Blockchain Revelation (Part II) — Development & Challenges of Public Blockchain

Founder series — the Future of blockchain governance and Dapps

“Development and Challenges of the Public Chain” 
Table of Contents:

1. Introduction of the EOSForce Mainnet
2. Why did we launch the EOSForce Mainnet?
3. Current statistics from the EOSForce mainnet
4. Inspirations from EOSIO
5. Some challenges that EOS will face and the implications for the future of public blockchain

6. The difference between the EOSForce mainnet and the EMLG mainnet contracts
7. Future of DAPP development
8. A Possible roadmap for DAPP and smart contract
9. Why must we use the blockchain to reshape the future?
10. Future development direction of blockchain

VI. The difference between the EOSForce mainnet and the EMLG mainnet contracts

Two weeks ago we launched the EOSFore mainnet contract. I will talk about the difference between EOSForce and EMLG mainnet contracts. We have learned from EMLG development, such as CPU net and things like that. We posed questions on issues related to these subject matters at the beginning of the launch and discovered that these issues do exist during actual operations on the mainnet. That’s why we had delayed the launch of smart contract until recent, mainly for the resource issue.

1. Prevent DDOS attack and resource price speculations. People can see that we have replaced CPU net with dynamic transaction fees. RAM is an independent rental model, so both developers and users can rent it without facing price speculation issues. One advantage of this model is that using transaction fees as a limitation prevents two kinds of DDOS attacks:

First is DDOS on the blockchain level, such as Blocktwitter’s DDOS attack on EOS EMLG, causing EOS Bet to be unusable at the height of its popularity. You can send free transactions and trades limitlessly just by staking a bunch of coins on it, taking up all the resources that other users need. Because theoretically, most nodes should have the officially recommended setups, but in reality they do not, other chains are not limitless in resources.

Also you can see that the congestion has to do with transaction spamming. DApps can spam trasaction to score a higher user activity. The higher the activity, the more attention it gets from the ecosystem. Just like exchanges spam trasaction volume to get higher in ranking. These kinds of DDOP attacks are very dangerous in effect.

2. Transaction fees are returned to the users. So we have reduced the risk of these two DDOS attacks through the use of transaction fees. This makes sure every on-chain transaction and trade is authentic, and it is a obviously a more convenient way to transact than CPU rentals, net rentals, and ram rentals. For example, I have a good relationship with some of the EMLG BPs. Some of them do not actually use EOS to transact at all. It is inconvenient and complicated. User experience is very bad. That’s why you see all sorts of rental proxies. They do things like “I will rent the resource for you and transact for you.” This activity is in effect like centralized wallet/account management —you are literally asking transfering the ownership of your asset to another person.

Also, even though transactions on EOSForce mainnet charge transaction fees, the fees do not go to the team. They go into the block reward of the block. Then they go to the BPs as the reward, which is then distributed back to the voters through voting dividend. Therefore, in essence, as you might have observed, the trans-fee model is strictly for network manipulation prevention purposes.

These mechanisms allow us to mainly focus our energy on smart contract development. And this is why we are talking about DApps today.

VII. Future of DAPP development

1. What is DApp? I have noticed that many of my friends are investing in DApps or playing with them while having no clue at all about what they actually are. DApp stands for Decentralized Application. Application suggests a business setting, and decentralized means smart contract, or you could see it as storing computing data of the business in a decentralized storage or governance structure.

Clarifying the definition is very important. There are multiple decentralization aspects of an App. It can be decentralized in community, in governance, in contract updates, or in application itself. But none of these alone make a DApp. Yet there are many pseudo DApps floating just like these. This causes problems, which is why many of them will die for their centralization.

2. Finding actual business use case for DApps makes its future. Although we said earlier this year that the expectation for EOS Mainnet is that there will be a swarm of DApps after the launch — and there was — and that it will overtake Ethereum, the application of most of these DApps are limited to betting/gambling purposes. To be honest, personally I place my bets against these DApps. I think the blockchain gives a sense of fairness to these gambling games, but they do not make up our daily needs eventually and are not what blockchain originally intends to solve.

Other very popular concept these days are things like STO and stable coins. However, the only reason they are popular is because in a bear market, people resort to these concepts for hope. They are originally part of the blockchain and use case scenario already. There was really nothing new about them. Thats why you see the news turning this cliche into a new dish all the time.

STO is kind of special. Many mainstream institutions and Internet companies will pay attention to it. In essence, it is about finding a crypto asset product that the mainstream market can accept and the regulatory body can oversee. It’s really just adding tokenization to the security market. Personally, I do not think it is something that is reshaped by the whole smart contract invention. If you simply issue just a token or an STO, it will die sooner or later.

Previously before EOS in the age of Bitcoin, we could say that the blockchain industry is building its necessary infrastructure, but to the current stage, we must accelerate to find real business use case and service.

VIII. A Possible roadmap for DAPP and smart contract

Below are some ideas developed when we were discussing with some blockchain developers with regard to possible routes for DApp and smart contract.

1. Block reward model is a trend. Take previous ICO projects for example, the team likely takes away 20–30% of the token distribution at jumpstart while raising a large sum of money without actually delievering anything. The investment received is very inappropriate for the development delievered. The same goes with DApp’s contracts. The initial 20–30% of the token distribution that goes to the team is equally inappropriate for the 0 development on the DApp project. We believe that a team share of the block reward in place of the initial token distribution to the team is a better model of incentive.

2. Gaming as Mining & Trading as Mining. As discussed above, the issue of Proof of Stake (POS) revolves around the initial token distribution to the project’s team. On this respect, models such as gaming as mining are a fairer way of token distribution. This is equivalent to the Trading as Mining model many exchanges nowadays adopt. Exchanges on the one hand use this model to incentive community interactions while on the other hand distributes the token to the community in a very fair way. However, such models must be designed with much caution. Take FCoin exchange for example. Its exchange token became worthless very soon. Because its token model was crudely designed, you can see that later adopters used much better tokeneconomic designs that provided more stable market for their own tokens. BitForex is a good example in this respect — now its one of the top exchanges with such a model.

We must also mention Bancor here. Personally I don’t think Bancor is a good way to raise funds. For any past users, they know that a Bancor raise only lasts a couple of days in popularity and later investors basically enter at loss. I’d place my bet against it.

3. Gambling games are not the future. Gambling games emerge on EOS for the simple reason that they are the kind of games the infrastructure can support. Of course another reason is that developers have seen the profits gambling games generated back on Ethereum, so they just copycated the concept to a new platform. EOS, with a new infrastructure, also presented a technical service challenge to them. So the emergency of gambling games has a reason actually.

But it must pass. From gambling games to real games, and then to general entertainment, and last to live entertainment services. Our community has some developers that will use EOSIO to reshape their business end services. That will be a feat!

So I think that when developers enter into the ecosystem, you should not copycat the superficial growth, but rather study the underlying contract design logic and integrate it with actual business models, Internet services and whatnot. Early developers will have to have many attempts. You can view them as the early Amazon sellers. There is no existing blueprint for you, but when you do well, you become the brand of Amazon. Then you can even go head-in-head with some big mainstream sellers and retails. At that stage, we will have the golden age of DApps.

But as I said earlier, a single chain cannot carry all the business applications, so when the business volume reaches a certain level, something similar to the Tmall store will appear. The mainstream Internet players like Tmallwill settle in like a big brand. At this time, both early DAPP developers and mainstream players will need separate blockchains to carry their business services..

How so? First is that a blockchain itself cannot carry that much. For example, tthe daily EOS user activity does not exceed 10,000 by current estimates. This is already causing network congestion. In actuality, you do not have to channel all the network services into one chain and pay for the resulting network resources. In fact, you can start a blockchain and decentralize your business on it.

4. Blockchain must solve actual real-world problems. No matter the earliest time real estate brokerage, Internet economy, O2O, or smart contract, the technology must address real-world use case. If you only design a tokeconomic model and then speculate on the price of the token, it has no value.

5. Focus on serving contract developers. The development direction of our EOSForce mainnet development team is and always will be focusing on servicing contract developers, enriching the capabilities of our mainnet based on their actual needs during the development process. Because different contract types and different business scenarios must have different requirements for data computing and storage, and may even require different consensus. At this time, we will put this service point on the contract developer, and even later provide a one-click supply chain kickstart service. The developer’s business does not necessarily have to run on the EOSForce chain, it can also be modularized to start a public blockchain service of their choice. Just like you open a Taobao or At the Tmall store, you don’t need to develop a tool to manage your bills at all. Tmall and Taobao themselves have such a feature.

In addition, we have focused on the blockchain development itself during early stages. We will put more emphasis on community engagement and community communications to enrich the DPOS governance.

6. The future may be of a one-chain-one-business model with inter-chain interoperability. The future of blockchain may not be just one chain, there may be countless chains. It seems that EOS has a lot of decentralized exchanges with cross-chain capabilities. This is very good, but once it involves heterogeneous cross-chain interoperability, it gets difficult, even including what we commonly call the cross-chain contracts. It’s a ver ydifficult subject and few teams can actually solve it. In the end, when we start a public chain in the future, whether it is with other developers self-started, we will definitely make sure 0 team ICO reserve to ensure maximum fairness. Only in this way can we Guarantee the greatest fairness. Receiving block rewards as the team’s revenue in the early days is a much healthier growth model for any blockchain business.

IX. Why must we use the blockchain to reshape the future?

1. Enlarged gap between rich and poor in the Internet era. The main area the blockchain will reshape seems to be the Internet business. In fact, everyone will find that in the Internet era, the gap between the rich and the poor is expanding. Why? The reason is that in the age of the Internet, your data is production materials. Under this centralized system, your data is not owned by you. It belongs to these big companies, and the big companies get more income through the data. In any traditional industry, there is no such thing as an exponential rise as you would see in the Internet sector. It’s just that you double your investment and double your income. But in the Internet age, the only reliance is on the machines and users. Unlimited revenue can be generated by the user’s data, but all of this revenue is fed back to his shareholders, leading to users and so-called employees. This income gap is actually very large.

2. Privacy security issues in the age of data. The era of big data is a matter of privacy and security. Needless to say, this is actually a very serious problem, including the fact that I recently discovered that my various exchange accounts have been stolen, and that QQ (a Tencent social chat app) has been stolen. This centralized management is really not safe enough.

3. Centralized division of labor is still important, but distribution and governance need to be decentralized. It is not that the centralization of labor is not important. In fact, centralization has brought about a great increase in productivity in human history, but at the same time, centralization has brought about unfairness and brought about corruption. Therefore, we believe that distribution and governance must be decentralized. That is to say, if you use smart contracts or blockchains, you are reshape the business to let your users, the participants of the entire community ecology, be treated fairly!

X. Future development direction of blockchain

1. Bitcoin’s status as the center of the crypto asset ledger is unshakeable. Next, let’s brag about the development direction of the blockchain. The future of EOS and other chains of POS and DPOS, those blockchains for computing storage puroses, have a long way to go to get mainstream. Many technologies have not yet broken through yet, and the ecosystem is not rich enough. Bitcoin has been a billing center for the entire digital currency industry for a long time, and it is unshakable.

2. Multi-chain interoperability. Cross-chain interoperability contract platforms will exceed in value over Bitcoin. But on the other hand, in the past, our expectation for Bitcoin was solely accounting, but we found that we might expect more after the birth of EOS. We will use it for computing and storage, and it will necessarily have to be interoperable. So the future cross-chain decentralized trading contract platforms will surpass the market value of Bitcoin.

3. Multi-chain and cross-chain development in parallel. 2.0 smart contracts and 3.0 cross-chain are in parallel development. Because you can’t support so many contract types in your single chain, you need multiple chains, and you need to cross-chain to solve this impossible triangle problem, so it is parallel development.

4. Decentralization is a means, not an end, the purpose is fairness. With regard to decentralization, many community friends, and many public chain communities, they will pursue this extreme ideology of decentralization, or some communities will not decentralize, then there is a problem we have to understand. Decentralization is only a means of blockchain, it is not an end, the purpose is fairness! But we seem to say that a certain degree of decentralization can guarantee a certain degree of fairness. We should focus on decentralization and use blockchain to solve these fairness issues in your business settings, such as fairness in distribution of data, fairness in computing, and fairness in governance.

5. Smart contracts begin to explode and promote the evolution of the public blockchains. We used to say that the blockchain is now in the stage of infrastructure development, so many development teams are particularly slow, or some developers have gone to vacation after they simply took the ICO money. They don’t do anything. They think there is no need to do a lot during the infrastructure development stage. People who have seen the popularity of gambling game apps ask “where’s the real application of blockchain? Is this it?” From the perspective of blockchain infrastructure, gambling apps are a sign that the current stage of development can support certain apps, but we need to find more use cases.

Therefore, whether it is a public blockchain or a DAPP developer, everyone should actually understand each other and promote each other to improve the underlying and application paradigm, rather than saying that as a public blockchainchain developer, I only do my infrastructure, or I’m better. Then DAPP developers don’t pay attention to what the user actually needs. That’s the reason why I have been criticizing gambling game apps. They are not a demand. They are drivven by a desire. That is a big difference. One means that you have solved the problem that the users have. The other is greed. It is not sustainable. This is not rocket science. You don’t need a centralized authority to tell you this. It can be easily discovered by yourself.

I will share this much with you all today. Welcome to interact with EOSForce in our official telegram.