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The blockchain battle behind NFT: public chain or consortium chain?

In 2022, NFT will usher in an unprecedented outbreak in the world. Concepts such as digital collections and Metaverse are well known to the public. Although there is no wave of NFTs like foreign countries due to policy issues, its localized “digital collections” have become The new trend everyone is looking for.

After localization in China, “NFT” is gradually being replaced by “digital collection”. What is the underlying difference between “digital collection” and “NFT”? Can the digital collections on the alliance chain compete with the NFTs on the public chain? In response to these problems, Golden Finance specially invited Cao Heng, the founder of Boundary Intelligence, to participate in this issue of Golden Theory of Relativity to discuss the blockchain battle behind NFT.

Question: What kind of chain is the underlying chain on which the current domestic market NFT platform relies?

Cao Heng: From the perspective of classification, the general classification of blockchain will be divided into public chain and alliance chain.

The public chain is represented by the Bitcoin and Ethereum networks. Any user can access the network and use the network. At the same time, anyone can participate in running nodes to jointly maintain the network. These accesses are anonymous.

Consortium chains are generally permission-controlled blockchains, and are generally relatively closed business ecosystems based on specific business requirements, which are jointly maintained, managed, and used jointly by ecological participants under permission control.

At present, it seems that a small number of domestic digital collections use the public chain, conservatively estimated to be less than 20%, and most of the others use the alliance chain. Because the alliance chain can better support compliance.Practitioners of public systems and applications know that the system we launch must meet the management of national network security. Access to any platform system service requires a real name, which cannot be supported by the public chain. In addition, if there is an infringement or violation that needs to be corrected, it is basically impossible on a permissionless public chain.

If you need to meet China’s compliance requirements well, the alliance chain can form a good support for NFT (data collection) applications.

Question: Is there a mature NFT infrastructure platform in China?

Cao Heng: I think a mature underlying platform must be able to openly support multi-party distributed trustedcollaboration.

“Openness” and “trustworthiness” are important characteristics of large-scale public chains: relying entirely on network protocol support to achieve trust, rather than relying on a single center or several centers to maintain a “trusted” ledger. In China, the alliance chain can better support compliance. So I think the underlying platform of mature NFT should be a new form emerging now – open alliance chain. The open consortium chain combines the underlying open consensus technology of the public chain and the license management technology of the application layer consortium chain to a certain extent.

The BSN (Blockchain Service Network) that Bianbian Intelligence participated in the construction of has more than 10 open consortium chains using different chain technologies. Although these open consortium chains have different degrees of openness, they are all iterating towards the goal of providing credible public open ledger services.

The Wenchang Chain built by Bianbian Intelligence is the first batch of open alliance chains of BSN. It has been online for more than a year and now supports nearly 100 NFT Metaverse applications. Wenchang Chain is developed based on the border intelligent IRITA framework, mainly using the world famous open source public chain project Cosmos technology and our self-developed enterprise-level distributed application technology, which can provide a trusted public ledger system for large-scale and diversified distributed commercial applications. . 

The consensus protocol of Wenchang Chain is Cosmos/Tendermint, which has a large-scale ledger consensus capability at the public chain level. Now all chain nodes are deployed in the BSN environment. BSN has publicly released its plans for 2022, and will allow more application parties and ecological participants to operate accounting nodes in an environment of their own choosing after completing KYC. So far, Wenchang Chain, which can now support compliance requirements and support diversified large-scale applications, is still evolving towards an increasingly open infrastructure platform.

Question: What is the important technical significance of blockchain cross-chain technology and interoperability in the development of NFT?

Cao Heng: I believe that the Internet of Blockchains will be formed in the future. I do not believe that there will only be one (one) blockchain to support the world in the future. The bottom layer of the blockchain on which the next-generation Web is based must be blooming and multi-chain.

The multi-chain blockchain Internet must require interoperability, and it requires trustworthy and secure interoperability.Therefore, cross-chain technology is of great significance.

The final form of the blockchain Internet must be a multi-chain world, and with the development of blockchain technology, different chain underlying technologies will form their own advantages. It is very meaningful for everyone to explore along different technical schools.

For example, in the field of NFT applications, there are various chains with different characteristics. For example, Flow provides good support for NFT application development; Polygon provides a high-performance Ethereum-compatible chain; Cosmos/IRISnet provides a chain that supports NFT cross-chain interoperability.

As the innovation team of the underlying technology service of blockchain, Bianbian Intelligence wants to give the application better multi-chain technical support, so that the application can adopt the most suitable chain according to the business needs. Boundary Intelligence is also continuously developing better protocols and tools to support cross-chain interoperability.

Question: Unlike the public chain, which has many nodes and computing power, can the relatively closedconsortium chain support the performance requirements of current digital collection users?

Cao Heng: First of all, I want to explain or correct this problem a little. The multi-node of the public chain is not to solve the performance problem. The multi-node is more to solve the multi-party trust problem of the distributed system. Having many nodes can be a challenge to performance, not a help.

This question may be asked like this: Multi-nodes represent openness, how can the alliance chain meet the open ecological needs expected by the data collection application? In the past, the alliance chain did not dare to open, and could not open to support more nodes, and there were performance and security issues. In order to solve these problems, open consortium chain is a good practice. The open consortium chain also has many innovations around improving performance, such as building a two-layer network. The cross-chain technology just discussed is also one of the innovative practices.

Question: How to ensure that the digital collections purchased by users are in the hands of the users themselves, not the publishers , is there any relevant solution in the domestic market?

Cao Heng: There are already some solutions in the domestic market.

First and foremost, the data collection application must run on a trusted blockchain. The more open the blockchain the application is based on, the more credible it is. Now some payment institutions are also supporting the standardized management of data collection applications, all of which have requirements for the chain. At the very least, this data collection application must be published on the blockchain that has been filed by the Cyberspace Administration of China.

Second, data storage applications should support users to perform independent verification, such as checking their assets, on-chain addresses, and on-chain full-life-cycle activity history through a blockchain browser. We recommend that the bottom layer of the chain adopted by the data collection application should be able to provide an open chain ledger query API and have an open blockchain browser. The data collection application should also allow users to easily obtain the link of the blockchain browser in the application.

The third point is that the data storage application should apply for an independent chain address for each application user, and an application cannot have only one or several chain addresses. The user’s assets should be kept on the user’s chain address. Of course, this chain account can be hosted on the Shuzang application platform to give users a better application experience.

The fourth point is to allow users to manage their own chain account private keys.

I think a good data collection application should meet at least the first three points, the fourth point is not difficult technically, but I recommend implementing it without the first step. There are two reasons: the first is that users may not have the ability to manage their own private keys and ensure the security of their assets; the second is that compliance policies are still developing. At this stage, if users manage their own private keys and can transfer assets at will , there may be risks of financial speculation and illegal secondary transactions. Therefore, if the application is to support the fourth point, it must be extremely cautious and do its best to avoid the risk of financial speculation.  

Question: Does NFT, as a technical carrier of digital assets, need technical credibility or institutional credibility?

Cao Heng: As the technical carrier of digital assets, NFT technology itself must be able to provide technical credibility. It is this technical credibility that enables distributed applications to efficiently collaborate with multiple parties. In a public chain environment without institutional credibility, its business logic requirements can still be correctly and credibly executed.

Institutional credibility also has its own value, and the alliance chain environment has related advantages in this regard. In the consortium chain environment, we know who is providing the credibility of the institution and therefore who is issuing NFTs. Therefore, in addition to the guarantee provided by technical credibility, institutional credibility further enhances the credibility of digital assets supported by NFT technology.

Question: Does the opposition between compliance and openness limit the development of “blockchain+” in China? Such as blockchain + Metaverse, blockchain + NFT ?

Cao Heng: This question is actually asking: Are openness and compliance conflicting, which in turn affects the development speed of domestic blockchain applications?

Actually, I don’t think openness and compliance should be in conflict. A sustainable application or ecology must pursue openness and also support compliance. 

In the past ten years, the development of blockchain has experienced from the first generation of Bitcoin network, the second generation of Ethereum network to the third generation of blockchain Internet. Everyone realizes that if the blockchain industry is to truly influence the well-being of hundreds of millions of people, it must jump out of the small-scale social experiment of geek circles, and must meet stricter compliance requirements for business activities. The continuous improvement of compliance is a fact that is happening in the global blockchain industry, not just in China. Of course, the laws and regulations of various countries have different national conditions and development stages, which will be different. 

In the past, when blockchain technology was not perfect, it was difficult to support openness and compliance at the same time. For example, complex commercial systems needed to use privacy algorithms to support multi-party collaboration around big data. If it was an open system, neither performance nor security could be achieved. But now, layer-2 network technology, cross-chain technology, and on-chain and off-chain interoperability technologies have all reached a certain level of maturity. Using a multi-chain system to support both openness and compliance at the same time is a very good solution.

So compliance and openness are not opposites, and it has become technically feasible. The BSN open consortium chain, which we are very honored to be actively participating in, is an important measure to support the healthy development of the blockchain. As the promotion team for the development and innovation of the underlying technology of the blockchain, Bianbian Intelligence has been providing the underlying technology to support the development of open and compliant applications, which is also our unremitting pursuit.

Question: Will the future application scenarios of NFT go beyond the field of digital collections?

Cao Heng: Of course. The emergence of NFT as a digital collection is not only driven by the global environment, but also caused by the epidemic, and even determined by the digital migration of the entire human life. Digital collections directly allow C-end users to perceive and own digital artworks, and can directly have some usage scenarios (such as avatar skins on social platforms, etc.), allowing people to perceive NFT technology very intuitively.

As a programmable trusted data object, NFT is a very powerful technology. It can also support more applications, and digital collections are just one of them.

Take the practical work of boundary intelligence as a few examples. As early as 2018, the Boundary Intelligence team began to innovatively use NFT technology to support non-standard assets in supply chain finance. In 2021, we are also supporting partners to support carbon neutrality with NFT technology. Just in the past March, we supported the launch of the Asian Digital Banking System, a global innovative digital bank that uses NFT technology for the exchange of trusted business information and data in cross-border payments and cross-border trade. to support. Recently, we have also successfully supported the launch of new products of La Prairie, a famous Swiss skin care brand, and adopted NFT technology to support its digital marketing and customer activities. The NFT digital art collections launched combine virtual human technology and offline augmented reality technology, providing customers with very innovative Unique experience.

These are all application scenarios where NFT technology goes beyond digital collections.