Xu Jizhe: Explaining the development and goals of Newton in 2018
-Newton Meet-up Beijing Phase II, Speech of the Founder Mr. Jizhe Xu
In the speech of the Newton Beijing offline meet-up (Phase II),Newton founder Mr. Jizhe Xu pointed out that: the current economic model is most people contribute only a few people benefit. The new economic model that Newton is about to create will ensure everyone’s contribution and benefit everyone.
Newton Angel Investor and co-founder of Lightinthebox (NYSE:LITB) Mr. Liu Jun, Newton advisor Prof. Xueyong Gu from Tsinghua University, Newton advisor & Bitcoin Ambassador Lee Willson attended this event and delivered a speech.
Newton founder Mr. Jizhe Xu
Here are some highlights of Mr. Xu’ s speech:
The reasons why the project named after Newton
Mr. Jizhe Xu introduced at the opening: “Newton is a great scientist. He invented calculus in the first half of his life, discovered the law of universal gravitation and created classical mechanics. He completed theoretical synthesis of human cognition history in nature for the first time, which represented the birth of modern natural science. What is not well known by people is that Newton is also a financial economist.” Newton served as the director of the U.K. Royal Mint, and invented the coin anti-counterfeiting technology during his tenure. He initially proposed the gold standard system which influenced the world’s financial system for hundreds of years, and mitigated the pressure of monetary policy caused by the decline of silver reserves in the UK. Considering his great contributions through his life, this project is named after “Newton” and pays tribute to Sir Isaac Newton. In the middle of the Newton project logo is a calculus symbol, indicating Newton’s contribution in natural science. The elliptical wave shape represents the anti-counterfeiting jagged edge on the coin invented by Newton, representing his contribution in financing.
What is Newton?
Mr. Jizhe Xu said that it is may be a little difficult to explain the current blockchain projects to the public in a short sentence, but this is easy for the Newton project. “For consumers, shopping is mining, and the more they buy, the more money they will have. There will be various incentive mechanisms in the Newton business ecosystem. As long as they participate in the Newton business ecosystem, there are many ways to obtain benefits. For merchants and business organizations, joining Newton’s business ecosystem can significantly reduce operating costs and have significant user flows dividends. Currently, on traditional e-commerce platforms, merchants need to pay nearly 25% of their revenue to the platform as part of their operating costs, and in the future at NewMall, this cost will be reduced to 8%-10%. All new technologies will seem to have a lot of favorable policies at the beginning of development. So if merchants sell products on NewMall, they will enjoy free and huge users flows and many benefits.” Mr. Jizhe Xu gave the concise induction and the audiences have a clearer understanding of the Newton project.
The current economic model is most people contribute but only a few people benefit. Newton will create a new economic model to ensure everyone contributes and everyone benefits.
Why is it difficult to explain blockchain projects to the public? Mr. Xu said he thinks that because most of these projects only have tokens but without ecological systems. From the very beginning of the project, Newton has a clear application scenario and ecological system. For Newton, the original intention of the project stems from the Newton team’s critical thinking about the current business economic model. Under the current business economic model, most people who contribute to the business economy do not have the benefits. The benefits of economic growth have been taken away by a few people. The popularity of “Double Eleven” in China has led to the continued sharp rise to the stock price of e-commerce trading platforms, but unfortunately, most of the people do not have stocks of the platform. That’s why we said the current business economic model is most people contribute, but only a small number of people benefit.
This business economic model is not good. This economic model and incentive model were born in the era of industrial revolution. After the invention of the steam engine, there was a huge leap in productivity. Capital, shareholders and companies were formed to develop a more effective way for collaboration. Through these organizational structures, people and resources were integrated together, and the company was established. Generally, the company’s mission is to pursue profit, seek monopoly, and thus dominate the market. This traditional model creates an adversarial relationship between the enterprises, employees, and the consumers. This model has continued till now. In fact, from the perspective of an incentive mechanism, a better model is everyone contributes and everyone benefits. Based on these thoughts, the Newton project was inspired to create a community economy managed by a non-profit foundation through blockchain technologies, and to realize the economic model for benefiting everyone who has contributed to the economic growth.
The key issue that Newton is about to solve incentives rather than cost or efficiency issues.
“Unlike the traditional incentive model, the key issue that Newton has to solve is the incentive mechanism, not the cost or efficiency problem. If we only pursue cost and efficiency, the existing large centralized platform can already achieve the best. But this will also bring unprecedented commercial monopolies. Without the Internet and mobile Internet, it is very difficult to create such a world-class monopoly.” This is Mr. Xu’ s view of the current business model. He believes that in 1999, Wangfujing Department Store, whose customers cover dozens of kilometers, is difficult to become a national mercantile organization, because it needs to open branches in so many big cities. At that time, it was sometimes difficult to establish a monopoly and establish a super money-maker. From a fair point of view, that era is better. Nevertheless, the Internet and the mobile Internet has made it easy to establish national and even global super monopoly organizations.
The result of this super-monopoly is that all of us are contributing, but only a small group of people enjoy the benefits. This is the core issue of the contemporary commercial society, and it is also the problem Newton aims to solve. Newton initially proposed that the Newton project is a blockchain commerce (chain-commerce) rather than an e-commerce.
Mr. Xu Jizhe believes that the path of business evolution can be summarized as the first offline retail and wholesale. With the development of the Internet, e-commerce has emerged, and information gaps have been eliminated. As a result, costs have been reduced and efficiency has been improved. There has also been a monopoly. Later on the basis of the information on the Internet, the value of the Internet, the blockchain, evolved. In the blockchain world, data and certificates were confirmed to individuals, and chain merchants came into being. On the basis of cost reduction and efficiency improvement, chain operators can avoid large-scale monopoly and successfully construct an economic model that benefits everyone.
Mr. Xu Jizhe believes that the path of business evolution can be summarized as: At the first time, we have offline retail and wholesale; With the development of information Internet, e-commerce has emerged, information asymmetry has been eliminated, the costs was reduced and improved efficiency. Meanwhile, it also leads to a monopoly. Later, on the basis of the information on the Internet, the value-based Internet, i.e. the blockchain technology, has evolved. In the blockchain world, data and certificates were authenticated and confirmed to individuals, and blockchain merchants will be born naturally. For cost reduction and efficiency improvement, blockchain merchants can avoid large-scale monopoly, successfully construct an economic model that everyone contributes and everyone benefits.
Data produced by user consumption behavior should belong to the user and bring benefits to the user.
When talking about data and privacy issues in using the current e-commerce platform, Mr. Xu said “We will generate a lot of data when using the e-commerce platform. The purchase behaviors, browsing behaviors, and payment behaviors will continue to accumulate and become the basis of big data. However, the current situation is that users’ data and private information are gathered and leaked. Users lose the ownership of data, data becomes a profitable asset that the platform can get benefit while users can only enjoy a little convenience in the trading process. This is exactly how the platform getting a “watermelon” while users getting “sesame” in the production process of users’ data. This is the obvious drawbacks of the current business model.”
The birth of blockchain technology ensures that data truly becomes an private asset
Without the development of the blockchain technology, no one will care who the data belongs to. Bitcoin uses the blockchain technology to authenticate tokens to a specific person. The essence of Bitcoin transfers is that data is transferred from one person’s account to another. It is very profound that there is a property right of data asset for the first time in the bit world. Before the bitcoin or blockchain technology appears, there is no way to determine the date belongs to anyone, because it can be copied indefinitely. Just like an image is transmitted to the Internet, it will be everywhere. The use of blockchain technology is a prerequisite for the realization of Newton’s vision “everyone contributes and everyone benefits” in the blockchain area.
The property rights of data assets will bring economic prosperity
Blockchain technology ensures the property rights of data assets. This power is similar to China’s real estate reform. The government privatized the property rights of real estate by issuing real estate licenses, which led to the prosperity of China real estate industry in the past 20 years. If there is no privatization of the property, we will not care much about the value of the real estate, and there will be no such prosperity.
After the emergence of Bitcoin and blockchain technology, the privatization of ownership of digital assets was realized for the first time. People may not interest the privacy, but they do care about the economic benefits. When the data belongs to an individual and one can use data asset to make money. It will enlighten many people on the ownership of data asset. Built on the above considerations, Newton team designed the Newton token economic model and business economic model.
The blockchain industry is still in its early stages, so entrepreneurs have to explain the technical principles of blockchain projects.
In general, we don’t have to explain the internal technical principles of a new project. For example, when Apple launches latest products, they will not explain the technology of electronic circuit design. They just talk about the advantages of the products. But for now, as the blockchain industry is still in its early stage, if we only talk about the advantages of Newton, tell everyone that shopping is mining, the more you buy the more money you can get, people may not believe it and consider it as a scam. Mr. Xu said: “When I was operating the Elastos project in July last year, I tried to explain to many people around me about what is Bitcoin, what is the blockchain, why they are important and represent the future, almost all my friends do not believe me. So because we are in the early stages of the blockchain industry, we have to talk about internal technology to prove that the project is feasible.”
Newton has a clear location in blockchain industry, which is an e-commerce oriented public chain. Every industry has its unique characteristics. As for e-commerce business, the links such as procurement, warehousing, operations, customer service, logistics, financial reconciliation and social interactions, are all have its unique requirements. Newton will be still optimize technology for commercial applications.
Newton is divided into three layers. The top layer is the application layer, which contains various DAPP, wallet and e-commercial platform, insurance or financial lending applications. The middle layer is a hyper exchange protocol, including seven modules. Built on the protocol, users can develop applications easily. Under this protocol, there are five basic applications, including NewChain, NewNet, Atomic Hash, NewIoT, and DAI.
The transaction and token data will be stored in NewChain, and a large amount of data such as product images and videos will be stored on NewNet. NewNet is a decentralized network and we are working with a partner who is going to be the NewNet operator. They have the strength to provide a basic server to store bandwidth running the NewNet software.
From a business perspective, there will be three types of merchants in the Newton ecosystem with the large size, medium size and small size business. Small-size business will get free user flow at NewMall, and reduce transaction costs thus sell more products through new channels. They may not have too much technical development ability. But as for medium-sized business, they may need independent brands, so they can develop independent malls by their own technical ability based on the Newton hyper exchange protocol. The third type refers to the large size business which revenue may be more than 1 billion/year. In addition to the need for a separate mall, they may also need to issue their own token. NewChain provide a strong support for them to issue their own token which will anchor to the value of NEW, and co-create a prosperous, multi-level ecosystem.
All technology should serve human society
In fact, all technologies, including CPU, operating system, and blockchain, follow the same development path. There will be a turning point in this development path. Before the turning point was the technology exploration period. During the exploration period, everyone’s behavior was to explore the technology itself, whether it was entrepreneurial behavior or investment behavior. After the turning point, the technology has developed into a stage that is mature enough. This technology should serve human society and create convenience for human life, and it will become a vital and valuable technology. If a certain technology can’t cross the turning point, the technology will die out because it’s a useless and can’t solve the practical problems.
The development of blockchain technology will reach a turning point in 2018, this year will be the first year of commercialization of blockchain technology
Mr. Xu believes that blockchain technology will reach a turning point in 2018, and this year will be the first year of commercialization of blockchain technology.
Mr. Xu said “I have communicated with many senior investment experts. I told them that their current thinking has been biased by some technical geeks. Why do I say this? For example, I am an entrepreneur in the mobile internet industry. Now I want to develop a social contact app. If you are my investor, would you ask me what is the TPS of the server? What kind of hardware, software, and operating system do I use for developing the app? These problems are not very important. Because when the technology is very mature, investors should care more about what the business model is, where the users are, how to make money, and how to grow.
But now if a blockchain project doesn’t talk about TPS, it will be considered unprofessional. Current project evaluations are mostly positive proportional to its TPS. Everyone should think of it. If a project only good at its TPS, what can it do? Perhaps this project is very promising, but the token of this project has no better application scenario except to be sold on the trading platform. There are two exceptions, one is Bitcoin, because it reached the broadest consensus and became a digital gold. Its price is supported by the broad consensus. Another one is Ethereum, which is a super mint. Many projects currently need to use Gas. This is why I said we are now in the early stages of the industry. The essence of this phase is the technical exploration period. Before the turning point, we can’t see any promising business model of blockchain project, because they have no business model. Everyone must keep a clear logical mind to analyze the current blockchain project.
Mr. Xu believes that by 2019, all blockchain projects may be asked to answer a question: Why do people want to use the token of a project?
NewChain, which Newton is developing, has been verified that its TPS can meet the requirements of commercial applications. In this case, technology has realized commercialization. There may emerge some projects similar to Newton in 2018, but the Newton project is a technology application that truly uses blockchain ideas and technology, as well as other technologies to serve people’s daily life.
Newton is not just a blockchain project in the narrow sense. It is like going back to 1995, Jeff Bezos built a large e-commerce platform by using an operating system, database and hardware. However, ultimately, the value of the platform is whether the business model can operate healthily. Just as it can’t be said that the Amazon is an operating system company, Newton is not a blockchain project in the narrow sense. Instead, it uses advanced technologies including blockchain technology to solve problems.
The Newton project will serve a different customer group than the past
Mr. Xu has been emphasizing that Newton and Alibaba and Amazon are not competitive. They serve different types of people, namely blockchain users and non-blockchain users. We can make an analogy. If we return to 1999, did Alibaba and Wangfujing Department Store have a competitive relationship? No, because there were two types of people at that time, one was the Internet users and the other was the non-Internet users. Alibaba serves Internet users, and Wangfujing Department Store and other large stores serve people who do not have access to the Internet. This is totally two worlds. In 1999, the difficulty level of explaining “what is the Internet?” was the same as the difficulty of explaining “what is the blockchain?” to people now. At that time, the Internet could not be seen or touched, and there was not much content on the Internet. But at that time, there were a small group of people who were passionate about the Internet and often communicated together, similar to us people here today. In today’s world, there are two completely different types of people, namely blockchain users and non-blockchain users. So it is now difficult for blockchain users to explain to non-blockchain users what blockchain is.
Newton aims at serving the blockchain users and supporter, while Alibaba and Amazon aim at serving those people who do not engage in blockchain projects.
With such strategic locations, someone needs to implement the project. Many blockchain projects are still operating in an old way. In this regard, Newton will make a very significant innovation by creating 100 community nodes around the world. These community nodes are also the organization that realizes Newton’s vision and mission. In order to build such an organization, the most critical step is the token exchange process. Newton has no intention to show the popularity by completing financing instantly after declaring the second token exchange as the other blockchain projects did. Newton may use about two weeks to complete the second exchange process. And Newton aims at building global community nodes that truly understand and recognize the Newton project so that to lead the project to a higher level.
Building global community nodes is a critical step for the Newton project. Therefore, Newton designed a three-step token exchange process to achieve it.
Newton Project Community Building Progress
The second round of token exchange will be launched at the end of June, and the third round of token exchange will be launched around October. The purpose of the second round token exchange is to build global community nodes. We will comprehensively assess the allocation amount of the token exchange based on the applicants’ contribution record and plan to Newton project. The purpose of the first round of exchange is to build a Newton project team. The third round of the exchange is to cultivate Newton users. The purpose of the token exchange at different stages is different.
Current technical progress of Newton project
All the work is going smoothly. The main chain NewChain and the wallet NewPay are under steady development. Under relatively optimized network conditions, TPS can reach around 10,000. In the real cross-continental general network, TPS can be stabilized at 3000–5000 which is still working on its optimization. The first version of the NewIoT prototype has also been completed. Based on the current status, launching NewChain and NewPay in October will be on schedule and without any big problems. At present, we plan to release the NewMall in December based on the above advances.
Newton project business progress
At present, the first batch of commercial resources for NewMall is ready, including the main kinds commodities such as shoes, clothing, bags, fresh food, imported milk powder. The goods used everyday life will be available on NewMall. At the same time, the integration of overseas business resources has also been put on the agenda with continuous communication.
Expectations and planning for the Newton project
Mr. Xu said: “We hope to build 1 million NEW holders. We hope that more people will hold NEW and enjoy the growth of wealth. This is one of the core goals of this year, which is why we spend a lot of time to deduct and design various project processes.”
When Mr. Xu’ s plans are gradually realized, NewPay is likely to become one of the world’s largest cryptocurrency wallets.
After NewMall is launched, it is expected that the transaction volume will reach 10 million. In fact, this amount is under deliberate control. Because a larger transaction volume will put forward a higher requirement on the supply chain. But this still requires a running-in process. So NewMall trading volume will reach 5 to 1 billion next year.
In order to promote the project to achieve the above goals, Newton has launched the “Global 100 Cities Tour — Let 100 Million People Learn About Newton” program. Domestic community nodes have responded to this plan and actively assisted other local community node to hold offline activities. Meanwhile, community members from many overseas cities, including London, Lisbon, Silicon Valley, Seoul, Singapore, Moscow, New York, Tokyo and other big cities, have sent invitations and applications for holding official Newton offline activities.
Newton plans to hold the first Newton Community Nodes Summit by the end of July, hoping to find some community evangelists who can explain Newton. Newton can’t rely on one person to explain. It should be just like the Bitcoin, which everyone knows what it is, and people actively explain and pass on the consensus of Bitcoin.
Newton also plans to hold the first blockchain e-commerce conference in the fourth season of project development, and then expand to the world, bringing together traditional e-commerce and offline retail to communicate, so that more and more business friends will join the Newton ecology system. In the later period, Newton will also organize the Newton Developers Conference to facilitate the development of DAPP and gradually improve the entire ecosystem.