Interviewer: Password Media
Guest: Wen Hao, founder of Bither wallet, developer of Bitpie wallet
Graduated from the School of Computer Science and Engineering, Beihang University, Wen Hao has led the team in designing and developing lottery sales and management system. After entering the blockchain, he and his team developed Bither wallet, the only cryptocurrency wallet made by Chinese company that was officially recommended by bitcoin.org. Later, he and his team developed a multi-blockchain asset wallet, Bitpie and HD wallet, BITHD which are convenient and easy to use.
The interview is as follows.
Password Media: During the World Blockchain Conference held in Wuzhen last month, you mentioned that it is easy to develop a cryptocurrency wallet but it is difficult to develop a good cryptocurrency wallet. Would you please talk about how Bitpie develop the good wallet Bitpie wallet?
Wen Hao: Developing a wallet is different from opening exchanges or doing other blockchain-related apps. Now it’s all about multi-blockchain wallet. To make a good multi-blockchain wallet, you need to have a deep understanding of cryptography, blockchain technology, peer-to-peer data synchronization, and intelligent contracts.
Here is the explanation for the sentence "it is easy to develop a cryptocurrency wallet but it is difficult to develop a good cryptocurrency wallet". There are a lot of wallets currently. It is quite easy for a team to develop an open source cryptocurrency wallet. Just clone a code and change an UI, a wallet is made and you can show off to the public. But there are actually a lot of teams who don't understand the underlying technology of blockchain. For example, do they really know ECC (elliptic curve cryptography)? Do they know how to generate private keys or how the HD wallet works, and what is important to random numbers? As for the security, there are some important points needing notice regarding smart contract, including blockchain peer-to-peer data synchronization, how to do the data verification. Scammers can falsify some data using some null nodes, intentionally write wrong code or vulnerability code, which can lead to the loss of the user's assets.
In the past few years, our team has repeatedly emphasized the importance on random number security and cryptography security. Security accidents about this are very common. Many teams still write wrong codes, such as writing wrong random number code, using unsafe random number code on Android, writing wrong signature code, not following RFC6979 and so on. Even some teams with relatively rich technology experience still make mistakes by far. This is why I mentioned “easy and difficult”, a feature of developing a cryptocurrency wallet.
The reason why we (Bitpie) can do it well is because we have accumulated experience and technology in the field of cryptography for a long time and we have the ability to develop a good wallet. We developed our own bitcoin protocol library based on Java language and LS Object2C language. We are the first team that did this in China, while other teams are unable to do this. These technologies enable us a very solid foundation.
Password Media: Many people now think that the most profitable thing in the blockchain industry is the exchange. But at the World Blockchain Conference, the founder of ZOS also mentioned that companies focus on security will be the most promising companies in blockchain, what’s your opinion about this?
Wen Hao: The revolutionary character of the blockchain is no less than that of the Internet. This is for sure. As for which aspect will have greater development in the future, I don’t think security is the only sector. I think all fields will have greater development. Exchanges have been in the teeth of the storm for the past few years, and many of their giants have risen and fallen. For example, MT.gox, an exchange which once reached its peak and then fell. Now there are many exchanges in the market fiercely competing with each other. The same is true to the mining industry. For example, Bitmain at present, is an influential one in the mining industry.
As for the security you just mentioned, there are a lot of security issues recently, including contract security. The security issue in blockchain is different from traditional Internet security. The traditional mobile Internet security refers to hacking a website. While the security in blockchain is different because there is smart contract. If the smart contract is not written well, it will lead to the loss of assets. In the earlier time there was this kind of security issue to official Ethereum wallet, Parity. There were two serious contractual loopholes to the code and the multi-signature smart contract written by the ETH's fund development team in the second half of last year, which led to huge economic losses.
This incident brought the security of the blockchain to the agenda. Let’s go back to the question you just asked, maybe security is not the most important, but it is a very good point for business. Because the blockchain industry needs good security companies, good security services to provide better security for everyone and help platforms, businesses and users better keep their blockchain assets and smart contract assets, which is for sure. We are also very glad to see so many excellent security companies in security field now.
Password Media: Why are there 12 mnemonic phrases for decentralized wallets?
Wen Hao: First of all, about three or four years ago, some geeks in the Bitcoin community developed a new technology called HD Wallet with the full English name being hierarchical deterministic wallet. This is the whole set technical solution to keeping every private key using the former technique. Before HD wallet technique, one who trades Bitcoin or does other similar trades needed to keep hundreds or even thousands of private keys, which was almost impossible for common users, and there would be many tragedies of losing coins. Later, through the efforts of some Bitcoin geeks, the relevant technical specifications were determined and a relatively safe mechanism was designed.
Ordinary users only need to keep one HD seed phrase and one random number from which the private keys of other currencies are calculated from. That is to say, users don't have to worry about other things except keeping this random number. Millions, tens of millions of Bitcoin addresses, and Ethereum addresses can all calculated from the 12 or 24 words by a deterministic algorithm. Then why 12 words, not other numbers? In fact, 12-24 words are all fine. This technique is to select a certain number of words from 2048 words, the probability space of 24 words is exactly 2 to the 256th power, which is the same as the probability space of the Bitcoin's private key.
So, the question is, why does Bitpie choose 12 words? The probability space for 12 words is 128th power of 2. Some people might think that 128th power sounds less secure than 256th power. But in fact, from the point of view of Bitcoin cryptography, 12 words and 24 words have the same level of security, which is both 128 power of 2. So for the sake of simplicity, we chose and set up 12 words.
Password Media: Ok, we still want to know, there are a lot of projects in the discovery page of Bitpie wallet app. Are these projects all invested by Bitpie?
Wen Hao: That's not true. We designed discovery page out of the demand of our high-quality Bitpiers. Bitpie is doing both hot and cold wallets and enjoys good reputation in the industry. Many users choose Bitpie to manage large assets including BTC, ETH, EOS and so on, which have taken a big share of large deposits. But these users often face a problem—they also want to invest in the blockchain world and ] more assets, but they can hardly find many resources of good projects. Based on this, we designed this discovery page to recommend projects worth investing to the users. We did not invest in the projects before, rather we, through our operating team and partners, screen out the good projects and recommend them to the Bitpiers.
In the future, we will help Bitpiers select better projects, store tokens as well as trade coins/tokens of these projects in Bitpie.
The Discover page in Bitpie wallet
Password Media: According to what you said, is Bitpie wallet a bit similar to Alipay? Will it include all kinds of applications in it?
Wen Hao: Yes. We find that Alipay is a mixture of services and everything can be done in Alipay, like buying plane and highway train tickets, booking hotels. The current application scene of the blockchain is very limited, but in the future, we will design and develop meaningful services with high-frequency use cases and give the users a better experience. In this way, users can not only store and use blockchain assets in Bitpie but will also engage in dapp-based application scenarios in the future. For example, users can play a blockchain game and get a prop and equipment which is directly priced by EOS or ETH. So how do users keep this kind of things in the above case, how do you keep a very expensive cryptokitties? Then we need BITHD (hardware wallet) to keep large assets safely. Bitpie are doing wallet business, so we want to integrate all these things together. That's what we want to do.
Password Media: There is Pie bank in the Bitpie wallet, which has some monthly and daily financial products of mainstream currencies. This is a bit similar to the fund in the financial industry. What were the considerations for putting this function in the wallet?
Wen Hao: Pie bank is in its prototype now and can be perfected further is the future. We, at the very beginning, planned to provide users with more than just a full set of blockchain assets management from wallet to bank. At first, we provided the corresponding transaction service for the users with Bitpie. Since there were transaction services, we began to do some liquidity-related things, such as instant exchange services. So we needed to have currencies at our hand. Since we couldn’t have all the currencies, Bitpie charged commission for these services at first. And we also had to borrow some currencies form some partners. For example, I used to borrow Litecoin from big miners and pay them interests. In this way, we opened the exchange of Litecoin and so on. We tried to open this kind of functions and users liked these functions, and we could make some profit from it.
Then we thought that instead of borrowing from the miners friends, we might as well sell the product directly to the users so that the users can also get the related benefits. This is the origin of our first thought. Now our team is in a high-speed state of R&D and doesn’t have the spare energy fo this part now, but we will complete the entire framework of Pie Bank in the near future. That is to say, Pie Bank will eventually be the perfect financial solution for blockchain world and bank from deposit to loan. In this way, we can meet the needs of ordinary users.
To give a more practical example, suppose you have a thousand ETH and deposit them in Bitpie wallet. One day you plan to buy some luxury goods and prepare to spend hundreds of thousands legal currency but there is a problem. Many people in the blockchain world only hold cryptocurrencies and rarely hold large amounts of legal currency assets, which means you need to exchange your cryptocurrency for legal currency which is a bit of a hassle. Though an ETH worth just about 3,000 RMB now, it reached over 10,000 RMB before. You think it is impossible for you to sell it for three thousand RMB per ETH now since you believe ETH will appreciate a lot in the future. But now you really want to buy the luxury goods. What should you do? Well, we will recommend the financial product I mentioned above to you. For example, you can pledge your ETH in Bitpie Wallet to get equivalent USDTs, which is similar to the bank's loan product. Then all you have to do is to pay some interest by month. I’d like to say that we will provide services from financial management to debit and loan in the blockchain world for users. The principle is to provide safe financial products. We have sold several financial services during the trial run. There were limits on the amount of assets for financial management since these services were provided through the exchange.
We follow the following principles.
First, do not misuse the user's assets, ensuring the security of these assets;
Second, the interest will be bought at the beginning.
We will calculate the interests for users who have already bought the financial products at the very beginning in case the risks of turbulence of the market. This is a model we designed. By doing this, when we provide more of these quasi-financial products to users in the future, users will be able to see the security of the financial products.
Deposit and loan products and the demand for Alipay we just mentioned can also be connected. Some people want to borrow money while some want to lend. In the world of blockchain, we will get these needs connected. These are some of the ideas of Pie bank.
(The Pie Bank page in the wallet)
Password Media: You just mentioned EOS. Bitpie has clearly stated that it will support all the functions of the EOS ecology. I would like to ask about your next R&D plan for EOS?
Wen Hao: It’s no exaggeration to say that Bitpie is the best supporter for EOS among the mainstream wallets, including hot and cold wallets, for big users and large assets. Though up to now, our HD wallet has not yet supported EOS, which is still in the development state, it is expected that the hardware wallet (BITHD) will support EOS mainnet in the next week. Generally, the world's top wallet teams with a large number of users is actually far behind us in the current EOS mainnet support. Until version 3.4.3, Pie bank supports the withdrawal and deposit of EOS and related mainnet transaction projects have been opened, and users who have never held any EOS can directly create an account on Bitpie.
The fact that one can only use EOS after creating an account but creating an account requires EOS is contradictory. The built-in exchange in Bitpie Wallet can help you easily buy EOS in the exchange and directly help you create an EOS account. We have released these functions, which makes us relatively leading in this field.
We'll release a new version in the next few days to really lead the way in the field of EOS airdrops, such as those in EOS's smart contracts. Users will basically be able to get the airdrops in Bitpie within the next week, and directly trade quality airdrops. Next week our BITHD will support EOS mainnet and memory blocks will also be developmed. We'll be working with more EOS developers to provide users with, for example, EOS decentralized game, DAPP scenarios, and more convenience. These are what we are trying to do and are working on with acceleration.
Password Media: What do you think of the idea "wallet is the next entrance to the blockchain ecology”?
Wen Hao: Let’s look back upon the development of the bitcoin and blockchain over the past years. Before 2016, demand for wallet was low. This period is called the bitcoin and copycat period where few people used wallets and most people used exchanges. Although the wallet was used, the demand for wallet was low. Most users used wallets for coin speculation—people only wanted to find a good token. Bitcoin believers might be the only ones who need wallets. They bought hundreds of thousands of bitcoins, ready to hoard for five or ten years, or leave them to their child, in which case they brought them into the wallet after buying them on the exchange. Our previous cold wallet-Bither could exactly meet their needs. 6,000 bitcoins in Bither have been kept well for three years. This is a real case.
Then there were more and more ICOs, DAPPs like CRYPTO KITTY, and blockchain applications gradually in 2017, which made the use of the wallet more frequent. There were also more and more decentralized transactions made in the wallet. So the wallet gained quick development in 2017. We saw the trend where wallets can become the entrance to blockchain and are trying to keep up with the trend.
As the blockchain asset application scenarios become more widespread, we find that the traditional internet projects which are looking for cooperation with us are starting to have demand for blockchain business. The token assets they launched are based on their original ecology. They expect users to use and trade Token. In this situation, the user has gradually get away from "speculation" from deposit to consume. This is also a direction of blockchain development in the future. There is also other opportunity for wallets. For example, EOS will lead to more DAPP boom, leading to better experience solution of the blockchain game. These are all scenarios where wallet can be used. More cases there will be, more frequently the wallet will be used, making the wallet an important entrance.
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