Understanding of Bitcoin Fractions｜FAQs

Author: Daoshuo Blockchain

1. Does Ethereum have a safe financial management channel?

In the current crypto ecosystem, I think if you want to talk about safe financial management channels, you either lend ETH to lending applications (such as AAVE, Compound), or send it to participate in Ethereum staking. However, the returns of both are not very high.

I think in the current crypto ecosystem, we mainly earn the price difference of assets. In comparison, this return is not so important.

So, most of my ETH is mainly kept in cold wallets.

2. About Meta-Bitcoin

If my understanding is not very wrong, I think Meta-Bitcoin is still a bit similar to sidechains to some extent, and there is no particular difference in security from other Bitcoin second-layer extensions.

It still solves the old problem: the expansion of Bitcoin performance.

But I think that although the many existing Bitcoin expansion solutions each have their own problems that can be criticized, they can already meet the current applications in terms of performance expansion.

To make an inappropriate analogy: using the dumbest way to develop an Ethereum virtual machine hooked to the Bitcoin mainnet (in fact, many existing popular solutions do this), this architecture is sufficient to meet the current application requirements for Bitcoin performance.

But what can we do?

It still does not solve the main contradiction of the Bitcoin ecosystem: the lack of applications.

It is like what we lack now is not highways but cars running on the highway, but the current ecosystem is still trying to build more advanced and safer highways.

3. Cooperation ability of ZK coin project

If the ZK coin here refers to zkSync, then I think the reputation of this project seems to be average.

The negative feedback from the community caused by its last airdrop is not small. And after the airdrop, its TVL almost plummeted. From this, it seems that the cooperation ability of the project is relatively average.

At present, the best performing projects among the second-layer extensions of Ethereum are only Arb, OP and Base.

4. If the performance of Ethereum and its second-layer extensions continues to improve and reaches a certain critical value, some of the original application scenarios may have a qualitative leap.

To some extent, I think this situation is very likely. This has happened in the Internet field.

When reading the history of the development of the Internet in the past, I once read that in the United States around 2000, there were entrepreneurial teams that proposed various online stores and online marketing, but those practices failed at the time.

It was not until several years later when Taobao became popular that we saw the once imagined models in the United States being realized by countless small and medium-sized businesses in the e-commerce field in China.

Looking back at the current sluggishness of the Ethereum application ecosystem, I think perhaps the best way is to wait and observe. Perhaps some of the most insignificant small applications and inventions we see today are the seeds of great disruption and innovation in the future.

5. On August 19, the Supreme People's Court and the Supreme People's Procuratorate jointly held a press conference to issue the "Explanation on Handling Money Laundering...", which listed "virtual asset" transactions as one of the ways of money laundering.

In fact, using virtual assets to launder money is definitely illegal today, in the past, and in the future, and this is true in any country in the world.

However, in different countries, the interpretation and enforcement of laws are very different, which will cause some unnecessary troubles.

Specific to our country, I have always said that we must abide by domestic laws in China, and if we are in Hong Kong, we must abide by Hong Kong laws.

The last time I exchanged on Twitter, I specifically responded to a reader's question about whether it is necessary to open a bank card in Hong Kong. My goal is to hope that we can handle crypto assets in a legal way.