In early 2020 China was unexpectedly hit with the 2019 Novel Coronavirus epidemic which not only threatens the lives and health of the people throughout the country, but also poses a huge challenge for economic development. The blockchain industry is not immune.
In light of the epidemic, Mars Finance has launched a series articles — “Industry Watch: China’s Blockchain Industry in the Epidemic”, in which prominent figures from the industry directly address the current status of the industry in light of the epidemic.
The following is shared by Jack Lu, edited by Mars Finance:
The novel coronavirus epidemic situation is fierce and its contagiousness is startling. The government has urged all citizens stay at home as much as possible, avoid social gatherings, and work remotely. In areas where the epidemic is especially severe, the government has even adopted measures such as restricting travel in and out city and road closures.
Although it is still vital for us to continue the development of Wanchain and its ecosystem in light of the epidemic, the health and safety of our colleagues is of course our top priority. Wanchain has actively responded to national guidelines for dealing with the epidemic, and at present, all team members are working remotely from home.
We also require team members to make a daily health check-in and submit relevant information such as health status, body temperature, and contact with visitors from affected areas. Future measures will be based on the development of the epidemic situation and the government’s follow-up policies over the next few weeks.
Telecommuting has improved the work efficiency of individual team members to a certain extent. For example, everyone does not have to spend time commuting every day. However, telecommuting harms coordination and collaboration within the team. Certain technical frameworks and products currently being developed by the team can only be successfully completed through the team’s in depth cooperation and collaboration. Obviously, face-to-face communication and discussion are more effective than remote conferences on the Internet. Fortunately, since the early days of Wanchain, it has had offices in the United States, China, Europe and other places, so we have accumulated a lot of experience in cross-regional and even multinational work collaboration.
Companies (or organizations) in the blockchain industry can be roughly divided into four major categories according to their positioning and function: infrastructure, technology expansion, industry application, and media/community.
The online and offline companies in the media/community category will be the companies who are most impacted by the epidemic. For example, companies related to offline blockchain exhibitions, offline courses, etc. may see a drastic drop in clients or even be restricted from operating by epidemic prevention policies. For media companies with a focus on online traffic, however, the epidemic may in fact lead to an increase in traffic.
The epidemic impact on industry application companies will be very subtle. First of all, the spread of the epidemic, travel restrictions, and the temporary closure of many physical offices will inevitably reduce the number of business opportunities for application projects, which will lead to a decline in the revenue of industry application enterprises. However, at the same time, the use of blockchain technology to solve issues related to medical big data, charitable fundraising, drug traceability and other sub-sectors will see many new opportunities. Therefore, if industry application companies in these areas play their cards right now, they may see it pay off later in the year.
For infrastructure companies and technology expansion companies, because there is little direct contact with offline clients, the impact of the epidemic is relatively small. For Wanchain, which focuses on the development of cross-chain mechanisms and is an infrastructure organization, the epidemic will affect us to some degree, but this impact is controllable and predictable and will not cause serious harm to the development of the project.
Of course, new opportunities have also been created because of the epidemic, which can be considered from two dimensions:
First is the strong demand directly generated by the impact of the epidemic, which is the use of blockchain technology mentioned above to solve the needs of medical big data, charitable fundraising, and drug traceability.
These and related use cases will see great development this year. While there will be great opportunities in these areas, they will also be accompanied by huge risks. The demand spurred by the epidemic situation may be temporary, and the opportunities may fall as rapidly as they rise. A rapid decline does not represent the impracticality of blockchain-based medical big data sharing and charity donation on-chain projects, but just that these projects must be sustainable for a long time in the future. The current epidemic situation may generate a deceptively large amount of demand, and when the epidemic passes, this demand will disappear. This could have an adverse effect on companies that have invested heavily in these areas.
The second is the industries that have been hit hard by the impact of the epidemic such as the catering, restaurant, tourism, and entertainment industries. The epidemic has brought demand in many of these industries to crash down. However, in the future once the epidemic has passed we can expect a strong rebound in demand. Blockchain services related to these industries such as food traceability, travel insurance, and copyright protection will also see rapid growth. Therefore, blockchain applications in these industries are worthy of attention.
In addition to the industry divisions I mentioned above (infrastructure, technology expansion, industry application), the blockchain world can also be divided from another point of view: public chain communities, cryptocurrency communities, and the mining community. Well, emergencies like war and epidemic have different effects on companies on these different communities.
The historical background of the birth of Bitcoin was the subprime mortgage crisis in the United States, which seriously damaged the credibility of the US dollar. Therefore, in the past ten years, Bitcoin has been regarded as one of the ways of capital preservation and hedging against the dollar. Leaving aside morality, emergencies such as wars often make various cryptocurrencies such as Bitcoin increase in popularity. Therefore, when global black swan events occur, not all black swan events will necessarily have a negative impact on cryptocurrencies.
Regarding the mining community, this year will see continuing cryptocurrency production based on PoW consensus, such as BTC, BCH, and BSV. Unlike the black swan events mentioned above, the halving of production is certain, so what the mining community should guard against are gray rhino events. Historically, each halving always ushered in a round of new profits. Actually each round of new profits was based on some developments which brought new value, such as the emergence of smart contracts with Ethereum. However, if the current halving is not also marked by some major steps forward in the industry, it is likely that a gray rhino event will occur in the mining community, which may have a significant impact on the enterprises involved with mining.
If the blockchain industry is to really make progress then it must return its focus to the development of the underlying technology since current blockchain technology is still in the very early stages. The issues of scaling, block storage, cross chain transactions, and security all require the unrelenting efforts of industry developers and experts for real progress to be made. It is only when blockchain technology is mature and robust that the large-scale commercial use of the blockchain will become a reality.
In summation, external adverse factors such as war and epidemic will inevitably drag down the R & D process of the team driven by blockchain technology, which is obviously not good for the chain circle and the healthy development of the entire industry.
— Jack Lu, Wanchain Founder and CEO
Wanchain is the infrastructure connecting the decentralized financial world. Wanchain’s live cross-blockchain solution is EVM-based, includes optional private transactions, and provides a decentralized, permissionless, and secure approach for interoperability. Wanchain has employees globally with teams in Beijing (China), Austin (USA), Kuala Lumpur (Malaysia), and Madrid (Spain).
Wanchain Founder Jack Lu — The 2019 Novel Coronavirus Epidemic & its Affect on the Blockchain… was originally published in Wanchain on Medium, where people are continuing the conversation by highlighting and responding to this story.
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