Sunny Lu: Reaching Business Consensus: A Tough Yet Important Task

This article is reproduced and translated from PANews according to Sunny’s live speech at the Shanghai International Blockchain Week.

On September 17, 2019, the Shanghai International Blockchain Week 2019 kicked off. Hosted by Wanxiang Blockchain Labs, the event has the theme of “Blockchain New Economy: New Decade, New Beginning”, and focuses on the industry’s development in the past ten years and its prospects in the future.

“How to better play the role as an Enabler of Blockchain Technology?”

This was the subject of the speech held by Sunny Lu, co founder and CEO of Vechain, on September 17th during the Summit.

Sunny Lu believes only with professional teams and enterprise level applications can we promote the development of blockchain technology and in turn, boost its mass adoption. It’s more about business consensus, taking into account the interests and concerns of business stakeholders. There should be a reasonable incentive mechanism in place to bring various enterprises together. It could be more difficult to reach business consensus than a technical one, and to achieve this goal, enterprises need to be more open-minded and make their platforms open-sourced to attract more players and participants. In addition, the industry also calls for a governance consensus, governments and regulators need to play their roles. A compliant, fair and cooperative environment is essential to enabling blockchain to go mainstream.

Highlights from Sunny’s Speech:

• It might be of higher priority to explore the business value of blockchain rather than solving technical issues. After all, technology is supposed to serve the real economy and create business value before it continues to develop.
• Blockchain is an “invisible technology”, to some extent, it can be compared with the underlying technology architecture of the Internet.
• Only with professional teams and enterprise level applications can we promote the development of blockchain technology and in turn, boost its mass adoption.
• The The VeChainThor Blockchain comes with various innovative technical features, such as fee delegation, multi-party payment protocol, multi-task transaction, and more.

• With VeChain ToolChain, users are no longer required to pay attention to the underlying blockchain technology. All that they need to do is register their businesses and products on the VeChainThor Blockchain. In addition, VeChain has been constantly standardizing VeChain ToolChain and adding more modules to it.
• With this in mind, we are positioning ourselves as an “enabler” between blockchain and real business use cases. We are looking at this matter from the perspective of the product manager — we put ourselves in their shoes and think about what tools and services we should provide as a public blockchain platform to meet the demands of each individual builder.
• We also have a one-stop centre for all our technical documents at VeChainWorld. In addition to that, we host the annual VeChain Summit, which is a global conference that provides startups with an opportunity to network with established enterprises and see how they can work together to build valuable applications on the VeChainThor blockchain.
• VeChain is working with San Marino on three issues:

1. Integrate IoT and blockchain technology into the development of a carbon-neutral ecosystem

2. Build a blockchain-based ecosystem,

3. Introduce San Marino Innovation Token (SMIT) into the ecosystem.

• It’s more about business consensus to promote the mass adoption of blockchain. Business consensus can be more difficult to reach than technical consensus. I hope that the companies in the blockchain industry and traditional industries can be more open-minded in this regard. It’s of vital importance. BYD, a partner of VeChain, and Karma, a company that we had talks in the morning panel, had made their in-vehicle system and platform open-sourced before adopting any blockchain-based applications. Only open platforms can attract more players and participants onboard.
• With technical and business consensus in place, we also need to have a governance consensus to create a more equal and fair environment. The governments and regulators need to play their roles as well. A compliant, fair and cooperative environment is essential to enabling blockchain to go mainstream.

The following is the full text of Mr. Lu’s speech.

Sunny Lu, Co-founder and CEO of VeChain

Good afternoon!

I am honored to be here at the Summit organized by Wanxiang Blockchain Labs. Truth be told, I’ve participated in each and every summit since its inception in 2015. For China and even the whole world, 2015 was a crucial year for the blockchain industry because two interesting things happened:

The first was that in October, 2015, The Economist published a very interesting article, “The promise of the blockchain — The trust machine,” which enabled the blockchain technology to enter the spectrum of the mainstream’s awareness. If you look at the Google Trends index, you will find that the index of “blockchain” has soared since the article was published in October 2015.

The second was that on November 2, 2015, Wanxiang organized the first Global Blockchain Summit in China, which marked the first event to systematically introduce advanced, foreign technological concepts and leading blockchain projects to China, which facilitated the development of blockchain technology in China. The search engine index of blockchain on Baidu saw a huge increase after the first summit as well. That’s when VeChain decided to jump on the bandwagon of blockchain. To date, VeChain has been growing for four years. Now I would like to take this opportunity to share with you what we have done in the past four years and our thoughts on where the blockchain industry will be headed in the future.

First and foremost, we have been trying to explore how to leverage blockchain technology for business applications to empower the real economy. We believe that exploring such scenarios are more relevant than focusing on solving technical aspects and issues of the blockchain technology itself. After all, technology would ultimately serve the real economy and business applications, in which business values would guide the necessary technological development.

Based on our experience in the past few years dealing with different use case scenarios, we have found that blockchain is an “invisible technology”. Similar to how we use the Internet and email every day, few would understand what TCP/IP is. To a certain extent, we believe the same is true with blockchain technology because it is more of an underlying technology architecture. Blockchain technology alone can’t be used to build solutions in a silo. It often requires a combination of technologies, including traditional Internet access, the latest 5G, IoT, and AI, to make it possible for commercial applications. Blockchain is used as the underlying technology architecture to collect data at different key nodes and ensure data security and reliability, thus helping enterprises and commercial applications generate new values.

In the history of blockchain, the year 2015 can be seen as a “watershed”. Before 2015, everyone was talking about technology development and infrastructure construction and applications, including exchanges, wallets, browsers, and main chains. From 2018 to the present, we can see more and more participants are jumping in, and everyone is calling for blockchain applications with commercial values. In other words, we need to innovate the blockchain technology to make a real difference in the world.

What did the VeChain do in the process? From the very beginning, our goal has been to promote the mass adoption of the technology. Even now, the number of Bitcoin or Ethereum users pales in comparison with that of traditional Internet giants, such as WeChat, Facebook, and Amazon. We know that the blockchain technology will change everyone’s life, like what Internet once did, but how? How do we accelerate the process? It’s important to have a professional team and enterprise-level applications to facilitate the development of the technology.

Since its inception in 2015, VeChain has developed a lot of enterprise-level applications, and even researched supporting technologies by cooperating with research institutions.

Before launching our Mainnet, we consulted over thirty companies on a very important question: what would you choose to use blockchain technology? What would make you choose to use a public blockchain? Based on their feedback, we made some adjustments in the technical architecture of VeChain, such as the governance structure and consensus standards. Interestingly, two years later, we find that Facebook’s Libra is using a similar governance structure — Great minds think alike.

VeChain has also made many efforts in technical innovation. For example, in terms of fee delegation, we have developed “MPP”, a multi-party payment protocol. Traditionally, on a public blockchain, you must be in possession of a cryptocurrency asset to be able to transact. But on the VeChainThor Blockchain, “Sponsors” can be specified in the protocol, which would help third party corporate and end users to complete smart contracts and digital currency transactions through enterprise-level applications.

Another user-friendly feature of VeChainThor Blockchain is MTT (Multi-task Transaction). Each VeChainThor transaction is composed of a number of clauses, which each represents a single task. Thus allowing a single transaction to carry out multiple tasks sent to various parties. VeChainThor Blockchain also enables settings of time, expiration, and dependency. Thanks to the feedback from different companies, we were able to add tech features to substantially reduce the barriers for the enterprises to build decentralized applications.

When it comes to the mass adoption of blockchain technology, we should place equal importance to reducing the tech barrier and improving the accessibility of business scenarios. Just like what Alibaba and Amazon have done before. It’s a great achievement for them to make it so easy to run an online store. With the open platform they provided, people can start their business online easily without thinking about the complicated IT technologies and Internet technologies.

In April this year, we launched the VeChain ToolChain. With which, users are no longer required to pay attention to the technical aspects of the underlying blockchain technology. All that they need to do is to use our platform to seamlessly register their businesses and products on the VeChainThor Blockchain. In addition, we are constantly standardizing VeChain ToolChain and adding more modules to it, helping different companies with application development and make it extremely simple for various enterprises to blockchainize their businesses.

We’re also making unremitting efforts in optimizing the technical structure, including the connectivity of the underlying IoT, the core layer of the blockchain itself, the application layer, etc.. VeChain take it as its major responsibility to provide a variety of applications and services, aiming to enable various builders and developers to deliver decentralized applications more quickly, we also hope that the tools and services we provide will continuously onboard even more enterprises and startups to develop on VeChainThor Blockchain.

With this in mind, we are positioning ourselves as an “Enabler”. We are looking at this matter from the perspective of a product manager. As an enabler, we hope to attract more developers. Not only technical developers, but also business developers. We call them “Builders”. The builders can be large enterprises, small businesses, or even community members. The demand of each builder might differ, to better help them build, we would put ourselves in their shoes, and think about what tools and services we should provide as a public blockchain platform.

For example, we’re providing comprehensive support especially to startup companies. VeChain has partnered with a number of enterprises like PwC, and our relationship with PwC enables us able to provide more business opportunities for startups to develop their own applications.

We also have a one-stop centre for all our technical documents at VeChainWorld. In addition to that, we host the annual VeChain Summit, a global conference. This year, the Summit was held in San Francisco. We have invited many companies to talk about their experiences using the VeChainThor Blockchain. The summit also provides participants and startups with an opportunity to network with established enterprises and see how they can work together to build valuable applications on the blockchain.

It’s also critical for us to support the development of compliance in the industry and create a model for ecosystem development. An interesting case being San Marino, a small republic surrounded by Italy. We’re helping San Marino with 3 issues:

Firstly, create a zero-carbon emission ecosystem. This ecosystem uses IoT and blockchain technology to keep track of different user’s behavior, and adopts a positive incentive mechanism. By carrying out carbon reduction practices, each citizen in San Marino will be given a certain amount of tokens accordingly, and each of them will have a digital wallet to hold the tokens. San Marino has set it a national goal to become the world’s first carbon-neutral country.

Secondly, establish a blockchain-based ecosystem. The blockchain-based ecosystem is mainly targeted at blockchain startups. When they need to do compliant fundraising, they will receive professional guidance.

Thirdly, introduce San Marino Innovation Token (SMIT) into the ecosystem.

If interested, or you want to join the startups in this ecosystem, you can take a tour in San Marino and explore more yourselves.

If I may, I would also like to boldly share my thoughts on the future development of blockchain industry and blockchain technology. We have been talking about consensus, because it is a very important aspect in the blockchain industry. Over the past years, the direction towards consensus has shifted from the consensus of technology to that of business. In the past, the most widely discussed topics are the type of programming languages, technology stacks, or platforms that we should use to develop blockchain applications. In this aspect, technical developers are the main force and contributors.

Nowadays, if you want to promote the mass adoption of the technology, business consensus has been of increasing importance. We need to find out a reasonable incentive mechanism so that different parties, enterprises and stakeholders can work together towards the common goal of creating valuable transactions and make proper benefits for themselves, all on a common platform.

As of now, such business consensus can be much more difficult to achieve than technical consensus. I hope that the companies in the blockchain industry and traditional industries, especially in this audience, can be more open-minded in this regard. It’s of vital importance. BYD, a partner of VeChain, and Karma, a company that we had talks with during the panel this morning, had made their in-vehicle system and platform open-sourced before adopting any blockchain-based applications. Only open platforms can attract more players and participants onboard.

It’s hard to reach a business consensus, and yet we must do that. We need to bring all of us on the same platform, around the business consensus and work together for a common goal.

With technical and business consensus in place, we would also need to have a governance consensus to create a more equal and fair environment to e sure that everyone’s hard work pays off. The governments and regulators need to play their roles as well. A compliant, fair and cooperative environment is essential to enabling blockchain to go mainstream.

With this, I conclude my speech. Thank you all for your attention!