The project, which was funded $35 million by Sequoia China and Chinese Internet companies, claims to overcome a key limitation of existing blockchain technology. This limitation is rooted in the fact that protocols such as Bitcoin can add only one block at a time to the block chain that acts as the record ledger (aka the blockchain). The addition of more than one block simultaneously amounts to a fork which creates two competing chains.
Conflux claims, however, that it has overcome this with a system that allows parties to simultaneously work on blocks and put them in the chain. The protocol also maintains a decentralized consensus method, which prevents any entity from controlling the blockchain. The declared breakthrough is led by some notable names, including Andrew Yao, a recipient of the Turing Award, known as China’s “Godfather of Computer Science.” Fan Long, a professor at the University of Toronto, described Conflux to Fortune, is another co-founder.
Fan Long said “Conflux’s main idea is how to make the whole blockchain scalable. We’ve changed the structure of the blockchain so that it’s no longer a chain in the sense that it records each block based on what its parent block says.”
Long added that Conflux serves to fulfill Ethereum’s promise that users can create and execute “intelligent contracts” in a distributed blockchain library. While Ethereum is a proven and powerful technology, the same speed and scaling problems that have hampered Bitcoin have hampered it.
Although so-called private blockchains have overcome these scaling problems, they can do so by relying on a central authority — anathema to those who favor Bitcoin’s decentralized creed. Conflux claims, however, to offer both worlds the best, namely speed and decentralization. In a press release, the company describes the technical features:
The press release says “Contrary to popular belief, true decentralization isn’t sacrificed to increase throughput, highlighting Conflux as the first example that achieves the best of both worlds. By weaving a Directed Acylic Graph data structure into Conflux’s Proof of Work consensus algorithm, tests on its testnet have achieved a throughput of at least 6,500 Transactions Per Second (TPS), while supporting at least 20,000 nodes.”
Conflux also claims that China’s Internet giants support the new protocol by building “decentralized applications” on the company’s network. Long recognized that these applications, known as Dapps, have gained very little traction in the real world, but attributed this to the problems of scalability that Conflux intends to overcome. In consequence, Long says, intelligent contracts will go beyond their current uses–namely gambling and “initial coin offerings” –and become a force in the financial and insurance industries.
Of course, all this is a very high order, especially in times of growing skepticism about blockchain technology. At the same time, Conflux is facing competition not only from Ethereum but also from others who act as a blockchain for the next generation, including US-based Dfinity, which recently raised $ 102 million, and a Chinese company, Xunlei Technology, whose CEO claims that the company’s “thunder chain” can process one million transactions a second. Conflux, on the other hand, is supported by leading investors including IMO Ventures, FreesFund, Rong 360, Shunwei Capital, F2Pool and Huobi.
There will be proof of whether Conflux can deliver next year. According to Long, the company will launch its test network by the end of February and the main network by next year’s third quarter.