Hong Kong Conference Essay

This time coming to Hong Kong for the conference, mainly to meet old friends, some of whom are also long-term partners, and we are still maintaining cooperation.
This year, I had a new feeling: "This industry is old."
In my impression, these old friends were once spirited young people, but this time when we meet, the wrinkles on their faces, the white hair, dull skin, and even out-of-control bodies and dim eyes...
It was a huge shock to me, and I’ve always felt like the young me. I was thinking, "Why do all my friends look so old..."
I’ve always insisted on scientific eating and health preservation, which seems to show me that time hasn't spared them, but has spared me (if you see this, don’t hit me, haha). But I’ve encountered some “melon kings,” and they really fill you up.
Looking again at a group photo of early industry practitioners from yesterday, I finally felt, “This is truly a damn old industry!”
In the past, it was the epitome of geeks, emerging technologies, and the new era; now, it’s more like a risk asset industry, with various tracks almost fully solidified.
Bitcoin has been around since 2009, and it’s been over 17 years now—a fast-developing industry for nearly 20 years, and in many ways, it has already matured. All the experiments have been done, all the pitfalls have been stepped into, and most of the enthusiasm of the early days has faded. It’s hard to produce disruptive innovations anymore.
DeFi summer might be the most intense year of application and entrepreneurial explosion in this industry, but when people say it’s innovation, actually these gameplay ideas have all been played on BTS, ENU, and EOS, and even developed from BTS. This industry has gathered so many smart people and smart money, exploring for nearly 20 years. I have reason to conclude, “The industry’s pattern is set, and its boundaries are clearly explored.” So, my own reminder is that in this industry, returning to the capability boundaries and focusing on your own track and ecosystem is the way to go.
Today, I have more questions about BTC: can it still have an eternal bull market?
Over these years, under its unique mechanism, Bitcoin has relied on grand narratives to gather huge global consensus and has come this far. We’ve proposed many narratives, such as decentralization, anti-inflation, censorship resistance, digital gold, P2P payments, and super sovereignty... but almost all these narratives have now been almost completely shattered.
Decentralization: Bitcoin’s decentralization mechanism has not changed, but factors like concentration of chips, address monitoring, hash power centralization, and mining pool regulation have weakened this feature.
1) Chip concentration. Over 20 million BTC have been mined, but chips are increasingly concentrated in institutions and a few individuals. The concentration is becoming more centralized. ETFs and MicroStrategy will soon hold over 1 million BTC, other compliant institutions and listed entities already hold over 1 million BTC, and some national entities also hold large amounts of BTC... The concentration will only increase, and the trend toward centralization is irreversible.
2) Address monitoring. All addresses are being monitored and scrutinized, even for anti-money laundering and anti-terrorism checks. Many AML companies are doing this. Many clients ask me to buy clean BTC from addresses that have just mined coins—meaning there are still dirty BTC out there. These addresses are obviously under centralized forces’ control. Narrative shattered!
3) Hash power centralization. The top 3 mining pools control over 60% of the network’s hash power, the top 7 pools over 90%, and this trend of centralization has not changed. Our initial goal was to create decentralized mining pools, but after trying, we found many obstacles in technical feasibility, pool survival, and miner acceptance, so we temporarily shelved it. Our current contribution is just diverting some hash power from the top three pools, slightly increasing decentralization, or in some ways, participating in the process of hash power centralization.
Now, mining pools are in a highly competitive, low-profit era. With ongoing halving events, on-chain transaction fees won’t sustain many pools, and most will inevitably be eliminated. I am very certain and pessimistic about this trend, and I feel powerless. Narrative shattered!
4) Mining pool regulation and scrutiny. Almost all pools have legal entities and individuals. The major pools controlling most hash power are required to cooperate with laws in various countries for review—this is a legal obligation. Soon, every transaction on the Bitcoin network could be intercepted and stopped by law enforcement agencies worldwide. This is the centralization of on-chain transaction packaging rights. As hash power concentrates, this trend is unstoppable, and I am very pessimistic. Narrative shattered!
5) Censorship resistance. Seeing this, you already know that this narrative has essentially been shattered.
6) Digital gold. The narrative of gold as a safe haven has already been broken, so the digital gold narrative is also shattered!
7) Individual super sovereignty. Also shattered!
8) P2P payments. Bitcoin’s transfer speed and block capacity are destined not to be suitable for payments. The current demand for payments is fully met by stablecoins. This narrative has long been broken!
9) Anti-inflation. This dimension of the narrative still holds. The design of a total supply of 21 million coins remains effective, meaning Bitcoin is more of a store of value or a means of value preservation. Unless this cap is tampered with and broken, it’s hard to change. I am not too worried about hash power centralization or quantum computing.
In summary, nearly 20 years have passed, and most of Bitcoin’s narratives have been shattered or will be shattered. Our exploration of its boundaries is also clear: only the 21 million cap and value storage remain, with a sense of resignation.
So, does the narrative of Bitcoin’s eternal bull market still exist?
Risk assets are affected by cycles, liquidity, and macro factors. Bull markets are just phase summaries of exchange rate trends relative to fiat currencies, so there is no such thing as an eternal bull market. But the fixed cap of 21 million BTC and the trend of fiat over-issuance mean Bitcoin will outperform fiat in exchange rate, which is the only remaining unshattered feature of Bitcoin.
Today, I have a clearer understanding of Bitcoin: after resisting nearly 20 years of erosion from the world, it can no longer carry excessive expectations or narratives. It has returned to itself. Bitcoin remains an extremely unique and elegant design on this planet.
Bitcoin, I love you!
Postscript: The roast goose in Hong Kong is truly amazing!