What is the next 100,000 x cryptocurrency?
I don’t hope too many people will read this article. Afterall, market won’t let everyone to make money.
Director of PBOC research bureau Wang Xin announced these days, that under the permission of State Council of the People’s Republic of China, China’s central bank is developing its own digital currency (in monetary economic parlance: M0) to replace only cash with the digital currency, not bank deposits. The news triggered heated discussions.
In addition, the former Central Bank Chief, President of Chinese Finance Association (TCFA) Xiaochuan Zhou provided positive feedbacks on Libra. He said Libra is a large experiment, especially for traditional financial businesses and payment systems, despite with lots of uncertainties. However, Libra’s strategy of being backed by a basket of fiat currencies reflects the trend towards a globalized currency.
When citizens see government actions on cryptocurrency development, they’ll pay huge attention to it. Recently I’ve been asked by many people, what life-changing digital assets are worth purchasing except from BTC and ETH? Meanwhile, I’ve seen mainstream medias clearly stated that there’ll be no other 1000X digital assets in future. People are concerning about whether cryptocurrency’s era has ended? No wonder we’re in huge anxiety.
After all, it can barely create a “god” to see a bigger picture beyond Kondratiev wave or the current era. A correct prediction requires a bit of luck.
However, if 1000X — 10,000X digital asset does exist, then what is it? In my previous article <What’s the future of Bitcoin and the logic behind>, I have already explained the correlation among gold, silver, BTC and ETH.
The increase of BTC in the past decade aroused huge controversy. Most people couldn’t figure out the reason behind the great fortune effect. However, if we trace back to the history — as the origin of human capital, gold has gone through a 10,000-year-history of human civilization, from prehistoric civilization to ancient Egyptian civilization, from ancient Rome Emperor to Byzantine Emperor, from Spanish conquest to emperor of Chinese Ming Dynasty, from “the empire on which the sun never sets” to the fall of Qing Dynasty.
We have witnessed the history of human capital, from the first gold dig out till over 32 billion USD today, having reached nearly 10 billion X increase. Why BTC price achieved 1000x increase in the past decade? Because Machine Network civilization experienced the human history in a short period of time. BTC to Machine civilization, is similar as gold to human civilization.
I’ll explain the logic behind it. Evolution of the earth reflects the accumulation process of “the 2nd curve”. Father of modern economics, Alfred Marshall once wrote that “the Mecca of the economist lies in economic biology rather than in economic dynamics.”
Let’s trace back to the revolution of species on earth: the earliest evidence of life on Earth was discovered in Greenland rocks, around 3.85 billion years away from now. It’s nearly impossible to know what is the origin of life based on limited historical remains. However, there’s a possibility that the first organic molecule appeared near the hot spring under deep sea, where provide enough heat and chemical substances for life.
The blue — green algae evolved from Precambrian Archean to Proterozoic in 545 million years ago to jellyfish and sponges during the past 3.3 billion years. Then more types of deep-sea biologies appeared in Cambrian period. Until the Devonian age 350 million years ago, terrestrial biology appeared, and evolved for 200 million years. While stegocephalia became extinct 150 million years ago.
In Mesozoic Era over 200 million years ago, large reptiles ruled the world, such as dinosaurs. However, 65 million years ago in the Cretaceous Period, dinosaurs disappeared, which took 135 million years.
By contrast, the smaller ancient mammals, reptiles and birds survived. Part of the mammals evolved to more advanced primates. About 3 million years ago, in the Tertiary Period, large amount of mesophilic species and mammals were extinct. Part of the advanced primates evolved to human beings, which took 62 million years in total.
It merely took 3 million years for human civilization to evolve from Sumer, ancient China, ancient Babylon, to ancient India civilization. The evolution of the east and west empires finished within 10,000 years ago, a much shorter iteration period from thousand of years to hundreds of years. As gold and silver became currency standard, national border as territories, human civilization rapidly developed, until reached relative stability after the 2nd world war. The whole period took less than 100 years.
The first Internet message was sent over the ARPANET in 1969. In 1989, someone proposed the first Internet information protocol while working at the European Particle Physics Laboratory, which was later called HyperText Transfer Protocol (HTTP) in 1991, initiated a new era of explosive information for human beings in less than 50 years.
The “2nd curve theory” was proposed by the co-founder of London Business School Charles Handy. The key message of “The second curve” is that in order to make progress life, sometimes it is necessary to make radical changes, to start a new course that requires a complete new way to understand the problems we encounter.
“First Curve” contains two key elements: breaking point and limit point. Breaking point is what an organization seeks for during the initial evolvement period, a period from 0–1. Breaking point will lead its further development from 1–10. While limit point is the ceiling an organization cannot avoid during its development. Limit point can also be regarded as a stall point.
In other words, organizations need to figure out a “2nd curve” before reaching the limit point, so that the organization will extend its development. But when will “2nd curve” appear?
Former Intel CEO provided an answer in his book <Only the Paranoid Survive>, this is called “strategic turning point”. Every strategic turning point will accelerate 10x change, and every 10x change will stimulate a new strategic turning point. The so-called 10X change means a key force behind the development of an enterprise has become ten times compared with what it was recently. In 1st curve, a 10x change of any key force’s will trigger the 2nd curve.
The 2nd curve theory inspired us with two rules: firstly, any organization will face its future decline, only 2nd curve will extend its life expectancy; secondly, a new 2nd curve will evolve faster than the previous one.
The evolution of species fits with the rule of “2nd curve”. Then why bitcoin — the digital gold in machine civilization, was created at this point?
Let’s think about consensus of digital currency. Earlier than thousands of years ago, human beings have reached consensus of “gold”. Bitcoin consensus has no difference from gold consensus reached by Sumer 10 thousand years ago. It’s only a rapid iteration of 2nd curve from human civilization to machine civilization.
How many types of metals do we know? Gold, silver, copper, iron, tin. What else? The ground reason why humans could become ruler of the world, is imagination — the most precious gift that differentiates humans from other species.
Today we have witnessed the rise of BTC and ETH as digital gold and silver. If we believe that stories such as lightning network, thunder network, cross-chain, sharding, Defi will be enough to support the next 100,000X digital currency, means we have not thoroughly understood cryptocurrency. These are only part of the ecosystem, the “2nd curve” of bottom species.
I believe, only digital “copper” will become the next explosive 100,000X cryptocurrency.
Currently we are still waiting for the birth of digital “copper”. Copper is one of the earliest metals. In pre-historic era, copper mining occurred in open-pit mine, and it was used to make weapons, tools and various types of wares. During the slow iteration of human civilization, copper substituted seashell, knife money, cloth, etc., and became the main exchange currency in human civilization.
Today, copper is one of the vital elements of human world, to produce electronic products, chips, as well as petrol & chemicals, transportations, architecture, mechanical metallurgy, light industry, and emergent High-Tec, AI, etc.
I believe today’s blockchain development stage is still at 1995 Internet era, instead of 2000 as regarded by many.
The issuance of bitcoin 2009 was similar to the first HTTP introduced in 1989, and Ethereum was like ready to upgrade from DOS to Windows in 1995. Internet had a breakthrough product in 1993, which was called “browser”. Browser opened access to network traffic. What is blockchain’s breakthrough point? — I think “wallet” is, as it opened access to network traffic through value exchange.
However, browser itself is unable to produce huge value, since it has no “imagination”. Browser is merely a channel to transfer Internet information. Therefore in 1995, the first generation of killer product appeared — Internet portals. The well-known Internet portal companies are yahoo, Netease, Sina, and Sohu. Similarly, in blockchain world, wallet does not contain huge value since it only functions as a channel to exchange the value of blockchain.
What is the value of blockchain? For instance, as a blockchain operating system to distribute protocols, Ethereum can solve the unsolvable problems in Internet world, to break data monopoly, and exchange decentralized encrypted message. In wallet, value will be created only when the exchange of a large amount of data layers is realized.
In this case, what is the first generation of killer product? It must be a public blockchain that can exchange large amount of encrypted data layers.
As copper being the most widely applied metal and the basic exchange unit in ancient human history, public blockchain is one of the earliest “value consensus” reached in human history. As we already know the characteristics of “digital copper”, then what is it in blockchain world?
The appearance of bitcoin and Ethereum during the current recession cycle in Kondratiev wave coincides with the fluctuation of gold and silver price in the previous recession period. As we know, history repeats itself. Gold price will reach 1.26 billion USD by the end of the recession. As the “2nd curve” of human civilization, the “digital gold” bitcoin might reach or even surpass the gold price.
It also means, bitcoin price will reach 600,000 USD before the end of recession or even earlier. I have expressed in previous article <What’s the future of Bitcoin and the logic behind>, BTC/ETH ratio will reach its lowest of 1:6.3. In other words, the final price of ETH will reach or surpass 90,520 USD.
Let’s review what happened to gold in the previous recession period in Kondratiev wave? On 17th March, 1968, London gold pool collapsed. On 15th August 1971, the U.S president Nixon directed Treasury Secretary Connally to suspend, with certain exceptions, the convertibility of the dollar into gold or other reserve assets, ordering the gold window to be closed such that foreign governments could no longer exchange their dollars for gold. Dollars finally broke free from the gold limit to its issuance in foreign exchange market.
The gold price of 1972 gold market increased from 46 USD/ounce to 64 USD/ounce. In 1973 — the transition period from depression to recession in previous Kondratiev wave, gold price exceeded 100 USD. From 1974–1977, gold price fluctuated from 130–180 USD. In 1979, gold price grew to 500 USD. In Oct, U.S inflation rate exceeded 12%. On the first two trading dates in Jan 1980, gold price reached 634 USD. U.S secretary of Treasury G. William Miller claimed that the Treasury will no longer sell gold. In less than 30 min, gold price surged by 30 dollars to 715 USD, and reached its new top on 21st Jan. U.S president Carter had to take actions to control the gold market. On the same day, gold price plunged by 50 basis points. By then the previous gold bull market in previous Kondratiev wave ended.
Data never lies. History presents you with the script of the story. Whether BTC will reach two periodic price peaks in 2021 and 2023? The peak price will be around 600,000 dollars. In addition, whether BTC price will reach the final top at this round of Kondratiev wave by the end of 2025 and beginning of 2026, to reach the unbelievable 1 million dollar?
The second peak price of gold in previous Kondratiev wave was 500 dollars, which accounted for 0.59x of the final top price at 850 dollars. What a coincidence, the second peak price of “digital gold” — 600,000 dollars accounted for 0.60x of its top price at 1 million dollars.
Although humans cannot escape from the repetition of history, imagination is the magical key to understand the logic behind.
Two years prior to the end of last recession cycle of Kondratiev wave, when gold price reached its top, silver price closely followed to the highest gold/silver ratio of 15.15:1. With this logic, we can have a guess whether the peak of ETH price will appear in 2027?
The world’s gold deposit is around 40,000 tons, and silver deposits is around 530,000 tons, and copper deposit is around 70,000 tons. Silver saving is 13.25 X of gold, and copper deposit accounts for 13.21 X of silver. The price ratio is 99.67. When “digital gold” has issued its total volume of 21 million, “digital silver” ETH needs to issue a total number of 100 million to reach the stable gold/silver price ratio. Then the total issuance of “digital copper” will be 9.967 billion, approx. 10 billion.
In human civilization, copper has the most pervasive application scenarios as a basic exchange unit. In addition, it is also a consumable resource. After the invention of electronic devices, esp. Internet, the consumption volume of copper increased sharply. Currently, the highest copper mining volume is 25 million tons. Monthly explicit stock, which is calculated by consumed volume minus mining volume, fluctuates around 80,000 tons to 20,000 tons. The inflation rate is less than 1%.
Therefore, the initial total volume of “digital copper” should approach 10 billion. Since it’s an applicable public blockchain, the consensus protocol should support the value exchange of a scalable encrypted data layers, to “burn” the data value through exchange, and adjust the total number via inflation rate before it approaches “limit point”, to reach a balance.
According to the price ratio of silver/copper, the highest stable price ratio of ETH/”digital copper” should be 1:275, while the lowest ratio should be 1:43.44. In other words, the final price of “digital copper” should reach 2,194 dollars. We will see the price in 2029, at the end of this round Kondratiev wave.
Back to the core question of the article, what public blockchain can support a large number of encrypted data layers? The answer is map.
Post-2008, the whole Internet industry is moving towards mobile end. Now we see all these Internet apps with huge estimated value such as wechat, momo, Airbnb, meituan, ctrip, qunar, Uber or ele.me, are all built based upon map data.
In blockchain world, these application scenarios will become various data layers located in map public blockchain for data value exchange. The inelastic demand of map becomes its natural advantage to be the first blockchain infrastructure for traditional Internet applications. As we know, our need for decentralized data comes from the dispersive nature of human activities. From this perspective, map is the best answer to a decentralized blockchain application.
Although the view that blockchain technology will subvert the world has been discussed by many company leaders, but most were a flash in the pan. Since the balance between decentralization and efficiency is a natural paradox, monopolies won’t easily sacrifice massive user data and experience to decentralization. After all, for normal users, certain privacy leakage is still tolerable, until when a product comes into sight that is really worthy of changing their consumption behaviors.
By contrast, the blockchain industry with long-tail data feature will be the first winner in real-life applications.
For instance, finance has long-tail feature. So far, no financial service is monopolized by a single bank worldwide, nor any investment fund could monopolize market share. Even Warren Buffett were unable to control the market. Financial service is one of the most explicit ways of value exchange, therefore it became the first application scenario of blockchain technology in real-life.
Similarly, map data is pervasive, even the global map oligopoly Google could only keep a slow update of 1.2 billion population’s data, covering developed countries such as north America, Europe, Australia, Japan and Korea.
In addition, map can generate the biggest ecosystem. As long as the map has accumulated various type of encrypted data layers with exchangeable values, it will become an open and encrypted ecosystem just like Ethereum. In fact, currently all nodes in blockchain network are generated based upon PC end, without necessity to trigger mobile end participation. However, P2P encrypted network is vital for map applications.
In other words, map blockchain will generate the largest P2P mobile blockchain network, and utilize the brand-new concept of spatial consensus to broaden the imagination of the whole world. Whereby the decentralized map will become the first killer product in blockchain world.
From the perspective of investors, when Ethereum finishes POS upgrades in 2021, the competition of blockchain operating systems will be over. By then, what kind of bubble blockchain will develop towards?
I believe Hyperion MapChain is the only public chain that has found a practical application in real-life, and because of their clear perception and broad imagination that determines the scalability and feasibility of a project.
Hyperion MapChain has figured out the future trend of Map products and developed One Map — an open an encrypted map with global consensus. One Map will be contributed by open map communities, and exchange data as products to generate value. Hyperion launched three map products based on the core value of “aggressively open” and “decentralized” — Map3, Titan and Atlas Chain. Map3 is the first decentralized map service network, 2B; Titan is the first decentralized privacy map, and Atlas chain is decentralized spatial protocol which supports both 2B and 2C world-scale map services on blockchain. It means, a whole new Map world will be built based on MapChain.
When a valuable new product is introduced to the world, it always takes time for others to understand the logic behind it. After all, only few people understand at an early stage.
If I’m correct, please remember I was just lucky.