htmlOn the morning of September 20, the 8th Wanxiang Blockchain Global Summit was grandly opened online. Dr. Xiao Feng, Chairman and General Manager of Wanxiang Blockchain, delivered a keynote speech on the theme of "New Stage of Blockchain, Application Protocol Explosion". The following is compiled based on the shorthand of the live broadcast of the event, and there are some deletions and modifications that do not affect the original intention.
Dear friends and audiences, thank you very much for attending the Wanxiang Blockchain Global Summit. Today, the topic I want to share is "New Stage of Blockchain, Application Protocol Explosion". A few days ago, a major migration of the Ethereum consensus protocol was not only of great significance to Ethereum, but also a very important historical moment for global blockchain technology and blockchain applications. It means that the infrastructure construction stage of blockchain is coming to an end, and the explosion of applications is about to come.
Before talking about the explosion of blockchain application protocols, let’s review how the Internet protocol stack was built. In the decades from the 1970s to the 1990s, Internet protocol was chaotic and full of flowers.
The most important protocols at that time were:
1. The DECNET Internet protocol model launched by the famous DEC company at that time.
2.IBM's own SNA Internet protocol model.
3. The OSI Internet protocol model launched by the official European organization.
4. In the United States, the TCP/IP Internet protocol model initiated by the public from the bottom up.
In these decades of protocol wars, the TCP/IP model has become the ultimate winner. I think the TCP/IP model can defeat the Internet protocol models advocated by the officials, large companies, and scholars and experts. There are mainly five reasons:
First, the TCP/IP model is guided by demand, and the code is ahead of the standards, that is, use the code that can be run first, and after market testing, the standards are gradually derived. OSI, an Internet protocol model organized by European officials, starts from the framework to the standards, and finally to the code. Obviously, the demand-oriented TCP/IP model is more competitive.
Second, the TCP/IP model is launched from the bottom up by the community and self-organization. Although it eventually had an official organization, in the first 20 years, until the mid-1980s, it was a community-based approach, with developers with the same values, jointly promoting the development of the TCP/IP model.
Third, the TCP/IP model adopts agile development model to iterate rapidly, constantly iterating the TCP/IP model according to market needs and technical possibilities. The OSI model is waterfall-style development, that is, after designing the entire model, it is given to users and users at one time. This is obviously not a typical practice on the Internet.
Fourth, the TCP/IP model is a developer-friendly and user-friendly model. Customers are the first, customers are the first.
Fifth, the TCP/IP model is a completely open source and open model. Of course, several other Internet models are also open source, but they are not allowed to be licensed. They are proprietary models and need to be authorized to be used. The TCP/IP model does not require authorization, anyone can use it, and anyone can add bricks to this model.
By summarizing the successful experience of the TCP/IP model of the Internet protocol stack, we can find that in fact, the blockchain protocol also follows these characteristics and is developed in a similar way. In this regard, the Internet protocol stack and the blockchain protocol stack take the same path.
We generally divide TCP/IP into 5 levels: the physical layer is its first layer, that is, the lowest layer, including cable, fiber , etc. The second layer is a link layer, such as IP. The third layer is the network layer, the fourth layer is the switching transmission layer, and the fifth layer is the application layer of the Internet.
borrows 5 levels of the TCP/IP Internet protocol stack, and we can design a protocol stack for blockchain value networks. The lowest level of
is the basic layer of the value network protocol stack, which we call L0, mainly including decentralized bandwidth, decentralized storage and decentralized computing.Bandwidth, storage and computing are a very important foundation for the future value network . In the roadmap released by the Ethereum Foundation to the community, Ethereum's performance will reach 10 million TPS per second in the next 10 years. The prerequisite for reaching 10 million TPS per second is that bandwidth must increase by 100 times.
second layer - L1, we call it the settlement layer. Since it is a value network, there must be valuable clearing and settlement-related protocol layers.
The third layer is L2, which I call it the transaction layer. This layer is mainly used to realize how to exchange and trade smoothly and efficiently some value markers such as NFT and Token. I call it the fourth layer of
. This layer of protocol is mainly used to generate data assets and digital assets. Data assets and digital assets are two types of things. Data assets here specifically refer to the identity data that each of our users, individuals or institutions bind on the Internet and on the blockchain, and generates based on the behavior of these identities. We call it data assets. Digital assets are new asset categories created by users as creators on the Internet and on blockchain, including some digital artworks marked by NFT.
The fifth layer is the top layer, which I call it the application layer. All the business scenarios we are familiar with, experienced, and used will eventually be reconstructed in L4, that is, the application layer. Any business is worth doing it again on the value network, and this is the structure of the blockchain protocol stack we assume now.
In this structure, I personally think that Ethereum plays a core role. Ethereum had an important upgrade on September 15, upgrading from the PoW consensus algorithm to the PoS consensus algorithm. This is not only an important historical moment for Ethereum, but also an important historical moment for the global blockchain industry. Ethereum founder Vitalik Buterin once announced the future development roadmap of Ethereum, with a total of 5 stages. I think the three stages of merger on September 15, sharding after merger, and Verkle tree after sharding are the three most important stages in this upgrade process. The fourth and fifth stages are just the optimization and part of iteration. After the three stages of
are completed, as a network for blockchain underlying value clearing and settlement, Ethereum will have very high performance and flexible scalability, and at the same time, it will have the robustness and security of the Ethereum network that has been proven in practice in the past seven years. Higher TPS and more flexible scalability on a robust and secure network provide a very good technical foundation for the explosion of applications, which will surely usher in the explosion of applications.
In addition to the five stages of upgrading of the Ethereum main network, on or in addition to the main network, there are other new technologies and new protocols such as sharding, hierarchy, side chains, and sub-chains. Together, Ethereum's security, robustness, higher TPS, and more flexible scalability, so that the entire blockchain technology system is expected to reach hundreds of thousands of TPS within 3 years, one is expected to reach one million TPS within 5 years, and one is expected to achieve tens of million TPS planned by the Ethereum Foundation within 10 years.
If these 3-year, 5-year, and 10-year plans can be implemented as scheduled, then the value settlement achievements of the blockchain protocol stack must be Ethereum. At the same time, Ethereum's infrastructure construction should have ended within three to five years. The next step is to build a lot of applications on a very good infrastructure, so it will usher in a stage of a huge explosion in blockchain applications.
We can also compare the historical period of the explosion of Internet applications and the explosion of blockchain applications. First, let’s review how the explosion of Internet applications occurred.
Everyone agreed that the explosion of Internet applications began in 2010, but in the early 1890s, the TCP/IP Internet model was officially established. In 2000, the basic models of Internet business actually appeared, but they have not yet been able to achieve large-scale operations, especially they have not found ways and ways to monetize.
With the emergence of mobile Internet and smartphones in 2010, especially the revolution in the Internet presentation method of APP, we believe that the explosion of Internet applications has begun. Before the APP, we logged in to the web pages through computers and browsers to have relationships with the Internet. Such a complex and multi-link process prevented most people from contacting the Internet. However, using APP on mobile phones can access the Internet with one click, which has enabled Internet businesses to gain orders of 100 million or 100 million customers. Based on the one billion customers, through algorithm recommendations and customer portraits, companies can have a high conversion rate to obtain commercial value. The application explosion of
Referring to the process of development of Internet applications, I think the application explosion should begin in 2025. This judgment is first based on the fact that the blockchain system may be able to reach millions of TPS per second in 2025. At the same time, all aspects of Web3.0 may be basically ready. In addition, the new form of business organization has begun to improve and can operate well. At that time, blockchain began to enter its application explosion period, and I predicted that this time will be 2025. The application protocol of
blockchain must first be on the blockchain chain and run based on the blockchain. Second, it must use smart contracts to ensure the effective operation of the entire commercial activity. Third, all blockchain applications must adopt a decentralized governance mechanism. Fourth, NFT is not just a proof of interest in digital products. NFT will become the proof of ability, behavior, proof of work, proof of contribution, and proof of activity of each blockchain application participant. Based on these proofs, blockchain applications will use Token as an incentive tool to establish a very effective token-based incentive mechanism so that all participants and relevant parties can get their own advantages and receive sufficient and effective incentives.
In addition, the blockchain application protocol must be open source and also open and collaborative. Open collaboration means that all blockchain application protocols can enable participants to come and go whenever they want without anyone’s permission. This is the characteristics of the blockchain application protocol that I have summarized myself. I believe this feature can also be used to analyze Web3.0 and DAO (Distributed Self-Organization). DAO will become a very important form of commercial organization in the future during the explosion of blockchain applications.
From the perspective of the commercial organizational form of blockchain applications, I think it has four characteristics.
First of all, DAO is a trust-free network. To be trust-free, it must be based on blockchain, smart contracts and digital wallets.
Second, DAO is a transparent network, the whole process is on the blockchain. Therefore, the operating data of DAO is completely open and transparent on the entire network. From the perspective of information disclosure, DAO has an order of magnitude improvement compared to traditional commerce in terms of transparency, timeliness, authenticity and comprehensiveness of information disclosure.
Third, DAO is a network with the right to use. There is no founder in this network with the right to use, which means that DAO has no owner. DAO has initiators, and the initiators may have a certain influence on the network and have the appeal of the community, but they do not own this network.
Fourth, DAO is a network that does not require permission. Joining DAO or exiting DAO is decided by individuals. There is no need to apply. No person or institution can decide who can join DAO and who cannot join DAO.
Fifth, DAO's business model has two value markers, which I think are indispensable and equally important. One is NFT. I mentioned earlier that NFT is actually a proof tool, using NFT to record your behavior, contribution, ability, and property rights. After recording this information, DAO can issue tokens based on a set of models to provide economic incentives for these behaviors, so the token is economic model and incentive model. At the same time, because of the share and standardization of Token, it is also a value exchange for all DAOs, so the entire DAO business model should be said to be "Play NFT to Earn Token", which is what I personally think of the DAO business model.
Finally, I will summarize it. Whether it is the Internet protocol stack or the blockchain protocol stack, the more the underlying protocol is, the more globally unified it is. The more unified the underlying protocols, the more prosperous the application layer protocols are, for example, there are as many as hundreds of application layer protocols on the Internet. I believe that in the future, there will be as many as hundreds of protocols for blockchain at the application layer. The explosion of application protocols is actually the explosion of application, the explosion of blockchain business, so I am very much looking forward to the arrival of blockchain in 2025.
My sharing ends here, thank you everyone.
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