In a bustling Beijing coffee shop, there's over a 50% chance that someone is talking about blockchain. Wan Yang, a 90s-born tech development head at a mid-sized token trading platform, often finds himself in such conversations—though his expression sometimes betrays a sense of helplessness when the topic comes up.
At the start of 2018, blockchain was riding a wave of enthusiasm from investors and venture capitalists, despite ongoing regulatory efforts to clean up the initial coin offering (ICO) landscape. The sector’s fervor was far from cooling down.
As competition among B-side players intensified, the phenomenon of token issuance and trading under the guise of blockchain continued to attract non-professionals. Many speculative investors still couldn’t tell the difference between blockchain and Bitcoin. According to a survey by 21st Century Business Herald, behind the hype were bold ideas from practitioners aiming to integrate blockchain with next-generation internet credit systems, alongside the rapid rise of Bitcoin, which fueled the desire for quick wealth. However, many participants struggled with the paradox between real-world applications and token issuance.
The mystery of "overheating" remains. On WeChat, countless blockchain discussion groups are formed daily, and offline forums and seminars continue to thrive. Blockchain-related startups and media have also emerged rapidly, indicating that the heat hasn't faded yet.
But why did blockchain suddenly explode? Most participants haven't delved into this question. Even seasoned professionals found themselves confused. Some researchers who had been working in the field of distributed networks for years recently joined projects and started issuing tokens.
Wan Yang believes the root cause of the current boom lies in Bitcoin's recent surge. Despite market fluctuations, Bitcoin rose from $0.0025 per unit in 2010 to $9,000 as of March 13, 2018—a staggering 3.6 million times increase over eight years. He explains that Bitcoin possesses characteristics similar to gold, such as divisibility and scarcity, and its stable operation has demonstrated the feasibility of decentralized networks in solving credit issues.
However, feasibility doesn't always translate to commercial success. The rapid rise of Bitcoin and subsequent tokens like Ethereum and Litecoin allowed savvy individuals to find opportunities for wealth. To this day, many industry insiders admit that the most successful application of blockchain so far is speculation.
Despite this, many practitioners still hope that blockchain will become part of the next-generation network infrastructure. Wan Yang is one of them. Before joining the token platform, he had no prior knowledge of blockchain. He told reporters that he made his first fortune selling an indie game and came here to "learn," hoping to launch his own blockchain project in the future.
He acknowledges that current expectations for blockchain may exceed its capabilities but still believes it could become a key component of future network communication. Tokens, he argues, are essential to the blockchain ecosystem.
"Many people think that just having a chain without tokens is enough, but who would contribute to the nodes?" Wan Yang said. "Like the Internet's communication protocols, the foundation of a decentralized blockchain network is the token. As demand for a chain grows, scarcity will naturally make tokens valuable."
Yet, when asked how to make blockchain applications more demanding, he remained vague. "The application scenarios of blockchain depend on what is actually needed."
Reputation plays a crucial role. Unlike Wan Yang, some practitioners are driven by the financial gains of ICOs. Although two major crackdowns occurred in late 2017 and early 2018, many ICO sponsors still used overseas platforms to conduct their offerings, catering to domestic investors.
An industry insider noted that ICOs allowed many project founders to make quick money, with some projects even being launched out of thin air. "There's a lot of money involved, but since ICOs aren't legal, they're hard to regulate under market autonomy," he said.
According to incomplete statistics from 21st Century Business Herald, over 80% of ICO projects on leading platforms this year ended up in failure. Senior cryptocurrency investor Yang Jingyuan believes that current token pricing is unrelated to technology and instead depends on the popularity of the project itself.
"I think almost 100% of coins are 'air coins' without real use cases," Yang said. "What's the point of a use case if it's not based on technology? Even though Ethereum and EOS have better tech, Bitcoin remains the top due to its name recognition."
The unspoken rule of "fame equals price" in the ICO space has led to various side effects, including the growing importance of trading platforms and blockchain media. Tong Feng, a blockchain media head in Beijing, admitted that media outlets often promote well-known figures and projects, leading to an explosion of new media projects every week.
"Blockchain isn't hard to profit from through media. It's like doing roadshows for illegal projects. If the media is in the spotlight, the value of small tokens becomes negligible, while Bitcoin can reach tens of thousands of dollars," Tong said honestly.
"The big players are still the trading platforms. The cost of going live is usually around 10 million yuan, and it's like a fight for an IPO," Yang Jingyuan added. "Eventually, all the money ends up with investors, and many know the risks but still follow the trend."
"I had luck, who would have thought I'd be the last one?" Yang said.
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