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Blockchain in the U.S. and China in 2018

Price fluctuations in the cryptocurrency market since the beginning of 2018 have thrown investors into panic. At the Harvard College China Forum held in early April in Boston, blockchain was, unsurprisingly, among the most popular topics. Despite market oscillations, blockchain investors and entrepreneurs in the U.S. and China remain confident about the technology prospects.

At the Harvard College China Forum, Ray Xiao — the Tufts University alumnus who co-founded the Internet of Services Token (IOST), a Sequoia-backed blockchain infrastructure — said that 2018 is the year when only the fittest will survive. “For those people who had made profits or received investment in 2017, their strategies might not work anymore.”

From left to right: Zhang Yijia  (moderator), Robert Mao, Lucille Hu, Ray Xiao , Jiang Changhao. Photo from Harvard College China Forum.

“Entrepreneurs will see bottlenecks of current technologies, especially processing speed and consensus mechanisms,” added Xiao, “New discoveries are very likely going to emerge.” For instance, CryptoKitties, a virtual cat-breeding game built on the Ethereum blockchain, went viral at the end of last year, leading to a large volume of unprocessed transactions from the game, which resulted in immense congestion in the Ethereum network.

Xiao anticipates significant technological advancements in the blockchain sector in 2018. “I think we will most likely see a killer app in 2018. Ordinary users will be using blockchain without understanding the hashcode behind it. It’s kind of like when the internet was first invented, nobody would invest in backbone technologies such as the TCP/IP protocols. But today, internet services have become accessible to ordinary households,” said Xiao.

Jiang Changhao, co-founder of COBO Wallet, juxtaposed today’s blockchain development with the internet in 1993, the year prior to the release of Netscape. “When Netscape was released, it opened a whole new world. Ordinary users no longer had to use methods such as Telnet to access the internet. In the world of blockchain, we can see that the protocols of Bitcoin and Ethereum are not perfect yet. To build an application for ordinary users, there still are lots of challenges ahead.”

While investors have demonstrated strong optimism about the technology itself, many are uncertain about the cryptocurrency market trends. “[Blockchain startups] have been making a lot of breakthroughs this year. This will be the key year for the blockchain technology, but it’s tough to predict where the prices will go,” said Lucille Hu, general manager of FBG Capital, a digital asset management firm based in the U.S. and China.

“Most VCs last year tended to invest in the primary market, especially through initial coin offerings (ICO). Now, it’s no longer as easy,” said Xiao.

Li Feng, co-founder and partner of FreeS Fund, indicated that recent market oscillations had allowed venture firms to make more rational assessments on blockchain projects, following last year’s crypto boom. Li asserted: “We have seen massive bubbles in the cryptocurrency market from recent price fluctuations. While perhaps 99% of today’s cryptocurrencies are bubbles, the 1% of blockchain applications will eventually change the world.”

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