# TOKEN2049 - The Promise of Smart Economy - Da Hongfei (NEO)

- Channel: [TOKEN2049](https://streameth.org/token2049)
- Date: 2019-10-09
- Watch: https://streameth.org/watch/yt-Nvd96uysoKs
- YouTube: https://www.youtube.com/watch?v=Nvd96uysoKs

## Transcript

Uh today I will talk a little about my the history of Neo before Neo my about myself and then my understanding of blockchain and why it is so important for the future smart economy and then what Neo will do in the future smart economy. I will talk a little about when I was in college. I'm not a computer science major but one of my hobbies in college is to dig into the deep deep level of computers. Uh because I I went to college in 1997. That is the year that internet or people get get access to the internet in mainland China. I started to play with a computer. I tried to crack the software hard disk lock in the computer labs and try to teach myself assembly language and then write my own hard disk lock and install it into the computers in the lab. So it becomes a real personal computer for me. So I spend a lot of time doing a lot of research and learning computer science. And then the other hobby when I was in college is economics. I came across a blog called new institutional era. This blog introduced me to the Austrian and Chicago school of economics. So I became a free market believer. And then magically after almost 10 years I discovered something very special. That something is called Bitcoin. It it is also I I I believe I think I read it from a blog. It how Bitcoin works and then I instantly fall in love with it because it combines two things two of my hobbies when I was in college. That is the computer science and economics and I started to spend a lot of time research research on it and to read the white paper. And I even registered a a domain name. It's called mangox.cn. Anyone of you know mangox.com? Used to be the largest Bitcoin exchange in the world and I decided to run a my own business around Bitcoin to to to run a exchange and links orderbook with mangox.cn to mangox.com. Later on that become a very it's a it's a proven business model because one of the biggest exchange today Bitfinex they're using the same model at the very beginning. They link their orderbook to Bitstamp in Europe and later on they they cut the link and they become independent exchange. So that's the very early days before there's even a community or industry in China for blockchain or Bitcoin. Then after two years of research or study alone with the price rocket with the price going up dramatically in 2013 there becomes a community in China. I decided to build up the community of blockchain Bitcoin. I started to organize meetups started to organize conference like this but much much smaller even smaller than the audience will be 20 or maybe 25. If the number exceeds 30 that's a big one. So we even invited the Vitalik to China for the first time and in China he introduced Ethereum to the Chinese blockchain community. That's 2013. And after maybe four months or five months after Vitalik announced Ethereum we decided to build our own blockchain. That that is Neo but at that time it's not called Neo it's called Antshares. We are also inspired by I believe which is the first ICO in human history. It's called ASIC miner. There is one Chinese PhD candidates. He's studying in a in a prestigious Chinese university for PhD and he said that he has the ability to build a ASIC mining machine for Bitcoin. At that time most of the mining is doing through GPU. ASIC ASIC miner is 10 times if if not 100 times more efficient than GPU mining. So he said he claimed that he can do that but the only problem is he do not he he doesn't have the money to do so. So he posted a Bitcoin address and asked people to invest in his business idea. And he promised to give people a share to share the profit the future profit. Uh there are some people buy in and they send him actually a lot of Bitcoins. That's 16 16,000 Bitcoins at that time but it only worth about 150 US dollars at the very early days. And with that money that guy successfully built a ASIC miner machine and a business around it and he do did issued shares and the shares is tradeable on on a centralized security it's not security a centralized cryptocurrency exchange. Uh and people made a lot of money. The the price per share started from 0.1 Bitcoin per share to five Bitcoins in only a few months and with that during that time the value of Bitcoin also went up several times. So people made a lot of money but the problem is it's um it's they're doing it in a very primitive way and later on that guy called his ID is fried cat just disappeared because he faced some business difficulty some issue and even the shares traded on the exchange is the exchange is cracked down by SEC. So every investors actually at the end lost their money. So we are inspired by the story and we decided to build a blockchain for crowdfunding to better facilitate crowdfunding. So that later on becomes Neo. And Neo is funded by two co-founders. One is me speaking at conference a blockchain conference in 2014 and the other one is Eric Zhang. He's my co-founder. He's the technical guy and when I talked and I tell him the idea he very calmly said yes I can do that and we decided to make it happen. Um The the one of the reasons why Neo is doing good on the market is because we are have many innovations. It's quite different from other blockchains. For example the consensus mechanism is very different. We are first in the world to use a BFT style consensus. It's called delegated BFT and today many of you are many of industry practitioners are talking about STO and a BFT style consensus is very is perfect for security exchanges for security offerings because it offers there is identity with the consensus nodes. There is a very good finality with the consensus. So DBFT is the consensus we use it's very new and also we have a dual token economic model. We have two tokens the Neo token and a gas token. Neo is a stake. You can use it to vote to do on-chain governance and gas is a utility. You use it to pay for basically pay for everything on the blockchain for the transaction fees. And also our smart contract system is very different from other blockchains. You can use matured conventional programming languages like C# like Java Python or JavaScript to write smart contract with Neo. And also the philosophy the the management model is different. We have a much stronger governance comparing to other blockchains. We the foundation the Neo foundation reserved about 50% of all the tokens and as of today after three or four years we still hold about 40% of the tokens and in the coming years we will gradually distribute those tokens to the community. And then after the launch of mainnet after doing after boosting the ecosystem we held our first developers conference last year 2018 January. It is in San Francisco and about 600 people 600 most of them are developers attended our first developer conference. They're coming from US coming from Europe from Asia from many every corners of the world. And this is our second developer conference. It happened in Seattle only a one month ago and about 400 or 500 developers attended the conference and it's a very my experience is a very good experience. So today Neo is having a very strong, very diversified community across the globe. This is the history of Neo. And I'm going to talk about a little about the understanding of blockchain and why it will be the infrastructure for the future smart economy. Um first, blockchain is a distributed ledger. It's a distributed ledger technology, DLT. And second, it is also a platform for decentralized applications. So, people can build application on top of this on top of the blockchain. So, it's a platform. But it Neo is not a a private platform. It's a open platform. It's a blockchain is a open platform. It's more like a protocol. So, if you follow the protocol, follow the specifications, your implementation can directly talk to other people's implementation. It's completely open. So, it's much like a network protocol like TCP/IP. When we talk about TCP/IP, we think of internet. And a lot of people said that the traditional internet is for information. It is very good for delivering information, but it's not so good for delivering value. A blockchain is like a value internet. It's good at transferring assets, transferring currencies, anything have value. So, it's a it's a distributed ledger technology, a platform, a protocol, and also a internet of value. But my understanding of blockchain is more than that. I think blockchain is also a new institutional technology. A institution is a system that human invented to to organize, to better facilitate production, facilitate the human society. Our legal system is a institution. A company is a kind of institution. Even marriage, even sometimes culture is a very loose institution. But blockchain is a is a new way to to form new institutions. We've seen many We Any of you know DAO, the the DAO that being hacked on Ethereum? The DAO is like a new institution. It's not a company, but it's some organization that is um set up by the by the inventors and also obeyed by those rules defined by computer languages. Within human human history, we have different technology, different ledger technologies. And different technology will bring us different level of collaborations and economic economies. In the very ancient time, we are in primitive economy. It's a a hunter-gatherer society. And because the techno- the ledger technology is so primitive, there's no way to define your property. So, there's no real private property. All properties are egalitarian. And so, the collaboration is only happen in a very small circle, maybe in your family, maybe in a kinship or a tribe level. And then we move on. We move on to agriculture economy. Within agriculture economy, we have new ways to record things. We have a tally sticks. We people even invent invented double entry bookkeeping. And with this technology, we have a better way to record ownership. And we have we for for the first time we see a very limited private property ownership. Some of the personal properties are belong to to you, but the land, the means of production are belong to the king or to the to the lord. And we saw a bigger level of collaboration. Collaboration happens at the township level. And then with the with the with a lot of inventions, we moved into a industrial economy. In the industrial economy, most of the societies are in the their political system are or either capitalism or market socialism. And we have new technologies like spreadsheet, like digital ledger, even distributed ledger to to record things. And now we see a very a fine defined ownership. We have private properties. And only with this kind of new tech new ledger technologies, we can have public companies. We can issue those tokens to all the retail investors across the nation. So, the collaboration happened at a much larger scale, at a national scale. And what's next? I believe we are moving to the next phase of human society. We will experiencing a see a new kind of economy called smart economy. And at the smart economy, everything will be digital. Every physical things will have its digital representative. And because it's digital, we can use computer languages to manage them. So, everything will be programmable. We can program them. And because it is programmable, or every asset or every digit every every digital representative in different systems will be interoperable. So, we won't have independent silos of informations or assets. Everything can be linked together and interruptible with each other. Um with such kind of um a linked network, if everything is in a in a one system or is controlled by one identity, it will be a disaster if if there is anything bad happened to the one actor. So, we really need a decentralized a system. And this decentralized system, we don't need to trust a trusted third party. We instead we trust the technology itself. And because it's decentralized, it will be transparent. It will be very inclusive. And the ownership will be very different. We don't We have a new technology to record ownership. We don't need to We don't need to 100% fully control or fully own something. We are seeing the model of a shared economy like shared ride like Uber, like shared bike in China, the Ofo or Mobike. They We don't really need to own something by ourselves. We can share it with others. So, we have a finer granularity of ownership. So, with this new kind of ownership, the collaboration will happen at a very very large scale. And we will have for the first time see a true international or global free market. And the government probably will become smaller. We will see new forms of institutions that's that's will go beyond companies or any any of organization we are seeing today. So, what Neo will do? Neo is a open network for the future smart economy. And the smart economy will So, Neo is not just a blockchain. It's a it's a open network. So, we will work with other technologies like AI, IoT, cloud computing, and so on. And we will in the for the next for the coming years, we will have a lot of improvement for for the technology perspective and also governance perspective. For technologies, we will have a new version called Neo 3. We will have a completely new architecture. We will have better layering. So, people can build layer two solutions on top of Neo. By the way, I do believe in the next maybe two or three years, layer two solutions will be a huge thing. And we will have a optimized consensus mechanism. We will have new functionalities. So, smart contract can directly access internet resources within the within the blockchain. You don't need to a rely on the third party oracles. And also, we will improve our security. And also, we will have a different infrastructure modules like distributed file system, like a identity system. And then for governance, we this is the current structure of Neo governance. We have the Neo Foundation. The foundation is responsible for strategy and financial. And also, we have two branches. One is called Neo Global Development. And the other one is Neo Global Capital. NGC or Neo Global Capital is doing is the investment arm of Neo. They're doing very well in in financial performance. And for the coming years, we have in 2018 at the first develop conference, we announced our Neo's mission. Neo's mission is to make Neo the number one blockchain by 2020. So, that's about one year's time or two years time, depending on how you define 2020, the the beginning or the end. Um But we need to define what is the number one blockchain. We don't think the blockchain with biggest market cap is is the number one. We define number one to become the first the most favorable platform to build applications on top of it. Because at this stage, developers still very very important, the crucial part element of public blockchain. So, we want Neo to to provide the best performance, to provide a very diversified ecosystem, and to be compliant ready, to provide compliance solutions. To to meet that goal, we need to have something new. So, we decided to set up a new office in Seattle. That's the first time we started a office outside of China. And Seattle office NGD Seattle office will be led by two former Microsoft executives and John and and Juan John is a former GM of Microsoft Digital and he helped Microsoft Digital to grow from zero to a half billion business. My last slide will be um the quest to answer a question I've been answered a lot. What's the difference between you and other blockchains? And I There are many answers like there are different a consensus, different economic model, but the key factor I believe is the philosophy. At Neo, we are we the philosophy of Neo is called pragmatical idealism. I'm a believer of progressive decentralization. At this stage, blockchain is still evolving very quickly. I don't think a fully decentralized to be fully decentralized is is the only way to do blockchain right. We still need to be very efficient to upgrade the software, to to change things on the fly. So, at Neo, we're still we are more at centralized than blockchains like Bitcoin or maybe Ethereum, but we are slowly in a decentralization process. I do I I very appreciate the quote from a motivational speaker called Simon Sinek. He said, "Pure pragmatic pragmatism cannot imagine a bold future and pure idealism cannot get anything done." It's the delicate blend of both that drives innovation. So, let's keep the hard work and let's work together to make the magic happen. Thank you very much.