Interview with Cypherium about blockchains and Central Bank Digital Currencies trials

Monday 24 August 2020 13:25 CET | Editor: Mirela Ciobanu | Interview

Blockchain, or ‘distributed ledger’ technology that underpins Bitcoin, has emerged as an object of intense interest in the financial services industry and beyond

Blockchain technology offers a way of recording transactions or any digital interaction in a way that is designed to be secure, transparent, highly resistant to outages, auditable, and efficient. As such, it carries the possibility of disrupting industries such as financial services, trade finance, global payments and remittances, government projects, smart cities, and more. However, the lack of interoperability (can blockchains speak to each other?), performance issues (blockchain-based transactions can only complete when all parties update their respective ledgers – a process that might take hours), or transaction speed (the transaction processing capacity maximum is estimated between 3.3 and 7 transactions per second) have led to some people doubt about its viability.

To convince the sceptical about blockchain’s potential, there are companies such as Cypherium, that are focused on addressing the critical shortcomings of existing public blockchain infrastructures. Recently, the enterprise-focused blockchain platform has signed a Memorandum of Understanding with Suzhou City Municipal to advance the city’s development of blockchain infrastructure. Today we are speaking with Sky Guo, Cypherium’s founder, to learn more about the project and the company.

What is Cypherium for those who do not know it yet?

Cypherium is a third-generation blockchain and smart contract platform that offers both public and private DLT solutions to meet the various needs of global businesses and technology users. Our private blockchain itself is applicable to a wide variety of use-cases, including notably our partnership with Randstad, a leading HR-resources provider, in which our technology serves to organise and secure personal data of workers and businesses. Our technology also underpins several projects in the fintech space, particularly CBDCs, through partnerships and affiliations in different nations.

Our public blockchain, the open mainnet on which anyone can build, presents a dual chain structure that combines Bitcoin’s original Proof of Work with the HotStuff algorithm, recently adopted by Facebook’s Libra. This allows our network to reach speeds beyond even those of Mastercard and Visa, without sacrificing the principles and security of decentralisation. As a smart contract platform, the Cypherium Virtual Machine runs on Java, the most used coding language in the world. This unlocks literally billions of legacy devices waiting to be enfranchised by the world of blockchains.

How did Cypherium managed to secure an MOU with Suzhou City Municipal Government?

The Cypherium development team combines leading blockchain cryptographers with backgrounds at companies like Google, Amazon, and Microsoft, most hailing from China. As a result, we keep close ties with the technology (specifically fintech) in the local communities. Suzhou is an ideal city to experiment with blockchain, and we are thrilled to be a part of that journey for them. Suzhou is primed for blockchain because manufacturing and logistics continue to anchor its economy and those sectors will be totally transformed by this technology. More recently the Chinese government zoned the city to be a leading hi tech sector area. Over the past twenty years, billions of dollars of foreign and domestic investment have entered the city. Suzhou aims not only to keep up with this transformative technology but in fact to lead and to direct its course into the future.

An additional pilot to be run with Suzhou City Municipal Government would be testing China’s digital currency/electronic payment (DC/EP) once the DC/EP gets green light from the People's Bank of China. What would be Cypherium’s involvement/implication in supporting DC/EP adoption?

As with our work in Suzhou, Cypherium is here to help as China and other nations continue to bring their CBDC experiments to fruition and into the hands of millions of citizens. To this end, we are able to act as both consultants and contractors, helping to develop the technology to meet unforeseen challenges as they arise. We are founding partners of the Digital Monetary Institute at OMFIF, a UK-based central banking thinktank and the US Faster Payments Council. There we bring together policymakers, technologists, banking officials, and other relevant parties to help scale and perfect our tech.

What types of products Cypherium intends to build within the DC/EP ecosystem?

Cypherium has developed its Digital Currency Interoperability Framework (DCIF) to meet these goals in a way that is currently compatible with the Euro’s current TARGET2 system but can also be fitted to the new DC/EP framework. It is a novel approach that consists of six major bodies: the central bank, CypherLink (a notary mechanism based on the InterLedger protocol), Cypherium Connect (a third-party plug-in module for banking systems), Cypherium Validator (a verification machine),  a mediation institution, and finally the users. This structure maintains the autonomy and integrity of the central banks by allowing them not to directly carry their users, issue or distribute CBDC units, nor supervise the transfer of CBDC. This critically protects the banks, and in turn, the national economies they support.

What is in store for Cypherium over the upcoming period?

We are very much looking forward to continuing our conversations with central banks around the world as they continue their wholesale and retail CBDC experiments. Cypherium is also fundraising via a public sale at the end of Q3 2020. This will see an influx of participants helping to operate the network as their own. Along with our mainnet deployment, we will be expanding our team in the near future. First, though, we are trying to make sure that Cypherium begins with the strongest public community as possible.

About Sky Guo

Sky holds extensive infrastructure-level knowledge regarding blockchain consensus, transaction, cryptographic algorithms, and messaging mechanisms. He has conducted extensive research on present blockchain implementations and their source code. Since November 2016, he began developing a new scalable, enterprise viable blockchain infrastructure assembling an extraordinary team to implement it. Sky pursued Bachelor of Science in Computer science at Pepperdine University and received a degree in Entrepreneurship from Draper University.

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Keywords: financial services, blockchain, central bank digital currency, CBDC, Central banks, Sky Guo, Cypherium, digital currencies, DLT, China
Categories: DeFi & Crypto & Web3
Countries: China
This article is part of category

DeFi & Crypto & Web3