Cold Thoughts in the Blockchain Craze

At the beginning of 2018, a well-known investor's call for entrepreneurs to fully engage in the blockchain field sparked heated discussions in an investment group and spread widely on social media. In fact, as early as a previous speech, this investor had emphasized that the impact of blockchain technology should not be underestimated.

As a well-established internet company, Xunlei was the first to put blockchain technology into practice. In mid-2017, Xunlei launched a device called "Wankeyun," aimed at expanding the company's content distribution network by allowing users to contribute idle bandwidth resources. Users can earn a virtual asset called "Wankebit" as a reward. Xunlei executives have stated that Wankebit is more similar to a points system, mainly used for internal company services rather than for trading purposes.

However, this initiative, originally aimed at reducing bandwidth costs, unexpectedly sparked a market frenzy. The price of WanKe Yun devices has been inflated to several times their original price in the second-hand market, and the value of WanKe Coin has also risen sharply. Coincidentally, Chinese regulatory authorities halted ICOs and domestic virtual currency exchanges, allowing WanKe Coin to temporarily avoid the regulatory storm since it did not conduct an ICO. This series of events propelled the stock price of Xunlei from $4 to $27 in just two months.

Inspired by the success of Thunder, many companies have joined the blockchain concept craze. The century-old company Kodak announced the issuance of KodakCoin, claiming it is a picture-based cryptocurrency aimed at enhancing photographers' control over image copyrights. This news caused Kodak's stock price to surge over 119% in a single day.

However, amidst the fervent hype surrounding the concept of Blockchain, some major shareholders of companies have chosen to take the opportunity to reduce their holdings and cash out. For example, the actual controller of a certain technology company reduced their holdings by nearly 100 million in value in a short period.

Moreover, the once-glorious social networking site Renren announced plans to issue 10 billion virtual currency "Renren Fang" and detailed a token distribution plan. This news once drove the company's stock price up nearly 76% within two days. However, the good times did not last long; according to informed sources, regulatory authorities have interviewed Renren, and the project has been confirmed to be terminated, with private placement funds being refunded.

On January 12, 2018, the China Internet Finance Association issued a risk warning, specifically criticizing Thunder's "Chainker" project, stating that its essence is a disguised ICO. The association urged the public to be vigilant about illegal financial activities and report to the relevant authorities when necessary. This statement led to a nearly 30% drop in Thunder's stock price.

Despite the ongoing hype around the concept of Blockchain, attempts to truly explore the practical applications of Blockchain technology are relatively unknown. Several tech giants, such as Alibaba, Tencent, and Huawei, are actively exploring the application of Blockchain technology in their respective fields. From food supply chain traceability to email evidence preservation, from establishing commercial trust to authentic product verification, Blockchain technology is quietly making its way into various industries.

In the financial sector, institutions like WeBank have initiated blockchain cooperation alliances, covering multiple industries such as banking, funds, and securities. Companies like Ant Financial and Baidu Finance are also actively exploring the application of blockchain in areas such as payments and credit. 360 Finance has even established a dedicated blockchain research center.

The healthcare sector is also not willing to lag behind. A large group is trying to use Blockchain technology to record medical data and simplify the insurance claims process in pilot cities. International giants such as IBM and Microsoft are also actively laying out Blockchain technology, exploring its potential in cloud services, data storage, and other areas.

However, the practical application of blockchain technology still faces many challenges. Issues such as high technical barriers, limited application scenarios, and unclear profit models still exist. Investment institutions pay more attention to whether blockchain projects have rich application scenarios rather than a single business when evaluating them.

It is worth noting that the current blockchain craze is largely hijacked by the speculation of virtual currencies. Many people do not understand the blockchain technology itself, but are attracted by the myth of getting rich from digital currencies like Bitcoin. This phenomenon has led to irrational prosperity in the market and increased the risk of a bubble burst.

For ordinary investors, the dramatic rise and fall of blockchain concept stocks brings huge speculative opportunities, but it also involves high risks. Some poorly managed companies may use the blockchain concept to hype their stock prices, allowing major shareholders to cash out. For those companies truly dedicated to the research and development of blockchain technology, the current craze is both an opportunity and a challenge.

History shows that the development of any new technology is accompanied by bubbles and bursts. The future development path of Blockchain technology is still long, and its true value remains to be tested by time. In this process, it is wise to view Blockchain technology rationally and be alert to speculative risks.