Forbes: Qtum combines Bitcoin and Ethereum to issue proof-of-stake smart contract platform

Rage Review : Qtum is about to release a proof-of-stake smart contract platform based on the Bitcoin UTXO model and Ethereum virtual machine technology. The project has attracted many investors and raised $1 million last year to open the Qtum Foundation in Singapore. With the support of funds and technology from all parties, Qtum's goal is to build China's leading blockchain project, integrate the technologies of various communities, truly unleash the potential of blockchain technology, and subvert the entire business model.

Translation: spring_zqy

The Qtum blockchain architect team, the Qtum Foundation, is said to have a lot of innovative technologies and influential partners, and has obtained a large number of angel investors and signed one of the Big Four accounting firms to carry out project management and risk control. Kuaidi is also a strong supporter, the Chinese company is a mainstream car service company that emerged during the rise of Didi Taxi, and is also a large global Bitcoin holder.

Last year, through this network, Qtum raised a total of US$1 million to launch the Singapore project, with the goal of building China's leading blockchain project.

They have previously announced that they will merge the Bitcoin protocol with Ethereum technology, and now they have launched the first proof-of-stake smart contract platform. The development team behind the project hopes to bring together various ideas and creativity, and work with enthusiasts to subvert the entire business model, and the launch of a platform is part of it.

supporter

Ten large institutional backers have provided financial support and opened their networks to help accelerate the development of Qtum technology and underlying architecture. However, the specific four major institutions that provide management support for this project have not yet been disclosed.

Patrick Dai, 27, co-founder of Qtum, said, "All investors are not only financial sponsors, but also strategic supporters." The decision-maker of the project is the Qtum Foundation (established in November last year and headquartered in Singapore), which is responsible for the development of the project.

Patrick Dai

We have used various methods to contact major investors and discuss investment scenarios. Here are the protagonists supporting Qtum.

We learned that the supporters include billionaire Kuaidi founder Chen Weixing, Ethereum founder and JaxxWallet CEO Anthony Di Iorio, Augur co-founder Jeremy Gardner, Blockchain Capital's EIR, Left Coast founder Li Guoquan, and DLEE Capital Management.

In addition to Li Xiaolai, the largest Bitcoin holder and blockchain angel investor, Qtum supporters include Shen Bo, general partner of Fenbushi Capital; Jehan Chu, managing partner of Jen Consulting; Gao Qingzhong, strategic cooperation director of Huawei Technologies Co., Ltd.; Xu Mingxing, CEO of OKCoin; and Yi Lihua, partner of Zhongwo Investment.

Dai, who is also a doctoral student in computer science at the Chinese Academy of Sciences, said, “The project raised more funds than we expected at the beginning.”

He added: “But these backers are also able to provide a lot of technical and strategic support, which is very beneficial to the project and has helped us reach several milestones before the crowdsale.”

Dai, a former senior product management manager at Alibaba, told us that the funds raised from crowdsales will be used for technology development and to increase the usage of the platform.

He said: "By collaborating with other blockchain communities, third-party developers and technology innovation partners, Qtum is creating an open source community with global influence." Their ultimate goal is to apply blockchain technology to all walks of life, including finance, social networking, mobile phones, the Internet of Things, and so on.

Although they have clearly expressed their hope that the community will help develop this platform, Qtum has not yet decided when to start the crowdsale.

The Qtum blockchain combines Bitcoin Core, Proof of Stake, and Ethereum Virtual Machine (EVM) to develop its end product, Qtum Core, which is capable of executing smart contracts on a Proof of Stake consensus model.

Qtum's main goal is to create a set of value transfer protocols, including various decentralized applications (DAPP) to support and strengthen various industries. Another goal is to maintain compatibility with existing Bitcoin and Ethereum processing processes and use them as safely as possible in industries other than the financial sector.

While Qtum is theoretically used to send and receive digital currency like Bitcoin — except with the proof-of-stake twist — its actual performance is based on a system of smart contracts.

What are the benefits?

Many people consider Qtum to be the strongest team in China, considering their industry knowledge and corporate interests. Dai said: "Our supporters value what we have done and what we have considered to achieve with blockchain technology. They know that we are working hard to create." Moreover, the goal of industry pioneers and supporters is to make the most of this technology in the future.

Dai said:

“China urgently needs its own blockchain, and our goal is to build the country’s leading blockchain platform, and then move to the forefront of world technology through continuous strengthening and improvement.”

In addition to Dai, the Qtum team also includes Jordan Earls, the developer of Qtum Core, and Neil Mahi from the Qtum blockchain architect team. Among them, Earls has been developing software since he was 13 years old, and has reviewed more than 100 alternative cryptocurrencies and verified the functional advantages of various tokens. Mahi has a degree in business administration from the International Council of Science and Education Societies (ISCAE), but later devoted himself to computer science, has about 20 years of software development experience and four years of experience in the blockchain field. In addition, there are many technical personnel in the Qtum team from large Chinese companies, including Alibaba, Baidu and Tencent.

Bitcoin Core Protocol

From a technical perspective, Qtum is an open source value transfer protocol and decentralized application platform. It is called a "new paradigm" that combines the scalability of Bitcoin Core with an enhanced EVM to create the Qtum Virtual Machine (QVM).

Some people think that this is a fork of Bitcoin, an extension of the Bitcoin scripting language, and a new alternative currency platform. However, the founder of Qtum expressed his opposition.

The Bitcoin Core protocol is the most thoroughly tested blockchain code in the world, and its network contains billions of dollars in trust funds and costs millions of dollars each year for developers to maintain and develop it, but "unfortunately, the functionality of the Bitcoin scripting language is limited," Dai said.

“Bitcoin is mainly used to send value. Ethereum can be used for a variety of use cases, but Ethereum’s source code is not as stable and secure as Bitcoin. The new paradigm that Qtum wants to achieve is to combine a new enterprise-friendly consensus with a secure, stable, and scalable platform. We are combining the best features of Bitcoin and Ethereum.”

This is also consistent with Bitcoin Improvement Proposals (BIPs) as it is based on Bitcoin’s Unspent Transaction Output (UTXO) model and can interact with the QVM in real time.

Account Abstraction Layer

Through Qtum's account abstraction layer, QVM can run on a stable and proven platform - without using Ethereum's account model. (Note: This open source project combines EVM and Bitcoin's UTXO model, with the goal of providing smart contracts for global enterprises).

Dai noted:

“The integration of the EVM with the UTXO model has capabilities far beyond just executing standard smart contracts on Ethereum. We will continue to expand this in the coming weeks.”

This smart contract and decentralized application platform allows developers to easily transfer projects from the Ethereum blockchain to the Qtum blockchain. However, some people will definitely ask how to do this specifically.

John Scianna of Qtum has worked at several startups, including CoinPip, and has been following Bitcoin since 2012. John explained the above question: "All current Ethereum projects can be easily transferred to the Qtum platform because the Qtum platform is compatible with the Ethereum virtual machine. The only thing developers need to do is to build contracts and account status on the Qtum account abstraction layer."

He added:

“We have developed two community projects. One is BiSMTP (Blockchain Integrated SMTP), through which we hope that everyone can use their email address as an address to send and receive digital cryptocurrency through their email address. The main goal is to improve the usability of the blockchain.”

Another project, Qloha, aims to integrate it into WeChat’s latest mini-program platform, allowing people to send and receive tokens through WeChat. The goal of both projects is to improve the usability of blockchain.

Qtum Roadmap

The startup said they want to achieve more than just the current design results, they also want to ensure that this design can be extended and can serve as the underlying foundation for them to continue to build other things in the future.

These designs are constantly changing, and the current focus of discussion includes: how to better and faster interact with smart contracts of SPV wallets, create first-class blockchain data while improving efficiency and usability, as well as realize automatic/periodic contract execution and strengthen sidechain support for smart contracts.

They do not limit themselves to a specific field, which is why they communicate with different stakeholders to create a "platform without industry boundaries" rather than specifically responding to a specific corporate need.

Embracing blockchain

Qtum is a compatible community, and Dai believes that "Qtum embraces most of the top blockchain technologies."

Through Oracles and data transmission lines, its smart contracts enable anyone to participate in real-time economic activities. This decentralized economic model under the Qtum model will be open to the public in a completely open source form, which means that they welcome any developer to review the code.

An Oracle is a specific agent (i.e., entity, node, or address) that is trusted by participants in a blockchain. Oracle networks can be used to implement off-chain computing systems and (completely or partially) execute contract code.

Dai explained:

"Running smart contracts on a public blockchain requires processing certain data outside the blockchain (such as finance, economy, business, meteorology, society, etc.), that is, off-chain data."

For example, the results of a smart contract execution may be based on external data, such as exchange rates, national GDP, city temperatures, sports scores, etc. Data feeds refer to any system, process, or technology used to collect data "off-chain" and then feed it back into a smart contract - or decentralized application - and then execute it on the blockchain.

Dai said:

“Blockchain platform solutions based on built-in virtual machines have certain limitations, namely that each node must execute (run) all smart contracts in real time, which slows down the process and leads to redundant processing. These computing-intensive smart contracts may then waste a lot of resources.”

Therefore, full execution of smart contracts on the blockchain is not the best option. Moreover, Dai pointed out that it may be better or even necessary to run contracts or parts of the source code off-chain, so that the computing cost can be greatly reduced.

In addition, blockchain has a public attribute, that is, data and calculations are publicly visible, while many financial transactions require a certain degree of privacy, so off-chain execution may be able to better protect the privacy of contract data and transactions.

Blockchain ecosystem and existing problems

As an ecosystem with unlimited potential, the Qtum blockchain combines the strengths of the Bitcoin and Ethereum communities and is said to be able to solve this "inherent problem" of existing blockchain systems.

These issues include the lack of smart contracts for enterprises, and the fact that current smart contract platforms are mainly based on proof of work. According to the recently released Qtum white paper, "the proof of stake consensus mechanism is more suitable for enterprise applications."

There are also compatibility issues between different blockchain technologies. For example, Bitcoin's UTXO model is not compatible with Ethereum's account model.

However, due to the different participants, all consensus mechanisms lack flexibility. Public blockchains and permissioned blockchains have different requirements for consensus mechanisms.

Then there is the issue of lack of consideration for corporate compliance needs, that is, consideration of compliance requirements such as financial industry identity identification, know your customer (KYC), and anti-money laundering (AML), which are not supported by current blockchain technology applications.

In addition, the current blockchain system is not open enough, and the triggering standards of most smart contracts are still set within the blockchain. Moreover, there is no relevant trigger table for the source of off-chain data, so it is impossible to establish a connection with the real world.

The Qtum platform will be released this year, and its foundation is expected to be launched in the summer. Its test network will be available in the next few months.