• Bianca Chen

Patrick Dai: Ultimately, Blockchain Should be Able to Handle Infinite Number of Transactions

Updated: Sep 16, 2018

Crypto Asia 100 Vol.6


Recently, Qtum announced their partnership with AWS (Amazon Web Services) to develop decentralized applications (DApps). I will use the opportunity to Below, Bianca Chen revisits an earlier conversation with its founder, Patrick Dai.

BIANCA: Qtum is a smart contracts platform. Why do you think smart contracts are essential?

PATRICK: I think smart contracts are essentially a virtual agent, or an agency, used to carry out programmed operations with data or funds. For example, China's largest property agency, Lianjia, probably hires 10,000 salespeople. Most of them do repetitive work. With smart contracts, the same work can be done in a few minutes with a few computers. It reduces operating costs so that a company won't waste resources on simple, repetitive jobs. We deal with agents and agencies in real life, and when the blockchain network gains mass adoption, their roles will be slowly replaced by smart contracts. It takes time, but it may eventually become an intrinsic part of building a more efficient business. I believe that's the long-term value of smart contracts.

BIANCA: Sounds like smart contracts will work well with AI.

PATRICK: Definitely. Blockchain network helps to allocate resources. We have so many factories and machines and so much equipment, that it is reasonable to say we can achieve a high level of productivity with an improved, automated distribution mechanism. Perhaps in the future, not only will human beings contribute to a society's GDP, but so will machines and artificial intelligence. When AIs are advanced enough, we may expect them to play a more prominent part, and they also need a network for value exchange.

AIs can't connect to Alipay's or Wechat's network. Instead, blockchain may be more suitable for these scenarios. They can spawn some unimaginable business models. We think Google is a great company because it serves numerous people around the world. But there are things, facilities, that Google can't help. Blockchain can. It connects devices. Someday there will be a network that serves everyone and all kinds of devices around the world.

BIANCA: But we are not there yet. Single game like CryptoKitties can cause Ethereum congestion. Is Qtum facing a similar challenge?

PATRICK: Yes. That's the current situation. With most blockchain-based applications, the goal has been to establish a peer-to-peer network, which is a network of information symmetry. That is not the same as the centralized networks we are used to. For example, it is impossible for you to know all the information Google knows. Google will only push you what it wants you to know, and some of what you want to know. You can't learn everything about the entire Internet. But in a blockchain network like bitcoin, you can learn every transaction that has ever happened in the past nine years by downloading a node, and you can easily verify it. There will be tens of thousands of nodes like this around the world. Peer-to-peer networks maximize the fairness through the redundancy of the technology. On the other hand, it is incredibly inefficient.

Companies like Google, Facebook, and Alipay stand for extreme efficiency. But is that the only pursuit of Internet development? People are beginning to reflect on the question. Bitcoin shows us another perspective. It does not pursue efficiency. Instead, it seeks fairness. There will be trade-offs between efficiency and decentralization. Ethereum is also a completely peer-to-peer network. So it is far less efficient than a centralized server. Even one small game of CryptoKitties can clog the entire system. Qtum faces the same challenges. Bitcoin can process 300,000 transactions every day, and Ethereum one million. At Qtum we have some scalability solution to enable the processing of six million transactions per day, but it is still not enough.

BIANCA: What is your goal then? How much transaction processing capability do you think is enough?

PATRICK: If blockchain's goal for the future is to become a society's infrastructure, then the number of transactions it can handle should be infinite, or as many as need be. Because otherwise, blockchain can never be a trusted service provider.

BIANCA: We talked about smart contracts. In the end, do you think it is necessary to develop DApps?

PATRICK: I think DApps are one solution. But public blockchains don't have to rely on DApps to be useful. For example, we can build an Internet gateway on the public chain. It can interact with the chain when we stream movies. With that, users can make real-time micropayments. Say I only need to pay one token for a minute of content, and two for two minutes' watching time, rather than paying for the full movie in advance. It will also make film distribution much easier. And creators get compensated with a valid license for the copyright. Everything is done based on the blockchain. When blockchain becomes an infrastructure, it will be similar to how you make IP calling and send emails on the Internet, just doing whatever you like. So not all use cases have to go through DApps.

More Interview on Crypto Amazians:

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#3 Sunny Lu: Why Future Belongs to Public Blockchains

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#5 Genius or Trickster? Crypto Investor Shuoji Zhou Has Something to Say

#6 Patrick Dai: Ultimately Blockchain Should Handle Indefinite Number of Transactions

#7 Centralized Institutions Won't Die, But Blockchain Makes the "Least Bad Form" of Business

#blockchain #bitcoin #ethereum #smartcontract #dapp