Zhu Weisha October 14, 2024

 

How did Bitcoin develop without any advertising?

 

Transactions among acquaintances

First of all, Bitcoin had early transactions. Bitcoin has been traded over the counter since 2009. In October 2009, New Liberty Standard began to publish Bitcoin prices calculated based on power consumption. The quote on October 5, 2009 was 1 USD to 1,309.03 Bitcoins. With cost as a benchmark, Bitcoin has a floor price, that is, the bottom of computing power. Its ceiling is determined by market sentiment. The price on October 16 was 1 USD 803.27 Bitcoins. By May 22, 2010, 40 USD was equivalent to 10,000 Bitcoins, that is, 1 USD to 250 Bitcoins. It rose five times in 7 months. Since Bitcoin is only popular in a small technical circle. The small circle is what we call the "circle of acquaintances". OTC transactions in the circle of acquaintances did not bring much progress to Bitcoin. From the perspective of mining computing power, it only increased by 18% in the first year, which also proves this point.

 

Entering the Stranger Circle

In July 2010, the Mentougou exchange, which specializes in trading Bitcoin, was launched. It opened at 0.05 US dollars and rose 100 times in 4 months. In February 2012, it reached 1 US dollar for the first time. It soared 2,000 times in 7 months. This is the difference between the circle of strangers and the circle of acquaintances. What project can grow so fast? People have never seen it before. The rise is the biggest attraction. There must be a large number of transactions, and strangers must participate. Strangers examine it, and it must meet their own needs and have a reason to convince them. Even if this reason is irrelevant.

 

Reasons for Bitcoin's rise

The market began to look for reasons for the rise of Bitcoin. At first, Bitcoin was useless, that is, its functions were not attractive, and it could only rely on storytelling. This is the narrative. Those who agree with the narrative buy it, and those who disagree sell it. The price of the currency fluctuates greatly, which is very speculative. The Bitcoin narrative has been modified 7-8 times. Now it is positioned as a value storage, which is also the reason why mainstream financial institutions buy it. At present, Bitcoin is similar to a large blue chip stock. The news impact and volatility are similar to stocks. It has not yet reached the status of gold as a central bank reserve currency.

Bitcoin did not advertise, but relied on skyrocketing in the early days. The skyrocketing of Bitcoin exceeded that of stocks, attracting countless eyeballs, and the appeal of becoming rich overnight and leapfrogging across classes. In fact, the skyrocketing of Bitcoin is logical, and Bitcoin can be regarded as a venture capital project. Venture capital projects, from the seed round to the IPO, have a growth of thousands to tens of thousands of times. It’s just that early projects are not traded in the public market. After retail investors can participate in IPO, the annual growth is limited. When Bitcoin has a growth of thousands of times, it is undoubtedly a huge attraction for retail investors.

 

The rationality of cryptocurrency speculation

All cryptocurrency projects have the characteristics of venture capital projects, but retail investors can participate in the early stage. Early projects have large gains and risks. How to identify the pearls with wisdom? That requires cognition. Most people do not have it, so they will miss the wealth. But how to achieve class crossing without taking risks? There must be lucky people, such as Bao Erye, who is a living example. Of course, leeks are still the majority, because there are few successful early projects. There is a period of mispricing in early projects, that is, the market is a voting machine in the short term, and it is influenced by market sentiment. This is the charm of speculation. Experts must exist. On the other hand, functional projects are strictly controlled by fools, and cryptocurrency has become the kingly paradise of speculation. Of course, Bitcoin is no longer in its early stage, and the logic of large blue chips applies.

 

The logic of judging good projects has not changed

Which projects are good in cryptocurrency? Take Bitcoin as an example, it keeps rising in cycles, that is, one wave is higher than the next. If it cannot break through the previous high point, it is said that the project has problems. In addition to the high point, whether the bottom is rising step by step, if not, there is also risk. Another thing is whether there are continuous transactions. For projects that cut leeks, they will return to zero within 1-3 months after the transaction starts.

Does Memecoin fit this rising cycle? Meme is just an emotional value. Can emotional value be maintained for a long time? There are exceptions. Dogecoin and Shitcoin have no actual functions as Memecoins, which is the same as the early days of Bitcoin. However, Bitcoin's narrative is convincing, but what is Dogecoin's narrative? That is, whether the support behind the narrative is reasonable. There is a saying that the consensus of fools is also a consensus, and faith has power, which can put life and death aside.

What is a good project? The traditional view is that there must be functional innovation, that is, the innovative function can be recognized by the market. It hits the pain point of the market. Function is the support of narrative. The functions of exchanges, stablecoins and some L2 projects supported their narratives in the early years. Just look at the rankings of Coinmarketcap. In the long run, the currency market is also a weighing machine. The projects that continue to rise in the rankings are good projects.

Hitting the pain point of the market is an unchanging business rule. The cryptocurrency market lacks a distributed stablecoin. DW20 hits this pain point of the market, equips Bitcoin with a scale, and finally realizes Bitcoin standard. Readers can refer to the DW20 white paper. The powerful chainless platform allows users to participate in transactions and payments without spending money first, providing support for the application of DW20.

It is inevitable that chainless products will get community support. Since the launch on December 24 last year, there was only one function airdrop, OTC trading, and the project has increased 20 times from 0.5 yuan for 10,000 DW20 to today. The new multi-signature and multi-backup wallet will be launched soon, and its functions will begin to emerge. The connection with well-known exchanges and payments will bring new ideas to cryptocurrency.

All happy families are similar. Cryptocurrency is no exception. If a project does not have a solid functional foundation, it will only be a flash in the pan.

 

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