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Will the collapse of cryptocurrency destroy the next Internet revolution Overseas weekly election

Time : 30/07/2021 Author : dg9jq0 Click : + -
        Since January, the collapse of cryptocurrency has caused the price of atomic currency supporting the blockchain network cosmos to plummet by 80%, and the market value has evaporated by $10billion. This year's market collapse, to some extent, stems from the collective selling of high-risk financial assets caused by the Federal Reserve's interest rate hike, but the incentives that make cryptocurrency the hottest area in the technology industry will indeed be weakened. "Some people were shocked, others were afraid." Cosmos co-founder ethanbuchman said of the collapse in the price of tokens used to protect its network security. He tried to be calm: "but there are still people who see opportunities and double their bets on what they believe.
 
        ”。 Joseph Lau, co-founder of alchemy, another blockchain company, said: "everyone will be afraid (when the market collapses)." But he believes that the collapse of cryptocurrency does not mean that all relevant projects are doomed, nor does it mean that developers in the industry will lose interest. He said that the sharp decline did not mean that cryptocurrency projects could not develop in the long term. In the field of science and technology, fanaticism is often staged, but it is never simply repeated. However, at the time of the market collapse, some people still claim that the cryptocurrency revolution will not be affected, which inevitably reminds us of another recent past in the technology industry: the Internet foam at the turn of the century and the subsequent foam burst.
 
        These two foam originate from the so-called revolutionary technologies, which can weaken the control of existing political and commercial forces over online activities, open up a decentralized online world, and return power to the general public. As for cryptocurrency, the digital currency vision originally built around bitcoin has extended a movement called Web3. Advocates believe that blockchain technology, which was originally used to record and track cryptocurrency assets, will give birth to a number of new services controlled by users and eventually replace today's Internet giants. The performance of these two foam in the financial market also has similarities. The total market value of all cryptocurrencies peaked in November last year, and then plummeted by about 70%, evaporating $2trillion.
 
        Bitcoin, which accounts for 42% of the remaining total market value of $900billion, has attracted the most attention from all walks of life, but there are many other digital assets in the cryptocurrency world. Similarly, the Internet foam peaked in early 2000. In the following eight months, the total market value of Internet listed companies evaporated by about $1.7 trillion, accounting for about 60%. Stephanekasriel, head of Commerce and financial technology at meta, is in charge of the company's blockchain project. He believes that when the dust settles, the cryptocurrency mania will become a more stable and lasting technological revolution like the Internet foam.
 
        "Many of these technologies will experience the same hype cycle." He said that after the early enthusiasm and speculation, the foam would burst. But he also added that, like the Internet at the beginning of this century, the underlying blockchain technology can indeed solve real problems for people, and will be beneficial to the world for a long time. But this is not a universal concept. There are still no clear answers to these questions about what this technology is and what advantages it does not have today. So far, cryptocurrency technology is mainly used for financial speculation, criminal activities, decentralized Finance (hereinafter referred to as defi, which is still outside the supervision) and the creation and trading of NFT (non homogenous token) &mdash& mdash; NFT itself has also experienced boom and bust.
 
        "A lot of discussion about decentralization is almost a reproduction of what we talked about in the 1990s." Marthabennett, then head of advanced technology at Prudential Insurance Group in the UK, said. However, she pointed out that there was a fundamental difference between the early development of the world wide web and Web3 today: "in 1995, there were many practical functions — — you can send and receive e-mail, and you can check information online. But Web3 now has nothing.". Bennett, who is currently in charge of new technology analysis at forresterresearch, a market research company, believes that it is too early to judge whether anything lasting or useful can survive.
 
        However, more and more critics in the technology industry believe that, unlike the Internet, the underlying technology of cryptocurrency has no merit. In May this year, 26 computer scientists and scholars jointly wrote a letter to the U.S. Congress warning that cryptocurrency and blockchain technology are "risky, flawed and unverified". As one of them, bruceschneier, a computer security expert, believes that any application running on blockchain will be more practical, safer and cost-effective if other technologies are adopted. "No matter what you do, it will be better without blockchain." He said. The popularity of cryptocurrency stems from the admiration for new technology, the rebellion against traditional social forces and the strong money making effect. These factors collided in an era of monetary easing, forming an explosive effect.
 
        However, with the end of the era of easing, the cryptocurrency industry will also enter a new stage full of challenges. Phillibin, a computer scientist and former CEO of impression notes, summarized the cases against cryptocurrency and Web3. He believes that the forces that blow up this foam include: "80% greed, 20% ideology and 0% technology". The enthusiasm of the scientific and technological community for cryptocurrency stems from the belief that blockchain is a distributed open database. In theory, anyone can update this database, so it will build a new foundation for online activities. The public blockchain has specially designed a "consensus mechanism" so that participants can confirm the accuracy of updates.
 
        Supporters claim that these blockchains (and cryptocurrencies used to verify updates) will lay the foundation for a series of new services controlled by users, not companies or governments. However, even Web3 supporters admit that the existing blockchain technology is far from being able to support the core of large-scale online activities. Ethereum can only process 30 transactions per second at most, while newer and faster networks such as Solana have not yet given favorable proof in this regard. This technology is difficult for non professionals to use, and it also faces pending issues in privacy, security and law. Supporters said that this phenomenon is only because the technology is not yet mature and there are no fundamental defects.
 
        Protocollabs' filecoin network plays a decentralized market role in the field of computer storage. Juanbenet, CEO of the company, believes that today's blockchain is like cloud computing, which was still in its early stages of development. He said that as early as the 1990s, cloud computing had aroused widespread interest in the technology industry, but it took 20 years to build it before it was finally recognized by the industry. He predicted that cryptocurrency will also usher in similar technological maturity in the future. However, in this process, the ideal decentralization scenario of cryptocurrency enthusiasts may come to naught, and even be no different from the technology it vigorously replaces.
 
        Replacing "proof of work" with "proof of interest" is a widely publicized direction of transformation. The former is controlled by people who already have cryptocurrency, while the latter requires "miners" to compete with each other to solve encryption problems, so as to verify new entries on the blockchain &mdash& mdash; The whole process requires a lot of power. Ribin said that by definition, in the "proof of interest" system, the richest person has the greatest power, which runs counter to the distributed power concept pursued by the cryptocurrency system. At present, there are some new basic technologies developed based on blockchain, hoping to simplify the use mode and increase the number of transaction processing, but it will also weaken its decentralization.
 
        Bennett of Forrester said that this will give birth to a number of new leading enterprises, who will control the channel of this technology as a "gatekeeper", which is the same as the technology giant dominating today's online world. Any centralized transformation of Web3's distributed computing platform will repeat the previous development path of the network world. The open communication protocol based on the Internet was originally intended to prevent any government and organization from exercising control over it, but it has left ample opportunities for private enterprises to take this opportunity to build their own empires. In hindsight, although the basic technology originally developed promised to build a more democratic online world, it did not come true in the end.
 
        For this reason, although the media are trying to exaggerate the survival crisis posed by Web3 to Internet giants, big enterprises such as meta still take the initiative to get involved in the field of blockchain. "It is always a combination of centralization and decentralization." Kasriel said when referring to the underlying technology used by meta. The company also plans to develop a blockchain that allows software developers to continuously control the digital content they want to publish to the meta network. Kasriel said that to achieve this level, meta does not need to use blockchain, and it can achieve the same effect through other technologies. But by transferring control through blockchain, people who don't trust meta can use it at ease.
 
        Even so, critics such as Schneier believe that blockchain has great shortcomings, resulting in its extremely low use value. Moreover, if the decentralized Internet world becomes a bubble, there is no reason to recommend this technology. If the long-term use value of the technology behind Web3 is still in serious doubt, the power released by the cryptocurrency boom will not be so uncertain. The combination of idealism and greed is as powerful as the excitement that dominated the Internet foam. Supporters believe that this field has a large number of entrants, and it is impossible to ignore its existence. Electriccapital, where avichalgarg works, is an investment institution specializing in investing in Web3 startups. He said, "the rule of thumb of the Internet is that if 100million people are doing something, it deserves attention.
 
        ”。 The core of this enthusiasm is cryptocurrencies and digital tokens embedded in blockchain networks. The reason why people are willing to give value to them is either that they have some attributes of money like bitcoin, or that the derived online networks will someday support the new decentralized digital economy. But in any case, this willingness has contributed to the prosperity of the cryptocurrency market. The soaring prices of these digital assets have provided financing channels for blockchain projects such as cosmos, attracted a large number of talents for the entire industry, and attracted many netizens for the first batch of consumer services established on the blockchain. This includes the so-called "playtoearn" game &mdash& mdash; Participants can earn tokens from it for future sale and liquidation.
 
        Vinodkhosla, a venture capitalist in Silicon Valley, said that these new financial incentives have solved the problem faced by Internet consumer startups for many years: how to attract enough users to help launch new services, so as to stimulate the network effect, so as to continuously improve the service value with the increase of the number of users. Supporters still believe that user demand has changed profoundly, and this phenomenon will last longer than the foam itself. Ryan Wyatt, CEO of polygonstudios, said that cryptocurrency has changed the expectations of a whole generation of netizens. He believes that services that do not transfer any control or share any profits with users will eventually be abandoned by users.
 
        Organizations including cosmos and alchemy claim that the collapse of cryptocurrency prices has not shaken the beliefs of its underlying network developers. Believers said that although it is difficult to predict the ultimate use of cryptocurrency and the technology behind Web3, it is not worth worrying about. After all, from the social network of Facebook to the mobile Internet led by iPhone to the cloud computing platform created by AWS, many services in today's online world emerged long after the bursting of the Internet foam. "Even if it takes 10 years to see Amazon in the Web3 era, it doesn't matter.
 
        ”White said, "it will be a multi trillion dollar chain company. I think we will be very happy.". Decentralized finance is a general term, which refers to a series of cryptocurrency asset projects designed to bypass centralized intermediaries (such as banks or exchanges) to provide financial services. They use a new distributedapplication (DAPP) to provide conventional services such as lending, savings and currency transactions. This is a blockchain jointly developed by vitalikbuterin, a Russian Canadian computer scientist, and others.
 
        Web3 hopes to make blockchain no longer just a transaction database, in which Ethereum plays a core role. This technology can hold assets, allow programmers to add buying and selling functions to smart contracts, and also provide building blocks for most financial dapps. Ethereum is a token associated with Ethereum, and it is also the cryptocurrency with the second highest transaction activity in the world. In the "proof of work" system, groups called miners will compete to solve encryption problems to verify transactions, and the winner will be rewarded in the form of cryptocurrency. Such systems, led by bitcoin, have been widely criticized because they consume a lot of energy in the calculation process.
 
        The "proof of interest" system will randomly select one from a group of people who have held a certain cryptocurrency and "bet" (or use it as collateral) on the network to verify the transaction. This model consumes much less energy than the "proof of work" system, but it will concentrate control in the hands of the richest cryptocurrency owners. Ethereum is changing from "proof of work" to "proof of interest" mode, but it has been delayed several times.
 
        
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