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In 2021, take another look at CKB

2021-02-23 17:21

Read this article in 20 Minutes

Travel thousands of miles before the first product yongxing, Nervos big return.

The original title: "A Thousand Miles Away, A Short Step: A New Look at CKB in 2021"

Original source: TalkChain

Not long ago, the famed hedge fund Bridge Water released a research note in which Ray Dailo's attitude toward bitcoin changed dramatically. "Bitcoin is a remarkable achievement," he wrote in a Bridgewater research note.

No matter how carefully Dailo, the author of "The Debt Crisis," chooses his words, there is no denying that he has reconsidered the value of Bitcoin. A fund industry leader known for his heavy holdings in Moutai also declared on Weibo, "I have bought 1% of the Bitcoin ETF fund. Although it's a little late, I will practice it once I think about it! I hope I can keep my curiosity about new things!"

Dan Bin, chairman of Eastern Bay Investment Management Co., Ltd., and author of The Rose of Time, said on Weibo, "I have bought 1% of the Bitcoin ETF fund. Although it is a little late, I will practice it once I think about it.

You see, big guys are never afraid to punch in the face. Not sticking to old ideas, not stubborn in their own opinions, should be one of the most valuable potential investors. Investing is always a bet on the future, not the past.

CKB's original intention to go out has never changed

What kind of public chain is Nervos?

In my understanding, Nervos is not a public chain, but a set of blockchain system based on CKB. From the beginning, Nervos was designed to be a multi-layer network. The underlying CKB network is mainly used for verification and storage of core data, while all architectures based on the CKB main network (including Rollup, side chain, etc.) are collectively called NERVOS.

From the beginning, Nervos had very big ambitions. What it wants to do is a real commercial, can be "out of the loop" public chain system.

And commercial and out of the circle, the most important is "stability". So the Nervos team's main emphasis is on security, and the contract code is constantly audited. While other public chains are busy creating an ecosystem of flowers blossoming, CKB's team is steadily consolidating the bottom.

Because Nervos has been focused on adoption, or apps, to attract more people who actually have a need for blockchain. From this perspective, a secure, stable, and developer-friendly infrastructure is crucial. The most important thing about how tall a building is is how deep the foundation is. So far, CKB has been laying that foundation.

From this point of view, I think CKB's team is worthy of respect. Because I can imagine that there must be a lot of people, whether it's organizations, big players, communities, partners, who are constantly telling the team that you should go in this direction, you should try DEFI, you should pull the plate. It's not a long game, though.

But in the end, they were not swayed and persevered. I'm as excited as any investor to see an ecological explosion on Nervos, but I also know that if I'm going to go out of the loop, I'm going to go through a period of anonymity.

Figure Note: Blue is the price of CKB/USD, yellow is the price of CKB/BTC

Thankfully, CKB didn't let me down. The closing price on January 12, CKB was 0.004436, yesterday's closing price was 0.01134, the overall gain reached 155.6%.

But rather than the price, I'd like to share with you the four seasons of Nervos. Beautiful clothes should not travel at night, nor should bright pearls be covered with dust.

Infrastructure and interoperability 2.0

To get out of the loop, Nervos must have a secure and stable bottom layer. In the second half of 2020, people are talking about Layer 2, ZK-Snark and Rollup, but they all have a premise that there is enough trust in the underlying network of ETH.

To put it bluntly, Ethereum has come to life with the blood (and money) of many projects. CKB, being a latecomer, can't and shouldn't make developers and users go through that again -- so the underlying security should have been in place from the start.

Building a two-story network on top of an insecure ground floor is like building on top of a dangerous wall. So in 2020, the Nervos team is focused on infrastructure development for CKB, where the most important thing is stability and security.

On top of that, there are improvements in developer tools. The UTXO model has its advantages, but it also brings a relatively high development threshold for developers. Therefore, this requires the team to abstract an account model on top of the UTXO model for developers who are used to the account model.

This is Nervos' Animagus and Polyjuice, which will be launched in 2020.

Animagus can bridge the gap between the UTXO model and the account model, while Polyjuice can make CKB directly compatible with Ethereum code. In other words, from now on developers will be able to develop on CKB just like they did on Ethereum dApps.

In addition, the team has developed two components, Force Bridge and GodWoken. Force Bridge is a cross-chain Bridge that supports the connection of data and assets to other blockchains such as Ethereum. GodWoken is a framework for building rollups on CKB.

With the addition of the previous side-chain framework, Muta, the core infrastructure for the Nervos strategy has been developed. But these tools are not yet fully available to the market. In the words of the team, a 60-minute product is ready, but they want a better product.

Safety and stability is a place CKB can never compromise. So these products are still awaiting multiple rounds of audits by security companies, but should be available by 2021 Q1.

Another is interoperability 2.0, which is the biggest difference between CKB and other public chains. Interoperability 2.0 is primarily a function of three components, the PW Lock, Force Bridge, and Layer 2 (the Rollup solution, Godwoken, and the EVM compatibility Layer, Polyjuice).

At Layer 2, we mentioned Godwoken and Muta, which are the Layer 2 solutions developed by the CKB team.

Figure note: demo of PW Lock

PW Lock, on the other hand, is a wallet that allows dApps to call different cryptographic primitives directly. How to interpret this sentence? The equivalent of a CKB dApp can interact directly through MetaMask, or through Tron's wallet, or even directly through WeChat scan code (a sample version has been produced:https://pay.lay2.dev/#/).

Users do not need to understand what CKB is, nor do they need to understand what a wallet is. Blockchain will be an "unknown" layer, like the TCP/IP protocol.

This is where other public chains can't do it, and it's the first step for Nervos to get out of the loop. Only by making the portal wide enough, and the threshold for users to use the policy low enough, will it be possible to obtain users outside the circle.

Then there is the Force Bridge. The one-way BTC to CKB cross-chain Bridge has a mature decentralized scheme. The two-way bridge between ETH and CKB, which has been deployed and tested in both sides' test networks, will not be officially launched until the audit is completed due to security concerns.

On a smaller scale, Force Bridge and PW Lock can seamlessly connect existing Ethereum users (see Gliadex, a product based on CKB's Gilaswap framework that enables cross-chain conversion of ETH/CKB, currently deployed on the beta network).

More broadly, Force Bridge and PW Lock will be the beginning of tens of millions of new users' access to crypto assets. Just like the Internet, users don't need to understand what crypto assets are, just that their assets are secure and controllable.

Reason to be bullish on CKB

In a previous post, I argued that the value discovery process for mining coins takes longer and often starts with the miners. While this increase in computing power bodes well for increased security, it also means miners are betting on CKB in the long term.

There are three main reasons why I am bullish on CKB (not that it will go up tomorrow, but that CKB will outperform most benchmarks on a 3-5 year time scale) :

- CKB's valuation is far lower than other public chains, only 1/1000 of Ethereum's;

- CKB is most likely to host Ethereum overflow assets and users;

- CKB is the most likely to become a commercial base public chain.

As the whole market is still in its early stage, there is actually no systematic valuation method for the target, so I mainly look at the price of CKB from the perspective of horizontal comparison.

Ethereum is currently valued at around $200 billion, Boca at $29 billion, Cardano at $27 billion, BNB at $20 billion, and NEAR at $1.2 billion.

So what's the valuation of CKB? Only 230 million dollars. This is also a problem that has been criticized by the community. No one doubts the ability and determination of CKB team, but the uncapped additional issue and the selling pressure of miners have been affecting the confidence of the secondary market.

But that's not a problem. Carefully look, all public chain can face such a problem. Ethereum is infinite, EOS is infinite, Flow is infinite.

And CKB has a hard top. Over time, the number of additional issues will be lower and lower. After 10 years, CKB will not have more than 100 gigabytes of storage available on the chain. It won't have a definite peak like BTC, but it will grow smaller and smaller over time.

So additional issuance and miners throw pressure is a false proposition. The real central question is, at what point does demand exceed supply?

It seems to me that time is very close. Once the infrastructure is in place, Force Bridge and PW Lock will make CKB the best choice for Ethereum asset and user overflow. And CKB can provide two-way cross-chain interoperability, which other public chains cannot do.

You need at least a NEAR or POKA wallet to use these common links. But at present, the wallet entry with the highest degree of completion on the client side is concentrated in Ethereum. CKB's dApps and asset management can be done directly from Ethereum's wallet.

The demand for the CKB public chain (including writing data, executing smart contracts, etc.) is directly reflected in the price of CKB. Because CKB was designed not for miners' tips, but for land rents. 1CKB = 1 Bytes, CKB must be locked if on-chain space is used.

CKB links the value of the public chain directly to the native token, so I'm not worried about the return after the ecological explosion.

The only question is, when will ecological development break through that inflection point?

To be honest, I'm an investor, not a prophet. All I can do is speculate based on logic and the information I have, and the turning point is getting closer.

Finally, I would like to say something more like chicken soup: "All we have to do is accumulate enough small steps before we travel thousands of miles."