Crypto Assets: A New World Under Development

Crypto Assets can be seen as a brand new world that is being explored.

Many critics see it as a barren and worthless place, even considering it merely a site for投机. However, optimists see the potential of this untapped land: a place where a more advanced financial system and internet platform can be built.

The new explorers come in various forms, including adventurers attracted by cutting-edge technology and some unscrupulous speculators. Innovators and researchers are drawn to new possibilities, while ordinary people, especially those marginalized in traditional systems, are also joining their ranks.

Governance is still at an uncertain stage, with some regions prohibiting their citizens from engaging in the Crypto Assets field, while others are seeking to find a foothold in this new world.

The history of this new world has been marked by cycles of speculation and hype, causing many to question its future direction. Today's crypto assets speculation frenzy is merely a self-starting process. Just as the Gold Rush of 1849 transformed San Francisco from a quiet village into a major port (which ultimately became a center of technological innovation), today's crypto assets boom is also attracting explorers and promoting the construction of infrastructure, turning it from a barren place into a flourishing crypto civilization.

A new encryption world has been born. Bitcoin is one of the first explorers, while exchanges allow you to easily navigate this world. Ethereum has become the largest hub, with decentralized exchanges being the best means of transportation.

Why should we choose encryption?

Exploring a new world undoubtedly requires tremendous effort. But is it really worth it?

Where the existing system fails, we need a new property rights system the most. BTC, ETH, and stablecoins have been adopted globally, especially in some economically unstable countries, where they are more widely accepted by ordinary people.

Although many people are still waiting for the "killer app" of encryption, it has actually arrived. However, for those living in developed countries, this transformation may not be easily noticeable. If you ask someone who has experienced economic turmoil about encryption, they will tell you its uses without hesitation. Today, Crypto Assets are not only a useful tool but have also become a speculative high-end market. It is rapidly evolving and becoming a typical case of disruptive innovation, increasingly useful for more people.

Currency is just the first "killer application"; it won't be the last. Crypto Assets will give rise to a more transparent, programmable, and open encryption financial service. It provides a cheaper, more convenient, and more inclusive solution for those who cannot access banking services due to high costs or those who distrust the increasingly centralized banking system. We see stablecoin payments rapidly rising, while loans can be obtained through simple coding rather than complex banking or brokerage procedures. Systemic risks can even be mitigated by globally tracking collateral.

Looking ahead, with the expansion of encryption infrastructure, we can foresee that new consumer applications will become possible. Creators will have more rights in their creations, and users will better control their identity.

From a more macro perspective, this new world offers us an opportunity to reshape the existing system, upgrading it to a more advanced and flexible system. Encryption can achieve this not only for currency, finance, and digital assets but also for everything the internet has done for information and media.

More importantly, encryption provides a means to guard against an increasingly centralized world. In a world where "big" is becoming mainstream, we are slowly losing our appreciation for individual and diverse powers. By promoting the collaboration of small and diverse forces, encryption has become an important force against centralized power and a driving force for freedom, protecting us from the control of large companies and big governments.

Speculation and Crypto Assets

Although Crypto Assets have their advantages, is their speculative nature really necessary? In fact, speculation is not only necessary but can also generate significant value.

Speculative investment is the cornerstone of technological revolutions. From the rise of telecommunications and the internet to the prominence of railways, electricity, and automobiles, breakthroughs in new technologies are often intertwined with speculation and asset bubbles. As historians have thoroughly documented, they become an inseparable entity in the process of moving toward mainstream acceptance. In the field of Crypto Assets, speculation has propelled people's attention and awareness, investment flows, talent aggregation, infrastructure development, academic research, and the acceptance of existing companies.

Furthermore, there is a deeper connection between speculation and Crypto Assets: it is the "Hello World" of digital asset rights. When people have the opportunity to create rare assets, they tend to trade. Give a group of children some rare collectibles, and then observe what happens. The true value of a new property rights system lies in its ability to reliably record the transfer of property, which is also why people will naturally begin to try and test it. If this new system is not yet widely recognized, it may lead to a diversified future where price fluctuations and trading activities appear more speculative.

I remember in the early days of Bitcoin, people thought it was a fantasy that it could one day achieve the legitimacy and value it has today. I witnessed early participants joyfully mining, contributing, and experimenting, even buying pizzas. Now, more than a decade later, BTC and other Crypto Assets like ETH are steadily transforming from speculative toys into global commodities.

Speculation has also played a central role in the process of cryptocurrencies becoming a decentralized financial system. Many financial products have a clear "utility value" on one side of the transaction, but require speculation to meet the needs of the other side. For example, someone may need a 30-year mortgage to buy a house, but there is no inherent demand to provide that 30-year loan. Our modern financial system mediates between such practical demands and the more abstract demands for financial returns. In the cryptocurrency space, a similar system is being established that includes participants such as speculative traders, infrastructure providers, market makers, MEV searchers, blockchain builders, DeFi protocols, stablecoin issuers, and DEX arbitrageurs. Building such an N-sided market is not an easy task; it takes time to develop. However, over time, participants become more mature, liquidity is enhanced, and chain-based financial markets will also become stronger.

The "speculative" aspect of speculation has its dark side.

Although some criticisms of Crypto Assets may lack creativity, some of them are valid. Speculation can serve as a useful starting tool, but it can also lead to undesirable consequences and backlash.

Innovation relies on capital and labor being used for valuable experiments. Excessive speculation, airdrop farming, and other prank behaviors can create noise that disrupts price signals that could guide beneficial innovation. Even the most well-meaning entrepreneurs may be misled by incorrect price information or distracted by short-term profits, thereby slowing down the actual construction process needed for Crypto Assets.

Short-term speculation is essentially a zero-sum game, where seasoned traders extract value from novices, which can cause ongoing harm to them. A free market should welcome various participants, as long as their actions are legal and ethical. However, if we view the acceptance of Crypto Assets as part of a social coordination game, then choosing the optimal time frame may become a prisoner's dilemma. Through long-term cooperation, we can achieve a more satisfactory outcome.

Ultimately, the malicious acts are all too common: scammers, fraudsters, and hackers pose ongoing threats. Imagine a world full of rogues who "welcome" newcomers through violence and robbery------this is the dark side of the Crypto Assets space. Just like the early internet or the Gold Rush era, this frontier open field not only fosters innovation but also breeds illegal activities. Although good participants still hold the upper hand------for instance, we have had the privilege of witnessing the rise of a group of the world's top white hat security experts------this field still requires more self-regulation and standards.

Why is the progress so slow?

Crypto Assets have been around for nearly 15 years. Shouldn't they have already become mainstream by now?

In fact, exploring a new field takes time, and most people are only willing to migrate to a new area when the infrastructure is complete and no longer subject to social exclusion. The progress of technology also has its limits and can only advance to a certain extent. The social dissemination of new ideas is often fraught with setbacks rather than being smooth sailing. Due to the speculative nature of assets, they experience periodic severe fluctuations; at one moment, people are highly optimistic about the prospects of Crypto Assets, believing it to be everything in the future, and in the next moment, they claim that it has lost its vitality.

Establishing a social consensus around Crypto Assets is even more challenging than creating network effects around communication protocols or social networks. People can quickly recognize the practical value of instant messaging software or social media platforms, as they can communicate with a small group of familiar friends through these platforms. However, for a new property system, it is about how to securely transact with those you are less familiar with or do not fully trust, which requires broader recognition and legitimacy. We still have a long way to go, but it is encouraging that today you can already trade with over a hundred million people using BTC, ETH, or stablecoins.

Looking Beyond Speculation

Many technologies that we take for granted today were once seen as impossible, useless, dangerous, or fraudulent. Today, Apple Inc. has become the most valuable company in the world, but when it went public in 1980, Massachusetts banned the sale of its stock on the grounds that the risks were too great. The same goes for Crypto Assets; since 2010, there have been annual claims that Bitcoin is dead.

However, human history has repeatedly proven that we often resist reform due to our adherence to the status quo, especially when these reforms are disruptive. Crypto Assets touch upon profound concepts of currency, value, governance, and human collaboration. We need to maintain an open mindset to explore the possibilities of building better things, rather than simply rejecting Crypto Assets out of skepticism.

We must go beyond the speculative nature of Crypto Assets and recognize it as a guiding mechanism of one of the most important technologies today. We need to delve into this new world ------ the world of encryption technology, considering its substantial construction and real uses, rather than just chasing speculative hotspots.

Appendix

If we compare encryption technology to a new world, what would it mean?

Crypto Assets community

The crypto space represents a comprehensive ecosystem that we all should help build together. There are more common ideals than differences among the various hubs of this new world. Instead of internal extremist conflicts, it is more important to persuade the residents of the traditional world to settle in the new world or to protect this new world from the adverse effects of improper traditional regulations.

As the founder of Ethereum said, it is very important to think about how to build a perfect system for Crypto Assets. The new world cannot always rely on traditional infrastructure. The network system we currently rely on includes mainstream search engines, social media, code hosting platforms, and credit card systems, as well as an independent Chinese network system that includes WeChat, Alipay, Weibo, and digital Renminbi. What we need to build is an independent system of encryption, which should operate like the Chinese system, but be more open and ensure autonomy.

For a new world, having a unique culture is beneficial. We may not want encryption technology to fade into the background or for the new world to become highly similar to the traditional world.

Builder

Building products in the Crypto Assets field not only