In our crypto industry, everyone is looking forward to the large-scale application of the industry

So when will the large-scale application of encryption come?

Churchill once said: "The longer you look back, the farther you can see into the future."

At the age of 22, A16Z believed that crypto was in the 95th year of the Internet. Based on the current scale of 500 million crypto users, it should be around 2001.

Da Piaoliang also went back to study the Internet 30 years ago and found that the development patterns of traditional Internet and our encryption have many similarities.

01 Early Internet and Encryption

Our current blockchain-based encryption industry was born with the emergence of Bitcoin. The Bitcoin white paper was published on October 31, 2008, and the first Bitcoin was born on January 3, 2009.

However, the application scenarios of the Bitcoin chain are very limited. In the early days, the only currencies that could be hyped were various other altcoins that were modified from the Bitcoin code.

The crypto industry that really caught the attention of the technology community was Ethereum, which was launched in 2015, six years after the birth of Bitcoin. It was then that the public chain battle that continues to this day began.

Da Piaoliang believes that the landmark event in the formation of the Internet was the invention of the World Wide Web by British scientist Tim Berners-Lee in 1989, which enabled everyone to browse the web.

In the early days of the Internet, various web pages would change their display content, such as this million-dollar homepage. Each pixel on the web page was limited, and everyone had to spend money to buy it. Isn’t it very similar to our cryptocurrency trading?

This kind of web product in the web1 era can, at best, be made into a portal website, similar to Yahoo/Sohu, and invite professional editors to publish content on the website for everyone to see.

It was not until 1995 that Netscape went public that it really attracted the attention of the bigwigs in the technology circle.

What does Netscape do? It makes browsers.

It's so troublesome to make web pages one by one. If everyone uses my browser, can't I make money without doing anything?

In fact, the logic of the browser coincides with the idea of ​​our public chain project. When Ethereum became popular, didn’t every project use Ethereum to issue coins?

In 1995, Bill Gates sent a letter to all employees of Microsoft: The Tide of the Internet

In this letter, Bill Gates explained to the entire company why they wanted to go all in on the Internet, and designated the browser as the first battle in the Internet boom!

1995 was exactly 6 years away from 1989.

Isn't it a coincidence? Otherwise, why do they say that other people's web pages are web1, and our encryption is web3?

This "browser war" lasted for more than ten years. At the beginning, Microsoft defeated the first-mover Netscape by relying on its traffic advantage. When people thought the outcome was settled, Google's Chrome emerged as a dark horse.

Let’s take a look at our current public chain competition. Ton also wants to challenge Ethereum’s monopoly position by relying on Telegram’s traffic advantage. Is it the same routine?

The most prosperous company in the early years was Netscape, which once accounted for 80% of the entire browser market share.

Not many people may know about Netscape now, but everyone in the crypto circle knows its founder, Marc Andreessen.

The full name of A16Z is Andreessen Horowitz. The word Andreessen in the front refers to Marc Andreessen, who founded Netscape. We will talk about the story of A16Z later~

Let’s first talk about Marc Andreessen when he was at Netscape. He was really awesome.

Netscape's stock went public in 1995 and continued to soar until 1999, when it was acquired by America Online (AOL) for $10 billion.

02 Internet and encryption during the bubble period

Anderson's story of getting rich quickly can be said to have kicked off the frenzy of the US stock market's Internet bubble.

The peak of the Internet bubble was in March 2000, when the Nasdaq index broke through 5,000 points. By October 2002, two and a half years later, it had fallen back to 1,114 points, a retracement of 80%. This was 13 years after the birth of web1 in 1989.

At that time, a large number of companies simply copied other people's business plans, or even simply gave their company names such as .com and went public on NASDAQ.

For example, Pets.com's business plan was to sell pet food and accessories over the Internet. Pets.com successfully landed on the NASDAQ in February 2000 and raised $82.5 million in its IPO.

Then the company's next trend is as follows:

It went public in February 2000, and its closing price on the same day was US$14. In November 2000, the stock price dropped to US$0.64, and then it went bankrupt and liquidated.

A similar example is Webvan, whose business model was to sell fresh fruits and vegetables through the Internet. It went public on the NASDAQ in August 1999 and declared bankruptcy in July 2001.

Webvan's stock price was $25 when it first went public, but it was only 6 cents a year and a half later.

Seeing this, does it sound familiar to our encryption friends?

Nasdaq is known as the U.S. stock innovation index, while Ethereum, known as the crypto innovation index, hit a record high of $5,000 in 2021, and then fell to $1,000 in mid-2022, a retracement of 80%, which is consistent with the retracement of the Internet bubble. Moreover, 2022 is also 13 years away from the birth of Bitcoin.

This is another coincidence, isn’t it?

After the last round of crypto bubble burst, a pair of young talents, Terra and FTX, emerged in the crypto industry. However, due to fraud, the crypto industry was completely plunged into a deep bear market.

For details, please see Da Piaoliang’s inventory of tragedies in the cryptocurrency circle: It’s 519 again, and here’s a comprehensive inventory of tragedies in the cryptocurrency circle!

When the Internet bubble burst, a pair of talented people, the Crouching Dragon and the Phoenix, emerged to commit fraud at WorldCom and Enron.

Moreover, both pairs of projects are one infrastructure and one exchange, which happen to be bubble hot projects.

Both WorldCom and Terra are engaged in infrastructure construction. One is a telecommunications company that builds infrastructure for the Internet; the other is an application chain that builds infrastructure for encryption.

Enron and FTX are both exchanges. At that time, Enron Online transformed Enron's various businesses, such as electricity, telecommunications and ancillary businesses, into financial products that can be bought and sold.

This is another coincidence, isn't it?

There is something even more coincidental.

Before the Internet bubble burst, the founder of A16Z, whom we mentioned, sold Netscape at a valuation of 10 billion US dollars in 1999. It can be said that he was the person who made the most money during that round of the Internet bubble.

In the crypto world, A16Z was the most generous institution in the last bull market, bar none. It can almost be said that Anderson lost the most money in the crypto bubble, right?

03 After the Bubble

If you left Nasdaq twenty years ago because of the losses in the Internet bubble.

Then you will be missing out on the fastest growing market of the past twenty years.

The current price of Ethereum is still over 2,000 US dollars, and it has been 3 years since Ethereum reached its historical high.

You have to know that during the Internet bubble, the Nasdaq had not yet recovered to 2,000 points in 2003. Therefore, Ethereum’s current performance is actually better than that of the Nasdaq.

The Internet was developing rapidly in those years, but even with such a strong driving force of technology, it took 15 years for the Nasdaq to return to 5,000 points.

But now the Nasdaq has set new highs and the index is approaching 20,000.

But such strong growth is mainly driven by seven stocks:

The seven sisters that led the rise in U.S. stocks are: Apple, Microsoft, Google, Amazon, Nvidia, Meta (Facebook) and Tesla.

These seven giants are closely related to the Internet:

Microsoft has mentioned before that it embraced the Internet in 1995;

Google, Amazon and Facebook were pure Internet companies in their early days;

Apple provides hardware devices such as computers and mobile phones for Internet users;

In the early days, Nvidia provided GPUs to the video game industry, which was booming along with the Internet.

Perhaps the only company that is relatively far away from the Internet is Tesla, but the money Musk used to invest in Tesla came directly from the sale of PayPal during the Internet bubble.

Among these six Internet-related giants, three are infrastructure (Apple/Microsoft/Nvidia), and three are applications (Google, Amazon, Facebook)

All three of these infrastructure projects were listed before the Internet bubble. After the bubble, almost no new infrastructure projects emerged.

Google and Facebook are both application projects that were listed after the Internet bubble, one for search and the other for social networking. Driven by more and more application projects, the Internet has entered the Web2 era.

And since then, the application scenarios of the Internet have gradually begun to make money, and almost no one doubts that the Internet is a scam.

In fact, Da Piaoliang also believes that the overall structure of our encryption industry has been divided up.

According to the previous development rules of the Internet, it is highly likely that future long-term infrastructure projects have already issued coins, and we can just buy them in the secondary market; but if we want to invest in the primary market, we may still have to pay more attention to application scenarios.