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Bitmain CEO Jihan Wu: the Development of Blockchain Will Focus On 8 Issues In the Next Decade

Jihan Wu, co-founder and CEO of the bitcoin mining hardware maker Bitmain, elaborated the 8 major issues faced by the blockchain space in the next decade, at Wanxiang 4th Global Blockchain Summit on Monday. But the crypto’s mining king mulled Bimain’s IPO and bitcoin cash.

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Here is the excerpt from his speech:

I want to share with you about the important technical issues of blockchain in the next decade, and the impacts these issues will exert on the long-term development of the industry as well as the overall ecology.

1.Privacy and Security

First, the financial sector is expected to benefit the most from blockchain technology. But there is a contradiction between blockchain’s privacy and security. The UTXO model and account models have obvious advantages in terms of system security, but they lack privacy because all transactions on the chain can be seen by all.

Everyone pays close attention to privacy issues in the financial sector. Many algorithms such as ZK-snark have been rolled out to better protect blockchain users’ privacy, but they are highly complex technically. In extreme cases, the system will be exposed to huge security risks with these algorithms, and tokens may be supplied unlimitedly.

In the next decade, blockchain players will strike the right balance between security and privacy.

If this contradiction is a trade-off curve, some blockchain, will extrapolate the curve to the most ideal position. I am very much looking forward to some breakthroughs in the theoretical framework that can resolve this problem.

2. Blockchain’s Neutrality

Blockchain is a borderless financial network, but all the participants are separated by national borders.Therefore, there are complicated legislative issues involved that need to be addressed.

Blockchain will always keep its technical neutrality because it is free and beyond any government’s control. It is difficult to maintain neutrality if it is regulated. I believe a neutral blockchain network also needs a regulatory system. We can have internet and internet regulation as a reference, and internetters are always under supervision.

3. Scalability

Now blockchain users may reach 20 million across the world, but within the decade, the figure will possibly surpass 1 billion. Based on this user scale, blockchain’s capability to process data requires four orders of magnitude improvement which can be achieved though four methods.

First is sidechain and cross-chain technologies.They enable safe and fast interconnection between the main chain and the side chain, but these two technologies have theoretical limitations.

Second is lighting network. The lightning network is functionally feasible, but there are serious problems in user experience. I believe the application scenarios of this method must include the basic tool for user perception.

Third is the technology for compressing transaction history. The transaction itself is not restored on the blockchain, but its structure. This technology will enhance the privacy of transactions and improve the capability to process potential transactions.

Fourth is the software engineering technology that combines hardware acceleration and parallelization. I think this method is particularly practical. If some blockchain’s technical frameworks are changed in the future, the pressure for blockchain network to process transaction will increase. Thus in order to solve blockchain’s scalibility problem in the future, we don’t need to change software network framework significantly, but to add hardware servers.

4.Expertise Increasing Application Scenarios for Blockchain  

There are two ways for blockchain to interact with the real world. First, important issues in the real world can be recorded on the blockchain , for example, some firms leverage blockchain to trace and track food; second, virtual events on the blockchain are able to transform the objects in the real world, like decentralized Airbnb and Uber.

Most of current blockchain projects will end in failure,and a window of opportunity for them will not arrive in the coming years. But I believe at the end of the next decade, some interesting projects will come out. Specific application scenarios are usually built upon infrastructure. The interaction between blockchain and the real world still lacks the necessary infrastructure.

5.Security of Blockchain’s Cryptographic Algorithms

After two decades, quantum computers become more mature which exerts great pressures on the upgrade for blockchain’s cryptographic algorithms.

Conducting quantum-resistant researches or steering research results into production too early cannot address actual problems because we are under huge pressure now.

6.Blockchain-Based Identity System

The system of public and private keys designed by Satoshi Nakamoto is a semi-anonymous system that has nothing to do with social identity. With public and private keys, more ordinary users are allowed to prove their identity safely and conveniently and to participate in the blockchain economy directly.  The blockchain-based ID system will be applied in many industries.

7.More Powerful Smart Contracts To Make Development Easier

A smart contract is an independent computer program that looks to address the concerns of the central counterparties’ credibility. We hope that the decentralized program will play a completely impartial role.

Smart contacts can do fewer things than we expect. Centralized smart contracts have an upper hand nowadays because decentralized ones are more difficult to develop and a lot of loopholes exist which could be exploited by hackers. How to make a more powerful smart contract must be one of the hot spots in the space. A more powerful smart contract will further lower the development cost.

8.Blockchain +Artificial Intelligence (AI)

AI+blockchain is also an important issue in the future because artificial intelligence algorithms are very suitable for blockchain. The upcoming solution is to deploy AI algorithms on blockchain to increase the latter’s credibility.

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