the Internet. Peer-to-peer is widely used in the field of efficient big data transmission, and the addition, deletion and modification of data are more widely used in almost all large and medium-sized Internet products.

In order to achieve high security, the blockchain has done a lot of extreme design compared to traditional Internet applications.

First, the "server" of the blockchain is a thorough, multi-node, centerless distributed architecture. The distributed architecture is nothing new. Nowadays, large-scale Internet applications are almost all distributed architectures, which are used to solve data backup, optimize response speed, and improve TPS. However, in these distributed architectures, there will be almost one or even more levels of central servers, which we call the "Client-Server Model " architecture. The functions of the main server are different. They are generally used for user portal, scheduling, resource allocation, core request response, etc. If the main server is hung up, it will be serious. At least some important functions cannot be used normally. The client standby server will be enabled immediately, but it will still hang for a short period of time. The current hardware technology can almost achieve the level without user perception. However, some small companies have limited financial resources at the beginning, and it is difficult to afford such high hardware costs. Once the main server has problems, it will often be shut down for maintenance and even catastrophic accidents.

So why do not the traditional Internet applications use a fully distributed architecture like blockchain? The reason is simple. When there is a central server architecture, the efficiency is much higher than the fully distributed architecture, and it is easy to control and adjust.

Under the central server architecture, the response speed of a regular request can almost be considered as the bottleneck of the TCP/IP protocol of the underlying Internet transport protocol, which is about 200 milliseconds. Although the whole process is very complicated, it requires multiple encoding and decoding, multiple protocol communication, and network node jumps, but all of them are linear. The response is in milliseconds or even microseconds. Everything is in agreement with the interaction of one center with another.

So what about the blockchain? In order to avoid the central architecture being completely manipulated by political, military or financial forces, the blockchain uses a completely distributed architecture, which is due to the maturity of peer-to-peer transmission technology. But who is the ultimate non-central distributed architecture? So Bitcoin invented the POW consensus mechanism to solve this problem. But there are two new problems ensuing:

1、Without a center, it means that there are no centralized parties and stakeholders. It is reasonable to leave the parties aside because the blockchain is extremely secure, and theoretically it does not need responsible parties. However, it incurs another fatal problem, that is, there is no centralized stakeholders, which means no one is truly interested. Strong interest binding, which means that no one can really care about it and willing to contribute financial resources. It is absolutely impossible to rely solely on faith, so Satoshi added a reward mechanism to the consensus mechanism.

2、As there is no center, even with the consensus mechanism and reward mechanism that fit the logic, the execution efficiency is greatly decreased. Information needs to be confirmed by many parties. At the same time, the blockchain cannot be too fast, otherwise it will cause data explosion. As data cannot be deleted, expanding too fast can cause catastrophic consequences. In addition, when a block produces too fast, the attack will be very rapid, and the pseudo-chain can quickly grow into the mainchain and cause double spending which jeopardizes security.

Therefore, we can see that under the absolute distributed architecture design, although security can be guaranteed and the participation of reward mechanism is also established from the sociological perspective, it is at the expense of "efficiency", and this sacrifice is a last resort instead of subjectively considering that efficiency is not important!

In the blockchain design concerning efficiency, the P2P mechanism has almost no optimization. This is the basis of a fully distributed architecture; data is not allowed to be deleted and modified, and there is almost no optimization. If there is no center, it cannot be deleted. In addition, the data structure of each block of Bitcoin is almost the most simplified design, and can not significantly reduce the amount of data; finally, based on the consensus mechanism of distributed architecture and the speed of the block, it looks like there can be more optimization. As a result, various altcoins and chains after Bitcoin are mainly exploring in this direction, and the concepts are fantastic. However, from a purely technical point of view, the dazzling consensus mechanisms are all indeed trade-offs between efficiency, security, and decentralization. There is no creative invention like the Bitcoin POW mechanism.

To our regret, there is always a contradiction between efficiency, security and decentralization. No matter how we optimize the decentralized distributed architecture, it is impossible to catch up with the centralized server architecture at the efficiency level. The difference is quite enormous, which is determined by the discrepancy in the technical architecture itself instead of the temporary problems caused by hardware failure and imperfect public chain. Unless the public chain completely changes the technical architecture and makes a multi-center distributed architecture. But in this case, compared with the traditional multi-level server architecture, what is the essential difference other than the financial attributes under the reward mechanism?

Do you still remember why Bitcoin was designed to be a completely non-central distributed architecture? Isn't it just to shun problems caused by the government, the military, and the financial groups controlling the center? To this end, Satoshi has designed a distributed consensus mechanism at the expense of efficiency. Now, in order to improve efficiency, the newcomers have gradually begun to return to the centralized technology architecture. Is this sarcastic, or is Satoshi's original idea completely wrong from the beginning?

On the way forward, when it comes to bottlenecks, should we change our idea? This is a question worth considering.

First, Cyperpunks set out to create a decentralized cryptocurrency, and they have not yet reached the real technical bottleneck.

Second, the bottleneck is mainly from the successors who hopes to derive a "blockchain" concept based on Satoshi's design, and desires to generalize this concept to various fields and realize the decentralization of more fields. Successors believe that the blockchain should become an infrastructure like the Internet, and then implement a variety of blockchain + and + blockchains, and realize the dream of overtaking in this tide.

In business , if the road ahead encounters ups-and-downs, sometimes it is really necessary to adjust the direction because business is essentially about making profits by serving customers. If customers do not pay, then we can only change direction.

But is bitcoin and blockchain a purely commercial one? The blockchains of the successors seem to be more business-oriented. The efficiency of the blockchain is not up to commercial requirements. We should abandon decentralization, improve efficiency, and meet customer needs, which is in line with business logic. But remember the history of Bitcoin? Remember the mission of Cyperpunks? Remember the intention of Satoshi Nakamoto? Are they businessmen? Are they business organization? Is their intention to serve customers and make money? The answer seems to be negative.

At this moment, we should reflect again: what is the original intention of the blockchain design? What is the nature of the blockchain? In the big bull market in 2017, after thousands of projects in the trillions of bubbles, there was not one single large-scale landing project. Is this a distortion of human nature? Or is it the wrong way out?

Nature of Blockchain

Before I finally discuss the nature of the blockchain, I would like to list the important objective facts mentioned above:

1、Almost all of the core technologies of Bitcoin are mainly from the Cyperpunk.

2、The mission of Cyperpunk is to advocate freedom, believe in technology, protect privacy security of private property.

3、Before Bitcoin, there had many similar but failed projects dedicated to the creation of cryptocurrency.

4、Bitcoin comes first, and then there is a "blockchain". Satoshi did not mentioned the blockchain in the Bitcoin white paper. The "blockchain" is based on the "bitcoin" from future generations. The concepts has been refining and evolving, especially in the 2013 bull market, and after the Ethereum came out.

5、From the technical architecture design, the distrust of the center abandoned the centralized server. Under the universal distribution of the framework, through the cryptography, peer-to-peer and consensus mechanisms and other technical requirements to ensure security and feasibility, we have to sacrifice the efficiency and the advantages of many other centralized servers.

6、In 2017 bull market, after the trillions of bubbles, various projects with the concept of “blockchain” and “decentralization” have failed in business which neither meet the market demand nor produce normal business profits.

After a series of facts and arguments, I believe it is necessary to abstract two core contradictions that need to be discussed:

1、performance or decentralization?

2、token or chain?

The first question is not difficult as I have solid technical background, but I confess that it is difficult to understand technology with technical background. I have been trying to explain the principles of technology, even if you can understand its logic. If you choose not to believe it, then you can doubt the facts behind my logic. These facts, without a technical background, cannot be verified, which is why the "million TPS" is a red-herring but received more popularity in the space.

But even so, it is necessary to explore the nature of the blockchain and tackle the barriers. The blockchain itself a technological breakthrough.

First of all, most of the Cyberpunks are technical geniuses. After 20 years of failure and hard work, the last master, Satoshi Nakamoto created Bitcoin, and it is still an open source project. Countless talents can view the source code and directly modify it. In this case, if you insist that performance of Bitcoin is due to their lack in technology, then I am really speechless. Maybe only those who don’t understand technology are so fearless. Anyway, as a professional, I am not buying a single word of it.

In addition, although I am not capable of inventing the blockchain, I still have confidence in understanding the technology. I have been working hard to tell you the truth: sacrificing performance is the last resort to achieve distributed architecture. Perhaps everyone feels that sacrificing performance is a silly solution, but from my perspective, it is genuine creation where it can be realized by sacrificing performance in exchange for security and feasibility.

If we assume that under the current technical conditions, to achieve decentralization, we must sacrifice performance significantly, so what conclusions can we draw now? In fact, I believe that there should be a lot of people who know a little about technology, and they are not willing to stare it in the face because the conclusion may be very pessimistic, and the imagination of the blockchain may be greatly harnessed.

Without the support of performance, many large-scale commercial applications can't run in reality. The TPS of Bitcoin is less than ten, and the Ethereum is dozens. As for the public chain such as EOS with thousands of TPS, the security has not been verified yet. What can dozens of TPS do? Nothing at all. Can you play a cat game? No, a cat can block the Ethereum.

So what is the value of Ethereum? The answer is issuing tokens. The Cyberpunks fought hard for so long before they invented a reliable Bitcoin. Now it is so powerful that everyone can issue a decentralized cryptocurrency like Bitcoin, which directly advances the process and height of the 2017 bubble.

In fact, everything is for the users and the market in business. What the market wants us, as long as we don't break the law, we should change accordingly. In fact, since 2017, as many traditional businessmen have participated in the blockchain space, the blockchain and even the cryptocurrency field have gradually transformed into commercialization. The core logic of this trend is: we can't create reliable applications because the performance is not superior, then we will solve this problem, and always meet the needs of users. However, this group of businessmen who don't understand technology and like to boast "A technical problem is not a problem at all" every day, had been working for a long time, and finally found out that in the cutting-edge innovation, a technical problem is really a serious issue. It is not so easy to solve.

What should we do? From my personal observations, there are three categories:

1、Those who are obsessed with improving performance, even at the expense of decentralized structure.

2、Those who see through all this, give up, and even discredit blockchain behind the scene.

3、Those who respect the original intention and reality, and accept the blockchain cannot keep up with the reality of centralized server performance. So what else can we do? Is it still possible to build a truly reliable business model?

I don't comment on the first two categories. of people and will comment on the third because I am one of them and have more thoughts about it.

First of all, I believe that it is not necessary to compete with traditional technology in performance, and it is almost impossible. Some people also imagine that the performance of the future 5G network and quantum computer will not be an issue, but in my opinion, these two technologies may make the blockchain do more, but can not change it in the face of centralized technology. The disadvantages of time, and humans will always use the technology to the limit, large-scale applications will be built in the limit state, and in the limit state, due to the architectural, the blockchain will still be far behind the centralized server in performance. As a result, users will still find the blockchain-based application "unable to use."

But when we give up performance, we have to ask ourselves a question: What kind of application is worth the sacrifice? In my view, it must be paramount, but it is not a particularly large application for performance. For example, electronic money, electronic gold, large cross-border transfers?

These are all deductions based on the characteristics of the blockchain technology after we have understood. In order to create a free and decentralized currency, the sages of the Cyberpunks had to invent the blockchain technology to realize their ideas after various trials and failures.

The two ideas are ultimately the same, and are these all coincidences? I think it is inevitable.

Perhaps the decentralization, peer-to-peer, traceability and other characteristics of the blockchain can be achieved with more outcomes, but whether it is from the source of the blockchain or the technical architecture, the genes of the blockchain are determined. Currently, The most logical landing is issuing tokens and transactions.

This leads to the second important topic I would like to discuss:Is the nature of the blockchain token or chain?

This seems to be a conflict like chickens or eggs first. Without Bitcoin, there will be no blockchain technology, and without the support of blockchain technology, Bitcoin can't be realized.

The two are inseparable, but under the unspeakable pressure, a large number of successors, especially businessmen, began to intentionally or unintentionally isolate the concept of tokens and chains, and even advocated the token-less blockchain. These people are eager to extract the characteristics of the blockchain in addition to the token, and create new business models and management models for their own use. Ironically, they are usually in the center of tradition and politics.

If the chain is essential other than tokens, we have to go back to the previous question again: what application is worth the sacrifice of performance? What kind of application that cannot be endorsed and solved by the current powerful political and commercial centers?

The original centers shall use the blockchain technology to remove the center. Does this sound a bit strange? In fact, there is such a precedent in reality. For example, the reform of the feudal dynasty into a democratic system that changed an emperor to a parliamentary system and from a center to a multi-center. This is also an improvement, so in this sense, I am not completely against DPOS.

But from the history of the Bitcoin development and Cyberpunk fundamentalism, it is clear that the sages are not after parliamentary systems. They are devoted to a server node that is completely equal and a free cryptocurrency. Cyberpunks don't trust the monarch, the parliament, and even any centers in the power and commercial institutions built by them, such as financial tycoons and banks, etc., they have no essential difference in the eyes of Cyberpunks.

Therefore, when Cyberpunks invented the blockchain technology, they were thinking about how to limit the center. Now, the central powers only think about how to make it in their favor. This is an essential contradiction. When the two ideas collide, they will be different. Fundamental believers will argue that the fundamentalists are doing what they understand, and the central power and their affiliates will think that the blockchain technology architecture is an unusable technology. It can not be the future of the game.

People whose vision is restricted by technology argue that it is a crappy technology, which is really a bit ridiculous. This is like the prisoners behind the bars feel that the restrictions, rules and regulations in the prison can't be done, and they can't do it. It is a crippled living environment...

The metaphor of prison is very vivid. First of all, the blockchain is indeed a technology that can put power into the cage. Then, when people behind the bars feel that they are limited, should they first reflect on whether they have done anything out of range, rather than thinking about how to transform the prison?

The problem is what are the main attributes of the blockchain that can put power into the cage? Traceable and transparent? In fact, it is not because as long as the human being exists, you can forge any information before going on the chain. If the source is not right, what is the meaning of the so-called non-tamperable and traceable? Even if the source is decentralized, such as many EOS dApps, these dApps use the blockchain's openness to invent fake data, I believe that these fake data will be more and more sophisticated, and finally enough to fool outsiders. What is the meaning of the so-called transparency? How many people have the ability to detect and filter data?

In fact, to put power into the cage, the priority everyone should understand is, what is the check and balance of power? Or what is the main function of modern social power? Of course, first of all, we must admit that the normal power structure can actually improve the efficiency of social operation, which is necessary for the current social organization structure of human beings. But some powers are overdone and can have disastrous consequences. In times of war, force was often abused, which led social turmoil; and in peacetime, one of the most common practice is overissuing money. Eventually, personal wealth will be diluted and searched without restriction.

Cyberpunks are dying to pursue freedom and defend their privacy and rights in a technical and non-violent way. The first thing they have to face is the systemic ban and exploitation of various centralized parties. Breaking the manacles is the modern currency and the financial system. It is undeniable that these technical talents are remarkably accurate in striking the most important area. Only if you have money, your own money, you will not be controlled arbitrarily, and you are qualified to talk about freedom. Otherwise, direct bank card freeze, foreign exchange restriction, and multiple times of currency, how can you pursue freedom when survival is at risk?

From this perspective, the biggest value of the blockchain is actually the creation of decentralized cryptocurrency. As for attributes such as immutability, traceability, and transparency, they must be done to achieve this ultimate goal, but they are tools. And in order to achieve a decentralized cryptocurrency, isn't the value worth sacrificing performance? Obviously, it's worth it. Is there anything more tempting than the freedom of property to achieve personal freedom? Sacrificing some program performance for this is definitely a decision that can be made without thinking too much.

Remember that some Bitcoin forks have been created to promote the performance of Bitcoin and then sell their own forks? These people have been attacking that the Bitcoin CORE team is code tyrants, old and stubborn. But in fact, I have checked the information of some people in the CORE group. I am more inclined to believe in my own judgment. They are not. I am even more convinced that they are not willing to expand easily. There must be technical and security considerations. I will not go into it here. At the same time, they will not think that Bitcoin needs to add too many other functions. These functions are not the focus, nor are the things that the predecessors of the Cyberpunks pursue.

Let's review the core argument of this section: Is the nature of the blockchain a token or a chain? At this time, will you think that the chain is the nature which is more valuable than the token?

In fact, the blockchain has been built for a long time in history for creating this new monetary mechanism. And it can also build a new financial system, a set of guarantees for personal property safety and efficiency, the financial system of national border circulation, and finally this new financial system. It is possible to create a new production relationship or even a new social organization. Isn't this more amazing than the business objectives of “blockchain+” and “+blockchain”? At the same time, it is more in line with the technical characteristics of the blockchain. Because of the circulation of money, the performance requirements are not so high compared to the applications of Taobao and 12306. Some large international financial systems have only a few thousand TPS where blockchain is entirely possible.

Chains and techniques are just tools used to create tokens, and decentralization is an effective method to achieve this goal.

Tools are tools, and human nature is human nature. Tools can't change human nature, unless it is artificial intelligence, unless humans have mastered the genetic engineering that can modify human nature.

Humanity needs centers. Human beings are born to be social animals. They will worship heroes and need leaders and social structures. Human nature is also complicated. True, goodness, beauty and ugliness will not change or disappear because of any existing technology, and blockchains are impossible. However, everything is extremely counterproductive. Absolute power is likely to lead absolute corruption and excessive policies. Therefore, Cyberpunks hope to build a decentralized monetary system through their own technical expertise to counter and prevent this.

To our regret, after the Cyberpunk dissolved, there was no organization to promote this idea. The mainstream took the opportunity to invade and described a coin-making tool as a tool for building trust. The media joined the army, but the intention was lost, and the nature is blinded.

Can blockchain create trust? Yes! But why build trust? Because it needs tokens and tokens need to be trusted. And what if it exists independently of the most powerful national system? That can only rely on the "technical + decentralized" system. Trust and decentralization are tools, and tokens are the goal. If there is a trustworthy existence besides "country" and "technology", as long as it can also issue tokens, it is also optional. Unfortunately, it seems to have not been discovered yet.

Purpose, path, method, nature, derivative, I hope everyone can understand these concepts.

Last Question

If we have understood that the token is the nature and currently the strongest and most accessible direction of the blockchain space, issuing tokens, is to create a new financial system. So from a business perspective, can we still do it? Is it only the technical talents and the people who are pursuing freedom can participate?

Obviously not, the facts can prove that it is not because money and finance are the most basic facilities in society, and everyone is closely related. This is why the predecessors of Cyberpunks choose this direction.

In the modern business models, there are always some products with strong monetary and financial attributes. One of the lucky ones is a product that I am familiar with, that is,games. I mentioned earlier that I am a technical professional, but I didn't say which industry is. It is actually game industry. I am an expert in both the client and the server.

In the eyes of ordinary players, the game is a product composed of pictures, art, sound effects and planning, but in the eyes of our professional gamers, one of the most important elements is the numerical design, especially the large-scale games with a world view. In the numerical design, the most important thing is the design of the economic system. To put it simply, it is about how the gold coins are coming, how to spend, and how the overall rhythm is designed. Gold coins are actually the currency in the game. Building an economic system based on gold coins is actually a closed financial system. However, traditional games, the issuance and circulation of gold coins are entirely on the centralized server. In the blockchain space, we can learn from the ideas of the sages and use the blockchain to realize the decentralized gold coin system. Decentralized gold coin system then lead to a new game financial system.

So what advantages does the game have with this new financial system?

1、Gold coins have decentralized credit endorsements (which may not be important in the eyes of many ordinary people, but it is important for game companies to have a tool for self-certification and transparency).

2、It can easily carry out global crowdfunding, get start-up funds (although many countries prohibit, but I think that technology and tools are not wrong. It is the unreliable businessmen and scammers that exploit humanity) .

3、By issuing tokes and using airdrops or early bonus, it can get a large number of initial seed users which is convenient for low-cost project cold start (important for the startup team).

4、Games with gold coins and the financial properties of the blockchain will be more real and more attractive to the players, which will greatly enhance the sense of reality of the game!

5、Blockchain has opened up the economic system inside and outside the game, so that blockchain games have more possibilities. Of course, the game's numerical, economic, and financial system design will also face greater challenges.

6、The global characteristic of cryptocurrency can help the game easily achieve global profitability (especially when the traditional game internationalization, payment channels are one of the most difficult issues and both foreign exchange and geographical protection issues may encounter severe exploitation).

7、Decentralization, transparency, and the investment of the currency and other attributes, will encourage the project better understand the community's opinions, but also know how to share the benefits, which will make the token game community more vital than the traditional game player group.

.......Maybe someone will be amazed that how could you do all of that by just issuing tokens? You must be exaggerating. As a gamer of ten years, I have discovered that it is really exaggerating after I have recently participated in various token games. It is only a good game that takes time to polish, and as a lot of blockchain gamers do not start a business and do not have industry perspective, they only see the BUG and design issues of various games, these are nothing but experience and time issues, not the direction.

Why is there such strong chemicals when the game issues a token? Under the bubble of 2017 and 2018, thousands of projects are all issuing their own tokens, why are there few reliable ones? I think there are several reasons:

1、Half of these projects may only use the blockchain characteristics to make money.

2、Many projects that do things seriously are competing with performance, and even pursue everything to be on the chain. They either encounter more problems or simply give up.

3、There are some projects that pay more attention to the design of the token. It is on the right path, but unfortunately, the token must be attached to the complex financial system in order to exert its true power. The real world is complex enough, the national system is strong enough, and the currency-based financial system has the necessary and space for existence. Many tokenized projects are very funny. The so-called tokenized economy is just a set of reward mechanism, writing articles, or engaging in an interaction, and then giving you a token reward, which is actually not much different from points or mining. It can't be called a currency or financial system at all. Imagine if Bitcoin only had the design of mining and mining rewards, and then the Bitcoin had no complicated and diverse application environment, would Bitcoin still have future? Can you bring so much change and imagination?

What does it mean? It means that not all commercial projects are suitable for tokenization. If you only use tokens as points, you still need to solve the problem of redeeming points. How do people earn points? Without a rich economic system and financial system support, it can not consume, lend, circulate, and so it needs to be completely repurchased by the project? No, but where does the money from the project come from? Will the project always hold on?

In addition, if your economic system is not complicated enough, you will soon find the optimal solution, and then you may be arbitrarily failing in an instant.

Speaking of so many advantages of tokenized games, some people may question: players in blockchain games are making money, who will consume? I strongly disagree with this. I still think that human nature is human nature, tools are tools, and tools can't change human nature and blockchain can't change the impulse of players to play games and recharge games. If players don't spend money, there are only three possibilities: 1. The game is really unsatisfactory so no one is willing to pay; 2, the payment design has problems or the payment card is not accurate enough; 3, it has identified wrong group , and the investor and speculators cannot be consumers.

Ideally, a blockchain game should look like this: only tokens and a handful of core assets are on the chain; take full advantage of the advantages of tokens to get the project started, community maintenance and international development; the decentralized economic system and the financial system are designed as the top priority, and the win-win ideas are implemented; finally, the paying group is found to achieve profitability, and the basic value of the token is used to carry the token.

Will there be such a game? I believe it will, and maybe everyone will see a successful example this year. In order to avoid advertising, I will not name it.

Finally, does blockchain games need a chain? Yes because after all, the token is to be based on the blockchain, the core assets are also to be on the chain, but is the chain the goal? It seems to be not and the token is the focus with the economic system based on the token and the financial system as the primary goals.

In business, we don't have to talk about freedom and revolutions like the sages of Cyberpunks. Instead, the token is a must because this is the most powerful weapon that the sages have given us against traditional business models. It is the most powerful weapon for us to overtake in business and fight against the giants.

The nature of the blockchain is the token and it is a tokenized economy based on tokens.

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Author: Hanson, Founder of TopPlayer

TopPlayer (TOP)：The World's First Professional Blockchain Gaming Organization, homepage: http://topplayer.org

Translator: Rex Liu, Blockchain and NeoWorld Enthusiast

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编译者/作者：推比特火山哥

玩币族申明：玩币族作为开放的资讯翻译/分享平台，所提供的所有资讯仅代表作者个人观点，与玩币族平台立场无关，且不构成任何投资理财建议。文章版权归原作者所有。