Lon Wong: “Scaling is a Worrisome Issue”

Blockchain, FinTech, Group, ICO News, Innovation, Investing, News, Opinion, Regulation | July 3, 2017 By:

Singapore-based NEM.io Foundation, creators of the peer-to-peer NEM blockchain platform, recently announced a strategic alliance with Blockchain Global of Australia. The partnership is aimed at expanding NEM’s reach while facilitating international mainstream adoption of blockchain technology.

The first initiative will be a Blockchain Center in Kuala Lumpur, Malaysia to serve as an incubator, accelerator, and coworking space. Scheduled to open in August 2017, the 10,000-square-foot Blockchain Center will house the NEM Blockchain Innovation Lab, a headquarters for research and development, as well as regional support for organizations interested in using the NEM platform within their IT infrastructures.

Later this year, NEM plans to work with Blockchain Global to develop a cryptocurrency exchange for the NEM ecosystem. Blockchain Global previously built ACX.io, Australia’s largest Bitcoin exchange by volume.

Block Tribune had a few questions for Lon Wong, president of the NEM.io Foundation.

BLOCK TRIBUNE:  What can be done through the innovation centers to promote blockchain adaption?

LON WONG: Although awareness is an important first step, we want to go beyond awareness and allow people to fully immerse themselves in blockchain technology. The industry is still very nascent, and our plans to create a blockchain innovation center will help develop new use cases and apply them to mainstream technology. Our next steps are to open the first innovation center in Malaysia, and begin educating industries, incubating startups, and promoting blockchain technology to local organizations.

We’re developing programs to work with startups, universities, and other groups ranging from talks and seminars to startup competitions. Part of our goal is to recruit startups to join our project, and nurture them into business. We believe that the innovation center will be a good place to promote and spread the knowledge of blockchain and develop these programs. Our NEM Blockchain Lab will become training ground for blockchain engineers and entrepreneurs, and a universal gathering place for the incubation of young blockchain companies.

BLOCK TRIBUNE:  Your release mentioned instability in other tokens. What do you mean, and how is NEM better?

LON WONG: Some projects are unstable and appear split in their decision to further improve their blockchain solutions, like Bitcoin’s current situation and impending split. Ethereum’s scalability issues are another concern. Both are still very experimental, whereas NEM was designed with careful planning in all aspects of how it should work.  Furthermore, NEM is considerably the most tested blockchain development. Our test code size has always been larger than our program code. We run many quality assurance tests to make sure the code is bug-free. We have not encountered any major problems since NEMs creation.

NEM supports two version of blockchain solutions: One is the main public blockchain, and the other is the private blockchain. Also, NEM does not need to use big machines to maintain the network, making it is very energy efficient.

BLOCK TRIBUNE:  We seem to be in the “denial” stage of cryptocurrency development, where a lot of media and investors are raising issues on scaling. Is this valid, and what will it take to overcome?

LON WONG: Scaling is a worrisome issue and many of these networks were not designed to scale. Someone in the know could see that. Many who have tried to bring up the scalability issue have always been silenced by the larger crowd with an alternate interest.  “Denial” has always been played up and the issues were never properly discussed. Alas, the truth must unveil someday.

Networks have been designed differently. Each solution has its own problems. For example, Ethereum is unable to scale because it is overloaded with applications (more commonly known as smart contracts, but they are just program code on the blockchain). Bitcoin’s issue is its inability to handle the number of transaction per second operating on the platform.

Overcoming it, sadly, cannot be done easily as these platforms need consensus to move forward. The crux of the problem with a decentralized development environment is the inability to come to any conclusion without protracted discussions by multiple parties, each with their own agenda.

In the case of NEM, we have taken a different approach to problem solving that allows us to be extremely efficient. Although our public chain is a decentralized blockchain technology, our decisions to move forward have always been decided by a few. We needed to do this so that we can react fast and make quick decisions on new issues. We deliberately chose this route because we could foresee the problems that could arise if we didn’t. This method of decision making is starting to become exemplified, with many other projects following suit.

BLOCK TRIBUNE:  What are the NEM token’s advantages to bitcoin and ethereum?

LON WONG: As a token, all three are the same, in that they carry value. As a technology, Bitcoin is a first generation proof of concept technology that has its inefficiencies. These include inefficient and expensive machines to run it, a fixed architecture that cannot possibly scale with its increasing volume, and a natural lead up to concentration of power and control – something that came up as a result of their mining design that they thought would be decentralized, but turned out otherwise. More importantly, it served itself well to prove to that blockchain technology is a fantastic technology. Bitcoin is a first generation solution with a proven concept of Blockchain as a method of immutable and irreversible transaction and record. Apart from that and the value it is holding, it has nothing much else to offer.

Ethereum is based on writing program code and putting it onto the blockchain. Programs put onto the blockchain are immutable and irreversible and there are serious consequences if there is a bug.

The advantage of NEM versus Ethereum is that we offer an out-of-the-box solution with a few very powerful smart contracts, built to serve almost 80% of the market requirements.

In addition to our smart multi-sig solution that is on-chain, we have a smart asset issuance and management solution. Together these form a very powerful combination where many applications can be designed with just those features.

Another advantage that NEM holds is our powerful set of APIs. We could write off-chain smart contracts, or use existing smart contracts that are already deployed in enterprises and integrate them with our blockchain. This method of deployment is, in our opinion, what mainstream businesses should be doing. It saves costs in the development and it does not require the programmer to be a highly skilled and specialized in certain kinds of programming (e.g., Ethereum programming).

Off-chain programming can use any programming language, making it convenient for development because of the abundance of skilled programmers in traditional and mainstream industries. These programmers can easily be deployed for these kind of projects.

Essentially, deployment using NEM takes a very short development cycle, therefore reducing substantial development cost. Additionally, NEM is easy to integrate, has out-of-the-box solution, is inexpensive to run, and is less erroneous when it comes to programming readily available skillsets. Finally, NEM is much more superior in performance overall.

Ethereum, on that count, makes it an experimental solution vis-à-vis our production ready solution.

BLOCK TRIBUNE:  Give us your six-month forecast for cryptocurrency in general.

LON WONG: We believe the next 6-12 months will bring more blockchain applications, going way beyond fintech. With the phenomenal growth of ICOs around the world, more ICOs will pop up, following the same path as the dotcom bubble.

We could see more visibility and first movers in the governments and regulatory agencies as they begin to embrace the many facets of blockchain uses in the government and financial markets.

Innovation shall continue to be the talking point. There could be a sudden dip in the value of the cryptocurrencies which is likely to be largely affected by Bitcoin’s indecision and impending fork as well as issues that are plaguing Ethereum. However, these dips are not to discourage those looking to get involved with cryptocurrencies, as development to prevent these dips are well under way.

It is therefore expected that there will market chaos in the next few months. But once the dust settles, we should be able to see a wide take up and renewed interest in cryptocurrencies. Hedge funds are already looking at including cryptocurrencies in their portfolios. With this growth trend, more investors would enter the cryptocurrency marketplace.. Also, more institutional investors may consider cryptocurrencies as investment instruments.

Once this happens, we will see an explosive growth of cryptocurrency usage.