One
In 1986, a baby boy was born in Shaoyang, Hunan.
Don't get me wrong; this baby boy was not the future Chinese beauty blogger No. 5—Lu Yanzhu—but the future richest man in Hunan—Kao Mao (Jiang Xinyu).
Saying he is the richest man in Hunan is not an exaggeration.
Conservatively estimating, Kao Mao's known two Bitcoin wallets hold 74,715 Bitcoins. Based on the price peak in November 2024 approaching $100,000 each, Kao Mao's assets are worth 54.9 billion RMB, making him undoubtedly the richest man in Hunan.
However, Kao Mao might not have lived to see the day he became a billionaire.
Kao Mao was a top student from a young age; in 2001, at the age of 15, he was admitted to the Young Scholars Program at the University of Science and Technology of China with a national ranking of 11, becoming the pride of Shaoyang. To this day, his name still hangs on the honor roll of his alma mater, receiving admiration from juniors.
In 2009, 23-year-old Jiang Xinyu published a paper (on constructing a secure thread mechanism with formal methods), graduated with a master's degree, and went to Yale University for a doctoral study before 2011.
No one knows that Kao Mao's trip would bring a massive revolution to the Chinese Bitcoin market.
Speaking of Bitcoin, it can be traced back to a small circle that emerged in 1992.
That year, a crypto-anarchist group was born. During a gathering, Timothy May, an electronic engineer at Intel, published the "Crypto-Anarchist Manifesto," officially introducing the concept of crypto-anarchism.
The first sentence of the manifesto feels familiar:
"A ghost, the ghost of crypto-anarchism, wanders in the modern world."
The core viewpoint of crypto-anarchism is to use cryptographic software to avoid interference, surveillance, and denunciation when sending and receiving information on computer networks, striving to protect privacy rights and political freedom.
With a religious devotion, they decided to create a new digital technology with decentralization as its spiritual core and SHA256 algorithm as its foundation to combat state regulation and commercial monopoly in modern society.
They firmly believe that this technology can subvert human society:
"Computer technology will soon enable individuals and groups to communicate and interact with each other in a completely anonymous manner.
... combined with the emerging information market, crypto-anarchism will create a fluid market for all materials that can be expressed in text and images.
Rise up, crypto-anarchists; what you have lost will only be the barbed wire fence!
It must be said that although this viewpoint seems like an idealist's one-sided self-indulgence, in fact, they really changed our lives.
Because the inventor of the World Wide Web, Sir Tim Berners-Lee, BT download author Bram Cohen, Facebook founder Sean Parker, and WikiLeaks founder Assange, among others, were all members of this group.
Of course, this also includes Bitcoin's founder Satoshi Nakamoto.
Who is Satoshi Nakamoto? It remains unknown. Even today, computer geniuses and hackers from various countries and intelligence organizations have been unable to uncover Satoshi Nakamoto's true identity, leading some to suspect that Satoshi Nakamoto is a time traveler from the future.
It must be said that Satoshi Nakamoto has not revealed his mysterious identity to this day, which is very crypto-anarchistic.
In 2008, the global financial crisis broke out. On November 1 of the same year, Satoshi Nakamoto published his white paper (Bitcoin: A Peer-to-Peer Electronic Cash System), informing the world: "I am developing a new electronic currency system that operates completely on a peer-to-peer basis and does not require a trusted third party to intervene."
Thus, an electronic currency—Bitcoin—that is not controlled by any political or financial forces began to be known.
This means that crypto-anarchists can own their own central bank and build their own financial system.
To validate his theory, on January 3, 2009, at 6:15 PM, Satoshi Nakamoto mined the first block of Bitcoin on a small server in Helsinki, Finland, known as the "Genesis Block," and received the first mining reward—50 Bitcoins.
Thus, Bitcoin was officially born, and Satoshi Nakamoto became the "creator."
Satoshi Nakamoto quickly announced the mining algorithm, and a crowd of tech geeks began mining on various university servers, rapidly increasing the number of Bitcoins.
But soon, questions arose: how to prove that Bitcoin has the function of currency? Or how to prove that Bitcoin can buy things?
On May 18, 2010, a cryptographer named Laszlo Hanyecz in Florida, USA, posted online, willing to buy two pizzas for 10,000 Bitcoins, on the condition of a face-to-face transaction.
You heard that right, 10,000 Bitcoins, at the current market value, is about 7 billion RMB.
But at that time, everyone thought it was a joke, and nobody paid attention.
It wasn't until four days later that a British man, thinking "you can't lose by buying two pizzas," ordered two pizzas delivered to Hanyecz's home and received the 10,000 Bitcoins, while Laszlo quickly devoured the two pizzas worth 7 billion RMB.
From then on, May 22 became known as "Bitcoin Pizza Day" in the coin circle, commemorating Bitcoin's first commercial transaction.
After the pizza incident, the value of Bitcoin began to be recognized by the world, and Bitcoin trading was subsequently born, with prices also starting to rise.
Soon, this path to wealth was noticed by the Chinese.
Interestingly, the first group in China to come into contact with Bitcoin was not the most technically sensitive geeks in universities but rather the non-mainstream people in small towns with wildly colored hair.
Game boosting.
In 2010, the most popular game in China was (World of Warcraft), and behind World of Warcraft was a whole industry chain for boosting levels, competing, earning gold, obtaining equipment, and running dungeons... Countless teenagers from the non-mainstream could earn dozens of yuan for a night's work, and those lucky enough to get good equipment could sell it for hundreds or even thousands.
Suddenly, in some game boosting QQ groups, ads for recruiting miners appeared, stating that all you needed to do was install a software to mine automatically on your computer without affecting your gaming. The next day, you could sell the mined coins at around 2-3 RMB each, and typically mine 10 Bitcoins overnight, easily covering a day's meal expenses.
Thus, Bitcoin was promoted in a very down-to-earth way among the non-mainstream crowd in China, who knew nothing about crypto-anarchism.
These eccentrics in strange outfits could never imagine that the string of code they casually sold would one day be worth a fortune.
However, these early miners quickly faced a business crisis, as mining technology innovated at the end of 2010.
According to Satoshi Nakamoto's design, Bitcoin exists in a utopian ideal where "everyone is a central bank"; thus, anyone with a CPU can mine. All you need is a regular computer and software to embark on your mining journey.
However, this decentralized situation was soon broken, as GPU mining came into play.
We all know that mining heavily relies on computing power. Initially, everyone used CPU mining, but as research into mining algorithms deepened, they discovered that mining was just repeating the same work, and CPUs, as general-purpose computing units, were not good at parallel computation, executing at most a dozen tasks at once, making mining too slow.
On the contrary, GPUs have thousands of stream processors, making them inherently suitable for mining, with obviously higher efficiency.
Regarding GPU mining, Satoshi Nakamoto initially disagreed. He even advocated reaching a gentleman's agreement to artificially limit GPU mining, thereby maintaining a "fair state" of mining.
However, Satoshi Nakamoto still underestimated human nature.
When Bitcoin has value, naturally, someone will want to make money from it.
As Hanyecz open-sourced his optimization algorithm for GPU mining (now you know why he has 10,000 Bitcoins), Bitcoin's network hash rate increased exponentially, with the unit rapidly rising from MH/s to GH/s. Before, the maximum number of Bitcoins mined in a day was only a few dozen; with GPUs, the output surged dramatically, making it no longer a dream to produce hundreds in a day.
Thus, China's non-mainstreamers began to flood into internet cafes with good graphics cards, leaving the cafe owners confused, indirectly prompting the first large-scale upgrade of graphics cards in Chinese internet cafes, while also solving Huang Jiaozhu's Nvidia crisis.
GPU mining was popular for two years, but encountered challenges again.
In June 2012, Butterfly Labs' ASIC mining machine was successfully developed, bringing a new mining revolution.
ASIC mining machines use ASIC chips as the core of their computing power. In simple terms, they are ASIC chips customized for Bitcoin's SHA256 algorithm, enabling higher performance, lower energy consumption, and smaller size.
Let's compare; currently, the high-end 4090 graphics card, after optimization, has a mining capacity of 129.8MH/s with a power consumption of about 322W, while the Antminer S9 mining machine? Its mining capacity is 13.5TH/s! That's several orders of magnitude higher!
Whoever has the mining machine has the power to "mint coins."
At Yale, Kao Mao heard about the progress of Butterfly Labs and keenly sensed an opportunity to make money.
The post-80s generation grew up reading (Readers). (Readers) once told a story about the San Francisco gold rush, where due to intense competition, few miners made money, while those selling shovels to them earned a fortune.
Kao Mao thought, why can't I be the one selling shovels?
Thus, almost simultaneously with the successful development of Butterfly Labs, Kao Mao, using the ID Friedcat, posted on Bitcointalk forum, claiming he had the ability to develop mining machines and publicly raised funds from the community.
According to Kao Mao's financing plan, he dropped out of Yale, founded Bitcoin Spring Information Technology Co., Ltd., with the company's shares divided into 400,000 shares, each worth 0.1 Bitcoin.
No one realized this was the first ICO (Initial Coin Offering) in the history of the world coin circle.
Kao Mao not only raised funds online but also went around promoting his mining machines. In the end, Kao Mao successfully raised 16,000 Bitcoins, worth about 1 million RMB at that time. The largest investor was a 26-year-old named Wu Jihan, who invested a total of 15,000 Bitcoins.
Having made money made it easier to get things done. Kao Mao's mining machine development went very smoothly, and within just two months, he launched his product—Kao Mao's first-generation mining machine.
Kao Mao took the first-generation mining machine, set up a mining farm for trial use in his company's warehouse, and as soon as it was powered on, it accounted for 51% of the world's Bitcoin hash rate!
In other words, at least in early 2013, 51% of the newly produced Bitcoins in the world were produced by Kao Mao!
At its peak, the "Kao Mao Mining Farm" mined over 40,000 Bitcoins in a month!
The huge success of Kao Mao's mining machine sparked collective panic in the coin circle; after all, there were only 21 million Bitcoins in total, all dug up by Kao Mao—what would others mine?
Consequently, hacker attacks followed one after another.
To divert hatred, Kao Mao only retained 20% of the network's hash rate, selling off the excess mining machines.
At that time, no mining machine could rival Kao Mao’s; although the Butterfly Lab's mining machines were successfully developed, they were not produced in volume, and the Avalon mining machine developed by North Aviation University PhD Zhang Nengeng was also not supplying. Therefore, in the ASIC mining machine market, Kao Mao was the absolute king.
At that time, people from all over the world came to China to buy Kao Mao's mining machines; some recalled, "Some even threw the money directly over, grabbed the mining machine, and ran, fearing it would be snatched away."
In just half a year, Kao Mao earned over a billion, all while being just 27 years old.
Kao Mao had a dream; he wanted an island that did not belong to any country, with no army and no police. On this island, the currency would be Bitcoin, a free paradise for crypto-anarchists.
However, before he could earn enough money to buy the island, his dream was prematurely shattered.
Mining machines made money too easily, naturally attracting countless competitors.
In June 2013, Butterfly Labs' mining machines were finally mass-produced. In July, Avalon mining machines began to be shipped in batches. Meanwhile, Kao Mao’s side? Due to not being able to obtain TSMC's 55nm chips, the second-generation mining machines failed to develop successfully, causing the hash rate of Kao Mao's mining farm to drop to just 4% of the network.
It wasn't until January 2014 that Kao Mao launched his third-generation mining machine BE300, initially thinking he could return to the peak, but this chip faced continuous burning incidents due to packaging issues, ultimately ending Kao Mao's mining machine journey.
At the end of 2014, Kao Mao went missing, and no one has seen him since, and the 74,715 Bitcoins in his wallet are also missing.
The first myth of Kao Mao has come to an end.
Around August 2017, Kao Mao's two wallet accounts transferred out a total of 17,600 Bitcoins in a week. On November 12, 2024, Kao Mao's Bitcoin account, which had been silent for 7 years, awakened again and transferred out 206.34 Bitcoins, valued at 18.12 million USD.
Was this transfer done by Kao Mao? Or was he manipulated by others? Is Kao Mao still alive? No one knows.
Everyone only knows that the Bitcoin pioneer, who appeared at the roadshow in a wrinkled T-shirt, with eyes shining brightly, can never return.
Two
Kao Mao's company was not doing well; his major investor Wu Jihan could only seek other avenues.
At this point, Wu Jihan was no longer the novice who just emerged from obscurity but a big shot with assets in the millions (Kao Mao's dividends).
Seeing the potential of Bitcoin, Wu Jihan still hoped to engage in mining machine sales, so he thought of one person—Chang Jia.
Chang Jia is a pen name; most people do not understand him, but he is well-known in the science fiction circle.
We all know that Liu Cixin is the number one figure in Chinese science fiction. From 1999 to 2006, he won the highest award in Chinese science fiction, the Galaxy Award, for seven consecutive years.
So who won the Galaxy Award in 2007 and 2008?
Chang Jia.
Interestingly, Chang Jia is also from Hunan, with the real name Liu Zhipeng. He has loved the Chu Ci since childhood, especially the heroic and romantic lines from Qu Yuan's (Nine Chapters): "With a long sword in hand, I wander the dazzling land, crowned by clouds, adorned with bright moon and precious jade." Thus, he named himself "Chang Jia."
In reality, Chang Jia is also a passionate idealist; at 16, he began writing science fiction, publishing works like (Kunlun), (Road 674), (Wounds of Fusang), (Dragon Slaying Techniques), (If Ma Kai was still alive), etc., which made him famous.
Some commented: "His works intertwine modern and history, and classical works often resonate with generous melodies, while modern works gradually reveal exquisite western influences." After winning the Galaxy Award, many regarded him as Liu Cixin's successor.
But after 2009, Chang Jia never published another science fiction novel.
Many speculated that he was in a creative bottleneck, but one netizen mysteriously replied in the forum: "Chang Jia is doing something very science fiction."
That's right, Chang Jia is doing something very science fiction—Bitcoin.
Let me insert a side note: if we look back at the history of the Chinese coin circle, we will find that there are very many science fiction enthusiasts.
For example, Chang Jia, a science fiction writer.
Xuan Chain founder "Crazy Little Strong," a science fiction writer.
Wu Jihan, known as the "magnet," named the chips he created after he went solo, based on the English name of "zhizi."
How much does Wu Jihan like Liu Cixin? When he organized the "World Blockchain Conference in Wuzhen" in 2018, he even held a cross-border roundtable forum called (Sci-Fi World in Blockchain) just to meet Liu Cixin.
Zhang Jian, founder of Fcoin, named his "Singer Capital" after (The Three-Body Problem).
And so on.
Why is there a high overlap between the science fiction community and the initial coin circle?
Perhaps because the two circles share a high degree of consistency, they are both sensitive to technology, emotionally nuanced, and fond of fantasy.
Bitcoin naturally suits their appetites; after all, such a thing is both technical and cultural, both realistic and idealistic.
Chang Jia is such a person; after encountering Bitcoin in 2009, he quickly became captivated by the grand ideals behind it, recalling: "The emergence of Bitcoin perfectly matched my imagination of the cloud era and grand distributed computing projects. I was soon enchanted by it…"
In 2011, Chang Jia found a job within the system, like Liu Cixin, slacking off during work hours, wandering online, and introducing Bitcoin to the public.
That year, a female college student posted a question on Zhihu: With 6,000 yuan, how should I invest?
Chang Jia gave an answer that exceeded everyone's understanding: "Buy Bitcoin, properly store your wallet, and then forget about it; look back five years later."
Years later, when Bitcoin skyrocketed, if that female college student had listened to Chang Jia's advice at that time, she would have definitely become a billionaire.
So this response was dug up and worshiped by countless people, becoming a legendary "Zhihu post."
However, at that time, Chang Jia received not praise but ridicule; Bitcoin was at a low, and no one believed it could make money.
Chang Jia was dissatisfied and began to publish Bitcoin articles continuously on his blog, debating with critics.
One day, he suddenly received a message from someone named QQAgent: "Blogger, I think your website is very valuable; why not apply for an independent domain name and space? I'll cover the expenses."
This QQAgent is Wu Jihan.
However, Chang Jia was unwilling to follow Wu Jihan to make mining machines, as he had a deeper understanding of Bitcoin compared to others.
Chang Jia believes: "If you only understand Bitcoin from the perspective of investment arbitrage, you are merely a small passerby in its life; but if you understand it from the philosophical and technical level and immerse yourself in it, whether in wealth or spirit, you will be much richer than the former."
Chang Jia was unwilling to lose himself in the volatility of wealth, so in 2011, he collaborated with Wu Jihan to found Babbit, and from then on, the Chinese coin circle had its own Bitcoin media.
If Kao Mao is the one selling shovels during the gold rush, then Chang Jia is the one running a tavern selling information.
However, perhaps due to being overly idealistic, Chang Jia's Bitcoin career was not smooth; both Babbit and the later Bitcoin Private Chain were once hot but quickly faded.
Compared to those early entrepreneurs from Chang Jia's time who had already achieved financial freedom, Chang Jia is obviously not as "successful."
So why do we spend so much ink introducing Chang Jia's story? Not only because he is the evangelist of Bitcoin in China but also because his Babbit almost connected the entire coin circle in those years.
Let's put it this way; during the wild era of Bitcoin, almost all early entrepreneurial big shots met each other through Babbit.
One day in 2013, a person named "GGGGG" posted a message, the core content of which was about offline meet-ups.
The location was set in Beijing's grassroots entrepreneurs' holy land: Garage Cafe.
At that offline meet-up, the crowd was full of losers, but most of them became future big shots, such as Shen Yu, Zhao Dong, Li Xiaolai, Pumpkin Zhang, etc., discussing the future of Bitcoin.
From then on, coin players across the country began to organize offline meet-ups frequently, connecting resources, recruiting partners, creating one coin legend after another.
For example, Wu Jihan met with Jian Ketu, who came from an integrated circuit background, and together they founded Bitmain.
Pumpkin Zhang met Li Jiaxuan and established Beijing Jianan Yunzhi Innovation Information Technology Co., Ltd., which became a future mining machine giant.
Li Xiaolai met Zhu Fangyi and also started his own mining farm.
Li Lin met Du Jun and began planning to create a platform.
Of course, Kao Mao, a considerable portion of mining machines were also sold on forums.
These individuals often gathered in a small courtyard, discussing passionately until dawn, then left filled with ambition.
The night was dark as ink, the lights dimmed, and the road ahead was unclear, but everyone remained filled with ambition.
Under the connection of early coin circle enthusiasts, mining machines and mining farms began to bloom everywhere in the market, with names like Silver Fish, Little Bee, Rand, TMR, SmarT, 42BTC, etc., marking the arrival of China's Bitcoin golden age.
With more mining comes more problems.
In discussions, the biggest pain point for these early entrepreneurs in the coin circle was that they had mining machines and Bitcoins, but lacked a trading platform controlled by Chinese people.
In that era, the world's Bitcoin trading was mainly monopolized by two platforms: Japan's Mt.Gox and Slovenia's BitStamp.
And in China? There was only one trading platform—Bitcoin China.
The founder of Bitcoin China is Yang Linke, who was originally selling sauna equipment. By chance, he invested a few thousand yuan to create a Bitcoin China trading website.
However, this trading system was very rudimentary, requiring online banking to recharge and transferring money to two people's accounts, held by Yang Linke's wife and mother-in-law.
This is not science fiction at all.
More critically, both domestic and foreign platforms suffer from low security and slow speeds, and often charge a 0.3% fee for two-way transactions.
More complaints surfaced in the circle, and naturally, someone would focus on this business.
Thus, in 2013, Xu Mingxing's OKCoin and Li Lin's Huobi were born as two new Bitcoin trading platforms.
To seize the market, both OKCoin and Huobi adopted a fee-free model; this model is similar to China's thriving internet industry, first using a free model to attract users and then charging after gaining market share.
By using this strategy, Chinese Bitcoin exchanges instantly crushed international exchanges, quickly occupying 80% of the world's Bitcoin trading.
They were very fortunate to have caught the bull market of Bitcoin.
In 2012, the price of one Bitcoin was still $13, but by the end of 2013, it had exceeded $1,000!
What business in the world can achieve such exorbitant profits? Soon, countless people flocked into the coin circle, even the Chinese aunties who knew nothing about cryptocurrency joined in, making exchanges as lively as markets, and servers even went down at times, taking hours to sell a Bitcoin.
It has been proven that selling shovels is not profitable, nor is selling information; the most profitable is running a trading market.
In just one year, Xu Mingxing and Li Lin earned what others could not earn in a lifetime, and in 2020, both of them made it onto the Hurun Research Institute's (Hurun Global Young Self-Made Billionaires List).
That was truly a dividend of an era; if you caught it, you would soar, if you missed it, you missed it.
However, the good times did not last long, as the booming situation of Bitcoin attracted the attention of the regulatory authorities, which began to assess the risks of Bitcoin.
On December 5, 2013, the central bank, along with five ministries, issued a notice (on preventing Bitcoin risks), denying Bitcoin's monetary attributes and stating that Bitcoin cannot and should not be used as currency in market circulation.
The entire market was in a panic; Bitcoin prices plummeted, and countless speculators' money turned to ashes in an instant.
Two months later, Japan's Bitcoin trading platform Mt.Gox issued an announcement, claiming it had suffered a hacker attack, with over 750,000 Bitcoins disappearing, leading to the company's bankruptcy.
This triggered intense panic globally; who knows if it was a real hacker attack or a "fake hacker, true escape"?
Not long after, the American Butterfly Lab was also shut down by federal court for "suspected commercial fraud."
From then on, Bitcoin entered a long bear market.
Zhao Dong faced a liquidation in leveraged trading, losing 150 million.
Yang Linke sold off the vast majority of his Bitcoins.
Kao Mao went missing.
Li Xiaolai also sold off his Bitcoins, intending to open a billiards hall.
In the cold winter, the players in the domestic coin circle, who shouted "Bitcoin faith" fiercely, often forgot that no matter how firm the faith, it cannot withstand reality.
However, during this long bear market, those who were able to persist obtained generous returns later.
For example, Wu Jihan continued to improve his mining machines, maintaining 42.5% of the world's hash power during Bitcoin's winter, achieving the later renowned status of "mining overlord" for Bitmain.
For example, Li Lin's Huobi, who believes that the policy indeed denies Bitcoin's monetary attributes but does not limit its commodity attributes; Bitcoin still has investment value, and Huobi secured two angel investments to continue operations.
Also, Xu Mingxing's OKCoin launched trading leverage policies, simply put, treating Bitcoin as a financial product, achieving "coin speculation" through shorting and longing, while OKCoin charged fees for withdrawals in RMB.
Many dreamers harboring dreams of wealth traveled across the country, building numerous mining farms in the grasslands of the north and deep mountains of Guizhou, using cheap wind and hydropower to start their "coin-making enterprises."
More than two years later, they finally received the rewards of fate.
The underlying technology of Bitcoin—the blockchain technology—began to receive widespread attention after 2016 when Russian genius Vitalik Buterin added smart contracts, greatly expanding the application scenarios of blockchain, making it the new darling of the industry, and the coin circle erupted again.
Those who persisted through this round of bull market completely turned their fortunes around.
However, the embarrassing thing is that new technologies are always exploited by scammers at the first opportunity.
What did blockchain bring? It did not bring the spring of the "crypto-anarchists" but rather the rampant growth of "altcoins."
The reason is simple: there are many people in the market who do not understand "crypto-anarchism" or blockchain, but they understand human nature.
As long as human nature has a greedy side, they can exploit human nature to make money.
Let's recall those years; weren’t there countless ads for "blockchain financial projects"? Various celebrities live-streaming to promote blockchain? Even friends and relatives continuously pulling you into the fold, claiming blockchain is the new hot topic and you should hurry up and get on board?
In fact, they just want to harvest the chives.
Those dealers issuing various "altcoins" often first register a shell company, then hire an outsourcing team to design a virtual currency, naming it something like Dogecoin, Catcoin, Pigcoin, Eelcoin, Shitcoin, etc., and then through finding hired traffic, inviting big names to endorse, live broadcasts, etc., they hype the project to the sky, then lure investors into ICOs, recharge transactions, and even crowdfunding to buy virtual mining machines.
As the dealers continually raised the currency value, increasing by 10% in a day, who could withstand the temptation? Even if some knew of the huge risks, they always gambled on not being the last one holding the bag; as long as someone bought in, they could always make money.
As a result, they often became the chives harvested by the dealers.
When the dealers are about to harvest, they directly announce the virtual currency crash, leaving a mess.
Then the dealers change names and do it all over again.
Furthermore, altcoins have also become money laundering channels for telecom fraud, where victims only need to transfer money, which will instantly turn into altcoins and then disappear in some corner of the earth.
Thus, the entire Chinese market was stirred up into chaos. More critically, this method completely transcended regulation, making it impossible to regulate and extremely susceptible to manipulation. You think you can achieve financial freedom, but in fact, you are only facilitating someone else's financial freedom while you are just green chives.
In that era of rampant altcoin growth, some became rich overnight, while many others faced ruin; to put it bluntly, every profit in the coin circle was stained with blood.
It seems we can no longer sit idly by; we must take action against Bitcoin.
Why?
Because, unlike the U.S. and U.K., which are built on financial capital, China is built on manufacturing. Markets like virtual currencies, apart from stimulating speculation, have almost no effect on the real economy, national taxation, or promoting consumption.
On the contrary, this chaotic "altcoin" is essentially a form of capital plunder by dealers, not only detrimental to common prosperity but also easily amplifying human greed. Once it crashes, it can easily cause many social problems, ultimately leaving everyone to foot the bill.
Meanwhile, China itself is a huge energy-consuming country, bearing immense carbon reduction pressure. Yet, mining farms are the main contributors to carbon emissions, with some "mining farms" consuming millions of kilowatt-hours daily; a certain mining farm in the southwest consumes as much electricity in a year as three cities do in a year...
Such a large power consumption neither supports any real industry nor generates any actual value, nor does it promote employment and taxation; it merely creates wealth myths, attracting more people to fly into the flames.
So, on September 4, 2017, seven ministries jointly issued a notice announcing a complete ban on ICOs, considering their risks of illegal fundraising and financial fraud. They also required all projects that had completed ICOs to return funds to investors and to wind down all ICO-related activities within a specified timeframe.
This is the 94 incident that shook the coin circle.
Once the announcement was made, many altcoins plummeted to zero, and some altcoin exchanges even chose to shut down directly.
Even more powerful was yet to come; on September 14, 2017, the Chinese government officially issued a notice to shut down cryptocurrency exchanges, requiring all cryptocurrency exchanges in China to completely withdraw from the Chinese market by September 30.
As a result, not only did tc, eth, etc., crash, but Bitcoin also fell by at least 20%.
So, what about the Chinese coin circle?
Escape.
Yang Linke sold "Bitcoin China" to a Hong Kong blockchain investment fund.
Li Lin sold all shares of Huobi Global to Baiyu Capital.
As for Xu Mingxing? He has been the most successful in transforming; OKCoin has gradually transformed into a company for blockchain technology applications and development, and Xu Mingxing even became the director of the Blockchain Committee of the Beijing Youth Internet Association.
It just so happened that Xu Mingxing did not expect that the future of cryptocurrency exchanges would be devoured by his former subordinate.
This subordinate is none other than Zhao Changpeng, the richest Chinese who was just released from a U.S. prison at the end of September this year.
Zhao Changpeng is from Jiangsu, born in 1977. In 1989, his mother brought him to queue for 36 hours outside the Canadian embassy, finally obtaining a visa to immigrate to Canada.
Zhao Changpeng's most direct impression of Canada was: I drank fresh milk for the first time!
After graduating from university, Zhao Changpeng first worked at Bloomberg and later participated in the construction of the cryptocurrency market website Blockchain.info.
By chance, Zhao Changpeng met He Yi.
He Yi, later known as the number one woman in the coin circle, was originally a host on Travel TV. In 2014, she joined Xu Mingxing's OKCoin as Vice President, fully responsible for OKCoin's brand building.
He Yi originally wanted Zhao Changpeng to advertise OKCoin cheaply on Blockchain.info, but Zhao Changpeng ruthlessly rejected He Yi.
Man, you successfully caught He Yi's attention.
He Yi felt that Zhao Changpeng did not let personal feelings influence his decisions, being "very professional," so he introduced him to Xu Mingxing and invited him to join OKCoin.
That year, Zhao Changpeng was 37 years old.
Having just joined OKCoin, Zhao Changpeng performed excellently, proposing many of his ideas regarding the underlying infrastructure, custody, and security of on-chain transactions. Moreover, due to Zhao Changpeng's overseas life experience, he naturally had advantages in expanding overseas markets, quickly growing into the Vice President of OKCoin.
Thus, Xu Mingxing, He Yi, and Zhao Changpeng became the leading figures in the coin circle in 2014, known as the iron triangle.
However, the iron triangle is not iron; Xu Mingxing and Zhao Changpeng soon fell out.
Some say the fall-out was due to the huge differences in technology and management approaches between Xu Mingxing and Zhao Changpeng.
Some also said the fallout was because Xu Mingxing discovered Zhao Changpeng's affair with He Yi and was digging at his corner.
Xu Mingxing once tweeted:
"They are a couple partnering with me; how can this last? At that time, the company had clear rules: internal relationships must have one party resign. She, as a high-level executive, took the lead in breaking the company rules, and now bringing up these matters does not highlight her professionalism or partner spirit, right? Regardless, without me, she wouldn't have her current marriage; she should be grateful to me for that."
These two clearly refer to Zhao Changpeng and He Yi. Moreover, at that time, Zhao Changpeng was still a married man.
When things reached this level, it was clearly impossible for everyone to continue working together, leading to Zhao Changpeng and He Yi leaving one after another.
Then, in 2017, Zhao Changpeng and He Yi came together again to establish Binance.
At that time, Zhao Changpeng could not have imagined that his Binance would become the largest trading platform in the world.
Perhaps, he should thank the 94 incident.
The 94 incident was a disaster for Bitcoin China, Huobi, and OKCoin, but it was an opportunity for Binance to overtake.
Why? Because Binance is registered overseas, and its servers are also located overseas. Zhao Changpeng himself is still a foreign national, which gives him a natural advantage in internationalization. So while other virtual currency exchange owners were busy sipping tea, Binance moved its servers to Hong Kong, inadvertently benefiting and rising to fame.
At that time, 80% of the world's Bitcoins were held by Chinese people, while the 94 world scared all Bitcoin holders in the country, eager to transfer their coins out. He Yi, who had experienced OKCoin, understood the situation filled with LSP in the domestic market clearly, and created a "Binance 101 Girl Group," each with fair skin, beautiful looks, and long legs. Through marketing activities like "recharging for exclusive gifts for girls," they successfully attracted a large number of male customers. It seemed simple and crude, yet it genuinely brought Binance a massive amount of trading.
As a result, the traffic of the three major exchanges—Bitcoin China, Huobi, and OKCoin—after the 94 incident, all shifted to Binance, using the Bitcoins held across the country to forcibly elevate this newly established trading platform to a giant in the virtual currency trading world.
What is a hero born of the times? This is a hero born of the times!
By 2021, Binance had become the largest virtual currency trading platform in the world. Originally "decentralized" Bitcoin had, due to Binance's existence, become "centralized."
Binance's daily trading volume can reach $76 billion, and Binance can earn substantial commissions from it, just like a casino; regardless of whether you win or lose, the casino always makes money.
Moreover, Binance not only provides trading services but also issues Binance Coin (BNB), in addition to collecting fees from transactions, listing fees, service fees, etc., making it a lucrative business.
In January 2022, Zhao Changpeng topped the Bloomberg Billionaires List with a net worth of $94.1 billion (approximately 634.8 billion RMB at that time), surpassing big shots like Zhang Yiming, Zhong Shanshan, and Zeng Yuqun to become the "richest man in China."
This marked the first Chinese individual whose net worth approached $100 billion and also one with the grayest business dealings.
However, being wealthy does not mean being safe; on the contrary, being wealthy may signify greater insecurity.
After all, since the birth of crypto-anarchism, a sword of Damocles has hung over its head—regulation. To maintain financial security and protect investors, regulatory authorities in various countries have always viewed Zhao Changpeng unfavorably. An American economist once listed the "seven deadly sins" of virtual currency: concealment, corruption, deception, crime, fraud, price manipulation, and CZ.
This CZ refers to Zhao Changpeng.
After leaving China, Zhao Changpeng's Binance roamed the world, being warned by financial regulators in the UK, Germany, Japan, Malaysia, South Africa, Singapore, and other countries. Zhao Changpeng didn't even dare to go home, hiding for a long time in the UAE, but ultimately could not escape the long arm of U.S. jurisdiction.
In June 2023, the U.S. Securities and Exchange Commission (SEC) announced 13 charges against Zhao Changpeng and Binance.
At this time, no one was shouting about the "business environment" anymore. After a struggle, Zhao Changpeng finally pleaded guilty to charges of money laundering, unlicensed remittance, and violation of sanctions, and was forced to pay a fine of $4.316 billion for settlement.
Yet, even if Zhao Changpeng is so obedient, the U.S. still does not intend to let him go.
After he signed the plea agreement in the U.S., his passport was immediately confiscated, and he was subsequently fined an additional $3 billion.
You see, this is the power of a state-level "pig-killing plate."
Ultimately, due to the efforts of lawyers and the collective plea letters from 161 relatives and friends, including ex-wives, current wives, life partners, partners, sisters, and mothers, the judge lightly sentenced Zhao Changpeng to 4 months in prison.
On September 29, 2024, Zhao Changpeng was released from prison.
However, the story is not over yet.
In October 2024, U.S. prosecutors emphasized that Binance failed to report over 100,000 suspicious transactions involving Hamas, Al-Qaeda, IS extremist organizations, etc. The Binance platform also supported the sale of materials related to child sexual abuse and was a major recipient of funds from ransomware.
In November 2024, Zhao Changpeng was sued again, seeking to recover nearly $1.8 billion transferred based on fraud.
Zhao Changpeng's legend continues, as do his legal troubles. Clearly, as long as Zhao Changpeng's wallet remains, the U.S. will not stop its bloodletting.
Seemingly challenging the government with "anarchist cryptocurrency," faced with the government, it crumbled in an instant.
Three
Looking back at the 10 years of coin circle history, how do we evaluate Bitcoin?
Technically speaking, Bitcoin is neither good nor bad, neither good nor evil, neither beautiful nor ugly; it is merely a program, an algorithm, a string of mysterious code hidden in the internet.
Culturally speaking, Bitcoin is a combination of individualism, liberalism, and technological determinism. It represents the hopes of technological geniuses and madmen to achieve anarchism and a utopian society.
However, no matter how great the ideals, they must withstand the gravity of reality.
For liberals, Bitcoin is a great ideal of human progress.
For those uninterested in technology but wanting to make money, Bitcoin is merely a tool for creating wealth.
Due to the lack of regulation, Bitcoin is forever filled with ups and downs, and there are no shortage of wealth myths; due to survivor bias, people only focus on those making money.
When someone flaunts in their circle of friends: "I accidentally made another 100 million."
When someone takes a picture showing half of a Maserati logo on the steering wheel, along with the caption "Heaven rewards the diligent."
When more people flaunt their yachts with a group of young models.
Who can restrain their desires?
As humans, we have desires, and Bitcoin happens to stir the most greedy beast within us; neither you nor I can withstand it.
Luo Jinhai, founder of CoinNeed, once made a very vivid analogy:
Bitcoin is the supreme magic ring that rules them all; it bewilders the mind, and those who don the ring ultimately become servants of the Dark Lord Sauron.
In reality, those who wear Bitcoin rings, unless they have a very strong heart, will mostly become slaves to this magic ring.
Bitcoin, as a technology created by "crypto-anarchists," is neutral in itself, but when technology combines with reality, encountering the unresolvable issues of human nature, problems inevitably arise.
Satoshi Nakamoto can collide with that unique hash value among 440 trillion, but cannot calculate the madness of human nature.
When greed distorts an originally neutral thing, that thing itself becomes unimportant. Back then, there were tulips, and now there is Bitcoin. Both tulips and Bitcoin are not wrong; the only thing that is wrong is human nature.
Therefore, when human nature cannot bear the negative feedback of technology, regulatory intervention becomes very necessary.
After all, Bitcoin cannot quench hunger, cannot circulate, and lacks any monetary anchor. Apart from consuming vast amounts of energy to create wealth myths, it brings only disaster.
Why are Chinese people so enthusiastic about the coin circle?
Why do 70% of Bitcoins in the world come from Chinese miners?
Why do Chinese people control 50% of the Bitcoin market and the vast majority of trading platforms in the world?
Looking at the stories of generations of coin circle big shots who soared to the peak in an instant only to fall from grace just as quickly, perhaps we will find the answer.
Don't test human nature with Bitcoin; human nature can never withstand the test.
