Bitcoin has no advertising; how did it develop?
Transactions in the circle of acquaintances
First of all, Bitcoin has early transactions. Bitcoin has been traded over the counter since 2009. In October 2009, the New Liberty Standard began to publish Bitcoin prices calculated based on power consumption. On October 5, 2009, the quote was 1 US dollar to 1309.03 Bitcoins. With cost as a benchmark, Bitcoin has a floor price, the bottom of computing power. And its top is determined by market sentiment. The price on October 16 was 1 US dollar 803.27 Bitcoins. By May 22, 2010, 40 US dollars was equivalent to 10,000 Bitcoins, that is, 1 US dollar 250 Bitcoins. It rose 5 times in 7 months. Bitcoin is only prevalent in a small technical circle. The small circle is what we call the “circle of acquaintances.” OTC transactions in the circle of acquaintances have not brought much progress to Bitcoin. Mining power only grew by 18% in the first year, proving this point.
Entering the stranger circle
In July 2010, the Mt.Gox exchange, which specializes in trading Bitcoin, was launched. It opened at 0.05 US dollars and rose 100 times in 4 months. In February 2012, it reached 1 US dollar for the first time. It soared 2,000 times in 7 months. It is the difference between the stranger circle and the familiar circle. What project can grow so fast? People have never seen it before. Rising is the biggest attraction. There must be a large number of transactions, and strangers must participate. Strangers examine it and must meet their own needs and have a convincing reason, even if this reason is irrelevant.
Reasons for the rise of Bitcoin
The market began to find reasons for the rise of Bitcoin. At first, Bitcoin was useless; its function was not attractive, and it relied only on storytelling. It is the narrative. Those who agree with the narrative buy it, and those who disagree sell it. The price of the currency fluctuates wildly, which is very speculative. The Bitcoin narrative has been modified 7-8 times. Now, it is positioned as value storage, which is also why it attracts mainstream financial institutions to buy. At present, Bitcoin is similar to blue chip stocks. The news impact and volatility are similar to stocks. It has not yet reached the status of gold as a central bank reserve currency.
Bitcoin did not advertise and relied on skyrocketing in the early days. It exceeded the skyrocketing of stocks and attracted countless eyeballs. It was appealing to get rich overnight and cross the class. The skyrocketing of Bitcoin is logical. Bitcoin can be regarded as a venture capital project. Venture capital projects have increased thousands of times from the seed round to the IPO. It’s just that early projects are not traded in the open market. The annual increase is limited after retail investors can participate in the IPO. When Bitcoin has increased thousands of times, it is undoubtedly a huge attraction for retail investors.
The rationality of cryptocurrency speculation
Cryptocurrency projects have the characteristics of venture capital projects, but retail investors can participate in them early. Early projects have large increases and risks. How to recognize pearls with wisdom? That requires cognition. Most people don’t have it, so they will miss wealth. But how to achieve class crossing without taking risks? There must be lucky people, such as Bao Erye, who is a living example. Of course, leeks are still the majority because few early projects have succeeded. There is a period of mispricing in early projects; that is, the market is a voting machine in the short term and is influenced by market sentiment. It is the charm of speculation. On the other hand, fools strictly control functional projects, and cryptocurrency has become the paradise of speculation. Of course, Bitcoin is no longer in its early stage, and the logic of large blue chips applies.
The judgment logic of good projects has not changed
What projects are reasonable in cryptocurrency? Bitcoin continues to rise in cycles; one wave is higher than the other. If it cannot break through the previous high point, it is said that the project has problems. In addition to the high point, there is also whether the bottom is raised step by step. If not, there is also risk. Another thing is whether there are continuous transactions. Projects that cut leeks will return to zero 1-3 months after the transaction begins.
Does Meme coin conform to this rising cycle? Meme is just emotional value. Can emotional value be maintained for a long time? There are exceptions. Dogecoin and Shitcoin, as Meme coins, have no actual functions, which is the same as the early days of Bitcoin, but Bitcoin’s narrative is convincing, and what is Dogecoin’s narrative? That is, whether the support behind the narrative is reasonable. There is a saying that the consensus of fools is also a consensus. Faith has power and can put life and death aside.
What is a good project? The traditional view is that there must be functional innovation; the market can recognize the innovative function. It hits the pain point of the market. The function is the support of the narrative. The functions of exchanges, stablecoins, and some L2 projects support their narratives in the early years. Just look at the ranking of Coinmarketcap. In the long run, the market is also a weighing machine. Good projects are constantly rising in the ranking.
An unchanging business rule is to hit the market’s pain point. The cryptocurrency market lacks a distributed stablecoin. DW20 hits this pain point, equips Bitcoin with a ruler, and finally realizes the Bitcoin standard. Readers can refer to the DW20 white paper. The powerful chainless platform allows users to participate in transactions and payments and then use the money, providing support for the application of DW20.
It is inevitable that the community will support chainless products. Since the launch of only one function airdrop on December 24 last year, the project has increased 20 times, from 0.5 yuan 10,000 DW20 to today. New multi-signature and multi-backup wallets will be launched soon, and chainless functions will begin to emerge. The connection with well-known exchanges and payments will bring new ideas to cryptocurrencies.
Happy families are all similar. Don’t say that cryptocurrencies are an exception. If a project does not have a solid functional foundation, it will only be short-lived.
