Most blockchain projects are still "air", but stock prices have already started to go wild

While virtual currencies such as Bitcoin are still controversial, their underlying technology, blockchain, has ushered in a carnival era and has become another hot field. Blockchain has been full of crazy and fantastic wealth stories since its birth. From China's square dance aunties to South Korea's "Gangnam" aunties, from domestic Xue Manzi, Xu Xiaoping, Cai Wensheng and other investors in Silicon Valley...Now, many Internet companies such as Xunlei and Renren have also joined this carnival, and the stock prices of these companies have also risen accordingly. The stock price of the craziest company has risen by nearly 700% in one day.

The popularity of Bitcoin has introduced the public to blockchain technology, and the recent surge in Internet company stock prices has once again made people realize the power of blockchain technology. Take You9 Games as an example. After announcing its layout of blockchain game business, its stock price rose by the daily limit for two consecutive trading days, closing at 8.94 yuan on January 10, an increase of 9.96%.

Although the popularity of blockchain has driven the rise in the stock prices of related companies, many listed companies have issued clarification announcements after the rise and warned of risks. After the opening of the Shanghai and Shenzhen stock markets on January 15, blockchain concept stocks fell collectively. By the close of trading, Zowee Technology and Yiqiao Shares hit the limit, Youzu Games fell 8.39%, Gaowei Technology fell 7.42%, and Sifang Jingchuang fell 5.76%.

Xiao Lei, a digital currency analyst, pointed out in an interview with reporters that there are actually very few blockchain projects that have been put into practical use, and most of them are "empty projects". China Merchants Securities also stated in a related research report that the blockchain applications currently being tested by major Internet companies have relatively simple functions, and blockchain technology is not yet ready for large-scale implementation in the short term.

The application space still needs to be explored slowly

Recently, a "blockchain cat-raising game" launched by Ethereum, "CryptoKitties", brought blockchain technology to the public again after Bitcoin. Of course, this time it is still related to the jaw-dropping transaction prices: according to Kitty Sales data, five of the rarest digital kittens on the game's trading platform sold for more than $100,000, and the most expensive digital kitten sold for a staggering $120,000.

Subsequently, domestic companies announced that they had participated in blockchain projects or were preparing to participate in them. Driven by the blockchain concept, the stock prices of related companies began to rise.

For example, after the long-dormant Chinese concept stock Renren Inc. released the RRCoin white paper on January 2 and announced its involvement in blockchain, its stock price soared by 76.3% in two trading days; even crazier was the US-listed China Netcom Cable, whose stock price soared by 698.29% on January 4 after it announced its cooperation with Wuxi Jingtong Technology to jointly develop the blockchain industry and related technologies. Other beneficiaries include You9 Games, Sifang Jingchuang, and Gaowei Technology.

Digital currency analyst Xiao Lei told reporters that blockchain technology, as a very basic technology, is actually a distributed ledger, from which some attributes of smart contracts and payments are derived. Therefore, blockchain technology was first used in exchanges, such as Nasdaq in the United States and some European exchanges, including the domestic central bank's bill exchange.

Regarding the blockchain applications currently being tested by major Internet companies, China Merchants Securities pointed out that the applications are still mainly issuing "tokens" or implementing "points management", with relatively simple functions, and are still in the early stages. The real potential application space of blockchain is still huge and needs to be slowly explored. In the short term, it is not yet ready for large-scale implementation.

"Blockchain technology has great potential, but no one knows how much it is worth, so people are willing to hype the concept of blockchain," said Xiao Lei.

Regarding the current blockchain craze, Pacific Securities stated in a related research report that in the short term, the blockchain sector is more of a game at the market capital level. Liu Weijie, general manager of Guangzhou Silu Equity Fund Management Co., Ltd., further pointed out in an interview with reporters that the recent rise in blockchain concept stocks is synchronized with the recovery of the market index, and resonates with the first quarter spring market of individual stocks in various sectors. Although the subsequent development of the sector still needs to correspond to the depth of market capital participation, at least the first quarter in the short term is relatively optimistic.

Landing applications require specific scenario support

Although investors are optimistic about the trend of the blockchain sector in the short term, many companies have attracted the attention of regulators due to large fluctuations in their stock prices and have been asked to explain the situation.

Among them, You9 Games issued an announcement after its stock price rose by the daily limit for two consecutive trading days, saying that it had received an inquiry letter from the Shanghai Stock Exchange regarding blockchain matters, and suspended trading on the 11th. After being suspended for two trading days, on the evening of January 12, You9 Games indirectly clarified blockchain after responding to the regulatory letter. On January 15, its stock price plummeted. Sifang Jingchuang was also required by the Shenzhen Stock Exchange to explain the relevant situation and provide risk warnings due to its large stock price fluctuations.

It is also worth noting that You9 Games mentioned in its reply to the Shanghai Stock Exchange's inquiry letter that the company's current main business is the distribution and development of online games and the operation of the game media information platform You9.com, which has nothing to do with the blockchain business; Sifang Jingchuang also stated in the announcement that the current application of blockchain technology in the financial industry involves technical and legal risks. Although the first cooperation project was successfully developed and implemented, the revenue was only more than 270,000 Hong Kong dollars, which contributed very little to the company's performance. It will take some time for the cooperation between the two parties to be transformed into larger industrial revenue, and there is still uncertainty about the impact on the company's future performance.

As for the implementation of blockchain, Xiao Lei believes that it needs to be combined with specific application scenarios. Guojin Securities also pointed out in a related report that using blockchain technology to support its original business is the fastest model for implementation. For example, Alibaba launched the "blockchain + evidence storage application", JD launched the "blockchain + anti-counterfeiting application", Xiaomi launched the "blockchain + digital marketing application", Haoxin Internet launched the Haoxin Competition Cloud, and Xunlei launched the Wanke Cloud.

OKline said in an interview with reporters that both Haoxin Jingdou Cloud and Xunlei Wanke Cloud are sharing scenarios of network resources such as broadband, which can give full play to the technical advantages of blockchain from a business perspective. However, when it comes to the details of technical development, it is still unknown whether it can improve the efficiency of concurrent processing of large amounts of data and whether blockchain technology can be well commercialized.

The current blockchain can really be said to be in a state of ice and fire. On the one hand, people are looking forward to the vast imagination space behind the blockchain, but on the other hand, since the blockchain technology is still in its early embryonic stage, there is no clear profit model. In this regard, Guojin Securities said that it is recommended to be cautious about blockchain companies that are based solely on digital currency speculation; for companies that have real scene support and whose blockchain technology layout can directly benefit the development of the original business, it is recommended to keep an active eye on it.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.