Background
The Blockchain Research Institute runs a biweekly program called “Blockchain Research Q&A,” where we invite leading thinkers and industry experts to share insights with the blockchain community. The discussions are consistently sharp and insightful, making it a vital forum for the space. In this session, we are delighted to host Professor Changyong Liu, a distinguished economist and seasoned blockchain advocate. With the global economy reeling from the COVID-19 pandemic—an event with deep political and economic ramifications—Professor Liu shares his perspective on “The ‘Risks’ and ‘Opportunities’ for Crypto Assets in a Global Economic Crisis.”
Professor Changyong Liu is the founder of Zhimi University, holds a Ph.D. in Economics from Peking University, and initiated Free Cash. He serves as Director of the Blockchain Economics Research Center at Chongqing Technology and Business University, a specially appointed mentor at Huobi University, Deputy Director of the Digital Asset (Chongqing) Research Institute, and a member of the Academic Cooperation Committee of the Asia Blockchain Industry Research Institute. He is also a columnist for Mars Finance, ChainNews, Bitmain, Golden Finance, and CoinKan K-Station.
Blockchain Research Q&A: Bitcoin was born out of the 2008 financial crisis, and its whitepaper directly addresses flaws in traditional fiat currency. This year, amid the pandemic-driven economic downturn, BTC has shown extreme volatility. Is its reputation as “digital gold” and a safe-haven asset fading, or was that perception mistaken from the start?
Professor Changyong Liu: Bitcoin’s recent sharp decline, moving in lockstep with traditional markets as the U.S. economy showed strain, has surprised many.
Before 2017, the relationship was clear: when traditional economies stumbled—during currency fluctuations, stock market turmoil, or banking crises—Bitcoin’s price would rise.
Consider a few examples. First, the Cypriot financial system collapse around 2012-2013 triggered Bitcoin’s first major rally. Second, during the Brexit vote, as support for leaving the EU grew and the British pound fell, Bitcoin began climbing within minutes. Another instance was Donald Trump’s election victory: as his votes mounted and traditional markets dipped, Bitcoin rose.
In short, Bitcoin historically moved inversely to traditional finance: weakness in mainstream markets meant strength for Bitcoin, and a Bitcoin rally often signaled underlying economic problems.
Why? Conceptually, Satoshi Nakamoto designed Bitcoin as an alternative to the traditional fiat monetary system and the financial architecture built on it.
Its structure reflects this: it’s decentralized and borderless, fundamentally different from a system reliant on continuous money printing and plagued by currency conflicts. Bitcoin was conceived as a revolutionary counterpoint to mainstream finance, hence the inverse relationship.
This dynamic attracted Bitcoin’s early adopters—many with anarchist or libertarian leanings. They were skeptical of traditional economies but bullish on Bitcoin. When mainstream markets weakened, they bought Bitcoin, driving its price up and cementing its inverse correlation.
Calling Bitcoin a “safe-haven asset” is therefore inaccurate—it isn’t one. It acts as a hedge: it underperforms when traditional economies are strong and outperforms when they falter.
A true safe-haven asset has low volatility; investors flock to it to escape market storms. Bitcoin’s volatility dwarfs that of any mainstream asset, so it’s better described as a “hedging asset.”
The narrative of Bitcoin as “digital gold” and a safe haven has weakened since 2017, especially recently as it moved in tandem with—and fell harder than—traditional assets on March 12. Why? The answer lies in several major shifts within Bitcoin after 2017.
First, mainstream finance and institutional investors began allocating to Bitcoin after 2017. Their capital fueled a massive rally and boosted the entire crypto market. However, when global markets soured, these large players, facing liquidity crunches, sold what they considered peripheral or non-core assets. Bitcoin, fitting that description, was among the first to be liquidated. Their selling pressure, due to their size, overwhelmed the market influence of smaller retail investors or early ideologues.
Second, Bitcoin encountered internal problems. The 2016 scaling effort failed, leading to network congestion. This undermined Satoshi’s vision of Bitcoin as efficient peer-to-peer electronic cash. Decentralization was strained when core developers blocked scaling despite broad community support. Congestion caused transaction fees to soar—from cents to over $1,000—and confirmation times to lengthen. Key early adopters like Microsoft, Dell, and Steam stopped accepting Bitcoin payments. Essentially, Bitcoin’s functionality as a decentralized cryptocurrency regressed post-2017.
Third, the 2017 bull market attracted a wave of speculators chasing quick profits, who remain a dominant force today. Many newcomers lack a deep understanding or conviction about Bitcoin’s foundational principles of decentralization and cryptographic money.
Consequently, much of the activity shifted toward peer-to-peer trading and financial speculation. Many blockchain projects now focus on lock-up-and-pump schemes.
In short, Bitcoin has become just another asset in mainstream portfolios, losing ground as a functional decentralized currency. Its monetary utility has eroded, and it is now widely seen as “digital gold”—a store of value to be held, not used. The third factor is that Bitcoin became a prime target for speculators.
These three factors have profoundly changed Bitcoin’s original core community—the idealists and libertarians motivated to replace traditional fiat and financial systems.
So, our earlier understanding wasn’t flawed; rather, crypto assets evolved post-2017 into vehicles for mainstream capital and speculation. This is deeply regrettable.
Blockchain Research Q&A: Recently, the most discussed topic in crypto has been Bitcoin’s sharp drop on March 12. Could you walk us through that crash and highlight the key angles for analysis?
Professor Changyong Liu: As mentioned, Bitcoin’s March 12 plunge is closely tied to its integration into mainstream portfolios. That day, virtually all global asset classes fell. At least two factors were at play. First, major economic players, including institutional investors, suddenly realized the pandemic could trigger a severe short-term slowdown, potentially unleashing decades of accumulated economic contradictions and causing a major crisis.
This triggered an immediate global liquidity crunch. Investors halted new allocations and rushed to raise cash, even selling digital assets, embracing “cash is king.” In this environment, mainstream assets plummeted. Bitcoin, no longer a safe haven but part of mainstream portfolios, was among the first assets large investors sold to restore liquidity—precisely because they still view it as a peripheral holding.
What about Bitcoin itself? Its market is relatively small, with extremely shallow liquidity compared to any major global investment platform. Consequently, even a selling pressure significantly smaller than what's seen in commodity markets can have an outsized impact due to Bitcoin's tiny market size.
Another factor is that the pre-halving rally pushed Bitcoin's price up on excessive optimism. At the time, many believed a bull market had arrived—a widespread sentiment that created a minor bubble. My own experience was telling: in the two weeks before the halving around March, I did nearly seven or eight live interviews, all focused on the "halving narrative." The consensus was that the halving would trigger a massive bull run, and Bitcoin's price surged roughly 40–50% during that period.
However, in those interviews, I stated clearly that the halving effect was premature—its positive impact would likely materialize only in the second half of the year. What people called the "halving rally" was driven more by hype and wishful thinking about an imminent bull market. This was a dangerous situation, and it coincided with the bursting of industry-wide over-optimism, leading to a correction more severe than even I had anticipated.
So, are there any benefits to this sharp correction? Yes, there are two key silver linings. First, historically, strong pre-halving optimism drives prices up, followed by a post-halving "mining crisis"—a liquidity crunch across the crypto ecosystem. Miner revenues drop, outdated rigs become unprofitable and shut down, forcing BTC sales to cover costs. Many mining operations collapse, hence the term "mining crisis." This typically triggers a price decline around the halving. Since the market has already corrected sharply beforehand, some of that downward pressure may have been absorbed early.
Historically, the market priced in rising value from the expected supply reduction post-halving. That optimism often shatters at the halving, triggering a reversal as investors realize their assumptions were wrong, sentiment sours, and prices fall. But since the decline has already happened *before* the halving, the post-halving drop may be less severe. The second benefit is that this downturn has eroded the price support Bitcoin (and other cryptos) derived from being seen as mainstream financial assets. Before 2017, Bitcoin primarily served as a hedge—or even a short—against traditional finance. Later, it gained a dual function: some held it specifically to short traditional finance, believing it fundamentally unsound.
Meanwhile, many others began treating Bitcoin as a mainstream investment, fueling the 2017 bull run. During 2018 and 2019, much of that speculative bubble deflated—but not entirely. This latest crash has further weakened Bitcoin's appeal and valuation as a mainstream financial asset. What remains are holders who believe in Bitcoin's decentralization or its role as a short against traditional finance.
Therefore, as traditional economies deteriorate further, Bitcoin's function as a hedge or short against traditional finance will reassert itself. In short, I remain bullish on the second half of the year. If, as I anticipate, the global economy enters a once-in-a-century crisis, traditional finance will likely face a sustained recession lasting one to two years. During this period, cryptocurrencies—especially *decentralized* ones (note: decentralization is critical)—will increasingly demonstrate their utility as hedges or shorts against traditional finance.
To summarize: I am bullish on H2. First, the halving will cut daily supply issuance for Bitcoin and other major PoW coins in half, reducing daily sell pressure by ~50%—a persistent tailwind for prices. Second, a prolonged (1–2+ year) systemic crisis in traditional finance will benefit decentralized cryptocurrencies like ours.
Q (QuYan Research): The crypto industry is inherently tied to finance. Recent developments—the COVID-19 pandemic, the internet cycle, and economic crises—have been dizzying. Could you provide an overview of the current macro environment?
Prof. Liu Changyong: Good question. Building on my earlier points, the current macro environment is exceptionally grim—we have entered what I consider a once-in-a-century crisis. Its scale rivals the 1929 Great Depression. That said, there's no need for excessive alarm: in 1929, society was materially oriented, so the economic contraction devastated physical production, leading to mass unemployment and severe hardship. While today's crisis matches 1929 in scale, its human impact may be less catastrophic.
In 1929, the material-based crisis caused widespread hunger. Today, in our information- and finance-driven society, the primary consequence is financial loss, not famine.
Why has this crisis emerged? Several structural factors are at play. The pandemic acted merely as a catalyst—popping an existing bubble. The first major cause is the internet economy's cyclical maturation. After two decades of explosive growth, the internet reshaped the global economy but has recently hit structural bottlenecks, stifling innovation, growth, and broader economic dynamism. From a 10–20 year perspective, this slowdown is pivotal.
Second, viewed over 40–50 years, emerging-market economies—those that achieved rapid growth through market-oriented reforms (China being the prime example)—are exhausting their reform-driven growth engines. Countries like China and Russia have implemented most feasible reforms; remaining reforms are politically difficult or even regressive, shifting toward greater state control. This is a critical constraint.
Additionally, these nations previously leveraged open access to advanced-country knowledge—acquiring information, patents, and technologies cheaply. Now, that advantage is fading: China, for instance, has reached the global technological frontier and must pioneer innovations independently—a far more challenging task.
Other factors include the exhaustion of demographic dividends and diminishing urbanization benefits. While China retains some residual growth momentum, it's fading fast. Economists widely recognize that China's economy is entering a prolonged adjustment phase. Globally, the growth engine from emerging markets is nearing exhaustion.
Third, from a longer historical lens: the fiat monetary system itself is under strain. The gold standard collapsed during the 1929 crisis, prompting a shift to non-convertible fiat currencies—the system we use today. Many libertarians and Austrian School economists view this as a profound failure. I disagree: this shift catalyzed nearly a century of robust growth. Fiat systems grant governments unlimited money-printing power, directly mitigating the severe boom-bust cycles of the past. When crises loom, central banks slash rates and inject liquidity to limit damage. Historical data shows pre-1929 crises intensified progressively—prompting Marx's theory of capitalism's inevitable collapse.
Post-1929, however, crises became less severe—a direct result of fiat systems' stabilizing influence. They enable forward-looking resource allocation: capital-intensive, cutting-edge projects can launch immediately via monetary expansion, even before sufficient savings accumulate. This is evident in the internet economy: startups operate at losses for years, then recoup investments rapidly—a dynamic intrinsically linked to fiat-driven financial expansion.
The problem? Sustained fiat expansion is like opioid addiction—tolerance escalates, requiring larger doses. Eventually, everyone expects perpetual inflation: they borrow aggressively, invest in assets, and ride the wave of currency devaluation. Even retail investors now speculate on real estate—a red flag signaling systemic exploitation of the fiat system's flaws. It's like discovering a game exploit: initially, a few gain an advantage; when everyone uses it, the game collapses. The fiat system faces the same risk, though central banks are acutely aware and actively manage it.
Thus, the system persists, supported by decades of institutional inertia. But the pandemic acted like a needle piercing a massive, resilient bubble—built up over years but suddenly burst. Don't dismiss this as alarmist: the Federal Reserve understands this acutely. It employs hundreds of economists who drive actual policymaking and conduct forward-looking research. And don't underestimate Fed independence: while Trump appears erratic, the Fed operates autonomously—even deliberately countering his agenda at times.
Yet, when the pandemic emerged, the Fed immediately slashed rates to zero and launched unlimited quantitative easing—deploying virtually every tool available. This signals they perceive an unprecedented crisis.
I recently read Chief Economist Liang Hong's analysis: two weeks ago, he argued the pandemic's impact on China would be short-term, only affecting Q1 GDP, with full-year growth holding at 6%. But yesterday—or today—he revised China's 2020 growth forecast down to 2.6%. That's a staggering downgrade.
Yet I consider this revision realistic—even potentially optimistic. The threat of a global economic crisis is immense.
In summary, the confluence of pandemic-triggered disruptions, internet economy stagnation, emerging-market challenges, and fiat system tensions has created an exceptionally adverse macro environment. You may well be living through a once-in-a-century crisis—though "fortunate" is clearly ironic. One meaningful upside is the opportunity for profound learning. There *is* hope—and I know where it lies. We'll discuss that next.
Q (QuYan): Could you briefly explain the overall structure of the cryptocurrency market? And within this environment and structure, what ripple effects might it have on other crypto investments?
Prof. Liu Changyong: The current cryptocurrency market is structured in layers. The top layer is BTC—it has the largest market cap and attracts the most capital inflow. BTC serves several key functions. Primarily, it's an investment asset: once a niche holding, it now draws mainstream institutional participation, making it the market's largest segment. Second, it still sees demand for gray-market transactions. While its use as digital cash has declined significantly, large-scale illicit activities—like ransomware payments, arms trafficking, and drug trades—still rely on BTC because participants value transaction finality over fees or network speed. Third, BTC is used for large-value cross-border settlements in international trade. So, by scale, BTC remains the dominant cryptocurrency.
Other major cryptocurrencies like ETH, BCH, and BSV each have dedicated core communities built around distinct philosophies. Ripple (XRP) is a bit of a puzzle to me in terms of its social foundation; as a centralized token with strong insider control, its true user base isn't clear. ETH, on the other hand, was designed from the start as a global, decentralized computing platform—a vision it still actively pursues. Early applications like CryptoKitties demonstrated its potential, and now DeFi stands as its most significant use case.
BCH follows Bitcoin's original trajectory more closely, focusing on peer-to-peer payments and monetary utility from the ground up. Roger Ver has tirelessly promoted BCH payment solutions worldwide, including in Australia where local groups actively drive adoption. I've personally tested these solutions and found them effective—for foreign visitors, using BCH can cut transaction costs by 10–20% compared to traditional fiat payments.
BSV markets itself as a cryptocurrency but pursues a much more ambitious agenda. It argues that both BTC and BCH have strayed from Satoshi Nakamoto's original vision, becoming more flawed with each upgrade, and advocates for a full return to "classical" Bitcoin. Its approach is extreme: it rolls back nearly all subsequent developer improvements to revert to the earliest protocol version. Its second major selling point is moving all internet services onto the BSV blockchain—posting everything from weather forecasts to news directly on-chain. Essentially, BSV aims for strict adherence to Satoshi's design, allowing only one type of change: continuously scaling block size to eventually host the entire internet on its chain. Personally, I find this direction technically unviable, but it has attracted a fiercely loyal community. Other emerging tokens similarly maintain devoted followings.
These projects have clear visions and engaged communities—many members are highly rational and deeply involved in ecosystem development. However, the vast majority of tokens lack such foundations. One category comprises tokenized economy tokens: these often have concrete ideas, business models, and functional roles within their ecosystems, but they're limited by closed-loop designs that prevent global, currency-scale adoption. Examples include exchange-native tokens like BNB (Binance), HT (Huobi), and OKB (OKX), which operate solely within their respective platforms.
These tokens are centrally operated by project teams, meaning their value depends entirely on the health of their underlying businesses or exchanges. Strong performance supports the token; poor performance undermines it—this fundamentally distinguishes them from decentralized cryptocurrencies. While some aspire to decentralize, achieving it is exceptionally difficult: full decentralization often erodes economic viability, causing value to collapse, while retaining centralization perpetuates the very limitations they aim to overcome, stifling ecosystem growth.
Such tokens thrive when their ecosystems flourish, but they face long-term legal uncertainty: centralized tokens lack clear regulatory frameworks or enforceable protections. Their sustainability thus hinges on two critical factors: first, the platform's consistent profitability and operational integrity (i.e., no exit scams); second, the team's reputation—some platforms implement robust safeguards to maintain credibility, while others do not. Therefore, investors should be cautious with tokens issued by unprofitable platforms led by teams with questionable reputations. Even if the early narrative seems compelling, the long-term risks remain substantial.
Another category includes tokens rebranded from legacy pyramid or Ponzi schemes, alongside projects explicitly designed to "harvest韭菜" (scam retail investors). These share common traits: heavy upfront marketing investment, and sophisticated yet deceptive mechanisms built on two pillars—first, grandiose promises (like revolutionary technology or celebrity endorsements); second, complex yield-generation schemes (static/dynamic rewards) engineered to lure profit-hungry participants. Once launched, these projects aggressively pump prices, attract mass participation, then exit abruptly—or hand control to "the community"—leaving investors stranded.
In today's macroeconomic environment, only truly decentralized cryptocurrencies can effectively hedge against mainstream financial systems or serve as instruments to short traditional economies. Their decentralized nature places them in direct opposition to conventional finance—creating a fundamentally divergent logic that enables survival and resilience. Centralized alternatives inherently carry systemic risk.
Q (QuYan): Investment in the blockchain industry is closely linked to—but not the same as—the industry itself. Given the extraordinary global context, what are the crises and opportunities facing ordinary investors versus industry professionals?
Prof. Liu Changyong: For ordinary investors right now, the greatest opportunity lies in identifying promising, genuinely decentralized projects.
To recognize crises, we must first understand their root causes—and identify which projects can credibly address them. For example, projects that solve critical challenges facing internet economies or fiat-based monetary systems will gain exceptional traction during crises. Under normal conditions, displacing mature, entrenched systems—like the internet or fiat infrastructure—is extraordinarily difficult due to path dependency and behavioral inertia. Transformation becomes possible only when people perceive existential threats to their livelihoods. Consider China's market-oriented reforms: they succeeded precisely because post-Cultural Revolution hardship created an urgent demand for systemic change.
Thus, for both ordinary investors and industry professionals, the crisis manifests as universal risk across traditional assets—leaving investors uncertain where to allocate capital. Even cash, historically "king," loses reliability during systemic crises: emergency liquidity injections risk triggering hyperinflation. So what should we do? Focus on future-oriented solutions—strategically positioning ourselves in sectors poised to resolve the global economic crisis and catalyze a new phase of worldwide growth.
In my view, the most critical frontier is the cryptography-based economy (crypto-economy).
The crypto-economy directly addresses pressing issues in today's internet economy—like information security vulnerabilities and monopolistic data control—while also tackling fiat system failures. Decentralized money, decentralized finance (DeFi), and decentralized infrastructure collectively offer solutions to both internet-era challenges and rising anti-globalization trends. Specifically, the crypto-economy is pivotal to reversing recent global fragmentation—rebuilding interconnectedness after years of deglobalization.
Q (QuYan): As an economist by training, how do you assess the global crisis we currently face—and where does the solution lie?
Prof. Liu Changyong: As I mentioned, the solution lies in the crypto-economy. Let me elaborate: Why the crypto-economy? Fundamentally, it represents the path pioneered by Satoshi Nakamoto through cryptocurrency. Its cornerstone is the widespread adoption of asymmetric cryptography. Why is this so vital? Since the advent of computers—and later the internet—the global economy has undergone a profound transformation: shifting from material-based production to an information-centric paradigm. Concretely, spending on physical goods (like food and clothing) has rapidly declined relative to expenditures on information services.
As economic activity increasingly revolves around information, the internet emerged as the dominant infrastructure—processing data and delivering information-based products at unprecedented speed. Yet its rapid ascent exposed a critical vulnerability: information security. Digital information flows freely online and replicates instantly, cheaply, and effortlessly.
Information security concerns arose with computing's inception—starting with software piracy (unauthorized copying without compensation), evolving into malware, and expanding as digital social interaction proliferated. Only large corporations have the resources to implement robust security measures, leading users to depend increasingly on centralized service providers. Simultaneously, governments reinforce security through intellectual property laws—yet these regulations paradoxically restrict information flow, fragmenting the digital landscape further. Corporations, jurisdictions, sovereign currencies, and even religious doctrines now partition the internet.
Why is the internet now declining? Because instead of fostering global economic integration and individual economic freedom—as envisioned in the "global village" ideal—it has become a tool constraining economic behavior.
The world has fractured into isolated "islands"—a "world archipelago." Three to four centuries ago, geographical discovery connected disparate regions, fueling centuries of growth. Today, we're regressing: deliberately fragmenting the globally connective internet into disconnected shards.
Our opportunity lies in the crypto-economy—powered by two foundational elements: first, asymmetric cryptography; second, distributed consensus mechanisms (technically a governance protocol rather than pure technology).
Why are these critical? Asymmetric cryptography was invented specifically to solve information security problems—with exceptional efficiency and minimal cost: controlling your private key grants absolute sovereignty over your digital identity and assets.
Asymmetric cryptography solves the problem of information security, which means we can reclaim the rights we've handed over to centralized entities for safekeeping. Yet in our current centralized landscape, even though major corporations use asymmetric cryptography, they don't return that power to users. Instead, they still rely on symmetric cryptography, only encrypting data in transit. They don't let users control their own rights through private keys, because if companies knew users' private keys, they would control those rights.
This is where a second crucial mechanism comes in: distributed consensus. When Satoshi Nakamoto designed Bitcoin, his primary concern was that money—being so fundamentally important—had to compete with and outlast fiat currency. Studying history, he saw that earlier digital currency projects failed primarily due to centralization. Centralization posed two major risks: first, a centralized entity could collapse under major economic pressure; second, even if it survived, the critical nature of money made it a target for seizure or exploitation—indeed, earlier digital currencies were eventually shut down by agencies like the FBI.
In essence, asymmetric cryptography lets individuals control their own online data with high efficiency and low cost. Meanwhile, distributed consensus removes the need for centralized control—not just over money, but across many domains. Together, they have the potential to fundamentally reshape the internet economy into something truly open.
China's internet economy has grown rapidly in recent years—an opportunity we must cherish. If we can swiftly transition from an internet economy to a cryptographic economy, we may not only emerge first from the current global crisis but even surpass the United States. After the 1929 crisis, the U.S. rebounded quickly: restructuring industry, implementing the New Deal and Keynesian policies, achieving rapid post-crisis growth, and ultimately becoming the world's leading power after WWII. The Great Depression, in effect, propelled the U.S. to global dominance. China now faces a similar inflection point. Building on our strong internet economy foundation, if we successfully pivot to a cryptographic economy, within five to ten years China could become the world's leading economy.
Over the past six months, I've become increasingly convinced of this direction—especially as I've moved from conceptual vision to practical implementation. I'm now certain this path is correct, and progress has been accelerating.
I believe this crisis represents a once-in-a-lifetime opportunity—if you understand its roots, see its trajectory clearly, and find the right people and methodology to act. Over the past few months, I've felt a daily surge of energy, like an adrenaline rush. I have to remind myself to stay calm, but the pace is relentless, with tasks piling up. It genuinely excites me, and I hope more people will join us to seize this moment together.
Community Question: You argue that the cryptographic economy is the way out of the global economic crisis. How exactly can blockchain lead us out of this crisis?
Professor Liu Changyong: How does the cryptographic economy help us exit this crisis? First, through cryptographic consensus mechanisms. The cryptographic economy operates on two levels: one is "cryptographic consensus"—combining asymmetric cryptography with distributed consensus to build decentralized systems. Such systems are ideal for solving today's greatest economic challenge: fragmentation and trade protectionism. Users inherently have the capacity to interconnect the global economy, but they've been artificially segmented. So how do we fix this? Let's first look at how these entities fragment us—and the global economy.
They achieve segmentation by controlling key infrastructure. First, they control money—creating monetary fragmentation. Second, they control user account and identity systems. JD.com has one system; Tencent another; Alibaba another; Facebook another; Google another—all isolated, trapping users within corporate silos. For example, can you transfer funds directly from Alipay to WeChat Pay? Technically yes, but it's cumbersome. This is a critical issue.
Other examples include file storage and IoT infrastructure. In short, many foundational components of the global economy—if interoperable and not monopolized—would naturally enable integration. To reshape this, the cryptographic economy must first build decentralized economic infrastructure. Satoshi Nakamoto's cryptocurrency is vital here because money is the nexus of global markets. Once monetary flows are unblocked, other economic activities follow. Yet progress has been slow because Bitcoin has been financialized—co-opted by mainstream finance as just another portfolio asset.
As a result, Bitcoin hasn't fulfilled its historic mission of advancing monetary decentralization or establishing a globally shared currency. Since 2017, it has regressed, abandoning that goal.
To solve this, we must resume progress where Bitcoin stalled or reversed—and push forward. But this is immensely challenging. Bitcoin Cash attempted it but didn't fully grasp the underlying issues. Bitcoin's 2017 stagnation wasn't caused by a few individuals or Blockstream alone. Satoshi's original design prioritized early-stage experimentation, solving initial centralization problems and achieving foundational decentralization. However, once adopted by mainstream society, the system evolved beyond pure technology—it became an economic, political, and social system, far more complex.
This complexity reveals that while Satoshi's design was brilliant, it wasn't perfect. Key shortcomings include: no developer incentives, over-reliance on developers for governance, and inefficient decision-making. Even after Bitcoin Cash implemented scaling upgrades, it couldn't adjust the entire framework—the ship had sailed, and its scale was too large. As seen in the Bitcoin community—including my own extensive involvement and proposals—driving change remains extremely difficult.
Why? Because it's decentralized—lacking coordination or communication mechanisms.
Therefore, to fulfill Satoshi's historic mission—and advance further—we must build on his foundation. He may not have foreseen all future complexities, but his insight on money was correct. Progress stalled partly due to his early departure. Had he remained, he likely would have iteratively refined the system. This is also why I disagree with BSV: reverting to Satoshi's 2009 design is misguided. Had Satoshi stayed, he would have evolved, not regressed. Any mature entrepreneur knows that standing still guarantees obsolescence. Our task is to synthesize lessons from Bitcoin's first decade-plus of development.
Crucially, we must analyze why the shift occurred post-2016/2017—to uncover structural flaws and devise practical solutions. Only then can we realize truly decentralized cryptocurrencies. Once cryptocurrencies gain traction, economic life becomes decentralized at its foundation—enabling further decentralization: account systems, identity systems, and more. Applications won't depend on large corporations; no entity will monopolize user data. Progressively building this decentralized infrastructure creates fertile ground for small enterprises previously stifled under the internet paradigm—innovative but unable to compete with resource-monopolizing giants. Now they can leverage shared, non-monopolizable infrastructure, ushering in a viable cryptographic economy. This is what I'm building today.
Our project improves upon Satoshi's framework and is named Free Cash. "Free" reflects the core intent of cryptographic consensus—to make the internet freer; "Cash" reaffirms Bitcoin's original vision of peer-to-peer electronic cash.
We're focused on three main areas. First, parameter-level improvements to Bitcoin's design—for example, reducing block time to one minute for better UX; introducing a ten-day maturity period for mining rewards to raise attackers' costs and uncertainty; replacing the four-year halving schedule (which exacerbates volatility) with a smoother annual 20% decay rate. Second, addressing governance: while our public infrastructure remains decentralized, certain decisions require higher efficiency—not the current two-and-a-half-year scaling debates.
Hence, we're exploring novel governance mechanisms. For instance, governance fund rewards are distributed quarterly to all contributors in a decentralized yet efficient manner. Recently, I hosted a livestream on E-Boo (via my Weibo account "Changyong Laoshi") titled "Free Cash Governance Mechanism," explaining how our design achieves both efficient decision-making and robust decentralization while preventing corruption and abuse of power.
Third, building additional decentralized infrastructure atop decentralized cryptocurrency. Currently, our priority is a decentralized account system. With decentralized currency and accounts, the platform becomes ready for real-world commercial applications—allowing diverse internet services to integrate seamlessly. Then we'll truly transition from cryptocurrency to a full-fledged cryptographic economy—exactly what I'm focused on building today.
Over the past three months, I've experienced firsthand: when the direction is right, momentum accelerates—progress becomes smoother, and others naturally join and propel you forward. Previously, I'd play video games every half year; now, I have zero free time—every day is packed. This state confirms I'm doing the right thing, and that both I and the project need each other.
Currently, the most urgent need is more participants. Post-pandemic, we plan to host a Cryptographic Economy Developer Conference. First, we'll grow the developer community—clarifying what we're building and our direction. We've developed a series of protocols, largely finalized, but implementation requires more developers.
That concludes today's discussion. I've walked through this narrative—from crisis to action—and for me, the logic is crystal clear. My actions are therefore unequivocal. I won't hesitate before criticism or suspicion—none of that matters. What matters is seizing this once-in-a-lifetime convergence of colossal crisis and unprecedented opportunity—acting boldly, decisively, without pause. Thank you!