Two Paths of Blockchain Development: Credibility and Usability

Blockchain technology has shown two different directions in its development process: the pursuit of trustworthiness and the pursuit of usability. Usability refers to features that are easy to use but may not be as comprehensive or in-depth. Most Internet products and electronic devices focus on solving usability issues. Trustworthiness, on the other hand, involves expanding the boundaries of human cognition, such as how Bitcoin addresses the establishment of trust in things and data. The existence of these two demands has led to the forked development of blockchain technology.

Bitcoin can be seen as the origin, while Ethereum continues its basic理念 and spirit. Ethereum has not compromised on centralization, but has also produced forks during its development process. Currently, many people's understanding of Blockchain still remains at this stage. Some consortium chains have made certain compromises in usability, as Ethereum does have some inconveniences in use. When the transfer function extends to smart contracts, the on-chain logic becomes complex. Consortium chains have obvious advantages in computing, storage, and communication efficiency, so the emergence of such forks is based on demand.

In the entire Blockchain industry, verification is the most important and challenging link. Bitcoin uses reconciliation verification, Layer2 employs zero-knowledge proofs, and some systems that claim to be decentralized have not actually achieved true verification. There are mainly three ways of verification: guarantees, accumulative game ( approximation ), and built-in efficient market assumptions. Bitcoin has also failed to completely solve the problem of verification incentives, which has been a constant issue throughout the development of Blockchain. Forking is actually a benign choice. Open finance blurs the boundaries between countries, with the most typical examples being certain stablecoins, but there inevitably exists a risk of centralization.

The closer blockchain technology is to traditional finance, the easier it is for ordinary people to understand; conversely, the further it strays from traditional concepts, the more obscure and difficult it becomes. When studying Bitcoin, the concept of decentralized assets is the most attractive. From the perspective of monetary theory, Bitcoin is difficult to become a true currency. Modern monetary theory has departed from the gold standard thinking, and currency needs to reflect the dynamic information of the economy, while Bitcoin's information acquisition is relatively narrow, and its total supply is entirely controlled by algorithms.

If we adhere to the original architecture of Bitcoin, we will find that it is not merely a simple product, but rather a construction of a non-cooperative game system. Throughout the history of social development, early management methods often employed cooperative games, such as religious and political systems, which were highly sensitive to resource allocation issues. This allocation mechanism attempts to assess each person's contribution and constrain behavior through strong contracts. However, the questions of who will allocate and how to verify the consistency of allocation and contribution have remained unresolved in traditional social management systems.

The political mechanism represented by agricultural civilization inevitably falls into the dilemma of cooperative games, making it difficult to reach an optimal state. In contrast, the non-cooperative game under the market mechanism does not require the establishment of mutual trust relationships and can operate through a clear pricing exchange mechanism. From an economic perspective, "The Wealth of Nations" is essentially elaborating on the rules of non-cooperative games and their impacts.

Bitcoin has built a new global non-cooperative game system. In this system, miners mine based on their own computational power, and their investment decisions affect every participant. Miners are paid through random algorithms, and when information is disseminated widely enough for everyone to participate freely, the system reaches a state of equilibrium. The Blockchain has made all information public from the very beginning, achieving the goal of general equilibrium.

Cryptocurrencies like BTC and ETH are trying to build non-cooperative game systems, thereby crystallizing decentralized assets. These decentralized assets have a unique risk-return structure, fundamentally different from traditional asset classes. From an information theory perspective, decentralized assets perform better in eliminating uncertainty.

Although the price of Bitcoin is highly volatile, its hash rate data and transaction data are completely public, which makes its uncertainty much lower than that of traditional credit assets or publicly traded company stocks. We should not judge it from a traditional perspective. Even with the introduction of a secondary market, which leads to dramatic price fluctuations, the distribution of mining by miners remains relatively stable and predictable at the core of the game, and any changes in data can be known in real time.

In contrast, internal events within companies in traditional equity assets often do not become public in the market. The discussion about whether Bitcoin is classified as a security mainly involves the issue of legal entity identification. The primary reason for restricting securities participants is to prevent the misuse of insider information to gain undue advantage. If true distribution is achieved, it becomes difficult to classify it as a security.

The process of exchanging Bitcoin for fiat currency on exchanges is actually more complex than the game mechanism of Bitcoin itself. The initial concept was to create a closed loop on-chain, providing services similar to traditional finance for on-chain assets, but encountered many challenges in practice. The core issue lies in how to achieve fully decentralized financial services, as well as how to create, realize, capture, and sediment value in this process. Ultimately, it was found that decentralized exchanges struggle to effectively sediment value.

Blockchain is not a simple linear service system; it lacks features such as automated communication. On-chain services ultimately converge to DeFi financial services, but questions about how to capture value and compete should have been thoroughly considered at the design stage.