Recent Interview with Da Hongfei, Talking About the Decentralization Process, Public Blockchain Competition, and Stable Coin…
As NEO passed its 2 year anniversary for its mainnet, the famous Chinese crypto community — 8btc took the opportunity to invite NEO Founder Da Hongfei to talk about NEO and shed some light on hot topics recently.
Below is an interview with Da Hongfei, a groundbreaker for domestic blockchain industry.
Application Scenario: Games or Finance?
8btc：NEO aims to realize the smart economy. Is it going as expected as when the project was initialized?
Da Hongfei: Our general goal hasn’t changed. But down to specific focuses, like when to do what, they may vary in different development phases. Starting a business can be compared to playing basketball. A basketball player usually keeps one foot motionless and moves the other to find the best position to shoot at the basket. But the basket always stays there. For example, game development is our recent focus. We are cooperating with many game developers and hopefully more games will be built on NEO.
8btc: It can be told from your recent moves that the game industry is a major focus of NEO ecosystem, like NEL hosted NEO Blockchain Game Development Competition (http://neo.game/rules.html) and NEO Global Capital invested in Cocos-BCX, a blockchain game development platform. Why are you so optimistic about game development on blockchain?
Da Hongfei: In the early days, people were expecting to see blockchain being applied to the finance industry as the new technology may disrupt the traditional finance industry. However, implementation has been faced with regulatory barriers as the finance industry is strictly regulated virtually everywhere in the world. There are only two possible ways to integrate blockchain into finance industry by either cooperating with a licensed traditional financial institute where the license may limit your business scope and your activities may be limited to what is permitted under the license, which is a tricky issue for blockchain companies; or you may bypass the license by doing something that doesn’t need a license.
In essence, blockchain can barely survive within the existing financial regulation system. A licensed institute may find it unnecessary to cooperate with a blockchain company because it is already licensed to conduct the business. Why would it bother to be engaged in a partnership that doesn’t benefit it that much? If blockchain companies end up with no license, they won’t be legally permitted to promote massive adoption of applications.
Gradually some game developers turned to NEO for development and noticed that game development is also popular in other platforms like Ethereum. Game assets and tokens go together naturally.
However, some existing blockchain games only add a few blockchain compatible features, e.g. some game’s digital assets can be recorded on-chain. For such games, their blockchain compatibility is merely an add-on feature, in essence, they haven’t been turned into something that relies exclusively on blockchain; speaking of the games running exclusively on the blockchain, currently, they are usually built for gaming purpose. Such games may attract large groups of users in a short time because it taps into human weakness. However, what really matters in the long run is the game’s playability.
In the future, blockchain games may present a virtual world similar to that constructed in the sci-fi film “Ready Player One” where all the virtual assets are recorded on the blockchain, the implementation of which requires a flawless economic model. However, we can’t predict the timing of such games. I hope that someday blockchain games can even be played by my daughter.
How to Realize the Decentralization of Consensus Mechanism?
8btc: NEO’s decentralization process arouses some controversy and the community is concerned with its updates. Is there any progress or plans on hand?
Da Hongfei: Of the 7 consensus nodes currently running on NEO MainNet, 6 are hosted by NEO Foundation while 1 is hosted by NEO developer community CoZ; of the 7 consensus nodes currently running on NEO TestNet, 2 are maintained by NEO Foundation, 1 is maintained by NEO Global Development, 2 are maintained by CityofZion, 1 is maintained by KPN and 1 is maintained by Swisscom Blockchain. If the consensus nodes maintain stable operation for over six months, token holders can vote them onto mainnet.
However, the majority of votes come from exchanges and our team so far, which gives the NEO team more say on the matter. The team will delegate the voting power to the public in the future and by that time, the team will have a less dominant influence on the voting results.
8btc: If external parties were to run a consensus node, e.g. the state-level telecom group that recently became a consensus node, how would they be motivated to run the node?
Da Hongfei: First, they are technically qualified; second, they want to learn about a public blockchain, which will hopefully benefit their blockchain-related business development in the future.
Originality and Developer-Friendliness are Key to Public Blockchain
8btc: From BitClub till now, you have witnessed China’s blockchain history and the birth of the first domestic public chain. Public chains are mushrooming these days. Can you shed some light on the evolution of public chains in recent years and their pain points?
Da Hongfei: Public chains have experienced the following changes in the past two years: 1. There is an increasing number of public chains because the market cap of public chains is usually higher than others, thus attracting more people to enter the space; 2. Public chains nowadays are aiming for the global market, even from their first day.
One pain point is the language and cultural barriers faced by many domestic projects, which is a large difference from the overseas project. Besides, domestic projects’ underlying core technology may be less original. Originality is essential to public chains. If a project’s infrastructure is taken from others, it should join that project to make it better.
8btc: Indeed, there are many public chains. Do public chains compete against each other? Several well-known public chains launched their mainnet around the same time this year, did that pose a threat to NEO?
Da Hongfei: There are many public chains, but we are running short of upper-layer application and developers. It’s like you have developed an operating system but there are no apps running on it, without which the operating system is same as dead. Yes, we do feel some sort of threat. Facing the competition from our peers, NEO reacts by exploring how to develop an ease-of-use and developer-friendly public chain. For example, we think docs and tutorials are important as they can quickly teach a developer to develop smart contracts on NEO.
Products are the Chief Element of Developing Overseas Communities
8btc: You also mentioned that a successful developer contest was held overseas in January this year. NEO’s overall reputation and popularity in overseas is probably the best among the domestic team-led projects. Can you share some experiences about how to build overseas communities in the past two years? And what problems have you encountered and solved during the construction of overseas communities?
Da Hongfei: Generally speaking, overseas communities value products and technologies much more, thus perfecting products is the first important factor in developing overseas communities. The second is communication. The Chinese team will definitely face cultural barriers in the development of overseas communities. Therefore, it is necessary to have English materials that can be disseminated locally.
8btc: You spent a lot of time overseas. What is the difference between the development of the blockchain at home and abroad?
Da Hongfei: In fact, apart from China, there are various places where the development of each place is different. Compared with North America, we are more involved in marketing activities while underlying developers are fewer. Secondly, in terms of regulation, blockchain projects are relatively more exposed to regulators in small countries.
“Vision” is the Key Word of the Future Industry
8btc: The greater part of 2018 has passed. What do you think will be the keyword of the industry in the coming year?
Da Hongfei: Vision. Over the past year, we have seen a lot of new projects, and perhaps most of what these teams want to do are: ‘I’d like to do something with a market capitalization of one percent or five percent that of Ethereum, this can be a success. ‘In my opinion, this kind of thinking is actually very difficult to persist in a relatively calm market.
On the contrary, teams that equipped with a strong vision and engaged in meaningful things with far-reaching influence are more likely to achieve complete dedication in the calm industry. And their achievement is more easily to be found out and recognized by the market when the industry comes to the next boom period.
Investing Time and Intelligence Into the Industry, Not Just Money
8btc: What suggestions can be shared with entrepreneurs and investors in the current market environment, who are in contact with the blockchain soon or plan to invest in the blockchain industry?
Da Hongfei: You can be a smart investor who invests time and intelligence in the industry and does something creative, at the same time, refrain from just investing money in it, expecting how it will rise tomorrow and how many times it will be doubled. I’ve seen people who put their time and intelligence in, and the outcomes seem to be good in the long run. While for those speculative investors, who put in some fund and make a lot of money in the short term, there are ups and downs. Only a few lucky dogs can retain the gifts, most of which will be withdrawn by the market eventually.
If One Thing Conforms to the Original Definition and Regulation, Its Subversiveness is Limited
8btc: There are several industry topics that have been hot recently, such as Stabilizing Coins and STO. Circle Coin (USDC), Gemini Dollar (GUSD) and Paxos (PAX), are the new generation of stable currencies that are audited and even regulated in comparison to USDT; while STO, many believe it may become the next hot spot after ICO for wealth creating. What do you think?
Da Hongfei: Assumed the supervision conditions remain unchanged, the emerged stable currency that meets the supervision is useless since it is no different from bank transfer. If one stuff is 100% in line with the specific measures of the original supervision, not the actual intention of supervision. It is likely that it is the same as the original product, which is already in existence in the world.
8btc: But the majority believe that in the cryptocurrency world, there is still a need for a relatively stable, infrastructure-like currency, or it will not be widely accepted.
Da Hongfei: Yes, I agree that it is necessary, but the model that is needed may not be so significant if it fails to promote the emergence of new regulation.
8btc: Does it mean that new regulatory frameworks need to be created together, rather than staying in the existing regulatory framework?
Da Hongfei: Yes, it is definitely an original thing if it can be defined as an original thing, and it meets all the conditions of supervision. For example, if it is defined as a bond, then, it is a bond. If it is defined as something and meets all the original regulatory requirements, it is probable that the mechanism is almost the same as the original one, or the efficiency is improved.
A new item, if it conforms to the original regulation and the definition of the original thing, and does not promote the emergence of a new regulatory system, it is likely to be an efficient upgrade of the original. The subversiveness it can provide is limited since it is just an optimized version, not a subversive product.