Recently, many institutions have collapsed, and users have suffered financial losses. The US SEC has begun investigating the companies, institutions and individuals involved. In addition to the necessity of regulation and compliance being put on the agenda, the debate between centralization and decentralization has never stopped. Where will cryptocurrency go? What is the future of the blockchain industry? This article will explain the direction of Crypto from the perspective of currency value.

Throughout history, any currency has two most basic attributes: first, monetary attribute; second, non-monetary attribute.

In the ancient Stone Age, people used shells as currency, which could be used to exchange for food and survival necessities. Trading was the monetary attribute of shells, while decoration and the scarcity of certain shells were its non-monetary attributes.

In the Bronze Age and Iron Age, various currencies made of gold, silver and copper gradually appeared. It can be seen that human currency gradually evolved from naturally formed objects to man-made processed products.

This process is like a piece of iron ore, which is processed into an iron ingot, the iron nail is processed into fine steel, the fine steel is polished into parts, and the parts are assembled into a mechanical watch.

Humans process currency, increasing its non-monetary value while also increasing its monetary value.

It was not until the birth of paper money that humans ended its value as a non-monetary currency and increased its value as a currency to 100%.

This is how disasters come. Paper money is different from gold and silver. Gold and silver can be used to make electronic components, handicrafts, jewelry, medical supplies, scientific research supplies, and even to show financial strength. Gold and silver are given values ​​other than currency, and the price of gold and silver will never fall below their use value (non-monetary value). However, paper money has no value other than trading, unless you use it to burn firewood or keep warm. This means that when paper money exceeds the demand for transactions, its value as currency will decline.

After the birth of blockchain and Bitcoin, humans have been thinking about a question: Does currency no longer need a physical entity? (Note that the money in mobile banking does not belong to this category. Every penny corresponds to the banknotes printed by the central banks of various countries, which does not mean that they do not exist physically.)

First, as a non-physical currency, Bitcoin greatly improves the convenience of circulation. Second, its total amount is fixed, and it will not be over-issued, which will cause the currency value to decay. Finally, Bitcoin solves the fatal weakness of gold and silver as currencies, and Bitcoin can be infinitely divided downward.

Someone asked, what about the non-monetary value of Bitcoin? In fact, the non-monetary value of Bitcoin is the loss of all natural resources from the production and circulation of gold, silver and paper money. No loss is the non-monetary value of Bitcoin. (Mining costs electricity, but electricity also has clean energy and overflow energy during the flood season. At the same time, I personally support POS, which happens to solve this problem)

Having said so many advantages, in fact, Bitcoin also has its fatal flaw: Bitcoin has no government authority to endorse it.

At this time, I would like to ask three soul-searching questions about cryptocurrency and blockchain:

1. Does the world really need so many types of cryptocurrencies?

2. What if the government issues cryptocurrency to ban traditional cryptocurrencies?

3. Does blockchain as a technology really need to tokenize its technological value?

Therefore, I have a clearer view of the future development of cryptocurrency and blockchain:

1. Blockchain technology will flourish, but there will not be so many tokens. Most of the tokens will disappear, even from Bitcoin to Bitcoin, and eventually only Bitcoin will be left as electronic gold, coexisting with digital legal tender issued by various countries.

2. Compliance is an inevitable process for cryptocurrency. Since the existence of human civilization, currency has inevitably relied on power.

3. Technology is technology, and money is money. The two will inevitably draw a clear line. Money uses technology, but technology does not derive money.

Therefore, compliance and strong regulation are good things for Bitcoin, but not good things for other projects and project tokens that have loopholes, are centralized, and are profit-oriented.

Finally, it is right to believe in blockchain technology and the future of blockchain. The establishment of laws and the development of compliance cannot be achieved overnight. There is still a long period of dark forest. Just like the Spring and Autumn Period and the Warring States Period, Wei, Shu and Wu, heroes are made in troubled times. As builders and holders, we are the ones who enjoy the dividends of development during the period of rapid development. The only thing we have to do is to survive until the next wave comes.