Summary: The Road to Innovation in Cryptocurrency 8. The successful king and defeated bandits to Justin Sun Satoshi Nakamoto opened Pandora's box and released hope and the devil. What is hope? What is a devil? Graham once said: "Stocks are voting machines in the short run, but weighing machines in the long run." In the fourteen ...
The Road to Innovation in Cryptocurrency
8. The successful king and defeated bandits to Justin Sun
Satoshi Nakamoto opened Pandora's box and released hope and the devil. What is hope? What is a devil? Graham once said: "Stocks are voting machines in the short run, but weighing machines in the long run." In the fourteen years since Bitcoin came out, the top cryptocurrency projects have stood the test of time, and their currency prices can undoubtedly reflect the value of the project. Analyzing the gains and losses of these projects will be instructive to those still on the road.
8. The successful king and defeated bandits to Justin Sun
Justin Sun respectfully calls him Brother Sun and is nicknamed "Sun Cut" by people. On September 11, 2023, TRX ranked tenth on the coinmarketcap website, with a market value of US$6.9 billion. Brother Sun is only 3 years older than Vitalik and a formidable young man. There are three Chinese originals in the top ten of the cryptocurrency rankings. They are No. 1, No. 4, and No. 10. They are all characters with stories. The total market value of Justin Sun's TRON currency TRX in 2018 reached US$13 billion, and it once entered the top ten and fell all the way. At that time, many Chinese-issued blockchain projects were ranked ahead of him, among which There was no shortage of cryptocurrency veterans and people with auras. Time is like a butcher's knife. Only Brother Sun is back in the top ten in the same environment.
Among the three Chinese originals, I only know Sun. I have had dinner with him several times at a friend's house. He is polite and polite, which is different from the description in society. On March 23, 2023, the U.S. Securities and Exchange Commission (SEC) announced the filing of cryptocurrency fraud charges against eight celebrities, including supporters of Justin Sun and his crypto asset companies TRON (TRX) and BT Download (BitTorrent). Writing about Brother Sun is a chore. Saying good things about him and saying he is not a "liar" will make you think how much money I took from him. The authoritative official pointed out that he committed "fraud," which I am slightly confused about. Because Brother Sun does not have the essential characteristics of a liar: "A liar can only deceive for a while, but not for a lifetime." If he can deceive for a lifetime, it will be "eternal love." It is also Graham's principle: "Stocks are a voting machine in the short term (you can cheat for a while), but they are a weighing machine (you cannot cheat for a lifetime) in the long term." The market has a classic saying: "Everyone hates Sun Cut; they all want to be Sun Brother." According to the article, after the TRX was launched in 2018, Sun Brother cashed out 6 billion TRON coins for US$300 million. The highest price in history occurred on January 5, 2018, reaching US$0.1984. The average price for Sun Cut's cash out was US$0.05. Today, Brother Sun's coin price is US$0.078.
The Leeks who took over Brother Sun at US$0.05 are far better than the A-shares, let alone Xu Jiayin of Evergrande. Brother Sun pales in comparison to them. But Brother Sun cut a handful of leeks, hence the name "Sun Cut." The positioning of this name is accurate; it is not "cheating" but "cutting." Zhou Yu is willing to hit the Yellow Gai that accepts it. Brother Sun's method may be inappropriate, but if he didn't "cut," would he be able to survive so many years of risk? Brother Sun is not a moral bitch. When the market has short-term "voting" errors, it demonstrates Brother Sun's ability to seize opportunities. So many projects died today without even a scrap left, but the leeks who bought Brother Sun still have a chance to escape their trap. The market is the winner and loser. If the project loses and loses everything, it will be the greatest betrayal and harm to the people who trust you. A responsible entrepreneur and project party must never forget the trust placed in you by long-term investors and remember the mission of pursuing sustained increases in project value.
The development of cryptocurrency reminds me of the early days of China's reform and opening up, which can be described as the beginning of chaos. There is a saying in China that early Chinese entrepreneurs were either in prison or on their way to prison. The tyranny of power is the same all over the world. It scares Satoshi Nakamoto into hiding his name and Changpeng Zhao and Justin Sun into hiding everywhere. Chinese entrepreneurs have emerged as A new element in China's reform and opening up. While creating their wealth, they also optimized social resources and brought economic prosperity. They are all ordinary people with flaws and heroes of the times. Both liars and Initial entrepreneurs have to tell stories; one has broken it, and the other has succeeded. The one who succeeds is Brother Sun, and the one who fails is Sun Cut. Justin Sun's TRX outperforms the general trend, which seems "done" in the long run.
Justin Sun, who outperformed Satoshi Nakamoto
Figure 1 is the trend chart of Bitcoin since 2017, and Figure 2 is the trend chart of Tron. Tron slightly outperformed Bitcoin in the short term. Among the top ten, Ethereum tied with Bitcoin, and the rest lost to Bitcoin. Looking at the long-term trend, TRX's distance from its high point is much smaller than the gap between Bitcoin's today's price and its historical high. The long-term trend is a weighing machine. After considering US regulatory factors, the market still favored Brother Sun. The market does not agree with the statement that Brother Sun is a liar.
Figure 1: Bitcoin trend chart
Figure 2: Trend chart of TRON currency
According to data from a third-party browser, oklink.com, on September 10, 2023, the number of transactions per second (TPS) of Tron Chain is 66, Binance Smart Chain is 39, and Ethereum is 10. There are 200 million non-zero addresses on the Tron chain and 100 million on Ethereum. The issuance of USDT on Tron is US$42 billion, while the issuance on Ethereum is US$39 billion. Why do some small countries choose the TRON chain instead of the Ethereum chain? Because the TRON chain is fast and transactions are cheap. Tron's USDT and TUSD are both stablecoins, with USDT accounting for 92%. TUSD has two meanings: TrxUSDT and TrueUSD. Currently, TrueUSD can no longer be found on the TRON official website.
Figure 3 shows TrueUSD (TUSD), another stable currency issued by Tron. It can be seen that TUSD has jumped rapidly to US$3.2 billion after entering 2023. Clearly illustrates the changes in stablecoins on Tron.
Figure 3: TrueUSD's jump in the TRON ecosystem
The author specially selected data from the Coinmarketcap website. It is a trend, and some of the top cryptocurrency statistics websites have begun to publish news about TRON. According to the public chain (L1) report for the second quarter of 2023 released by Messari, a well-known research institution for encryption data analysis service, Tron continued to maintain strong deflation in the second quarter of 2023, with a deflation rate of 2.8% in the first half of the year. In terms of revenue, Ethereum and TRON accounted for 93% of the total revenue generated by public chains in the second quarter of 2023, ranking among the top two blockchain networks.
Brother Sun didn't have a silver spoon, and a poor boy from the valley finally gained mainstream service research institution recognition. The use of the TRON chain by small countries reflects Sun's strategy of surrounding cities from rural areas. The most significant characteristic of Brother Sun is that he has no boundaries. Is this a good thing or a bad thing? I have no idea. Daring to think and venture may bring the only opportunity for the grassroots. What if it happens? Besides, he is not a mortal.
The "black" history of extraordinary people
Brother Sun is different from other successful entrepreneurs. He does not have the originality generated by profound thoughts like Satoshi Nakamoto, nor does he have the technical advantages of improvement innovation like Vitalik and Zhao Changpeng, so his path is more difficult. One thing is that he and Jack Ma are both ignorant of technology. They both have caught up with the opportunities of the times, and they both have tenacity that is different from ordinary people.
Like Jack Ma, he is also a good storyteller. They are both marketing masters who understand the Internet. He graduated from Ma Yun's Hupan University. He has 7 honors introduced on the Tron official website, and Hupan University is one of them. He did not forget to add the only one. Post-90s. He cherishes this very much and gets the true story from Master Ma. Like Master Ma, he is good at employing people. His core developers were first poached from Alibaba, and even his "copying" skills are genuine from Alibaba.
In addition to touching porcelain with Jack Ma, he also touched porcelain with Warren Buffett and spent a sum of money to fool the old gentleman three times. The effect of three coverages far exceeds the value of $4,567,888. He has done many things others dare not think of and cannot do: serving as the permanent representative of Grenada to the World Trade Organization, selling works for US$20 million and US$2 million at Christie's 20th century art evening auction in London. Picasso's "Reclining Nude with a Necklace" and Andy Warhol's "Three Self-Portraits" were acquired. Justin Sun Tpunks' head portrait, numbered 3442, was acquired for US$10.5 million. ; Spending $25 million on a ticket to space. That is the image of a rich man. What does having money mean? Individuals have opinions, but this must cause concern and red eyes in a money-worshiping society. So, the material that discredits him spreads like wildfire and has many reprints. He has also become a consumer object.
Wherever there is excitement, there is him, and he is good at stealing the limelight. In April 2023, Xiao Feng of Distributed Fund hosted a Web3 summit in Hong Kong. He attracted the attention make use Ms. Little Ears (a host) made a big splash. So many and so many.
Just yesterday, Justin Sun said on the X platform: "Consider making an offer for the tokens and assets held by FTX to reduce the impact of its sell-off on the cryptocurrency community. Let us unite and support our crypto ecosystem ". I don't know if it will succeed or not, but the attention is there, and the public image is there.
The spread of the Internet has the characteristics of a ripple spread, either with many clicks or with large waves. It is also called event marketing. It's hard to attract attention without events. How do you continuously attract attention? The current common method is for the project leader to speak for himself. Brother Sun has 3.465 million followers on Twitter in English and 66,000 in Chinese, for a total of 3.531 million followers, ranking third in the currency circle, 1.45 million less than Vitalik. There are not many hot events in the currency circle. If you want to say who has the most hot spots, it is Brother Sun. There are good and bad things in not taking the usual path. Brother Sun has only 66,000 fans in the Chinese community, which is disproportionate to his English fans. Obviously, the Chinese community is greatly affected by black material.
TRON issued its currency in 2017 and went online in 2018. As can be seen from Figure 2, it will be relatively stable by 2022, and its users will continue to grow. Currently, it is the project with the most non-zero addresses on the chain. If it has not become famous in three years, it has no success as an Internet project. It took Sun's TRON chain three years to become the third largest public chain in cryptocurrency, which is naturally quite famous. He has an Internet mindset and does not adhere to the dogma of blockchain. How can there be a concept of project acquisition in cryptocurrency? But Brother Sun acquired multiple projects. Brother Sun can make a lot of money, which is dazzling. There is no complete picture of this empire on the TRON official website, so opacity is a big problem, easily reminding people of his lousy information.
Brother Sun's technical breakthrough is not significant. Brother Sun said that Tron is better than Ethereum in 7 aspects, and Vitalik added one to him: "There is also copy and paste." Cryptocurrency technology is open source. Dogecoin and Litecoin are basically copies of Bitcoin. It's not shameful for Brother Sun to copy some. The cryptocurrency industry strives for innovation, products, and market capabilities.
Regarding product and market capabilities, Brother Sun can give courses to friends in the coin circle. Now is the time for cryptocurrencies to compete for commercial applications. If the project side does not have market capabilities, they will not have the good fortune. Satoshi Nakamoto can win by lying down, but Ethereum needs a big V without needing marketing; Brother Sun is good at marketing to create and chase hot spots. Brother Sun's level is the benchmark for product and market integration capabilities. Without his ability, it would not be easy to survive in the currency circle in the future.
How to see the value of Tron
The value of Bitcoin has a floor price and a market price. The cost of mining determines the floor price, and the market determines the market price. The floor price of Ethereum is determined at the moment of conversion from Ethereum 1.0 to Ethereum 2.0 because there is no concept of mining cost in 2.0, and the floor price is brought about by Ethereum 1.0. Ethereum 2.0 is a deflationary currency. The value of Ethereum is determined by two aspects: burning transaction fees generates deflation, forming scarcity value; staking generates interest income. The value of interest income is the value of the risk-free arbitrage compared to U.S. Treasury bonds. With such high-interest rates on the US dollar, no funds will choose to buy Ethereum for arbitrage. The scarcity of Ethereum depends on the development of the Ethereum ecosystem, which in turn depends on the development of users and transaction volume. There is no concept of bottom price for Tron coin, and there is no concept of bottom price for equity.
Regarding user data, Tron has 200 million accounts, which is about double that of Ethereum, and its active users are more than double that of Ethereum. On June 2, 2023, data from Nansen, a well-known blockchain data provider, showed that "Tron's transaction volume exceeded 11.47 million, which is ten times that of Ethereum." In 2023, it will thoroughly beat Ethereum regarding the number of accounts, active users, and transaction volume. It is an advantage. But it loses to Ethereum regarding security, transparency, centralization, and legal compliance.
TRON, like Ethereum, does not represent the value of their respective systems and, therefore, is not a security. The U.S. Securities and Exchange Commission did not attack Tron from the securities perspective, but it made accusations from the fraud perspective, which I cannot comment.
Currently, there is no complete set of valuation methods for cryptocurrencies that are not securities, and equity valuation methods are not applicable. The crypto ecosystem has invented a valuation method based on total locked volume (TVL). In the first half of 2023, the total locked-up volume of Tron was US$13 billion, and Ethereum's was US$8.4 billion. The author disagrees with the logic of valuation based on total locked-up volume because this indicator is not linearly related to trading volume. It can only be said to be a relative indicator.
On September 11, 2023, the market value of Ethereum was US$186.8 billion, and Tron was US$6.9 billion. Tron was only a fraction of Ethereum. Is it too underestimated? What's the reason? The author listed 5 items:
The future of Tron
The initial sale of TRX is 100 billion, and the token distribution is as follows:
1. TRON Foundation (34.3%): used as a foundation and team;
2. Public sale (40%): 40 billion TRX coins will be sold at 1ETH=205,000TRX on August 30, 2017;
3. Private sale (25.7%): Before the establishment of the Tron Foundation, 25.7% was privately sold at 1ETH=1,025,000TRX;
4. According to the community governance reward resolution, an additional 1.8% is issued every year for super representative and voting node rewards, which is approximately 1.85 billion/year. By 2021, the total TRX stock will be approximately 101.9 billion. With the expansion of transaction volume, TRX has deflated by 2.8% in the first half of 2023.
On the road to the future, Brother Sun has a very sharp view of the market and the underlying technology. He is application-oriented and has quietly surpassed Ethereum in terms of data.
First of all, they dare to copy and catch up with the style of Chinese companies. If Europe and the United States don't have it, they will have nowhere to copy it. The reason why it cannot surpass Ethereum now is because there are no new ideas. Cryptocurrency greatly respects innovation, and mainstream funds have little interest in following it. How do we get mainstream funds to pay attention? As the author said in the seventh part of this series, "Solana may be underestimated" (chainless.hk). TRON also has flaws in finance, and He must find ways to improve and implement correct financial logic.
The second issue is transparency. Please look at the official website of Ethereum and then at Tron's official website. It is not easy to find the currency issuance data of Tron. Ethereum does not have any dark history, and its transparency is good. At least the foundation's annual report is released every year. Is this difficult to do for Tron?
The third problem is over-marketing. It's right to attract attention early on, but it makes sense in the second phase, just like Vitalik did ok. Investors from large financial institutions are not easy to fool, and fooling leeks is useless to large investors.
The fourth problem is that hiding is not the answer. You can face the SEC head-on and admit the penalty if you make a mistake. It is difficult for a project with problems to have a mainstream funding platform. To solve this problem, the situation of issuing tokens to investors will be very different.
Fifth, the idea of investment and acquisition is good, but it needs to show the relevance of the overall ecology and the real goal. The ten-year goal is too empty.
Tron has gone through a rough era. If the above problems are solved, there is hope for it to enter mainstream finance.
It is not easy for Sun to achieve such results. He verified a truth: regarding application products, the Chinese are not inferior to Europe and the United States, and the copied ones are better than the original ones. Here, the author is not a moral judge but a hero based on the data he has seen.