Bitcoin "Old Zombie" - Shoufei
It has been nearly ten years since the birth of Bitcoin. In the meantime, it has experienced dark web transactions, hacker attacks, expansion, and forks, and finally stepped out of the geek circle and moved to the general public step by step. But as it has developed to today, we are beginning to ask ourselves, how much has Bitcoin progressed over the years? Is it a good thing or a bad thing to move from a niche to the mainstream?
On January 3, 2009, the Genesis Block appeared and the first 50 bitcoins were announced to be born. Bitcoin is a Chinese transliteration. It was first called Bitcoin in Satoshi Nakamoto’s white paper. It includes many cutting-edge theories and technologies such as cryptography, economics, politics, monetary theory, and computer technology. New concepts such as "peer-to-peer", "encryption algorithm", "distributed ledger", and "mining" have made Bitcoin full of magical colors since its birth, and have also fascinated a large number of geeks and libertarians.
But today, people no longer seem to be keen on discussing technology, but have started to chatter about the rise and fall of prices. The increasingly serious Bitcoin speculation makes people worry. Is Bitcoin still the same Bitcoin? What has changed?
By chance, I met Shouci, the founder of the first Chinese Bitcoin mining pool in China. He started investing in Bitcoin in 2011. At the peak, he owned four-digit Bitcoins, and the cost price at that time was only a few dollars. He experienced the earliest mining and quietly left the market when the market was most desperate. Now he is back in the circle. For such an "ancient beast"-level figure, it may be most appropriate for him to personally tell the story of the "cryptocurrency circle" over the years.
1
2011, Hidden Merit and Fame
Let’s go back to 2011. That year was the starting point of the stories of many old people in the cryptocurrency circle.
Yang Linke first heard about Bitcoin from a programmer. After gaining a brief understanding of the operating mechanism of Bitcoin, he took out tens of thousands of yuan, brought together his programmer friends, and founded China's first Bitcoin exchange - Bitcoin China.
This was also the first time that Wu Jihan came into contact with Bitcoin. He used all the 100,000 RMB he raised from his friends to buy Bitcoin. In the same year, he also founded China's first Bitcoin vertical media - Babbitt - with Chang Qian and Lao Duan.
Also in this year, Shouci founded the first Chinese Bitcoin mining pool in China.
(On January 3, 2009, the Genesis Block appeared, just when British Chancellor of the Exchequer Darling was forced to consider a second move to relieve the banking crisis)
Shouci is a semi-professional Texas Hold'em player. By chance, he found people talking about Bitcoin on a foreign poker forum called "twoplustwo". His innate strong curiosity prompted him to study the relevant information about Bitcoin as soon as possible. Soon, he discovered that there are two ways to obtain Bitcoin, one is trading and the other is mining.
He started by buying coins. He bought more than 10,000 RMB worth of bitcoins at Mt. Gox, the world's largest bitcoin exchange at the time, at a price of about 10 USD. Soon, the money doubled a week later. The rapid rise of the market made him excited, but also uneasy, because he found that the market rose and fell quickly. The price could double or halve in a week. So, is there a relatively certain income model?
The answer is mining. Shouci calculated that mining at that time basically required a home computer with two graphics cards, and one machine could mine about 0.5 bitcoins a day. Compared with the cost of electricity, it was definitely profitable. Even if the price dropped to a few dollars, it could still generate considerable income.
So after a week of trading, Shouci decided to shift his focus to mining, but at first he just replaced the graphics card of his home computer. Later he found that it was exactly as he expected and the profit margin was quite large. Then he immediately went to the computer city to assemble 20 computers. The memory was not large, but each was equipped with two very good graphics cards. He then rented two cabinets from the telecommunications company, hosted the machines in them, and started mining.
In this way, the first Chinese Bitcoin mining pool in the country was born in the telecommunications computer room.
Looking back now, Shouci still clearly remembers that the graphics card models at that time were HD5850 and HD6850.
6870 graphics card and USB flash drive containing Linux mining program
Shouci recalled that there were several major problems with mining pools abroad at the time, the first of which was speed. When the domestic network connected to a foreign mining pool, there would basically be a packet loss rate of about 3% to 5%, which was equivalent to an invisible loss of 3% to 5% of profits. If a mining pool was built in China and the network speed could be guaranteed, then this part of the profit would be equivalent to being earned in vain.
The second reason is that at that time, foreign mining pools charged a 2% handling fee for each Bitcoin mined, and each package was about 50 bitcoins, which means that for every 50 bitcoins mined, the mining pool would charge you one coin, and the profit was very high.
At that time, there were no mining pools in China, but Shouci believed that mining would bring higher returns in the long run, so he was determined to establish a mining pool. The difference was that his mining pool was free of procedures from the beginning.
But this attempt did not last long. A few months later, Shouci shut down http://GetCoin.org.
2
2013-2016, retired from the entertainment industry
Shouci’s last Weibo post about GetCoin.org was on June 17, 2011, when he announced that the mining pool had officially exceeded 5.5G.
Shouci Weibo
Since then, the latest Weibo post was in July 2018. What happened in between?
2011 was the embryonic stage of Bitcoin, but it was also its “barbaric period”.
In June 2011, the Silk Road was found to be used for dark web transactions, and the price of Bitcoin reached as high as $31;
On June 19, the computer of a Mt. Gox auditor was hacked. The hacker used the exchange's software to sell stolen bitcoins, which put tremendous pressure on the system and caused the value of bitcoins in the system to drop sharply. The value of bitcoins on the Mt. Gox platform fell to only 1 cent overnight.
The environment at that time was in a precarious state. Mt. Gox was still the largest exchange in the world, but it was often attacked by hackers and coin loss was a common occurrence. But what was even more terrible was that the price of Bitcoin fell from US$30 to around US$4 at one point, and it lasted for quite a long time. For a while, there was a lot of pessimistic voices in the market, and everyone thought that Bitcoin was going to die, so the number of people buying and using Bitcoin at that time dropped sharply.
Under such circumstances, the prospect of running a mining pool is naturally not very good. For a mining pool, if there are few people, the income from mining is actually very volatile. The price of Bitcoin continues to fall, the number of people mining decreases, and the first halving of Bitcoin production is about to come, and the difficulty of mining increases. At this time, Shouxi's mining pool's monthly mining output is actually not enough to pay for the computer room fee, so he began to consider quitting.
At the same time, Shouchi also ushered in another important moment in his life: his child was about to be born. In order to better take care of his family, he chose to shut down the mining pool.
The story about the mining pool ends here. Shouci recalled that he invested about 60,000 RMB in the mining pool, which was almost all his assets at the time. Although he didn't make much money in the end, looking back now, he thinks this experience is really rare.
But in fact, Shouci didn't know at that time that the despair he thought of in 2011 was just the beginning.
In November 2013, Bitcoin broke through $1,000. Just when everyone thought that the bull market had arrived, on December 5, the central bank and five ministries jointly issued a "Notice on Preventing Bitcoin Risks", denying the currency attributes of Bitcoin. In less than a month, the price of Bitcoin was halved.
The darker moment came three months later, on February 25, 2014, when Mt.Gox, the world's largest Bitcoin exchange, posted a notice to suspend all transactions. A day later, Mt.Gox announced that its wallet had been stolen, the company went bankrupt, and 750,000 Bitcoins disappeared.
The bankruptcy of Mt.Gox caused the price of the currency to plummet. For two whole years, Bitcoin entered a long bear market.
After December 2013, Bitcoin entered a long bear market
It seemed that overnight, a feeling of despair permeated the entire market. "Feeling that there was no hope was the most desperate thing," recalled another veteran in the cryptocurrency circle.
“In the midst of laughter and conversation, masts and oars were reduced to ashes.” Many people who once claimed to believe in Bitcoin could not withstand the bombardment of reality and began to turn from fans to haters. A large number of early players were cleared out in this way.
In 2014, Zhao Dong’s position was liquidated in leveraged trading, and combined with the losses from operating the mining farm, he lost a total of 150 million yuan.
Roasted Cat, the creator of the first generation of mining machines, also felt the pressure from reality due to the bottleneck in the research and development of the new generation of mining machines. After suffering a series of blows such as the obstruction of chip sales and the difficulty in operating the Huai'an mine, Roasted Cat suddenly disappeared without any warning in early 2015.
Comments from netizens on Shouci's Weibo
How many people chose to leave as the end? In that desperate environment at that time, those who could persevere were true warriors. They later became influential figures in the industry, such as Wu Jihan and Zhang Nangeng. However, they are still a minority after all. More people became cannon fodder in this long bear market.
Shouci has incomplete memories about the period from 2013 to 2016, because he has not paid attention to anything related to Bitcoin since he closed the mining pool. But he is also very fortunate because he still had three-digit bitcoins in his hands and had not sold them. If he had paid attention at that time, perhaps he would have sold them in 2013.
"If the coins you have cost a few dollars, you will most likely sell them when you see a thousand dollars," Shouxi said.
3
2017, goodbye is already the world
At the beginning of 2017, Bitcoin had just reached $1,000. By December, Bitcoin had exceeded $20,000. The huge wealth effect made Bitcoin receive unprecedented attention. It was also at this time that Shouxi's memory of Bitcoin was evoked again. He sold some Bitcoins and invested some again. It was equivalent to returning to the market since 2017.
But Shouci did not expect that the Bitcoin market in 2017 was no longer what it was at the beginning, and this change made it a little difficult for him to adapt.
"So what are the differences between the environment you saw then and now?" I asked Shouci.
“It was very different. At that time, there was only Bitcoin, no other coins, no ICO, and no one mentioned blockchain. The entire ecosystem was very simple at that time. People were more discussing how to develop technology, how to inject value into Bitcoin, and how to better develop and spread it. The participants at that time were not as chaotic as they are now. They were all geeks and technology enthusiasts. It was relatively simple. But now, I think it’s basically a big casino.”
Looking back at the earliest posts in the Bitcoin community, one can clearly feel the significance of Bitcoin to people at that time. It was like great adventurers discovering the New World, liberals deconstructing existing financial boundaries, and mysterious geeks exploring surreal value systems. To them, Bitcoin was an "alien", a destructive force beyond the current value system, and a new species that was extremely subversive and revolutionary. Bitcoin, in the eyes of people at that time, was so mysterious and fascinating.
Early Bitcoin Blogs
So much so that some people say, “Whether the Bitcoin craze is a bubble or a ninth wave, I am happy to see it develop further because I love it so much.”
Now, what people are talking about is "If you win, you will be a young model in the club, and if you lose, you will go to the sea to work."
Once you have seen the ocean, you will never be impressed by the puddles you have glimpsed. Those who have experienced the earliest days of Bitcoin will not be able to tolerate the current cryptocurrency world.
If this is the inevitable wild growth path that Bitcoin must go through as it moves from the geek circle to the general public, then we still hope that Bitcoin will develop in the process, or at least see more related applications, but it seems that this is obviously not the case now.
Early Bitcoin Blogs
Shouci said that in his opinion, although seven years have passed, the number of people who actually use Bitcoin now is not much more than in 2011. If Bitcoin still has the highest market share in the next few years, it is not a healthy phenomenon, because it means that other applications have not yet been implemented and there are no other widely used applications. Therefore, Bitcoin will continue to be hyped, which is what he does not want to see.
2017 is the first year that Bitcoin and other digital currencies really began to enter the public eye. We have experienced the 1CO explosion, witnessed the wild growth of exchanges, and witnessed the financing boom of blockchain companies. Amid the hustle and bustle, we have also come to realize that for both Bitcoin and blockchain, the world has just begun.
4
In 2018, the Bitcoin legend is still being written
People in the cryptocurrency circle love to talk about faith, but sometimes, to some extent, this is a false proposition.
Shouxi believes that faith is a very serious word and should not be discussed lightly. It is not a word that can be blasphemed.
Faith can be divided into several types: faith in the industry, faith in the project, faith in people, and faith in the price of the currency. The last one is the least reliable, or it does not exist at all.
Shouxi's understanding of "faith"
At the end of 2017, the entire digital currency market ushered in a bull market. Many people said that making money was too easy and they might as well quit their jobs and trade in cryptocurrencies full-time. But in fact, two months later, when the bear market came, such voices became less and less.
The cryptocurrency world is a magnifying glass of human nature, which puts everyone in the same place for questioning. Sometimes you will find that people you once respected in some fields will become another person once they enter this circle. Even if they are wearing gorgeous clothes, they are just profit-seeking people in front of the magnifying glass of human nature.
Shouci said that there is a big problem in the current cryptocurrency circle, which is that it is easy to blindly worship the so-called big guys. In other industries, when you can go from an ordinary person to a person with a say in the industry, your status is basically equal to your accumulation of knowledge and connections in the industry, but this is not the case in the cryptocurrency circle.
In the cryptocurrency world, no matter you speculate or just have good luck, as long as you make a lot of money from it in a short period of time, you are a big shot. But in fact, he may have no investment experience at all, or even no economic common sense, but because he happened to make a little money, many people will believe what he says.
"Too many people now say that they have faith in someone or a certain currency. They only have faith when the price of the currency is high. Just like many of those who praised Li Xiaolai and those who stepped on him were the same group of people." So, don't talk about faith easily. If your faith collapses because of a small thing, your faith is false.
On July 5, 2018, Shouci retweeted a Weibo post he had posted on June 2, 2011, in which he excitedly announced that "BTC price has reached 9.9 and will soon break through the 10 yuan mark." This Weibo post attracted great attention, and many netizens left him messages, some asking for advice, some asking about his journey, and some asking how much money he had made, but the most common message was about regret for missing out on the opportunity to invest in Bitcoin in the early stages.
From Shouci Weibo, in June 2011, BTC was less than 10 RMB
“If I could go back to 2011, I would definitely buy Bitcoin and hold on to it.”
I asked Shouci, what do you think of this comment from netizens?
He said that this is impossible. Even if they go back to 2011, they still won't buy Bitcoin. If they buy it, they won't hold it for long. They will probably sell it in 2013.
“I asked myself, if I had paid attention to Bitcoin in 2013, and the cost of ten dollars suddenly increased to, say, several hundred dollars, I would probably have sold it and bought a house.”
You can look back on the past, but you can never go back.
These comments from netizens are just a story for later.
The wheel of history is rolling forward, and the legendary story of Bitcoin continues to be written.
————Source: Online
