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Introduction to Zero Knowledge Proofs
How to evaluate an ICO?
Jul28
These are some of the key considerations when evaluating an ICO:
- What is the token trying to achieve/solve/disrupt
- How many of the total tokens being issued are held by the ICO issuer?
- Which individuals are part of the ICO issue core team? What are their backgrounds, what is their track record in this space
- If there is a GitHub page, review the various repositories and see how many people are supporting it, and what percentage are active, because you could have one hundred people listed, and only five are active, not a good sign. How often are changes being committed?
- How long does the ICO run for?
- What does the ICO issuer plan to do with the capital raised?
- If the ICO has already been issued, check http://coincap.io for its details.
- See what community is saying about this ICO, sites like:
https://www.smithandcrown.com/
http://reddit.com
Team sites on Telegram
Team sites on Discord
Team sites on Slack
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Introduction
Blockchains suffer from scaling issues. This is due to the fact that every transaction has to be propagated to all the nodes in the network and after propagation is complete the mining activity to create a block and provide a confirmation. In bitcoin blockchain a confirmation can take about ten minutes. When it comes to the security of a blockchain the number of nodes is directly related to the security of the blockchain, more nodes mean better security. Whereas the performance is indirectly proportional whereby as the number of nodes increases the blockchain starts to slow down as the transactions need to be propagated to more nodes.
Transactions Per Second (TPS) for some blockchains are:
- Bitcoin Blockchain processes 7 TPS
- Ethereum processes 13TPS
- Ripple processes 1500 TPS
- Visa processes 1700 TPS, if required the system can process up to 56000 TPS
Scaling Solutions
Besides sharding, some of the scaling solutions, called layer two solutions that I will be discussing are:
- Plasma for Ethereum
- Raiden for Ethereum
- Lightning for Bitcoin and Litecoin
Plasma
Plasma addresses the scaling problem by providing a framework that allows implementation of nested chains.
As per the Plasma whitepaper:
“Plasma is a proposed framework for incentivized and enforced execution of smart contracts which is scalable to a significant amount of state updates per second (potentially billions) enabling the blockchain to be able to represent a significant amount of decentralized financial applications worldwide.
These smart contracts are incentivized to continue operation autonomously via network transaction fees, which is ultimately reliant upon the underlying blockchain (e.g. Ethereum) to enforce transactional state transitions.”
This is how you would deploy a Plasma chain:
- A smart contract is deployed on Ethereum main net that serves as the “root” of the child chain. It contains the basic “state-transition rules” of the child chain, records hashes, and serves as bridge that lets users move assets between the child chain and Ethereum main net.
- A child chain is created that has its own consensus algorithm such as PoA, PoS, or other.
- Deploy Child chain related contracts to the child chain
- As the child chain produces blocks, they are committed to the root contract created in #1 above.
- The root contract commits the updates to mainnet.
Raiden
Raiden is a lightning implementation for Ethereum, and next I will talk about Lightning.
“The Raiden Network is an off-chain scaling solution for performing ERC20-compliant token transfers on the Ethereum blockchain. It is Ethereum’s version of Bitcoin’s Lightning Network, enabling near-instant, low-fee, scalable, and privacy-preserving payments.”
Lightning
Implements Smart contracts, using three technologies:
- Multi Signatures.
- Check Lock time and Check sequence verify, relative time from previous transaction.
- Hash lock time contracts, forward a promise that can be unlocked by a secret.
State channels are setup between parties. The party initiating the channel has to deposit bitcoin in escrow, this ensures that the other party will receive the funds once the channel is closed. The amount deposited establishes the maximum value that can be transacted within the channel.
- Final transaction is written to the bitcoin blockchain after the state channel has been closed.
- You have to stay online all time to ensure other party does not close the channel on you
- In case you get cheated, you have 8 hours to send a competing transaction
- Scaling at every layer
- Lightning applications (lApps) vs dApps
You can deploy a lightning node. BOLT(Basis of Lightning Technology) is an interoperability standard. Currently there are three BOLT compliant technologies to implement lightning.
- LND from Lightning Labs
- C-Lightning from Blockstream
- Éclair from ACINQ
Conclusion
All blockchains throughput was tested in Q4 2017 when they got bogged down by the number of transactions and the transaction fees soared. Lightning went live Q1 2018 while the other two are still in development.
References
- Karl Floersch: Plasma Cash and the Ethereum Roadmap
- What are state channels?
- The Bitcoin Lightning Network Questions – Andreas M. Antonopoulos
- Bitcoin Q&A: Misconceptions about Lightning Network
- Lightning Networks Explained (Segwit advantage)
- Scaling Ethereum with Plasma
- Raiden, Plasma and Generalized State Channels
- Making Sense of Ethereum’s Layer 2 Scaling Solutions: State Channels, Plasma, and Truebit
- Ethereum Plasma Explained
- Minimal Viable Plasma
- ERC-721
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Introduction
Smart cities, AI, Blockchain, are the new buzzwords these days. In this post will be talking a bit about these technologies and their relationship to blockchain.I have been to a few meetups at The Blockchain Hub at York University in Toronto. The Blockchain Hub folks seem to be contributing a lot to the blockchain action in the Toronto area. Of the meetups worth mentioning following come to my mind:
- Smartcities, IoT, and Blockchain
- AI and Blockchain
- Hadera, a public version of the Hashgraph
Smart cities, IoT, and Blockchain
I totally understand smart cities and the use of internet of things, but the whole proposition becomes questionable where people throw the word blockchain in the mix. There were claims of money saving and energy efficiency, what escapes me is what does blockchain have to do with all this. It would have made sense if the presenter had spoken about a specific blockchain use case, apparently not. The way I see it is that what makes a city or a home smart is the deployment of various sensors and control systems performing actions in unison. IoT comes into play where all the control systems and sensors are connected together over IP. This central hub processes all the information flowing in from the IoT devices, and signals IoT devices to perform certain activities.
The only use case I see of the blockchain is when monetizing is involved. IoT devices effectively could be charging other IoT devices and control systems for providing them the data they have collected. For this collection, sharing, and charging for data a very fast blockchain technology has to be utilized. The only blockchain that is capable of accomplishing such speed is IOTA Tangle, which is designed for this very purpose. There is nothing stopping anyone from using existing database technologies such as MySQL, Oracle, etc. It really depends on the architecture and requirements that the platform needs to address.
AI and Blockchain
This is the area where people have done presentations saying data is being stored on blockchains. As far as I know, current blockchains are not capable of storing a lot of data to begin. Then comes the issue of data privacy. Is the blockchain going to be private or public. To date none of the private blockchains are robust enough. AI and ML need very fast storage as well, and to date no blockchain based storage technology exists that can quench the needs of the AI/ML processing.
Hadera Platform
Hadera is a public blockchain platform that is based on the hashgraph consensus algorithm. Swirlds is a US based company and developed hashgraph, and now Hadera. The blockchain is based on a Directed Acyclic Graph (DAG) algorithm, it is very close to IOTA Tangle blockchain. Main difference in my eyes is that while IOTA Tangle does not have any transaction costs, Hadera transactions will incur some costs. Charging for transactions is a great SPAM and DDOS protection approach. Hadera will be operated by a board of directors from 39 large organizations, across the globe in multiple verticals. Although the main principle of blockchains is de-centralization, this idea of Hadera being managed by a group of elders is totally negating it. For a platform to be purely de-centralized, the platform decisioning should also be on chain just like Tezos is attempting to do.
Properties of Blockchains
The main properties of a blockchain are:
- Distributed-highly available as there are multiple nodes.
- Immutability– Data cannot be modified.
- Replicated-all data is replicated across multiple nodes.
- Transparency-all data written to blockchain is available to everyone to read. When it comes to crypto currencies, this property is questionable, hence introduction of privacy tokens that are trying to address the issue of privacy and fungibility.
- Consensus-a mechanism to agree on writing data to the blockchain even though nodes are owned by parties who have no trust relationship with each other. While this aspect of trust is true for public blockchains, private blockchains operate in trusted environments. And the consensus mechanisms are usually monetary based for public blockchains and for private there are none.
Conclusion
Although blockchain is a cutting edge technology, it is not a solution to all problems. Always ensure you document the requirements first, and then look for a solution, and blockchain may well be the solution. So far teams are building blockchain based solutions looking to solve a problem, which is great for an ICO and collect money from poor souls who are just looking at it from “nice and shiny” aspect, and the fact that it is a great money multiplier. Of all the ICO’s I have seen, almost 95% have been failures.
References
- Don’t Forget About Storage When Planning For AI And ML <https://www.forbes.com/sites/patrickmoorhead/2018/01/27/dont-forget-about-storage-when-planning-for-ai-and-ml/#5027f3bc5ccd>
- The Difference Between Artificial Intelligence, Machine Learning, and Deep Learning <https://medium.com/iotforall/the-difference-between-artificial-intelligence-machine-learning-and-deep-learning-3aa67bff5991>
- Hadera Hashgraph <https://www.hederahashgraph.com/>
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