Welcome to this week’s edition of the RHIZOME Wire!
Why DApps Matter
While we all recognize that what will truly differentiate ICON from other projects is it’s promise of interoperability, it’s also been increasingly clear that applications built upon the network itself will be important to the ongoing development of the network — especially over the short-term.
To begin explaining why this is the case, I am going to draw initially from an answer that Ricky Dodds provided during an AMA in 2019:
Fast forward to today and the question is has that vision changed and if so why? And if not, what is taking so long to see it through?
First, I would say that the vision hasn’t necessarily changed. But I would say perhaps the scope has tweaked. Originally, the plan was like you said. Onboard all of ICONLOOPs enterprise customers, and connect them to the public Nexus and have freely flowing data across the network, powered by ICX. That’s still the vision, but I think we’re early (Bottom of the 1st, Top of 2nd… early… to use a baseball analogy) and enterprise adoption of public blockchain solutions will take some time and patience.
We want to be building for the vision we see. ICON Republic as a digital representation of a country with governance and economic policy programmed into its core, facilitating the growth and expansion of crypto native and/or new breeds of companies (such as DAOs) while also dedicating resources to the design and implementation of interchain. We believe this path of parallel activity increases the likelihood of the success of the project and frankly speaking, limits the reliance on 3rd parties for short and medium-term success.
Simply put, adoption is disruption. And at the foundation, we don’t want to wait around on others to get off the fence. Although, that’s the home run scenario and one we will continually push :). That said, we want to be more pragmatic and focused on driving utility now and the governance system we’ve designed should allow for this growth.
To expand on this, here are some quotes from Ben Lee of the ICON team, made in the Telegram chat (please note that the “chat” style of this dialogue will make it read a bit awkwardly):
For now, since we don't have enough users and Dapps in our network there is not much to do even if we connect private blockchian with our public blockchain
what we are trying to do is setting many private block chain as possible with their own benefit first and then suggest them to connect with public blockchain because every other private block chain will do
Connection is easy
There is no utility to connect in both company side and user side for now
what we try to do is get more people to use private blockchain without noticing they are using it and then adopt to public block chain when they are get used to use it
so what we are doing is setting loop chain(ICX private chain) here and there and try to make some utility to connect them all in public blockchain.
so connecting ICON to EOS or Tron is cool stuff
but right now, if we connect, people will most likely to use Dapps on EOS with ICX
not EOS people to use ICX
because there is not much things to do in ICX for now
so what we are trying to do is make something significant first in ICX and then connect
so the other platform users are willing to use ICX platform
The simplified explanation of these statements is that, even if an entity has an ability to connect to the public chain, if there isn’t any value added in doing so, they won’t do it. There are few private chains even existing right now (just another reminder of how early blockchain really is), meaning there are few opportunities for possible interconnectivity (because the number of candidates for connectivity is so low). The fact that these handful of private chains are not yet integrated with a public chain means there is essentially no reason for any entity to connect to the public chain (because who would they connect to?).
But just because that’s the case today, doesn’t mean it will be the case forever.
As more and more entities start to use the private chain with success and confidence, I believe they will start onboarding to the public chain (under belief that their counterparts will as well) — but that point is still a ways off. (My-ID is the clearest path to initial public chain adoption, and their efforts don’t really start gaining momentum until 2021, according to their roadmap.)
However, major institutions onboarding for the purposes of interoperability aren’t necessarily a requirement for traction and success of the ICON public chain. In fact, should ICON become “successful” over the long-term, it will be the result (in my opinion) of both major enterprise usage, along with a layer of smaller-scale operations that create large volume in the aggregate.
So just how do we build that layer and generate the initial momentum we need in the short-to-medium-term to generate utility for the public chain?
The importance of contribution proposals
While ICON held elections for P-Reps to determine which teams would operate nodes and receive contribution rewards, the network will be holding a similar process for “contribution proposals” — specific ideas on how to either expand the ecosystem or build applications to run on the ICON network.
These proposals — and their materialized projects — could be the key to generating increased utility over the coming months (and ultimately years) on the ICON public chain. In this instance, my focus is primarily on the application proposals, rather than the ecosystem expansion proposals.
So what do I mean by utility in this context? To describe what I mean, I am going to use a very extreme example: Let’s pretend somebody came along and essentially built an application that was as popular as Facebook, but did it on the ICON public chain (not likely, but we can dream, right?). With so many users, there would be significant demand to integrate — through interoperability — with that application, for a number of reasons and use cases (digital identity verification, perhaps, being one of those use cases!). That is what I mean by utility.
Ultimately, I see the contribution proposal program as a door of sorts — when it’s open, it provides significant opportunity, especially if people are willing to walk through it. But over time, the door can also close if too few quality proposals are put forth, or if those proposals never come to fruition.
In terms of opportunity, the fact that the ICON network provides funding for those who wish to build applications is a unique feature, and one that could differentiate ICON as a platform from the many others out there. There are likely a number of ideas for applications that are sitting dormant because those who thought of them have no idea how to capture the resources necessary to build them. Well, fortunately, ICON is doing just that — offering those resources.
From that standpoint alone, there is little reason to believe that ICON won’t have the ability to recruit enough talent and ideas to start building some truly practical applications with genuine use cases.
The risk, however, is if an inadequate number of proposals (either in terms of quantity or quality) materialize. In other words, if word isn’t adequately spread regarding the opportunity presented by contribution proposals, the entire program will be essentially wasted. Even with a monetary incentive, there is still so much noise, and so many other tempting projects to build upon, that ICON standing out among them all may not happen. If this is the case, not only will we lose out on a number of the potentially game-changing applications and tools that we’ll need for success, but it may also create a negative image of ICON if the network can’t recruit quality projects even when offering compensation for doing so.
To be clear, I do not think this is likely. Beyond the compensation, there are plenty of other reasons people will be enticed to build on ICON. Yet, the risk is sufficient enough where I believe one of the most important things the community and P-Reps can do over the coming weeks and months is promote the contribution proposal system as far and wide as possible.
Ever since the start of the bear market, there has been essentially endless discussion about the need for “marketing” in order to motivate crypto enthusiasts and retail investors to purchase ICON based on speculative value. I generally have not believed that this type of marketing is all that productive.
However, promoting the contribution proposal system is the type of marketing that can build long-term value and utility for the ICON network. It’s my hope that the community as a whole can shift our energy toward doing just that.
News from ICON World
broof 1.0 Launched
ICON announced that it has officially launched broof, it’s blockchain-based certification process. While the ICON community was aware of broof for some time now, the platform had still been in a development/testing phase. With the release of the 1.0 version, it appears broof is ready for greater adoption.
my-ID Alliance continues to grow
This week, we learned that the my-ID Alliance has added three new partners: “Popular online recruiting platform Saramin, online shopping company GS Shop and data analysis company LIME Solution,” according to The Iconist.
According to the my-ID Alliance roadmap, they hope to have 100 partners by the end of 2020. Based on their gradual growth thus far, that number certainly seems in reach.
Meanwhile, Ben Lee weighed in:
mincircle@mincircle6#MyIDAlliance @ICONLOOP1 The total number of partners has increased from 41 to 44 Recruiting platform Saramin, Homeshopping GS Shop and LIME Solution, a data analysis IT company joined as a new partner of MyID Alliance. https://t.co/HozDJ3Qizh
Interestingly, Lee pointed out that all global partners explicitly plan to use the public chain. While the list of global partners only includes Yoti at the moment, but it will be interesting to watch this list in particular grow in time.
Staking just got easier
ReliantNode, an ICON P-Rep candidate, has launched “Covert-Stake-Vote” on MyIconWallet:
For many, the multi-step process to claim i_Score, stake, and then vote can come off as a bit cumbersome. Accordingly, ReliantNode has built a system to streamline the process.
Another example of the community building helpful tools for ICONists!
Mineable, an ICON P-Rep and Youtuber has released his most recent video featuring ICON:
For those who haven’t heard of the project — or perhaps haven’t followed it closely — this can be a very helpful introduction!
Is Korea relaxing its crypto laws?
Interesting reports emerged this past week indicating that certain elements of the Korean government were indicating a desire to liberalize some of Korea’s cryptocurrency laws, especially in regard to trading:
In a new report, the Presidential Committee on the Fourth Industrial Revolution (PCFIR) proposed the government could move to bring cryptocurrencies into the mainstream of finance through a number of measures, including derivatives.
With cryptocurrency trading surging worldwide, "it is no longer possible to stop crypto-asset trade," said the PCFIR, as per a report by Business Korea on Monday.
The committee said the government could follow the lead of U.S. regulators and sanction products such as futures contracts tied to bitcoin. Institutions would also be allowed to offer other cryptocurrency services such as trading.
While the impact this will have on ICX itself is difficult to determine, it’s nonetheless positive that Korea is moving in a more accommodating direction regarding cryptocurrency.
Blockchain Industry News
The blockchain and crypto community is ringing in the new year to a level of legislative and regulatory attention that would have been hard to predict a year ago. On one level, this is unsurprising when many predicted that crypto was dead a year ago following an 85% decline in the price of bitcoin from its 2017 peak. With Christmas 2018 headlines such as “Rhymes with Bitcoin: Has Crypto Hit the Fan?”, the revealed wisdom was that crypto was either dead, or destined to be a minor financial footnote. What a difference a year makes.
Lawmakers in the city of New York are proposing a new form of hyper-localized digital cash that would run on a peer-to-peer payments platform called an “Inclusive Value Ledger.”
The proposition comes from New York State Assembly member Ron Kim, Senator Julia Salazar, and Cornell law professor Robert Hockett, who, in true crypto form, published a whitepaper to elaborate on the idea in November 2019.
South Korea’s largest cryptocurrency exchange Bithumb is set to invest 10 billion won (~$8.6 million) in Busan city’s “regulation-free” zone for blockchain development.
The country’s Ministry of SMEs and Startups announced the news on Thursday, saying that Bithumb will invest via its subsidiary GCX Alliance.
In short, I think over the next decade we’ll see a blockchain, that is both more scalable and includes privacy features, reach about 1B users by the end of the decade (up from about 50M at the start of the decade). Adoption will happen both in emerging markets, where the financial systems are most broken, and from a crop of new crypto first startups producing products people want. By the end of the decade, most tech startups will have a crypto component, just like most tech startups use the internet and machine learning today. Governments and institutions will move into the cryptocurrency space in a big way as well.
The total amount of Ethereum locked in the decentralized finance (DeFi) has recently hit a new all-time high above the 3 million ETH mark, meaning around $432 million are locked in DeFi apps.
Data from the decentralized finance tracking platform DeFi Pulse shows the amount of ether locked in these apps has been surging, going from 2.68 million ETH in December 2019, to over 3 million ETH at press time.