Rong Chen’s Speech at the Elastos and BIT.GAME Meetup

Rong Chen’s Water Cube Meetup Speech on May 26th

Topics include:

The so-called value Internet, the transfer of value is the transfer of the program.

If you do not own the program, you do not own the data.

Blockchain allows the Internet to be decentralized, but the blockchain itself is not decentralized.

On May 26, at a meetup co-organized by Elastos and BIT.GAME, Rong Chen delivered an insightful speech about blockchain and the internet.

Rong: First of all, what do we mean by value internet? Fei Liu (Huobi COO) said just now that once we have a blockchain, we are able to verify personal data. Many people are saying that we probably divide the development of the Internet into three stages: The first stage is that the personal computer has a browser, which is IT; in the second stage, someone calls it big data, DT, all the data that it makes. The oligopoly, for example, you made a video and passed it to Youku (similar to Youtube) or Sina (similar to Twitter). As a result, the copyright of your own work was attributed to Youku or Sina. In the third stage, we will help individuals own the property of their own work with the help of blockchain which has the ability to conduct direct transactions between people. We know that the current blockchain allows individuals to send tokens to other individuals, and allows authenticity without intermediaries. There is no doubt about that.

Today, I want to share a very different point of view: the so-called value Internet, the transmission of value, is the transfer of programs. For the current internet, everyone knows that once you click the browser, you will open a webpage. Web pages are data. Or in a social network, like WeChat public accounts, we share a photo, a video, a public link, all the things that we pass on are data. There are two things that make up the computer. One is data and the other is program. Some people say that the meaning of the blockchain is: You own your own data — You have your own data. There is nothing wrong with this concept. For example, I wrote an article. This copyright belongs to me. I took a short video and I own the copyright. But I didn’t dare to send it out because once I do that, I immediately get pirated. If I take a video, and I share it in a social group, someone copies it. In this case, am I still the first author or has someone else pirated me? I hope to get some returns, in addition to the incentives that I can charge others for watching on Sina. This is a difficult task, so you must follow rules to do it right through smart contracts.

Therefore, it is not enough to own your own data. There must also be a program to interpret this data. I took a short video and I sent it to the WeChat public accounts. Everyone immediately made a lot of copies. It is called first hand piracy and it pirated the original data. Then, if I decided to share profits with some media sites, such as Facebook or Sina, I’d say that if someone rewards my work, I should get half of the profit. But some of the social media sites are being evil, for example, if my video is broadcast 1 million times, the evil site tells you it was broadcast 100,000 times. The remaining 900,000 times is a net profit for the site. This is second hand piracy. All the software is a player because software generates data, plays data, and software produces data. The software then digests this data by itself, and this is not big data. If the data that’s generated by a software is used by other software, this is big data. If we want to spread so-called digital assets in social networks, it is to spread the value. I will introduce you to a concept. Passing value is passing the program. At present, all the things passed on the Internet are data. There are only two things on the computer: data and programs. When we talk about the next generation of the Internet, we know we are not the data generation, so the next generation must pass on the procedures by process of elimination. Then I will talk about why passing on programs is passing on value.

The transmission of programs process goes back 30 years ago, when the exe code could be transmitted in an e-mail. However, do you dare to open it when an exe is passed in an e-mail? There is a risk of viruses if you open the email. This is where I want to introduce to you to why the operating system is related to passing on values. Later, I will tell you why it is related to the blockchain. Let’s start with why we talk about the operating system, instead of a simple blockchain. The authenticity of blockchain is a very new thing and a great invention. But we pass on anything. It is not just a number. For example, if we want to pass a bunch of numbers, we have to explain what the pile of numbers is. Is this music? A film? Or a game? As long as you don’t have a program that explains those numbers, you’ll be pirated first hand of second hand, so you don’t own your own data. If you do not own the program, you do not own the data.

First of all, as long as you pass on the program, it is necessary to say how to make a virtual machine, to start the virtual machine on demand, and let the program run without viruses. As we all know, when I wrote a Word document, I generated a PDF at the time of publication, and then spread the PDF. This is the current method of distributing electronic works. For the same reason, if I wrote Word, and then I told you to make 100 copies of the program for me. You think about it, say I have a tool that generates 100 programs like 100 PDFs, each with a built-in Token. This is actually not difficult to do. After that, I sent out the programs. Every time the program was played, I would say that it was broadcast once or broadcasted 1 million times to prevent one-time and secondary piracy.

Secondly, if the movie is made into a program, both the game and the e-book can become programs too. As soon as the virtual machine is loaded, you can go to the blockchain to check to see if I still have property rights and copyright or not. I bought a paper book on Amazon that can be sold to you or given to you. But the precondition for giving away is that I don’t have it any more once I give it to you. This is called an asset. I can dispose of my assets at will. I can give the book to someone else, or you can help me to sell it to get a share. This time this book is my private asset. As I previously mentioned that when the program is loaded, the virtual machine checks the blockchain. For example, I have generated 100 e-book games. When I play, I can broadcast it. Then I give them to Mr. Sun. Just like a Bitcoin exchange, the public key and private key have been packaged and changed. Even though the binary program is on my mobile phone, I have no longer broadcast it because when the virtual machine calls an e-book game, it goes to the blockchain and it sees a bunch of 0's and 1's, but you don’t have any digital assets.

We talk about authentication on the blockchain today, and many projects are doing the authenticity. If you don’t own the program, the authenticity has no use actually. For example, Microsoft released about 100 million copies of Windows in one year in 1998. The central server has records. If pirates are all over the place, Microsoft will not receive the money. If anyone suspects that Microsoft has not issued 100 million at all, only 50 million in fact, then its central server is not credible. It will seem to be more trustworthy if we turn its central server into a blockchain ledger, whether it is 50 million or 60 million. It doesn’t matter if you use a centralized server for a ledger or decentralized server ledger. If you can’t prevent piracy, it doesn’t make sense to ledger it. Can you accept this concept? This leads us to have a new ecosystem. We must be able to use URLs small programs similar to Tencent, to transmit small programs on the Internet.

The Tencent small programs have two problems. The first issue is that Tencent does not allow its competitors to transmit small programs. For example, if you want to create a Taobao website, Tencent will not allow it. This is the unfairness caused by the intermediates. The blockchain spirit is that anyone can use this platform without restrictions, including Wechat public accounts, media content, and they should not be restricted by one company. Secondly, it should be able to transfer any programs, such as programs that can run on the phone. This time it should not be emphasized that it is Turing complete. Turing is not equivalent to running any program on the phone.

We must make up for these two points. In this case, we call it the new Internet. The original Internet was a browser, a social networking site, and it’s the Web. The social networks that we are doing now are all transmitting programs and are all transmitting small programs. This is an important concept that I want to emphasize. Because the Internet is a platform for people around the world to communicate, there must be an ID number like WeChat ID on this Internet. Tencent made it unfair and they can kick you out anytime they want. We call it the Internet. Who is the most fair to issue the IDs? Blockchain — use blockchain to send an ID to everyone, and generate a public key with a private key, and then generate an Internet ID. The ID issued by the blockchain to the Internet is the most fair and credible way. Everyone can trust anyone on the Internet when they don’t even know their names. But they do know that there must be someone behind the ID. If someone comes to visit my website often, I can mark him as an important customer. I don’t know what his name is, but I know this ID. Or if someone is often harassing me, I will put him on the blacklist. When we distribute the work, we have a proof on the blockchain such as who was the first author and the future profit sharing model. Same thing for publishing 100 books. A token can generate 100 Token side chains. Why should we cooperate with the public chain, because some of them are smart contracts, such as Ethereum, and some are NEOs because different public chains are having different ecologies. We have created different sidechains on the public chain of Elastos. Different sidechains need to implement different smart contracts. We hope that everyone will come together to build the ecosystem.

The first concept mentioned above is that transmitting values ​​is transmitting programs. The second concept to mentioned below is that the blockchain is not decentralized, and the blockchain is not distributed. The blockchain that we talk about is a ledger. Even if there are 10,000 nodes, there is only one ledger, which is more credible than the Microsoft central server we just talked about. A ledger is not decentralized, and there is no concept of distribution. What is distributed? There must be multiple units and multiple related people in order to say it’s decentralized. So it must be multi diversified culturally first, then comes the decentralization.

One ledger is not diversified, no matter how you do it. We know that there is at least 40 CPUs in a cell phone. We don’t care if there are 40 CPUs inside the phone. We see a cell phone, that’s it. Same thing, we don’t care if there are 6,000 nodes behind one ledger. It’s just a more credible ledger. With so many nodes on the Internet and no mutual trust, we had to believe in a blockchain ledger. Therefore, blockchain can make the Internet decentralized, and the blockchain itself is not decentralized. We do not trust each other, but we trust a robot, and we ask the robot anything, such as ID. No matter how quickly a ledger is performing, it is impossible to solve human problems. One million TPS or 10 million times are just bragging. The peak is 300,000 TPS for both Alibaba’s website during double 11 (Nov. 11 each year is called double 11 shopping day) and train ticket purchasing on 12306.com. That (300,000 TPS) is the peak of Alibaba, which is a centralized server. The decentralized blockchain technology will never reach this target. With so many people doing the ledgering, the 6,000 nodes ledgering is certainly not as fast as one person who does it. A person’s node versus one of the 6000 nodes, how can you compare that with Alibaba’s Cloud?

Now let’s talk about the Internet node. We do not trust the third-party ID, but we trust the blockchain issued ID. Each of us can use the blockchain wallet address as ID, then cache it. For example, five people don’t trust each other’s database, but each has its own database. All IDs are cached here. When I read the ID, it is my database. There is no direct use of the blockchain ledger. Since all the Bitcoin ledgers add up to 150 GB, I can find all the wallets and cache them. Then I am solving the trust problem, not the speed issue.

The blockchain itself is to make the Internet decentralized and make the Internet more reliable. This trend has gradually become prominent. For example, the project IPFS has begun to go in this direction. Elastos is going in this direction too, and so are some other projects. Everyone should pay more attention to this direction. Because the Internet is a big trend, and we must actually look at the applications. The so-called DApp should be at least an App that can be used on mobile phones.

There are four types of DApps. The first type of DApp I just talked about is to remove media player mediations because it pirates me twice, not telling me the truth. The biggest evil is the software’s evil, then we eliminate the media player. In fact, the greater workload is not in the blockchain, but in the software’s virtual machine. The second biggest evil is the Web server. For example, some Web sites tamper with data when doing the ranking, and manipulate public opinions. So when they are doing evil, that is, the website is doing evil. The third evil is that operators are doing evil, such as smart homes. Video Surveillance. Has anyone on the Internet broadcast live video from other people’s homes? This is how operators do evil. Smart homes use P2P networks. There is an operator behind each camera and smart speaker. The evil operator has put your video on the air. We think about smart speakers. How terrible this matter is, someone is listening to you at your home at any time.

How do we use blockchain technology to allow P2P operators to run automatically? The blockchain is an autorun ledger. Using this automated ledger principle, we can let the Internet of Things operators run automatically. Without an operator, it is actually a robot that acts as an operator. We call it decentralized Carrier, which means no one runs the centralized website. Elastos has had a completely open network like that. We just did a hackathon on May 12. Someone took it and made a decentralized IM. Using this network platform, you can also make decentralized cloud disk and decentralized camera to ensure that the camera is encrypted, that no one else can broadcast your video. This is to remove the operator intermediary.

The fourth is that we build a consensus-based website. The current website is relying on one company’s final say. The database of this site may be tampered by others. For example, supply chain finance, what if one partner’s data is fraudulent? If the Wen Service of the website is controlled by a consensus, that is, several related personnel are running together and all have confirmed that such a website will have more credibility.

Therefore, the four types of applications we mentioned above include media player App, web service, operator, and consensus website. Today we do DApp on blockchain, and most of them only talk about consensus type of DApp. And we all know that we should run on the side chain, not on the public chain. A public chain cannot support everyone on the Internet no matter how fast it is. It is okay to support five people. A computer can no longer solve human problems. For example, Galaxy machine is large and powerful, but it won’t fit at my home, or I can’t afford to pay my home’s electricity. Each computer has it’s own various uses. A blockchain is a computer, and a dedicated computer.

Question from a guest: What do you think is the most important thing for the blockchain to solve?

Rong: Credibility. Credibility cannot be exchanged from efficiency. Some people say that Bitmain is consuming so much power. But if this power is used to bring credibility to the Internet, then I think it is worth it. So we chose to jointly mine with Bitmain. Is there a better algorithm in the future? We will also listen to everyone’s opinions, but I think that the current technology is enough. Enough technology is the best technology. I just said that the decentralized carrier that we made on May 12 has been open sourced. We have already released a prototype program. Our Elastos public chain code is also open sourced. Then our DID will be released at the end of June, allowing us to have an ID on the Internet. Based on DID and Carrier, we have prototyped a virtual machine. We are making the next generation of SmartWeb browsers. Imagine that this browser has Chrome’s ability to subtract the application’s direct access to the Internet, plus our wallet and network, plus our own Runtime, and then the DApp passes the digital assets just mentioned on the premise that it cannot directly access the Internet. We will hold an annual meeting of Elastos in August. Because our project started in August last year, there will be a performance report in August of this year. We will invite partners to participate and we hope to surprise everyone.