Hyperion Map3 Conference Keynote Speech Part1— Isaac Zhang
I chose the term “new continent” to depict the current stage of the blockchain industry. The continent is big and new, indicating that it’s been open for quite a long time.
In addition to transforming the world, we also need to transform the world view, and learn how to localize a new idea. Therefore, Hyperion has proposed a new paradigm, a new technology and business pattern. We’ll discuss it in the next chapter.
As new ideas emerging, problems will come up and gradually converge with time, just as the sharding design of Ethereum 2.0, which took more than two years to converge from the start of design principles.
Reshaping the world view is a starting point, reshaping the world is destiny, and the most interesting thing.
But this process can only be achieved by joint efforts of the entire community. I hope that with my sharing, everyone can realize the two self-confidence in Hyperion’s core concepts and routes, which is theoretical self-confidence and path self-confidence. Now my sharing begins.
The outline is divided into two parts. I will talk about the main variables and invariants of the new continent in the first part, which indicates a clear direction of the new concept to enable you to work more effectively and to avoid mistakes.
Once everyone understands what is 1+2 in the 1st part, you’ll know what 3+x is in the second chapter.
3 represents Hyperion’s three-tier structure. X refers to the Hyperion ecosystem, like a decentralized Didi. As what Mr. Luo have said, we are building a standard system for blockchain projects.
Changes and Invariants of the New Continent
The largest variable in current era is the blockchain. What is the major difference between blockchain and traditional Internet, and which part of economy it affects? Economy is a sum of the entire transactional behaviors, and transactional cost is the main element of transactions. I’ll talk about how blockchain creates a new growth curve with reduced transaction fees on various layers of the traditional Internet.
Let’s first look at the five levels of costs on y ordinate. These are five types of transactional costs. Search fee is easy to understand; negotiation fee is the cost you paid to get a fairer price. Contract fee is your spending on a lawyer to draw a contract; Supervision cost includes auditing fee, etc.; execution cost requires a third-party institute to force the contract execution. These five costs stand for various stages in transaction cycle.
Technology reduces the 1st two expenses. Mobile devices make it easier and cheaper to search for products via trading agencies such as Amazon and eBay. While the other three costs are deducted by systematic reforms. However, with decentralized technology, cost efficiencies will be improved through technological methods.
Next, let’s look at the major differences between Internet and blockchain.
Blockchain reduces the contract cost to zero with smart contracts, as the data on-chain is open and verifiable, so lawyer cost can be substituted. Contract supervision fee is minimized as well. In addition, as smart contract is fundamental to the entire blockchain as a state machine, which in compulsory, the contract execution fee is also diminished.
In this case, Blockchain technology can address the high cost issue generated from the Internet for the first time. The transactional cost also explains how blockchain generates the new infrastructure with an emerging growth curve.
Let’s analyze China’s new infrastructure development with this perspective. With agile institutional reforms and blockchain industry upgrades, blockchain will become the main chapter of China’s new infrastructure era.
Suppose there are a large number of automobiles running on the street with blockchain map navigation in future, when an accident occurs, how will the blockchain ecosystem ensure legal justice? What evidence is required to determine who’s the responsible party for the accident?
If the decentralized map data hasn’t reached a consensus by the majority, then you need a third-party to supervise and execute the legal contract. However, if it is a decentralized with consensus, everyone will know that the map data has been approved by a majority.
Then the remained problems become much simpler, which is to reduce the cost of the accident. This will be a key perspective running through my speech. We’ll further analyze the importance of blockchain from various aspects, then talk about why we chose map industry.
The first is the institutional perspective. Where the institutional cost is high, it exists the pain points to be solved by blockchain. Let’s further explore its key features.
Cross-subject and cross-system generates high production fees. It’s featured with geographical isolation, subject isolation among different countries; and institutional isolation between corporations and individuals. However, map data breaks the three borders with its long-tail feature.
For example, Hyperion is currently working on a smart contract for everyone regardless of the participants’ different legal systems and regions. Just imagine how high the previous costs could be based on traditional Internet.
The second is a new infrastructure perspective. Internet and blockchain innovate on transactional costs from different layers, which will motivate the traditional industry to take further structural reform and reduce the entire upstream costs.
The third is a combined perspective, which is institutional plus new infrastructure perspective, featured with long term, multi-layers, and thorough reform. If we can develop a map public chain across the world, the new infrastructure will fit into a broad market such as decentralized user and Airbnb as we just said.
As we finish the new infrastructure part, next I’ll talk about who and how we achieve the blockchain ecosystem? Demographic dividend plus organizational structure is a constant growth engine behind the ecosystem. I’ve found out some key misunderstandings about demographic dividends that people often misuse.
If early entrants just aim to earn economic rewards from the ecosystem in a short-term, this is called pirate bonus. Just like you go to the U.S for treasures rather than construct infrastructure. Only those who settle down to build a house, build a road, and benefit the ecosystem will bring demographic dividend to the network.
In return, the system needs to benefit early comers, which is a key criteria for the development of the ecosystem. Where the demographic dividend comes from? I would like to share a data here: There are 2 billion users in the map industry within different fields, such as open-source map.
OpenStreetMap (OSM) project initiated in 2015, with more than six million registered contributors. From the list of contributing countries, we can see North America, South America, Europe, Africa, etc,. OSM community has already entered the second stage of additional demographic dividend resources, and it will reach the next glass ceiling in terms of the contributor growth.
We need a sophisticated framework to settle the demographic dividend in Hyperion’s ecosystem to build blockchain infrastructure, and to reduce transactional costs. Abstractly, we’ve designed the framework in temporal and spatial dimensions. For instance, BTC halving can be regarded as a temporal structure, since it focuses on the scarcity of tokens as time increases.
Burning mechanism is also categorized as a temporal structure with ostensible advantages, as it rewards the braves, pioneers, and explorers. But the limitation is, it emphasizes too much on decentralization, and the structure is one-dimensional. Participants are simply divided into early and later entrants, which is fixed, as a hundred dollar-worth of bitcoin five years ag ois no longer available nowadays.
As each participant is labelled with time of entrance, the additional value brought by the new admissions are mainly obtained by the early players. For instance, as more BTCs are generated by new miners, the pioneers remain as the largest beneficiaries. As a result, the growth of the demographic dividend will gradually decrease.
In the next session, we’ll talk about spatial structure. Stay tuned…
