Metaverse Chinese AMA

Introduction

Hello everyone. I’m Chu Xiahu, the founder of Metaverse. First allow me to briefly introduce myself. I lived in Canada for over ten years. I started off writing codes for the fiscal and taxation system of Ontario, Canada. Four years later, I began to work as a manager of fiscal and taxation programs, many of which were financial-related, giving me a basic grounding in finance. Meanwhile, I had long been interested in financial transactions. I started trading in Shanghai A share market when I was a high school student. After I moved to Cananda, I also traded in the US stock market, investing not only in shares, but also leverage and options. I spend a long time understanding products and the market. In 2008, I got exposure to foreign exchange transaction and executed many of my trading strategies through programming. Ever since 2013 when I first got to know Bitcoin, my work experiences enabled me to have a profound understanding of it from the perspective of a programmer and a person who worked in the financial industry.

Question 1: Since you are one of the role models of blockchian programs in Shanghai, can you share with us your view on the entrepreneurs in Shanghai’s blockchian industry?

CHU: Shanghai is an unique place. In early 2014, together with Da Hongfei, Hitters Xu, Aero Wang, “Ju Xie“ (“Lone olf Cancer“), ”Lan Ling“ (“Civilized Blue Collar“) and Da Tou, I built Shanghai Bit Entrepreneurship Camp. My partners are all famous now, or in other words, have made great contribution to the blockchain industry. For instance, Da Hongfei is the chief of NEO. I myself founded Metaverse. Ju Xie is the leader of the Bitshares community. Hitters Xu is the founder of Nebulas. The Shanghai community is a very interesting place. We people in this community have a lot in common. Let me give you an example. In 2014, AntChain was founded. It is a public blockchain. Later, Patrick Dai started Qtum in Shanghai. Metaverse also headquarters in Shanghai. That is to say, the three top public blockchains in the country are all based in Shanghai. Only since then did Bytom in Hangzhou and some other public blockchains elsewhere appeared. The James Gong’s lab and Wanxiang Blockchain Labs are also in Shanghai. The blockchain industry is performing robustly. However, the circle of blockchain is not as interactive as that in Beijing and Shenzhen. People seldom see each other and talk.

Blockchains in Shanghai show very strong Shanghai local characteristics. They closely follow the new trends in the industry. For example, NEO, Metaverse and Qtum all keep pace with the international cryptocurreny market. Before the early autumn in 2017, we kept abreast of the trend as well as the Silicon Valley, if not better. However, the founders of NEO, Qtum and Metaverse are too busy to sit together and discuss. In Beijing and Shenzhen, people often meet and chat, which is rare in Shanghai. This is what we should change.

Question 2: Some said that there would be competiton among blockchains in 2018. It also had it that the majority of blockchain tokens would collapse since few people used them. What’s your take on the different blockchains?

CHU: If we are talking about blockchains like Ethereum, NEO, Qtum and Metaverse, then I think they are very unlikely to crash. As long as there’s no major designing problems, I believe that there will be a mainchain boom in 2018 and 2019.

You might notice that many “3 o’clock blockchain groups” sprang up recently. As a matter of fact, the heads of them are investors and venture capitalists. They entered the industry just recently. I met with many venture capitalists at the end of 2016. They. weren’t interested in the blockchain because they didn’t know much about it. The problem of venture capitalists lies in how to apply the blockchain technology in the projects they previously invested in. It is unlikely for venture capitalists to get their previous projects listed in Shangai A share market. According to the media, backdoor listing was no longer allowed in the three years following the IPO flop. In other words, now it is even hard to go public on the main board and growth enterprise board market.

Venture capitalists will put their programs on the mainchain, but there is no need for them to build their own chain. Therefore, the demand for mainchains will outstrip the supply in 2018. We all know that Bob Xu and Mike Cai invested in Internet applications. The app-buiilding teams are experts in their own programs, but they are not good at blockchain application. So the rule of thumb is put the programs on the blockchain, one way of which is to build infrastructure on the existing public blockchains such as Ethereum, NEO or Metaverse. In 2018 and 2019, we can expect hundreds, even thousands of programs put on the public blockchains. So my prediction is that there will be a shortage of blockchain.

You may wonder why the investors themselves don’t build their own public blockchains. The underlying layers of a public blockchain include a network layer, a security layer, a consolidated layer, a digital asset layer and a digital identity layer. Only when an additional smart contract layer be built on the underlying structure can the blockchain be applied in financial services. Venture capitalists are usually investing in applications. They have limited exposure to the blockchain underlying structure or consensus or blockchain security mechanism, so the best solution is to base their applications on public blockchains such as Ethereum and Metaverse.

Question 3: The blockchain industry is highly commercialized. Do you think that the blockchain will do underlying protocols like tcp/ip?

CHU: Personally, I believe that blockchain enterprises maintain a academic research atmosphere. Foreign programs like Ethereum, EOX, Iconomi and Waves, as well as outstanding programs in our country including Metaverse are all conducting research on the underlying technology. By far, Metaverse is not working on commercial application. We commit ourselves to developing the underlying technology. I’m not sure whether Metaverse will eventually become tcp/ip, but there must will be such protocols. Many companies are currently doing this.

Question 4: What’s your roadmap for Metaverse’s future? I’m a programmer. Can I join your team? What does it take to be one of your programmers?

CHU: I just mentioned the five underlying layers of public blockchains, which are also what Metaverse has been striving for. The day that Metaverse went online, we already finished the building of network and consolidated layers. Digital asset layer that enables asset issuing on Metaverse was also done. We are currently optimizing our chain. The following step is to create digital identity layer. Our plan is to build perfect blockchain underlying protocols. If you are a programmer, I welcome you to join us. We are a team with aspiration. On the 2018 annual meeting, I talked about my expectations for my colleagues: faith, to have faith in the blockchain industry, which is important; passion, to be passionate about what we are doing; and pursuit of excellency, to pursue perfection and do their best. If you have faith in the industry, are passionate about what we are doing and are determined to do your best, then you are the programmer we are looking for.

Question 5: During the lunar new year holiday, there was a heated debate in the Wechat group of 3 o’clock no sleep blockchain. Was that a recognition of blockchain, or even cryptocurrency by the state, or an illusion led by the big names in the industry?

CHU: Just now I commented on the 3 o’clock group when I was answering your previous question. The leaders of the 3 o’clock group are venture capitalists. They sure are experts, in the field of investment, but not in the blockchain industry. They might invest in programs with high returns, but it doesn’t mean they really understand how the blockchain works. Then question comes: why was the 3 o’clock group so popular? They did so because the profit model of the whole venture capital industry could barely function. From seed and angel rounds, to A round, B round, C round and to IPO and listing, this investment and profit model is already disrupted not by the emergence of the blockchain, but due to the difficulty of going public on A share market, limited backdoor listing and impossible acquirement. If you are to go all in a program, it might take you seven years to exit. That means you are going to miss many promising programs, leading to low return on investment. Many venture capitalists found the first blockchain application interesting, so they invested in it. They did not necessarily know much about blockchain. So I don’t agree that the state is sending any signal. It’s just that the venture capital industry is changing fast, making it harder for them to find promising investment programs. At the same time, I hope that there can be more groups exploring blockchain technology led by people who are experts in the technology.

I’m also suspicious of the group. It claimed that it’s a platform for people to talk about blockchain technology. But it seems that people who really understand blockchain technology are not in that group. So I want to remind our readers not to be credulous.

Question 6: If all financial transactions are to be handled on blockchains in the future, how will the blockchains store the massive amount of data? What is the biggest challenge for blockchain application in financial industry?

CHU: It’s a good question. It is impossible to upload all transaction information in the blockchain. The blockchain has several weaknesses. One is limited TPS, namely the number of transactions that can be handled within a second, is not infinite. TPS is negatively correlated with the number of nodes. The more nodes we have, the slower transactions will be. Yet if we reduce the number of nodes, we sacrifice security. The fewer nodes there are, the easier it is to break the blockchain. But if we increase the number of nodes, say to ten thousand, then it will take a long time to synchronize the data on all the ten thousand nodes even with lightspeed. Therefore, the transaction per second is limited. You can’t have high security and fast transaction speed at the same time. Blockchain basically compromises efficiency to ensure credible transaction. In other words, the transaction between nodes can be done without the endorsement of third parties. Transaction speed wasn’t emphasized when the blockchain was first built.

The second disadvantage of blockchain is small storage. It’s inefficient to have many nodes and use all of them to store data. The solution is not to store the massive amount of data, but the results of Hashing algorithm on the blockchain. Moreover, the matchmaking of financial transactions doesn’t need to be on the blockchain. What we need is only the settlement information.

As for the question of what the major challenges are for the financial industry to use blockchain technology, I don’t think it relevant. Let’s assume you work in the financial industry, say microfinance or other financial products and what you are preoccupied are blockchain and innovation. The problem is that the blockchain technology is disruptive. It is a gamechanger, not innovation based on the previous model. I’m afraid I don’t have an answer to the question.

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