This post is a transcription from Nebulas co-founder Aero Wang’s group chat with Public Chain Technology Alliance (PCTA) members. For more information on PCTA, please visit “bitsclubvp.io”.
Good afternoon, everyone. I’m Aero Wang, Nebulas co-founder. First of all, I’d like to wish everyone a Happy Lunar New Year. Because this is an internal group sharing, I’d like to use audio instead, so it’s friendlier and more casual.
Q1: As we know, blockchain industry went through a lot of ups and downs in 2018. We would like to know how differently Aero feels about it now compared to last year?
- “The blockchain bubble in 2018 was a violation of common sense. Things that violate common sense will eventually return to common sense. The crypto price bubble would sure burst, but it is a relief after the burst.
2018 was a very unsettling year for blockchain, and this kind of unrest has happened in the previous cycles before, but the intensity is much greater this time, and also received more attention.
I think everyone who’s deeply involved in blockchain would have some fear, uncertainty and doubt. This began in mid 2017, or even earlier, the first half of 2017, till now- we are in Feb 2019. It’s almost a full cycle in our industry, or maybe it’s not over yet.
But time is a sense of form. After 2018, now in 2019, my mood is really much better. Suddenly I feel relaxed. I personally have such an experience, that I left the beautiful bubble in 2018, whether it belongs to me or the whole industry.
In 2018 we had a lot of fear, anxiety or setbacks, because the participants in the entire industry, whether it is the project startup or the users, wanted to retain a beautiful bubble. But the bubble is a violation of common sense, a false boom in a price-based industry.Therefore, things that violate common sense will eventually return to common sense. The bubble would sure burst, but it is a relief after the burst.
To some extent, it proves that there is common sense everywhere, blockchain industry is no exception. In an industry with common sense, we can find laws, then relying on the laws to further develop. We can see that today there are still a lot of blockchain projects keep building, there are many active members in the blockchain community. People begin to pay attention and really promote the technology, which is about the fundamentals of a project, not just at the price level.
This is the ebb and flow of nature.
- “Blockchain won’t die. A true technological revolution will create new possibilities to change the pattern of a zero-sum game. As new technology will direct the interests of all participants to an incremental market.”
In 2018, there is a very common phenomenon in the blockchain industry. This phenomenon is also a common problem in the traditional industry, like an unavoidable disease- which is “adverse selection”, results in the bad or unethical winning the good and ethical.
We saw some projects that pumped and dumped the market, some speculators pumped and dumped the market, some relatively centralized nodes, or centralized organizations that pumped and dumped the market then left.
To some extent, the people who left the market, or people who ride the cycle of the blockchain industry, have short-term gains at the cost of the bottom line of the entire industry. But I think their gains are not that much, compared to the opportunities they have missed in the future. Because the current market value of the blockchain industry and the infrastructure are still in its infancy.
So I firmly believe that blockchain is a great technological revolution, and blockchain won’t die. A real technological revolution will succeed or not, doesn’t rely on the early adopters personal morality.
A true technological revolution will create new possibilities to change the pattern of a zero-sum game. As new technology will direct the interests of all participants to an incremental market.
Therefore, if blockchain is such a technological revolution, then it will not die. And those who quit early or consumed the market, will know that their loss is far greater than their gain.
Even till now, there is still lot of debate about blockchain, but I think in a year or two, when we look back, we will see a clearer picture. The bad apples will be left behind, and blockchain technology continues to grow.
- “Permissioned blockchain is only a subplot of the blockchain story. If a blockchain doesn’t provide a new resource allocation method, then it’s not blockchain.”
Another point that I’d like to talk about is a technical detail that everyone is paying attention to. Because we are promoting major adoption of blockchain to users in real life, we are facing difficulties, this is a pain point in the industry. We cannot make it happen on the existing blockchain infrastructure. So some people turn back and believe that the answer lies in technical improvements on a traditional business model.
This is the case of a permissioned blockchain. Personally I’m cautious about such a use case. Because it’s only a subplot of the blockchain story, and it won’t become the main plot.
Because the first principle or our common sense tells us that, if it is a technological revolution, if many people have reached a consensus, and are optimistic about this future, participating and investing their resources, it will certainly create something different, which must be different from the existing Internet, our mobile Internet. And it will be a new form of application and organization.
Just like the internet and mobile internet have changed the way we allocate resources and organize work flow. If the internet didn’t bring us Google or Baidu, Alibaba and Tencent, then it is not the internet. If the mobile internet didn’t bring us WeChat or Alipay, then it is not mobile internet. So if blockchain is really a technological revolution, it will definitely bring a new way of organization, and the size of this organization will be very huge.
This is why I have reservations about permissioned blockchains. Because based on the first principle, the story of blockchain will not be about a traditional system to improve its efficiency, it must be a story from a parallel world or a new technology space, to reorganize resources.
Q2. Whether it was at Antshares (NEO) or Nebulas, I believe that Aero has a lot of heart-felt stories, could you share one with us?
- “At the bottom of last crypto cycle, I thought AntShares (NEO) was dead.”
Since we are sharing our experiences to encourage each other to live through the winter, I will share with you a story of our early blockchain development, which happened during the last crypto crash. It was in mid 2015, the second year after Antshares (NEO) was founded. At that time, a considerable amount of seed funding was raised in the form of bitcoin. This fund had not been used yet, and its value had shrunk by nearly 50%. In contrast, during 2015, a lot of
hype was about the internet finance, equity crowdfunding, and even the stock market.
So at the time, no one was truly optimistic about NEO, including the seed investors and founders of NEO. No one in NEO had very strong confidence then. Even within the blockchain industry, people were mostly interested in permissioned blockchain such as R3 or Hyperledger, and sometimes even we would think that perhaps R3 and Hyperledger got the right approach. Should blockchain be a technology that simply improves traditional organization and its work efficiencies? So we had our doubts too, whether a classic token blockchain like bitcoin has a future.
In 2015, I remember that there were only three and a half team members in NEO (because one of them was an intern). We didn’t know what to do, and there was no salary for the founders. Da Hongfei and I were doing an unpaid entrepreneurship. So it came to a point that we needed to spend NEO funds, which was partly raised in bitcoin. At that time, we paid our team members in fiat currency. The fund we raised was only about 300,000 RMB. In fact, it couldn’t last very long. Even the basic salary for the technical team was a problem, let alone the expenses on any commercial promotion.
So we thought that we might need to abort the project, and before that happened, should we let everyone have a chance to withdraw? So the nine seed investors were given an opportunity to withdraw their investment in equivalent fiat currency. I remember there were two investors who chose this option. Of course, the other investors also had their doubts. Because at that time, the funds raised in bitcoin had lost half its value, the withdrawal in fiat currency was a kind of welfare.
- “ We would encourage Bitsclub memebers to hang in there, because at least give Antshares (NEO) a chance to try and make mistakes.”
But since Bitcoin had crashed, it was impossible for everyone to withdraw their investment. For those who joined us from Bitsclub, we would encourage them to hang in there, because at least give Antshares a chance to try and make mistakes.
But in retrospect, I think at that moment, I felt the event would bring us mix feelings in the future, because after all, Antshares was China’s first open source public chain project.
Those who chose to quit during the seed period, I have met them again later in the blockchain industry, and we all talked about it. Everyone was emotional, that they had doubts in a project that they used to create or believe in. This is actually very normal.
- “If you understand the spirit of the times, in fact, it has little to do with ability, but a lot to do with choice. Ordinary people can do great things too.”
Back to now, our situation is similar to the situation in 2015, the magnitude has increased, but the basic situation is the same. People feel lost. They are trying to see if there is a classic development direction in the traditional sense. The blockchain community have a generally low morale, and project startups are tightening their belts. Things will spiral up, and it won’t be a straight line. In my personal experience, if you have seen the origin of the Chinese blockchain community, Hitters Xu organized Bitsclub, from a few to a dozen people. From a dozen to hundreds of people, then we held the first blockchain international summit. From subculture to mainstream culture, from a group of geeks to some traditional organizations, from small companies to big corporations, the Top 500 or BAT (Baidu, Alibaba, Tencent.) More people, more experts, more resources are invested in this industry, then you will believe that the vitality of blockchain technology really goes beyond the imagination of all the participants.If you understand the spirit of the times, in fact, it has little to do with ability, but a lot to do with choice.
So it’s important to make a choice and stick to it. No one has superpower, everything is done by ordinary people, a group of people who have been working together for years, so ordinary people can do great things.
Q3. Aero do you have any resolutions for yourself or Nebulas in 2019?
- “I will do more exercises in 2019, and work hard for blockchain.”
In 2019, I will give myself a small goal. I hope that I can live a healthier life and exercise more. Earlier this year, after visiting some communities abroad, I have more confidence in the long-term development of blockchain. Blockchain industry also needs long-term work, so I want to exercise more and stay healthy.
The goal for Nebulas is clear. This year we will launch Nebulas NOVA mainnet (currently running on testnet, the mainnet will go live by the end of March). Nebulas NOVA is, in our opinion, a true Nebulas blockchain that implements the core tech features laid out in Nebulas whitepaper, providing the infrastructure of the blockchain that people can really use.
- “Nebulas NOVA implements NR, DIP and NBRE, which achieve a unique technical design in the blockchain world.”
The first one, we call it Nebulas Incentive, part of it is our DIP (Developer Incentive Protocol), which is now running on the testnet. It’s been two weeks, and some DApp developers have received on-chain rewards, an automated distribution. Such an incentive for smart contracts is no longer a centralized “manual” distribution of income.
If you have a very active DApp, or a very active smart contract, then we use the application layer protocol which can detect and give you the appropriate incentives. Because incentive is a core ability on the overall system, we would like to see how to use it well, how to make it better and improve the whole ecosystem. So we welcome everyone to participate, and we always pay attention to the feedback.
DIP, as I just mentioned, is an automated incentive protocol. So, who should be incentivised, how to choose a good application or smart contract, this is a very important question. For this, we have Nebulas Rank, which is one of the core abilities of Nebulas. It is an open and transparent data sorting, and the algorithm is also on-chain. So, it provides good complement to DIP. With such a Ranking ability, we can see who has really contributed to the system, and such a decentralized Ranking it will not do centralized “evil”. And such a mechanism will also effectively prevent cheating. So, this is also an important technical point that we would like to see feedback.
What we want to know, is the ability of Nebulas Force, which is NR, NI, NF. In fact, we call it Nebulas Force, which is an automatic upgrade capability. Although Nebulas NOVA does not fully implement the side chain based NF described in our whitepaper, but we implemented an automatic upgrade mechanism for blockchain called NBRE. This mechanism is to solve a pain point in current blockchain upgrade, which often results in a hard fork. NBRE enables the entire blockchain system to be seamlessly upgraded in a frictionless, low risk, low cost environment.
These unique technology is what Nebulas has created for the blockchain world. We also want to see the adoption of such technology and being applied in actual use cases, then solve the pain points of the blockchain system.
To learn more about how Nebulas NOVA discovers blockchain data value, https://www.youtube.com/watch?v=jLIYkG35Ljo&pbjreload=10
- “Looking forward to NBRE providing better tools for blockchain governance.”
Just now I have also mentioned NBRE. We hope that besides solving the problem of upgrading a blockchain, we can also solve the problem of blockchain governance. The decision right of NBRE’s direction of upgrading, or the decision maker, should not be a centralized entity. It should belong to every participant in the community. Or you can say that the token user on Nebulas has the right to participate, or to choose the future of Nebulas.
So this year we have a core task, is to turn Nebulas from a corporate organization into a community-based organization, but this is a gradual process and will not happen overnight. But we think we have reached a suitable stage because we now have tools based on the blockchain technology itself. Previously our biggest concern was about upgrades. In a PoW consensus, miners would monopolize its entire system, monopolize the rewards, rules, and upgrade decisions. This divide makes it impossible for the team to effectively implement the technical vision in a community-based organization. But now with Nebulas NOVA, this can be avoided based on NBRE support.
So this year we will gradually start to let the community participate in the governance of our entire blockchain system. We will also turn a traditional “manual” off-chain method of governance to an on-chain governance. We hope that it will form a blockchain system that automatically runs, self-organizes, and self-selects the direction of development, organizes its own resources, and continuously upgrades itself.
Q4. Can you elaborate on the key steps and difficulties in this organizational transformation? Are there any similar attempts at other public chain projects? Is there any experience to learn from?
There are many difficulties and challenges for a company to transform from a corporate organization into a community-based organization. But things are like this. If you do it right, the motivation you have, or the ability you have, should be greater than the difficulties you encounter, otherwise it means you do it wrong. So if we feel that a community-based organization is the future, then we must find a way to solve these problems that we face.
- “The biggest problem in current public chain governance is that the interests of miners, developers and token holders in the ecosystem are fragmented.”
On the consensus level of the nodes, that is, what we traditionally call the miners; the technical team or developers of the blockchain system; and the entire blockchain users, between these 3 groups of people, there is no way to reach a consensus in a system, or the existing blockchain technology does not provide them with on-chain tools, so they can only go back to this off-chain method, or based on traditional social media or other ways to organize. That’s going to have a problem. Even if they form a consensus, everyone feels like they need to do an upgrade.
There is no way to force this consensus or apply effective execution, in the end, we still have to depend on the nodes, or the miners, whether to follow or to vote with their feet. The interests of the miners or nodes, may be inconsistent with the interest of the entire blockchain system, or inconsistent with the interests of developers and users, because there is a cost, such as a system like Bitcoin, there is a huge cost on mining. Therefore, from the technical perspective, the existing blockchain can not do a on-chain, mandatory upgrade, the power of nodes is greater than the power of the entire community.
Therefore in this case, the “chain right” is above “community right”, if we take a system, the basic power of existence as its “chain right”, and the development direction of such system, the power to form consensus as its “community right”, then the “chain right” overrules the “community right” in the traditional blockchains.
That’s why Bitcoin and Ethereum still can’t solve their upgrade issues.We had mentioned since last year that PoW will definitely be a very big pain point for Ethereum, it’s unavoidable to have another hard fork, because there is already a vested interest group in the current Ethereum ecosystem, this vested interest group will not easily give up these benefits they have already obtained.This makes the system have a huge inertia, they must pay a huge cost to upgrade. So we saw that there are more than 1,000 Ethereum Improvement Proposals (EIPs), but each time they need to upgrade, they have to go through more than a year, and may only pass a few EIPs. And also need to consider the huge uncertainty they face and the risk of failure or hard fork.
- “The main setback for the blockchain development is the lack of native system upgrade capabilities to ensure community consensus.”
If a blockchain system is so difficult to upgrade once, then when can we expect it to provide us with a real user experience infrastructure? The ability to upgrade is the biggest pain point of a distributed system and is now the main setback for the blockchain development.
Is it possible, to ensure community consensus based not on the traditional social media off-chain, but using an on-chain mechanism, to create a blockchain native force, so that all nodes, without affecting the asset security of the whole blockchain system, can support continuous and rapid upgrade. I think this is a very big topic, and Nebulas has always been very concerned about this topic, and we think we have prepared the most basic version of the tool, and we would like to see its effect this year.
We want the organization of a blockchain to have its own power to determine the direction of its development. And whether it’s a node or a developer, or a token user, it should be an integral part of the organization. That is, we want to implement a model in the blockchain system where “community right” is greater than its “chain right”.
That’s all for now, and based on some of the previous blockchain governance research, we’ve also done some data analysis, and there are some publicly available reports online about blockchain industry. So later I will ask my colleagues to share it in the group chat and discuss together.
So we have come to the end of this event, Aero please give your wishes to our PCTA members!
Thank you all for listening to me nagging so much on an afternoon during our Lunar New Year celebration. Before I send my wishes, I still want to say a few words. The first is that, no project can survive the winter alone. For the whole fiat currency world, or the whole traditional industry, we are one. It’s like a super-market with many shops, if the whole market is down, it’s unlikely to have one shop doing well by itself. Therefore, our competition or in game theory, is definitely not zero sum. So we should come together to build a solid infrastructure for the whole industry. Reduce the cost of using blockchain technology across the industry, so that more people can really adopt blockchain.
And it seems that we have a lot of different ecosystem roles in this Public Chain Technology Alliance, we have public chain, protocols on the application layer, wallets, media, crypto exchange, so we actually already have some internal resources and partnerships, to allow each project achieve what cannot be done on its own.
From this perspective, we really are not in a zero-sum competition,, we actually have the premise of common prosperity. And I think it’s the only way to create a sustainable blockchain industry that is as robust and resilient as an ecosystem.
Then let me give my wishes. I hope that PCTA will be more professional and international in 2019, and I also hope PCTA to be more open and transparent, so that more members of PCTA can participate in the governance of the alliance, the development direction of the alliance, and all of us can work together to make PCTA a good one. Thank you.
Thank you for your time, and that concludes my sharing today.
🌟🌟Thanks to Singapore community member Journey for her contribution to the translation work.🌟🌟