Let’s start with the first challenge: “how to design a sustainable consensus mechanism”. The most popular consensus is proof of work. Because in a Nakamoto consensus blockchain system, the longest chain is the only correct chain, to avoid attackers forking and extending the forked chain too easily, miners have to contribute enough computing power by solving math puzzles to put the blocks they have discovered onto the chain. But this causes serious energy waste: in 2017, the electricity used in bitcoin mining cost is over that of 159 countries. Additionally, the cost is not going toward useful computation – it's not computation of genetic engineering nor artificial intelligence, which would be useful in the real world, it's just using computation for solving random math puzzles.
此外，该成本并没有转向有用的计算 – 不是计算基因工程或人工智能这些在现实世界中很有用的问题，而是计算随机的没有意义的数学难题。
To avoid this issue, people start to support PoS: proof of stake. It allows miners to extend the blockchain by staking their token without any computation power. However, pure PoS will introduce security issues, such as the “long range attack” and “nothing at stake”; this is because anyone can extend the blockchain only if he has enough tokens, so the chain is easier to be forked.
So we need to design a sustainable consensus mechanism, to find some useful computation to secure the PoS
The second challenge is how to establish a peer to peer sharing network.
Bitcoin was invented to create a pure peer to peer system, and so were most public chains. In such a system, all nodes have to have the right or ability to share something to earn rewards. Otherwise they would only become consumers. It’s like in any community, anyone has to earn resources in order to survive here.
比特币是为了创建一个单纯的点对点系统而发明的，大多数公链都是如此。 在这样的系统中，所有节点必须有权利或能够分享某些东西来获得奖励。 否则，他们只能成为消费者。 这就像在任何一个社区里，任何人都必须获取资源才能生存一样。
Personally I haven’t mined bitcoin, because back in 2015 when I first started working on blockchain, my laptop could hardly mine any bitcoin. I have mined Ethereum, but only for about half a year. Then it became impossible as well. This is because computation power has a monopoly effect – if you are a big mining factory and I am a laptop, I am not going to earn any reward because the task takes you 1 minute to finish and takes me 1 hour, you take away the reward while I am just getting started. This also happens more thanks to the revving up of the “arms race”in mining industry, whereby people are always busy with creating more advanced mining machines.
我以前挖过以太坊，但也只持续了大概半年时间。后来，这也都变得不可能了。这是因为算力的垄断效应 - 如果你是一家大型矿厂，而我只是一台笔记本电脑，我将不会获得任何奖励，因为你花1分钟完成的任务，我需要1个小时，你拿走奖励的时候，我才刚刚开始。
To solve this problem, people start to think of sharing more things instead of computation power, such as storage. There are certain products that work well, such as Storj, ipfs, sia, and Genaro sharer, launched by the Genaro team. However, purely sharing storage and getting the reward from whoever uses the storage without any system-based reward, this cannot satisfy the sharers – they expect much more. For example, bitcoin mining also comes from system rewards, instead of purely from transaction fees. This cannot last forever. We need to find out a fair business model – this means we need to think about what else users could share to earn reward.
为了解决这个问题，人们开始考虑共享更多的东西，而不是算力，比如存储。有些产品运行良好，例如Storj，ipfs，sia和由Genaro团队开发的Genaro Sharer。但纯粹共享存储空间并从使用存储的人那里获得奖励，但没有任何系统奖励的话，无法满足分享者们的期望——他们想要的远远不止这些。 例如，比特币采矿也来自系统奖励，而不是仅仅来自交易费。这不是长远之计。我们需要找出一个公平的商业模式 - 这意味着我们需要考虑还有哪些用户可以分享的东西以获得奖励。
The third challenge is: how to increase blockchain transactions per second, as is known as TPS. This was one of the hottest topics over the past year and still is. Many projects are working on it in different ways. Basically:
TPS = concurrency divided by average response time.
So naturally，projects such as Zilliqa, Ethereum apply sharding techniques to blockchain to increase the concurrency.
In a blockchain system，TPS also equals to the amount of transactions in one block divided by the time of generating one block. So bitcoin could increase TPS by increasing block size, so there could be more transactions in one block. On the other hand, EOS uses DPoS techniques to decrease the time of generating one block. Only 21 master nodes reaching consensus takes a much shorter time than reaching consensus by all nodes. Some projects try to jump out the box – they put certain transactions outside blockchain. This is called an“off-chain” solution, examples being the Raiden network or lightning network. It's like, if you run a coffee shop, all transactions happen inside your coffee shop, buy a cup of cappuccino, or something, only comes to you, then you clearing with the global financial system at last.
21个达成共识的主节点花费的时间要比所有节点达成共识的时间短得多。有些项目试图另辟蹊径 - 他们把某些交易放在区块链之外进行。
All these projects are great innovations, but most of them try to increase efficiency by sacrificing security and decentralization too much. There is no way to break the trilemma. But we also need to think about the how to maintain security and decentralization level to meet market need, or how to establish secure and trusted system in other ways.
The fourth challenge is "how to store DAPPs’ data securely in a decentralized way". Most DAPPs today are still using cloud servers such as amazon cloud. Blockchain is not designed to store data because no node could store all data comes from all Dapps. That's why Ethereum swarm is so limited. There are some projects working on decentralized storage, such as ipfs, Storj and of course Genaro Eden. Unfortunately, most the decentralized storage is isolated from the public chain. It’s like your CPU and hard drive are separated.
The fifth is “how to establish data channels between blockchains and the real world”. Currently the blockchain and the real world are isolated because of the trickiness of pulling data from outside. When miners run smart contracts on virtual machine, it is not possible to grab the exact same data at the same time. Let’s say there is a Dapp arranging my travel to Vietnam here, when help me book the flight, the ticket price varies on different website, some miner may go to expedia while some may go to skyscanner.
Current solution is to make a prediction market work as an oracle machine, and push data to the blockchain, this includes projects like Augur, Gnosis etc. however, the way this market works is whichever data has the highest stake, is regarded as correct. The logic is that those who bet more will try harder to get the right data. Obviously, they are all good Dapps, but is not enough to work as oracle machine.
The sixth hard problem is how to design a sustainable token model. For instance, the transaction fees are too high. If you buy a coffee with bitcoin, the transaction fee might be higher than the coffee itself. This leads to the bitcoin’s value becoming negative if we apply purchasing power parity to estimate bitcoin. Also most public chains are relying on the mining or forging model too much. But think about where the system reward comes from? It actually from who join the system later. Finally, a utility token could be used for a product or service. This may be the most promising innovation in the fintech area, however this also cause the service price fluctuates too much.
People are thinking other kind of solutions such as DAG, which has no transaction fee. Also there are stable token like Dai and Tether. Just note that token model is still at very early stage that most problems are open problems that there is not a single solution could solve all those problems.
Lastly, how to specify blockchain governance?
Reaching consensus for a single block is easy, but for the whole project’s direction it is extremely hard. In traditional structures such as a company, we organize individuals by department and reward by salary. management groups discuss important things, and the board of directors has the most power to decide things. However, blockchain is governed in a decentralized way, we need to organize each kind of community member well by fair incentive.
For instance, bitcoin uses BIP signal system; when someone wants something, he or she just writes the information in block and there is no guarantee this suggestion is listened and adapted or not – the bitcoin core team still needs lot of off line discussion and can hardly reach other miners and token holders.
例如，比特币使用BIP信号系统; 当有人想要某些东西时，他或她只是将信息写入区块，并不能保证这个建议是被听取和采用的 - 比特币核心团队仍然需要大量的离线讨论，并且很难接触到其他矿工和通证持有者。
EOS tries to solve this problem by voting. Setting aside the whole problem of bribery during elections, its logic is "whoever has the power to attract most votes has the ability to guard the chain ." We think there might be a better logic to solve this problem.
Blockchain technology has been developing for decades and all the mentioned projects are great innovations. However, this industry develops so fast that technology iterates fast as well. When everyone tries to add padding to current blockchains such as Ethereum, we think, why not make a new thing and try to solve the issues at the first time designing the system? like it is said “the best way to improve a carriage is to make a car.”