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I have been traveling abroad recently and have paid little attention to the market, but I have seen a lot of despair, doubt, and anxiety. Let’s take a look at it rationally.
Today we are going to talk about the blockchain industry. In recent years, you may have heard many people say that “blockchain is doomed” and it seems that there is no hope for this industry.
Indeed, from the current perspective, there seems to be no core application layer narrative, and modularization and Layer 2 (L2) are like ghost towns. No one cares, no one asks, and many people are shouting "no hope".
But this scene reminds me of 2018, when the ICO (initial coin offering) craze had just subsided and everyone was asking: "What else is blockchain used for besides issuing coins?"
If we could go back to 2018, we probably would not be able to think of any practical significance of blockchain other than issuing coins. Today, let’s talk about the development history, current challenges and future possibilities of blockchain, hoping to bring you some inspiration.
Early Exploration Stage (2008-2013)
The story of blockchain technology starts with the birth of Bitcoin. In 2008, a person named Satoshi Nakamoto (or a group of people) published a paper proposing the concept of Bitcoin. Bitcoin is the first cryptocurrency based on blockchain technology, solving the trust problem of digital currency.
At that time, the application of Bitcoin was basically limited to the field of cryptocurrency. People's understanding of blockchain was also limited to "it is a new type of currency". At that time, blockchain technology was still very rudimentary and its application scenarios were also very limited.
ICO boom and smart contracts (2014-2018)
In 2014, the emergence of Ethereum ushered in a new phase for blockchain technology. Ethereum is more than just a cryptocurrency platform. It introduced the concept of smart contracts. Smart contracts are contracts that can be executed automatically. They are stored on the blockchain and can be executed without the intervention of intermediaries. This opened up a whole new world for blockchain technology.
With the rise of smart contracts, ICO has also become popular. ICO is a new way to raise funds by issuing cryptocurrencies. Many blockchain projects have raised a lot of funds through ICO. However, due to imperfect supervision, the ICO market is full of speculation and fraud, causing many investors to suffer losses.
Decentralized Finance (DeFi)
With NFTs (2019-Present)
After the ICO boom, the blockchain industry has entered a relatively calm adjustment period. However, decentralized finance (DeFi) has gradually emerged since 2019. DeFi uses blockchain technology to create a financial system that does not rely on traditional financial institutions, allowing people to conduct financial activities such as lending, borrowing, and trading on a global scale.
At the same time, the rise of non-fungible tokens (NFTs) has also brought new application scenarios to blockchain. NFT is a unique digital asset that can represent various digital content such as artworks, music, videos, etc., and has the characteristic of being unreplicable. The emergence of NFT has enabled blockchain to find new uses in digital asset management and creative industries.
Although blockchain technology has made considerable progress in the past few years, it still faces some severe challenges.
Although blockchain technology itself is constantly improving, there is no prominent core narrative at the application level. In other words, many technological innovations have not been widely promoted and recognized in actual applications.
For example, although modularization and Layer 2 technologies can solve the scalability and efficiency problems of blockchain, their actual application and popularization are relatively slow.
The rapid development of the blockchain industry has also brought challenges in standardization and regulation. At present, the blockchain field lacks unified standards, resulting in poor compatibility between different platforms and affecting user experience.
In addition, the decentralized nature of blockchain technology makes supervision more complicated. How to strengthen supervision while ensuring innovation is an urgent problem to be solved.
Despite many challenges, the potential of blockchain technology remains huge and may achieve breakthroughs in many areas in the future.
Web3.0 is considered the next generation of the Internet, and its core concept is decentralization. Blockchain technology has great potential in creating a decentralized Internet. Through decentralization, people can better control their data and privacy, and no longer rely on a few large Internet companies.
In addition to the financial sector, the application of blockchain technology in other industries is also being explored. For example, in supply chain management, blockchain can improve transparency and traceability, reduce fraud and errors. In the medical field, blockchain can be used to manage electronic health records and ensure data security and privacy. In terms of intellectual property protection, blockchain can help creators better manage and protect their works.
Digital identity and data sovereignty are another important application direction of blockchain technology. Through blockchain, people can manage their own digital identity and personal data to avoid data abuse and privacy leakage. This not only helps to protect personal privacy, but also provides a safer and more reliable authentication method for various online services.
Whenever the blockchain industry is at a low point, we can look at the problem from the following perspectives, adjust our mindset, and respond proactively.
Any emerging technology will go through a post-bubble adjustment period, which is a process of finding practical applications and improving technology. Blockchain is no exception. Although the industry seems to be stagnant at present, this may be the time to accumulate strength and prepare for the next breakthrough.
Looking back at the development paths of other technologies in history (such as the Internet and artificial intelligence), we can see similar cyclical phenomena. Every technological revolution will go through a process of bubble, burst, adjustment, and rise again. Blockchain is also undergoing such a natural evolutionary process.
We should focus on the potential of blockchain technology in solving practical problems, not just short-term market performance. The development of technology requires time and patience, and only when it truly solves practical problems can it be widely recognized and applied.
Although blockchain technology is currently facing some challenges, its potential is still huge. Through continuous technological innovation and application exploration, blockchain is expected to find more practical application scenarios in the future and bring more changes and opportunities.
So, when you hear someone say "blockchain is dead" again, think about that period in 2018. Perhaps, just as the rise of DeFi and NFT was unforeseeable, the seemingly dormant blockchain industry is now nurturing the next major breakthrough.
We welcome it with an open mind, and patience is an eternal theme.
I hope this article helps you better understand the ups and downs and prospects of the blockchain industry. If you have any questions or ideas, feel free to discuss!
Good luck and see you next time!
I will be posting project research and essay updates regularly, so stay tuned for more information and to stay up to date!