ChainCuration.exe

With the mainnet around the corner (30th April), I decided a closer look at QuarkChain and their innovative sharding and scaling techniques – particularly with all the recent news about BTCSV and BTCABC, it seemed fitting. One of my favourite topics is also Interoperability and this is a unique approach that I believe will scale well as Quarkchain grows, not just technically, but from a community lead perspective as well, which is equally (if not more) important.

QuarkChain were one of the first blockchains to implement state sharding, with a roadmap goal of 100,000 on chain TPS, having already achieved 14,000 on testnet. This is extremely high and puts QuarkChain at an extreme edge in the race for Visa-like transaction speeds in the real world.

The blockchain itself is multi-layered, made up of a layer of elastic shards as the first layer, and the root, native layer underneath. The shard layer is extremely flexible and what makes QuarkChain so unique and powerful. The root layer is PoSW, a hybrid model developed exclusively by the QuarkChain team, but each individual shard is capable of different consensus mechanisms, virtual machine support, ledgers and token economic models and structures.

key components of a blockchain

• Consensus Mechanism (PoW, PoS etc)
• Virtual Machine (TX Method
• Ledger (UTXO and Account Base)
• Token Economic Model

One of the problems of creating an immutable ledger, with a standard set of rules, is once the chain is launched, you cannot change the underlying infrastructure or individual 4 key components above without forking them into a new chain.

The Ethereum DILEMMA

Ethereum is certainly known as a battle hardened blockchain, but its standard set of rules as above are rooted in place and can’t be easily changed. This is what birthed Ethereum Classic, diluting the community and their focus, and weakening ultimately both chains. This standard blockchain problem is also what makes it difficult to now migrate to Proof of Stake, implement new scaling solutions and more. While it can be done, it’s certainly not easy, but who could’ve known back then that we’d go this direction? While Ethereum efforts are admirable, they are definitely up against fierce competition, particularly with solutions presented by 4th gen solutions like QuarkChain.

If you build on Ethereum, you are locked into these very specific sets of rules. You have to use the Ethereum VM, ERC20 model and (for now) PoW Consensus.

The Bitcoin DILEMMA

In Bitcoins case, we have seen over 10 separate forks, each claiming to be superior than the previous version. Sadly, this is very bad for the ecosystem – it dilutes hash power, causes controversy and divide amongst the community, and ultimately confuses external individuals and slows the wider goal of adoption.

With the bitcoin.com and @bitcoin handles owned by Bitcoin Cash (now Bitcoin ABC), it certainly doesn’t bode well for new entrants to the cryptocurrency market. It’s confusing, and very frustrating.

We had Bitcoin Cash (BCH) that was then forked again to Bitcoin Satoshi’s Vision and Bitcoin Cash ABC. This is very unlikely to stop, and we can be confident in more forks that are often scammy and an intention to steal the Bitcoin brand to profit from it.

In short, all of these forks are due to technology or governance disagreements, and could’ve been presented if the infrastructure we prepared for them – but at these times, it simply wasn’t, so the option was to fork the chain and split the community in two..

The Quarkchain Solution

With the dual layer technique mentioned earlier that QuarkChain have implemented and continue to grow out, there is a very innovative solution that aims to prevent forks and encourage a more sustainable ecosystem.

With every shard created, you can create a fresh technology stack as you please, you are not at the mercy of the QuarkChain consensus, token model, or ledger. As you see below, one shard may contain the Ethereum Virtual Machine, Proof of Work, and use an Account Based Ledger, but another shard here can use a completely technology stack.

This makes QuarkChain the first infrastructure that enables multiple consensuses, multiple ledgers, and multiple token economic models in one ecosystem.

As the space evolves, so will what is considered to be the most popular ledgers, consensuses and more. New consensus mechanisms and smart contract engines will be hard to keep up with, and for most, already are, with so much emerging research and open source contributions.

Where as some people may only support PoW or PoS now, something better (for them) may be around the corner, and the ability to pivot is extremely important in such a rapidly innovative market – particularly if the goal is building solutions for businesses that need to future-proof.

By allowing multiple combinations under each shard, you open up lots of possibilities for specific solutions. In the case of a Decentralized Exchange, the orderbook must be stored on the ledger which is very easy to arrange using QuarkChain.

The ability to support multiple Virtual Machines is also important here, as technology advances quickly, allowing the integration of future virtual machines helps to create a robust future proof solution.

With this dual layer blockchain, all shards also benefit from infrastructure upgrades to the main chain. For example if privacy features are added to QKC, they can be easily implemented on the shards. As QuarkChain adds features in the infrastructure, all other tokens in the QuarkChain system will enjoy the benefits of the entire ecosystem. For example, when a privacy shard is built into QuarkChain, all other tokens in the network can enjoy the benefit of a privacy cryptocurrency.

Collaborative Mining to build and strengthen communities and reduce CENTRALISED power.

Another scaling trick is the collaborative mining on the root (PoW) chain. The hash powers are incentivized to distribute evenly among all shards, ensuring all shards are mined evenly and the system TPS increases and the number of shards increases. The root chain takes over 50% of the hash power of the whole network, to prevent double spend attacks and malicious mining.

As QuarkChain uses this unique sharding method, note that a network who are using the system have several minor blockchains (shards) and one root blockchain. This means each blockchain offering miners different incentives and difficulties, allowing them to choose any chain optimal for their hashpower without joining a mining pool. As all shards and the root chain benefit, everyone who takes part is still incentivized and rewarded in a fair way.

To make this even more attractive to miners, Quarkchain aim to support multiple mining algorithms, including its own unique algorithm called Qkchash – a customized ASIC resistant, CPU mining algorithm, which encourages CPU mining. As mentioned before, users can also choose whether to mine on the root chain, or on smaller shards depending on their computing power. By allowing and actually encouraging a wider variety of miners on the network, a scaleable community model is created.

This creates a very unique, open market model for miners

The token

My initial concern was that the importance of the native token would be diluted and become less essential in the ecosystem, given that there can be multi-native tokens, but I quickly understood that to create a shard, you have to stake QuarkChain tokens – you also have to pay all smart contract fees in the QKC native token, meaning everyone who builds a shard still has a vested interest in the wider community. This is extremely important to the longevity of the project.

As well as this, there is a staking governance model so people can vote in the ecosystem, also taking tokens out of circulation.

All Smart Contracts also still require QKC, making it the fuel of the ecosystem.

QPOCKET wallet

Something that was overlooked was the launch of QPocket, QuarkChains Smart Wallet that supports QuarkChain, Ethereum and Tron blockchain tokens. It’s extremely user friendly and easy to connect to dApps through the dApp Store.

With over 250 shards on the Quarkchain Testnet, it’s important that QuarkChain have a smart wallet in place for the future that is both user friendly and scalable. Having it already launched, and also supporting multiple chains gives them a good headstart for the launch of mainnet.

You can learn more about it here:
https://www.qpocket.io/

OVERALL

Overall the solutions presented by QuarkChain are really exciting, particularly as they approach scaling from both angles: Technical and Community, something most teams seem to overlook. With the mining collaboration technique opening mining up to CPU users and on smaller chains (shards), allowing more aggressive reward structures, I expect this to be very well received by people who have been put off from mining previously.

The QuarkChain Mainnet launches on the 30th May, and you can learn more about it here:
https://quarkchain.io/countdown-to-quarkchain-mainnet/

Resources:

Website
https://www.quarkchain.io
Discord
discord.me/quarkchain
Telegram
https://t.me/quarkchainio
Twitter
https://twitter.com/Quark_Chain
Medium
https://medium.com/quarkchain-official
Reddit
https://www.reddit.com/r/quarkchainio/
Facebook
https://www.facebook.com/quarkchainofficial/

Before I began to look at AERGO, I found myself first looking into Blocko, the Korean company that are building AERGO and are ultimately responsible for its success.

Blocko is a Samsung backed, award winning commercial Korean blockchain startup founded in 2014, that created Coinstack, a “Blockchain-As-A-Service (BaaS) packaged solution for enterprise clients to benefit from blockchain technology that is easy to deploy. Over 20 leading Korean companies are providing services backed by Coinstack, with partners as big as IBM, Samsung, LG, SK Telecom and Hyundai.

Blocko have had aggressive success since their inception, winning many clients, partners and awards, including recently even winning “Best Brand in Korea” in 2018, and hosting Blockchain Industry meeting for the Korean Ministry of Science and Information Technology.

AERGO takes Blocko’s proven technology stack by transforming it into an end-to-end, open source platform based around hybrid private/public blockchain design. It allows businesses to build innovative applications and services through a shared, trustless, and serverless ecosystem. It allows Blocko to scale even further and to have a much bigger and wider impact on their clients markets they have already proven to affect.

Notable projects Blocko/AERGO are working on:

• A blockchain-based storage platform for the Korean Ministry of Land, Infrastructure and Transport to connect real estate registries to government network data with a blockchain ledger.
• A distributed social media platform for partner Cyworld, a South Korean social network service that came out of SK Communication in 2014.
• A collaboration with government funded Electronics & Telecommunications Research Institute (ETRI) to develop cutting-edge consensus algorithms.
• Blockchain based micro-payments for Bank of Korea – to assist with the countries settlement infrastructure, allowing for faster, cheaper transactions. This system includes transaction validation, participant authentication, wallet management as well as a create transaction process and mobile implementations centered around micropayments.

Knowing now that Coinstack-based blockchain systems have already been deployed to over 25 million users in over 20 in-production systems, I will now look at AERGO for its own merits.

Like many others, AERGO are intending to advance enterprise blockchain, by allowing mass market usage – Simply put this is another 4th generation blockchain solution that aims to tackle enterprise level. Their intention is to:

1. provide advanced, friendly and easy to use technology for developers and contractors.
2. a secure and fast public and private blockchain cloud architecture for businesses
3. an open ecosystem for third parties and businesses to connect and engage with

I will try to avoid focusing too much on the solution and instead what makes AERGO different to other solutions, as the “4th generation” space is very crowded and competitive.

AERGO is leveraging both public and private chains supported by modern cloud architectures. It’s built around a public chain, called AERGO Chain. This makes it different from private solutions like Hyperledger or Corda, or Blocko’s Coinstack.

One of the notable features of AERGO is that it supports “SQL smart contracts” through AERGOSQL, a “multi-paradigm smart contract engine”

While I initially found this a little strange as SQL is typically used to interrogate and retrieve existing data, it’s an exceptionally common programming language. As I researched further, I found that the coding language itself will not be SQL, but it will be a language with a SQL-like syntax.

This is thankfully as simple as it seems, a proposed data-relational model for storing and accessing data from the chain with simple query language.

Using AERGOSQL will require the AERGO native token, but the AERGO public chain also supports Ethereum Virtual Machine to achieve interoperability between different smart contract operations. This is one of the key factors that I looked for when investigating the AERGOSQL smart contract engine.

AERGOSQL aims to be able to create advanced smart contracts, but with simple SQL-like query language.

I am a sucker for open source. I find that anyone who avoids being open source, opens themselves up to be disrupted by someone who is (unless they are waiting for patent approval of course!). AERGO are on the right side of the market here – making it clear they want to open up their ecosystem to the world by supporting developers who want to use, develop, incubate, and expand their core features and projects on the existing stack. By allowing SQL developers access to smart contracts, there are really endless possibilities.

They acknowledge the importance of attracting talent to build out the ecosystem, which is comprised of 3 parts

AERGO CHAIN – An open source blockchain operating system / public internet of blockchains

“A protocol consisting of a global public decentralized network of enterprise blockchains run by node providers, aergo chain contains the AERGOSQL smart contract engine. “

AERGO Chain is DPoS (Delegated Proof of Stake). I am typically resistant to DPoS; It opens doors to bribery – vote buying and collusion – such as we have seen with EOS “Cartels” forming – however it has some notable upsides to more enterprise focused networks or those where Nodes are competing businesses. If your Node Operators are enterprises or competitors, they are less likely to collude. This is where DPOS may work out. This is yet to be demonstrated successfully at scale but I’d keep an open mind considering the model it is being implemented into.

(a good example of DPoS: gaming company Ultra will fork EOS and assign competing game development companies as block producers. I can’t see these competing companies colluding with eachother..)

As the node operators form “The Horde” (likely made up of enterprises) and they will govern and have rights within the AERGO stack. Likely a simple rewards model for staking, I’d like to learn more – the AERGO team have announced they will share a more detailed Token Economic Model by Summer, which I eagerly await to review as I intend to stake my AERGO.

The Node operators form “The Horde” (likely made up of enterprises) and they will govern and have rights within the AERGO stack. Likely a simple rewards model for staking, I’d like to learn more – the AERGO team have announced they will share a more detailed Token Economic Model by Summer, which I eagerly await.

The chain is currently processing around 8000 TXPS, before scaling efforts have begun.

AERGO HUB – the public interface to aergochain

HUB works in harmony with secure dApps to the AERGO Chain. There are two dApp repositories:

1. Public Repo – a shared, open and decentralized infrastructure for dApps, (similar to GIT Public Repos) used for open source projects.
2. Private Repo – a private controlled and secure infrastructure for dApps. The focus here is on compliance, performance and quality of service, and will be focused around Enterprise users.

Both of the above repositories inherit tested infrastructure technology that’s been previously used by Blocko’s Coinstack.

Using this repository method, information can be protected in a Git-like manner and only accessible by those who are able.

The HUB aims to offer advanced capabilities such as support for Software Microservices, a serverless database, a gateway for intelligent routing of data traffic & messages to a blockchain, and even an interface for smart oracles, allowing you to connect a blockchain to seperate data sources like external databases (SMS, Active Directory, for example). (Oracles are a subject that interest me a lot, so I’ll be looking into this subject more on ChainCuration)

To deploy dApps or other supporting software or resources on the AERGO chain, they must be first provisioned and managed. This is achieved through “AERGO HORDE” (to be installed by Node Providers)– a public orchestration software framework for anyone who wants to participate in AERGO HUB. Conceptually, this is very similar to a public Cloud Web service.

AERGO MARKETPLACE – One stop shop for services optimised for AERGO CHAIN

Also managed by the AERGO HORDE (node operators) the marketplace is self explanatory – a place for software applications, computing resources and other services that were optimised for AERGO Chain. The scale of which is demonstrated above – for businesses of any size, developers, contractors and more.

The idea is to allow service providers, independent software vendors and cloud infrastructure vendors to make their products and services available to all AERGO users.

AERGO also plan to support national and regional government agencies, particularly those aiming to solve very specific problems using blockchain technology. As seen above in recent news, this is already in effect.

The end users of AERGO Marketplace are software developer or businesses of any size wishing to build a blockchain project, but also as mentioned above, those looking find a particular solution using blockchain. As time progresses and the marketplace matures, we can expect to see some really interesting capabilities that may become available, such as:

• Computing Power (CPU)
• Storage
• Machine Learning Algorithms
• Smart Contract and Smart Oracle Templates
• Digital Identity Blueprints
• Blockchain Training!

The vision for the marketplace is extremely grand, and I hope that winning “Best Brand” in 2018 will translate into a friction-less User Experience on the Aergo Marketplace!

Scaling

There are 3 main approaches to solve scalability.

1. Domain Partitioning
2. Scale “up”
3. Scale “out”

Domain Partitioning – Unlike conventional blockchain implementations, AERGO is able to fork and merge its data through branches freely. As a result the ledger can be partitioned both logically and physically through different repositories, similar to how GitHub is able to have tens of millions of repos.

Scale Out – The Scale Out strategy incorporates the AERGOFS (Aergo Filing System) which serves as a storage layer for each node’s blocks and indices. AERGOFS is a Distributed File System, a simple HTTP interface that enables access from both smart oracles on a server (such as SMS or Active Directory) or dApps on a web browser. Where the smart contracts provide smart, structured storage, AERGOFS provides unstructured data storage. It allows each node to store an unlimited number of blocks and indices and act as an “uber-node”

(AERGO smart contracts have to store locators to access files stored on AERGOFS, while I don’t see this as problematic at all, and it is in fact a great pairing, I can’t help but think back to Overledger’s (Quant Network) solution that requires no new imposed blockchains, connectors, or locators to retrieve information from chain.)

Scale Up –AERGOFS seeks to optimise a single node, scaling upward rather than horizontally. While horizontal scaling works well for large amounts of data, it doesn’t meet realistic benchmarks. With fast storage like SSD, optimizing a single node becomes very effective for everyday systems. Blocko learned this through tried and tested methods with Coinstack, which gives me good confidence over some competitors who haven’t had time to test these methods yet.

To aid “Scale Up” – AERGO nodes are equipped with an efficient networking stack and an optimized storage engine for enhanced Input/Output.AERGO networking stack provides a networking fabric able to serve a high number of nodes with complex topology in a bare metal or cloud enviornment.

AERGO Token

A seemingly simple utility token. It is intended to be the medium of exchange on the Aergo Ecosystem. As listed in the whitepaper, the tokens are for the following:

• running smart contracts
• DPOS Consensus
• payment method for Blocko’s tech support on Coinstack 4.0
• payment method for AERGO Hub
• payment method for services and assets on AERGO Marketplace
• payment method for the AERGO domain

The most interesting of the above is indeed time dependant and that is the success of the Marketplace and Hub, now that mainnet has released (15/04/19) we will begin to see growth in the ecosystem.

To be frank, the token economic model at present is rather simple. I would really like to see the full model release, which is intended to be out by Summer. Though simplicity is sometimes the best way to approach a token, I’d like some more information on staking and how node operators are selected and what the requirements are, as well as the parameters for payment. Just how imperative is the token? While it has a clear use case, I’ll be keeping an eye on the mainnet now it is live to see the impact it has.

One thing I am excited about, is how many developers will suddenly have access to smart contracts, with so many people familiar with SQL – the game changes very quickly. The fact these smart contracts are powered by AERGO token paves the way for some interesting demand for the token itself.

Aergo enterprise

Blocko also just announced that it is beginning a client migration program.

“We’ve been supporting Aergo Organization in the design and construction of the Aergo platform for a full year. After a long and intensive R&D process, we are excited to finally launch our largest product to date,” said Won-Beom Kim, founder and CEO of Blocko. “Our existing customers will be able to complete the migration program with ease and switch to our hybrid, high-performance blockchain network setup to achieve greater levels of security and scalability, while expanding their use cases.”

This effectively reduces go-to market considerably, as all of Blocko’s clients and partners will now be encouraged to migrate over to Aergo. With a list of readily available solutions that Coinstack have built for previous clients, now readily available on Aergo Enterprise, with payment available in Aergo tokens, we may see some demand for the token increase in the coming months.

Some of the services Aergo Enterprise offers:

• Simplified administration: Familiar, easy-to-integrate, one-click provisioning of custom blockchains, as well as simplified cloud system orchestration.
• Easy monitoring: Integrated with Hub Enterprise, Aergo Enterprise provides a dashboard, transaction and block history, as well as resources and asset monitoring for independent blockchains.
• Usable development kits: SQL/PL-like programming and data handling, as well as an integrated development environment for smart contracts.
• Integrated node management: Extended node management systems for more configurations and settings such as managing permissions and deleting data.
• Pre-built applications: Fully-developed applications built on Coinstack that are in use by large-scale companies for Identity Authentication, Document Management, Smart Contracts, Payments, and IoT will now be offered on Aergo Enterprise.
• Around-the-clock support: Providing the same expertise accumulated from working with large clients over the past four years.

I expect that Blocko will almost entirely focus exclusively on Aergo now, given that they aim to become the global blockchain equivalent of TCP:IP, they will likely have to. This move demonstrates their push to get all their clients to migrate over to Aergo Enterprise.

Just this month they completed the following as part of their marketing efforts, with more to come.

• Video Q&A
• Bittrex International Listing
• Upbit Listing
• Aergo 1.0 Open Source
• Mainnet Launch
• Aergo Enterprise Announcement

Overall

I am confident in Blocko and Aergo’s ability to execute at scale, and to bring on some big partners and clients. They are being perhaps dangerously ambitious, but with a clear route to market and defining differences from competitors like AERGOSQL – bringing smart contracts to 8 million SQL developers – where Solidity only has a few thousand.

I’d like more information on the token economic model, but I foresee Blocko’s ability to bring value to the Hub & Marketplace that will generate demand for the token, giving it an edge platforms like Ethereum or EOS don’t currently have.

Aergo have been one of the most consistent blockchain startups I’ve seen since their ICO, with regular activity on github & medium, powerful branding and cohesion with roadmap targets.

When they begin shipping Smart Contract templates in AERGOSQL, I think everyone will be surprised at how quick developers begin to build out the ecosystem. This is something that I personally overlooked and now I understand more, I am very excited about.

I’d like to see some more “sister network” style partnerships with other platforms, and I’d like to see some corporate level partners acting as nodes.

Predictions

Now that Upbit have listed Aergo, it probably won’t be long before it is on Bithumb and/or Huobi. With currency pairings, it’ll likely perform very well. By the end of April, we will likely see another exchange listing. While I do not think more exchanges are particularly essential, they will want to get on board with the events of the past few days, particularly Blocko’s announcement.

I expect a corporate partner like Samsung or another Tech Giant in Korea coming on board to use Aergo Enterprise and to act as node operator.

Disclaimers:

1. This article was not paid for by AERGO or Blocko and was created in my own time for personal and public benefit.
2. Most information was readily available in the business and whitepapers, and I have done my best to consolidate that with external information published since then.
3. Business practice and successes do not necessarily impact token price! An explanation will be made as to where they may in the token section. I am not responsible for token price, nor do I encourage or endorse the purchase of any token on ChainCuration.

References

https://www.aergo.io/resources
https://www.blocko.io
http://www.ciobiz.co.kr/news/article.html?id=20180828120007
https://www.marketwatch.com/press-release/blocko-collaborates-with-south-korean-government-funded-etri-on-consensus-algorithm-research-2018-11-27
https://m.news.naver.com/read.nhn?mode=LSD&mid=sec&sid1=105&oid=092&aid=0002149937
http://www.etnews.com/20180928000128