Erik Zhang’s Chinese interview with Tokenclub on 2nd August 2018
Below is the transcript of Erik’s Chinese interview with Tokenclub on 2nd August 2018 — https://www.youtube.com/watch?v=2MPxzAkNalQ. If there are any inaccuracies in the document, feel free to comment and I am happy to correct where necessary.
(1:30–8:08) — FUD 1: Decentralization
Interviewer:
We understand that you prefer to maintain a low-profile.
Erik:
Yes, you are right, I rarely do these (interviews).
Today, I want to first address the media industry’s feedback, opinions, articles, FUDs etc. concerning NEO. The crypto-media likes to cook-up headlines, ie. NEO is not decentralized, team attrition to Ontology. I have nothing against the media, just encouraging media outlets to not cook-up stories. I’m actually not referring to TokenClub’s media, but the market in general.
Moving on, there are 2 main concerns in the community:
The first concern lurks around the subject that NEO is not decentralized enough. While I agree to a certain extent, I believe there are a few ways of looking at this topic:
1. Technical development
On the topic of how decentralized we are, in terms of NEO’s technical development, we are actually rather decentralized, because we have a very inclusive process. We allow anyone to go onto our Github and propose ideas to improve NEO. With that, our development community will analyze it further and will vote to get the best solution, and more elaboration will follow.
For the accepted ideas, development plans will be prepared. And based on these plans, any developers are welcomed to expand on them into any versions they prefer.
We will then have our core developers look into the codes that are submitted. This is to help fine-tune the codes or eliminate bugs (if any) before we push it into our core architecture.
So, we are actually quite decentralized in terms of technical developments.
2. Consensus nodes
On the topic of how decentralized we are, in terms of consensus nodes, we previously only had 7 consensus nodes that are all managed by NEO Foundations. In fact, we have already started the work of decentralizing (the distribution of) consensus nodes and have recently voted in a new consensus node, which is held by one of our development communities — CoZ.
In the following half of the year, we plan to introduce at least 3 more consensus nodes that will be held by other entities in the NEO ecosystem. Next year, we will implement voting and election features to allow the process of introducing new consensus nodes.
So, these are the key milestones for us to decentralize our consensus nodes.
3. NEO tokens
On the topic of how decentralized we are, in terms of token management, it is given that we have (a max supply of) 100m tokens. 50% of the tokens are already used for our early stage ecosystem development, and the other 50% is held by NEO Foundations, which will be used for future developments, partnerships etc.
There are a lot of discussions regarding the funds. While it is definite that the funds will be spent on NEO’s ecosystem developments, there are 3 main value propositions on how we plan to utilize it.
- NEO Foundations will fund team-building for NEO’s core. They are committed to providing their expertise in many areas, so it is natural that they will need reimbursement.
- NEO Foundations will provide monetary support to its development communities, to be used for team-building, events etc. NEO currently has communities around the globe — ie CoZ, NEL, NeoResearch.
The development of these groups will require a budget, so we will channel to them a portion of the funds as their reimbursement.
In return, they provide expertise in a wide range of areas, ie. core architectural improvements, wallets, scanners, development tools etc. - NEO Foundations will invest in projects within the NEO ecosystem and this initiative will be headed by NEO Global Capital. They will look into solid projects that create value for the NEO ecosystem and provide investments (if they qualify).
Hence, these are NEO Foundation’s plan for distributing the remaining 50%, and when all of it is distributed, then the plan for decentralization of NEO tokens will be considered complete.
(8:08–10:30) — FUD 2: Team attrition to Ontology
Erik:
The second concern is on the subject of team attrition to Ontology. I can confidently say that this is not true and really just baseless hot air.
The main reason for this is because of the misconception of the business relationship between Onchain and NEO — many assume that NEO is founded and managed by Onchain, which really isn’t so.
With Uncle Da and I being the founders of both NEO and Onchain, the plot thickens. Despite so, these are independent organizations with respective management teams and there is no team member turnover from NEO to Onchain or vice versa.
Here, I want to briefly emphasize that NEO is an open-source project, developed mostly by the community, and is not intended to be managed like a corporate. Ontology, on the other hand, is founded by team members from Onchain and management style is more like a corporate. Therefore, both projects are very different and it is invalid to merge them into a discussion (and look at them from these angles).
I hope that this will put the rumors to rest.
Even though Uncle Da and I are founders and shareholders of Onchain, neither of us are involved in the operations of Ontology. For the record, both of us are team members of NEO, and not Ontology.
(10:30–12:08) — The relationship between NEO & ONT
Erik:
Lastly, I want to clarify the relationship between NEO and Ontology. They are independent projects and there is a partnership to collaborate.
There are also claims that Ontology is, in fact, a competitor to NEO. I want to point out that all blockchain projects out there are competitors to each other and the competition between NEO and Ontology is almost non-existent because they head in different directions.
NEO’s aim is to build an open network, coupled with the capabilities of Digital Identity, Digital Assets, and Smart Contracts, to realize a vision for a Smart Economy; Ontology is inclined towards the direction of Identity and Trust Verification Framework.
Therefore, they complement each other and is very ideal to partner up and collaborate, which also helps reduce competition. Having the same founders on both sides also strengthens this partnership.
The partnership covers joint research and development in many core areas, such as NeoContract and NeoVM. With an aligned effort, we hope to deliver more ambitious and better work, ie. cross-chain compatibilities. I look forward to achieving these.
(12:08–12:32) — Reddit AMA
Erik:
To address all the concerns, we will be hosting an AMA on Reddit, from today until tomorrow, so I welcome everyone to check it out. I will also (take it as an opportunity) to answer the feedbacks posted by the media about NEO.
(12:32–14:53 ) — Recap Antshares and NEO 2.0, Pt.1
Erik:
Next, I want to share with everyone NEO’s upcoming plans. In short, it is NEO 3.0. I guess some of you have already heard about it and on this matter, we have already started some preliminary planning and designs.
Before we continue, I want everyone to understand what is NEO 3.0. To answer this, we have to look back to the Antshares-days (and history). So, what was Antshares? The first definition of it is that Antshares was a digital assets blockchain platform.
On Antshares, we implemented many new features, such as digital asset registration, digital certificates etc., essentially allowing the digitalization of assets.
Along the way, we realized that having only digital assets is actually under-utilizing the full potential of blockchain technology. The reason is that it solves only the mapping of real-world assets into digital assets and having them on a blockchain. It lacked a pragmatic approach to allow for advanced interactions for the digital assets.
We then decided to broaden the scope of Antshares by introducing Smart Contracts features. This not only allowed us to digitalize assets, it also opened doors for us to input programmable commands for advance interactions (between digital assets), pivoting our vision to build a Smart Economy.
A rebranding event followed and we renamed from Antshares to NEO. Hence, if Antshares was 1.0, then the rebrand into NEO to realize a Smart Economy would be 2.0.
(14:53–16:31) — Recap Antshares and NEO 2.0, Pt.2
Erik:
But, what is a Smart Economy?
This is when we map real-world assets into the digital world. We will then use Smart Contracts to program specific commands, making the interactions between digital assets and NEO’s blockchain much more intelligent and decentralized.
We also know about Bitcoin and its blockchain technology. Bitcoin did some really amazing stuff, which was something that no one was able to pull off — when we want to transact peer-to-peer payments online, it was never possible before this.
And if I really wanted to transact in a peer-to-peer fashion, there are only 2 ways.
The first way would be through AliPay, or WeChat Packets, or an online transfer, which is essentially through a third-party intermediary, then only is it possible. However, what if I do not want to use an intermediary? Then the only way is for me to meet the person offline and transact in cash for a peer-to-peer payment.
But, what if I do not want to use an intermediary nor meet offline to transact in cash, and still prefer to transact peer-to-peer online, what options do I have? Before Bitcoin, there was no way to do so. With the invention of Bitcoin in 2009, we were able to use a peer-to-peer decentralized blockchain system to make payments. This was something no one was able to achieve. So, in this sense, Bitcoin and blockchain are marvelous technologies.
(16:31–17.39) — Lowering transaction costs with blockchain
Erik:
The invention of Bitcoin and blockchain technology has shown us a way to eliminate the need for intermediaries in many areas, especially payment.
There is also a substantial cost attached to upholding and maintaining these (conventional) intermediaries. For example, the reason Alipay is capable of transacting such high-volumes is that of their costly underlying technology and infrastructure, which is funded from the role they play as an intermediary and collecting transaction fees from their users.
This means that our modern-day economic activities on the Internet are plagued with high transaction costs.
Consequently, if we can use blockchain technology to replace intermediaries, then we will be able to significantly lower the transaction costs in our economic activities.
I personally foresee that we will, in the future, transact mostly on blockchains.
Hence, NEO’s vision of a Smart Economy is meant to allow people to more effectively use blockchain technology to transact and trust each other. This was the ambition of NEO 2.0.
(17:39–19:37 ) — NEO 3.0 intro
Erik:
I now want to share about NEO 3.0. Some may ask, “don’t we already have a very ambitious goal for NEO 2.0, so why do we still need 3.0?”
The reason is that the current NEO is unable to cater to large-scale enterprise solutions. As a matter of fact, it isn’t NEO being inept, but all other blockchain projects out there are also on the same boat. At this point in time, blockchain technology is still incapable of catering for large-scale enterprise applications, such as Alipay, WeChat, TaoBao etc.
In order to qualify for large-scale enterprise applications, there are 3 fundamental requirements that a blockchain project must meet.
1. Stability and uptime
If the blockchain has random (unpredictable) downtimes, then it’s a no-go.
2. TPS
This means the maximum number of transactions it can handle per second. If the blockchain can only handle tens-of-hundreds of transactions per second, then it’s also another no-go. If we look at Alipay, they have the potential to handle hundreds-of-thousands of transactions in the future. This is still impossible for current-day blockchains.
3. Data storage
Can blockchain store all the data we need? Let’s take Weibo as an example — we share so much stuff on it every day, and if we upload all of that onto a blockchain, then that blockchain will just explode.
In relation to these requirements, none of the current blockchain projects meets them, and thus, are unable to support large-scale enterprise applications.
Coming back again to the question of why do we need NEO 3.0, the answer is that we want to build a better core architecture, so that NEO can be used in large-scale enterprise applications, allowing these applications to perform seamlessly on the blockchain, and ultimately delivering our vision of a Smart Economy.
(19:37–21:02 ) — NEO 3.0 proposals
Erik:
Besides the challenges mentioned above, NEO 3.0 will feature improvements in key areas (that will include, but not limited to):
- Voting mechanism
- Economic model
- Pricing mechanism — to lower costs on Smart Contracts deployments and usage
- Core architecture — to eliminate bugs, better interoperability, increase efficiency and congruence etc.
These will be included in the planning for NEO 3.0 and these are just my individual proposals.
As mentioned earlier, NEO is an open-source community project. So, any proposals will still have to be discussed by the community. They are welcomed to propose more meaningful ideas with better features, and we will be happy to include them in the plan for NEO 3.0.
Eventually, we will see a consensus within our community, which will translate into our strategy and direction for implementing NEO 3.0.
(21:02–21:46 ) — NEO 3.0 discussions on Github
Erik:
Let me also share with everyone the latest news and development on this topic.
On our Github, there are ongoing discussions with many brilliant ideas, followed by an in-depth analysis by our development community.
Our Github portal is open for all, so I welcome everyone to follow it and participate in the discussions. You can voice out your thoughts for us consider it and be part of the contributing community.
(21:46–22:30) — NEO 3.0 timeline
Erik:
Another topic that is most often asked about is the implementation timeline.
NEO 3.0 is a process and it may require 1 to 2 years to develop. However, I want to address the concerns of the community that we are adopting an iterative development approach, where we will develop components that can be implemented on 2.0’s core and be brought forward into 3.0. In other words, current developments are made sure to be compatible with both 2.0 and 3.0.
When development on 2.0 is complete, we can consider that to be the beginning of 3.0.
I hope to hear more ideas from the community (on improving NEO) and see everyone participate in our NEO 3.0 development journey.
(22:30–23:00) — Wrapping up the first half and opening for Q&A from TokenClub
Erik:
That pretty much sums up all that I want to say to address all the concerns regarding NEO and share with our community about NEO’s current and future plans for 3.0. So, now I will open the floor for the host or anyone to ask questions if there is any.
