Source: Dao Says Blockchain
During this period, readers often express their confusion and misunderstanding in the comments at the end of the article.
I think much of this confusion and perplexity comes from a certain misunderstanding and resistance to common sense.
The viewpoints I share in these articles are my reflections on investment and the crypto ecosystem over the years. These reflections mainly draw on the common sense and the essence of things that have been summarized from mature cases in the past.
What are the common knowledge of investment and the essence of things?
It is the free cash flow that enterprises/companies/projects can generate in the future.
I believe that this is applicable regardless of the ecosystem in which investments are made, whether it is a traditional ecosystem or a cryptocurrency ecosystem, whether it is venture capital or value investment.
However, for many participants in the crypto ecosystem, our experiences over the years seem to be quite different from the common knowledge mentioned above: it seems that many “investments” in the crypto ecosystem over the past few years do not require this common knowledge, do not need to discuss the profitability of projects, and do not need to talk about the free cash flow that projects can generate in the future.
Just by telling stories and relying on meme coins, one can “get rich quick.”
In my opinion, this aspect is purely because we happened to encounter its bubble period, while on the other hand, it precisely proves that the market is increasingly going astray and diverging in the absence of positive incentives.
Duang Yongping said (in essence): You can see all of this by visiting a casino in Macau.
Such a bubble and such a deviation cannot exist for a long time, nor can they fundamentally promote the healthy development of this ecosystem.
He also said another sentence (the gist is): Someone won a hundred million in the lottery, can you learn from him? Can you repeat his story?
As investors, it’s fine for us to have a little fun with the lottery, but trying to interpret winning the lottery as a path to success could lead to big trouble.
In fact, similar bubbles have long occurred not only in the crypto ecosystem but also in other already mature fields such as stock investment and venture capital, and similar “get rich quick” scenarios have also played out before. It’s just that our generation, most of us, have not experienced it.
But there are also some areas that our generation, our group of people, has experienced. For example, in the past 20 years, there have been two unshakable myths in the world:
One is that housing prices in China never fall, and the other is that the stock market in the United States never falls.
In the past, anyone who dared to expose these two myths would be taking a huge risk and would be scolded to death.
However, the first bubble burst like this.
There are no immortal bubbles------------ this is common sense, it’s just that when the market is crazy, we don’t know when the bubble will burst.
But we cannot truly believe that the bubble will always exist just because it has not burst, or even immerse ourselves in it and be unable to extricate ourselves, while ignoring common sense and the eternal, unchanging objective laws.
Since you know that bubbles are problematic and you are aware that you do not have the ability to control the bubbles, then you should honestly return to the basics and common sense.
In Duan Yongping’s Q&A, there is a sentence that left a deep impression on me the first time I saw it:
The easiest person to deceive in the world is oneself.
This sentence is worth sharing with all readers.
If we no longer want to deceive ourselves, we must face the facts, return to common sense, and return to the original.
Some basic facts are:
As I look back on the development and performance of Bitcoin over the years, I increasingly fail to see Bitcoin as a “safe-haven asset” or as “digital gold.”
At least it is not now.
Since it is not valuable now, what is it? The only thing I can think of is that it is a valuable luxury collectible.
If Bitcoin is a luxury collectible, what will sustain its future value increase?
Value spillover can only be generated by the prosperity of the cryptocurrency ecosystem.
If the crypto ecosystem is to thrive, what will the final manifestation be?
That can only be a large number of projects that generate real value, provide real services, can sustain profitability, and generate free cash flow.
Otherwise, what is the prosperity of the crypto ecosystem?
Is it a meme coin?
Or is it a narrative that can only tell a story and never land?
When the prosperity of the crypto ecosystem comes, what should it share with investors, and what benefits should be shared specifically?
Is it a governance token that only has governance functions without actual rights or use value?
If it is a governance token with only governance functions, can its real value compare to stocks? Can it compare to equity?
If we can’t compete, what else could explain the current high prices of these governance tokens?
If the price of these tokens wants to rise steadily, won’t they only become assets with real equity value or assets with use value?
I don’t think it’s hard to understand or deduce, as long as we don’t lie to ourselves.
It is also based on common sense, and it is also a return to the essence of things:
The world we live in is a centralized world. Although it brings efficiency and speed, at the same time, in many cases, we sacrifice personal freedom and personal interests. Our data and rights are often exploited and plundered by centralized forces, and sometimes our lives are arbitrarily handled by centralized powers.
That is why generations of predecessors have fought their whole lives for decentralization. These predecessors attempted to create a decentralized world with the power of technology, to resist the oppression of centralization, liberate the human soul, not kneel to authority, and not submit to power.
It is precisely because of this that we have Bitcoin and Ethereum, and the crypto ecosystem we have today. Without the decentralization of these foundational platforms, it would be impossible for us to have such a free world in the future.
Now we even have to doubt the decentralization of these basic platforms (L1), isn’t this deviating from common sense and the original intention?
Moreover, we are about to enter a world of feudal fragmentation and self-governance. If we still believe that human interconnectedness cannot be disrupted, and if we believe that there can be such a neutral world that can prosper in the future, then what kind of platform can support such a world? What kind of assets can be trusted by all of humanity?
If you still can’t think clearly, then consider what assets and what platforms can be safely held and used by both our isolated neighbor to the northeast and the empire that dominates the Western Hemisphere?
Returning to common sense, many issues in the crypto ecosystem can be clarified.
