China Crypto News’ main purpose is to inform the world about the latest trends and developments of the blockchain industry in China. And what is better than letting the experts do the talking. Therefore, we reached out to Qtum’s CEO Patrick Dai (28) to ask him about the latest status of their project, as well as his opinion about the blokchain industry in China in general. Qtum, although registered in Singapore, is considered China’s second largest cryptocurrency with a market cap of nearly USD900 million at the moment of writing. Forbes Magazine named Patrick Dai on the Chinese edition of the “30-under-30” list with Chinese young innovators, entrepreneurs and leaders.
Patrick Dai describes himself as young yet ‘old’ in the blockchain industry. His interest for peer-to-peer (P2P) networks started during his study at the Academy of Science where he did his Phd in Communication and Information Systems, when his professor told he should have a look at bitcoin. It became clear to Dai that this revolutionary technology would soon change the world. He started to mine bitcoin and other altcoins and was even one of the biggest miners in China during 2012 and 2013.
Later, Dai started focusing on the technological side and exploring more opportunities to utilize blockchain. In 2015, he got the idea to combine the best of both worlds of bitcoin and Ehtereum, which were the two leading projects at that time. After more research and initial preparations, Qtum was established in 2016. The project grew fast and currently employs 35 full-time people (of which 25 are developers) from all over the world. At this stage Qtum has office locations in Shanghai and Minsk, another office will be opened in Denver soon and next year they plan to open an office in San Francisco.
Q: Could you tell us a bit more about the core values, company culture and way of working at Qtum? How would you describe your leadership style?
Patrick Dai: The most important thing for everyone working at Qtum is the ambition to change today’s world by building a blockchain platform that is accessible for thousands of people to develop and implement useful blockchain applications, and thus more than only cryptocurrencies. We aim to achieve this by hiring the best developers. Currently, we have developers that have a lot of experience with bitcoin and Ethereum. We also have developers that worked at companies like Alibaba, Tencent, Baidu and NASA.I will be the gatekeeper to keep this strong focus. I worked at Alibaba before, which has more than 30.000 employees. I know how difficult it can be to implement new ideas in a big company like that.
Our way of working and my leadership style are of course connected with each other. I am not someone that is bossing around telling people what to do and when to finish. First of all, I really don’t have time for that. Secondly, it won’t work with our team of developers. They are all very independent, have their own ideas of how to do things, and honestly speaking, they often come up with better ideas than I would have myself. Thirdly, given the fact that our team is spread across the world, basically all work and communication happens online through platforms as Github and Slack. Within Qtum we are all very open-minded, we appreciate feedback and encourage people to come up with new ideas. The only basic rule I set, is clear communication. I expect everyone to keep each other updated about what they are working on, the progress they made and the issues they are facing. Another thing I like to do is giving my staff ownership of their project. They will feel responsible for the tasks they are working on and can really measure their own achievements. In this way, our staff gets self-motivated to achieve our common goal. These values, in combination with our incentive program ensures that the staff at Qtum is very necessary. Our incentive program divides Qtum coins among the best performing developers every 6 to 12 months.
“By launching Qloha we aim to utilize Wechat’s user base of more than 900 million users and make it easy for people to send Qtum coins to each other”
– Patrick Dai, CEO Qtum
Q: In a recent interview you mentioned quite some interesting upcoming milestones. Can you tell us more about this? In addition, what can we expect in Q4 of 2017 and Q1 of 2018 on the business development side?
Patrick Dai: As you probably know, Qtum launched its main net just over a month ago and things are going really well. At the same time, we are testing many new features on the test net. First of all, the alpha version of the Lightning Network has been tested successfully on our test net, and the next step is to launch the beta version. I expect a completely working version on the test net by the end of 2017 and to launch the Lightning Network on our main net in Q1 of 2018. The Lightning Network addresses one of the most important issues for blockchain to go main stream, as it will significantly increase the speed of our platform.
Furthermore, we are currently developing the Qtum X86 Virtual Machine. Our Virtual Machine will be a game changer, as it will support all main stream programming languages, including C#, C++, Rust and Haskell among others. The main purpose of doing this, is to make our platform accessible to as many developers as possible. In our view, this is a crucial step to increase the security and quality of smart contracts being developed on our blockchain. The Ethereum Virtual Machine, for example, is currently based on Solidity. This programming language is less mainstream and there are less experienced developers. This increases the risk of mistakes and it compromises the security of the smart contracts.
Our Virtual Machine in combination with the smart contract market place we recently launched, ensures that everyone can access a complete database of smart contracts. There is already a prototype of our Qtum Wallet available in the App Store. It includes a smart contract function where you can find an overview with many smart contract templates, for example to release your own ERC20 token or to start your own crowdsale through our mobile wallet. It is important to notice that currently the Qtum blockchain supports the Ethereum Virtual Machine and it will stay like that after implementing the X86 Virtual Machine. Our blockchain will also be compatible with any new Virtual Machine developed in the future.
The launch of our mobile wallet is strongly related with our mobile first strategy. Obviously, me being Chinese and having a strong developer team in China influenced our view on this. Contrary to many western countries, China already has a strong developed mobile payment infrastructure, where Wechat Pay and Alipay dominate the market. No matter where you are or what you want to buy, you can use your phone to pay, from taxis to local street food vendors. You actually don’t need cash anymore in China. The goal of Qtum wallet is to launch a similar concept on our blockchain and make it mainstream across the world. And with mainstream I mean that it has at least 10 million users. This moment will still be quite far away, as you realize that today bitcoin has only about 10 million users and Ehtereum maybe around 3 million.
Secondly, as mentioned in our roadmap as well, we will launch Qloha in Q4 of 2017. We recently renamed it to Qchat, but both names can be used. Qchat is a WeChat mini-program wallet service, and will be one of the first use cases of Qtum as a currency. By launching this Dapp, we aim to utilize Wechat’s user base of more than 900 million users and make it easy for people to start sending Qtum coins to each other within the Wechat interface, including ‘red envelopes’, which are extremely popular during Chinese New Year and other holidays. It is important to notice that there is no official partnership or cooperation between Qtum and Wechat/Tencent for developing this mini-program.
One of the founder’s from SOMA Messenger is creating a similar kind of dapp called BeeChat. BeeChat is the world’s fastest HD video, voice and messaging app available today. BeeChat is built using proprietary distributed technology with a network of servers around the world, this highly secure and encrypted service offers unlimited free, high quality voice and video calls with no buffering. It is also the only messaging app to allow group chats of up to 5000 people.
Furthermore, we currently have more than 20 developers building applications on our blockchain across a variety of industries, including Bitclave (advertising), Bodhi (prediction market), SpaceChain (aerospace) and Energo (energy). The first ICO on the Qtum blockchain was successfully finished just a few days ago by Ink, which is developing a platform for IP and copyright registrations and transactions. They raised roughly 800.000 Qtum coins during their pre-sale, equaling about USD8 million.
Another project being built on Qtum is Qbao, which is building a Dapp ecosystem and wallet service. I am also involved as investor in this project, as it is a good way to support the development of our own ecosystem. I am not involved as advisor or whatsoever, as our internal policies at Qtum do not allow this.
Besides the technical side, we also have many things going on in the field of marketing and building our channels to support developers. We are trying to get listed on more exchanges. We just got listed OKex, Bithumb and Quoinex. We are also talking with Huobi Pro, but didn’t get their final decision yet.
For developers that have questions or remarks regarding developing on our blockchain, we currently refer to our private slack channel. If people are interested and want to be added to this channel, they can send an email to email@example.com.
Soon we also start with developer meet-ups in China, which is kind of like going to university and learn how to develop on the Qtum blockchain. For these meet-ups we will work closely together with tech-related open-source communities. Besides helping developers learning more about Qtum, it also offers a good opportunity to us to find more talented developers. Besides China, we will also become more active in other countries. On the 10th of November we have a meet-up in Japan. Next year, we will host a big developer conference in San Francisco and we will hold developer meet-ups in many other countries, including the UK, France, Germany and Israel.
Q: Recently the Qtum Enterprise Alliance was announced. Can you tell us more about what it is, its goals, members, etc.?
Patrick Dai: This is also something that our business development team has been working on. This initiative is not only for Qtum, but we try to get together the whole blockchain industry involved. For us the most important is to discuss and exchange ideas about what is the best way to apply blockchain. There is this hype going on about blockchain, and many people are talking about how it is going to change our lives. But from my perspective, at this stage it is all too vague. What we need is actual use cases, and not just blockchain as a concept.
Besides, many people have a narrow focus on the banking and finance industry. Yet, these areas are historically very conservative and highly regulated. As a result, things are moving really slow and real progress is limited. Therefore, our first Entreprise Alliance focuses on the Internet of Things (IoT). This area is much more flexible and less regulated. Hence, we can move much faster.
Personally, I see a lot of potential for Qtum in relation to IoT, as we apply a proof of stake method. This is very energy and environmental friendly and makes it very suitable for many IoT sensors and devices. We are currently talking to dozens of companies in the IoT industry from different countries to bring them together and discuss how blockchain can contribute to further developing the IoT industry. You can expect more announcements about this early next year.
Q: Who do you consider to be your main competitor? And what makes Qtum different / better?
Patrick Dai: I don’t like to talk about who’s our competitor or who’s project is better. The blockchain industry is very young and at this stage I think we should all try to help each other and exchange ideas to make blockchain mainstream. How to do this, of course, is up for debate and you can notice the differences in how projects develop their blockchain.
We made some very fundamental choices in the way we build Qtum. First of all, we apply Proof of Stake (POS) as our validation method, as this is more suitable for a platform and more environmental friendly than Proof of Work (POW). Eventually both are just ways to validate transactions and one should look at the purpose of their project what is most suitable. bitcoin, for example, does not aim to be a platform, it is designed to be a currency. Therefore, the most important thing it should offer is security. Personally, in the long-term I believe more in POS than POW, mainly because POW wastes so many resources. People need to buy mining equipment and use so much electricity, in a certain way it is just ridiculous.
Qtum’s goal is to be both a currency and a platform. Therefore, the Qtum coin serves two main purposes. Firstly, it is a decentralized currency, similar to bitcoin. Secondly, it serves as gas fees to fuel all transactions on the blockchain.
I understand people are always comparing projects. From that perspective, Qtum is a hybrid blockchain project that takes the best of the bitcoin protocol and the best of Ethereum. It doesn’t make sense to compare Qtum to bitcoin, as the latter is a currency and we are a platform. As a currency bitcoin proved itself and is doing very well. Today there is a lot of misunderstanding between what is a currency and what is a platform. Requirements for becoming a currency or platform are very different. The first one is decentralization, and secondly how to measure decentralization. This depends on the number of full nodes. The initial requirement is not how many and how fast you can process transactions, it should be focused on security and decentralization. People should be confident to see it as a storage of value. In my view, bitcoin is succeeding in this, as it is slowly replacing the gold market. People should focus less on “making bitcoin faster”. Compared to Ethereum, I think Qtum has the advantage of offering compatibility of all mainstream coding languages, making it much more flexible than Ethereum, which is based on Solidity. In addition, all the layers of the Ethereum network are deeply connected with each other, which makes that you cannot distinguish them anymore. Qtum is designed really well, whereas the first layer is the currency layer, which is mainly based on the Bitcoin protocol. We then have an Account Abstraction Layer (AAL) that allows the blockchain to communicate with the final layer, the Virtual Machine and smart contract layer. Then there are projects such as Ripple, which apply very centralized algorithms. The speed of the network will be faster, but there is little chance to become a full node.
“ Qtum’s price can go up to USD100, but this doesn’t mean anything to me if we cannot achieve that blockchain is being used in other cases than as a currency or to fuel ICOs”
– Patrick Dai, CEO Qtum
Q: What do you think is the biggest challenges for Qtum to overcome? And how do you plan to address these challenges?
Patrick Dai: In my opinion the biggest challenge is for the blockchain industry to proof itself and become mainstream with actual use cases. This does not only apply to Qtum, but to all projects. These days there is just too much speculation and many people are looking for quick and short-term gains. It is important that people in the blockchain industry keep explaining the concept, so we keep educating the market to get a better understanding of this technology. Especially these days’ people jump in blind and invest a lot of money without any understanding of what they are investing in. There are also people that have been active in this industry for many years that still do not completely understand it.
Qtum’s price can go up to USD100, but this doesn’t mean anything to me if we cannot achieve that blockchain is being used in other cases than as a currency or to fuel ICOs. As mentioned before, we have a mobile first strategy, because we feel that there is the biggest opportunity to develop many use cases. Next to that, our Lightning Network and X86 Virtual Machine addresses to major challenges for widespread blockchain adoption: scalability and flexibility. The first one ensures that many applications can run on our blockchain simultaneously, the latter makes it possible to write smart contracts in all mainstream programming languages. Other very important requirements are security and privacy. If party A transfers money to Party B, it needs to be sure no other parties can see the transaction details.
Q: As a China blockchain expert, can you tell us your opinion about the current status of China’s blockchain industry?
Patrick Dai: The Chinese government acknowledges the importance of blockchain and actively supports companies to research and develop blockchain applications. They also mention this in their 5-year plan. The government want companies to focus on applying blockchain in many industries such as supply chain, IoT, health care and public services.
What the government doesn’t like is trading cryptocurrencies and ICOs. As we all know, at the beginning of September the Chinese government banned ICOs and forced all exchange platforms to cease trading the RMB against cryptocurrencies. The main reasons to do this are that there were many scams among the ICOs and the government thinks that people are exposed to high financial risks. So much money was flowing into this market, the government couldn’t control it anymore. OTC trading has not been affected and is still legal. I have been in touch with the Chinese regulators since 2013, including the central bank and the China Securities Regulatory Commission. From the signals we get from the regulators lately, I understand that it will be very hard for them reopen centralized exchange platforms and it might even take 1 or 2 years.
From a more general perspective, I think blockchain development in China is still in its infantile. But this is not any different from other countries. At this stage, I dare to say that Qtum is the biggest influencer in the Chinese blockchain industry and I am often invited to give speeches at all kinds of blockchain related events. This is also reflected by our active and fast growing community. Currently, our community counts about 500.000 people. Next to that we get great support from Wanxiang Group, one of our biggest coin holders and long-term supporters of the Qtum project.
Want to read more? Check out our interview with Loopring’s CMO Jay Zhou on decentralized exchanges, Loopring’s project, international expansion and more.
 The Lightning Network offers a solution to the blockchain scalability issue and allows for millions or even billions of transactions per second and extremely low transaction fees
 WeChat is a Chinese social media mobile application software developed by Tencent. It was first released in 2011 and by 2017 it was one of the largest standalone messaging apps by monthly active users, with over 963 million monthly active users