The cryptocurrency bubble has burst, that much seems obvious. Bitcoin’s precipitous decline, plummeting from a peak of $20,000 per coin last year to roughly $4,000 today, is evidence enough. But blockchain, the technology behind virtual currencies like Bitcoin and Ether, has yet to have its day.
Lei Chen, CEO of Xunlei Technology, a digital services company that transformed itself into a blockchain pioneer last year, believes that a blockchain company with an above $30 billion market cap is not an unrealistic future.
“I’m not saying this is easy,” Chen says, joining a panel on blockchain at Fortune’s Global Tech Forum in Guangzhou. “For this to happen, three things must occur first.” Chen summarises those prerequisites with three numbers: one-million, one, and ten-million.
“First, I believe there must be a blockchain architecture that can sustain one-million transactions per second and can have a response time within seconds.” Chen claims Xunlei’s blockchain processing platform ThunderChain, launched in April, already fulfils this requirement.
Significant computation capacity is required to run transactions that quickly. Xunlei Tech has accumulated that bandwidth by leasing unutilized processing power from personal computers.
Jennifer Zhu Scott, founding principal of Radian Partners and an inaugural member of the World Economic Forum’s Future of Blockchain Council, points out that this distribution model has been previously deployed in other industries, such as gaming.
Gaming is one sector blockchain advocates believe will be disrupted by the technology, although existing blockchain frameworks are too weak to process the data generated by complex games. When Cryptokitties, a blockchain-based trading game, launched on the Ethereum network last year, the network crashed.
Data ownership could undergo a blockchain revolution too. “Blockchain will challenge the data ownership models of today, because data should be of the people for the people by the people,” Chen predicts. “I think ten years down the road we’re going to see user data in the same way as intellectual property”
Creating the regulations that permit individual’s to truly own their own data will be tricky. That returns us to the second of Chen’s prerequisites. “There needs to be one, somewhat unified, well thought-out regulation framework that is developed proactively, not reactively.”
Last on Chen’s list: we need to see an application of blockchain technology that surpasses ten-million users.
Chen says, “If there is a ten-million user application of blockchain today, we would be seeing the entire technology in a completely different light.”