Last December, we published the keynote speech of “Liang Xinjun, a co star of Fosun Group”, which was made by Alibaba, the official account of the group, which is widely read and commented by readers. On April 30 this year, Mr. Liang Xinjun delivered a keynote speech entitled “the future has come – twenty years of blockchain and data economy” at the science and technology entrepreneurship center of Nanyang Polytechnic University in Singapore. On the basis of last year’s speech by Rohan hall, this speech integrated the latest development trends and investment hotspots of the blockchain industry, and brought a wonderful ideological feast to the audience. With the consent of Mr. Liang Xinjun, we will organize the content of this speech into words to share with readers.
The speech is divided into four parts
1. The global monetary policy in response to the epidemic has greatly promoted the growth of encryption assets
2. The long-term social isolation and home-based measures to deal with the epidemic accelerated the data economy and promoted the rapid formation of the digital earth
3. The largest blockchain application growing arbitrarily: defi
4. Investment in encryption assets
The first part: the global monetary policy in response to the epidemic has greatly promoted the growth of encryption assets
The upsurge of crypto assets since the fourth quarter of 2020 is closely related to the uncontrolled currency issuance of many countries in the past. I don’t think this situation will improve in the future. In this case, the global residents will certainly look for new assets to deal with this impact, which has spawned the recent rapid growth of encryption assets. We can also find that bitcoin’s growth rate in the first quarter of 2021 was close to 100%, ranking the first among all major categories of assets.
Why did many countries issue currency without restraint for a long time in the past? We can see from the historical data: from 1932 to 2019, the GDP growth rate of the UK was 2.5%, but the growth rate of M2 was 8%, far exceeding the GDP growth rate. The same is true for the US dollar. From 1934 to 2019, the GDP growth rate of the United States was 3.7%, but the growth rate of M2 was 7.4%, which also led to an average annual growth rate of 4.9% for gold against the US dollar. Due to the epidemic relief, in 2020, the excess currency and M2 reached a new high. In 2020, the M2 of the United States increased by 24.9% year-on-year, close to 27% during World War II; M2 of Euro increased by 11% year on year; Japan’s M2 increased by 14.7% year on year, both of which are very high growth rates. Through an example, we can intuitively feel the impact of high-speed currency issuance on residents: according to the purchasing power, from $100 in 1913 to $3.87 in 2019, if we keep cash, it will depreciate to 0 for only four generations, with an average annual depreciation of 3.4%.
Therefore, I suggest that you should make some value investments instead of waiting for devaluation with cash. Moreover, the benchmark of investment should not be CPI, but should be the average M2 growth rate of 8% in the past 80 years.
Here we also look at the situation in China. In 2020, China’s M2 will grow by 18.1% year on year, which is the highest since 2011. This growth rate is very strong. Similarly, we can see that: according to purchasing power, from 100 yuan in 1987 to 22.7 yuan in 2019, the average annual depreciation is 5%.
Compared with those countries that issue money without restraint, the issuance of encrypted assets is relatively moderate. BTC’s current issuing speed is 2% – 3%, and the issuing growth rate will be halved in three years; Eth’s current issuing speed is about 4%, and it is expected to be 1% – 2% after it turns into POS consensus mechanism in the next year. Therefore, compared with the growth rate of CPI, BTC and eth will be deflationary assets in the future. The new output of gold is about 2.2% a year, which is also the result of deflation. Similarly, we can see that BNB is also a deflationary encryption asset due to its destruction mechanism. But there are also inflationary assets in the field of encryption assets, such as EOS. You can see that the price performance of EOS is very weak.
The second part: the long-term social isolation and home-based measures to deal with the epidemic promote the data economy and promote the rapid formation of the digital earth
Xiao Feng, chairman of Wanxiang blockchain holdings, believes that there is a parallel digital earth above the physical earth. With the rise of the Internet of things, every object or most objects on the physical earth will have corresponding identities on the digital earth. Business activities, social activities and government affairs activities on the physical earth also have corresponding functions on the digital earth. And affected by the epidemic, the digital economy has grown rapidly in the past year.
In the past, we often said that the Internet will digitize all content, and the mobile Internet will also digitize goods and services. I think the future blockchain is to digitize all kinds of assets. Now we don’t have digital things around us. In the future, blockchain will find a way to become digital. Blockchain is bound to become a technology that completely connects physical earth with digital earth, making data economy the main driving force of economy in the next 20 years.
In every big era, the core driving force of the economy will always easily beat m2. For example, if we look at the top five market capitalization of the United States in the past 100 years, you will find that in 1917, it was energy, mineral, basic raw materials that dominated and beat the market, and in 1982, it was advanced industrial manufacturing; In 1998, it was; In 2017, qingyishui was all mobile Internet; So what are the next 20 years? I can definitely tell you that it is the data economy. Of course, the development of Internet of things and blockchain technology will redefine who has data assets.
So, back to the topic of investment, what should we invest in? Recently, we often hear a lot of people say that the stock price is overvalued and the market should pull back. But we can see from the following data that these people’s views are wrong. At the end of 2020, the market value of faang accounts for 29% of the total market value of the Nasdaq composite index, but the net profit accounts for 43%. Moreover, the proportion of net profit is higher than that of market value. Therefore, it is difficult to say that the market value of mobile Internet companies, as the main driving force of the current economy, is overvalued.