This is an excerpt and the first in a series. To hear the full interview, click the Soundcloud or Youtube links.
Although news of the adoption of various cryptocurrencies into a growing number of industries and systems is becoming more common, interoperability remains an issue–for example, banks that adopt the RippleNet may have difficulty interacting with other banks and platforms who operate on the Ethereum network.
We spoke to DJ Qian, creator of Qtum, about his new project–Fusion. Fusion is a blockchain network that is aiming to act as an interoperable layer for transactions and smart contracts between all cryptocurrencies.
What is Fusion, exactly?
DJ explained that the function of cryptocurrency and blockchain has been limited to the distributed ledger: “In cryptocurrency today, people today use a lot of terminology like cryptocurrency, but the only function of cryptocurrencies is for ledger booking for transactions. There are no financial functions on top of it.”
He said that Fusion is essentially a platform for taking crypto from a simple ledger to an actual financial instrument: “Fusion is going to create an inclusive cryptofinance platform by providing cross-chain, cross-organization, interoperable cross-chain smart contracts which can enable all of those cryptocurrencies to have financial functions.”
“Fusion is a part of blockchain devoting itself to the next generation of finance, which is cryptofinance,” he added.
What is cryptofinance? “Terminology we use for finance on the Internet of Values. We call it cryptofinance because the financial assets on the Internet of Values.”
He concluded: “We are trying to utilize the distributed network nodes, to control various kinds of tokens, and private keys to make cross chain smart contracts possible, to provide an API for centralized organizations to make blockchains scalable, and connect offchain data sources to make smart contracts truly ‘smart’. We want to create a new era of cryptofinance for the Internet of Values. That’s what Fusion is about.”
What is the Internet of Values and how is Fusion a part of it?
DJ began his explanation by speaking about the nature of the internet as we know it today. “The Internet is designed for information transfer,” he said. “In the future–just as we see in Bitcoin and other tokens–crypto tokens [that are transferred across the internet] are unique and they represent a certain value.”
He continued by explaining Fusion’s role in the ‘IoV’: “On Fusion, we’re gonna provide a finance function to support an Internet of Value, to support the transfer of value. On Fusion, we can define a much more complex function regarding the finance. If you’ve got a banknote that says you can get $1 million in the next 60 days, then there’s the bank which issued this banknote guarantees you that the money will be sitting in your account in the next 60 days. But it hasn’t been realized today in cryptocurrency.”
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— FUSION (@FUSIONProtocol) February 14, 2018
DJ said that Fusion’s platform will be used to create smart contracts representing the same kinds of cash flow “which can also be programmed with other tokens with other conditions.”
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“For example, if two parties, Alice and Bob, are gonna have a smart contract agreement that says Alice’s ten Bitcoin will go to Bob’s account in the next ten days, based on the condition that Bob’s Ethereum account will be a Jax account in the next 90 days. Then the Jax account is going to send the Louis Vuitton bag token to Alice’s account. Those kind of smart contracts will guarantee that, that the tokens will flow this way. It will never be influenced by any centralized institution.”
Why does the world need the Internet of Values and a blockchain for cryptofinance? “The risk of today’s banknotes will rely on the risk of banks. They have the risk of bankruptcy. In the cryptofinance era, no such kind of risk will exist,” DJ explained.
He continued: “The token flow will be conducted without any risk. We will release a very interesting video today, the topic of which is the risk of free loans. People can build the risk of free loans on Fusion. It has never happened before in the traditional financial market.
“You can borrow based on what the codes says, without the centralized government, without any centralized institution. That’s the era of Internet of Value we mentioned. In the future, I think that all types of values will transfer based on the codes of the internet, not only the information but the value itself.”
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— FUSION (@FUSIONProtocol) February 16, 2018
Can you talk a little bit more about Fusion and how it differs from Qtum? Is it an improvement of Qtum, or is it a continuation of Qtum, or is it a totally separate project? How do these two things interact?
DJ answered that Qtum and Fusion are “two totally different types of projects…The original idea for Qtum was to create a generic platform for smart contracts and the decentralized application, just like Ethereum.”
“We really want[ed] to create a better version of Ethereum. So that’s the original idea of Qtum, so you can see Qtum is a kind of generic platform for smart contracts and decentralized applications.”
DJ explained that what Fusion does is acts as a layer over all cryptocurrencies so that “every token in each Blockchain, even some token generalized by a centralized organization, can be interoperated with each other.”
Can you go more into depth about how Fusion facilitates interoperability between various other crypto networks and crypto tokens?
DJ explained that “Fusion uses distributed nodes to control private keys.”
Essentially, “if people have a lot of different tokens; some people have Bitcoin, some people have Ethereum, and other people have Zcash or something–they can lock in on Fusion. They can get the private key controlled by the distributed nodes on fusion, and then they can interact and interoperate with other tokens on Fusion.”
For example, if “people put a token on the Fusion blockchain–let’s say in account A they have ten Bitcoins, then Account A can send ten Bitcoins to Fusion distributed nodes. Then account A can have control of BTCX, which represents the right to lock out at any time in the future to redeem those ten Bitcoins. But if he has Bitcoin X, then there’s the Bitcoin token on Fusion, and the BTCX can interoperate with maybe, ETHX, which is locked in by other people.”
So you can create a smart contract that pays out in multiple different currencies? Would that be possible on the Fusion network?
DJ said that this was indeed possible–and emphasized the importance of flexibility on the Fusion platform: “Today, the financial instruments, including real assets, stock, and insurance. All those types of instruments are based on the control of assets. Even the banks. What we are trying to do is provide a facility where people can lock in their assets, and the distributability is controlled by all of the nodes. Each party of the nodes can not operate on their own, but can cooperate with other nodes to make this move.”
You mentioned that there seems to be a lot of demand for this particular kind of smart contract. Can you tell me more specifically what industries Fusion will be adopted by? Or how do you see it being used in the real world?
DJ responded by saying that he believes that Fusion will have a wide spread of application in the future. “I think that all of the industries which need the financial function will need Fusion in the future. If some industries do not have needs in finance, maybe later they will have relationships with Fusion.
“If an industry like supply chain, finance, insurance, asset management, trading, commercial, all those kinds of industries that are related to the finance function, they can adopt Fusion in the future,” he concluded.