Latest speech from Dr. Xiao Feng, founder of PlatON: a $5 trillion company may emerge in the blockchain industry
Dr. Xiao Feng believes that the blockchain is the Columbus sailboat that humans have discovered the “New World.” Columbus expands the physical space of human society, and the blockchain will expand the “digital space” of human society.
The Distributed 2018 Enterprise Blockchain Conference, co-organized by BTC Inc, Consensys, HKDAG, and Wanxiang Blockchain Labs, was held in San Francisco from 19 to 20 July 2018. The conference invited more than 150 speakers from different institutions and projects to share their unique opinions on the blockchain, attracting nearly a thousand elites around the world from blockchain industry to discuss the current issues of the blockchain.
Dr. Xiao Feng, the founder of PlatON, was invited to attend the summit and shared his opinion on the blockchain technology and the industry trend at the “Next-Generation Computing Architecture-PlatON” project presentation.
The following content is collated from the shorthand of the speech from Dr. Xiao Feng.
First, Dr. Xiao Feng believes that the blockchain is the Columbus sailing boat that humans have discovered “New World.”
Columbus expands the physical space of human society, and the blockchain will expand the “digital space” of human society. There is no contradiction between physical space and digital space. Digital space does not replace or subvert physical space. Their relationships are like “parallel universe.”
Second, for the recent implementation of blockchain technology application, Dr. Xiao believes that the blockchain industry has not yet reached the “blockchain+.” It is necessary first to have a mature blockchain technology, and then there will be a “blockchain+” that applications are widely used. The current blockchain technology is still immature. The establishment of a blockchain ecosystem requires the stability of the chain technology first, and then the development of the native blockchain application, such as wallets. Next, there will be an explosion of various industrial applications, that is “blockchain+.”
Internet companies such as Alibaba and Tencent were founded at the end of the last century, but it was not until 2008 that the “Internet+” broke out. A lengthy process was also required to evolve from the blockchain to the “blockchain+,” The current focus should be on developing blockchain technology and various native applications.
Third, Dr. Xiao is the proponent of the distributed business concept. He believes that distributed commerce is a new commercial frontier brought by blockchain technology.
In the distributed business world, all intermediary organizations will be replaced by “mathematical algorithms.” Both the Internet and the blockchain have changed the credit system and trust in traditional business activities. The cost of trust in conventional business practices is very high, and the Internet and blockchain have significantly reduced this cost of mutual trust through technical means. The lower the marginal cost of trust, the more business activities can expand without borders. Internet technology has made information exchange easier than ever before, and the marginal cost of information has been reduced to nearly zero, but the Internet is operated by centralized organizations, which collects fees, so participants have costs.
In the blockchain world, in theory, mathematical algorithms can reduce the marginal cost of business activities to zero. Therefore, the distributed business model based on blockchain can expand the commercial activities infinitely.
Fourth, from APP to DAPP.
The Internet has put the business model on the platform, and the blockchain does the opposite. In blockchain, the business platform is destructed, and the centralized platform is “decentralized.” This is the difference between the centralized APP in the Internet era and the decentralized DAPP in the blockchain era.
Fifth. Dr. Xiao proposed that the industrial economy follows the principle of Newton physics, that is the transformation between energy and physics, while the information economy follows the law of quantum physics, that is the transformation between energy and information.
The law of value growth under two different economic models is entirely different. Take Bitcoin as an example; the mining machine realizes the conversion from energy to information.
While we realize that mining of bitcoin and Ethereum consumes lots of energy, we should also recognize that traditional centralized governance is also a high energy consumption model. Under the centralized operation mechanism, various authorities such as the military, the government, and the police are required. In a sense, this consumption will be much higher than the energy consumption of hardware and chips.
In the consensus mechanism of the blockchain, energy conversion is indispensable. Otherwise, the blockchain system is not secure. In the future, various computer chips will become the key to convert energy to information in the blockchain.
Sixth, the blockchain is the underlying architecture of the digital economy. In a digital world where the code is the universal language, its governance mechanism can only be mathematical algorithms.
Dr. Xiao believes that any blockchain that is governed by human or employs election mechanism is non-blockchain or even anti-blockchain.
Seventh, there may be no killer application in the blockchain industry.
Different from the Internet, the blockchain industry may never reach the Internet-phenomenon level which applications have billions of users. In the future, it will be more likely to have billions of DAPP on a public chain, each with its token, valued at $100,000, forming a digital economy valued at $10 trillion.
In the blockchain world, massive market capitalization can only occur on public blockchains and will not appear at the application level.
Historically, there have been 500-billion-dollar companies in manufacturing, and trillion-dollar companies have emerged in the Internet industry, and in the blockchain industry, there are likely to be 5-trillion-dollar projects.
Eight, in the digital economy era, digital accounting methods are required, and they need a digital account system.
Digital wallets are the way that digital accounts record digital currency. The most significant deficiency of legal currency compared to digital currency is the incompetency of programming.
Many people say that the circulation of digital currency is fixed, which will cause deflation. But digital currency can be divided indefinitely, such as bitcoin, which can be accurate to 18 decimal places. In the traditional financial field, the government realizes “additional currency issuance” by printing and issuing legal currency. In the field of digital currency, the growth of market capitalization is the “additional currency issuance” mechanism of digital currency.
Ninth，How to determine the value of a public chain?
Dr. Xiao gave a formula: the value of the public chain = the total amount of all DAPP values on this public chain. Therefore, when there is a tremendous amount of DAPP on a public chain, the value of the public chain will be manifested and increased. With the development and maturity of DAPP, it is possible to have a public chain with 5 trillion US dollars regarding market capitalization.
After the presentation from Dr. Xiao, there is a Q&A session. Someone asked Dr. Xiao about the following questions:
1. How do you view the risks of the blockchain and digital currency markets?
Dr. Xiao believes that the current blockchain technology is not yet mature, and it is necessary to pay attention to the development of technology, and the investment risk comes from the capital market, which is another matter. According to Dr. Xiao’s investigation of the industry, the mainnets of various public chains will be intensively launched at the end of 2018 and early 2019.
2. How do you view the battle between public chains?
Dr. Xiao believes that the existence of battles between public chains means that everyone is paying attention to the technology of public chains, but 80% of the public chain will fail.
Only those teams who are down-to-earth and write code in earnest, having their values and analytical framework, can become the 20% winner.
3.If large companies like Google, Facebook, etc. enter the blockchain industry, what impact will it have on the existing industry pattern?
Dr. Xiao believes that the core value of the public chain is the currency. Most large companies now enter the blockchain industry, and they focus on the alliance chain. Without the currency, the alliance chain is just a distributed ledger. Therefore it loses the core value of the blockchain and loses the distributed commercial value of the blockchain. So, the alliance chain cannot live long. If these large companies choose the alliance chain, it is very likely that they will not be able to make their mark in the blockchain industry.