Whilst blockchains continue to be developed in the financial domain, seeing the bigger picture isĀ obscured. One blockchain tech group that has come primarily from working on Government applicationsĀ of blockchain tech, the NuGenesis group, provides a sharp contrast. For as long as they are not taintedĀ by the marketing hype of promoting their coins, they are useful for some analysis as to where theĀ industry is going.Ā Ā
The main driver for the spread of blockchain tech to public services, Internet of Things (āIOTā), securityĀ services and everyday social interaction, is the promise that blockchain is immutable. It can avoid the single point of failure situation. Dominating this promise is the consensus algorithm.Ā Ā
Of course, interconnected issues include scalability and selfish mining strategies. Larger blocks means larger storage space and slower propagation in the network. With centralization the inevitability, less users influence the blockchain. Also, it has been proved that miners could achieve larger revenue than their fair share through selfish mining strategy. Miners hide their mined blocks for more revenue in the future. Proof of work (POW) is now recognised as excessively unjustifiedĀ in is waste of energy and consequent environmental impact. Proof of Stake (POS) is beingĀ recognised as promoting an aristocracy where the rich will get richer. So where are we going?Ā
Consensus algorithms are about reaching consensus mechanisms among untrustworthy nodes.Ā That is, solving the Byzantine Generals problem where they have to reach an agreement to attack or retreat or the attack would fail. In blockchain, there is no central node that ensures ledgers on distributed nodes are all the same. Some protocols are needed to ensure ledgers in different nodes are consistent.Ā
In a decentralized network, someone has to be selected to record the transactions. The easiest way is random selection. However, random selection is vulnerable to attacks. POW used computerĀ power as the deterrent. Some attempt to solve the excess wastable of energy is PrimeCoin that hasĀ a side application which searches for special prime number chains which can be used forĀ mathematical research. NuGenesis developed BitCoin Green with some Bitcoin core devs, to createĀ an offsetting treasury in their minting system that is used for Green projects. But these donāt solveĀ the excess energy solution in the first place.Ā Ā
Hyperledger Fabric uses PBFT (Practical byzantine fault tolerance) is a replication alg orithm to tolerate byzantine faults. The process is divided into three phases: pre-prepared, prepared and commit. In each phase, a node would enter next phase if it has received votes from over 2/3 of all nodes. Like PBFT, Stellar Consensus Protocol (SCP) is also a Byzantine agreement protocol. In PBFT, each node has to query other nodes while SCP gives participants the right to choose which set of other participants to believe.Ā
Rippleās consensus algorithm utilizes collectively-trusted subnetworks within the larger network. When determining whether to put a transaction into the ledger, the server would query the nodesĀ in each Unique Node List (UNL) in the server and if the received agreements have reached 80%, theĀ transaction would be packed into the ledger. For a node, the ledger will remain correct as long as the percentage of faulty nodes in UNL is less than 20%.
Tendermint is a consensus protocol that is in Cosmos SDK. Consequently, many crypto use it including Ā Terra (LUNA), Secret Network (SCRT), Band Protocol (BAND). In Tendermint, a proposer would be selected to broadcast an unconfirmed block in a round. It could be divided into three steps: 1) Pre-vote step. Validators choose whether to broadcast a pre-vote for the proposed block. 2) Pre commit step. If the node has received more than 2/3 of pre-votes on the proposed block, it broadcasts a pre-commit for that block. If the node has received over 2/3 of pre-commits, it enters the commit step. 3) Commit step. The node validates the block and broadcasts a commit for that block. if the node has received 2/3 of the commits, it accepts the block. Contrast to PBFT, nodes have to lock their coins to become validators. Once a validator is found to be dishonest, it would be punished.Ā
It is with Scalability that these protocols hit barriers. With more transactions, the blockchain becomes bulky. Each node has to store all transactions to validate them on the blockchain because they have to check if the source of the current transaction is unspent. A number ofĀ Ā
protocols, including Mina, Netty, Capistrano, Ansible, Chef, and Puppet Labs for example, are about Ā removing records from the network so speed up the data flow. Privacy based coins like Zerocoin, use Ā zero-proof systems to remove the need for miners to validate with signatures. Paymentās origin are unlinked from transactions to prevent transaction graph analyses. However, they still revealĀ payment destination and amounts. Zerocash seeks to solve this problem with, zero-knowledge Succinct Non-interactive Arguments of Knowledge (zk-SNARKs). Transaction amounts and value are hidden.Ā
These sorts of solutions are an anathema to NuGenesis. Coming from working for Government basedĀ use of blockchain technology, NuGenesis sees the future as data management and data analytics. Data,Ā they say, is the new Gold. Likewise serious Corporate applications including health care would benefitĀ from blockchain technology that NuGenesis provides. Storage of patient health care information whereĀ that information cannot be tampered with, stolen or privacy compromised has implications moreĀ appreciated in the current Covid environment. Predictability of behaviour and consequent resourceĀ demands is, according to NuGenesis, an imperative we should expect.Ā Ā
NuGenesis uses system validators and is given added integrity by a layer of AI monitoring to avoidĀ corruption. Optimal efficiency with excess capacity has been achieved with 4 validators nodes that areĀ super nodes and 1 simple or authority node. The network topology, P2P, uses the Aura round robinĀ protocol to ensure randomisation between validators and integrity of the block.Ā Ā
There two consensus mechanisms:Ā
(a) Proof of Authority with useful work AI (Artificial Intelligence); and,Ā
(b) Grandpa, being substrate functionality to ensure block transactions are valid and theĀ longest chain is the best chain.Ā Ā
On the NuGenesis main chain, system validators are used comprising the 4 super nodes and 1 authorityĀ node which is a simple node. The authority (non validator) node keeps the blockchain data. It can beĀ transacted upon but cannot make a block. It runs the explorer, data analytics and outputs dataĀ generally, designed to keep these activities from putting pressure on the validator nodes.Ā
The system validator nodes run on the randomness of the round robin protocol and monitored by AI andĀ can achieve transaction speeds in the milliseconds. There are no requests from 1000ās of validators andĀ fee actions. The streamlined validation process through the super nodes with byzantine fault toleranceĀ and randomness via round robin monitored by AI, makes unnecessarily superfluous broadcastingĀ through validation networks. NuGenesis has found that as few as 4 super node validators is optimal specĀ efficiency to be an enterprise solution for any of the worlds current global corporations.Ā
NuGenesisā current innovation is the use of specially designed load balancers for blockchain. LoadĀ balancers are used on the internet to transact millions of transactions per second. There is no apparentĀ limitation on the load balancer. All requests from wallets, apps etc come to the load balancer, whoseĀ role it is to send the data to the right chain.Ā Ā
The load balancers work on both the hardware level (routers, switches and dedicated systems) andĀ software level. They allocate the data according to the utilisation of the relevant chain at the relevantĀ time with where the data is supposed to be processed.Ā Ā
NuGenesis load balancers do not require a continence chain to reconnect the data from the separateĀ chains because they have a blockchain ledger built into them with a consensus mechanism that recordsĀ what is in each block and backs up to a storage chain.Ā Ā
With parallel processing of infinite blockchains running as para-networks, scaling up to 1,000 chainsĀ parallel processing data is efficient. Data is sent through the load balancer which keeps track of theĀ database and storage of where data is sent in the storage chains. Data can be readily searched from theĀ explorer on the load balancer.Ā Ā
With NuGenesisā implementation of load balancers and consensus before packing on the load balancer,Ā the more parallel network chains that are added, the more data is injected into block creation of theĀ connected chains. Without a validation delay (validation occurring within a 100th of a microsecond), andĀ accordingly there are more dramatic increases in the speed of transactions. The more chains thatĀ connect to the NuGenesis blockchain system with their own sovereign systems, they claim there is noĀ extraneous pressure on any particular system. With parallel processing, the more systems, the faster theĀ transactions processing. Rather than having any layer 2 processing, NuGenesis opted for data flowĀ processing.Ā Ā
Whilst scalability is an issue they believe they have solved, accidentally also they solved the SelfishĀ Mining problem. Eyal and Sirer showed that a network is vulnerable even if only a small portion of the hashing power is used to cheat. In selfish mining strategy, selfish miners keep their mined blocks without broadcasting. Their private branch is longer than the current public chain andĀ would be admitted by all miners. Before the private blockchain publishment, honest miners are wasting their resources on a useless branch while selfish miners are mining their private chain without competitors. So selfish miners tend to get more revenue.Ā
Based on selfish mining, many other attacks have been proposed to show that blockchain is not so secure. In stubborn mining, miners could amplify its gain by non-trivially composing mining attacks with network-level eclipse attacks. The trail-stubbornness is one of the stubborn strategy that miners still mine the blocks even if the private chain is left behind. Yet in some cases, it can result in 13% gains in comparison with a non-trail-stubborn counterpart. Attackers with less than 25% of the computational resources can still gain from selfish mining.Ā
In NuGenesis, staker-miners are not validators. They have a different duty. They are minters. They sayĀ the system was designed to be Green. It was designed to eliminate unnecessary computational powerĀ required from validation and unnecessary requests on the system.Ā Ā
It is probably best described in the minting of coin to ensure that the tokenomics run as expected.Ā NuGenesis is focused on maintaining an innovate rate in a constantly evolving blockchain ecosphere. ItĀ did not start with a large number of created or pre-minted coin. Rather, it is based on a minting systemĀ to reward all those participating in the various roles to support the evolution of the system.Ā
In NuGenesis, the guaranteed uniqueness on any block hashing address is achieved by a randomisedĀ number known as the universal serial identifier (USI). The USI facilitates the capabilities for blockchainĀ parallel processing, sharding, para-chains and minting. Coins are minted with audit trackability throughĀ the USI. Each Coin, Crypto Asset (NFTās and smart contracts (which they call their version āDNCāsā orĀ Digital Notarised Contracts) can be serialised. This serialisation is a foundational requirement for CBDCsĀ (Central Bank Digital Currencies) and provides the basis for the DeFi to be revolutionised. Crypto assetsĀ can be have security attached for lending, can be multi-party owned etc and consequently do not haveĀ leave a usersā custody to be utilised.Ā Ā
Ultimately, the interesting question is whether the commercial incentive for blockchain innovation isĀ from developers working through the needs to commercialise in the financial domain and is thereforeĀ the source of inspiration. By contrast, NuGenesis has taken the polar opposite route. By working withĀ Government-based applications for social good, the āstripping downā of systems for particularĀ commercial application has been easier. This does appear to be the better approach for the growth ofĀ the industry. There is no room for miners or human validators in any serious application of blockchainĀ technology when applied to Government or Corporate scale records, for when the entire financialĀ industry will eventually shift to blockchain technology as the international standard.
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