Hsuan Lee, vice president of Cobinhood and Dexon spoke at Blockchain Live 2018 in London on Wednesday, where he outlined a number of prominent issues with current blockchain payment systems and offered a solution of his own.
He said, ”We see a lot of promising projects but there is still an underlying problem in the ecosystem: we’re building all this on a shaky foundation.”
”Blockchain was meant to empower people to transfer money even without a central authority so you don’t have to trust the bank, you just have to trust the algorithm,” he added, laying the basis for why an efficient blockchain payment system is so crucial. Bitcoin, however, is just a prototype of this use case as he sees it because the network is only able to support up to 7 transactions per second – far from sufficient for a mass-adopted payment network.
Lee noted several of the issues in addition to speed, such as needing a blockchain that can be know-your-customer (KYC) compliant as the area becomes more regulated, meaning there must be a way to know which address belongs to who exactly.
Blockchain technology right now is still relatively slow and expensive, and cannot compete with the big players in fiat currency on nearly the same efficiency scale. While Lee recognized the Ethereum blockchain could conduct transactions better than Bitcoin at around 20 transactions per second, this is significantly outperformed by the likes of Visa. On a low day, he cited Visa’s bandwidth as conducting 2,000 transactions per second, and tens of thousands at its peak. ”So right now it’s not enough. We need a better solution,” he told the audience.
Another issue blockchain faces is a fragmented ecosystem; with so many different blockchains being used for different things, and no protocol to communicate with each other, so overall effectiveness suffers.
Lee framed the predicament in terms of social media: ”It’s like, can you imagine using Facebook if you only have five friends on the platform? It’s not very useful.” His blockchain project Dexon may have found a way to integrate blockchain with one another, and he urged the audience to read the whitepaper and look at his proposed solutions.
Dapps are the future
Alongside payment systems, Lee thinks there is a promising future for blockchain in terms of emerging digital assets exchanges and peer-to-peer markets, as well as with stablecoins built on the technology, but he also thinks the blockchains currently available are inadequate in the long term for applications. He believes it has ushered in a whole new era of decentralized apps (Dapps) that will replace the traditional model.
”When Apple introduced the iPhone to the world it opened up a new era of mobile apps. I think nearly everyone uses at least one mobile app these days, it’s hard to imagine a world without messaging apps, Facebook, Instagram. Now we have a new era, a Dapp era,” he said, sharing his theory with the audience, ”Maybe in 5 or 10 years it will be hard to imagine a world without blockchain technology and Dapps.”
This new era has not come without any challenges as he outlined, comparing blockchain to the dot-com bubble. He predicted, ”Companies are taking advantage, raising a lot of money and some lack the capability to lack what they want to achieve. I believe that in 5 to 10 years from now a lot of these companies will perish but at the same time blockchain still will shape the future.”
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Image Courtesy: Amelia Trapp/ Blockchain Live 2018