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If Ethereum were a country, how would it work? you may often hear “The words "blockchain", "public chain" and "Ethereum" feel vague and vague, like some advanced black technology. Don't worry, today we will change the approach, not talking about code or algorithms. Let’s imagine a public chain (such as the most famous Ethereum) as a country, or a very large open company, and see how it operates and what its value is. Part One: Ethereum This “How is a country formed? Imagine that a country needs a territory, currency, laws, citizens, and business activities. Ethereum, no more, no less, has exactly the same thing. 1. Land and Infrastructure: Blockchain Network Country: The foundation of a country is its territory and infrastructure such as roads and power grids. Ethereum: The "land" of Ethereum is a decentralized network connected by tens of thousands of computers around the world. This “land” is digital; 24The hours work non-stop, providing the basis for all activities. its “"Infrastructure" is this set of blockchain technology that ensures that data cannot be tampered with and is open and transparent. 2. Central Banks and Fiat Currency: Ethereum (ETH) Country: The country has a central bank that issues legal currency, such as RMB and US dollars, for tax payment, transactions and savings. Ethereum: The “legal currency” of Ethereum is Ethereum ( ETH ). It has three core functions: Pay "Tax" ( Gas Fee ): Anything done on Ethereum, such as transfers and transactions, is like using national resources, and you need to pay a "handling fee" or "tax". This fee must be used ETH Pay. Participate in “nation-building” ( Staking）： you can put your ETH “Pledge" to the state to help verify transactions and maintain system security (this is called PoS consensus mechanism). In return, the state pays you interest, just like a national bond. Store of value: As a country's economy becomes more prosperous, its currency will naturally become more valuable. Related Data: As of2024At the end of the year, the amount pledged on the Ethereum network ETH The total amount exceeds3,200Ten thousand pieces, calculated based on the current price, the total value exceeds1000billion, which forms the core cornerstone of Ethereum’s security. 3. Government and Law: Consensus Mechanisms and Smart Contracts Country: A country has a government that sets rules and has laws to restrict behavior. Ethereum: This “country” is special in that it has no president or central government. Its “government” is a set of automated procedures called a “consensus mechanism” that ensures everyone follows the rules. its “"Laws" are "smart contracts" - contracts that, once written and deployed, are self-executing and unchangeable. For example, if you want to borrow money from someone, you can sign a smart contract: after an agreed month, your account will automatically return the money to the other party, and no one can default on the loan. The law (code) is everything. 4. Citizenship and Business: Users and Decentralized Applications (dApps) Country: Citizens live and work in the country, and companies provide goods and services in the country. Ethereum: Anyone with an Ethereum wallet address is a "citizen" of this digital country. And various applications running on Ethereum ( dApps ), is from this country “Company" and "Store". These “There are many types of companies: Decentralized Bank (DeFi) ,like Uniswap : You can freely exchange various digital currencies here, or save money to earn interest, and no one can freeze your assets. digital art store (NFT) ,like OpenSea : Artists can sell certified, one-of-a-kind digital works here. identity system (ENS) : You can register one .eth The domain name at the end serves as your identity in this digital world. Part 2: How to measure this “country’s value? The value of a country is usually determined by its GDP , monetary value and international influence. When measuring the value of Ethereum, the logic is the same. Value 1: Prosperity of the country —— Network activity Whether a country is strong depends first on whether its economy is active. The value of Ethereum is directly reflected in its “How busy the land is. Daily transaction volume: On average, the Ethereum network processes over120Thousands of transactions. “tax revenue (Gas Fee) : When the market is active, the fee income generated by Ethereum can reach millions or even tens of millions of dollars a day. Part of this money is destroyed (deflation), and part is rewarded to those who maintain the network “Builder” (pledger). Value 2: The gold content of currency—— ETH value The value of a country's currency is a reflection of its economic strength. ETH Its value is determined by its rigid demand in the "Ethereum Kingdom". Application scenarios: As long as you want to use any application on Ethereum, you must hold and spend ETH。 Asset properties: ETH Not just fuel, but an asset that can earn interest (via staking). Market capitalization: ETH The total market value ranks second among all digital assets all year round, which is a direct reflection of market consensus. Value 3: The total value of the economic ecology—— TVL (Total locked value) This is the core indicator for measuring the size of the Ethereum economy. Total locked value (Total Value Locked, TVL)： Refers to all those running on Ethereum DeFi How much money is locked in total in the application. This is like the total amount of deposits in all the banks in a country. Relevant data: According to authoritative data website DefiLlama Statistics, on the Ethereum chain TVL It has maintained a scale of tens to hundreds of billions of dollars all year round, occupying the entire crypto world. DeFi half of the country. in conclusion: Therefore, the real value of a public chain does not lie in the short-term fluctuation of a certain currency price. Its value lies in: 1. A secure, neutral, and non-tamperable underlying platform (homeland). 2. A native currency (fiat currency) that powers and secures the platform. 3. A prosperous and open digital economic ecosystem (commercial activities) established by countless developers and users. Just as the value of a country is ultimately determined by its comprehensive national strength, the value of Ethereum is also determined by the stability of its underlying technology, the economic model of its native currency, and the prosperity of the on-chain ecology. (Written when ETH price exceeded 4300+) This article is for academic analysis only and does not serve as a basis for buying/selling recommendations. |
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