After his recent departure from QTUM, Stephen Xu shared his thoughts with BTCManager on the challenges facing the blockchain space, the China ban and the future of cryptocurrency. A graduate of the University of Chinese Academy of Sciences, Stephen Xu is a veteran in the blockchain space, and also worked for Tencent as a game developer specialising in “in-game currency mechanics.”
What led you down the blockchain rabbit hole, and how did you got into development?
I chanced upon Bitcoin a few years ago, when I was a candidate for a Masters at the Chinese Academy of Sciences. Since then, I started to follow forums and even did some mining. I would analyze Satoshi Nakamoto’s proposed framework for Bitcoin in my spare time, and often thought about blockchain infrastructure as I learnt more about the technology.
After my graduation in 2014, I worked at Tencent as a game software engineer. During my time with Tencent, I had the opportunity to develop, consider and design in-game currencies and economic models. This segued into an interest in blockchain and tokens. When Ethereum came into the blockchain sphere, I became increasingly interested in the utility and feasibility of blockchain technology and cryptocurrency, especially with regard to real-world applications.
In 2016, Patrick Dai, co-founder of QTUM Foundation and my schoolmate from my days at the Chinese Academy of Sciences, asked me to join him on QTUM Foundation. Given that I had been thinking about blockchain technology in the years leading up to this, I did not hesitate and jumped onto the opportunity to dive into blockchain development.
What made you leave QTUM, and will you continue to work in blockchain now?
I am proud of how far QTUM Foundation has come and appreciated my time there. We were able to release both testnet and mainnet within six months of the Initial Coin Offering (ICO), which I would say is quite a feat! However, QTUM Foundation’s platform is a public chain whose use is limited to application developers. Being deeply interested in blockchain technology with practical and real-world applications, I wanted to work on something with a more layperson user base, which is why I left QTUM Foundation to co-found DREP Foundation.
DREP Foundation offers a decentralized reputation ecosystem for internet platforms of different types, from e-commerce to content, and for users of these platforms. By quantifying and tokenizing the reputation of users based on the desirability of their behavior across platforms, DREP Foundation aims to incentivize quality user engagement and contributions to help platforms acquire quality users, encourage user engagement and monetize traffic. I am excited to be leading the development and implementation of DREP Foundation’s network – especially when it comes to identifying use cases and tailoring for the users.
What would you say are the biggest challenges facing the blockchain space?
Players in the blockchain space face challenges in a few big areas: Finding real world applications, technical development, and regulations.
Given that blockchain technology is still a nascent industry, many players are very excited to develop and build smart contracts or blockchain networks without much thought for real world applications and use cases. Additionally, the public is far from understanding and adopting blockchain solutions and technology. It is important for blockchain players to think about how their solutions can add value to their users’ lives.
From a technical viewpoint, blockchain platforms seem to be unable to achieve scalability, security and decentralization in perfect balance. We see that congestions on existing blockchain networks. However, newer platforms that have innovated around this, such as using delegated proof-of-stake (DPOS) mechanism, end up compromising on decentralization. Beyond this, the recent General Data Protection Regulation (GDPR) mandates that data must be removable. Players will have to innovate around this, given the immutable nature of transactions on blockchains.
Other regulations are also introduced by governments and other financial institutions in an attempt to control the blockchain industry. Players have to stay abreast of these regulations and work carefully.
Are you able to comment on the ban on ICOs in China? Do you think it is likely to be lifted?
There are so many factors influencing regulations that it is difficult to comment on what’s ahead. It certainly affects the blockchain industry in the short term by lowering investor confidence and causing volatility. As I understand it, this ban is a possibly a temporary way to protect lay people from investing in potential scam projects.
I believe the ban could be lifted as the industry continues to mature, with government and public better understanding the technology and how it affects the flow of money and resources. We definitely expect to see other regulations being introduced in the long term, as with the growth of any new technology.
Thank you very much for the time Stephen Xu has devoted to this interview, and the insight he has provided. We wish him the best of luck in his next venture.