Qtum’s Patrick Dai at 2018 China Internet Conference

On July 10, the 17th China Internet Conference hosted by Chinese Ministry of Industry and IT, ISC, and other governmental departments was held in Beijing’s national convention center. The theme of the conference was “integration, development, synergy, and governance — the driving force for the new era.”

Zhaoxiong Chen, vice-minister for the Chinese Ministry of Industry and IT attended the conference and pointed out new requirements on the future of Chinese Internet construction: “We should make breakthroughs in cutting-edge technologies and key core technologies, keep promoting innovation in applications and business models that are locally based and globally oriented, and build a dynamic Internet innovation ecosystem.”

As a potential part of the third industrial revolution, blockchain technology has been continuously attracting the eyes of the public. Qtum’s founder & CEO, Patrick Dai, explained how Qtum pushed the development of blockchain technology by innovating tirelessly from the perspective of an industry insider and entrepreneur.

Why can blockchain become an overnight hit when it is not a phenomenal technology?

People are talking about blockchain technology every day, but first, we should understand it conceptually to know how it can alter business models for the better. Basically, almost all Internet services are built on top of underlying protocols built by computer scientists decades ago. Those protocols enabled the earliest peer to peer transmissions with high efficiency.

Value exchange through a peer-to-peer network

Value exchange through peer-to-peer networks were barely impossible to realize before Bitcoin appeared. It turns out that all value depends on a legal framework, on a central authority, on some sort of middleman and guarantor basis. However, with the change and development of this era, people are starting to pay more attention to flat network architectures, which laid the foundation for cryptocurrencies.

How to create a highly efficient peer-to-peer network?

There are several ways to achieve efficiencies in peer-to-peer networks. We have Internet giants like Baidu, Tencent & Alibaba, social networks that pursue endless efficiency. However, blockchain is an exception which reminds people that on the other side of the balance is fairness.

First of all, every node in the network is equal, meaning there are no privileged nodes in the network that has more power than the others. The structure differs from the traditional business frameworks which are also a key point in leading the rapid growth of blockchain industry. Secondly, Bitcoin has attributes of a hard currency with a sophisticated and symbolic system design. With Bitcoin, it is very clear how to manage the funds and how to implement the signature of design ideas and methods to make it secure.

Tokens and ICOs

In contrast to Bitcoin, tokens have value in a particular sense, and its value needs to be standardized. Tokens are not as simple as a cryptocurrency, but it involves a complex legal, tax, usage, and regulatory framework behind it.

Since 2013 until now, we have had a limited number of successful blockchain projects. There are two primary paths the blockchain industry has been pursuing, one of which is promoting cryptocurrency and its continuous development as a form of decentralized money. The other is how to promote blockchain as more of a trustless platform or in essence ‘decentralized programmable money’. Both camps of blockchain should pursue efficiency on a more equitable basis. The industry hopes to have this done through various layer 1 and layer 2 scaling attempts.

Layer 2 protocols have tended to focus a lot on scalability, including lightening networks on Bitcoin which can achieve small-size payments, highly efficiency payments, and lower-fees payment. This is a development transcending the whole blockchain industry. The network, through layered technologies, can be the basis of a decentralized world. To realize the vision of a comprehensive network, services need to become more extensive. To achieve this, both academic and technological research and development should be the focus of the blockchain industry.

Trustless Platform

The concept of a trustless platform is best illustrated by bitcoin, a distributed network, in which each node acts similar to branches of a large bank. All nodes can extend the service boundaries to all where there is a network connection. This is the power of the decentralized network. Qtum now has more than 7,000 nodes around the world deployed in 56 countries.

Another major point that people always talk about are smart contracts, which must be deployed under a trustless platform. You could simply consider smart contracts as virtual agents who will be able to execute your logic on your assets. The process of decision-making and value transfer in many societies will become procedural, automated, fairer and more credible with smart contracts. For instance ‘Lianjia’ the largest real estate agency in China has to hire thousands of clerks to guarantee lease contracts. What if those clerks could be replaced with smart contracts? It will unleash those workers to do more productive things for themselves and society.

Blockchain technology may be a low-level settlement platform in the future, where settlement is needed for various commercial transactions. Through smart contracts, those actions can be implemented efficiently and reliably, and blockchain could become infrastructure like water, electricity, and gas to serve our daily life.