I. Comparison Between Company and Community
There are many types of enterprises, such as cooperative enterprises, partnerships, unlimited liability companies, and limited liability companies. Similarly, communities can be of different types, such as interest-based, benefit-based, and faith-based. Here, we compare companies and benefit-based communities. Both generally aim for profit, although there are non-profit organizations within communities.
Differences in the Composition of Company and Community
Both companies and communities are organizations.
– Companies have clear organizational structures; communities may not.
– Companies aim for profit; communities may not.
– Companies have clear ownership; communities may not.
Traditional companies have clear decision-makers; crypto communities, though they have core teams, make decisions through community voting. Company decisions are centralized, similar to centralized government, while community decisions are decentralized and can adopt a representative system, similar to a parliamentary system, making decision forms more diverse.
Companies have clear top-down driving forces, with employees as tools assigned to positions. Communities are free associations with a unifying relationship, which could be benefits, interests, beliefs, or collective needs. Members are not tools; their importance is determined by their participation weight.
Companies have a hierarchical structure, while unified communities do not. The internet aids in forming unified communities.
The scale of company personnel is limited, while the scale of community personnel is limited only by the relationship that achieves the goal.
Company management costs increase significantly with scale, but efficiency may not. Internet-based communities can scale with minimal cost increase and substantial efficiency gains.
Companies have legal status and coercion, while communities do not need registration, representing voluntary public will.
Communities can be promotional organizations for a company or project, with differences in purpose and constructiveness.
Communities have brands but no property rights and are not protected by law.
Communities can set up management institutions to represent their interests and gain legal protection.
Members of ownerless communities have only nominal ownership of the community.
Communities with owners can be administered by owners of groups or operate like a company.
A company’s project is always managed by a unified system, while crypto community projects may consist of various sub-communities.
Differences in Organizational Structure Between Companies and Communities
Companies are pyramid-structured organizations, where information is transmitted level by level. The larger the company, the poorer the information transmission and hence efficiency. Companies with hundreds of thousands of employees are rare. In contrast, communities can easily have hundreds of millions of members. Internet-based communities lack hierarchical concepts, and everyone is equal. For instance, enterprise WeChat is not a community because it is designed for companies, and subordinates can’t speak freely. This is the essential difference between company management systems and crypto communities, with the latter using technology to allow participants to protect themselves in their chosen manner, representing the mainstream direction of the future. Crypto communities express the majority’s will, shaping future social interactions.
Which is Larger: Community or Country?
Facebook has 3 billion customers with a centralized relationship. If it were a community of 3 billion people, it would be larger than any country. Communities transcend national borders, connected by a common link. Currently, only religious believers exceed national populations. The Vatican is small but highly influential, matching the characteristics of a crypto community with a small core and large periphery. If they formed a Catholic community, representing the spontaneous will of divine belief without coercion and with all Catholics communicating equally, the dynamics might be different. The Catholic faith aligns with the definition of a belief-based community and would thrive under the crypto community concept.
II. The Emergence of Crypto Communities is a Necessity of the Times
Characteristics of Crypto Communities
Crypto communities are a type of community with unique characteristics not found in ordinary communities. They play a crucial role in the realm of cryptocurrencies and feature many avant-garde innovations. Crypto communities can be categorized into interest, benefit, and belief-based groups, but they cannot be distinctly classified, which makes them different from traditional company-based communities.
Crypto communities are primarily benefit-driven, centered around cryptocurrency, but they also contain other elements. For example, the Dogecoin community has a stronger interest component, while the Bitcoin community has a stronger belief component. Why does Bitcoin have a belief component? What is belief? Belief arises from liking and recognizing something, leading to expectations for future value, and it manifests through spontaneous dissemination to generate influence. Since Bitcoin’s price is solely determined by the market and does not reflect the system’s valuation, belief plays a significant role in its price increase, influencing token lock-in rates with the price level determined by new entrants. Early Bitcoin forums served as the Bitcoin community, playing a key role in maintaining and spreading belief. Although they have faded over time, the strong lock-in of early tokens indicates the spread of belief within the community. Currently, the Bitcoin community is scattered and lacks a unified structure.
It’s worth noting that communities driven solely by profit without belief won’t last long; at the very least, they need interest (liking). The market value difference between Dogecoin and Litecoin illustrates this. Dogecoin was once a bonus with Litecoin mining, yet today, Dogecoin’s market value is $47 billion, while Litecoin’s is $7 billion.
Let’s examine the belief in Bitcoin. Bitcoin’s long-term narrative remains constant, while its short-term narrative continually evolves, from store of value to national reserves, commanding reverence and belief. What is Litecoin’s narrative? What should I believe or hope for? Dogecoin relies on admiration for Elon Musk in addition to liking. Of course, I’m not a Dogecoin enthusiast. When joining a crypto community, one must ask themselves: Do I have interest, benefit, and belief? If there’s only one, it won’t last long.
When crypto communities are profitable, they share many similarities with companies. The closest analogy to company equity is platform tokens; if the platform is centralized, like Binance, the token represents the platform’s value and its community doesn’t have obvious characteristics of crypto communities. If the platform is decentralized, the community should play a significant role, especially in major decision-making. Centralized exchanges are being replaced by decentralized exchanges and on-demand trading mini-programs, showcasing the technological direction and business model driven by human needs.
With the adoption of crypto communities, most promotion and service tasks are completed by the community, allowing cryptocurrency projects to remain small, characterized by a small core team and a large peripheral team, resulting in low operational costs.
The development of cryptocurrencies will promote the growth of crypto communities, necessitating corresponding economic and legal systems. The advancement of technological civilization should be gradual, not seen in black and white terms. The current relationship between cryptocurrencies and social systems should not be one of conflict but of embracing a smooth transition to the future.
Differences in Decision-Making Mechanisms Between Crypto Communities and Companies
Company decisions are opaque; crypto community decisions are transparent.
Executive teams in companies are appointed based on authority; core teams in crypto communities are elected by voting.
Lower-level employees and users in companies have only advisory rights, while the highest decision-making body in a crypto project is the community itself. Any community member can initiate a proposal for voting and follow the decision-making process.
Companies do not inspire users; crypto communities do, as the benefits provided by companies can be exhausted. Communities, however, offer endless interest, hobbies, and contributions aside from benefits.
Company decisions are centralized; crypto community decisions are democratic. Company decision-making is efficient; crypto community democratic decision-making is less efficient.
Company checks and balances are through shareholder meetings, boards of directors, and management. Crypto community checks and balances are less complete; Bitcoin’s checks and balances are between miners and developers, lacking a unified Bitcoin community to fully reflect check and balance mechanisms.
How Should Bitcoin’s Community Be Established?
Crypto communities have voting systems, but unlike state voting, which is one person, one vote, crypto community voting is based on the nature of the community. The core principle is that crypto community rules are built and shared collectively, not set by company executives for everyone to follow.
The Bitcoin system consists of three parts and cannot be determined by a unified token voting system. Currently, there is a developer community and a process, but no unified user community. There is no visible mining community, though it may exist.
Bitcoin is designed with a system of checks and balances where miners and developers counterbalance each other. In companies, shareholder meetings counterbalance the board of directors, and the board counterbalances management. Company checks and balances are binding, while Bitcoin system checks and balances are not. Developers can modify programs, but miners can refuse to download updates. Which is more advanced? Perhaps both have their merits. Whether centralized or decentralized, having checks and balances is essential.
It’s worth mentioning that a system without a designed checks and balances mechanism is inherently flawed. This is a critical criterion for evaluating cryptocurrency projects. If it doesn’t meet this criterion, the project may have only emotional value. Can a protocol truly generate value? Experience tells us that the most popular internet protocols are free. Cryptocurrency protocols are no exception; protocols cannot capture value.
Is there a need for Bitcoin to establish a user community? Absolutely. As mentioned in the “Characteristics of Crypto Communities” section, Bitcoin inherently requires belief, but without a religious organization or management, it needs a unified structure to prevent increasing entropy, i.e., avoid chaos. Modern states are ownerless systems that still require voting to elect representatives to maintain order and prevent increasing entropy.
How Should Bitcoin’s Community Be Established?
The community needs a unifying link that everyone recognizes; otherwise, voting isn’t possible. There are three types of people for Bitcoin: users, developers, and miners. The weight of users can be assessed by the amount of Bitcoin they hold, developers by their maintenance duration and code contributions, and miners by their computational power.
Voting on profit-related issues requires input from all three parties: users, who fund the system, hold 50% of the voting power, while miners and developers each hold 25%. Technical issues do not require user participation in voting, as they may lack the necessary understanding.
Company Structure Cannot Resolve the Issue of Customers Being Both Contributors and Consumers
How to solve the problem of customers being both contributors and consumers in the internet age? This is the famous question posed by Kevin Kelly. The best internet companies, like Facebook and YouTube, have users who contribute content but do not benefit from their contributions. Influencers (KOLs) can profit, but ordinary users only have the right to consume. This thinking has persisted for centuries and was valid before the internet, but in the internet age, people have not changed their mindset, treating the internet merely as a productivity tool. Despite reducing hierarchies, users and companies are not unified entities. The developer community within the Bitcoin system spontaneously formed after Satoshi Nakamoto’s departure, and crypto communities have since become standard in the cryptocurrency industry, though a standardized system is still being explored.
Crypto Communities Address the Issue of Users Being Both Contributors and Consumers
Crypto communities are similar to cooperatives from the industrial era. The similarity lies in the fact that only those needing cooperative services can join, ensuring ownership and usage are aligned. Cryptocurrency communities are established with the currency as the bond, and community members are all holders of the currency. Chapter 3 of the Chainless White Paper, “Community Governance and Indirect Incentives” introduces a profit-oriented community structure.
In the internet age, two factors not seen in the industrial era have emerged: key opinion leaders (KOLs) and group owners. These two factors play critical roles in communities. The white paper introduces indirect incentives, comparable to wages in the industrial era, with a similar overall wage disparity. Group owners in the internet age have not been given more missions, but within the Chainless community, group owners are endowed with managerial functions. Their “wages” are closely related to the number of group members they manage. Members can choose new owners, helping to improve service quality. Both KOLs and group owners face competition and a last-place elimination system. All currency holders enjoy monthly dividends based on their contributions to the Chainless community.
Crypto Community Incentives Must Include a Last-Place Elimination System
The last-place elimination system is judged by machines, serving the role of human resources. Automatic elimination ensures the system remains dynamic. This is also reflected in the Bitcoin system, where miners are the profit beneficiaries, much like shareholders receiving dividends. Miners are continually eliminated, ensuring the strongest “shareholders” remain, a concept hard to achieve under traditional corporate systems where shareholders do not face competition, and anyone can become one by providing funds. In contrast, the Chainless community’s last-place elimination stems directly from Bitcoin’s mining competition. Since all participants are currency holders, it’s slightly different from corporate employee elimination systems. Under corporate systems, shareholders do not compete; controlling shareholders are only removed by selling their shares or death. Shareholders are profit beneficiaries but not contributors to company development. This thinking was valid in the industrial era, rooted in capitalism, but is outdated in the internet age. It now aligns with “people-oriented” thinking, or traffic-ism. Bitcoin’s competitive mining power corresponds with competitive traffic, necessitating internal competition within crypto communities to align with Bitcoin’s competitive principles.
The Chainless community functions like a company’s general meeting of shareholders, but with real-time supervision of the core team by the community. The community has voting and recommendation rights, enabling them to vote out core team members and approve proposals. The operational transparency far exceeds that of companies, reducing management costs. The Chainless platform’s initial human-driven promotion evolved into a contribution-based red packet system, with smart contracts automatically locking benefit weights, ensuring no manual intervention. This step is crucial for the Chainless platform’s significant move into the blockchain crypto empire.
III. Customer Value and Airdrop Models
Revaluation of Customer Value
The existence of communities increases customer valuation. In the early internet era, the value of a customer was approximately US$50, and customers were just users. The high valuation of cryptocurrency customers is due to the high value of financial customers, though exceeding even current financial markets’ valuation of trading customers. For example, HYPE has only 360,000 customers but a valuation of US$7 billion. In contrast, a customer of Binance, with a more established business model, is valued around US$500. Why? Because Binance follows a centralized model, where customers are still users, similar to traditional financial valuations.
Actually, the market hasn’t fully understood Binance. Binance is undervalued, seen as a traffic platform but with overstated compliance risks.
HYPE’s decentralized model and community-based foundation present a vision for a new era, expected to surpass centralized systems. Binance belongs to the old era, HYPE to the new era. Is it the allure of the new era inflating its valuation? I don’t think HYPE’s model is necessarily correct, but the potential of Web3 overtaking the industrial era is certainly exciting.
Cryptocurrencies are listed early, with markets buying expectations. When customers are not just users but also contributors, how should they be valued? We find that the most significant difference between Web3, Web2, and Web1 lies in community composition. The market often overestimates an uncertain future, with community decision-making and innovation possibly contributing to high cryptocurrency valuations.
Community Unites Holders, Employees, and Users
Airdrops before Bitcoin were unimaginable. For tokens to be valuable, they need believers to promote them. This process endows social consensus value. The more users, the greater the promotional effort. Web3 commonly uses referral codes, recognizing user value. The ideal is for shareholders (token holders), employees (contributors), and users to be one entity.
This trinity structure integrates all participants, unlike companies where the three are separate. For internet projects like Facebook, with 3 billion users, how many shareholders trade Facebook stocks? How many of those are Facebook users? The trinity is a community mechanism superior to the corporate structure. Community transparency and a large user base also boost cryptocurrency prices.
Airdrops Recognize User Value
Cryptocurrency ICOs (Initial Coin Offerings) were rejected due to early public fundraising risks. Thus, the airdrop model emerged, incentivizing early interest and speculators. Web3 airdrops, distributing tokens to users in specific ways (e.g., “register and get 100 tokens”), recognize user value. In the industrial era, early projects needed financing, but Web3 should not seek early market financing. Satoshi Nakamoto’s Bitcoin had no early financing; it started “mining” after the project was prototyped, with each miner promoting Bitcoin. Participants brought their tools, investing themselves in the process. When coins became tradable, transaction value emerged, a scenario impossible in the industrial era. Satoshi had no ad budget; price increases drove word-of-mouth promotion. Each participant contributed to Bitcoin’s promotion. Satoshi’s “ad budget” was distributed among participants. In the industrial era, promoters were paid money (e.g., “download and get $100 cash”), but Satoshi offered convertible tokens—coins. This idea eventually evolved into “airdrops.”
Cryptocurrencies forge ahead amid challenges, fundamentally representing society’s contemplation and struggle with current financial issues. Today’s changes in cryptocurrencies are not accidental. Information dissemination and consensus-building take time.
Initially, Bitcoin was “air” and thus worthless. With participation, the system’s value rose. Most post-Satoshi projects are not currency issuance projects; issued tokens represent system value. Early on, system functionality isn’t evident, so system value equates to customer value. To measure system value, we developed a headcount-based POP algorithm, detailed in Chapter 2 of the Chainless White Paper. According to the 700,000 registered airdrop participants, Chainless platform’s equity token CLY reached a market price of US$1.26, slightly below the white paper’s predicted US$1.49. The trading token DW20 was priced at 0.1 cents, further below the predicted 0.18 cents. Figure 1 is cited from the Chainless White Paper.
Rapid growth refers to the coin being listed on exchanges. Due to 11 months of OTC trading, there is a discrepancy between Figure 1 and the actual projection. In reality, towards the end of the 7th cycle, both coins started to experience rapid growth. The preparation period was less than 12 months. According to the standard “Bitcoin Natural Growth Curve” calculation, the preparation period is 1, the rapid growth period is 2, and the stable growth period is 1. The three cycles have a time ratio of 1:2:1. Thus, with around 14 cycles of rapid growth, it should complete rapid growth by the 21st cycle, reaching close to US$1.
Figure 2 shows the Chainless OTC trading trend. The first few days were free trading, and nobody recorded the OTC trading curve. The lowest DW20 price was 0.007 cents. To reach US$1 would be an increase of 140,000 times. Currently, there is still a 1,000-fold growth potential to reach US$1.
Bitcoin started from Laszlo Hanyecz’s transaction at US$0.005. Bitcoin reaching US$100,000 means it has increased by 20 million times. This is the allure of early investment: huge risk and huge reward! There is a lot of trash in cryptocurrencies, but they offer opportunities to change one’s fate that traditional finance does not.
Airdrops are unique features of cryptocurrencies. Under a corporate mechanism, it is impossible to distribute stocks through airdrops. Even if a company wanted to, it would be impractical in reality. Fiat currency does not possess the multiple characteristics of cryptocurrencies, making communities under corporate mechanisms very weak. For cryptocurrencies to develop well, they must utilize airdrops to build strong communities.
This section introduced the differences and similarities between companies, communities, and crypto communities. The next section will use the Chainless community as an example to further discuss the characteristics of crypto communities.
Further Thoughts
Figure 2 shows the price trend and prediction curve of Chainless tokens, containing all the information about the Chainless project. The downside is that it hasn’t reached its forecast valuation, but the upside is that rapid growth started earlier than expected.
The accelerated growth of Chainless tokens is due to Chainless reflecting the broader trend of cryptocurrencies. President Trump’s ability lies in creating opportunities. The saying “a breeze starts at the end of the green leaves, a wave forms between the ripples” speaks to seizing opportunities. Are you ready?
