Interview with CPChain Founder Long Chengnian: The trusted Internet of Things

calls for a breakthrough in the core technology of the Blockchain.

The core issues in this exclusive interview include:

 Introduction to CPChain.
 CPChain team qualifications and background.
 The current development status and future development trends of the Internet of Things
industry.
 "Blockchain + Internet of Things" will solve some of the current pain points.
 CPChain technical architecture.
 How does data on CPChain be stored?
 CPChain consensus mechanism concept.
 Horizontal comparison between CPChain and IOTA, Waltonchain, and IoT Chain.
 How does CPChain prevent hacking?
 How to treat the argument that a strong academic background is not good at entrepreneurship.
 Current development progress.
 Dr. Long wants to say something to everyone.

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Wang Cannon:
Hello everyone, this is the 18th issue of the "Cannon Interview." Today's guest is Dr. Long Chengnian,
founder and chief scientist of CPChain. Dr. Long is a well-known university professor and doctoral tutor.
He is also an IEEE senior member and ACM member. Readers with academic background should know
that the membership is very high-level, which also represents Dr. Long is the premier senior expert and
academic authority in the field of Internet of Things in China. Today's interview is in the shared finance
interview room.

Wang Cannon:
Could you first give a brief introduction CPChain, including where did the project come from and what
you plan to do?

Long Chengnian:
We are simply referred to as CPChain and our English name is Cyber-Physical Chain. We are actually
trying to build a physical trust network. It is a combination of blockchain and Internet of Things
technology to realize the integration of information and physical systems.

Wang Cannon:
Just now we mentioned that there are very few academic authorities like Dr. Long. You are both a
professor and doctoral tutor of a well-known university, and a member of the domestic blockchain
Internet of Things. Can you give us a brief introduction?

Long Chengnian:
I personally have been engaged in research on the Internet of Things industry, including basic research
and applied research in a number of applications. I have worked as a postdoctoral fellow at the Hong
Kong University of Science and Technology and at the University of Alberta, Canada. I returned to China
to teach in 2009.

Wang Cannon:
Can you give a brief introduction to the core team of Cyber Physical Chain?

Long Chengnian:
Our core team is composed of three parts. The first part is myself, the team lead, mainly engaged in the
research and development of the deep integration of the Internet of Things and blockchain technology,
mainly to do technical research. In addition, I also have two co-founders who are responsible for
development and operations. One of the founders, Dr. Zhao Bin, has also been engaged in the research
of the Internet of Things for a long time. He worked as a chief engineer of the Internet of Things at
Shanghai Bell, participated in the major projects of the Internet of Things, and promoted international
and domestic Internet of Things. He also has many patents on the Internet of Things. He has also worked
as a chief research and development expert at a technology company. Another co-founder, Shi Qingwei,
has deep accumulation of blockchain media operations.

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Wang Cannon:
Dr. Long you just mentioned that another founder, Dr. Zhao Bin, once worked for Shanghai Bell. I would
like to briefly introduce this reader to Bell Laboratories. Bell Labs is one of the few companies in the
world that specializes in basic scientific research created by companies. As far as I know, it should be the
largest number of corporate laboratories born outside of colleges and universities with a total of 8 Nobel
Prize awards. Many of the bases of computer science theories are derived from Bell Labs.

Dr. Long can you simply help us introduce the current development status of the Internet of Things
industry and future plans?

Long Chengnian:
We know that the concept of the Internet of Things has been proposed long ago. In general, the concept
of the Internet of Things was first proposed by the MIT Media Lab in 1999. At that time, the concept of
the Internet of Things was still based on RFID technology.

After more than 20 years of development, I can summarize the development of the Internet of Things by
roughly dividing it into three stages: from RFID in the lead to universal micro-sensor in Sensor Networks,
to present the material for IP networking. These three phases are mainly centralized and dedicated IoT
systems. There are some problems with this centralized and dedicated IoT system. The first is that the
interconnection cost of equipment and systems is relatively high. Secondly, the privacy of data and the
security of the system in the centralized system have great hidden dangers. The third is that centralized
systems tend to confine data in an island; it is difficult to make full use of the value of data. This is also
the most important issue. In general, we have just mentioned the high cost of equipment, privacy and
security dangers, and data value is difficult to fully reflect. These three issues actually imprisoned the
Internet of Things in from further innovation.

In fact, in the area of the Internet of Things, I will be deeply troubled by these three issues whether I am
doing research on technical theory or integrating with actual industry systems. When I contacted
Ethereum and the blockchain technology behind it at the end of 2014, I discovered that the blockchain
and IoT are actually very good combinations. Therefore, at the end of the 2014 and 205, I took four or
five doctoral students and ten graduate students and began to experiment with the combination of
these two technologies and did some in-depth research and development work.

Wang Cannon:
Dr. Long, you just mentioned some of the problems that exist in a centralized IoT system. Can you
further explain how the blockchain technology and Internet of Things will be deeply integrated to solve
these problems?

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Long Chengnian:
We know that blockchain is actually to establish a decentralized trust system, which can realize the
credit and data transfer of value. We can use blockchain technology to open the barriers to Internet of
Things. At this level, it means that the value of data can be fully realized.

First of all, we can construct a device-to-system interconnection language through blockchain, which
greatly reduces the cost of device interconnection. Second, in terms of privacy and security, the
blockchain actually has some cryptographic algorithms and security considerations built into it. A kind of
encryption security, coupled with the security technology of the Internet of Things, we can fully protect
data privacy and improve the security of the system; the third is the biggest point of the combination of
the blockchain and the Internet of Things that we are talking about. We can build a shared platform
inside, and bring the value of data aggregation and real-time flow into full play. In fact, the combination
of the blockchain and the Internet of Things mainly responds to the three pain points I just talked about,
so this is a very good combination.

Wang Cannon:
I have read your whitepaper. In the white paper, you proposed a parallel distributed architecture. In
your design, the main chain only retains the label position of data, thus greatly reducing the space
burden on the main chain. In fact, it is trying to solve the problem of a very large node like Bitcoin. Can
you give a brief introduction to this technical architecture?

Long Chengnian:
Before I introduce the technology of this architecture, let me talk about my understanding. We now see
some scalability problems in the blockchain, especially the scalability of the consensus protocol. I
personally understand that this is mainly because of the scalability of data transactions. In fact, we know
that the data currently being traded is actually very small. The mainstream blockchains such as Bitcoin
and Ethereum are now getting slower and slower. In retrospect, I installed Ethereum full node in 2015
and I could fix it in a few hours. But now if I have to install the entire Ethereum node I would have to
spend four or five days to synchronize the node. So its scalability is very problematic.

In addition to the scalability issues of the transaction, the Internet of Things and blockchain integration
have another layer of issues. Just now I also said that the core of the Internet of Things lies in the value
of its data flow. It generates large-scale data all the time. If these large-scale data are in a chain, then
the system will soon collapse. From this perspective, the combination of the Internet of Things and
blockchain is not just a matter of scalability of data transactions, but also of data storage and computing
scalability issues. The original purpose of the decentralized system is to reach a consensus, but this is a
price to pay. The cost is that at each node it has to perform the same storage and calculations. This is a
typical “wood barrel effect”. Slow nodes are the bottleneck of the system.

The distributed system we have been doing for a long time is actually using the cooperation of nodes to
complete the calculation and storage tasks. In order to solve the scalability issues of the data
transactions, we propose this parallel distributed architecture. Decentralized systems and distributed
storage systems work together to solve the scalability issues. This is where our CPChain shines.

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Wang Cannon:
Dr. Long you mentioned that using your technology can really solve some problems and make the space
more scalable, but it also brings another problem. We know that although Bitcoins’ nodes have its
drawbacks, such as a large number of redundant calculations and a large amount of space occupancy, it
also has its own benefits. That is, every node of the Bitcoin can have data of the entire network. Loss or
control of the node will not have any impact on the entire network, but in your architecture, the data is
stripped from the main chain, then I would like to know where your data is stored?

Long Chengnian:
In fact, our data is placed in a distributed cloud storage system through an encryption method. We can
use IPFS or some current decentralized database systems. Maybe you are worried that this is
centralized, but in fact it is a completely decentralized system, and the benefit of this is that the
authorization and control of data is completely controlled by the data source, and no other entity can
control the use of this data.

Wang Cannon:
Dr. Long, this means that your data will also be stored in a number of decentralized distributed storage
structures, not cloud storage or massive redundant hard disks. Is that correct?

Long Chengnian:
We need to differentiate the concepts; cloud storage has both centralized and distributed
implementations. We use a decentralized implementation.

Wang Cannon:
I know, I just had to ask because I had feared there could be such a problem. Because we know that in a
decentralized project, the reason why we want to decentralize is actually to make the whole system
avoid the risk of centralization. So when I first started looking at your whitepaper, I was unclear where
your data storage is located. Assuming that it is placed in a company, although the entire chain may be
decentralized, your data is centralized. In fact, the decentralization would not have too much
significance. I was worried about such a problem at that time.

Long Chengnian:
This worry is not necessary.

Wang Cannon:
Your consensus mechanism is conceptually more innovative. Your approach is based on the credibility of
the double consensus assessment model and dynamic election commission. Can you briefly introduce
this?

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Long Chengnian:
Well, this is the scalability issue of the consensus protocol in the main chain. The mainstream main chain
consensus protocols now include PoW, PoS, DPoS, PoX, etc. Now, whether in the academic world or in
the industry where the blockchain is a consensus protocol, they consider hybrid as a consensus protocol.
It is the mainstream development trend in the future. We are standing at the forefront of this issue to
consider this issue.

Although we now propose this hybrid consensus agreement, there are many consensus agreements on
this basic principle. Our idea is to create a committee within this large-scale node, and this committee
has a quick consensus. This is its basic principle. No matter what kind of mechanism is used, it is very
difficult for existing implementations to achieve the election of a dynamic committee, which is basically
a kind of static committee.

In fact, this will also bring about some problems of security and fairness. This is a pain point that we
think may exist here in the future. Therefore, we also propose that we can combine the methods of
distributed reputation systems in distributed P2P systems to establish a distributed consensus
reputation system based on this reputation system to generate a dynamic committee election. This may
be generated in conjunction with, for example, a locally based certifiable random function, ensuring its
fairness and security.

Wang Cannon:
Dr. Long, as you said a consensus mechanism like DPoS does not have a very dynamic committee
structure. Then you just mentioned that your key nodes are dynamically elected; can you discuss
whether there will be efficiency issues and ease of implementation?

Long Chengnian:
The dynamics here are that the election of this committee is completely dynamic. There is a credibility
mechanism here, and I need to emphasize on the credibility mechanism, because now either DPoS or
PoX it’s basically based on an authoritative authorization, which is actually the power behind it. The
source or the source of money. This is relatively static and unfair. And with more and more money and
rights, there is a danger of centralization.

Our idea is that, of course, there must be an authorized mechanism here, but this mechanism will
saturate its weight after a certain degree. At the same time, we must increase some of the performance
of its network participation, such as itself in a node or P2P network. The performance, its throughput,
the degree of authenticity of its certified transactions, etc., all these can be added to achieve a relatively
fair election. At the same time, the addition of such factors will actually bring about a dynamic factor,
because our election is related to the dynamics of the network, and therefore it will bring more good
randomness and fairness. This is a basic aspect of ours ideas.

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Wang Cannon:
Before I ask the next question, I would like to introduce a project that is IOTA. The reason why I mention
this is because IOTA or some other well-known blockchain projects related to the Internet of Things are
actually based on the technology of a DAG. DAG is also a directed acyclic graph, which is a computer
basic data structure. Compared to Bitcoin or Ethereum, DAG technology is not a blockchain, but a
detour. Many of the well-known blockchain projects of the Internet of Things are in fact based on DAG
technology. DAG technology as a whole should be more suitable for such a large number of IOT projects.
Then I would like to ask you, Dr. Long. Why did you not choose to use DAG technology for this project?

Long Chengnian:
You may have a slight deviation in your understanding. In fact, if you notice, we have an overall
framework for deep integration of the IoT and blockchain. This framework is just the main chain, side
chain plus distributed cloud storage. This side chain is actually a different industry chain of the Internet
of Things. In this industry chain, we can combine this DAG technology.

Here I also share my deep understanding of IOTA. Everyone at IOTA is very concerned that IOTA can be
said to be a flagship project in the area where IoT and blockchain are combined. We all know that the
Internet of Things is actually a communication between machines and machines. It is a high-frequency,
small-grained data transaction at the transaction level. Therefore, everyone wants it to be fast enough
and free of charge. IOTA is response to these needs. The IOTA technology we have just talked about is a
directed acyclic graph. Its characteristic is that it can achieve a concurrency. For example, after a
transaction is created, it can be connected to the DAG immediately, and there is no need to wait for the
first one in the blockchain. Blocks are generated one block, which is its advantage.

But IOTA actually has its drawbacks. If we analyze it in depth, IOTA is essentially altruism. We know that
there are two common types of reciprocity. One is the direct feedback I can give you to help me, and the
other is the altruistic model, the IOTA model. For example, if you generate a transaction, then you first
need to find a transaction that has already been applied for on this network, and help them to do the
corresponding PoW certification. That means you must first help others before you can connect to this
network. After connecting to this network, your transaction will have the opportunity to be confirmed
by others. This is the basic model of IOTA.

We see that this kind of altruistic transmission mechanism still has some problems. The first is how its
incentive mechanism should be done. IOTA is still at the initial stage of development. The second
problem is within IOTA. Obviously, it is very easy to be attacked by DDOS because if a new transaction
requires a data structure such as DAG, it must connect to new nodes that have not yet been confirmed
on the DAG map. For the attacker it’s easy to find these points to do some distributed denial of service
attacks. We believe that with the side chain consensus agreements on development, we will have the
appropriate technologies to solve the problem. When I personally cooperated with a teacher who was
the earliest P2P video internationally at the Hong Kong University of Science and Technology in 2006, we
analyzed this altruistic cooperation model based on evolutionary game theory. Next we will continue to
work on the side chain of consensus agreement in the development of depth.

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Wang Cannon:
Dr. Long, you just made a comparison between your project and IOTA. In fact, there are several other
Internet-related projects in China, such as Waltonchain, IoT Chain and SDChain. Would you mind sharing
a horizontal comparison of these projects?

Long Chengnian:
We can see that the combination of the Internet of Things and the blockchain is a big blue ocean and
has many opportunities for development. Therefore, it is highly valued by the industry and has produced
so many projects that combine the Internet of Things with blockchain. These projects and ideas actually
have their own characteristics. Just now we talked about the characteristics of IOTA. I simply share my
thoughts on several other projects.

The first one you just talked about is Waltonchain. According to the Waltonchain, I understand that it is
a deep integration with the traditional retail industry stores. This project is oriented towards the
logistics field of the Internet of Things. It can be said to be a better combination. I think it is more
distinctive in this respect. However, in terms of the overall level of the combination of the Internet of
Things and the blockchain, I think it’s OK. There is a deeper idea. This is my view of the Waltonchain.

Wang Cannon:
Let's mention IoT Chain. I will briefly introduce IoT Chain. Its entry point is intelligent lighting equipment.
I also asked their team a question that smart lighting devices need blockchain to solve any problems?
Their answer is that the number of smart lighting devices in the current Internet of Things is the largest,
based on which they want to quickly pull out this node to form a huge network. I would like to ask Dr.
Long. Do you have any ideas for the rapid distribution of such a network?

Long Chengnian:
This may be a feature of them. My understanding is that the key to the combination of the Internet of
Things with the blockchain is the value of the data in the IoT entity. The first is data aggregation. Data
aggregation can generate some big data analysis, generate some artificial intelligence decisions, and
then feed back into this actual physical system. For example, in its lighting system, from the perspective
of energy conservation, assuming that the current centralized system is not doing well enough, and then
we pass some states related to the lighting equipment, such as its on/off status, road environment
surrounding the lighting equipment, and usage conditions. And so on, this information is put on the
chain of things , and then through the data to achieve some intelligent lighting, in the case of meeting
our application, while at the same time can greatly reduce these energy consumption, then this I think it
is valuable.

I have been deeply convinced that the combination of the Internet of Things and data should be able to
achieve a trustful transmission of the value of the data in the physical system through the decentralized
system of the blockchain, and at the same time, the efficiency of the physical system that transmits this
feedback to the entity. In this way, we can say that these two are really organically combined.

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Wang Cannon:
When I mentioned this, I suddenly wanted to insert a question. I have read a data saying that in the
Internet of Things industry, the current huge Internet of Things devices are actually very easy to be
hacked and may be controlled by hackers. Let me give you an example. For example, some video
equipment and cameras are often invaded by hackers, and then they do illegal things. I would like to
know whether a technology based on yours can solve the current access control problem of smart IoT
devices, or do you have any relevant application scenarios for this?

Long Chengnian:
You are right. This problem is indeed very serious. For example, in the United States last year, incidents
involving the invasion of camera devices by the U.S. have caused major mainstream Internet
information transmission channels, such as Twitter, to be blocked. For this problem, I think it is not just
a blockchain technology that can solve it, but rely on the deep integration of blockchain technology with
the Internet of Things. Blockchain technology solves the problem of data source, identity authentication
and how to flow. It is equivalent to a full track record.

If we can combine some hardware security technologies on the Internet of Things , then we can quickly
capture these DDOS intrusion systems, so that it cannot be widely transmitted from the Internet to the
Internet of things , so that it is directly isolated , it can limit its impact to a very small extent.

Wang Cannon:
We all know that using blockchain can make fast transactions, such as transactions between Bitcoin, it is
also a transfer of assets, and so what I just wanted to ask is whether your project can realize IoT devices
and the rapid transfer of permissions. But I think this should be possible, because this is a basic
application of the Internet of Things.

Long Chengnian:
Access control is not a problem, for example, the door of the control is in my hand, I need to authorize
you to control it within a certain period of time, this we can engage the blockchain technology to realize
that this is not a problem.

Wang Cannon:
There is another question I would like to ask. From the introduction of your whitepaper, we know that
the academic background of your team is very strong and can be considered an academic school venture
project. But for a long time, because of some well-known cases, the entrepreneurial community has a
view that a team with good academic background is usually good at publishing articles and proposing
theories, but actual application-level entrepreneurship may not be grounded enough or the promotion
is not enough. I do not know Dr. Long What do you think of this view? And have you ever thought or
reacted to this?

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Long Chengnian:
This may be a point where everyone will have questions. My response has two points. First of all, the
current development of the blockchain is still in its infancy, and it is a technology - driven industry. In
fact, we can see the internet industry, big data industry, and artificial intelligence industry in recent
years. A typical characteristic of this type of industry is knowledge-intensive and needs high-end talents
to promote. Therefore, in these three industries, if the team does not have a strong R&D team and does
not have a leader in the university background. In fact, it is difficult to achieve breakthroughs in this field
and it is difficult to occupy a place in this fierce market competition. This is my first point of view. It
means that the blockchain is technology - driven and is still in a preliminary stage of development. It
needs a team with a good academic background as a support point.

The second point is that our academic background is actually an advantage. For example, doing things
will pursue perfection. Whether we are writing a thesis or writing a report, we all like to pursue
perfection. But when we combine with specific industries, we have to face a problem of perfection and
speed. If the speed is slow, even if it is perfected, the opportunity may be lost. In fact, of our three
founders, I was partial to academics. Another founder, Dr. Zhao Bin, applied technology and Shi Qingwei
operated in a partial manner. We have a better and organic combination between us.

In the context of such a layout, we also hope to build a core team with the best R&D capabilities,
technical public relations capabilities, and operational capabilities both at home and abroad. Because
from the perspective of the blockchain itself, its philosophy is to achieve a democratic decision through
an open and shared approach. I hope that our company will also be able to embody such a concept of
blockchain in terms of governance.

Wang Cannon:
There is another problem. This is actually a question that everyone is very concerned about. I have seen
that the date of your white paper's inscription was December 20-17. It should be less than a month until
now. Does this mean that the actual progress of your project is still in the stage of the whitepaper?

Long Chengnian:
Actually, I mentioned in the previous question. In fact, from the end of 2014, I have led my team to do a
lot of in- depth research and development in the deep integration of IoT and blockchain technology,
which has been accumulated for three years. Although the installment of our whitepaper was December
of last year, our technology accumulation phase has actually gone through a long period of time.

If we look closely at our whitepaper, we will know that we have a roadmap for R&D. The roadmap of the
architecture we are going to build is clear. This is an accumulation of our long-term research. In the
future, we will do our research according to such a clear route, so 2018 is an extremely critical year for
our Cyber Physical Chain team. At present, our core algorithm has been developed, which is the parallel
architecture; in order to achieve the sharing of encrypted data in this parallel architecture, we use some
symmetric, asymmetric, encryption, re-encryption technologies, and even in the future for some
extremely privacy- safe data, we will consider adding some holomorphic encryption technologies to do

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in- depth research and implementation in this area. In June we will open this part of the open source,
because our algorithm has come out.

In October, our main chain will be officially put on the chain. After the main chain is up, we can develop
our own side chain on the above. Here we can see the flow of data. After the values of data flow have
been realized, I think more vehicles will be able to grow above the main chain of our chain of
information and form a relatively good ecology. I think our plan is very clear and the path to R&D is
already very clear, so it should be possible to advance quickly along the time we plan.

Wang Cannon:
Our interview here is basically over. Is there anything I did not mention, but Dr. Long, you would like to
share with us?

Long Chengnian:
Let’s say that 2016 was the first year of blockchain, blockchain technology behind Bitcoin and Ethereum
began to be known to the public. 2017 was a year when blockchain mass was popularized, but in
relation to China, 2017 was also a more aggressive year for China. Things like Bitcoin and ICO related to
the blockchain industry have caused great controversy. I hope that through this popularization, the
blockchain can really enter a deep water zone in 2018 and deeply put the value of trust in the blockchain
and the value of data transfer into reality through the development of technologies and applications. I
also hope that we will be a member of this team, together to build a better blockchain ecosystem.

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