guide

At the beginning of April, the sharp rise of BRC (Baer Chain) and SHE (Flash Chain) sparked a new concept - model currency. Actually, the concept of "pattern" is not new. This week's topic will analyze the mode of operation, trading methods, and identification methods of model coins, and reveal the essence of model coins.

Summary

Summary

Special topic: It is impossible to verify who first proposed the model currency, but they all have similar characteristics: a well-formed marketing model, obvious signs of market control, and speculative funds. Flash Chain stated in the white paper that it wants to build a global Ping An health mutual insurance system through blockchain technology, but it launched a "venture capital plan", and users can share a fixed proportion of income by locking the pass. And the business model of Flash Chain - mutual insurance has little prospect. The Baer Chain mainnet will be launched in the near future. In October 2018, the blockchain game "Super Rich" was launched, and it was promoted under the name of "Fully Automatic Earning Blockchain Game". It is "recommended dividend". The two common hype methods of model coins are: using various "models" to attract people to buy tokens, and then pulling the market with good news. The essence of the models of Flash Chain and Baer Chain are "Ponzi schemes". Model coins are nothing new. They have not played any role in promoting blockchain technology innovation, but are not conducive to the long-term development of the industry as a whole.

Market: short-term corrections, the market outlook can still be expected. The total market value of digital tokens this week was US$172.77 billion, a decrease of US$3.73 billion or about 2.1% compared to last week; the average daily trading volume was US$55.40 billion, an increase of 1.4% from last week, and the average daily turnover rate was 31.0% , down 2.3% from last week. The current price of BTC is US$5,089, with a weekly increase of 1.0% and a monthly increase of 30.3%; the current price of ETH is US$164.7, with a weekly decrease of 0.5% and a monthly increase of 23.6%. The BTC balance on the exchange was 796,000, an increase of 4,972 from last week; the ETH balance on the exchange was 9.499 million, an increase of 53,000, and the short-term selling pressure increased slightly.

Output and popularity: The computing power of BTC and ETH has risen steadily, while public attention has dropped. The mining difficulty of BTC this week is 6.393T, an increase of 0.014T from last week, and the average daily computing power is 46.13EH/s, an increase of 0.33EH/s from last week; the mining difficulty of ETH this week is 1879, an increase of 58 from last week , the daily average computing power is 148.2TH/S, an increase of about 5.7TH/S. The public's search for digital tokens has dropped compared to last week.

Risk warning: market volatility risk, IEO risk

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March has just passed, and the IEO concept and platform tokens are still hot. At the beginning of April, the sharp rise of BRC (Baer Chain) and SHE (Flash Chain) made a new concept popular - model currency. Actually, the concept of "pattern" is not new. This week's topic will analyze the mode of operation, trading methods, and identification methods of model coins, and reveal the essence of model coins.

1 Topic: What kind of model currency, all of them are liars

1.1 What is a model currency

It is impossible to verify who first proposed the model currency, but they all have similar characteristics.

There is a formed marketing model. Model coins are different from general blockchain projects. These projects usually lack technological innovation, lackluster development plans, and vague background information of team members, but they all have their own marketing models, advocating the so-called "investment plan" of the project to investors , and promise future benefits. These projects either claim to be supported by the revenue of the real economy such as tourism, e-commerce, real estate, liquor, etc., or they propose some unrealistic "innovative" concepts and formulate a series of "partners" and "dividends". Promote the marketing plan to attract investors to invest.

There are obvious signs of control. The project side of the model currency generally masters most of the circulating tokens. After listing on an exchange, it manipulates the market price by controlling the market, or cooperates with some media to release good news, and attracts follow-ups and completes high positions by violently pulling up. cash out process. These projects usually have a low market value in circulation, are not usually traded actively, and may leave obvious traces of human manipulation.

There are speculative funds sought after. Due to its high volatility, the model currency can attract investors with a more speculative mentality in the secondary market. On the other hand, it does not rule out the possibility that some large capital joint project parties who are well versed in the operation of model coins will jointly "cut leeks". The short-term speculative funds involved in the hype of model coins account for a large proportion, which further exacerbates its price fluctuations and is extremely risky.

If a project and token meet the above three characteristics, we call it a model currency. Similar tokens include EKT (Education Care, EKT partnership plan), GTC (Game.com, node fixed deposit dividend plan).

1.2 ShineChain: a "venture capital" in the cloak of "mutual assistance and protection"

Flash Chain stated in the white paper that to build a global safe health mutual insurance system through blockchain technology, users can lock a certain number of Flash Chain tokens SHE into the "lock pool" and sign the corresponding guarantee agreement. The compensation is paid according to the multiple specified in the agreement, and the compensation amount is shared equally by the funds in the locked pool. The slogan put forward by Flash Chain is "7.3 billion people in the world, regardless of poverty or wealth, everyone owns SHE and everyone enjoys security."

Flash Chain was listed on Huobi HADAX (Huobi's own digital asset exchange, now Huobi Next) in March 2018, and ranked second in the first phase of Huobi's voting list, with 29.59 million HT votes. The price of SHE one month ago (March 19, 2019) was US$0.0012, and the highest price of SHE on April 9 was US$0.037, with a maximum increase of 30.8 times. What is the force that drives SHE's huge increase, but also from the "venture capital plan" announced by SHE on March 20.

According to the description in the figure, Flash Chain divides users into five levels, and every ten days is an investment cycle. The expected rate of return will increase accordingly with the number of rounds and levels of user investment. User promotion is mainly done by recommending new users, and users are eligible to receive a part of the income of their recommended users. The way to participate is to purchase SHE from the secondary market and recharge it to the official venture capital platform, but the official has not made any announcement on the source of income. illustrate.

And the business model of the flash chain - mutual insurance will also be a dead end. Alipay launched the "Mutual Insurance" product in 2018. The Flash Chain is similar to its business model. Participants need to share the compensation of other insureds due to various unexpected situations. "Mutual Insurance" was stopped in April this year by the Banking and Insurance Regulatory Commission for failing to use approved or filed insurance clauses and insurance premium rates in accordance with the regulations, and transformed into a network mutual aid "Huangbao".

This concept of online mutual assistance has relatively high risks in terms of regulatory compliance and market prospects, and it faces strong competitors such as Alipay and Easychou. I don't know how long this head-pulling drumming game of flash chain can last.

1.3 BaerChain and the "Super Rich" game

The goal of Baer Chain is to use blockchain technology to create a distributed game ecological platform. The Baer Chain mainnet will be launched in the near future, and the "Million Ecological Plan" will be launched to conduct super node elections. However, what really attracts the attention of ordinary retail investors is not BaerChain’s game public chain or ecological plan, but an on-chain game “Super Rich” officially launched by BaerChain.

This game was launched in October 2018. It has been promoted in several digital token investment communities under the name of "automatic income blockchain game", and advertised itself as a "global game public chain pioneer". There is nothing remarkable about the content of the game, traces of imitating “Happy Farm” and other simulation management games can be seen everywhere, and the promotion point of the game is not valuable content such as gameplay, creativity, and social interaction, but “investment dividends”.

Players need to recharge ETH to exchange BRC tokens, and "operate" various industries in the game to obtain BRC income, but this small part of income is far from enough to pay back. The platform encourages players to recommend new users to participate in the game through systems such as recommendation rewards and ecological partnerships, and players can obtain a certain percentage of the income of the new users they recommend. When the accumulative recharge ETH of the new users recommended by the player reaches a certain amount, the player can "upgrade" and enjoy higher dividends. Player levels are divided into "community petty bourgeoisie", "ecological boss" and "super rich". Every time you upgrade to a level, you need 3 players who have upgraded to the same level among your recommenders.

The Baer chain token BRC once achieved an 8-fold increase from the end of November to the beginning of December 2018 by virtue of the "Super Rich" game. At the beginning of April this year, BRC was hyped again with the news of the mainnet launch, and its price rose from $0.63 a month ago to $5.

Whether it is the three game levels of "Super Rich" or the five venture capital levels of "Flash Chain Venture Capital Project", it is nothing more than the continuation of the ancient "pyramid sales" and "Ponzi scheme".

1.4 Identify model coins with sharp eyes

Flash Chain and Baer Chain reflect two common hype modes of this type of model currency: using various "modes" to attract people to buy tokens, and pulling market with good news.

The model currency takes advantage of people's greed and fluke psychology, and designs various "models" to make investors believe that they can obtain income through investment in tokens, and believe that they will not be the last person to receive the last stick in the drum. The essence of various models is mostly a Ponzi scheme that uses the funds of late entrants to distribute the benefits of old players. The profitability of the project itself is extremely low and it is not sustainable. Different from traditional funds, model coins are deposited and distributed in the form of virtual tokens. They are usually listed on one or more leading exchanges. People ignore the huge risks of the project out of trust in the exchanges. And the project party can directly speculate in the secondary market, attracting ordinary investors who do not know the truth to participate in speculative activities.

The model currency collects chips from retail investors at a low level. After the chips are concentrated to a certain extent, it cooperates with the project party to release good news to pull the market, such as the launch of the top exchange, the launch of the main network, the repurchase and destruction, and complete the shipment process at a high level.

In the operation of many model coins, these two methods are used in combination, and they are usually carried out after a phased bull market and mainstream tokens complete their main rise. At this time, the profit-making funds in mainstream tokens flow out, and the selling pressure is relatively small, so it is easy to follow suit. They have the following characteristics:

The market value of the project is low, lacking technological innovation and a viable business model, but it promises benefits such as financial management and dividends in various ways.

There are signs of anomalies in transaction data. As shown in the figure below, there are obvious rules in the distribution of intraday trading volume of BRC and SHE.

In addition, the long-term trading volume distribution of model coins is also irregular. For example, the daily trading volume is too average, which does not conform to the overall trading volume of the same period in the long run; Caused by human control.

Exchanges such as Huobi Global will mark some tokens whose trading volume and project progress do not meet the standards as ST to warn investors of risks. These projects will also take the method of brushing volume to avoid being ST.

Model coins are nothing new. In the bull market in 2017, it has become a fixed pattern to hype good news such as "mainnet launch" and "listing on exchanges". All kinds of marketing models that use "investment dividends" as their selling point are nothing more than capital disks covered with blockchain clothing, and they wander in the gray area of ​​supervision and law.

In the short term, the hype of the model currency will attract a certain amount of speculative funds to enter the market and push up the price, but they have not played any role in promoting the innovation of blockchain technology. Linking is not conducive to the long-term development of the industry as a whole. Investors are extremely risky and should stay away from model coins that are already at a high level.

2 Quotes: short-term corrections, the market outlook is still expected

2.1 The overall market: the short-term encounters obstacles and falls back, maintaining a high level of volatility

The total market value of digital tokens this week was US$172.77 billion, a decrease of US$3.73 billion or about 2.1% compared to last week. BTC rose and fell, and mainstream tokens followed the callback.

The average daily trading volume of the digital token market was US$55.40 billion, an increase of 1.4% from last week, and the average daily turnover rate was 31.0%, a decrease of 2.3% from last week. Transactions continued to remain active.

This week, the BTC balance on the exchange was 796,000, an increase of 4,972 from last week. The balance of ETH on the exchange was 9.499 million, an increase of 53,000. Short-term selling pressure increased slightly.

The market value of USDT is 2.43 billion U.S. dollars, an increase of 330 million U.S. dollars from last week. USDT priced at $1.007 still maintains a premium. Tether has issued a substantial increase in USDT for three consecutive days, indicating that off-market funds have increased demand for stable tokens.

2.2 Core Token: High volatility, BTC trend is slightly stronger

The current price of BTC is $5,089, with a weekly increase of 1.0% and a monthly increase of 30.3%. This week, the average daily trading volume of BTC was 15.9 billion US dollars, and the average daily turnover rate was 17.4%. BTC surged to $5,400 this week and then fell back. It maintained a volatile trend at the high level, and the increase was at the forefront of mainstream tokens. After finishing, it may continue to attack $5,500.

The current price of ETH is 164.7 US dollars, with a weekly decrease of 0.5% and a monthly increase of 23.6%. This week, the average daily trading volume of ETH was 7.67 billion US dollars, and the average daily turnover rate was 42.1%. The trend of ETH is weak, the increase is smaller than that of mainstream tokens, and the pullback is strong.

The current price of EOS is $5.38, with a weekly increase of 0.8% and a monthly increase of 48.7%. The average daily trading volume of EOS this week was $3.15 billion, with an average daily turnover rate of 63.2%. EOS has a very high turnover rate and sufficient liquidity. The current rebound is close to the pressure level.

The current price of XRP is $0.326, with a weekly decline of 9.8% and a monthly increase of 3.9%. The average daily trading volume of XRP this week was $1.34 billion, with an average daily turnover rate of 9.2%. XRP almost completely missed this market. It tried to pull up twice but fell back. It failed to get out of the independent market. You can pay attention to the follow-up supplementary market.

This week, the monthly volatility of major tokens maintained an upward trend. The monthly volatility of BTC was 17.8%, an increase of 1.1% from last week; the monthly volatility of ETH was 19.6%, an increase of 1.9% from last week; the monthly volatility of EOS was 26.4% , an increase of 0.9% from last week; the monthly volatility of XRP was 17.9%, an increase of 2.0% from last week. As the market warms up, both market turnover and volatility rebound.

2.3 Market view: rising market or sustainable

Mainstream tokens pulled back, and BTC fluctuated at a high level. This week, BTC once again hit a new high of $5,400, but it is difficult to break through the resistance of $5,500 to $6,000 above. At the same time, BTC’s volume and main indicators deviated. BTC went out of a strong callback market, and then remained at $4,800 Above the shock, the upward trend has not yet been broken.

IEO risks are gradually accumulating. As major exchanges have launched IEO channels one after another, platform tokens have also risen, and BNB is already close to the peak of the bull market in early 2018. The IEOs of Bittrex and some small exchanges have already broken. The exchange’s IEO rules have also been criticized by some investors. The Block Cloud project, which was first launched on OK Jumpstart, opened at 10 times the IEO price, rose to 16 times at the highest, and fell all the way. Many investors reported that it was “difficult to grab coins” . The essence of IEO is the "financing" behavior of the project to the secondary market. The exchange should fulfill the responsibility of ensuring the authenticity of the project and protecting the legitimate rights and interests of investors, instead of artificially creating scarcity of tokens and fueling the hype. Investors should pay attention to the risks of IEO projects and platform tokens.

The rising market may continue. BTC’s strong breakout last week kicked off its fourth upcycle, opening up space for the market. In addition, major institutions have begun to lay out the blockchain industry, and the International Monetary Fund and the World Bank have also launched a private blockchain called "Learning Coin" to study blockchain technology. After the short-term consolidation is completed, the popularity of IEO will subside, and after the funds flow back to mainstream tokens, a new round of rising market may start.

3Output and popularity: the computing power has risen steadily, and the attention has fallen

The computing power of BTC rebounded slightly, the difficulty of mining remained the same as last week, and the computing power and difficulty of mining of ETH increased simultaneously. The mining difficulty of BTC this week is 6.393T, an increase of 0.014T from last week, and the average daily computing power is 46.13EH/s, an increase of 0.33EH/s from last week; the mining difficulty of ETH this week is 1879, an increase of 58 from last week , the daily average computing power is 148.2TH/S, an increase of about 5.7TH/S.

According to Google Trends statistics this week, the search popularity of Bitcoin is 10, and the search popularity of Ethereum is 10. The public's interest in digital tokens has not increased significantly.

4Industry news: The blockchain industry is constantly being standardized

4.1 Announcement of the List of Blockchain Information Service Filing Enterprises

Song Qinghui, a well-known economist, said in an interview with a reporter from the Yangtze Evening News that the release of the list of blockchain information service filing companies means that blockchain technology has taken the first step towards standardization, which is conducive to promoting the healthy development of the blockchain industry. It can make the blockchain market go longer. Blockchain is a hot word and a new technology, and the industry giants responded the fastest, which shows that the commercial interests behind it are huge, and the early entry can obtain greater investment opportunities.

4.2 World Economic Forum Blockchain Director: CBDC will be the most reliable form of digital token with price stability

According to CryptoInsider, Ashley Lannquist, director of blockchain and DLT projects at the World Economic Forum, pointed out that encrypted tokens and digital tokens (operating on distributed ledger networks) are a breakthrough that enables people to transfer funds digitally, very Quickly and economically, without going through third parties to manipulate, trust or share private information, which was not possible before DLT. Lanniquist said that there are major loopholes in the stable certificate forms currently seen, so if the central bank digital certificate (CBDC) is issued, it may be the most reliable form of blockchain-based digital certificate in terms of price stability.

4.3 The National Development and Reform Commission issued the "Industrial Structure Adjustment Guidance Catalog Consultation Draft": The eliminated industries include virtual currency "mining"

On April 8, the National Development and Reform Commission revised the "Industrial Structure Adjustment Guidance Catalog (2011 Edition) (Amendment)" and formed the "Industrial Structure Adjustment Guidance Catalog (2019 Edition, Draft for Comment)", which is now open to the public solicit opinions. Among them, the subcategory "Others" in the third largest category - eliminated industries includes (not: the second largest category - restricted industries): virtual currency "mining" activities (the production process of virtual currencies such as Bitcoin) ). The guidance catalog adds "big data, cloud computing, information technology services and blockchain information services within the scope permitted by the state" to the encouraged "information industry".

4.4 Fan Yifei, deputy governor of the central bank: the central bank is actively studying and formulating standards and regulations such as blockchain

On April 11, the People's Daily published an article by Fan Yifei, Deputy Governor of the People's Bank of China, "Adhering to the People-Centered Development of Financial Standardization". According to the article, at present, the People's Bank of China is actively researching and formulating standards and regulations for big data, blockchain, and open banking to further guide the healthy and orderly development of financial technology.

4.5 IMF and World Bank launch private blockchain and quasi-encrypted tokens