[Translation of the original interview by JOIN:D]
Interview with the Mainland China cryptocurrency project founder
“I hope we can achieve true community autonomy, apply our anti-counterfeiting traceability system solutions to different industries, and eventually expand to the needs of every corner of the world. What I would like to achieve is to monitor the full life cycle of all goods by assigning each product with a unique DNA. In this way, all the fake products will be eliminated; and we can bring a new digital life to people. We would like to apply blockchain to endorse the value of all goods, so as to truly realize the Value Internet of Things (VIoT) concept.
Waltonchain proposes a new concept, the Value Internet of Things (VIoT), which perfectly applies blockchain technology to different industries. It is committed to becoming a global leader in blockchain + the IoT.”
Q: In the interview with other media, CTO Wei Songjie said, “I work in the manufacturing industry, but I feel very painful because transparency cannot be guaranteed.” What was the situation at that time?
A: Our CTO Dr. Wei said that lack of transparency in the manufacturing industry was painful for him. To give you a specific example, it is like a bottle of Chinese liquor. We are not clear about of its bottling and circulation. If such data is manually uploaded to a central server or even to blockchain, we cannot guarantee it is authentic. Thus, Doctor Wei said he felt helpless and painful. However, Waltonchain can solve these problems perfectly. The way is to extract the characteristic values directly from the data of various sensors, or extract the core values and load them to blockchain. The word “directly” here means the work can be completed at the chip level. For traditional projects, it is impossible. The vast majority of the Waltonchain team is experts in chips. We made some modifications to the communication chip inside the sensor; and the original data can be directly transmitted to the designated place through the chip. Then, the hash value of the characteristic fingerprint is extracted and uploaded to blockchain. In this way, the authenticity of the original data can be verified.
Q: Attempts to introduce blockchain into the logistics and fashion industry have been relatively active. What do you think is the difference between Waltonchain and its peers? For example, VeChain also builds blockchain-based logistics.
A: Waltonchain is different from other similar anti-counterfeiting projects for the fashion industry logistics. Here, we only mention VeChain. In fact, VeChain has always treated us as imaginary enemies, although it ranks higher and has better marketing than we do. I think the biggest difference between Waltonchain and other projects is that they cannot provide chip-level solutions like us, whether it is VeChain or other anti-counterfeiting traceability projects. As far as I know, VeChain has recently proposed the use of NFC chips for traceability, but VeChain’s team does not have capabilities to develop their own chips; and they buy NFC chips.
Waltonchain integrates blockchain and the chip deeply. We self-developed an RFID chip with blockchain encryption. Each time, we can write the hash value of the data back to the RFID chip. Thus, this is an integrated and in-depth process. We achieved a perfect combination of reader-writers and RFID chips. In this way, it can make fake products disappear, and make each data string unique on blockchain. Each chip interaction with the reader writes the hash value back to the chip. The chip flow process is divided into stages, but it is possible to back-track the information flowing through blockchain by the hash value. Thus we can truly achieve the anti-counterfeiting traceability we want.
Moreover, the ID of each chip is unique and cannot be forged. This is impossible for other blockchain projects, either using QR codes or NFC. VeChain has mentioned NFC, but it does not develop the chips, nor does it have a deep integration with blockchain. Our project also has an ultra-high frequency RFID chip which can realize long-distance and one-to-many chip reading. This is an enormous advantage for logistics analysis and quick goods inspection.
Q: The combination of the Internet of Things (IoT) and blockchain is a feature. Every hour, the IoT generates a lot of data. Blockchain has not solved the speed problem completely. At first glance, the combination of these two technologies seems awkward.
A: We take the parent-child chain approach; and Waltonchain parent chain only needs to endorse data authenticity. In the parent-child chain mechanism, the child chain can be a consortium chain, a private chain, or, of course, a public chain. Different child chains solve difficult problems faced by different industries. In a scenario with frequent payments or transactions, we tend to use a private chain and a consortium chain. Using three or five nodes as a consortium chain can double the efficiency and reach millions or even tens of millions of TPS. Then, how to ensure the data of these three or five nodes is accurate? We extract data fingerprints, make data comparison on blockchain and know that the data of these three or five nodes is authentic. Therefore, technically, the combination of the IoT and blockchain is not awkward at all. We can apply blockchain technology in different industries through the hierarchical tree structure of the parent chain and child chains.
Q: You revealed the self-developed Waltonchain RFID chip. What is the difference between this chip and a typical RFID chip? In order to be applied to the existing RFID logistics systems, all equipment, including card readers, should be replaced. If so, do you think companies can immediately benefit from the part that excesses replacement cost?
A: We have deeply bound and integrated the concepts of blockchain and RFID. Data within each RFID chip that uploads to blockchain is rewritable and erasable. During each uploading session, it is not the data itself but the extracted hash value that is uploaded. If our hardware products such as readers and chips are used in all RFID logistics systems, it will add cost to the enterprise. But can the added value cover the cost? Take the solutions we provide for China’s well-known liquor enterprises, Moutai and Wuliangye for example. The annual anti-counterfeiting cost for these two enterprises is CNY 1 billion; and the price of our hardware products is only around 10% of that cost. At such cost, they can achieve the anti-counterfeiting traceability that was impossible before. For enterprises with strong anti-counterfeit traceability requirements, this is also a way to save cost.
For ordinary products, take natural agricultural products for example. They are organic and pollution-free. However, with no brand, these products experience overstock; nobody knows the products are good. In fact, these products are often the best and most valuable. Hence, we introduce the concept of blockchain into the whole production process. The production process is monitored by the traditional IoT; and the core data is uploaded to blockchain to ensure that the data generated during the entire production and processing cycle is authentic. This will increase the added value of agricultural products and help farmers sell products at a better price.
The vast majority of the cost can definitely be covered. Now, we also follow this mode to cooperate with our partner enterprises. We do not directly charge companies for the fees or chip cost. For example, the original price of a product is CNY 10. Due to its added value, its current price is CNY 15; and the value added is CNY 5. We divide it with the merchant. The increase of sales can benefit our enterprises. For consumers, although they may spend more money, the purchase becomes credible. They feel assured and are willing to purchase. In fact, consumers do not spend too much money, because many agricultural products are overstocked and the price is very low. From agricultural production to purchase by consumers, many intermediate supplier circulation steps can be reduced; and consumers can get high-quality products, which is a win-win for consumers, farmers and us.
Q: What do you think is the correct value of your company’s cryptocurrency? If it is higher than the current market price, why is it not properly evaluated in the market? And, what is the reason?
A: To be honest, to give an accurate value is quite hard. The reason is we have to observe benchmark competitors in our industry. However, I think Waltonchain has been seriously underestimated. For ranking, I always think that Waltonchain can be a top ten cryptocurrency. There was a story. When I was interviewed by a Korean media last time, I said top TEN. However, the pronunciation of ten and four is similar in Chinese. The Korean friends misunderstood that we want to become a top FOUR project. Today, I would like to take this opportunity to make a small correction. But I still believe that Waltonchain will become a global top ten cryptocurrency. Of course, I hope Waltonchain enter the top four, but at present our market price is significantly lower.
I think an important reason is that we are more dedicated to technology and less to marketing and promotion. Besides, we are constructing the global ecosystem; and it is a new ecosystem based on hardware and underlying chips. The spread and layout of hardware is slower than that of software, so the promotion speed is much slower than that of many pure software projects. But hardware lays a solid foundation for us; it is visible. Most of the projects initiated at the same time with us have disappeared, while Waltonchain is still standing here and continues to grow. Hence, I always believe that our project can enter the global top ten.
Q: However, in South Korea, Chinese projects may meet negative reviews. For example, there exists a bias to treat some Chinese projects as fraudulent. What do you think about such bias? And, why does such attitude exist among Koreans?
A: Yes, I know that. As far as the projects we have screened, the Chinese ones are not very welcomed. Indeed, there were too many fraudulent Chinese projects, especially in 2017 and 2018. Those projects used pyramid sales for financing. After financing, they ran away. Those were countless projects. There is a Chinese saying “one bad apple can spoil the whole bunch”. This made a bad impression among our foreign friends; and they may think that most of the Chinese projects are not reliable. It is because of this that Waltonchain, the cooperation project between South Korea and China, is more valuable. In the eyes of Chinese investors, our project is quite rare, as it is committed to technology and focuses on practical purposes.
Reference link: https://joind.io/chinese?id=153