This article is the second excerpt in a series of two. To read the first, click here. To hear the full interview, click the Soundcloud or Youtube links.
The concept of ‘smart contracts’, originally conceptualized by Nick Szabo in 1994, has become one of those buzz words of the crypto world.
Every other new network that appears on the scene talks about having smart contract capabilities, but very few of them deliver on their promises in a way that’s accessible to the general public. Networks often require their users to have some sort of programming ability or other esoteric technical know-how to create and operate smart contracts.
What’s more is that smart contracts are limited to the network that they are created in–for example, smart contracts created on the Ethereum network can’t pay out or receive payment in the form of Bitcoin or IOTA.
Qtum founder DJ Qian claims that all of this is about to change for the better. We spoke with Qian about his new project, Fusion, a blockchain network that will have interoperable smart contracts that anyone can use.
Scalability, Fees, and Transactions on the Fusion Network
“People are always talking about transactions per second when we are talking about scalability,” DJ began. “For example, the Ethereum platform can handle about 15 transactions per second, and Bitcoin can handle 7 transactions per second tops because of the size of the blocks. Maybe in other blockchains they can handle more if you build an alliance chain, the transaction number could be a million.”
DJ explained that “based on our testing, the transaction number on Fusion could be 10x higher [than the transaction rate on the Ethereum network]. But that’s not the only thing we want to achieve.”
While faster transaction times are an important part of the Fusion network, DJ explained that Fusion’s crowning quality is that smart contracts on the Fusion network will be interoperable: “All kinds of tokens will be running on Fusion, and they can interact with each other. You can build the smart contract amongst different parties with different tokens in just one smart contract.”
DJ added that smart contracts on the Fusion network will also be executed more quickly than smart contracts on the Ethereum network.
“This requires much more computational power,” DJ noted, which is why “we built a parallel computing function in our consensus. The speed of the smart contract will be much quicker, and the bandwidth of the solution will be much higher than any of the existing blockchains.”
What else is Fusion capable of? “Each smart contracts on Fusion reflects a cash flow, like a token flow,” said DJ.
“I can give you an example,” he continued. “Let’s say Account A is gonna pay account B in Bitcoin–but not immediately, maybe in 60 days.
“Based on the condition that account B is gonna pay a token (let’s say each token represents a Louis Vuitton bag) based on the condition that account B paid this token to account C, under the condition that account C is going to pay some tokens to account A. You can organize those kind of smart contracts on Fusion.”
Fusion is a public Blockchain that will serve as a cryptofinance backbone, by allowing secure, programmable & flexible cross-chain, off-chain, cross-organization and cross-data sources transactions seamlessly.
— FUSION (@FUSIONProtocol) January 13, 2018
DJ alleges: “This cannot be done today because there is no such kind of platform of all the cryptocurrencies like Fusion…The purpose of Fusion was to have those kinds of tokens to be interoperable with other tokens. On Fusion, the smart contract will define a certain cash flow, and token flow just like in finance today.”
“The fees are just like the gas [on the Ethereum network],” he replied, simply. “When people create a smart contract, it will cost a Fusion token.”
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A User-Friendly ‘Template’ for Smart Contracts
DJ said that the overly-technical nature of smart contract creation on the Ethereum network inspired him to create a more user-friendly method of building smart contracts on Fusion. The Fusion network will tackle the issue of technical know-how in two different ways; the first is “a smart contract template”.
“For example,” said DJ, “the loan smart contract will be designed in a similar way, they just need to input several parameters. Like, if I’m going to sign a smart contract with you to have a risk-free loan, we just need to input several parameters like how many tokens, how many values I’m gonna borrow for you, for how long, and the interest rate. There’s just a few parameters to input.”
“The second thing that we’re trying to do to solve this problem,” he continued, “is that we have a bunch of different third-party auditors to help with those kinds of smart contracts.”
This will ensure “that people can trust the contracts.”
The Fusion Algorithm
DJ explained that Fusion consists of two separate layers: “The first layer is governed by PoS [Proof of Stake]. It is enabled with parallel computation.”
“Each smart contract has computation power to do calculations under which kind of conditions a bunch of tokens will go to another account in a certain period of time,” he continued.
“Those kind of computations will rely on the first layer. We enable the parallel computation in the first layer, all of the nodes supporting Fusion will be divided into different groups. Each group will do their interconnecting works for computation.”
DJ added: “All of the winning nodes [on the PoS layer] that are selected will need to compete for the ledger booking on the second layer which is governed by PoW [Proof of Work].”
“That means, in our consensus, by the parallel computing function, we can support the smart contract by running distributedly. If someone develops an app and a smart contract on Fusion, they can use the parallel function, and divide the work into different groups to finish the computation work.
Buying and Storing Fusion
DJ said that discussions with exchanges are underway.
He also noted that “people will also have the opportunity to run a node for Fusion to get the Fusion token. We have designated 30% of the Fusion tokens to be used as rewards for the community.”
In terms of storing Fusion tokens, “Before the main net goes live, people can use any wallet that supports ERC20 to store the Fusion token.” After the main net is up and running, “people can store their Fusion tokens in the wallet, designed by Fusion or designed by some third party.”
— FUSION (@FUSIONProtocol) February 12, 2018
The Future of Fusion
“I can see a lot of different tokens being locked in on Fusion,” DJ said. “We are also trying to attract more developers. Even some people from the community are already volunteering to do these kinds of things, and build the smart contracts on finance to support the finance function. One year from now, we can see a lot of different types of finance functions and smart contracts to be running on Fusion as well.”
DJ explained that over the next six months, “we’re gonna have more connections with today’s finance market. You can see a lot of support–selected supporters and advisors–from Wall Street. They are from existing financial institutions. We will get their help and support to modularize those kind of finance products, which can be designed in a technological way to be running on Fusion.”
He said that Fusion hopes to develop a positive and long-lasting relationship with financial institutions: “What Fusion is trying to do is have an open environment and an open ecosystem…We are not the host, we are just a facilitator. We hope those type of financial institutions will join with us together, to make a product that will work efficiently and will have more function in the future.”
DJ concluded: “This is what I want to echo to the voluntary participants that are happening these days. We have strong confidence that in the next 6 months we will see a lot of people and a lot of institutions from the community, that we can group together with to make sure that much better finance can happen in the future.”