Truechain CEO Eric Zhang: What’s blocking the blockchain from large-scale commercialization?

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Isn’t that a billions-of-dollar question — what’s blocking the blockchain from large-scale commercialization? The answers can be a lot, but “consensus” may be one of the generally accepted one. The importance of consensus to blockchain may just be demonstrated by the fact that the largest blockchain technology summit this year is named as “Consensus 2018”. The conference, which was held by coindesk in midtown New York from May 14 to 16 has drawn more than 8,500 attendees and $17 million in ticket sales.

So what exactly is consensus? And how important is consensus to block chain?

In short, consensus enables blockchain to do what it does. Despite the presence of faulty processes, distributed computing, like other multi-agent systems, sets out to achieve overall system reliability.  Some agreement is needed among a number of processes for a single data value.  As a consequence, consensus protocols must feature fault tolerance. As a public ledger, consensus creates the data on the ledger. A data record is born on the ledger as a consensus is reached. Consensus validates the data. As the blockchain was originally designed to prevent double spending, any transaction or data would be validated not by a single authority, but by consensus.  Consensus prevents data tampering, thus ensuring security.  That is, above all, its strength and, frankly, its raison d’être.

Any public chain would need at least one consensus protocol as a bottom construction. However, many public chains based on single consensus mechanism such as PoW or PoS, are having a bottleneck in efficiency. One the other hand, those based on dPos or dBFT have been improved in efficiency, but are having problems in decentralization. That being said, the single consensus mechanism is not meeting the requirement of both scalability and security from the real-world business, and therefore is blocking the blockchain from the large-scale of commercialization to some extent.

As one may ask, what’s the solution?  While Classic Proof of Work (POW) solves the problem of security but is lack of scalability and Practical Byzantine Fault Tolerance (PBFT) works on efficiency but is not decentralized enough, combining the two may be a way out. Let’s call it hybrid consensus — by combining PoW and PBFT together, hybrid consensus can solve the most important problem of public chain — the co-existence of decentralization and efficiency. It enables large number of decentralized applications (Dapps) with growing numbers of users to be carried on the chain.  It is important to note that combining POW and PBFT is not as simple as it sounds. It is far more than one plus one equaling two. Only the best hackers and blockchain technologists can solve the many conflicts and problems underlying Hybrid Consensus.

This doesn’t mean block chain can not solve everything with hybrid consensus. Blockchain technology will not cure cancer nor stop countries from going to war with each other.  It will not end hunger nor stop global warming.  It will however, stop some of those bad things from happening so frequently for it will disrupt the financial industry, the legal profession and the mechanics of international trade by providing a distributed ledger that removes the need for financial and other intermediaries. By decentralizing information and allowing for more transparency, equity, and participation in the global economy, the little fish will have has much to gain as the big shark.

But that message sometimes got drowned out this week with the flurry of each press conference, keynote presentation, and fireside chat at the Ethereal Summit, Consensus 2018, Token Summit, and Blockchain Without Borders conference.  Instead, much of the talk around Manhattan (and yes, Brooklyn, where Consensys is headquartered) was about regulation of fraud, money laundering, and tax evasion.  Sure, there are some bad actors using blockchain and crypto currency to evade taxes, hide ill-gotten gains, and hurt small time investors.   But as the week continued, the expectation meter only ticked higher.  So did the value of many coins that companies involved in Blockchain Week.

Now that the engineering behind Hybrid Consensus is nearing completion and is being readied for full deployment on the Internet, we should concentrate our efforts on finding smart regulations to match the onslaught of smart contracts, the software programs that add layers of information onto the digital transactions that the blockchain executes.  These databases of information are created by a network with no central authority – a true distributed ledger.  Lawyers, legislators, bankers, insurance companies, lawyers, and accountants should be scared.  Really scared.

This week’s Blockchain Week showed that consensus is the antithesis of trade wars with its punitive tariffs, barriers to commerce and bans on sales.  Blockchain is the opposite of insider trading and bad faith negotiations.  Blockchain is the end of price gauging by dominant financial institutions and other bloated intermediaries.  Blockchain technology can help enshrine the rule of law and ensure more equitable economic growth – not just for the big institutions, but for all.  Consensus allows for the digitization of human creativity and potential, filled with the hopes and dreams of normal people trying to better their lives.  On the blockchain we can place decentralized applications that encourage and facilitate philanthropy, that provide less expensive means for transferring remittances (a business that does $574 billion annually) of foreign workers to their families in other countries, that promotes and monetizes innovation and artistry through Intellectual Property micropayments, and that assists refugees fleeing war-torn nations by providing digital identities.  Most importantly, the blockchain can allow us to renegotiate the social contract and provide for an era of digital sovereignty.

Now it is time for the technology to catch up with the hype.  It is no secret that the talent to make blockchain work is in high demand.  There is no paucity of funding.  Venture capitalists are falling over one another to provide seed capital to budding blockchain ventures. As we move from our test nets to the main net in the coming month or two, the rubber will meet the road.

What this week in New York City also demonstrated was there is another consensus:  that blockchain technology requires great engineering.  Coders are coming from Bangalore, Beijing and Boston to collaborate. We all know that making this technology real and usable is paramount.  You could say that we found consensus. 

Eric Zhang is Chief Executive Officer of Truechain, a leading blockchain company with engineering teams in China, India and the United States.  He founded Dorahacks, the largest hacker community in China.

by Eric Zhang

Media Contact
Company Name: TrueChain Newsroom
Contact Person: Jamie Cooper
Email: Send Email
Country: China
Website: www.truechain.pro

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Jasmine Petters

Jasmine Petters

Jasmine hails from the city of Nizams, Hyderabad, and is currently pursuing her M.D. from there only. She is an internet wizard and has keen passion in All Things tech. She is a regular Comment contributor for The Daily Telescope and writes a Web column, in which she covers war, sports, and everything in between.
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