Why did the ancestors of value investing fail to make value investing in the face of Bitcoin?
To this day, the Chinese blockchain circle has not truly “out of the circle”. China’s practitioners have the world’s first effort, blood and sweat first, tears first, but now they have fallen to the second place. There are not many investors who really implement value investment, and the atmosphere of the entire blockchain circle is always the prevailing hype that cannot be curbed. To be honest, our environment is not much better than India’s Asan. This circle does not have a place where value investors gather like Snowball, there is no Goldman Sachs, and there is no Buffett. There are only countless wreaths, only the mouth is the Bitcoin body, the platform is the second treasure of MLM coins, only Li Xiaolai, who inexplicably claimed to have sold Bitcoin years ago, only one by one accidental outbreak of legends and a large number of bankrupt leveragers. Of course, starting in 2020, we have Musk, Cai Wensheng, and Blackstone Goldman Sachs apples in the line behind… But they are almost all foreigners, foreign capital, Chinese people have gone out, they have gone out, and follow the United States. Behind people’s DeFi, living in a disturbed mood. Faced with such a big change, “changes that haven’t been seen in 5000 years”, why do the Chinese seem to be a little behind? A little lost?
We Chinese were the first to do blockchain, but now we have the least gains. What a bird’s eye is this. There are multiple reasons for this. I personally summarized 2 years of long and painful thinking. The main reasons I summarized are:
1. The ZC factor.
2. The Buffett factor.
3. The weakness of human nature (execution).
4. The blow caused by the intervention of MLM forces.
5. Technical factors.
Adding up all factors, the superimposed effect results in a poor information, which eventually leads to an imbalance in the norms of behavior, regardless of whether the currency circle, mining circle, shovel circle, exchange circle, or institutional circle (if China also has one) clouded with mist and smoke.
I will expand on each point below, which may not be rigorous enough.
We don’t talk much about the ZC factor. In the past 4 years, ZC has changed repeatedly, but it has never been separated from its origins. In short, it is a simple matter of a mine, and it has not been brighter in 4 years. In the past 4 years, the industry’s ZC has undergone major changes more than 10 times, and small changes more than 10,000 times (haha). For example, there was a period of time when the term “no-coin blockchain” prevailed, and it was finally lost, but it was very misleading. I remember that when this argument was the strongest, Yang Moumou, a big miner I respected the most, smiled bitterly at me, and said firmly and affirmatively (I still remember the scene and the way he spoke): If this theory is established, all Miners will be unemployed, and the entire industry chain is not logically established. Its absurdity is that it completely ignores and insults the work and dignity of miners. The person who put forward the whole theory does not know what “proof of work” is, and completely ignores the value of the laborer.
Under this logic, we can see that in the general direction of the past few years, the global attitude towards the “mine farm” has changed repeatedly. There is a famous argument that mining electricity consumes a year of waste. “It is equal to Argentina’s electricity consumption in one year, etc., this account is correct, but it does not take into account how much electricity was wasted, but it was “saving” by Bitcoin mining. Without the mining industry, how much waste electricity will always be waste electricity! There are many absurd anti-scientific arguments like this “power consumption in Brazil”, such as every report on “Bitcoin hits a new high” in mainstream media, and the title of each report always maliciously attaches the sentence “There are ** people.” “Break out”, imagine that the mainstream media will add the sentence “1.3 million people burst out” when reporting “Nasdaq’s new high”? Or when it is reported that Tesla has reached a new high, it must be said that there are 40 billion US dollars of short sellers that have burst? “My son was admitted to Tsinghua University, but unfortunately it cost me 1 million training fees.” Or, “That buddy watched a wonderful movie “Hello, Li Huanying” yesterday, but he wasted their family assets of 45 yuan. Renminbi.”
When reporting on the currency circle, many media deliberately mislead you with malice and contempt. Jesus said, forgive them, they don’t know.
2. The Buffett factor
Buffett has a typical meaning. It is a historical benchmark and a particularly huge shame and insult. Buffett is a great symbol of value investment. This is true. No one dares to disrespect him. He has become a traditional financial power. The old-school value investment flows to the top, so his remarks (behavior), the fatal misunderstanding of Bitcoin against cryptocurrency, and the blow and destruction to the entire market and industry, are at the level of the atomic bomb, which is extremely terrible and huge losses. Think about how many people miss the opportunity to make a fortune in life because they respect and worship Buffett, and how many people get in the car in time to make a fortune because they believe in Musk? This account is impossible to calculate. The two people are very different in the history of human cryptocurrency revolution and in the process of the blockchain super revolution.
Buffett’s mistake is that he himself does not understand technology, does not respect science, does not understand the new world and new technology, does not know the value of scientific and technological innovation, does not know it’s okay, but he bravely made speeches, committing a life-long prohibition of himself Mistakes made: not making money outside of the cognitive range (the bowler theory). Looking at these words on the other hand, no matter how great a person is, he cannot say what he or she does not understand, and judge what he does not understand. Public figures should be more cautious in their words and deeds. Buffett’s “rat poison” remarks have caused losses to global investors that cannot be measured with money, and he himself will never realize this. We are delighted to see that Bill Gates’ remarks have been completely changed this year, from the previous “I want to go short at $3,000” to “I remain neutral, I do not sell nor buy”. This change shows the honesty of Americans. , The quality of the courage to admit mistakes.
I personally hope that Barao can live to 120 years old, so that I can see the day when Bitcoin becomes the world’s super currency. He will definitely see that day. Of course, it is very likely that on that day, he will still smile and say to you: Bitcoin is rat poison, and I don’t want to give it to me. There is a guy in Hong Kong who may not be convinced. It is his patent to say this. This man is called Lang Xianping-he has never admitted his mistakes all his life.
3. Human weakness (execution)
I want to tell a few stories in this regard, so everyone will understand.
In mid-2017, Bitcoin fluctuated from 7,000 yuan to 10,000 yuan. Dogecoin fluctuates between 2 cents and 3 cents. The interesting part of this story is here. I formally participated in coin speculation and mining around March 2017, and vigorously “milked” Bitcoin in my circle of friends. A good friend in Beijing, a top novelist and producer, has made a lot of investment in the stock market, is an atypical value investor, and started out by speculating on ST at the beginning.
He was interested in blockchain because of me, but he seriously warned me: Bitcoin is overvalued. You like to tout at high positions and chase after high positions. This is not good. Please recommend me a low-priced one. , No one pays attention, small market value. The requirements are: international characteristics, high visibility, and technical clearance.
I gave him 10,000 reasons. I said, Boss, Bitcoin can rise to 100,000 yuan in the future. The real value investment must be the investment in the top project, which has the first-mover advantage.
100,000? He laughed: You bastard, fuck, fuck me. Please recommend me a cheap one.
I had no choice but to look around according to his requirements, and I really found one that met the conditions but made me laugh bitterly (it was true at the time): Dogecoin.
As a result, he was overjoyed and made a plan: a fixed investment of 100 yuan a day, a few months to complete a position of 50,000 yuan, a long-term investment plan is to hold for 5 years, by 2022, when Dogecoin rises When it comes to one dollar each, this investment will have a return of 50-80 million.
At the time, this was a jaw-dropping plan. I didn’t believe it at all. Nobody believed it except for lunatics and neuroses on this planet. At that time, the prospect of Bitcoin was not clear, let alone Dogecoin, which was a joke. But I deeply know what he said makes sense (but I don’t think no one can do that kind of patience). 5 years? Everyone says that one day the currency circle, the world ten thousand years, many coins can rise 10 times a day, why do you want to make a five-year plan? In other words, I know the theory of value investment (Buffett was well-known by the Chinese in 1997), but the execution is not enough.
In just four years, countless people-I am most impressed by a female netizen: Gudong, I once had 1,000 bitcoins. I will never forget these words. At the time, I was speechless and didn’t know how to comfort her. But think about it carefully, who doesn’t have a similar story in the currency circle? Her tone of sadness, regret and helplessness has appeared in the mouths of a large number of speculators around the world. The typical context is: once. once. once. No ing.
The whole plan of this novelist I respect is seamless. Even if the total loss of 50,000 yuan is zero, it is less than one-thousandth of his total assets (so I was also disappointed at the time that what he did was actually a very high-dimensional thinking and assets. Configure extremely low-end plans), so he can hold on and successfully build positions. After a month’s time to build a position, he only bought 3,000 yuan Dogecoin. At this time, a major event that the world knows happened.
On September 4, 2017, after this major event that everyone knows happened, he called me and said to me, “Gudong, hurry up, a god-given opportunity, “I’m brave when others panic”, and he swiftly around September 4 A full warehouse, holding about 5 million to 8 million Dogecoins, the cost should be between 3-7%.
I was completely occupied by panic and didn’t listen to him. I remember that I processed all the bitcoins on September 4th. Bitcoin that costs $1,000. my God.
Time flies quickly. On the day when Musk “received the order” Dogecoin, I surprisingly discovered that this novelist is a genius.
However, this story has an unfortunate ending: as early as 2 years ago, when he earned more than 600,000 yuan (a 10 times increase), he committed a fatal violation of the principle of value investment at this time: he replaced all of them with him. Pomelo, which I think is more promising, costs 32 yuan, and it has not been solved so far. The price of Dogecoin, based on his initial investment calculation, is currently worth at least 3 to 7 million.
More importantly, I judge that before the real 5-year plan, that is, before September 4, 2022, Dogecoin has a mythical hope that it will reach a dollar. I am talking about possibility. That is to say, if the “execution” of this investment is in place, for example, if the entire trader is a robot, a smart contract, an “autopilot”, and an iron discipline, then this amount is as low as It can be said that an investment is a joke, and there is a great possibility of profiting 30 million or 50 million. If Dogecoin rises to $10 each, it is a tragic story like “I missed 500 million”. If that day comes, it will be an extremely tragic story. Far more teary than “Norwegian Forest”.
This story has very typical characteristics. Everyone who speculates coins in the world has a similar experience. There are many such stories in the currency circle, but if it happens to a value investor, there is a great typical sex education. Makes sense. Li Xiaolai didn’t know if what he said was true or false a few days ago. He issued a public statement saying that his bitcoin had been sold out at the time of $3,000, which made the majority of netizens extremely disappointed—another value investor failed in the face of bitcoin. .
So someone put forward a greater point: Bitcoin will redefine traditional valuation methods. Regarding this point, I strongly recommend that you carefully read an article written by an American, “How to Value Companies in the Post-Inflation Era?” “, you can search online.
For example, the traditional value investment method cannot estimate the flow, but we have deeply realized (regardless of whether you accept it) that the value of the flow can be quantified.
Traditional value investment cannot accept the valuation of traffic, so obviously it is impossible to evaluate the innovative business models of various bizarre Internet thinking on the website of cryptocurrency. In the face of new things, they can only do nothing. Policy. In this regard, “Japanese Buffett” Ieyama Eitaro put it well: never be eliminated by the times.
The weakness of human nature (execution) is vulnerable to Bitcoin, so many institutions and individuals are obsessed with strategy and quantitative trading, and leave emotional shortcomings to robots to eliminate them. To some extent, it is right. But there will never be a robot in the world that will eat from the beginning to the end the next time an invention similar to Bitcoin appears in the human race, and intervene from the genesis block until today, or even 10 years later, will it? Will this kind of robot be invented by humans, and next time a Satoshi Nakamoto is reproduced, this robot will stand up and act?
4. The attack caused by the intervention of MLM forces (coin circle)
This part of the blow to speculators and investors in the currency circle has still not disappeared. MLM forces were ecstatic after they discovered the blockchain. At the peak of 2018, there were at least 8,000 “plates” in China, and a derivative industrial chain called “circle” appeared, and its tentacles extended far to include mainstream transactions. On the bedside, this is a malignant tumor derived from Bitcoin in China and the world. It has nothing to do with Bitcoin and Satoshi Nakamoto, but the result is that even Buffett thinks Bitcoin is rat poison and a pyramid scheme. Let’s replace the metaphor that may not necessarily be vivid: If Feng Qingyang doesn’t understand technology (swordsmanship) and Ren Yingying doesn’t understand love, he can definitely evaluate Linghuchong as a rapist, gangster, and alcoholic, because he always drinks with Tian Boguang. . This is called information fault.
Looking back, a large number of projects were MLM behaviors in the Aixi era. In the IEO era, a large number of projects are involved in the circle. In the era of model coins, all model coins are MLM. We now realize this. Almost most people in the currency circle are directly and indirectly victims. This is especially true in terms of external reputation-they have profoundly (permanently for some people) shifted your correct focus on Bitcoin. It has deeply polluted the blockchain practitioners in China and splashed a ton of stinky water. The impact will be difficult to eliminate for a long time in the future. But all blockchain colleagues should work hard to eliminate it. Only in this way can we re-turn and overtake and regain the top spot in the global blockchain industry. Yes, I personally think that due to the intervention of MLM forces, China’s blockchain industry has fallen behind the United States in the past two years. We originally It was the first place, but after DeFi appeared, the United States regained its lead. This is all fate.
I know a miner. At the peak, there were 5 mines in Yulin and other provinces. He worked hard for many years and dug 200 bitcoins in his hand. In his hometown, he is famous far and near. Many people visit him admiringly, knowing that he depends on him. Mining made a fortune.
His story is also typical.
In the middle of 2018, a friend with open crotch pants mobilized him to participate in the famous Plus Token several times. At that time, Bitcoin was only 3,000 US dollars. It was the lowest time when the whole industry was struggling at the critical point of shutdown. At this time, the largest MLM plate in history was born. The storm hit the shore and rolled up a thousand piles of snow. He started to invest 10 bitcoins. He was surprised to find that he made several times in less than a month. At this time, a fatal thing. Here comes: his friends (online) are here again, eating, drinking and having fun all night, happily, after dazzling, the spirits, MLM Plus, Token all entered, he, he put 200 bitcoins , All the belongings were smashed in.
Everyone knows what happened later. The final result of the Plath case was that the Treasury had 320,000 more bitcoins and more than 10 leaders went to jail. And his mine’s capital chain broke and all went bankrupt. If Bitcoin rises 10 times, his loss will be 600 million. This is also a tragic story.
The Plath case has given the world a profound inspiration. Many miners started at the end of Qingping, started slowly, and quickly became big, but the management could not keep up and was not standardized. This is also a common problem for a large number of small and medium-sized enterprises in China. In 2018, his scale is already 200 bitcoins (thousands of bitcoin mining machines). The chairman, CEO, and finance alone have the final say. This is the result of the company’s irregular system, so “wine The latter impulse, all Plath”, the miner did not reflect on this point. So far, he still believes that the result of his conclusion is: the blockchain industry is too pitted to touch. The market is so good now, but he no longer has any enthusiasm to make a comeback and re-mining, no matter how his peers encourage him to cheer him up, it is useless. He is now a job contractor on JD.com, a generation of big miners, retiring from the world, and becoming a worker in a traditional industry.
I don’t know many miners with my naked eyes (not counting those on the Internet), and all of them are dead. Only one has survived in 4 years.
He should be the largest miner in Hubei Province. How did he survive? He was proficient in technology, and he was born in an Internet cafe. During the few months when almost the world was shut down, he did not shut down, and he was able to maintain a single machine to maintain revenue and maintain a normal expenditure. It was just a hard life. Haha, in the worst time of 2018, his net worth Not much. Now that the big bull market is coming, his wealth has skyrocketed several times again, and he is once again approaching the ranks of billionaires. These miracles have no luck. He has achieved the value investment behavior of the mining industry: focus and focus. He almost never speculates coins. So far, the coins held still account for a small part of the assets, all of which are mainstream coins, and most of the assets are mining machines.
“For many items, I can tell what it is with just a sniff,” he said. The time is early 2018.
What impressed me the most was that he was able to accurately determine that the following items are MLM under almost one day of research, such as Plus Token, Bell Chain, various model currency wallets, FT, a considerable part of IEO, and Xunlei. The entertainment treasure box made by the Three Musketeers Chen Yun…In the heyday of the disc circle, it is estimated that there are more than 8,000 pig-killing discs lingering over China, and many people are in tears and blood.
The blockchain industry has quasi-financial characteristics, so practitioners in the traditional MLM industry find this treasure land and devote themselves to it. Only those who understand technology can avoid these pits well. Technology changes not only the world, but also the mind. The blockchain industry with obvious financial characteristics can easily fall into the abyss of speculation as soon as the mobile phone slips. Short-term speculation is magnified in the currency circle, and the degree of freedom far exceeds the stock market, so it is difficult for ordinary people to avoid the temptation of speculation. I often walk by the river, so how can I not wet my shoes? A truly profound understanding and proficiency in blockchain technology and understanding of the Internet can make clear and precise judgments a long time ago in the era when MLM forces invaded the currency circle. Only when similar situations arise in the future, can we recognize the reality, because the essence of MLM will never change, and the form of packaging will always be “innovative”. This is why Buffett was also deceived-Buffett’s hype from speculators The above research and observation of Bitcoin, the conclusion obtained is obviously the conclusion of MLM, which is the same as the blind person touching the image. The Bitcoin that Buffett touched is not Bitcoin, but is part of the chaos derived from Bitcoin.
5. Technical factors
Some people say that Bitcoin (we sometimes use the three words of Bitcoin as a synonym for blockchain) is 30% technology, 30% finance, and 40% religion. This is very reasonable. This is an American. The points made. It deeply illustrates the complexity of Bitcoin. The three are indispensable. If one is missing, you and I will not be able to earn Bitcoin money. If a certain point does not deeply enter your bones, you will make a mistake at a certain point. This is true for miners, so are investors, and so are speculators.
As far as technology is concerned, I personally gave up the research on the technical aspects of the Bitcoin blockchain a long time ago, because the technology of Bitcoin is too complex and too esoteric. It is very painful to learn if the liberal arts thinking is heavy, but I know that there is no technical knowledge. , I will be lost forever in the blockchain. I gradually concluded that ordinary people should be able to understand the blockchain and understand Bitcoin, and they must learn to believe, recognize and follow those who really understand technology. This is the same principle as we know that Musk’s going to Mars is not a science fiction novel (people who believe that Musk’s Tesla and Bitcoin, including Dogecoin, have made money, believe that Buffett’s limitations are extreme and wrong Bitcoin remarks People have broken their thighs in life).
Sometimes we believe in Musk, and sometimes we think Buffett is right. Almost all the mainstream media in the world will throw out the “return to zero theory” every time Bitcoin has plummeted by more than 50% in the past 12 years, and set new heights. At the time, there was a lot of reporting on the rise in the search index and the misery of the people who sold out (this shows that media professionals with very high-end and diversified information sources will also be confused in the face of high-tech). In short, we like Musk when we are skyrocketing, and we want to kiss Buffett when we are down. In the end, we lost the space for our own independent thinking and could not understand the relationship between the various ecology of the entire blockchain industry, thus affecting our own and others’ investment decisions.
Let me repeat it again. Around 2017, China’s blockchain industry should be the world’s first, and now it is the second in the world. What is the reason? In the five summary reflections I mentioned above, this aspect of technology should be the core.
We know that pure science and technology can’t have enough to eat. Bitcoin cannot be born in any national laboratory because it has the characteristics of revolution and subversion. This kind of technology has its own financial attributes and is intended to allow practitioners to eat. In order to let participants have money to spend and invest money, so as to promote ecological development. There are coins on the chain, and there is a chain on the coin, which is endless. Every country likes its technological attributes and knows that it is very fascinating, and when the financial attributes rapidly change and infringe on the traditional vested interests, contradictions erupt, the industry forms a strong cycle, great ups and downs, and the cheering and vinegar of MLM staff, this time Of course, religion is a ridiculous metaphor. Satoshi Nakamoto is the godfather, and the godfather has been missing. Wang Xing bought Bitcoin in 2013 and has not sold it yet. He is regarded as a real value investor. The ratio of currency floating profits must surpass that of Meituan. A while ago, he vowed: Satoshi Nakamoto is theoretically the richest man in the world.
No, Satoshi Nakamoto is too great. He has never used a cent of Bitcoin. He is very handsome. He avoids suspicion. He uses his life to practice decentralization. In our lifetime, the biggest wish of blockchain practitioners is to know who Satoshi Nakamoto is. Everyone hopes that he will live a hundred years, and one day he will become Musk’s KOL and re-transmit the original Bitcoin teachings to the world. We will clean up the roots and carry forward this aspect of the religious system.
Author/ Translator: Jamie Kim
Bio: Jamie Kim is a technology journalist. Raised in Hong Kong and always vocal at heart. She aims to share her expertise with the readers at blockreview.net. Kim is a Bitcoin maximalist who believes with unwavering conviction that Bitcoin is the only cryptocurrency – in fact, currency – worth caring about.