QTUM: the Future for Proof of Stake Blockchains?
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Earlier this week we had the chance to attend a presentation from the team at QTUM, a PoS blockchain that aims to be an ecosystem that can host decentralized applications (or ‘dapp’ for short) using a tech-combination of ethereum and bitcoin. It is definitely one of the more well-known currencies in the crypto world, and it has gained significant steam here in Korea as well with both Bithumb and Coinone listing it on their exchanges. We listened to the some of the members of QTUM which include Patrick Dai, Stella Kung, Stephen Xu, and Brett Fincaryk, as they went through the details of QTUM and its structure and status, as well as what the future holds for the closely-watched cryptocurrency in terms of smart contracts and dapps.
“Why we built QTUM”
Patrick, the Co-founder of QTUM and Chairman of the QTUM Foundation, first started off with why they decided to build QTUM. Started in 2016, He described the bitcoin and ethereum mining worlds as very combative towards each other. Patrick described his goal as trying to combine the two sides together to strive towards a common goal. He goes on to explain that “For QTUM, we want to combine the currency aspect [bitcoin] and the platform aspect [ethereum].”
He moved on to talk about the governance and management aspect of decentralized networks and how it can eventually end up being centralized, and the necessity to design some way to make sure that the deciding power is truly decentralized. QTUM’s answer was the decentralized governance protocol. It allows all QTUM stakeholders to having voting power according to the parameters of the smart contracts.
He also touched on the difficulties for developers trying to build applications on the blockchain with the vast variety of languages that they would have to know in order to build one. Using the Ethereum Virtual Machine and Solidity language as an initial example of this difficulty, Patrick explained how his team was trying to create their own version of an Ethereum Virtual Machine so that every developer, regardless of programming language, could program their own smart contracts and applications. “We want to extend the virtual machine and smart contracts to a wider concept” he stated.
QTUM Roadmap
The presentation next laid out in detail about the roadmap for QTUM. After their mainnet release, their next steps were:
- Wallet Service — creating different wallet services for different mediums and platforms (i.e. SPV, online, etc.)
- Explorer — to support the QTUM token
Then for the developer rodemap, they were working on:
- Lightening network
- X86 virtual machine
And finally for the business roadmap:
- Marketing (USA, Korea, other regions)
- Community building
- Dapp support
- QTUM payment services (for exchanges, games, credit/debit cards)
QTUM Technology Evolution
When moving on to the the next topic, Patrick posed the question, “What’s the core value of the currency?” He explains that part of the answer is found in first the concept of decentralization, not the speed of transaction. “For bitcoin, the synchronization is important — like how many full nodes you have in the network; like how many peers.”
He moved on to talking about cryptocurrency as a platform, and with that, other important factors: flexibility, speed, stability, ecosystem, privacy, economy, and governance structure. From there, he jumped into where QTUM lies:
“When we designed QTUM, we designed different layers. For the basic layer, its similar [to] bitcoin, so its very simple and very stable…we designed a virtual middle layer to support the virtual machine. We call it the QTUM Account Abstraction Layer. With this kind of design, you can support multiple virtual machines…in the long term, its more flexible and scalable.”
In regards to decentralization and full nodes, while showing a map of the bitcoin network, Patrick explained that even having a copy of the ledger by each full node gives them value as well. He then transitioned to QTUM’s full node map which stands at 820 nodes in 57 different countries. The power of the full nodes is verifying the ledger and protection against attacks such as DDoS; in contrast to the banking system which is centralized.
QTUM App Ecosystem
Moving to applications on QTUM, there are currently more than 70 apps, here are few of them:
- Bodhi — a prediction market app
- Spacechain — bringing the blockchain to space!
- Energo — energy production and consumption on the blockchain
In addition, QTUM is planning to build a QTUM Enterprise Alliance soon.
QTUM Wallet
Next, QTUM developer Stephen Xu talked about the QTUM wallet and details in how to utilize it. You can find where to download it on your computer here (also available on ios and Android, and supported on myetherwallet), a more detailed version of the steps at their github here. The wallet will also allow you to stake your coins in the wallet.
QTUM Upcoming News and Community
Stella Kung from QTUM PR and Brett Fincaryk from Community Management spoke about upcoming news. For messaging, QTUM supports Wechat, Telegram, Kakao, Line, and Slack. Their community is growing all over the world to places such as Korea, Russia, and Spanish speaking countries. QTUM is also very active on social media (facebook, instagram, reddit, and Weibo).
Stella also mentioned about hackathons and bounty programs, and invited developers to check out QTUM and contact the team if they find any errors. Later on they do plan to host hackathons to build the community. For dapps, QTUM has the ability to support for PR and resources to grow and spread awareness about any applications that will be built on QTUM.
QTUM’s Community Manager Brett Fincaryk talked about the role of communities and how QTUM’s community is built up. He was frank about his surprise at the spread of communication through platforms such as telegram and others in Korea.
“People are genuinely interested in the underlying technology…it’s about people talking truly about your core technological achievements. If I was a passive investor, I would be first looking at this.”
Some of the problems they’ve encountered was censorship or harsh criticism, and how it was important to ignore and focus on your own development. They will come out to address any major issues, but he maintained that censorship does not work and that they must allow all sorts of comments both positive and negative.
He also talked about face to face interaction as an integral PR role, such as the team going around the world and holding events so that the QTUM community can meet core members of the team. One example is the QTUM western developer community taking their own initiative, for example using a raspberry Pi to stake QTUM.
“We said to our western developers ‘Hey we’re going to be building a precompiled binary for rasberry pi ARM architecture’. That was a smart move because we instantly gained about a dozen developers.”
Brett also talked about their plans to campaign in Latin and South America, and for North America he said that hackathons would be the main method of PR for QTUM.
“Now that we can see that our main network is stable; now that we are listed on exchanges; now that we have developer framework; now that we have some documentation and dapps, what’s stoping us?”
In short, QTUM is planning a variety of events, functions, and content/documentation in multiple countries and regions: meetups, hackathons, online events and streams, and social media.
QTUM Q&A
This is a selection of some of the questions asked at the meetup:
Q: This week the every five-year Chinese Party Congress is happening, and obviously your platform and business is largely geared towards the Chinese market. Do you expect any type of outcome, or have you received any announcement related to cryptocurrency, ICO, or trading? If not, how you are preparing for it?
A: QTUM is the most influential blockchain project in China. Before the regulation came out, we had one of the biggest communities in China. Since it’s very influential, I have been invited to talk to the Chinese government many times since 2015, so I [have been] talking with all the regulators.
But even before the regulation, we knew it would happen: one month before it happened, I was talking to the Chinese security regulators (like the US SEC). The reason why regulation in China [happened]: 2–3 months before it happened there were so many ICOs, and they were very bad projects. All they wanted to do was “I want to do ICO, I want to raise some money.” So that made the government very angry, and [for these ICOs], they cannot raise money from traditional venture capital, so they find the wild west to raise money. So people change their initial purpose; their purpose is just to target money, not to build the project, so that’s the reason why we have this ICO regulation.
But another reason why we close exchange platforms — there are still two exchanges running (OKcoin and Huobi), but I don’t know what they’ll do later. For the ICOs, I think the government will regulate the market, like the US: if you want to do an ICO, you can do that, but you should be listed and have verified investors. For the regulation for the exchanges, I don’t really know; there’s a lot of uncertainty right now. Maybe they will reopen the exchanges after the new year.
But the Chinese government is encouraging blockchain use cases. For QTUM, we are trying to build more use cases, and even after the regulation we have kept talking with all of the regulators. The regulators’ purpose is not to kill all of the projects, but to regulate the market, and also to find some real value in blockchain. So we are still talking with all of the regulators and building some use cases [so that China] can use it for public service (e.g. counterfeiting, copyright, healthcare, supply chain, IoT, etc.).
Q: Two parts:
- What are the advantages of implementation of PoS versus the upcoming Casper?
- Also I saw in the slides — you did mention zero-knowledge proofs along with ring signatures, is that going to be part-roadmap with QTUM? Or is that going to be a 3rd party thing?
For the first question: before we designed QTUM, we had many choices. [We thought] “We could do it in PoW or PoS, and if we do it in PoS, we have many choices, and we can even write everything from scratch.” The reason we chose PoS is — from my understanding — there are few requirements for the consensus. You should choose a consensus that has the ability to allow everyone to become a full node, otherwise it becomes centralized. For QTUM, you have no barriers to become a full node; you have the chance to reap the block reward.
For Casper, you need to have some security [deposit], maybe 2/3 ethereum or more. So if you do some bad behavior, there’s a punishment, and they take your coin away. That’s something I don’t like, because you cannot do this in the crypto-world; you have no right to take away people’s money. Also, if you have some minimum requirement to become a full node, in the network it let’s the rich become richer, so that’s something I also don’t like.
For the second question: so I mentioned that about the privacy use case. This kind of designed mode is just at the beginning; not to many people are using the privacy [function of cryptocurrency], even on Zcash [which is the biggest privacy coin in circulation].
But not that many people are using Zaddresses in Zcash, because we know Zcash since the first day. But it’s important in the long term and for some people, [for example] such as bank A transferring some money to bank B and they don’t want other banks to see the transactions. So this kind of use case is very important. But the whole blockchain is not ready for this kind of use case at all; we are still in very early stages. However we do have the plan to add more privacy on the upper platform layer. For the platform, you have so many applications, so you need privacy for the dapps.
But that’s not a 1st priority right now for QTUM — the biggest priority is the x86 virtual machine. With this, we can move smart contracts to mainstream and on a scalable plane.
Q: A small question about your PoS: What’s your targeted inflation rate for the first year for the mined blocks?
A: It is 1% per year, but since not all the coins are not are staked right now — about 10 million coins have been staked — the circulation is about 100 million coin, so if you do a stake now, you’re supposed to get about 10% reward every year.
