Meng Yan: A Decade of Reflection on the "Chain Circle": How to Generate and Spread Trust Without Relying on Authority?
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Meng Yan: A Decade of Reflection on the "Chain Circle": How to Generate and Spread Trust Without Relying on Authority?
Does blockchain still have a future? What should be the next step?
Navigating Web3 tides with focused insightsIn November 2013, Vitalik Buterin published the first version of the Ethereum whitepaper. In hindsight, this is often seen as the symbolic beginning of the "Blockchain 2.0" era. At the time, however, it was actually Ethereum’s emergence that separated “blockchain” as a distinct technology from “digital currency.” In other words, Bitcoin as "Blockchain 1.0" is a retroactive label. Blockchain truly became an independent field starting in November 2013—exactly ten years ago.
Blockchain and digital currencies should be viewed as two distinct industries, because their goals and value propositions are fundamentally different. The digital currency industry—commonly known as the “crypto圈 (crypto circle)”—has created a defiant parallel world, generating virtual digital assets within it, building free financial markets, and profiting through trading. Because its rules and value system clash sharply with those of the real world, the crypto circle rarely or never considers impacting the real world or the real economy. The blockchain industry, by contrast, aims to transform the real economy and influence the real world. Hence, its participants call themselves the “chain圈 (chain circle)” to differentiate themselves.
Blockchain was once expected to be a revolutionary technology on par with AI, but honestly speaking, after ten years, the results have been disappointing—a classic case of high expectations followed by underperformance. It has yet to deliver any world-shaking achievements. High-profile projects once hailed as breakthroughs—such as IBM and Maersk's supply chain management system or the Australian Securities Exchange (ASX)'s blockchain-based stock trading platform—have ended in failure. Some well-known projects initially centered around blockchain have abandoned it altogether and reverted to traditional architectures. These failures have undoubtedly dealt a serious blow to confidence in blockchain.
Where did things go wrong? Does blockchain still have a future? And what should we do next?
I began studying and researching blockchain in 2015, entering as a typical member of the chain circle. Since late 2017, I gradually shifted my focus toward digital assets. Personally, however, I still align more closely with the chain circle’s value proposition—I want to see this new technology impact the broader real world, create tangible value, and gain recognition from ordinary people. On the occasion of blockchain marking its tenth year as a distinct field, I’d like to share a few personal reflections.
Let me begin with some empathy: blockchain is indeed still in a very early stage. Many compare blockchain to AI, electric vehicles, or cloud computing—all technologies that emerged around the same time—but point out how far ahead the others have surged, while blockchain seems to have achieved nothing. However, such comparisons are deeply unfair. Those fields are essentially old trees bearing new blossoms, whereas blockchain is a genuinely nascent domain. Specifically, blockchain offers an algorithmic solution to a theoretical challenge in distributed computing and social coordination: How can trust be generated and disseminated without relying on authority? This problem has puzzled humanity for millennia, until the Bitcoin whitepaper in 2008 suddenly provided a viable answer. Thus, the blockchain industry is now only in the first dozen years following this theoretical breakthrough. If we examine today’s hottest tech sectors—chips, internet, AI, electric vehicles, new energy—we’ll find their theoretical foundations were laid decades or even centuries ago. When they were merely teenagers, they might not even have had products, let alone the ability to draw lessons. By comparison, blockchain has already produced some outcomes and accumulated valuable lessons. So yes, blockchain is still in infancy—we must afford it greater patience.
Despite this, the chain circle’s development over the past decade has been unsatisfactory, full of detours. Without these missteps, the chain circle could have advanced much further. Some issues were objective, beyond the control of the community itself, but many were subjective—and worth reflecting upon.
First problem: The chain circle blindly adopted technical tools and ideologies from the crypto circle, leading to severe “rejection reactions” when applying them in real-world scenarios.
Undoubtedly, the crypto circle has always been at the forefront of blockchain technology applications. However, technologies like Bitcoin and DeFi are extreme solutions for extreme problems. They operate within a “cypherpunk” digital jungle environment—characterized by radical libertarianism—that differs drastically from the real world: everyone is anonymous, yet all data is fully transparent; digital identities can be freely created and discarded; code is law, and nothing outside code counts as law. These rules and philosophies permeate every aspect of blockchain technology. When the chain circle brought these technologies into the real world, it failed to conduct broad, systematic discussions across the industry about which elements could be adapted and which needed fundamental adjustment. As a result, strong resistance arose during implementation.
Second problem: Misplaced emphasis in value proposition, overly ambitious rhetoric, and failure to position itself correctly.
The core ideology of the crypto circle is decentralization and consensus. At its inception, the chain circle uncritically adopted this value proposition and promoted it widely, making unrealistic “decentralization” its primary selling point. It took on a revolutionary posture from day one—seeking to replace and overthrow traditional systems—alienating potential allies and failing to win user understanding or support. The appeal of “decentralized consensus” only resonates broadly when centralized authorities are clearly malicious and widely recognized as such. This condition holds partially true in the cryptocurrency space, but not in most other domains. In other words, traditional trust mechanisms based on trusted third parties have not generally revealed serious flaws. On the contrary, due to their flexibility and maturity, they remain more trusted by users. Under such circumstances, overstating the risks of centralization and then attempting to replace established systems entirely with an immature new architecture naturally fails to attract users.
Beyond practical considerations, logically speaking, “decentralization” and “distributed consensus” should not be the core value propositions for blockchain industry applications. As previously stated, blockchain fundamentally addresses how to verify facts and establish and propagate trust without relying on authoritative third parties. In cryptocurrency use cases, facts are determined by majority voting. But in most industry applications, facts are either agreed upon by relevant parties or attested by authorized institutions—rarely would a group of unrelated individuals vote to determine truth. Therefore, the core value proposition for the chain circle—focused on industry applications—should never have been “decentralization” or “distributed consensus.”
Third problem: Long-standing obsession with the elementary debate over “with token or without token,” wasting enormous amounts of time.
For years, the chain circle has debated whether pure blockchain applications must include a token. This is an utterly meaningless debate, as the conclusion is obvious and long-established: blockchain applications must have tokens.
Why? First, blockchain applications are fundamentally about solving trust issues. In the commercial world, 99% of scenarios involving trust are tied to money. If there is no money on-chain, there is little need to solve trust problems—and thus little justification for using blockchain at all. Second, a core capability of blockchain is programmable payments. With this feature, many applications become dramatically more powerful. Remove it, and the utility of blockchain diminishes significantly. Third, blockchain must address incentive design—this also requires having money on-chain.
These are self-evident truths. Yet, due to strong public and governmental opposition to “issuing tokens” in certain countries and regions, many in the chain circle have danced around this constraint, feigning compliance with the fantasy of “tokenless blockchains.” They voluntarily reduced blockchain to a slow, expensive, crippled database—naturally achieving nothing meaningful.
In reality, having tokens on-chain does not equate to “issuing tokens.” We can introduce CBDCs or compliant stablecoins—these can fully realize blockchain’s value. Rather than wasting time chasing the unrealistic dream of “tokenless blockchains,” we should unite to engage governments, regulators, and the public, clarify benefits and risks, and work toward enabling compliant digital currencies on-chain as soon as possible.
Fourth problem: Failure to fully explore the potential of “tokens.”
“Token” (通证) is a term coined by me and Yuan Dao in 2017, corresponding to the word “token” in blockchain. Our observation at the time was that although blockchain can do various things, there is one thing it excels at above all: managing and programming tokens. Thus, expanding blockchain applications largely means exploring the potential of token usage. From another perspective, blockchain’s core value lies in solving trust problems—and trust needs a credential as a carrier. In the real world, licenses, seals, badges, signatures, bills, money, and contracts serve as trust carriers. In the digital world, blockchain tokens are currently the best available trust carriers under existing technological conditions. On-chain tokens offer unmatched advantages in verification, transfer, trading, and programmability, effectively demonstrating blockchain’s utility. Therefore, tokens should be the centerpiece of blockchain applications.
Yet, judging from the chain circle’s practices over recent years, this has not become a widespread consensus. Many blockchain projects demonstrate severely inadequate understanding and application of tokens—often limited to basic token standards like ERC-20 or ERC-721, while layering on complex business logic. This reduces both clarity and functionality of the solutions.
Fifth problem: Lack of industry-wide practices addressing data privacy.
In crypto applications, users are anonymous, but all data and behavior history behind each address are publicly transparent. This is the exact opposite of the real world. In reality, users participate in commerce under real identities and are subject to regulation, while their business data and behaviors constitute private information that does not need to be disclosed unless exceptional circumstances apply. Thus, the crypto-originated blockchain technology’s approach to data privacy creates a fundamental contradiction with real-world needs. How to reconcile this conflict in enterprise blockchain applications is a make-or-break issue for adoption. Yet some chain projects not only fail to confront this directly, but even try to persuade users to accept the crypto world’s privacy norms—an approach that is neither reasonable nor feasible. Of course, I know some projects are working on solutions, each with their own methods, but there are no industry-level standard practices, and even horizontal discussions on this topic are scarce. One could say: without resolving this, blockchain will never succeed in the real economy.
There are certainly other reasons why blockchain industry applications have struggled to take root, but I believe the above five are the most critical.
Based on this analysis, here are my suggestions for how the chain circle can break through in the future:
First, treat blockchain as a solution to specific, concrete problems—not as a “blockchain revolution.” Aim for integration and coexistence with traditional architectures, rather than aggressively seeking to replace or disrupt them. Honestly assess real-world trust requirements in each scenario. Do not exaggerate the risks of centralization; if a problem can be solved centrally, it doesn’t necessarily need blockchain. If cryptography alone suffices, blockchain may not be needed. Let blockchain play a decisive role where it matters most—this approach is healthier than trying to make it a universal fix.
Second, actively promote the integration of central bank digital currencies (CBDCs) or compliant stablecoins onto blockchains—this is a crucial step for real-world adoption. Don’t get bogged down in ideological debates over CBDCs. Recognize that CBDC adoption will drive billions of users to adopt self-sovereign identities and accelerate the integration of regulatory technology with blockchain—this is the foundational bedrock for blockchain’s broad application. Get this right, and everything else follows. Fail here, and the chain circle will remain stagnant.
Third, deepen understanding and research into tokens, and unlock their potential quickly. Domestic blockchain developers need to overcome the misleading connotations of the term “代币” and recognize tokens’ rich expressive power and programmability as trust carriers—while also avoiding the opposite extreme of “everything can and should be tokenized.”
Fourth, continue focusing in the medium term on finance, trade, and payment-related applications as key entry points. Emphasize asset representation, transfer, trading, programmability, and regulatory compliance as core value propositions. Highlight efficiency gains, downplay ideology, and strive for early breakthroughs in these areas. Without progress here, blockchain applications in other fields will struggle to gain traction.
Fifth, treat data privacy protection as one of the most important challenges. Hold industry-wide discussions, and develop standard practices and tools.
Sixth, seriously consider how to incentivize user adoption of blockchain solutions. Blockchain is a new tool—its benefits over mainstream technologies aren’t immediately obvious. Its massive advantages only emerge once network effects are achieved. For such technologies to succeed, we must clearly identify “who our friends are and who our enemies are,” seek broad support, and learn from the internet and crypto circles by considering subsidies for early adopters.
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Yan Meng
