So far we have signed commercial contracts with China Mobile (mobile service provider), NETNIC (enterprise cloud integrator), and iQIYI (video streaming service). There are a few companies in the pipeline.Zheng “Bruce” Li, NKN co-founder, April 2020
Catching up with the latest news for NKN (New Kind of Network) proved more challenging than I had thought it might.
Scanning through their Medium blog (NKN have always been diligent about updating their community on Medium), I was overwhelmed by all the news, products and announcements including partnerships with businesses in China, a country which three of the four founding members come from.
Fortunately, I have co-founder Zheng “Bruce” Li to guide me through the latest in NKN’s development of its massively distributed, peer-to-peer, self-evolving and scalable network (properly incentivized and secured with blockchain, of course).
Before we get to former-Nokia executive Bruce, readers should also know I have written an in-depth primer on the workings of NKN’s original and highly innovative tech, published a very personal interview with co-founder Yanbo Li, and explored the almost infinitely scalable properties of the network with yet another co-founder, CTO Dr. Yilun Zhang.
The team also streamed a Live Q&A earlier this month.
NKN launched their mainnet at the end of last year, broke past 20,000 full-mining consensus nodes (solo miners), secured their Binance listing, and continue their relationship with advisors who are among the greatest minds of their generation: Stephen Wolfram and Whitfield Diffie.
For ease of consumption, here follows a list of achievements as presented by NKN since I last spoke with them in November 2019.
- December 2019: Year End Review. “We filled the year with major achievements including the launch of Mainnet 1.0, new Communication as a Service (CaaS) solutions including nCDN, commercial trials and contracts with enterprise customers like NETNIC and China Mobile, and new exchanges including Binance, Huobi, Bittrex Global, and Upbit.”
- January 2020: Launch of nMobile, an all-in-one Android app that “combines the functionality of NKN wallet, D-Chat, latest NKN news, mining node monitoring, as well as IoT communication and control.” An updated version with enhancements and private groups was released on the Google Play Store was announced in March.
- January 2020: Launch of nCDN website and fiat and crypto payment gateway “to fully enable Freemium business model. Free to try, low cost to deploy.” Also publishedTunneling Mozilla WebThings Gateway through NKN client,and a tutorial on running NKN secure shell commands (nsh) in Ubuntu published in March.
- February 2020:Launch of dataRide, “a decentralized PaaS (Platform as a Service) of fast, reliable, secure and low cost messaging, streaming and file transfer service for person to person, machine-human as well as machine-machine communication.” Also in February the team hosted a lengthly AMA Q&A and published the results.
- March 2020: NKN SDK: powering client side communication without serverswas published, ans so too the successful results of NKN’s video streaming solution with GSMA Future Networks.
This case study introduces a new model in providing carrier-grade content delivery services for Video Service Providers. Using China Mobile’s edge compute infrastructure together with NKN’s distributed micro hosting software, the solution was able to meet all of the technical hurdles in commercial content delivery services for one of the largest Video Service Providers in China.
- April 2020: NKN Joins iQIYI in Advancing Technical Innovation for Video Content Delivery. “iQIYI is an innovative market-leading online entertainment service in China.” This news was covered by a CoinDesk article titles “Baidu-Owned Video Streaming Giant iQiyi Taps Public Blockchain for Performance Boost.”
One of the world’s largest video platforms, iQiyi, hopes to improve its user experience after joining forces with a public blockchain that enables bandwidth sharing.
The Way of Bruce
Hi Bruce. I was going to start by asking you how the corona pandemic had affected NKN and the team, some of which is based in China. Looking at all the news it doesn’t appear to have slowed you down much. How has it been?
First of all, we are happy to report that all our staff and family are healthy and safe. Our Beijing team felt the impact of Coronavirus first, and have been working from home since late January (shortly before the Chinese New Year). And we plan to return to office in early May, as part of the overall Beijing municipality plans. For the California office, we don’t know yet.
Our team has been working remotely between China and California since our inception in 2018, so we are digital natives to remote working using Zoom, GitHub, Google Suite and other collaborative online tools. And the more we work from home, the more opportunities we see in improving today’s Internet experience by using NKN technology and products. One example is scaling for video streaming like what we did with iQIYI.
We are doing this small charity event in China (sorry but only in Chinese language), as well as my personal guide to prepare for coronavirus before the politicians take the pandemic seriously.
Could you tell us a bit about yourself, and how you came to be known as “Bruce” Li?
I grew up in China,went to Australia to do my postgraduate studies,worked for Nokia in Finland, and eventually landed in California. So I have been wandering around several continents, looking for exciting new adventures.
My nickname Bruce came from at least two sources: when I was in high school studying English, our teacher gave us an assignment to come up with English names for ourselves. And I happened to watch a Bruce Lee movie “The Way of the Dragon” that night, so naturally I picked Bruce. (And my last name is the same in Chinese characters). Later on, when I was in Australia, I found there is this Monty Python sketch called “Bruces” that every Australian is called “Bruce”.
What is Edge Computing, and how does NKN fit in? Please tell us more about NKN’s successful video streaming trials with GSMA Future Networks, and what it means for NKN.
Edge computing is quite easy to explain using the analogy of McDonald’s. Today’s major data centers are like having only one single McDonald’s in Washington DC, for the entire United States. So if you live in San Francisco, your chicken nugget will probably arrive in 2 days and will be quite cold and stale. And it probably costs you $20 per order.
Edge computing is like having McDonald’s at every other street corner, so you will always have hot and crispy chicken nuggets within 5 minutes of ordering. And it only costs $3.75 per order.
We can get similar benefits for video streaming using edge computing, that users will get video started faster, running smoother without jittering and buffering, and also much less expensive for the content owners like Youtube or iQIYI. China Mobile provided NKN with their edge computing resources, and either NKN or community members can run NKN node and nCDN service on their edge computing servers.
NKN is a private company that runs a public blockchain. How close are you to securing commercial agreements and contracts with online streaming services, CDNs, and other network service providers? Will these companies use the public NKN network or roll their own privately, and what do you imagine securing such a contract would do to the value of the NKN token?
So far we have signed commercial contracts with China Mobile (mobile service provider), NETNIC (enterprise cloud integrator), and iQIYI (video streaming service). There are a few companies in the pipeline. Signing a contract with bigger enterprise customers takes a longer sales cycle, e.g. 6–12 months. We started early, some already in 2018, and hope to see more fruits in the coming months.
In all the commercial contracts so far, we will use the NKN public network. This will give us the best technical and economic advantage. Crowdsourcing and shared economy mean that we don’t need to invest in optical cables or data centers like traditional startups do. And it will also benefit everyone, since the improvements we made to commercial products can be fed back to the open source NKN code base.
In terms of token economy, the enterprises typically pay us in fiat (USD or RMB) because this is how they operate. NKN in turn, will convert fiat into NKN tokens, in order to pay miners who run the additional nCDN services. And the miners will sell part of the NKN tokens for fiat in order to cover their operating costs. All of these hopefully will create a virtuous cycle, and increase the token velocity.
Which of your recent announcements (listed in the introduction) are you most excited by?
I’m most excited about the iQIYI announcement, which has the biggest impact and was the hardest to win. This gave us a convincing reference customer, who happens to be the largest video streaming platform in China and among the largest in the world. It will generate revenue for NKN, which will jumpstart the virtuous cycle of token economy.
It took us about 9 months: starting in late last summer with a thorough Proof of Concept, followed by technical trial and commercial negotiation, and eventual signing of the contract. And we are fortunate to get their PR approval to publish the news. Coindesk broke the news, since they found it significant and newsworthy.
There are not many crypto projects that have won a real commercial contract with such a legitimate large Internet company. It is not a fluffy partnership, not Proof of Concept, not trial, but real paying contract. This is a big deal! We are very proud of it, and now working hard to deliver the products and services to iQIYI. And we are telling all our prospective customers in the pipeline that we are vested and ready for their business.
You released so many products, but how many downloads and how much usage are you seeing?
I think nCDN for iQIYI will soon yield the most usage, due to the sheer volume of iQIYI’s active user base. But that is a proprietary solution for iQIYI and we cannot publish it.
In terms of dataride, we have NKN file transfer running on over 10,000 NAS (Network Attached Storage) devices.
In terms of nMobile, we saw a few hundred downloads on google play store since we launched about a month ago. We hope to get significantly more downloads and DAU, once we release the iOS version and update Android version.
Zoom is a hugely popular video streaming service. How long before we see video streaming on nMobile?
We have been using Zoom video conferencing since early 2018, and love it. Despite some of the overblown press about its security, Zoom has provided essential service not only for NKN but the world at large during the pandemic. And I’m a huge fan of Eric S. Yuan, CEO of Zoom.
Now about audio and video streaming over NKN: yes this has been Yanbo’s priority in recent months. We have already done a few Proof of Concepts: HD video game streaming over NKN (using TUNA and Moonlight) last year, voice over IP calls over NKN earlier this year, and video streaming on nMobile in recent weeks. We have optimized our SDK for Android and iOS so much that they are close in performance to our native Go SDK on computers.
We hope to include audio first in nMobile, and then video, around summer time.
The nMobile app is a feast for the eyes. Who’s the designer?
Thank you! We are fortunate to have community designer Sam to help us. We did a few iterations of the nMobile app, collecting feedback from community, family and friends.
Eventually we want to make the secure and private d-chat front and center, and shield some of the wallet functions from the average user who might not know cryptocurrency so well. We want to make it simple and intuitive to use, while aesthetically appealing. After all, we would like it to succeed beyond the NKN community to everyone who can operate WhatsApp or WeChat. That includes my parents.
There’s a lot going on with NKN code and business development. Are you hiring to meet the increasing demands being placed on the team?
We do feel stressed sometimes due to the heavy workload. The activities do come in waves, except peak too often. 🙂 What we could do is two folds: work smarter and add more resources.
Work smarter means focus on the highest priority items, engage community developers and open source communities, and leverage partnerships and other projects and companies.
Once we get the commercial revenue rolling, we could also hire more people to work on business development and sales, product management, customer technical support, and so on.
Many large exchanges, including Binance, now list NKN. Yet all of them continue to list the pre-mainnet ERC20 token (for which you maintain a swap tool for NKN mainnet tokens). How do you feel about this, and are you confident mainnet tokens are safe for exchanges to list?
There are a few factors before the major exchanges list our mainnet token: security and reliability of mainnet, exchange resources for mainnet integration.
We are getting closer to the completion of our security audit. We took quite a bit of time to evaluate the best auditing companies and chose the best fit for us. We have gone through the majority of our software code, from consensus, ledger, p2p networking, all the way to SDK and APIs. We don’t want a rubber-stamped audit report that does not go deep enough, we don’t want a quick and dirty audit report just so we can get through exchanges. We want to be 99.9% sure about the security of our software. Knowing our founder Yanbo and Yilun, you can expect no less technical perfection.
Vast majority of mainnet today are small variations or derivatives of an existing and mature blockchain, which makes security audit and exchange integration much easier. But we have a fundamentally new blockchain technology, based on Cellular Automata. Therefore we do need a bit more time for this phase of our network transition.
Once the audit is complete, we will get in line with major exchanges in terms of their R&D resource availability for our mainnet integration.
We are focusing on specific use cases in IoT that benefit from NKN’s secure communication technology, since IoT is such a huge space. NAS and Security Camera are two areas we are currently working on with hardware vendors. We can be the cloud caching replacement for them, via our p2p direct file transfer and audio/video streaming solutions.
Is the team preparing for a bigger advertising and marketing push to promote all these new products and services?
We are doing several things already and plan to do more. We want to invest our marketing and PR money wisely, where there is most bang for the buck.
We have launched blog.nkn.org [link], which is a search engine optimized platform not only for traditional NKN news and announcements, but also for general interest articles that can create more organic search traffic (e.g. “CDN”, “Messaging”). Those articles will be listed under nLearning, e.g. “Encrypted Messaging: What Is It and Why You Should Use It”
We are working on PR and media outreach both in China and US for both sponsored and earned media coverage. Coindesk’s article is a first success, but we need to do more in mainstream tech media as well. We hired a PR firm during the 2nd half of 2019, but it did not yield the results we expected. So we are a bit on the fence whether to hire another PR firm.
With the revenue from nCDN rolling in, we should also have a bit more marketing budget to target the specific media channels for CDN, video streaming and etc.
Finally Bruce, let’s look forward to the rest of 2020 for NKN. What can NKN followers expect to see in the coming months?
Typically I can see the big trends and have a decent forecast. But I have failed many times to predict the exact timing. So I will simply point out a few things that we look forward to, without giving a specific time frame.
With the iQIYI contract, we will be recruiting miners in China for nCDN service, and ramping up our capacity rapidly. And we should land a few other customers who are in the video streaming and gaming business. We have been talking to a large US customer for a while now, and I hope our recent development can propel them to move to the next stages.
We should see a healthier token ecosystem, where tokens are used to pay for nCDN, TUNA and various services on top of NKN. And the fiat inflow will make the pie bigger for everyone in the NKN ecosystem.
This pandemic has changed the world a lot, but several things seem to stay true. For example, people still have the fundamental needs to stay in touch, communicate privately, and feel safe for themselves and for each other. Big corporations and governments might use pandemic as an additional excuse to further centralize our digital existence. We, as the decentralized communication service, will contribute to an alternative that will enable “Together at home” without the big brothers.
Summing It up
NKN has made huge progress in a short time. They have secured three commercial agreements which will generate the company revenues that feed back and reward the miners.
The magnitude of these commercial agreements mustn’t be overlooked. China Mobile has 940 million users, as reported only yesterday in Bloomberg. Yet Bruce remains even more excited about the deal with video-streaming giant iQIYI (parent company Baidu), and their 100 million paying customers. If NKN were to route only 1% of their traffic, the revenue from these in a single quarter would likely dwarf the current market capitalization.
iQiyi is currently one of the largest online video sites in the world, with nearly 6 billion hours spent on its service each month, and over 500 million monthly active users. [Wikipedia]
An auditing company has been hand picked by founders Yanbo Li and Dr. Yilun Zhang, which should ultimately result in NKN tokens finally being listed on exchanges in their true form, and not as ERC20 tokens. A salvo of n products (nMobile, nCDN, nsh, nLearning and others) have been deployed, and are steadily garnering adoption. These products show off NKN’s sleek technology with equally sleek design.
Few players in this space have figured out how to get their products into real-world adoption. Not only have NKN worked it out, they’re also making revenues from companies in the private sector, and sharing them with miners on a public blockchain.
“With the revenue from nCDN rolling in, we should also have a bit more marketing budget to target the specific media channels for CDN, video streaming and so on.”
Bruce has founded multiple internal startup projects at Nokia & Google towards commercialization. He is an expert on telecom innovation, specializing in strategy and business development.
I love to build innovative products in mobile wireless and software, that disrupts an industry either in business model, technology, or both. I believe in the power of small yet highly talented teams, and had the privilege of leading a few. Seasoned technologist by training, I’m equally fluent at developing business, forging partnership, and envisioning the grand strategy. [Linkedin]