In the next decade, the colonization of the Web3/Crypto world will be the main storyline of the industry. The industry narrative will undergo fundamental changes, and the most significant innovation and wealth creation opportunities lie along this main line.
Two “big” things happened recently in the field of AI and Web3. Both events are indicative, but their significance has been buried by a lot of gossip details in the media.
In fact, there are two different perspectives for looking at any major event. The first is the perspective of entertainment, finding fun in news events. If this is the purpose, then you have to bring a microscope, and the more details you know, the better, because the more details there are, the denser the density, the more gossip points there are, and the more interesting it is. The other perspective is macro, which is mainly to judge the trends of the industry and even the world based on the events, and think about how these trends are related to yourself, mainly to guide decision-making. If this is the purpose, then you have to bring a telescope and don't choose the wrong lens. Only by omitting various trivial details can the patterns on a large scale be presented, and only then can you identify trends and help yourself make choices and decisions.
There is no difference between the two perspectives. Entertainment is also important, especially in a bear market cycle. When you are powerless to resist, it is understandable to enjoy it actively. But if your goal is to make a decision, then the bigger the matter, the more it is better to be rough rather than detailed. Don't always think about deciphering the mystery, those gossip details have nothing to do with you. Think about how the middle school history textbooks will write about today's events 100 years later, and think about which historical episodes these events rhyme with, so that you can discover trends.
Unfortunately, many people in the real world don't understand this principle and blindly believe in "seeing the big from the small", thinking that the more details they know, the better. In fact, they overestimate their brain's ability to process information and go in the wrong direction.
I am not an expert in AI, but taking the internal strife of OpenAI as an example, in fact, the comings and goings of Ultraman and the palace fighting conspiracy behind it are indeed exciting, but these details are just entertainment gossip for the audience and have no other value. The really important thing is the struggle between the "Advent Faction" and the "Savior Faction" at the node of the advent of strong artificial intelligence reflected by the internal strife. Similar struggles have also occurred before and after the emergence of nuclear weapons, and have recently become known due to the release of the movie "Oppenheimer". But if you are obsessed with details, it is difficult to see that these two things are actually rhyming in the air, and it is difficult to realize that the occurrence of such events shows that the singularity of strong artificial intelligence has arrived, and its capabilities far exceed the expectations of the creators themselves, causing fear, controversy and conflict. The result of the conflict is similar to that of the year, that the "e/acc Advent Faction" has won a complete victory, which also indicates that the development of strong artificial intelligence has broken free from the last endogenous shackles and is running all the way. In the future, humans can only restrict and control strong artificial intelligence through external constraints such as forming a balance of power with another strong artificial intelligence, or through cryptography and blockchain. Endogenous mechanisms will no longer be effective.
I have repeatedly expressed the view that AI and crypto are two sides of the same coin. Many people disagree with this, thinking that AI is a big deal and crypto is a farce, and that my statement is just to help crypto gain popularity. In fact, they don’t see that cryptography is the only tool to build order in the digital space. It’s just that the existing digital world is relatively simple and naive, mainly dealing with the relationship between people, and some basic cryptographic tools can roughly cope with it. After the advent of AI, super-intelligent entities appeared in the digital world, and at the same time, a large number of economic resources and economic activities were digitized. The relationship between AI and people, and between AI and AI has become more complex and more decisive. The construction of order in the digital space has become a matter of life and death. Simple cryptographic tools and protocols are not enough. The emergence of blockchain, smart contracts, self-determined identities, verifiable credentials, and token economy, whether it is coincidence or destiny, is ultimately just some new cryptographic protocol components, which actually enriches our toolbox and helps us build order in the digital world. I once proposed a statement that "blockchain should legislate for AI". Now it seems that it is too narrow to only mention blockchain. We should include all the tools mentioned above and regard them as a whole. We should give this whole a name, such as crypto, and then say "Crypto should legislate for AI", which may be more appropriate.
The judicial settlement between Binance and the United States is actually very indicative. The so-called indicative significance is that when you see this happen, you can assert which direction the trend is heading. For example, as mentioned earlier, when you see the internal strife of OpenAI, you know that the strong artificial intelligence singularity is coming. Similarly, when we see the settlement reached by Binance, we can assert that the entire Web3 has left the era of wild growth and exploration and entered the era of colonial competition.
A brief explanation is as follows.
As early as the early days of blockchain development, many people described the crypto economy as a "parallel world" or a rich new continent. If this analogy is appropriate, then we naturally have to ask, when people face the sudden emergence of a new space that contains huge wealth and risks, how will they react? This has happened at least twice in history, one was when Homo sapiens walked out of Africa, and the other was the colonization of the new continents of America and Australia by Europe after 1500. The specific process of the former is no longer traceable, but the latter has detailed information and can be used as a reference. Five hundred years have passed, but human nature has not changed. When we try to grasp the general trend of the development of the Web3 industry, a historical template that can be used as a reference is the process of the gradual colonization of the American continent after 1500.
The two centuries of colonial history after the discovery of the New World can be roughly divided into two stages. The first stage was in the 16th century, when the first batch of immigrants were mainly adventurers and gold diggers from Spain and Portugal. They quickly occupied the gold-rich South America, obtained a large amount of gold and silver, returned home in glory, and returned to Europe to become the upper class. For this purpose, they were not interested in building institutions in the New World, but plundered and exploited to the best of their ability, and transported gold and silver back to Europe to exchange for tea, silk, porcelain, spices and the Invincible Armada.
In the 17th century, latecomers such as the Netherlands, Britain and France saw the wealth potential of the New World and also colonized it. Because they came late, they could not rob Spain and Portugal of gold and silver, so they had to develop agriculture and agricultural product trade. Developing agriculture is more complicated than simple plundering. It requires the establishment of a cooperative order, the construction of infrastructure, the organization of division of labor and cooperative production, and the improvement of the quality of workers through education. Therefore, the main colonial model at this stage is to export population, order, technology and culture as a complex to the New World through the form of companies, and start a new stage of regional colonization. Most areas of North America started their colonial history at this stage. It was on this basis that in the late 18th century, the British colonies on the North American continent combined the original colonial system with local characteristics and created a country like the United States under the guidance of new ideas.
This description is not to be underestimated. If we examine it carefully, we can certainly find a lot of evidence and details to refute this general "historical logic." However, only under this broad filter can we get rid of the interference of details and identify the "rhyme of history."
The past decade or so since the emergence of blockchain is a "rhyme" of the American colonial history of the 16th century, which can be called the "Age of Exploration."
Among those who have entered the new world of Web3 in this era, there are a handful of idealists, but the vast majority are explorers and gold diggers. They do not care about the concepts, values, and social goals of Web3 itself. Their purpose of entering this new space is 100% to make money, big money, and quick money. Under this purpose, the technologies, tools, and innovations of blockchain and Web3 are just means that can be replaced at any time. The purpose is and can only be to return home with a full load of gold and silver. As for whether it will corrupt the order of Web3 and destroy the ecology of the new world, they do not care about it.
This is a stage of wild growth, and also a stage full of innovation, exploration, speculation, hype, fraud and chaos. During this period, Binance, led by a realistic idealist, seized the historical opportunity, balanced a variety of complex factors, rose in the chaos, and became the king of this stage. Binance's success is certainly due to luck, but more importantly, it is because Binance has been able to use its power and influence in a restrained manner, and consciously provided the most scarce public good - order - for the chaotic and disordered market.
However, the New World has not yet produced an organization or power that can compete with the traditional world. Its original passive confrontation methods based on a thin anonymous mechanism are now useless. In this case, when its scale becomes larger and larger, and even begins to reversely affect the balance of power in the Old World, the Old World will definitely not sit idly by and will inevitably use its existing strength and means to intervene in the New World. This will push the history of the New World into the second stage, which can be called the colonial era, corresponding to the colonial history of the North American continent in the 17th century.
In the colonial era, Web3 will enter an era of order construction, and the active promoters of order construction are actually the people in power in the traditional world. They disdain the possible gains from plundering, but pay more attention to the inherent technical advantages of Web3, hoping to create huge wealth by establishing a more complex production and transaction structure in Web3, thereby affecting the power distribution mechanism in the real world. Therefore, compared with the previous group of people, they will pay more attention to institutional construction and will be more inclined to use new corporate forms to promote the colonial process and build a new order.
Countries that have seen this are advancing their colonization process in different ways. Some countries are more proactive and willing to go deep into the hinterland, while others are more passive and only seek to defend their borders. The Binance legal settlement we have seen is essentially the same. This event marks a significant acceleration of the United States' colonization process in the new world of Web3. Other regions such as Hong Kong and Singapore are also accelerating, but their strategies, pace and goals are not the same.
The order established in the colonial era is not the order that best fits the local characteristics of the New World. Instead, it is an order in which multiple colonial systems with different characteristics coexist and compete with each other, formed by the multiple colonial powers of the Old World after they had established their own territory in the New World, combining the new technological features in the colonies with the original systems of the colonial powers. The colonial era is definitely not the end. The process of competition among multiple systems will eventually lead to the emergence of a new order. This new order is not only more in line with the characteristics of the new technology itself, but also has outstanding competitive advantages and the ability to compete with other systems, and can strongly reversely affect the Old World. However, it may take a long time for the new order to be created, established and successful. For quite a long time, we only need to focus on the strategies of the colonial era.
In the next decade, Web3/Crypto world colonization will be the main storyline of the industry, and the industry narrative will undergo fundamental changes. The most significant innovation and wealth creation opportunities are on this main line. We will soon see the following phenomena:
- Central banks, regulators and multinational organizations in some countries have successively published important reports on technical topics such as central bank digital currency, programmable payment, decentralized identity, blockchain, etc.
- Major countries are strengthening their control over the Web3 world, establishing their own colonies based on population and industry. The order of the Age of Exploration will continue to grow in the cracks, but regulators in various countries will become increasingly intolerant of cross-border behavior.
- Government agencies in some countries will take the initiative to foster and support a group of companies, encourage them to enter Web3, and continuously develop and deploy new application cases.
- Some backward countries and regions, because they have no historical burden, will be more radical and innovative. On the contrary, some countries and regions that were leading in the previous stage of the digital economy will be conservative and hesitant and will not dare to take action.
- Because the natural advantage of the Web3 world is cross-border business, multinational organizations will take active action, and some countries will take the initiative to establish collaborative relationships and enter Web3 in an alliance manner.
- Enterprises supported by different countries follow their own rules and systems and compete in different fields of Web3 based on their own resources and strengths. They become the vanguard and coordinating forces of the colonial operations of the colonial powers before and after the national power is personally involved.
- Innovation is still the key to success in this stage, but most innovations will no longer be wildly imaginative, but will be carried out within the construction of order.
Only by looking at the Binance incident and Binance itself from such a position can we better understand it. The settlement between Binance and Nabi seems to be a helpless move, but in the long run, it is actually a very positive event. As the king of the exploration era, Binance will survive smoothly and enter the colonial era, and its strength will not be damaged. It will have ample opportunities to negotiate or cooperate with major colonial countries and continue to play an important role in the new era. Such good things are rare in history books. And those who simply think that the settlement of Binance has eliminated the last big mine before the bull market, so they are about to get rich, I am afraid that they will continue to experience great joys and sorrows in life again and again.
