This fire is getting hotter and hotter.
The visionaries who ignited the early flames were not surprised after seeing the once skeptical elites turn their directions.
And some stubborn people, still leaning on the fire, seemed ready to maintain this state until they were swallowed by the advancing fire.
Once again, someone shouted: “We are at a boiling point, now is the time to wake up from the ashes and let go of the financial revolution”, but is this optimism okay?
Under the heat of the technological melting pot, the skeptics closest to it gradually dissipated. The cynicism turned to the pursuit of self-interest strategy, while the haters hoped to be redeemed or suffer from amnesia because they avoided past beliefs and chose to join. This campaign to fuel the flames.
The good news update has stirred the flames for this new financial era, but in this dark and turbulent market, can light shine through the crests and troughs?
Unavoidable trend
The fight for digital currency has spread to the government level. Behind the scenes, the United States, the European Union, and China are scrambling to understand and standardize this technology, while also working hard not to be washed away by the trend of innovation.
In order to maintain a competitive advantage, the existing financial system will have to accept a certain degree of out-of-control and follow the trend instead of struggling to close the floodgates.
As the world realizes the redundancy of greedy middlemen, and with the emergence of unprecedented forms of monetization, the strengthening of individual power will pervade all industries.
New generation
Children born under the uncertain environment of the new crown epidemic will enter puberty in an unfamiliar new world full of aggressive and fully monetized.
Looking to the future, the entire media industry will be replaced and empowered by social tokens, bringing fresh air to the innovation industry, and the success of the creative industry depends heavily on online followers.
In addition, global politics will become more and more polarized, and the nature of uncensorable code will attract people such as liberals and bohemians.
With the smart investment of industry leaders, innovation and development continue, the cycle of change has become tighter, and technological progress is accelerating.
As technological elitism becomes the economic standard, a new economy will emerge, self-employment will flourish, and more and more remote work will be combined with global currency.
The selfless application of Web 3.0 will change the public’s view of charity, and mature DAOs will be as well-known as non-governmental organizations today.
However, not all DAO activities can win public recognition.
The war on governance agreements will expand dramatically. As the struggle for power among banks, large technology companies, and governments becomes more intense, we will see that complex game theory can be used not only to manipulate agreements, but also to manipulate entire democracies.
Tensions between the United States, China, and the European Union will escalate. As countries lose control of the printing press, decentralized currencies will increase turbulence. After China realized the tokenization of the renminbi, the United States was either forced to keep up or be left behind.
Governments will be forced to incentivize citizens to use their national currency, rather than decentralized alternatives. Some will be enforced by law, while others will take a more liberal approach, but in any case, an alternative global economy will develop.
In this radical transition period, because different leaders will adopt their own supervision methods and impose different restrictions on their people, citizens of some countries will suffer pain while their neighboring countries are prosperous. But be aware that countries that allow full financial freedom are still in danger, because the unsuspecting public will be exposed to experienced hackers and cunning arbitrageurs in the decentralized world.
Not only will countries be forced to create and adapt to chain economies in their own countries, but they must also learn to protect themselves from the interference of attacking countries that try to disrupt and influence their politics by any means necessary.
Certain governments will restrict or eliminate regulated industry tools, such as stablecoins or centralized exchanges. For example, users of Coinbase or Tether will ultimately be dominated by the government that manages these companies.
We will look back at the past DeFi summer with nostalgia. This is a naive but interesting period. We created the concept of gamified, which later evolved into a pragmatic application.
Bitcoin has gradually lost its voice during the birth of DeFi, but it will never lose its position. It is inevitable that Bitcoin will become the focus of people’s attention again, and the global turmoil in 2020 will only enhance the attractiveness of Bitcoin. .
After working on it, we can see that this DeFi summer brings more liquidity and volatility to the market. It has attracted the attention of some larger participants. They used their influence to turn the market’s attention to what they felt was the most Comfortable currency with large market value.
The market’s optimism towards Bitcoin and Ethereum will continue to rise, which is triggered by the good news released by established financial institutions such as JPM, Square, and Microstrategy in 2020.
Those who dare to look directly at the trend of the times and bet accordingly will get huge returns in the next few years, because the narrative of the new financial world is written with 0 and 1.
A tokenized world
Unfortunately, tribalism will never disappear. Maximalists who love conflict always try to discredit the work of others, but as cross-chain interoperability and tokenization become more common, the debate will become less intense.
In 2020, the number of BTC-anchor coins on the Ethereum network has experienced rapid growth. As of the third quarter, this number has increased by more than 13,000%, from 1,109 BTC in January to 150970 BTC in late October.
2020 will be regarded as a turning point in tokenization, not only for BTC, but also a turning point for real-world assets (for example, FTX recently provided tokenized Tesla stock chain trading).
But this will have two sides. When the price of private company stock is copied to the blockchain, this allows speculators to trade volatility in a mirrored financial market without paying any fees to the middleman, but it may also cause Undisciplined gamblers went bankrupt.
In addition, the number of bitcoins held by listed companies will continue to grow. “Square purchased approximately 4,709 bitcoins with a total value of 50 million US dollars” is one of the most eye-catching bitcoin news in 2020. In an inflationary economic environment, Jack • Jackdorsey sees Bitcoin’s increasing role, and he is not the only one doing this.
When a listed company buys Bitcoin, it is a financial capital management decision, not a speculative act. After 2020, “companies hold BTC” has become a common way of propaganda. Misleading headlines such as “The British listed company Mode invests up to 10% of its cash reserves in Bitcoin” are an example of this, but in reality Above, this company only purchased 6.7 BTC.
As multi-million dollar hacking and vulnerabilities so common in cryptocurrencies begin to enter mainstream news, ambitious students who want to change the rules will begin to choose computer science and software development instead of accounting and business research .
However, the demand for white hat hackers will also be high. As time goes by, the difficulty of hacking or exploiting vulnerabilities will become more and more difficult, new standards and best practices will continue to emerge, and the security of the entire industry will be improved.
Then, we will find that a small team of young developers can build billions of dollars worth of companies using only laptops, so the balance of power will change.
The uninterrupted global nature of this new open finance industry will encourage companies to spread their workforce geographically, and the importance of skills and experience will far exceed qualifications.
We say that COVID-19 will have a lasting impact on the global economy, and some industries will never recover.
The birth of new technology means that some jobs will be lost, because as long as there are profits, inefficient employees will be replaced by complex smart contracts or well-trained AI. The employee’s work is expensive and unpredictable, but the code does what it instructs. This kind of role change does not necessarily lead to a net loss of employment. It can create the same number of jobs, as happened in the previous four revolutions.
Of course, the market value of DeFi may fall, and may even fall by 80% or more, but the best projects will inevitably become stronger. In the end, banks will compete to use DeFi, if not for revenue, then only to save daily transaction costs.
When the first western commercial bank starts to offer DeFi interest rates to its customers, the floodgates will truly open and all banks will implement this technology, which will shake local councils and governments around the world.
However, decentralization will be weighed in a range. Complete DeFi can hardly provide a secure network in the form of “customer service” or “refund”, while centralized services provide a more familiar, A more secure space, but less flexibility, and will control users’ funds.
Overcoming obstacles
The process will not be linear. It will encounter obstacles, restrictions, fraud and market collapse. However, a common vision is the key.
The industry and the desire for financial freedom have not disappeared. The only uncertainty is how we will achieve the goal of mass adoption.
Transaction costs must be reduced, TPS must be increased… These are only a matter of time, and once it happens, the opportunity passes.
The world based on mathematics, code and binary clearing is not suitable for everyone, and for those who don’t like to expose smart contracts through Etherscan, the diluted DeFi will be provided to them.
For those who are uneasy about the risks and responsibilities of private key management, centralized entities will continue to exist, and the scope of DeFi will extend to the entire financial system.
We must focus on trends, not short-term fluctuations. Our goal is not to illuminate the entire room, but to illuminate the path to a new financial system around the world.
The scorching light is sharp and sharp.
