Why hold encryption assets?

The development status of the encryption ecosystem this year has recently raised two concerns for me:

The first is my concern about the development status (not ideal) of native encryption enterprises in this cycle;

The second concern is my worry about the erosion of the value system of this ecosystem as more and more centralized institutions flood into it.

Yesterday's article shared the first concern, and today I will share the second one.

During this period, two main forces rushed into the encryption ecosystem:

First, there are the capital groups on Wall Street;

The second is traditional institutions centered around various types of RWA businesses.

Many times, these two forces are one and the same.

Whether we like it or not, these two forces will undoubtedly play an increasingly significant role in the encryption ecosystem in the future.

With the addition of these two forces, they will undoubtedly have an increasingly widespread and profound impact on the entire encryption ecosystem. The effects they bring will not be limited to tangible factors such as projects and funds, but will also introduce intangible and more alarming influencing factors—values that are deeply rooted in their genes.

Values are something invisible and intangible, which usually do not attract attention, but often play a huge role at critical moments—at turning points in history, they may determine an individual's fate; at moments of confusion in life, they may determine an individual's future.

Therefore, I occasionally remind myself to think about some questions regarding values when major changes come.

What are the values rooted in the genes of these capital groups and traditional institutions?

It's all about centralization: centralized control, centralized supervision, centralized operation, centralized...

This value system is clearly in conflict with the original encryption spirit.

This kind of conflict can usually be ignored or forgotten, and sometimes we even enjoy the "benefits" brought by this centralization. However, I want to especially remind you that at critical moments it can very likely choke us or even cause us to lose all our previous efforts.

In that case, it is essential to review the original values of the encryption ecosystem here.

In fact, this value has been clearly explained in Satoshi Nakamoto's white paper long ago. There is also a way of expressing it through assets that is easier to understand and more incisive; if I remember correctly, it comes from Li Xiaolai:

This is the first time in human history that technology has achieved the sacred and inviolable private property.

What specific aspects reflect the sanctity and inviolability of private property here?

My understanding is:

• No one can take it away;

• No one can stop transactions/transfers.

I have 100 yuan in the bank, and suddenly the bank gave a reason and confiscated it, my account was zeroed out. Is this 100 yuan my private property?

I have 100 yuan in the bank, and suddenly some institution finds a reason to blacklist my account. I cannot make any transfers. Is this 100 yuan my private property?

If either of these two is violated, it is no longer my private property.

Many issues become immediately clear when judged from this perspective.

However, in Bitcoin and Ethereum:

Can someone confiscate/move your native tokens (BTC, ETH)?

No.

Can someone blacklist the transfer function of your native tokens (BTC, ETH)?

No.

In fact, many blockchain native tokens (such as A, B, C, D) also possess the above two characteristics.

But one day, the U.S. government took a dislike to Chain A and demanded that its team blacklist the account of a certain "terrorist organization" and freeze the assets in that account.

The A-chain team resolutely refused.

This angered the US government, but upon looking, it turned out you only have 21 block-producing nodes?

Then it's easy to handle, you don't want to listen, right?

I will use the power of the state to attack your 21 nodes simultaneously and directly take your entire system down.

Chain B has also caught the attention of the U.S. government, and it has more block nodes than Chain A, with a total of 31.

But this is still a piece of cake in the face of national power.

The next targeted C chain has 100 nodes.

This is a bit challenging for the U.S. government.

The next targeted D chain has 1000 nodes.

This is even more difficult for the U.S. government.

......

Until a blockchain has 10,000 block-producing nodes, the U.S. government can only watch helplessly.

Once the number of block generation nodes/validators in a certain blockchain reaches one hundred thousand, unless the internet is shut down, no one can interfere with this system.

This is what Vitalik often mentions, that one should consider whether a chain can still operate normally when it is subject to the influence of national powers.

Only in this way can the native tokens in the system be considered true private property, and truly guarantee their sacred and inviolable status.

At the same time, there is another type of asset in the encryption ecosystem that is not considered private property, such as USDT and USDC. They have a blacklist function. As soon as the U.S. government gives the order, they will actively and proactively freeze accounts and blacklist them more than anyone else.

Of course, although USDT and USDC are also centralized, they still adhere to some rules, which is much better compared to those institutions that completely disregard rules and the protection of private property.

But we all have to put it down.

Today, I want to share this concern with everyone, to remind our readers that now and in the future, while we enjoy the benefits and profits brought by these centralized institutions, we must maintain a sense of vigilance and clarity in our hearts.

Are the assets in my hands sacred and inviolable private property?

This value is the final bottom line.