Encryption Native: Pioneer of Exploring the Decentralization World

Since 2021, the term "crypto-native" has gradually become popular in the cryptocurrency industry. Almost everyone new to the space has heard this term, as it is frequently mentioned by seasoned insiders. However, if you ask them for a specific definition of the term, you might receive different explanations. So, does "crypto-native" simply mean staying updated on cryptocurrency news on social media every day, investing most of your assets into Bitcoin or Ethereum, constantly analyzing market data, or casually discussing professional terms like "Decentralization"? The answer may be more complex than that.

Data shows that mentions of the term "encryption native" across the network have seen significant growth. In 2018, it increased by 5.57 times compared to the previous year, in 2021 it grew by 7.52 times compared to the previous year, and in the first 11 months of 2022, it increased by 2.85 times compared to the previous year. As time goes on, people's attention to "encryption native" has grown exponentially, and there are no signs of this growth trend slowing down.

Evolution of Native Encryption

The concept of "crypto-native" in the world of encryption inherits the decentralization thought of native cryptocurrencies. This idea can be traced back to Satoshi Nakamoto and Bitcoin. As the foundation of cryptocurrency, Bitcoin's underlying decentralization thought and trustless mechanism are the origins of the "crypto-native" concept.

Since the advent of Bitcoin in 2008, the first batch of "crypto-native" communities has emerged in the world. After experiencing several significant events, Bitcoin reached a price peak in 2011 followed by a downturn. This group of people who truly own and trade Bitcoin believes in cryptographic algorithms and blockchain technology, advocating the idea that "code is law." At that time, "crypto-native" referred to individuals who believed in cryptographic algorithms and simultaneously owned and used Bitcoin.

As time goes by, Bitcoin has been given the title of "digital gold", with its commodity attributes surpassing its currency attributes. The influx of large numbers of people and funds has facilitated the improvement of the early infrastructure of the encryption industry, including mining machines, payment scenarios, trading platforms, and financial derivatives.

In 2014, the founder of Ethereum released the first version of the Ethereum white paper and conducted a presale of ETH. Subsequently, the Ethereum Virtual Machine and smart contracts emerged, marking the entry of the encryption industry into a new era. At this time, the definition of "encryption native" also expanded to include holders of Ethereum or other cryptocurrencies, but this group still firmly believes in the cryptocurrency system established by cryptography and blockchain technology.

The establishment and improvement of the Ethereum ecosystem has sparked people's imagination for public chain ecosystems. New types of financing methods are emerging one after another, and more and more decentralized applications are showcasing the application value of blockchain. In addition, the development of on-chain financial derivatives has also promoted the prosperity of centralized exchanges.

Since 2017, discussions around the term "crypto-native" have gradually increased on social media. Initially, this term was used to describe young entrepreneurs engaged in cryptocurrency-related projects. Similar to the earlier term "internet-native," "crypto-native" seems to have a stronger adaptability to certain lifestyles and mindsets, allowing for a quicker integration into the industry.

At the end of 2017, someone described "native encryption" as a representative of a new era and a new way of life. Encryption technology will subtly change people's lifestyles.

In 2018, someone proposed that "crypto-native" refers to a new way of operating a company, built through code and settled via blockchain, which is different from traditional companies based on contract law and legal systems. This understanding leans more towards referring to an underlying governance logic, where the basis for regulating behavior comes from code rather than law, which is what we know as Decentralization Autonomous Organizations (DAO).

In 2020, someone defined "crypto-native" from both personal and commercial perspectives:

1. Encryption native individuals refer to those who buy cryptocurrencies before owning any other assets (such as stocks or bonds).

2. Encrypted native commerce refers to decentralized protocols that support the functions currently provided by centralized finance or traditional finance.

From 2020 to 2022, decentralized finance, non-fungible tokens, and game finance emerged strongly, with countless projects surfacing, injecting new vitality into the industry. The imagination and valuation in the encryption field reached unprecedented heights. However, the craze will eventually pass, and speculation will ultimately fail. When the tide recedes, true value will become apparent. All native encryption communities need to re-examine the fundamentals and intrinsic value of the encryption industry and return to their original intentions.

The Core Concept of Encryption

Decentralization

In contrast to centralization and single-point control, the concept of Decentralization is guided by the absence of a centralized institution for macro-control. For example, Bitcoin is managed by a decentralized network, making it independent and fearless. Even if a certain country bans Bitcoin and other encryption currencies, other countries may welcome them to attract blockchain entrepreneurs or miners who take advantage of low-cost energy. Even if governments around the world unite to completely ban encryption currencies, as long as there are still connections and communications among individuals in society, encryption currencies will not completely disappear.

Trustless Mechanism

In contrast to the need for trust assumptions, trusted setups, and trusted parties, the most primitive trading method in the cryptocurrency industry adopts a trustless mechanism, providing a brand new product that is different from traditional systems. This product offers only basic rules and proof methods, without comprehensive subjective control. Essentially, the crypto industry provides an efficient, low-trust-cost form of global human collaboration based on rules. This industry relies on objective proof (mathematics or encryption), rather than subjective commitments, discarding entities that were once widely trusted.

No Permission Required

In contrast to permissioned, permissionless means that anyone can enter the market. Taking Web3 infrastructure as an example, its most important feature is a barrier-free Decentralization market. This market typically has a bilateral relationship, namely between those providing resources and those consuming resources. Permissionless means that anyone can provide or consume resources, regardless of who they are or what role they play. This is fundamentally different from Web2. The encryption native believes that anyone can freely enter the market to provide or consume resources, regardless of who they are or what role they play.

Personal Sovereignty

Encryption emphasizes personal sovereignty, which is a significant difference between Web3 and Web2, especially in terms of token and data ownership. In the Web3 era, the data generated by users belongs to the users themselves and possesses a certain level of censorship resistance, making it less likely to be lost. The reason Web3 can achieve ownership while Web2 struggles is that verifiability is inherent at the time the data is generated. When data is on-chain, the blockchain generates a verifiable time series, thus establishing ownership at the consensus level. Even if the platform shuts down, anyone can access the data and restart the platform, allowing for the tracing, verification, and confirmation of data and assets.

Nowadays, more and more people are focusing on how to tell the story of encryption well, how to break the shackles of centralized finance, networks, and society, and how to establish a free and equal world. This wave is unprecedentedly intense and widespread in human history. The deep-seated goal implied by the encryption-native community is to believe that the technology brought by the encryption world can solve many deeply rooted problems in the real world. The encryption-native community, situated on the grand stage of the Web3 world, is practicing the concept of Decentralization, creating trustless products, and building permissionless markets, thereby creating a society that effectively protects personal sovereignty. This is the beacon of hope seen by encryption-native practitioners.