Thanks to X-Order for holding the interview to IRISnet founder, Harriet Cao. Harriet Cao talked about the recent changes in Chinese policies, the current status of IRISnet and her thoughts on the value capture of public blockchain tokens.
The original interview was conducted in Chinese. The following is the translation of the conversation. There may be some inaccuracies in translation.
Q: Policies in China have changed so much. How has IRISnet, as a front-line project party, been affected?
Let me first introduce the background of our team and what we have been doing:
Our team was founded in 2016. Both of our founders have backgrounds in enterprise computing. I was originally at the IBM Research and had been working on artificial intelligence and big data. Haifeng is our other founder. He was the CTO at Wanxiang Wancloud and led the development of blockchain cloud technology.
The goal of our team at the beginning was to solve complex problems in a real business environment utilizing blockchain technology. Later, we realized that the technology itself is still immature in practice. As a result, we decided to embark on two routes: the first focusing on the development of foundational blockchain technology and its application to public blockchains, and the second on the application of the technology to industry consortium blockchains.
We have invested a lot of effort into cross-chain technology. In the main practice, we regard it as an important method that can truly solve complex problems related to the application of blockchain technology. Some issues that might not be solved by a large public blockchain might become solvable through the use of cross-chain technology.
Industry consortium blockchains are also a good validation and application of our public blockchain technology, however, it requires intensive integration of resources. The announcement of the national policy on October 24 approved blockchain technology at a macro level, and the most direct impact on us was that the work we have been doing has gained support from more resources.
The blockchain industry is still in its infant stage. It is a trust machine that integrates multi-party collaboration. Consortium blockchain requires coordination among multi-party business entities, and therefore it needs a strong integration of resources. In this case, there is nothing more efficient than promoting the integration of these resources at the national level.
Q: What is the difference between consortium blockchain, public blockchain, and private blockchain?
The most important feature of public blockchain is that it is open so anyone can join. Its security and maintenance are mainly guaranteed through cryptography and token economic incentive mechanism.
Consortium blockchain is a closed chain composed of multiple agents centering around specific business needs, and its admission requires permission. Generally, there is a very important module in consortium blockchain, which is identity authentication. Since consortium blockchain has identity authentication and KYC management, its security does not rely on token incentives.
Regarding private blockchain, in my opinion, blockchains are divided into permissionless and permissioned ones. Public blockchain is the former and consortium blockchain is the latter, so some people will call the latter private blockchain.
Q: Will there be such a case in consortium blockchain, that it can be hierarchical, where some nodes have IDs, and others do not need KYC and ID systems so anyone can access them?
The mixed architecture of public and consortium blockchains that we advocate can solve such needs through cross-chain technology. Public blockchain and consortium blockchain are adapted to different scenarios. For example, in the medical and health industry, medical data has very strict requirements for privacy and security. The consortium blockchain is very suitable for this scenario. Participants are hospitals, insurance companies, pharmaceutical factories, medical check-up centers, and other institutions.
However, in some to-C scenarios, such as mutual insurance, where everyone wishes to join more freely, then the permissionless public blockchain is more user-friendly. However, if some data verification is needed, verification can be given by the medical data consortium blockchain through cross-chain technology.
Technically, now we can solve the problem of interoperability of the public blockchain and consortium blockchain through cross-chain technology, however, we still waiting for regulation developments in China. Only under regulation, it might be possible for China enterprises to participate in public blockchain interaction in the future.
Q: If the identity of each node of the consortium blockchain is known, what would be the difference between it and traditional software shared among multiple parties?
Our general suggestion to our enterprise customers is that if a centralized system can solve the problem, then blockchain is not needed, because, in fact, a distributed system has a relatively high cost and low efficiency.
The blockchain suits the business scenario in which the multiple business entities need collaboration and they might not trust each other. The key difference is whether the scenario to be solved involves collaboration between multiple business entities. In this case, a centralized system will not be as efficient as blockchain.
Q: Why is on-chain governance consent needed in order to connect to IRIS Hub?
As a cross-chain hub, IRIS Hub needs to trust the information of cross-chain transactions sent by the Zone connected to IRIS Hub. For example, if the Zone is a very centralized, closed, and easily manipulated system, then the Hub can refuse being linked through governance.
Q: If I were a hacker, could I attack the less secure chains and then carry on the attack to Ethereum or Bitcoin through IRIS Hub?
In fact, I think that cross-chain will not carry on insecure factors, but can better confine some security issues in each specific zone. If IRIS Hub is connected to a DEX and someone is willing to use it and then he deposited 10 ETH. In that case, DEX is attacked. It does affect the value of these 10 ETH, but the Ethereum network itself is still intact.
Q: As an important token in cross-chain protocols, how does IRIS capture the value in the ecosystem? What is its utility?
The utility value of the IRIS token is at the consensus layer, which can be used as a staking token to participate in PoS consensus and network governance, and can also be used as transaction fee token. At the application layer, there are multiple uses, such as issuing new assets on IRIS Hub or deploying services that consume IRIS tokens. The governance issues regarding the application layer designs, such as service dispute resolution, are also accomplished through IRIS tokens.
Q: What do you hope the cross-chain technology or the entire ecosystem will look like?
I think it should be an open, cross-chain ecosystem that supports diverse needs. No matter whether it is a cross-chain service hub or an application blockchain zone, everyone has its own unique value contribution, which can support each other in the ecosystem to achieve a win-win or multi-win state.
Thanks to Harriet Cao.
This article was originally posted here: https://medium.com/irisnet-blog/irisnet-the-forerunner-of-cross-chain-services