The Silicon Review
The blockchain technology is well known as the foundational infrastructure that supports transactions in the cryptocurrency. But the benefits that the technology can provide are not dependent on bitcoin. Speaking of its functionalities, blockchain sets the foundation for decentralised, secure and trusted data exchange. Moreover, blockchain technologies have brought forward many capabilities that allow many mission-critical applications to function efficiently, and it definitely has the potential to introduce many more trends in the future of enterprise applications.
In the light of the above mentioned, it is indeed an honour to present Xunlei Limited (Nasdaq: XNET), a blockchain technology innovator that is leading the market with its cloud computing and blockchain technology in China.
Operating as a powerful Internet platform based on cloud computing in China, Xunlei provides users with quick and easy access to digital media content through its core products and services, Xunlei Accelerator and the cloud acceleration subscription services. Xunlei’s subsidiary, Onething Technologies, is a leading innovator in shared computing and blockchain in China. Notably, Onething Technologies launched ThunderChain Open Platform, a high-performance blockchain operating system that can concurrently process over one million transaction per second (TPS) and realize confirmation in seconds. ThunderChain is aimed to create one of the largest blockchain business ecosystems and can be applied in a spectrum of scenarios to empower the real economy.
Blockchain Powered Value Building
Bitcoin has witnessed a steep decline in its value from a peak of $20,000 per coin last year to hardly $4,000 today. However, that doesn’t indicate things won’t go good for blockchain, the technology that made virtual currencies like bitcoin and ether a reality. Put in the words of Mr. Lei Chen, CEO of Xunlei Limited, a blockchain company with an above $30 billion market cap is not an unrealistic future. It was under his leadership that Xunlei, a company that started off as a digital services provider, transformed into a blockchain pioneer over the past few years.
Chen says that achieving the $30 billion mark isn’t going to be easy. There are a few prerequisites that must occur first. He believes that the first and foremost requirement is a blockchain architecture with the capability of sustaining one-million transactions per second and a response time within seconds. Chen claims that Xunlei’s blockchain processing platform, ThunderChain, already fulfills this requirement.
One more thing that the blockchain revolution will impact is data ownership. “Blockchain will challenge the data ownership models of today, because data should be of the people for the people and by the people”, says Chen. He is of the opinion that user data will be treated in the same way as intellectual property in a period of ten years thus demanding the need for creating regulations under which individuals can truly own their own data. Here comes the need for the second prerequisite of Chen’s notion, i.e. there needs to be one, somewhat unified, well thought-out regulation framework.
Next on the list of prerequisites is the need for an application of blockchain technology that surpasses ten-million users. “If there is a ten-million user application of blockchain today, we would be seeing the entire technology in a completely different light”, Chen added.
Revolutionizing Business Model
Xunlei is one of the few companies with dedicated resources and a strategic focus on blockchain technology, especially around its fundamental capabilities and practical use cases.
The industry generally categorises bitcoin as Blockchain 1.0 based on its investment value and the adoption of ethereum as a decentralised platform for a limited set of applications as Blockchain 2.0. But ThunderChain is seen as a representative of Blockchain 3.0 because it is designed to create decentralised applications that empower corporations and end users across various industries as well as focus on applications related to healthcare, financial services, copyrights and food safety areas regarding traceability and transparency.
The ThunderChain is capable of concurrently conducting millions of transactions per second. It also supports smart contracts written in solidity language and is compatible with Ethereum Virtual Machine making it easy to migrate applications from other blockchain platforms.
ThunderChain plays a fundamental role in Xunlei’s shared cloud computing model. Users contribute idle bandwidth, storage and other computing resources to the shared computing network, a process made transparent and traceable via blockchain technology. In order to incentivize users to join the shared platform, users will receive a digital asset which they can use to redeem relevant products and services such as video site memberships, internet acceleration services, cloud storage, shared content services and gaming content services.
Furthermore, there have been a number of practical use cases launched or in the progress of deployment on Thunder Chain Open Platform. Xunlei has entered into cooperation with business partners from different industries such as media publishing, healthcare, food industry, financial services and IP protection.
The Roadmap Ahead
Xunlei began as a peer-to-peer downloading tool targeted at speeding the delivery of files on the young and speed-challenged Internet of China. With its unique shared computing and blockchain technologies, Xunlei is bringing innovations in cloud computing at a much lower price than the traditional cloud providers in the market. Chen mentioned, “We crowdsource our computing resources from consumers, then offer a cloud solution similar to AWS. But we can do it really cheap, and we’re currently serving the largest Internet companies in China.”
In the recent earnings report, Xunlei recorded the historical high in annual revenue in 2018. Total revenues were US$232.1 million, representing an increase of 15.0% from 2017. Cloud computing business – as the main driver of the total revenue – achieved around 30% year-over-year increase. Xunlei also disclosed multiple exciting developments in the announcement, including a strategic partnership with China Mobile, which is one of main telecom operators in China, and expanded client coverage for its cloud computing business.
In terms of future strategy, Chen highlighted, “The incoming era of 5G technology presents a critical trend for the IoT industry, leading to more demand for edge computing solutions. After years of investment, we have built a nationwide network of shared cloud computing nodes and provided edge computing solutions for commercial uses. We believe our head start and technological advantages position us well in capturing this great opportunity. We expect continued growth in shared cloud computing business in 2019.”
Lei Chen, CEO of Xunlei Limited and Onething Technologies
Mr. Lei Chen has been Xunlei Limited chief executive officer since July 2017. Prior to that, Mr. Chen served as Xunlei’s co-chief executive officer and chief technology officer at Xunlei. In 2015, Mr. Chen created OneThing Technologies, Xunlei’s cloud computing division. Prior to joining Xunlei in 2014, Mr. Chen was the President of Tencent Cloud, where he spearheaded Tencent’s cloud computing, open platform and social advertisement efforts. Mr. Chen also worked at Google and Microsoft in the US focusing on cloud computing and big data research and development, before returning to China to join Tencent.
Mr. Chen holds a bachelor degree of science in computer science and technology from Tsinghua University in China, and a master’s degree in computer science from the University of Texas at Austin in the US.