Stage 7 Expanded Reading
In this stage you are expected to broaden your horizon into the topic of the lecture.Please read the following article carefully.
Cryptocurrency,Blockchain and Cryptoassets
The terms Bitcoin and blockchain are sometimes used interchangeably,but there’s actually some misunderstanding about the innovation.In this opinion piece,Kevin Werbach,Wharton professor of legal studies and business ethics,explains the differences among the three groups that comprise this technology:cryptocurrency,blockchain and cryptoassets.
These days it’s hard to avoid pronouncements about how cryptocurrencies and blockchain technology could change everything(or at least,create massive wealth).Yet there’s an equally loud chorus labeling them a massive scam,useless,and dangerous.And a surprisingly large audience still doesn’t understand what’s going on.One big reason for the confusion is that we’re not all talking about the same things.
The three communities share a basic set of design principles and technological foundations,but the people,goals,and prospects are almost completely distinct.Those involved don’t help much by sniping constantly about which is the“real”movement.So,let me try to clarify things.
There is cryptocurrency:the idea that networks can securely transfer value without central points of control.There is blockchain:the idea that networks can collectively reach consensus about information across trust boundaries.And there are cryptoassets:the idea that virtual currencies can be“financialized”into tradable assets.The first truly is a revolutionary concept,but the jury is still out on whether the revolution will succeed.The second and third are game-changing innovations on the path to significant adoption,which are nonetheless essentially evolutionary.
Cryptocurrency is what you’ve probably heard the most about,starting with Bitcoin.The easiest way to understand it is not to puzzle over the details of mining or digital cash.Instead,focus on the decentralization of trust.
Many activities require trust.Without trust,a $20 bill is just a green piece of paper,a vote in an election is a pointless ritual,and someone offering me a ride in their car is a potentially dangerous stranger.Traditionally,trust meant depending on partners,institutions,or intermediaries.Those centralized trust architectures are powerful; among other things,they brought us modern industrial civilization.But there’s a downside to trust.Trust implies vulnerability.The people,governments,and companies we trust may turn out to be untrustworthy,for any number of reasons.Bitcoin showed that something valuable —money— could be trusted without trusting anyone in particular to verify transactions.
The idea,if brought to full fruition(and that’s a huge“if”),could transform society.We could have transparent companies that truly reflect the will of their stakeholders,governments that truly reflect the will of their citizens,an internet freed from the corrupting value-extraction of powerful gatekeepers,the end of fake news,and massive automation of daily life for the betterment of humanity.Or at least,we could have solutions that markedly improve on the status quo.Decentralization is valuable in all sorts of ways.
There’s a cost.(There’s always a cost.)For Bitcoin,the costs involve a very slow network with limited functionality that wastes massive amounts of electricity and enriches a side community of miners.Maybe those are worth it.Maybe technological advances,through the parade of new blockchains and blockchain enhancements,will drive down the costs.We don’t know yet.Yes,the bitcoin in circulation is notionally worth of $100 billion,but that’s cryptoasset thinking.Is anyone using bitcoin yet to do something,other than to get rich,to make a point,or to avoid law enforcement?And it gets steadily worse as one progresses down the list of nearly 2,000(or perhaps many more)extant cryptocurrencies.
There’s also a catch.(There’s always a catch.)What works for small groups,bounded applications,and idiosyncratic users doesn’t necessarily survive the climb to the mainstream.If it does,it often becomes something completely different.Until Facebook came along,it wasn’t clear anyone could make real money on social networking,which was just a frivolous exercise for kids anyway.The fact Facebook did come along doesn’t prove it was inevitable.
The world is filled with processes,especially among larger companies and governments,where things must be tracked from one trusted zone to another.Firms spend $10 trillion per year globally on“logistics,”which is short for putting stuff on transportation systems controlled by someone else.Manufacturers,distributors,and retailers keep their own trusted(yet independent)records of the same items as they flow through supply chains.When you walk into a new hospital or doctor’s office,your medical records don’t necessarily walk in with you.They are even less likely to walk out together with the new ones you generate.All of these breakdowns in information flow feed the fearsome dragon known as transaction costs.According to the dominant school of economics today,the effort to slay that dragon is the essential driving force in the economy.
A significant chunk of the transaction costs between firms(and sometimes within them)flow from the limited elasticity of trust.If every party to a transaction trusted the information involved,even though they didn’t trust one another,costs could fall and performance could improve drastically.That is the essence of the blockchain vision.
Trusting your own records on a blockchain is tantamount to trusting everyone else’s records,because those records are one and the same.The duplication of settlement,the further duplication of reconciliation,the further duplication of auditing,and perhaps the further duplication of regulatory reporting,can all fold into the original transaction.The most prominent companies in the world are participating in all manner of blockchain trials and consortia because they see the huge potential.Decentralization here is one design goal among several,not a foundational requirement as with cryptocurrencies.So these systems typically are“permissioned,”with essential functions limited to identified participants.
As with cryptocurrencies,there are aspects of this story that are still speculative.Because the blockchain thesis doesn’t assume any radical changes in markets or business models,though,it’s a question of degree only.Cryptocurrency advocates carp that you don’t need a blockchain for any of these arrangements.Well,you don’t need a blockchain to create digital money either.It’s only when you want to add the condition that banks can’t intermediate,governments can’t block transactions,and no one can influence the money supply that Bitcoin has a purpose.The blockchain thesis similarly targets a particular class of scenarios.Traditional database solutions don’t solve these problems because the people and companies involved don’t agree in practice,not because of some failing in theory.
Cryptoassets take cryptocurrency tokens,turn them into instruments of trading,and spin ever more complex financial instruments out of the threads they produce.The potential scale is immense,with trillion-dollar markets not that unusual in modern finance.Where this effort diverges from the first is that it views cryptocurrencies not as a way to facilitate activities without centralized trust,but as a new investment asset class.Because they are natively digital,cryptoassets can in theory be traded more efficiently than existing instruments.They are inherently flexible and global.Virtually all of the major Wall Street players are eager to get in on the action,as are the institutional investors that supply them with capital.Regulatory concerns that kept them out are gradually being addressed.
Once the fundamental value of a digital token on a decentralized network is established,why not just use it to make money?Cryptoassets depend on the fact of cryptocurrencies,because there needs to be something valuable to trade.Securities must be secure.But cryptoassets ignore or reject the idea of cryptocurrencies,that trust is“almost an obscenity”(to quote the man who did the original security audit on Bitcoin).To the cryptoasset trader,both trust and the absence of trust are nothing but means to an end,known as liquidity.
Another way to think of this is that cryptoassets divorce the exchange function of cryptocurrency tokens from their utility functions.If you want to use bitcoin to pay merchants,Ethereum’s ether to purchase computing cycles for distributed applications,Filecoin to purchase cloud file storage,or Augur Rep to verify the results of prediction markets,you put a value on those tokens based on what you get out of the application.In theory,more demand for use in the application means less available supply,which pushes up the price.In practice,none of the applications are significant yet,so the value of the tokens is highly speculative.Speculation isn’t necessarily a bad thing; it’s the appetite for risk that drives financial markets.Sometimes,though,that speculation drives markets over a cliff.The key question for cryptoassets is whether and how speculative instincts will be modulated.
The stories aren’t mutually exclusive,per se.The success or failure of any one vision doesn’t necessarily imply much about the others.Cryptocurrencies have the most disruptive potential,because they promise to decentralize power.That also creates the biggest barriers to success.Both blockchain systems and cryptoassets scale back that decentralization for other benefits.They differ in the uses they target,so it’s not a competition to determine the right answer.Crossovers can generate significant opportunities,but they need to be evaluated in their own lane.Initial coin offerings(ICOs),for example,fuse cryptocurrencies and cryptoassets.Should they be assessed as a new form of crowdfunding or a way to kickstart decentralized economies?What counts as success or failure looks different depending on the answer.
(Source:Adapted from“Why Blockchain Isn’t a Revolution”on http://knowledge.wharton.upenn.edu)
Task 1:Reading Comprehension Questions
The following questions are asked based on the above article.Please go back to the article and find the answers.
1.Why are so many people consumed about the cryptocurrency and blockchain technology?
2.What do“the three communities”refer to in this article?How do they differ?
3.What are the upsides and downsides of trust?
4.What are the costs of the bitcoin?
5.How can blockchain possibly reduce transaction costs between firms?
6.Why do some people argue that a cryptocurrency does not need a blockchain?
7.Under what circumstances do blockchains become necessary with regard to cryptocurrencies?
8.What are cryptoassets?How do they differ from cryptocurrencies?
9.What are the upsides and downsides of speculation?
10.Why are cryptocurrencies viewed to be most disruptive among the three concepts discussed in the article?
Task 2:Paraphrasing
Explain in English the underlined words and expressions in the context of the above article.
1.Yet there’s an equally loud chorus labeling them a massive scam,useless,and dangerous.
2.The first truly is a revolutionary concept,but the jury is still out on whether the revolution will succeed.
3.Or at least,we could have solutions that markedly improve on the status quo.
4.Until Facebook came along,it wasn’t clear anyone could make real money on social networking,which was just a frivolous exercise for kids anyway.
5.According to the dominant school of economics today,the effort to slay that dragon is the essential driving force in the economy.
6.Trusting your own records on a blockchain is tantamount to trusting everyone else’s records,because those records are one and the same.
7.The most prominent companies in the world are participating in all manner of blockchain trials and consortia because they see the huge potential.
8.Where this effort diverges from the first is that it views cryptocurrencies not as a way to facilitate activities without centralized trust,but as a new investment asset class.
9.The key question for cryptoassets is whether and how speculative instincts will be modulated.
10.The stories aren’t mutually exclusive,per se.The success or failure of any one vision doesn’t necessarily imply much about the others.
Task 3:Translation
Read the article again and translate it into Chinese.
阅读文章参考译文：
加密货币、区块链与加密资产
比特币和区块链这两个术语有时候可以互用，但是关于这项创新其实存在一些误解。在这篇专栏文章中，沃顿商学院法学与商业伦理学教授凯文•韦巴赫解释了组成这项技术的三个概念：加密货币、区块链和加密资产之间的区别。
宣扬加密货币和区块链技术将改变一切（或至少创造巨额财富）的说法，如今比比皆是。然而，另一种观点同样甚嚣尘上，认为加密货币和区块链一无是处、危机四伏，只不过是一个惊天骗局。令人惊讶的是，众多民众不知所云，莫名其妙。造成这种混乱局面的一个重要原因是，大家讨论的并非同一件事情。
这三个群体虽然共享一套基本设计原则和技术基础，但参与者、目标和前景几乎迥异。人们不停地争论谁的观点才是“正统”，但这对消解困惑毫无裨益。所以，让我尝试澄清一下。
首先，加密货币的概念是，在没有控制中枢的情况下，网络体系可以安全地实现价值转移。其次，区块链的概念是：网络体系可以跨越信用壁垒，实现信息共知共享。最后，加密资产的概念是：虚拟货币在“金融化”后转化成的可交易资产。加密货币是真正的革命性概念，但成功与否尚待观察。后二者（区块链和加密资产）则是颠覆性的，虽然离广泛应用尚有差距，但基本上在循序渐进的推广当中。
你听的最多的或许是始于比特币的加密货币。最简单的理解办法，不是去深究数据挖掘或虚拟现金的细节，而是着眼于去中心化的信用机制。
很多活动都需要信用。没有信用，一张二十美元的纸币只是一张绿纸，选举中的投票也只是毫无意义的走过场，主动让我搭车的陌生人更是潜在的危险罪犯。传统意义上的信用依托于我们的合作伙伴、机构或中间人。这类中心化的信任架构威力巨大，抛开别的不说，它给我们带来了现代工业文明。但是信用机制也有缺陷。信用意味着脆弱。我们所信任的人、政府和企业可能会由于某种原因变得不再值得信赖。而比特币此时就展现出了它的价值——能够作为货币用于交易之中，只需信任它本身而不需要信任某个特定的人。
这一想法成为现实的话（这一概率非常小），将有望改变整个社会。我们会有真正反映利益相关者意愿的透明企业，真正反映公民意志的政府，真正自由的互联网，不会再被一手遮天的腐败审查者榨取价值，不会再有虚假新闻，我们的日常生活将会大规模自动化，从而造福人类。至少，我们有办法在很大程度上改善现状。去中心化的价值体现在方方面面。
凡事皆有代价，（代价无处不在）。就比特币而言，代价就是网络缓慢而功能极其有限，大量电力被消耗，只有少部分矿工获利。也许这些代价都是值得的。或许随着科技的进步，新区块链的开发与区块链的升级，成本可以降低。但现在还不得而知。我们承认，流通中的比特币名义价值 1 000亿美元，但这还是一种加密资产的思维。除了致富、炫富、逃避执法，人们还能用比特币做什么呢？从现存近2 000个（也许更多）加密货币的情况来看，现状变得越来越糟。
比特币也有陷阱（陷阱无处不在）。对那些少数群体、应用有限、特殊散户有效的方法，不一定就能成为主流。即使可以，通常也会变异成不同的东西。毕竟在脸书出现之前，人们认为在社交网络赚钱只是无稽之谈。后来脸书虽然成为了主流，但这也不能证明其必然性。
这个世界充满了流程，尤其是大公司和政府，物品必须从一个信任区追踪到下一个信任区。全球范围内，公司每年都会在“物流上”花费十万亿美元。物流，简单来说，就是将货物产品放在一个被他人控制的传输系统上。当一件商品通过供应链流转时，制造商、批发商和零售商各自独立地保留有关同一件物品的信用记录。当你走进一家新的医院或者医生诊所，你的病历并不会跟着你一起过去。当新的病历生成时，旧病例更不可能与新病例整合在一起。信息流的崩溃催生了交易成本这条可怕的“恶龙”。当今主流经济学派认为，屠龙正是经济发展的根本驱动力。
企业之间（有时是企业内部）的交易成本，有很大一部分是源于信任弹性不足。如果交易各方都信任相关的交易信息，那么即使他们彼此互不信任，交易的成本也会降低，业绩也会显著提升。这就是区块链概念的核心。
在区块链中，信任自己的记录等同于相信每一个人的记录，因为这些记录是一体且相同的。结算、对账、审计的副本，甚至监管报告的副本，都可以并入原始的交易之中。世界上最杰出的企业正纷纷加入对各种区块链的测试和联营，因为他们从中看到了巨大的潜力。不同于加密货币，在区块链中，去中心化只是设计目标之一，而非基本要求。因此，这些系统通常需要“许可权限认证”，其核心功能仅对认证成员开放。
与加密货币一样，区块链概念中有些方面仍然有待推敲。因为区块链理论并没有假定任何市场或商业模型中的巨大变化，尽管这种变化只是一个程度上的问题。加密货币的拥趸吹毛求疵地认为，人们不需要区块链来进行统筹安排，而且也不需要区块链来创造数字货币。只有当你想增设条件，即银行不能充当中介，政府不能阻拦交易，货币供应不受他人影响的时候，比特币才有用武之地。同样，区块链理论针对的是特定的一类情境。传统的数据库方案无法解决这些问题，并不是因为理论瑕疵，而是因为相关的个体与企业在实践中意见相左。
加密资产将加密货币代币变成交易工具，并沿着其产生的线索抽离出更加复杂的金融工具。其潜在的交易规模相当巨大，在现代金融当中，数万亿美元的交易市场俯拾即是。加密资产与加密货币的区别在于，它并不将加密货币视为促进去中心化信任活动的一种方式，而是视其为一种新的投资资产类别。因为加密资产本来就是数字资产，所以理论上它们比现有工具的交易效率更高。它们具有与生俱来的灵活性与全球性，事实上所有华尔街的主要参与者以及给他们提供资金的机构投资者，都热切地希望参与其中，之前妨碍他们的监管担忧正逐步得到解决。
那么，如果去中心化网络中数字代币的基本价值得以确立，为什么不使用它去赚钱呢？加密资产依赖于加密货币，因为它需要有价值的东西进行交换。有价证券必须是安全的，但加密资产忽视甚至排斥加密货币的理念，按照那位最初对比特币进行安全审计的人所说，信用“几乎等于耍流氓”。对于加密资产交易者而言，有无信任并不重要，信任只是实现资产流动性的手段而已。
换一种方式思考，加密资产将加密货币代币的交换功能与使用功能分离。如果你想用比特币支付商品，用以太坊的以太币购买分布式应用程序计算周期，用文件币购买云盘，或者用占兆币去验证市场预测的结果，你都是在根据它们的应用价值来赋予这些代币价值。理论上，使用代币的需求越高，可用代币的供给越少，从而代币的价格上涨。但实际上，这些代币的应用都不成气候，所以代币的价值具有高度的投机性。投机未必是坏事，正是风险偏好推动了金融市场的发展，但有些时候投机行为会导致金融市场的崩盘，因此，对加密资产而言，关键问题在于投机的天性能否被控制以及如何控制。
这三个概念本质上并不互斥。任何一种概念的成败，并不一定就能预示其他概念的命运。加密货币的颠覆潜力最大，因为其承诺是权力去中心化，但这也同时是其成功路上最大的拦路虎。区块链系统和加密资产相应减弱了去中心化，以谋取其他好处。这两者之间的区别在于其用途各异，所以并不需要争出孰是孰非。概念的交叉运用可以带来重大的机遇，但需要把它们放在各自的领域里进行评估。举例来说，首次代币发行就是加密货币与加密资产彼此融合的结果，那么，我们应该视其为一种新型众筹？还是一种开启去中心化经济的手段呢？评价标准不同，评价结果也会不同。