This article was compiled and edited from an exclusive interview between Golden Finance and IoT Chain. Author: Hong He. Chief Editor: Yao Hongze.
IoT Chain co-founder Peter (Lyu) Xinhao previously established the blockchain team at Xiaomi where he used blockchain technology to solve data isolation issues in digital marketing. He discovered that data provides significant value, and blockchain presents an opportunity to return value back to its users.
A lack of standards in the industry has led to speculative and unsubstantiated claims among popular blockchain projects. In the near future, it will become clear which projects are truly pragmatic. When asked about the merits of their project, IoT Chain told Golden Finance, “in 2017, we saw a lot of opportunity and value in the industry. Protecting user data is our primary objective. After the main chain goes live, we will cooperate with short term rental, bicycle sharing, and other companies to help migrate them to our network. Smart homes and related devices are also a target for us.”
IoT Chain is a public chain focused on the Internet of Things. Using a hybrid blockchain / DAG structure, they plan to bring a new level of security and capacity to the IoT industry. That said, there are still issues with blockchain technology today. According to ITC co-founder Xinhao, the consensus, communication mechanisms, smart contracts, and nodes for projects such as EOS and Ethereum are all built from the ground up. However, these are not perfect solutions from a technology and application standpoint. “We think that Bitcoin is doing a good job with respect to the PoW consensus layer, and EOS is doing an even better job using DPoS. However, we believe the project that truly excels will not use either mechanism. Many blockchain startups claim that they can achieve a capacity of a million or more transactions per second. This bragging phenomenon is a direct result of a lack of standards in the industry. In July, we plan on building modules that introduce standardized performance testing for distributed systems. This will help set the record straight as to the practical performance of such networks. In October, we are launching our public test network where developers can work together to resolve issues, improve performance, and verify results. In November, we will release additional development tools, wallet apps, and other surprises for users.”
Today, the technical roadmap for the project is clear, and the technical team is working hard to deliver on each milestone. ITC believes that although it is challenging to develop standardized, abstract modules, the team will be able to deliver on their objective. They also aim to promote efficient and iterative development of external communities and technologies through their own progress. “The first-generation public chain represented by Bitcoin and the second-generation public chain represented by Ethereum both have their own technical bottlenecks. Previously, there were few technical experts in the blockchain industry, and even fewer companies optimistic about the technology. Today, technical experts from giants such as BAT (Baidu, Alibaba, and Tencent) are flocking to the industry, and the abstraction and standardization of blockchain architecture is becoming very interesting.”
Blockchain together with IoT may promote the development of a new IoT standard.
The ITC team is optimistic that blockchain will bring value to the Internet of Things. In their view, blockchain is not just a better communication mechanism; it adds new value protocols to the Internet of Things industry. In the context of IoT, any situation where value is transferred can be secured using blockchain technology. “Not all activity needs to be recorded on the main chain, only those transactions representing a transfer of value. This is a much more efficient approach to using blockchain with IoT. Although blockchain is still in its infancy, the Internet of Things is an obvious use case for this technology as it can be used to solve data security problems and promote the application of IoT in modern society. We are still in the early stages of IoT adoption, but the introduction of blockchain technology may pave the way to new IoT standards.”
The era of the IoT is here and it is no longer difficult to imagine a world where all things are connected. Blockchain can help protect user data, while also creating value from it. The data can be used transparently, and when users discover that they can profit from the data generated by their connected devices, they will be more eager to use them. The ITC team discussed the iterative development of blockchain technology, particularly recognizing Ethereum. “Ethereum is a very successful project with a strong development team. In their consensus model, Vitalik Buterin hopes to increase decentralization factors, making this one of Ethereum’s primary goals. However, Ethereum may not be able to satisfy all use scenarios for blockchain technology. Similarly, EOS has a somewhat centralized consensus model and may not meet other application requirements. Only when the team can deconstruct and abstract the blockchain architecture can we build a blockchain that meets the needs for the Internet of Things.”
Industries have varying requirements for technology and it is more effective to develop public chains when use scenarios are accurately defined. Without clear direction, technical development can become confused. The ITC team believes that “in the near future, there will be many public chains. From a development perspective, many projects are not focused on the public chain as a whole, but instead are concerned with particular aspects such as smart contracts or consensus. Although some people believe Ethereum is falling behind, it is still the most recognized and accepted smart contract platform in its field. People can also use specialized virtual machines based on the Ethereum blockchain. The architectural abstraction of the blockchain is the new focus for development, and competition will become more professional and intense in the near future.”
Decentralization is only a means to achieve a goal of trust. After products are released, users will not care whether blockchain technology backs the products. They will only care about the value it brings to them. The deconstruction and distribution of value is the core of the blockchain, and ITC aims to distribute value back the users. Blockchain is not the solution to all technical problems, and it is important for startups in this field to analyze their target industries.
Large companies often place emphasis on technical architecture, but they are not set up to become intimately involved. Both traditional VCs and large companies are taking interest in blockchain technology, and public investors are paying attention to how it is shaking up the financial landscape. The ITC team believes that during this wave of interest, transitions will occur where the top talent in industries such as AI will start working on blockchain projects. Though large companies are putting some pressure on smaller blockchain startups, there is no real cause for concern. “Large companies have their own priorities. Technology giants such as Microsoft, Google, Apple, IBM, and Tencent are working on their own flavors of blockchain technology. The greatest value in blockchain lies in the removal of other unnecessary third parties. From a competitive perspective, big companies are only now making technical arrangements and are not ready for deep involvement. The participation of tech giants will add some pressure, but do not pose a large threat to the smaller projects at this time.”
Shifting focus to investors, many are looking at foreign startups like those coming out of Silicon Valley. However, domestic projects have many accomplishments as well. “The domestic Internet industry has a lot of talent, and these technical resources are well suited for blockchain development.”
At the end of the interview, ITC provided their key word for 2018. “Our key word for 2018 is ‘real’. We are working hard to promote standardization in the industry, and this year we are going to make things real. We are blockchain believers, and as believers we feel that the technology has the power to uproot the existing economic structure.”
