Interviewing Qtum CEO Patrick Dai in November 2017, we thought it was time to get in touch with the famous project again. This time, we had the pleasure to talk to CN CTO Wenbin Zhong about technical details, developments, and achievements including their x86VM prototype, the QtumX enterprise version test net, Qtum and security tokens and more.
Q: What have been the major technological innovations of Qtum this year?
„We have achieved many technological innovations in the past year. The two most important milestones are the Qtum x86 Virtual Machine Prototype and the Qtum enterprise version Testnet, QtumX. The Qtum x86 Virtual Machine will not only lower the barriers of smart contract development but also offer various standard libraries and working tools. Compared to the Ethereum Virtual Machine, which only supports the coding language Solidity, the Qtum x86 Virtual Machine supports multiple coding languages. Additionally, it is not limited to the Qtum blockchain, in other words, it is applicable to other blockchains as well. Our enterprise version QtumX is a consortium chain based on PoA (Proof of Authority). QtumX is very user-friendly for enterprise users and allows developers to leverage smart contracts in daily enterprise management, transactions, and other operational activities. The x86 VM and the QtumX are also the main priority for next year and we will integrate the x86 VM to the main net and release the QtumX. Besides these two, we have adopted many other tools to the Qtum ecosystem such as the Qtum Lightning Network, the Qtum Payment Channel, Qtum Plasma, Qtum IPFS and so on. They are all open source and accessible via GitHub right now.“
Q: What have been the main challenges the Qtum team has been facing regarding your technological innovations?
„Here, I see two major aspects, for the technology itself, for example, the x86 VM, there are many tricky issues to be resolved, like how to adopt more programming languages in an easier way or how to enable most commonly used tools like GDB, a debug tool. However, all these challenges are technical and I believe that our team is experienced enough to resolve them, it is just a matter of time. The even bigger challenge I see is in regards to the whole blockchain industry. The lack of real use cases has been affecting the market more and more. It is very difficult for the blockchain technology to find proper coherence in many fields. From our side, the technology is almost ready. The blockchain works great within its ecosystem but lacks the ability to communicate with the off-chain world. Dapps are not different here. They exist within this self-consistent system but the vast majority lack the ability for „cross-world“ communication and therefore application. At Qtum we focus on making that step easier by providing developers with tools and infrastructure.“
Q: What do you think of the Trilemma of blockchain? Has it anything to do with the lack of real use cases? Is there any approach to it?
„I think the Trilemma is one of the reasons why we haven’t seen considerable real use cases yet, yes. There is no way to have all three at once – security, scalability, and decentralization. Hence, it is about to find a way that parties agree with. Qtum put more emphasis to decentralization which we think is the most important characteristic of the blockchain, and then consider how to improve the efficiency on top of that. Because efficiency and fairness in distributed networks are at opposite ends of the equation. GTPS stands for Global Transaction Per Second in a distributed network like bitcoin, GTPS=Amount of Peer Node * TPS, GTPS indicators reflect two characteristics of the network:
- The degree of network decentralization
- The processing speed of single nodes.
In the case of different network topologies, TPS is quite limited to determine the strengths and weaknesses of a blockchain network. For example, the TPS of bitcoin is only 7, however, it has more than 10,000 fullnodes in the network, while EOS has more than 1000 tps, the fullnodes is only 21. It is hard to say which one is better if we consider efficiency and fairness as being equally important. Qtum’s top TPS is around 100, and we have more than 5,000 fullnodes all around the world, so the GTPS of Qtum is higher than most of existing public chains. We would like to keep the balance between fairness and efficiency.“
Q: Do you think that decentralization is the first thing we should consider sacrificing? As for a lot of people, decentralization still seems against their current beliefs, holding them back from investing into the industry. I imagine that there are a lot of people who would like to have someone to go to in case of any problem or questions they cannot solve themselves.
„Yes, as I just stated, Qtum puts a lot of effort into decentralization. It is the end goal. But we also need to find a middle way approach between decentralization and centralization to see faster and wider implementation. Our QtumX enterprise version is one of our answers to this problem. It offers the solution for enterprises to enter both worlds. I also see that many people might not trust decentralized systems, even though it can be more trustworthy than having human interference. Therefore, I agree with what you said. But this belief will change, especially with the generations to come.“
Q: Coming to more non-technical questions, we know that Qtum and especially the Qtum Foundation has invested into a number of high-quality projects. What are your core investment considerations?
„Considering the market, our values and the projects we funded across Europe and China, we are heavily focusing on the technology aspect of the blockchain. We are continuously looking for ways to push the technology forward as much as we possibly can. Moreover, if we find ways to help the technology evolve, we are very interested to invest.“
Q: What overseas and Chinese market strategy is Qtum following at the moment? What cooperations has Qtum established and where?
„We are funding multiple programs and initiatives overseas and within China at the moment. Regarding overseas, we have funded three doctoral candidates research at Tallinn University of Technology in Estonia, a research that aims to develop post-quantum applied cryptography at UC Berkeley through our collaboration with Chronicled. Also, we have established a grant program that has awarded researchers from the University of Sheffield through the Trusted IoT Alliance.
Regarding China, The Qtum Foundation launched a blockchain research laboratory with Xi’an Jiaotong University and Ink Labs earlier this year and launched a blockchain course in March that has eight chapters focusing on the technology, lasting two months with over 400 students at Xidian University.“
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Q: How do you see the impact of the EU’s GDPR (General Data Protection Regulation) on blockchain? How is Qtum affected by that regulation?
„As I see it, most established blockchains have a problem with this as the information that has already been put onto the blockchain cannot be tampered. Therefore, a lot of blockchains do not comply with these regulations in the first place and it is not much you can do for them either. As for us, Qtum utilizes the same UTXO model as Bitcoin, and currently nearly the same smart contract state storage structure as Ethereum. So, if BTC and ETH are compatible with GDPR, Qtum will be compatible in the same way. Apart from this, we don’t have anything specifically for GDPR.“
Q: Considering the latest news when Huo Xuewen, chief of Beijing’s Municipal Bureau of Finance, has warned projects against holding security token offerings (STOs). What is your opinion on security tokens?
„About security tokens, Qtum can support any kind of tokens, but only in technical fashion. However, specifically to security tokens, we don’t have any extra support for this right now. Since I think it is more a regulation-wise problem, other than a technical-wise problem. Once the regulation is clear, we might consider how to support security tokens.“
About security tokens:
Security tokens are regulated differently from utility tokens. Although some utility tokens where even claimed to be securities, the ‚real‘ security regulations, and laws are much more difficult to comply with. So to speak, we still need to give the government authorities more time to develop a proper infrastructure in which we can operate in. What the government definitely does not want to see is illegal fundraising through STO’s. Some projects are trying to do this by renaming ICO into STO and claiming they are doing a whole different thing.
Q: How do you see private chains?
„For private chain and consortium chain, they have some special use cases for enterprises, but in my opinion, most of the current usages are not real issues. And most of them are not necessary to use blockchain. At a panel discussion at Devcon, Vitalik Buterin, founder of Ethereum said that IBM’s corporate blockchain is missing the point, and I agree.“
Lastly, we shortly talked about their recently held online Hackathon that had 1000 participants from more than 75 countries. Wenbing said that the Hackathon, although it was online and therefore very different from all the offline ones, it was very successful and they have been following up with the best participants afterward. According to Wenbing, more Hackathons, online and offline ones, will be held more frequently in the future aiming at one every 6 months. Possible locations for the offline Hackathon’s are Shanghai and Silicon Valley.
To summarize, this year has been critical in setting the foundation for Qtum. Next year will be a very important year for them as they will finalize their QtumX enterprise version test net and their x86 Virtual Machine. Despite investing and showing presence overseas, their main focus is on the technology and getting those products to work.
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