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Memories of the most important Shanghai investors in the early days of Ethereum
Author: Feng Xiao, founder of Wanxiang Blockchain
On September 15, 2022, Ethereum will usher in another historical moment after the publication of the first white paper at the end of 2013 and the mainnet launch in July 2015 — “The Merge”. Ethereum’s consensus mechanism will switch from Proof of Work (POW) to Proof of Stake (POS). “The Merge” will reduce the energy consumption of Ethereum by 99%, the issuance of ETH by 90%, and the cost of “Gas” will be close to zero after merging through sharding and L2 (layer 2 protocol). While network security and health are completely unaffected,”The Merge” will help Ethereum with extremely flexible scalability and high performance of 100,000 per second in the next 3 years and 10 million per second in the next 10 years. This will further establish Ethereum as the universal infrastructure of the metaverse.
“The Merge” is not only an important moment in the history of the development of Ethereum, but also destined to be an important moment in the history of the development of blockchain technology! After “The Merge”, Ethereum need to be upgraded again after 6 months in order to restore the normal transfer function. This upgrade moment was named “Shanghai” by the Ethereum community!
In September 2016, following the previous two global developer conferences held in Berlin and London, the third Ethereum Developer Conference (DEVCON2) was held at the Hyatt Hotel on the North Bund in Shanghai. Among the nearly 1,000 participants (now the Ethereum DVECON is already a 10,000-person conference), 90% came from overseas to attend the conference. Listening to the speeches of global blockchain opinion leaders has greatly promoted the popularity of blockchain technology in China. A Chinese technology media reporter who attended the conference wrote on Weibo: Stepping into the venue, I saw that 90% of the participants were foreigners, which made me think this was a conference held in Europe and America.
The Ethereum Global Developers Conference, which was held in Shanghai, China five years ago, gave people the feeling of “disorder of time and space”. It was introduced and sponsored by Wanxiang Blockchain Lab. According to the Ethereum POW to POS process started a few years ago, each key node is named after the city where DVECON is held. That’s how Ethereum’s “Shanghai Moment” came about.
In December 2014, at the “Sanya Finance and Economics International Forum” held by Caijing magazine, I organized a “Digital Currency Sub-Forum”. Speakers included former experts in the field of financial supervision, bankers, and digital currency practitioners. My speech mainly revolved around Ethereum, which has released its white paper for one year while the theme of the keynote speakers was Bitcoin. This should be the first time in a high-profile forum held by a well-known financial media in China to discuss the topic of digital currency represented by Bitcoin and Ethereum that was not popular at the time, which attracted the attention of domestic blockchain and digital currency practitioners.
Just during lunch after the breakout, I received a request to add a WeChat friend. He said that he was sitting in a coffee shop at Incheon International Airport in South Korea with Vitalik Buterin — the founder of Ethereum, waiting for the plane to take off after reading my speech from the Internet media. I finally got in touch with Vitalik, and the introducer was Shen Bo.
Vitalik came to Shanghai in April 2015, carrying a cloth bag with a cat printed on it. This was not his first visit to China. When we first met, I was very surprised that he could send WeChat in Chinese, and he could also have a conversation using unfluent Chinese, which was very good for a foreigner who has not studied Chinese. Vitalik’s level of Chinese is different from that of other foreigners. His written expression ability is greater than his oral expression ability. He introduced to me his unique secret to learning Chinese: find any blockchain and digital currency materials translated into Chinese, including Bitcoin and Ethereum white papers, and then study them against the original English version. Once, the three of us shared a taxi in New York. When he listened to our Chinese chat, he would take out his mobile phone from time to time, check the Chinese-English dictionary, and then check whether the words we mentioned in the conversation just now were understood by him. In 2016, at the Shanghai Wanxiang Blockchain International Week, Vitalik’s speech PPT was written in Chinese by himself.
For more than a month living in Shanghai, Vitalik lived in Shen Bo’s house. For life, he has no extravagant desires, even almost no demands other than food and clothing, and his only hobby may be to like cats. I traveled to Hong Kong on a business trip, and while visiting a bookstore, I found a photo book about cats published by a well-known photographer and brought it back to Shanghai as a gift to Vitalik. The photo album was very heavy. He is a cosmopolitan and he probably cannot carry this photo album with him though he is happy with it. In 2015, Vitalik stayed in Shanghai for more than three months on several occasions. This photo book may bring some comfort to his life in Shanghai.
We often met to discuss the topic of blockchain and Ethereum, focusing how Wanxiang Company cooperates with Ethereum to promote the research and development and application of blockchain technology in China. One morning in April 2015, Vitalik came to the Wanxiang Building. His expression was a little tired, and it was obvious that he had not had a good rest last night. Shen Bo took me aside and told me that the Ethereum community held a one-night meeting last night, and the focus of the meeting was that someone saw the cash retention status in the account of the Ethereum Foundation and doubted whether there was enough funds that could support to the Ethereum mainnet launch.
The 20-year-old Vitalik was clearly facing pressure from community developers. This kind of basic technological infrastructure with the potential to change the world should receive strong support from all parties. My intuition told me that this may be a greatcopportunity given to Wanxiang and me. If we can actively fund the development of Ethereum at this critical moment, Wanxiang blockchain can not only become a participant in this milestone project, but also implement our strategic plans.
So I proposed to Vitalik to donate $500,000 to the Ethereum Foundation in the name of “Wanxiang Blockchain Labs”. If necessary, we can continue to fund in the coming year to help dispel developers’ doubts, so that developers can go all out to work, and provide assistance to the best of our ability for the Ethereum main network to be launched as scheduled.
The Ethereum Foundation is a non-profit legal entity registered in Switzerland, so the lawyers of both parties helped draft the donation agreement. The Ethereum Foundation accepted the donation and would also unlock the ETH from the foundation after the mainnet is launched and donate an agreed amount of ETH to the donor. In order to comply with foreign exchange management regulations, the funds were paid by overseas companies in the Wanxiang system because “Wanxiang Blockchain Lab” was still in the registration process. However, for the blockchain cooperation, the soon-to-be-established “Wanxiang Blockchain Laboratory” is designated to be responsible for implementation.
After that, Vitalik wrote to the community announcing that the Ethereum Foundation had received a donation from a Chinese-backed institution, and that the institution had pledged to continue supporting the Ethereum Foundation. In this way, the developer community’s concerns about Ethereum’s cash flow in the coming months have subsided. In hindsight, these worries were unnecessary. But in the face of such a global project known as “World Internet Computer” at that time, especially such a huge project led by a 20-year-old technology geek, it was normal for some people to shout “how long can it last?”.
This event also marked the official launch of Wanxiang’s strategic deployment and work process in terms of blockchain. In the second half of 2015, Wanxiang Blockchain Lab was established, the first Wanxiang Blockchain Global Summit was held, and the first Fenbushi Capital in Asia dedicated to investing in blockchain was established (Wanxiang is a single limited partner) , Wanxiang Blockchain Lab released the “Blockchain Entrepreneurship Project Funding Plan” to the world, Wanxiang Blockchain Lab series books were published, Wanxiang Blockchain Lab cooperated with Chinese blockchain technology experts to organize blockchain training classes, etc.
In mid-October 2015, the first Wanxiang Blockchain Global Summit, based on blockchain technology and promoting the popularization of blockchain technology in China, was held in Shanghai. Wanxiang has made every effort to use the resources of the Ethereum community to extensively solicit global frontier blockchain topics, invite global blockchain leaders, and mobilize domestic blockchain practitioners to participate. At Vitalik’s call and invitation, many of the world’s top blockchain practitioners were present, which represented the highest level of global blockchain technology at that time. The first summit was held for two days. The first day was an open forum, and the second day was an invitation-only closed-door discussion. The activities of the summit have been strongly supported and widely praised by the domestic industry. A domestic industry pioneer company came to the summit with 8 colleagues. Due to the space limitation of the closed-door discussion venue, these 8 colleagues were not fully invited. They approached me directly and strongly requested to participate in all 6 closed-door discussions. I was moved by this enthusiasm.
It was not until the first blockchain hackathon was held in Shanghai in early January 2016 that Wanxiang’s first-phase action plan in the blockchain field came to a successful conclusion. The first blockchain hackathon was held by Wanxiang and Deloitte. At the same time, the Ethereum Foundation sent three technical experts as guides and judges, and Vitalik also attended the scene. More than 120 contestants from all over the world formed groups of three or five, formed teams on the spot, and played on the spot. One member of the group that won the first prize is a high school student who made a special trip from Italy to China to compete at his own expense. After 48 hours of intense competition, the high school student asked us if we could accept him to join Wanxiang Blockchain Lab full-time. We tried hard to get him on the return flight. A year later, we began to regret a little, because he finally participated in a blockchain startup project in Europe, and played a technical core role in this popular project. Youth is the mean how cherish high aspirations, unable to get up after a fall! Thinking that Vitalik was only in his 20s in the early days of his business, he couldn’t help but sigh: in the blockchain industry, young people are especially formidable!
In May 2016, a group of 9 of us set off from Pudong Airport, the first stop in the San Francisco Bay Area, then went to New York to attend the “Consensus Conference”, detoured to London, and then returned to Shanghai. This was an European and American blockchain study tour curated with Vitalik, who joined us in San Francisco. We visited a lot of big names along the way, learned a lot of new ideas along the way, and watched a lot of good projects along the way. Another purpose of this trip to Europe and the United States was to find a few mysterious speakers for the second Wanxiang Blockchain Summit. We had lunch with Nick Szabo, the “father of smart contracts,” at a restaurant in Mountain View, Silicon Valley, and invited him to Shanghai for that year’s Blockchain Summit. It was hard to invite him as Nick is very cautious. After two years of many invitations, he finally participated in the 3rd Wanxiang Blockchain Global Summit in 2017.
In late September 2016, the second Wanxiang Blockchain Global Summit arrived as scheduled. However, the summit has been expanded into “Blockchain International Week”. The first three days of the International Week were the second Ethereum Global Developers Conference (according to the practice of computer system development, the first developer conference is named DVECON0, this time it was DVECON2, which should be regarded as the third time), the fourth The day was the Demo Day of the blockchain project, and the 5th to 6th day were the global summit. It was because of Wanxiang’s funding commitment to the Ethereum community in 2015 that the Blockchain Global Summit expanded into an international week. At that time, in addition to the $500,000 donated by Wanxiang, we also promised to continue to support the development of Ethereum in 2016 as needed. After the successful launch of the Ethereum mainnet, the Ethereum Foundation obviously did not need this urgently. But Wanxiang couldn’t let this promise of its own become an “empty promise”. Therefore, we proposed that if this Ethereum Global Developers Conference was held in China, Wanxiang Blockchain Labs would sponsor all the expenses, and any ticket revenue and sponsorship revenue generated during the event would go to the Ethereum Foundation. The “Shanghai Blockchain International Week” was born.
On September 15, 2022, “The Merge” of Ethereum is about to come. I seem to see the prospect of a blockchain protocol stack that will be integrated around Ethereum. In the 1980s, the Internet was also full of various protocols, which were incompatible with each other. Later, they were unified into the TCP/IP protocol stack by market forces. The more the underlying basic protocol is, the more it is unified into the only standard protocol in the world, such as IP protocol, TCP protocol, and HTTP protocol. When it comes to the application layer, the Internet protocols begin to diversify. For example, the Internet may have more than 100 protocols at the application layer. The current multi-chain phenomenon of blockchain is similar to the era when the Internet protocol was not unified. The market demand for seamless interconnection will certainly also drive the integration of blockchain protocol stacks. And only Ethereum is currently constructing the blockchain protocol stack intentionally or unintentionally. On the one hand, from L0 (distributed communication, distributed storage, distributed computing) to L1, then to L2, and even L3… On the other hand, “ After The Merge, Ethereum can also support large-scale applications in terms of performance and scalability. According to the Ethereum Foundation, within 10 years, Ethereum will be able to reach 10 million transactions per second (TPS). According to my personal observation, analogous to the development process of Internet protocols, in the next few years, blockchain protocols will be gradually pushed by market forces to be integrated into a unified protocol stack; while other public chains other than Ethereum may become a subchain, sidechain, or shard and partition of Ethereum, so as to achieve an ideal world where the blockchain world is interconnected.