Onchain

If you are a fan of NEO but you don’t know much about Onchain DNA (Distributed Network Architecture), then you haven’t really finished with your homework. Although, I don’t blame you for this. Considering the great aspirations Onchain has with its product, DNA, they haven’t done a particularly great job at communicating it to the world; at least not the English-speaking world. Maybe Onchain needs a sleek rebrand like Antshares (now known as NEO) had to seriously let the world know what they have been quietly doing for the past three and a half years. In this article, I am going to tell you why you can’t mention China and blockchain without also talking about DNA.

Onchain, a Shanghai-based blockchain R&D company, first started developing Antshares in February of 2014 which will eventually become the foundation of DNA. Onchain was founded by CEO Da HongFei and CTO Erik Zhang in response to the attention from private companies garnered by the development of Antshares, China’s first public blockchain. In contrast to the weeks-old start-ups launching ICOs that is happening currently in the blockchain world, it took them 22 long months of R&D to even begin providing services to their first customers. Finally, in April 2016, the first whitepaper on consensus protocol from China was born — the dBFT (delegated Byzantine Fault Tolerance) protocol.

2016 was a busy year for Onchain and they really picked up the pace that year. Other than continuing the development of Antshares, brushing shoulders with Fortune 500 companies, Onchain became the first Chinese blockchain company to join Hyperledger — an open source blockchain project started by the Linux Foundation specifically focusing on the development of private and consortium chains for businesses. It is here where the Da HongFei and Erik Zhang, entered the hyperbolic time chamber that is now known as Fabric, a platform by Hyperledger for distributed ledger solutions, and has consequently helped them to develop many aspects underpinning the design of DNA.

Rare leaked photo of Da Hongfei and Erik Zhang during their time at Hyperledger (2016)

In June of 2016, during the first of many future partnerships with Microsoft China, Onchain founded Legal Chain specifically targeting the inadequacies of the digital applications within the legal system. In 2005, 《电子签名法》 (Digital Signature Act) was passed into national law which permitted an effective digital signatures to gain the same legal rights as a real signature. However, practically there hasn’t been anything that has been able to fulfil what constitutes as “effective” according to the regulation. Legal Chain’s first project is to apply blockchain’s immutability and transparency on digital signatures and complying with those regulations effectively. In company with Microsoft China, they are also aiming to integrate the technology with Microsoft’s face and voice recognition API function to kick start this digital revolution within the legal system. At the same time, a partnership was formed with FaDaDa, a third-party platform for electronic contracts that has processed over 27 million contracts to date, to provide secure evidence storage with DNA. If that’s not enough, they were also voted as KPMG’s top 50 Fintech Company in China and established a relationship with the Japanese Ministry of Economy, Trade and Industry which led to the recent tour to Japan. Finally, at the end of 2016 they announced a partnership with Alibaba to provide attested email service for Ali Cloud with Legal Chain where it provides a proof-of-existence for a blockchain-powered email evidence repository for enterprise-level use.

It is important to note the technical difference between Onchain and NEO at this point. Onchain is a private VC-backed company with over 40 employees. NEO is a public platform with different community-led groups contributing to this public project. There exists NEO council comprised of the original NEO creators, employees from Onchain, full time NEO council members and there is also the first Western based group called City of Zion. This confusion is likely the source of the rumour about Antshares and Alibaba having a connection. Onchain and NEO are separate entities who are intimately related via cross-chain communications and similar designs.

This run continued well into 2017. A strategic partnership with e-King Technologies, a subsidiary of a Fortune’s 500 company HNA Group, was formed to explore the application of DNA for private enterprises. Furthermore, the Guizhou government, who is currently leading the country in the big data industry, is now working with Onchain to develop Identify chain, taking another step to make digital identity a reality, and became the first province to commit with the development of a blockchain-based system for public services. Onchain also recently provided an equity crowdfunding proof of concept for China Clear, a centralised security depository, akin to the US’s DTCC, whose role is to act as a third party in the exchange of securities between buyers and sellers. Finally, Fosun Group, China’s largest private conglomerate, have recently invested into Onchain in order to apply DNA across all of its businesses. Currently, Fosun International has a market cap of 102.98 billion dollars on the Hong Kong Stock Exchange and that is only its international branch.

While it is regrettable that the English-based communication from Onchain has been minimal, it is also comforting to know that they are not simply standing on the sideline. In fact, we are slowly seeing an ecosystem of interconnected blockchains comprised of private, public, governmental and financial institutions all based on DNA forming in front of our eyes. This inter-blockchain network sounds awfully familiar to this funny technology that is allowing you to read what I am writing right now.

Schematic representation of DNA taken from Onchain’s website

DNA, The National Blockchain Standard 《国家标准测试的区块链系统》 and The National 1–3–5 Plan 《国家十三五规划》

There are many advantages for enterprises and government to use DNA as their gateway to blockchain. The main advantage for developers is they can focus on just building the applications and not having to build an entire blockchain. At the same time this will ensure the development of an ecosystem with shared skills and values.

“Our vision is to make Onchain a truly universal Blockchain framework,” said Da Hongfei, founder and CEO of Onchain and creator of Antshares. “Utilizing different plug-in modules, our framework could be applied for a public chain, a consortium chain or even a private chain. Our cross-chain adaptor module, currently under development, creates interoperability among these different chains.” Da HongFei, Oct 5th, 2016.

The modular design of DNA allows for a flexible application of blockchain catering to specific use cases across different domains of our society. You don’t have to worry about obeying to government regulations, choosing which consensus protocol to use, not being able to find developers to develop your own applications, the inability to connect with the rest of the blockchain community seamlessly: you still have full control over your blockchain.

During the end of last year, China published their 13th Five-Year Plan also known as 1–3–5. 1–3–5 specifically mentioned blockchain as a priority of development in the next five years. Furthermore, in June 27th this year, the largest bank in the world, China’s Central Bank, published their own 1–3–5 plan on Fintech development: “Strengthen foundation, Increase safety, Promote innovation, Develop standardisation and Improve regulation” (夯实基础、强化安全、支持创新、深化标准、提升治理). Finally, in May 16th of this year, The National Blockchain Standard was published by the Ministry of Industry and Information Technology of the People’s Republic of China and Onchain became the first group of companies to successfully pass this standard. Within this document lists the 4 main functions of this standard as: “Development, Management, Safety and Regulation”. The key points specifically under “Safety” and “Regulation” are “Confirmation and identity management, Safety strategies management, Privacy” and “Supportive of regulation, Auditable” (安全：认证和身份管理、授权和安全策略管理、隐私保护. 监管审计：监管支持、审计实现). Needless to say, Onchain already had the foresight when Antshares was first developed and planned accordingly. In a recent Q&A hosted by Blockchain Labo, Da alluded to Ethereum’s tagline on the website, “Build Unstoppable Applications”, and stated that anti-censorship is not a high priority of NEO and complying with the national regulations is of utmost importance. The recent news of ICO regulation by the Chinese government further validates the foresight Onchain had.

The opposite of a Maximalist

The role of Onchain so far is reminiscent of Ethereum’s EEA in addition to a stronger emphasis of governmental cooperation. Onchain has identified the shortcomings of present laser focus of hype on public platforms such as NEO and Ethereum and addressing that with DNA. DNA envisions a future where a network of assorted, specifically designed blockchains serving private enterprises, consortiums, government and the public communicating with each other forming an interconnected blockchain network.

This is the goal of DNA — infiltrating every little inefficient niche that had no better alternatives before the invention of blockchain. What is especially critical to remember during this explosive time of hype driven partly by the obscene degree of greed is that not every little niche that blockchain can fill will be holding its own little ICO for you to “go to the moon on your rocket powered lambos”. Some of those efficiencies gained will simply be consumed by companies privately or by public systems such as the legal system.

Personally, if I could buy DNA tokens I would buy them in a heartbeat and it would be the ultimate hodl buy. It might be something that you need to hodl until universities are offering “Blockchain 101” courses, that’s how far Onchain is looking with DNA. Of course I can’t and more importantly it goes against the fundamental philosophy of what DNA is aiming for. In order for the tsunami of blockchain technology to genuinely lift all boats and for blockchain to be adopted at the widest possible sense, there needs to be a platform which allows a simple implementation onto existing structures. That is, providing implementers will gain most of the immediate benefits from the implementation. A platform for platforms, if you will.

At the time of writing (August, 2017), Dogecoin is 4 whole places ahead of something as revolutionary as Factom in terms of market cap on CMC. There is no better evidence demonstrating we haven’t quite finished moving on from the aftershock started by Nakamoto’s prophetic white paper of using blockchain technology as a currency. The current myopic hype of the smart contracts functionality has also further distracted us from what the future of blockchain truly holds. Smart contracts, much like the idea of distributed public ledgers popularised by Bitcoin, is only one of many incredible development on top of blockchain technology. Equating NEO to Ethereum simply by the commonality of smart contracts is a short-sighted over-emphasis of smart contracts and an under-valuation of other equally, if not more, important aspects of blockchain technologies, such as ease of mainstream adoption or cross-chains communication.

This myopia will be vastly improved by putting on the glasses that is DNA and hopefully, it will become transparent that NEO and Onchain DNA are not simply China’s Ethereum. Rather, they are China’s future blockchain industry.

There are many races simultaneously occurring in this budding and exhilarating blockchain industry largely guided by the mistaken idea that the winner will take all. There exists the race to be the main cryptocurrency (BTC, BCH, LTC, DASH), the race to be the main dApps platform (ETH, NEO, LSK, QTUM), the race to be the main “crypto-wallet” (OMG, MTL, PAY, MCO), the race to be the main DEX (BTS, BNB, ZRX), etc. However, there is also one crucial (but less discussed) race occurring amongst these disruptive tribalistic races and that is the race to be the first country to develop a mainstream adoption of blockchain technologies. So far, it seems clear to me that Onchain strives to make China the winner in this race.

TL;DR: Smart economy = digital identity + digital assets + smart contracts. Onchain = Microsoft of blockchain. DNA = Windows 1.0. NeoX/Cross-chain adaptor = Internet Explorer. China = looking for any opportunity to stop living in the shadow of the West.