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Distinguished guests, good morning! I am glad to stand on the stage of the Wanxiang Conference again and share with you the progress of the Qtum.
Why say standing here again? Because in fact, in 2016, Qtum participated in the Hackathon organized by Wanxiang, and presented in Demoday and won the “Best Creativity Award”. This is the seed for Qtum's later growth. Starting from 2016, Qtum has been supported by many and together achieved what we have.
As one of the projects with a majority of members from China, in this wave of blockchain technology, we have learned some deep lessons. I am excited to have the opportunity to recap and share our thoughts on the real-world use cases of blockchain, how to promote the adoption of blockchain as a startup, and as a tech team, and how will our tech facilitate the adoption step by step.
First, a recap of the industry.
I am very grateful that Wanxiang has taken the lead in launching the blockchain global summit in China in 2015. IBM launched Hyperledger in 2015, and Ethereum has just been launched. In 2015, I also participated in the Wanxiang Summit, when the theme was “Blockchain and Internet of Things”. Again here today the general manager of China Unicom's Internet of Things has mentioned the blockchain and the Internet of Things.
The evolution of technology often sees temporary setbacks. In 2012, I once imagined that one day Microsoft, IBM, Google, and Ali would join the blockchain battlefield, waited for three years and IBM entered, and to 2018 giants like Facebook and Google swamped in. As a developer, in 2013 when I was still at school, I had the hunch that one-day big companies would come in.
2009 to 2019 is the first ten years for the takeoff of blockchain. The cryptocurrencies sparked massive discussions and experiments for real-world use cases of blockchain technology. The initial spark was the protocol that allowed peer to peer value transfer on the internet, spearhead by Bitcoin. Although we rarely discuss the basic protocols used by the Internet for data transfer, Bitcoin represents a new way of protocol exchange, such that spurred the later development in the industry.
There are many features that are trust-free. We are shifting from information asymmetry to information-symmetric business models, which poses a huge challenge to existing business models. Why so? Today's giant Internet companies, they essentially extract information and then provide value-added information on top of that. Whether it's Alibaba which provides matching based on information of buyers and sellers, or Tencent which connects people based on their information, they are all but “information traders” relying on technologies, platforms and their network effects. Of course, the connection of information has brought great convenience to the society, and such service providers have gained great profit along with it.
When the business information network is symmetric and peer-to-peer, how to build a new business model that suits it? We are still trying to find out.
Second, about cryptocurrencies.
Bitcoin is the most typical representative of cryptocurrencies. Whether we are discussing the blockchain or just cryptocurrencies, Bitcoin as a technological innovation and conceptual innovation is still inspiring how we can better construct a new open-source software system, service system. And the design concept behind it is a software system with automatic evolution based on game theory. Before Bitcoin, it was difficult to find software that has thrived after the founder disappeared for 10 years. And so far it has not seen the end, and the border and network effects are still expanding. The incentive design and game theory behind it provides a good reference for us to design more systems.
As an alternative asset, Bitcoin has raised the attention in many countries, for example, some have close regulation on it. This must be a long-term path, rather than a short-term establishment, and it will inevitably face a long-term collision.
There are
many fascinating aspects in the development of the Bitcoin network. It's the design concept that has inspired the following ten years. It is precisely because of the peer-to-peer open network and the information-symmetric network, and in essence, the capitals are also managed very efficiently. I am not sure if you have noticed that a few days ago a sum of one billion dollars worth of Bitcoin transfer occurred on the Bitcoin network. The transaction fees was only a few hundred dollars and completed the transfer within 10 minutes. Such an open financial system can have disadvantages and benefits. It is technically guaranteed that everyone can trust that the network can carry a single transfer worth up to $1 billion. What a strong manifestation of the trust behind it! It's also the trust of the security of this network. Behind it, it is backed by highly efficient ways of managing capital. Multi-signature technology can guarantee that even $1 billion of Bitcoin can be safely kept. $1 billion of gold can hardly be safely kept by some regular individual. The $1 billion in USD is hard to be kept safe for many individuals and companies.
The stability of network security has always been the cornerstone of the industry and enabled its development. Based on the Bitcoin logic, various platform development ideas have emerged. Why distinguish between cryptocurrency and blockchain platforms? This is a very deep misunderstanding in the industry.
Third, from cryptocurrencies to trustless platfomrs
The demand for cryptocurrency is very different. For community-based cryptocurrency, it needs to be simple, secure, stable, and reliable. Of course, it must be decentralized enough. The most original idea in some sense is how to allow any one to join the network. However, the initial definition of the Ethereum did not originate from the concept of cryptocurrency, but rather how to build a blockchain platform that supports a large number of applications in the future. This has brought Ethereum a huge growth in the past few years, and today it has become a huge constraint.
Why? Think about the logic behind it. As a platform, it needs unlimited scalability, good privacy protection, resource isolation, a very good governance framework, and of course, a very good financing/funding model besides ICO . As a platform, this is a huge challenge.
Fourth, rethink the decentralized application.
As a platform, Ethereum has made tremendous innovations, but we must also reflect on the difficulties that the industry is facing, not only in technology, but also in mindsets and business models.
Why do we need to rethink distributed applications? Redesign distributed applications? I believe that everyone has the same feelings, whether it is startups or investors in the industry, we all find that many distributed applications do not have suitable use cases, and do not create great value for the society, but rather a tool for hype.
We need to jump out of the old framework of thinking, to re-imagine and work on how to find truly valuable distributed applications.
Why do today's Ethereum, EOS, and Qtum have such huge problems when it comes to application? Because they are all originated from the logic of the earliest cryptocurrency. The cryptocurrency requires verification on the global chain, and any transaction on the Bitcoin network will be broadcasted to 8,000 nodes across the network, which is okay for a cryptocurrency because High-value things require a consensus across the network. However, if a small application needs to be broadcasted to 1000 or more than 8000 nodes on the network, this is a huge logic problem, which will impose huge constraints on the application platform.
Therefore, at the time, Ethereum expanded the Bitcoin scripting language and turned the limited processing power into a more flexible virtual machine processing capability. However, the idea of global verification of Bitcoin is still in use, which imposes huge constraints on development.
Ethereum is a world computer, but it is a single-threaded world computer, because all the lo
gic is executed by 8000 nodes together. Such parallelization will never happen on Ali Cloud. Ali Cloud has hundreds of thousands of servers around the world, and each server runs different tasks. But on the Ethereum, all the running logics are synchronized at any time. Its strong consistency constrains the development of all applications.
Therefore, it is necessary for us to jump out of the framework. Only this way can we expect more development from blockchain applications, because the infrastructure needs huge upgrades and iterations.
Of course, Ethereum is also aware of such problems. That's why it is doing sharding or off-chain computing. But if there is no fundamental change in its logic, it is difficult to make a major breakthrough.
Fifth, blockchain applications and platforms.
Why is DAPP a pseudo-concept? Perhaps DAPP should not be called DAPP, but should be called an application with blockchain features. What are the characteristics of the blockchain? Account, identity, address, and funds, all four in one. Unlike today's internet applications, you must first register with your mobile phone number, then provide your ID card, and then provide your bank card information. In fact, it is repetitive registrations, and our information is stored on each platform. However, the address on the blockchain network represents your account, your funds, your ID and your address, all in one.
A good token economy design would bring great value to the bootstrap of the project. The early development of Ethereum benefited from a good economic model. With more mature and clearer regulations, as a natural base layer micro-service clearing and settlement infrastructure, the blockchain will naturally provide the clearing and settlement tools. Although most of today's applications still use Alipay, UnionPay, WeChat to for clearing and settlement, but any public chain or consortium chain will naturally replace the clearing and settlement functions of Alipay and UnionPay. Still, whether we have the right regulatory guidance is something the regulators need to figure out. But technically the technology is ready.
In a sense, this is the “fundamental uses” of the blockchain, which can empower all existing Internet applications. In the future, new forms of applications will evolve out of it.
Sixth, the progress of today's Qtum.
Qtum integrated smart contracts to a bitcoin-based network in 2016, so Qtum is the only platform and project that follows up on major innovations in Bitcoin. In addition, there is a good synergy between Qtum and Bitcoin. One of our core developers has found major bugs in Bitcoin in 2018 which could allow attackers to print more Bitcoin, and we report it to Bitcoin core developers immediately. This is the merit of open-source software. We all have huge synergies, whether it is technology iteration or technology evolution.
There are a lot of thoughts and innovations in the Qtum 2.0 release, the main idea is how to better serve the developers of future blockchain applications. On Etheruem, in order to make a transaction, you need to possess a certain amount of Ether. Qtum allows the signing of the contract, which will allow contracts to be smarter, e.g. participation in on-chain governance. Just as Mr. Yao mentioned, each blockchain contract is a proxy for a virtual business. They are all logical and executable agents simulated by the computer network. The agent will execute based on data and logic. In this sense, a smart contract also represents virtual productivity. And if it is used well, it will bring great help to the commercial automation of the society.
Qtum 2.0 revolves around how to better serve the blockchain application developers, and build better infrastructure that serves the economy.
We will publish detailed technical documentation later on. If there are developers in the field, interested in the blockchain field, welcome to communicate with us after the meeting. There will be a Qtum 2.0 release on October 16th, please stay tuned.
Seventh, what are we still doing?
What are we working on in 20
19? As a practitioner who has been in the industry for more than 6 years, what are we thinking about the industry? In fact, the blockchain network has a huge distributed effect. The number of nodes in Qtum is second only to Bitcoin and Ethereum. There are nearly 6,000 Qtum nodes in the world. The geographical distribution is the same as that of many technologies. The most nodes are in the United States, which might be because a lof is using AWS or Google Cloud. And there are many nodes in China, Korea, and Japan as well.
I mentioned that Ethereum wants to do the sharding, but the result of unlimited sharding will be a stand-alone cloud service. When Ethereum 8000 nodes are sharded two times, it will be divided into 4,000 nodes, sharded 10 times then becomes1024 shards which is equivalent to 8 nodes. The result of infinite sharding will inevitably make it more like a traditional cloud service provider. When synchronicity weakens, the strong synchronicity of the network will become weak synchronicity, which will make it more application friendly. If the network always has strong synchronicity, it is difficult to integration with commercial uses.
An account system with inherent blockchain characteristics, public and private key encryption system, a token economy model, if there are cloud service vendors naturally support such blockchain characteristics, I think it will be huge promotion of the application. Therefore, we proposed the concept of “blockchain cloud ”. As a tool-kit embedded to all cloud services, the blockchain will bring great benefits to the so-called Dapp developers and distributed application developers, it will also help Web3.0 application development. It requires in-depth integration of blockchain and cloud services
Confidential computing, private asset, privacy data extraction, data mining value will also see a huge development. Whether it is with the popularity of the Internet of Things devices or 5G, the society will produce vast amounts of data. More attention will rise to how to extract the value of data and use it. The society will pay more attention to privacy. Leaving why Facebook proposes Libra aside, no one is willing to assume the responsibility of storing the data of the world. Because it is a huge responsibility and implies a huge legal risk.
How to integrate data privacy, data mining and privacy in the future? The blockchain has also done a lot of exploration in this area, especially the issuance of private assets. For example, the bank's bonds are unlikely to reveal all their positions, but everything is verifiable. We are optimistic about privacy assets, including privacy-centric data mining and data extraction.
Let the smart contract participate in the on-chain governance. The mechanism for the proof of equity is originally to vote for an agent, but the agent has the risk of a single node. Why can't we vote for a smart contract? The logic of the contract is written in advance and the rights are guaranteed. Therefore, it is based on the contract's equity certificate. Future contracts will play a more important role in the blockchain network. Including the preset of the contract parameters proposed by Director Yao, from the technical point of view, the evolution of the blockchain network can be observed and set, which is a path that commercialization must undergo.
The technical stack of the blockchain network is still not perfect. We are also inventing a new type of virtual machine that can be compatible with the X86 instruction level and will be officially released next year.
The future of blockchain industry is still embracing the real economy and embracing what really creates social value. Pure speculation is a tool for financial speculation. It is feasible in some sense before regulation is in place. Because it is an early stage of unregulated growth. The development of blockchain technology in the future still needs to create value for all real economies. In a sense, it provides efficiency and transparency for society. This is the only way for the large-scale commercialization
of the blockchain in the future.
As an infrastructure, Qtum2.0 hopes to have the opportunity to promote the development and progress of the technology field.
Thank you all!
