Wu Jihan, Founder of Bitmain, on the 8 Major Blockchain Technology Development Topics in the Next Decade
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The 4th session of the Blockchain Global Summit was held on September 11th in Shanghai. Wu Jihan, CEO and co-founder of Bitmain published the keynote speech “Main Focus of Blockchain Technical Development over the Next Decade,” which predicted that blockchain technology will focus on the following eight topics over the next ten years. I found it fascinating and would like to share with our readers.
Wu Jihan on the 8 Major Blockchain Technology Development Topics in the Next Decade
- Contradictions Between Privacy and Security;
- The neutrality of Blockchain Technology;
- Performance Expansion of Blockchain;
- Expertise in Expanding Blockchain Technology Application Scenarios;
- Cryptographic Algorithm Security on the Blockchain;
- Blockchain Identity;
- Reducing Development Difficulties with More Powerful Smart Contracts;
- Artificial Intelligence and Blockchain.
Here are the highlights of his speech, in first-person tense.
1) Contradictions Between Privacy and Security
In the next decade, blockchain technology will advance in addressing issues related to the contradictions between privacy and security.
The earliest UTXO and account models have obvious system security advantages because all transactions are recorded on the chain, and everyone can read and observe the script execution process. If any security vulnerabilities occur, they will be discovered immediately, but this system does not offer users enough privacy.
Everyone is particularly concerned about financial privacy. Many algorithms have been invented to address this need, like zCash’s zero-knowledge proof. Although these algorithms protect blockchain users’ privacy, they are very difficult to upgrade due to the complexity of the algorithms. In extreme cases, the system faces a high security risk where the underlying currency quantities can be altered without detection.
If we picture privacy and security on a trade-off curve, some blockchains will certainly be able to extrapolate this curve to the optimal position and surpass others. I look forward to breakthroughs in the theoretical framework that will help resolve this contradiction.
2) Challenges Brought by the Neutrality of Blockchain Technology
Blockchain technology involves regulations and law, and there are very complex legislative issues that need to be studied, particularly in relation to finance, which is blockchain’s most important application.
Although the blockchain’s financial network has no national boundaries, countries usually determine laws and regulations independently. Issues that might arise include whether cross-border financial fraud requires extradition and if cross-border movements of capital will impact national financial security. These and other issues are worthy of long-term industry discussion and research.
The Internet is an excellent example of this principle because although the Internet itself is neutral, its users and practitioners are supervised. For example, the Internet financial institutions are incorporated into a strict legislative framework. The neutrality of blockchain technology is hard to break because the blockchain is free. If a blockchain is supervised, another blockchain technology that continues to maintain neutrality will replace the controlled one.
With this in mind, legislators should develop their own regulatory technologies based on a neutral blockchain. The types of improvements made to the regulatory framework and future financial order will be an important subject for consideration and research in the coming decade as blockchain continues to develop.
3) Performance Expansion of Blockchain
Within a decade, the blockchain will have more than a billion users worldwide. To respond to the user scale, the blockchain must achieve four key performance improvements:
First, interactions between sidechain and cross-chain technologies, for which there are two solutions:
- Abandon the principle of decentralization and instead use centralized gateways to connect the sidechains and main chain.
- Wait for a theoretical breakthrough, though I have little confidence in this possibility. The centralized solution is preferable unless a theoretical breakthrough happens quickly.
Second, the lightning network.
The lightning network is functionally feasible, but it has serious user experience problems. It is expected to be used only in special scenarios and packaged as a basic tool, but users will likely have a hard time understanding it. In my opinion, any application that requires users to directly operate the lightning network will not be feasible economically.
Third, the technique of compressing transaction history.
When the transaction history is compressed, only select transaction results are stored on the chain and the transaction itself is not included at all. Transaction compression can increase privacy and record the results of large transaction histories with a smaller data footprint, but there are still concerns for security because the process is invisible and extremely difficult to audit.
Fourth, software engineering techniques that use hardware acceleration and parallelism.
To me, this is the most practical method for performance enhancement. In this scenario, it will not be necessary to make major changes to the software architecture if network processing pressure increases; instead, it will only be necessary to add a server in line or in parallel to achieve network performance expansion.
4) Expertise of Expanding Blockchain Technology Application Scenarios
There are two main directions for interaction between blockchain and the real world:
- Important events that occur in the real world must be accurately recorded on the blockchain. One such example is food traceability.
- Virtual events on the blockchain can drive material changes in the real world, such as decentralized Airbnb and online ridesharing.
But I think most of the attempts for implementation and these types of projects will fail, and that their real window of opportunity will require more time. At the end of the next decade, I do think some interesting projects will begin to appear because the implementation technology involves infrastructure. The interaction logic between blockchain and the real world still lacks the necessary infrastructure.
5) Security of the Cryptographic Algorithm on the Blockchain
At the end of the next decade, quantum computers will likely begin maturing significantly. In the blockchain world, the cryptographic algorithms currently applied will face pressure to improve and become quantum resistant.
It is irrational to become dedicated to the research and application of quantum-resistant cryptography algorithms too early; it is just a marketing gimmick during these early days.
6) Blockchain Identity
Satoshi Nakamoto has designed a public-private key system. The private key is the user’s identity on the blockchain. This concept brings a high technical threshold and it is common to lose the private key, so it is unlikely to become popular among the general public.
If we convert the public-private key system into an abstract identity problem, I believe that it would address a very important question by helping us determine how to use various identity authentication technologies with blockchain.
7) Reducing Development Difficulties with More Powerful Smart Contracts
The smart contract is an independent computer program. If a program is deployed on Ethereum, the program runs without dependence on its founder. Smart contracts are impartial and can relieve the concerns of all parties about the program’s integrity. Although there are many expectations for the possibilities that smart contracts present, their abilities are currently limited. The potential to strengthen smart contracts in the next decade is worthy of attention.
Just as computer technology development was initially limited by hardware performance and software development, so are smart contracts in the blockchain today. The centralized program development environment still has overwhelming advantages. It is currently still difficult to develop decentralized smart contracts, their advantages are relatively low, and security vulnerabilities occur frequently.
8) Artificial Intelligence and Blockchain
The combination of artificial intelligence and blockchain will become an important topic in the near future. This is because the technical concepts of artificial intelligence fit well with blockchain technology and can create an interdependent relationship. The solution will be to deploy artificial intelligence algorithms to the blockchain in order to improve credibility and authority. Data is the most important driver of artificial intelligence because it helps train algorithms. Data providers sometimes need to maintain privacy and blockchain can help solve this contradiction.
Artificial intelligence programs may also override all participants in the system. This is a viable solution in the future; that is, artificial intelligence itself is deployed on the blockchain which will no longer be owned or belong to any single system participant, thus providing a higher degree of credibility and authority. In contrast, if a single company were to control a vast amount of data and a powerful AI, it could present an enormous challenge to the fairness of our society.