On August 1st, Chinese online TV show ‘Chain Show’ released a 25 minute long interview with NEO founder, Erik Zhang. Erik discussed topics such the role of project founders, NEO 3.0, and NEO’s place in the blockchain industry. The English transcript of the interview can be read in its entirety below, and can be found on YouTube here.
Zhiqin Xiong: Focusing on blockchain breaking news, big people, big projects. Welcome to Global Vision. The person we invited to our show today is one of NEO’s founders, Mr ZhengWen Zhang. Hello, Mr Zhang.
Erik Zhang: Hello everyone. I am a founder of NEO, ZhengWen Zhang, and I’m also the core developer of NEO. I’m very happy to be here today.
Xiong: Mr Zhang, please tell us about how you entered the blockchain industry, including your experience before entering NEO?
Erik: I graduated from University in 2009, and started working in the security industry, specifically information security. After five years, I moved to Shanda Games Limited where I also focused on information security, and it was here that I first encountered Bitcoin. If I had never encountered Bitcoin at Shanda, I likely would have continued to work in the security industry without much change to my career.
I was born and raised in Shanghai and spent many years working there. Later I left for Huobi in Beijing, where there was coincidentally a Bitcoin conference in early 2014. It was there that I met the other founder of NEO, Da Hongfei, who attended as a guest speaker.
Da Hongfei shared some ideas in his speech at the conference, including a prototype of his project called AntShares. I found the speech very interesting, and in the middle of 2014 I left Huobi to return to Shanghai, where I met with Da Hongfei to further build on the AntShares concept. AntShares went on to become NEO as it is known now.
Xiong: What roles did you and Da Hongfei perform during your work with NEO?
Erik: Both Da and I are founders of NEO, but in my opinion the founder is just a mascot which is not particularly important. Our other roles are more important in the context of NEO’s architecture.
We all know that there are a total of 100 million NEO tokens. 50% of these tokens were used for early project financing, and the remaining 50% are planned for the future development of the NEO ecosystem. These tokens are managed by the NEO Foundation, of which Da and I are both members. The NEO foundation is responsible for spending money, which is decided by myself and Da. I prefer the maintenance and coordination of the technical community, whereas Da is more inclined towards management and publicity.
Xiong: You said that the founder is just a mascot, and it is obviously too modest. We heard that the early code of NEO was essentially written by you alone. Is that true?
Erik: In the early stages, yes, because the project was very new and it was difficult to gather a lot of people to contribute to it. This meant I was the main contributor. By 2016, the situation changed quite a lot. The community has grown massively and now there are lots of developers all around the world who all contribute to NEO’s code base.
Xiong: Is the present NEO the same as what you had in mind at the start?
Erik: Lots of things have changed. The name is a good example of this. The previous name of NEO was AntShares, as the original position for it was to serve as an application for the digitization of assets. Many of the interfaces were designed with this purpose in mind, such as asset registration and digital identities. However, this application scenario does not make full use of the technical advantages behind blockchain technology. Asset digitization only solves one problem; how to put real world assets into the digital world of blockchain and solve the problem of trust.
After we put real world assets onto the blockchain, we need a better way to transfer the value of those assets within the chain, and to allow people to collaborate with that value. This issue had not been sufficiently solved, so we thought about it and decided to add smart contracts to AntShares. This led to the design of a very complete smart contract system. With these features, we are not limited to only digitizing assets, everything can be maintained in the digital world using programming rather than trust. This is the future of human economic cooperation, and leads to the creation of a smart economy using smart contracts. In the end, we decided to perform a rebranding from AntShares to NEO to match our new vision.
Xiong: We know that NEO 3.0 is due to be launched in the future. What are the differences between NEO’s 1.0, 2.0 and 3.0?
Erik: NEO 1.0 was simply AntShares, serving as a platform for digitization of assets. 2.0 referred to our rebranding as NEO, with the aim of serving the vision of a smart economy. In NEO 3.0, our vision remains the same, but we want to improve the capability of the platform to serve that vision, particularly for large-scale commercial applications.
The concept for NEO 3.0 was actually the first one I proposed to the community. As I mentioned earlier, the development of NEO is not driven by one individual or authority. I might come up with an idea, but it is up to the entire community to realize and promote the idea. The initial design for NEO 3.0 was created to serve large-scale commercial applications, which is why we designed for technical features such as stability and high TPS. It also needs to be able to accommodate a huge amount of business data. Achieving those goals means continuing to improve the current system, and that means a lot of changes need to be made to the code. On top of that, we need lots of new features, including better support for new smart contracts and a more stable foundation for the blockchain. We also want to make modifications to the entire economic model.
We can put those proposals forward, but then the community will discuss and come to a consensus about what to include and what to change. So perhaps with NEO 3.0, half of them are my ideas, and the rest will come from the entire technical community. We’re all working towards the same goals, but anyone can submit a proposal and potentially change the technology of NEO.
For example, one of the things we really want to do is to reduce the cost for users who want to develop on NEO. Previously, deploying a smart contract would cost 500 GAS, and though this may be affordable for some developers, for others it is too expensive. So we have decided to reassess the pricing system as part of NEO 3.0 to compress those prices. Of course, as with the rest of NEO’s changes this is all being discussed by the community. To summarize NEO 3.0’s changes, we’re are looking to modify the token economics, improve the price model, make the network more stable and further increase the scalability in terms of TPS.
Xiong: We know that NEO has been listed since its inception, and the difference between the price at the top and now has shown some very large fluctuations. Will NEO do market value management?
Erik: I can tell you that NEO has never done any market value management, because the market value is not our priority. It rises, falls and fluctuates, but it has no effect on our community.
Xiong: NEO is a very special project. When we were in the NEO office, we noticed that there were not a lot of technicians. This is a big difference from other projects, because there is so much collaboration with other programmers across the globe. How did this happen?
Erik: This is a very big difference between NEO and other projects. Some people see this and think that NEO is not technical or has too few developers, but that’s not the case. From the start, we decided to focus on community-based development. NEO has a very large technical community. It is not a company, so we can’t develop it like we would a normal company. The focus is on creating a project as a community.
We will continue to grow NEO’s presence around the world and include a large variety of technical communities. We put money into the system to get things started, and then it can become self-sufficient and run by the community. The community will propose their own governance guidelines, and come up with lots of new interesting ideas to contribute to the NEO platform. That’s why you don’t see many technicians in our office; they are all around the world. There are lots of developers contributing to NEO.
Xiong: What is the ratio of NEO development between overseas communities and domestic communities?
Erik: Most of the technical community are overseas.
Xiong: Why does NEO value the overseas community more?
Erik: I can answer this question from another angle. It is not that NEO values the overseas community more, because NEO is a community in itself. There is no way to value a specific community. Instead, it’s the other way around. The overseas technical community has more interest in NEO, because they pay attention to blockchain technology itself. In China, from my perspective maybe people are more willing to invest in a token and follow something hyped, but they don’t have a lot of attention for the technology. As a result, a large overseas technical community is naturally formed because they are drawn to the technology and philosophy of NEO, and they eventually become the NEO community itself.
Xiong: Do you think programmers are people who will change the world?
Erik: Definitely, but it’s not just programmers. No one can change the world alone, and that’s why NEO is designed to be a community. It’s not one person or the power of a company, it depends on the whole community.
Xiong: Do you have any advice for programmers that are new to the blockchain industry?
Erik: They are very welcome to join the NEO family.
Xiong: We know that there are a lot of public chains, for example EOS is building its own ecosystem. Does NEO have an ecosystem layout?
Erik: Yes, the ecosystem has always been our main focus. The first point is the technical community as I just mentioned. NEO attaches great importance to the technical community, so we pay a lot of money to them. For example, there is City of Zion, NewEconoLabs and NeoResearch, and many other communities, including some in the security field. As you know, blockchain is very focused on security. We’re funding these communities until they become self-sufficient and can grow by themselves and give back to the larger NEO community. This is the layout of our technical community.
Secondly, we have the layout of specific industries, such as the game industry.
The third part of the layout is the exchanges. Because we are a base layer blockchain platform, there are lots of blockchain applications that need to be supported, often with their own currencies. These coins must be traded, so we have some exchanges within the ecosystem.
Finally, we have some layouts focused on security. Because blockchain is required to carry a lot of assets, a security problem would be an issue for user assets as this could cause a huge loss.
Xiong: What trends do you think will emerge in the future layouts of public blockchains?
Erik: I think serving large-scale business and applications is going to be an important trend. If the blockchain ecosystem does not go in this direction, those entities will struggle to use the platform. It’s like building blocks; the applications that didn’t work or are a little rough don’t make much sense on blockchain because they have no way of serving the real economy. The blockchain itself must become able to serve large-scale applications. After reaching that technical level, that’s when the blockchain has a real way to land.
Xiong: So you think that there will be a big reshuffle in the future?
Xiong: What blockchains will stay in the end?
Erik: Only those that are really able to serve large-scale enterprise applications.
Xiong: There is a saying out there that NEO is the Chinese version of Ethereum. Is there a competitive relationship between the two?
Erik: NEO and Ethereum are definitely competitive, but it’s not just limited to them. Almost all public blockchains are more or less competitive. I don’t really like the title ‘Chinese version of Ethereum’ though, because NEO and Ethereum are actually very different. In other words, in my mind NEO is a very strong technical competitor to Ethereum, but including influence and number of applications on the chain, there’s temporarily no way to compare it to Ethereum. Still, it’s a very strong competitor.
Xiong: So what’s unique about NEO?
Erik: Technically they are quite different. The beginning of NEO was not much later than Ethereum, and they both have their own independent smart contract systems. Ethereum doesn’t really have much to do, it has already positioned itself as a decentralized, distributed computer that cannot be stopped, and is a platform for running smart contracts. But our vision for NEO is not quite like it. Functionally they are similar, but the vision is different; we aim to serve the smart economy.
Xiong: EOS has said they are also going to focus on large-scale commercial application. What is the difference between NEO and EOS?
Erik: Everyone is starting to realize that they need to move in this direction. The advantage of NEO is that we started a lot earlier. EOS has only just been released on the main network, and the scale of the application is small. For us, our smart contract system is very mature, including the compiler, development tools and other parts of the ecosystem. Our technical community, developer community and investment systems are all very mature. Our development is happening much faster than EOS, which is a big advantage for us. In the end, we must compete based on who has the stronger ecosystem and community.
Xiong: Is there a stigma between blockchain technologists?
Erik: I don’t have any contempt for other chains. If it’s a blockchain project, I welcome and respect it very much. As long as it’s not the ones who cheat or overhype projects.
Xiong: There exists an opinion that NEO only runs on Windows. Have you ever heard that, how do you respond?
Erik: I have heard this opinion, and my response is simple. We know that NEO is a blockchain project, and that blockchain must be a set of protocols or a set of standards. There is no single protocol or standard that will only run as a single operating system.
Xiong: I heard that Da Hongfei claimed NEO will become the world’s number one public chain in 2020. Why does NEO have such an ambition to do this, and what does it really mean?
Erik: There must be an ambition behind it, that’s my personal style of doing things. Without having the ambition, I’d rather not do it at all. To achieve our goal, there are two directions to consider.
Firstly, by 2020 NEO will be the first to become a public blockchain available for large-scale commercial use. This is our main goal. The second point is that if I’m a developer that wants to build a decentralized application, what is my preferred platform? Right now, it could be Ethereum, because whether it’s in terms of popularity or the number of applications, it’s far ahead of NEO. So maybe now, the preferred platform for developers is Ethereum, but we hope that through our efforts and the construction of our economy, we can change that by 2020. We want to make it so that if a developer wants to create a blockchain application, his preferred platform will be NEO rather than any other public chain.
Xiong: Other public blockchains want to form their own economies, and many projects are built on them. How does NEO intend to attract a lot of projects to it?
Erik: The first approach we will take is to reduce the barrier to development. We have a large number of compilers, so we can attract a lot of existing developers in non-blockchain domains, and they can develop in languages they already know well. This makes it much easier to get into blockchain development, and can only be done on NEO. In this sense, we can attract a large number of projects.
Secondly, we aim to reduce the cost for developers and users. If an application is deployed on Ethereum or if the user actually uses that application, it costs a lot. When the network is congested, the cost of a smart contract will be very high. On NEO, our higher TPS of potentially thousands of transactions per second means the network will not be as congested. We aim to increase our maximum TPS even higher, because this is the only way to serve large-scale commercial applications. If the network doesn’t get clogged up, the costs for a user are much lower when using a smart contract. This makes it much more attractive to developers interested in developing on our platform.
Thirdly, we have the NEO Global Capital investment fund. We’ll use this to invest in quality projects and offer start-up capital to those projects. They’ll be much more willing to develop on NEO.
Xiong: We know that Ethereum experiences congestion, how does NEO avoid it?
Erik: The main reason it happens to Ethereum is because of the technology. The architecture was decided at a very early stage, making it difficult to change. The consensus mechanism, Proof of Work, makes it difficult to improve it’s concurrency. There are improvements that can be made, such as sharding, but these things are far off. This gives NEO a time window where we can develop for high concurrency and high TPS.
Xiong: We know that there are many true stories around us about people getting rich overnight with NEO tokens. Did these stories shock the NEO team?
Xiong: You imagined that NEO would produce such a big development?
Erik: We imagined it.
Xiong: What’s do you think it’s market value is going to be?
Erik: We’re sure no one can really think of that.
Xiong: We know that NEO’s price could increase a thousand times. Would you make an investment into another project when it happens?
Erik: I have not made an investment in blockchain so far because I am more focused on the technology. Early in the NEO program back in 2014, because NEO did not yet exist, there was no blockchain. It was not as convenient as doing an ICO now. At that time, everyone was financed by individuals paying maybe tens of thousands RMB each. It could add up to hundreds of thousands of RMB. Then I received 1% of the tokens for the NEO program, about one million tokens. Since then, I bought a little more for myself, which was the first investment I’ve ever made. I have not traded in the market since then.
Xiong: What do you think of the present and future of blockchain? What is the trend in development?
Erik: I think it’s still very much in the early stages. The technology is still young, and all projects are at a similar stage of their evolution. So far, there is no blockchain that can work for large-scale commercial applications. This scenario requires a high TPS and lots of stability, with huge amounts of business data stored in the chain. It can’t be saved. Our blockchain technology is still far from running that level of application, we’re still in the early stages. If a blockchain project can make the technological breakthroughs required to reach that level, that’s when the real blockchain applications are going to hit the ground on a large scale. At the time, the spring of blockchain will arrive. I hope that NEO can herald the spring awakening of blockchain.
Xiong: What’s the world like from a technicians’ view?
Erik: It will be like the real world.
Xiong: But what kind of authority will emerge?
Erik: Like I said, even though I’m the founder, it’s just a mascot. The mascot cannot and should not become a center of authority. If you are a founder and become an authority, the blockchain becomes centralized and violates the original intent of blockchain technology.
Xiong: What do you think NEO’s future will look like?
Erik: As Da Hongfei and I say, our goal is to be the best public chain in the world by 2020. Our ecosystem will be more decentralized, whether it’s in regards to the tokens, the network or development. The whole project will be more decentralized.
Xiong: Do you think blockchain will subvert or supplement the Internet?
Erik: I think it will supplement. The word subversion is used too much. People like saying subvert, but in the end not many things have ever been subverted. New technology is absorbed, new tools are developed and it simply makes it better. That’s the best way to do it.
Xiong: Finally, can you introduce NEO 3.0 to us in one sentence?
Erik: NEO 3.0 is more stable, faster and better than NEO 2.0 in every way. The user experience will be better, development will be cheaper, the barriers to entry will be lower.
Xiong: Who do you think is the most handsome between you and Uncle Da?
Erik: I think he is usually more handsome, but I’m more handsome today.
Xiong: Will he be popular with lots of girls?
Xiong: How about you?
Erik: I couldn’t answer, haha.
Xiong: Ok, thank you for coming on our show today Mr Zhang.
Erik: Thank you.