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Is this THE Blockchain Killer? CryptoTapas explores with Hedera’s CEO Mance Harmon

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HederaHashgraph-ethereum-killer

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Hedera is probably one of the most talked about projects in the blockchain and crypto space at the moment, some calling it THE blockchain killer.

Blockchain killer or not, Hedera does seem to have legs since the world’s most reputed brands are joining forces with the project. At the time of this writing, these companies have formally joined the Hedera Governing Council:

  • Boeing
  • IBM
  • TATA Telecommunications
  • Deutsche Telekom
  • DLA PIPER
  • FIS
  • Magalu
  • Nomura
  • Swisscom Blockchain
  • Swirlds (developer of the hashgraph algorithm)

A project in the works for over seven years

Dr. Leemon Baird first thought about exploring the true potential of distributed ledger systems back in 2012.  At that point, the concept started out with a simple yet ambitious thought of exploring the maximum potential of Asynchronous Byzantine Fault Tolerance (ABFT).

Carve out a piece of Cyberspace

Mance Harmon

Mance Harmon

Talking about the genesis of Hedera, Mance referred to the math problem and the desire of Dr. Baird to build a system that helps individuals carve out a piece of cyberspace to make it their own where they can interact, transact, and set rules without having to trust a third-party vendor.

That desire to solve the math problem and create a cyber sanctuary for individuals, along with years of hard work, helped Dr. Baird arrive at the hashgraph algorithm.

Nothing like this exists in the market today

Talking about how Hedera is pushing the envelope in the space, Mance exlpained how the consensus service that Hedera offers in conjunction with IBM is one of a kind.

“What we have is a platform that has very high throughput and very low latency, and fantastic security compared to the other platforms in the market,” he continued. “The way to think about the Hedera Consensus Services (HCS) is essentially providing ABFT as a service, and nothing like that exists in the market today.”

In essence, Hedera is able to offer the ABFT as a service to enterprises who can choose to keep certain information private while leveraging the interaction on the public network, all without compromising on the performance of the network and keeping the costs at a fraction of what it would have been on another network.

No forking, guaranteed

When a company invests money into building a DApp on a public network and that network then forks, splitting the resources and network strength, the company is assuming a huge risk in terms of performance and stability.

Lack of governance is a big issue in the public networks.

Hedera solves this issue by keeping the legal and technical controls with the Governing Council. “We addressed that risk by creating the legal and technical controls that eliminates the possibility of the Hedera ever forking. That’s the promise we made,” Mance affirmed.

Governance and stability by design

Unlike other projects in the space, Hedera is unifying the benefits of public networks and the security of private networks. It is, however, taking this concept a step further to avoid too much concentration of network decision-making power.

To this end, Hedera will be managed by a Governing Council. The Governing Council will ultimately have thirty-nine members. At the time of this writing, ten members have already joined the council.

Each of these members are co-owners of the organization, not just market partners. Members serve on the Governing Council for a maximum term of six years (two, three-year terms).

When all member roles are filled, Hedera is expected to have representation from eighteen market sectors and geographically diverse organizations.

“They are not just marketing partners; they are co-owners of the organization.  It’s structured as an LLC to provide liability protection and at the same time designed to be more like a not-for profit entity. There are no dividends paid to the members, for example,” Mance explained.

These members help run the nodes while setting standards for the business to operate on.  “They run the initial set of nodes and govern all the aspects of the network.  So, it’s a board-level oversight in one sense and a standards body at the same time,” Mance commented.

Working alongside regulators in an evolving environment

Hedera’s aim has always been to be compliant with the authorities every step of the way.

There have been projects that had to close shop because of SEC enforcement actions.  It is a good idea to work with the authorities before tripping any wires.

Mance said, “Our goal is for the SEC to never be surprised by anything we do.  Not just the SEC, we don’t want any regulators be surprised by anything we do.”

Built to survive 100 years

In the past three to five years alone, over 1000 projects have been considered dead.  Some of these projects were outright scams while others couldn’t keep up with the demands of the space. Projects that were once in the top fifty are now nowhere to be seen.

Hedera wants to be the exception to this predicament.

Mance says, “Our goal from the very beginning has been to build a company that is going to be around for hundred years.  The decisions you make with that as your goal, as opposed to decisions you might make if you are simply wanting to build something for a few years and cash out, they are very different decisions.”

Micro transactions can benefit enormously from a project like Hedera

Talking about some of his favorite use cases for distributed ledger technology, specifically Hedera, Mance spoke about how the gig economy is ripe for disruption so that customers and content developers stand to be big beneficiaries of the introduction of distributed ledger platforms in the space.

Micro transactions are another space that Mance is excited about.

“Every business in the world is sitting on data that could be monetized, but the friction associated with taking that data and monetizing it is huge,” says Mance.

A lot of companies choose not to touch the data at their disposal because of the hassles they have to go through to be able to use the data.  And even when the data is monetized, the cost of transaction usually outweighs the transaction value.

When the companies are able to settle payments in pennies at a fraction of the cost using auto-payment methodologies, the massive amount of data in the world could be monetized.  This could spawn a whole new industry that benefits businesses by providing intelligence, and customers by empowering them to monetize their data, which in turn brings more meaning and value to the advertising industry.

Questions explored in this exclusive interview:

How Hedera got started.

Will Hedera kill blockchain?  

Will quantum computing kill Hedera?

Best use cases for blockchain and how Hedera addresses them better than blockchain

How to get Hedera Cryptocurrency, HBAR

What’s stopping blockchain mass adoption?

Is Hedera just a copy of other blockchain projects?

And much more.

Read or listen to the interview to learn directly from Mance Harmon.

Hedera-Hashgraph-interview

CryptoTapas: Tell us about the genesis of Hedera.

Mance Harmon:

Leemon-Baird

  Dr. Leemon-Baird

Hedera started out as a math problem. It was Dr. Leemon Baird, co-founder of Hedera, who wanted to solve a very difficult math problem; this was in 2012.

Specifically, Dr. Leemon wanted to build a distributed ledger consensus algorithm that achieves the limits of what can theoretically be achieved in terms of security, known as Asynchronous Byzantine Fault Tolerance (ABFT).

He wanted to achieve the ABFT limit while achieving practical limits of the performance possible.

ABFT was well understood for three to four decades, and we have known the limits of ABFT. However, these legacy systems do not scale well.

The more systems you connect to the network, the greater are the demands and bandwidth, which limits its scalability. Because of this inherent limitation, there are no large-scale ABFT systems in the market today.

Dr. Leemon wanted to solve this problem.

He and his team worked on it from 2012 through 2015 and eventually figured it out. Today, that solution is called the hashgraph algorithm.

In late 2015, we decided that we were going to commercialize it.

We saw what Bitcoin was doing in the market. Essentially, Bitcoin was making the market ready for something like Hashgraph to enter.

It was even more exciting that Dr. Leemon had understanding of this technology even before Bitcoin became a mainstream buzzword, and right when the market was in need of an invention like Hedera.

We started out as private permissioned networks focusing on credit union industry in North America.  We were successful in that space in the first two years.

During the fall of 2017, we made the decision that we have done enough to be able to launch a public network on the hashgraph algorithm.

That’s how Hedera came to be.

It all started with this desire of Dr. Leemon to solve a math problem.

Dr. Leemon describes it as a system where “You can carve out a slice of cyberspace and invite your friends, family, and colleagues to participate in this virtual world with you to play together, work together, and buy and sell goods and services to one another without the need or requirement to have a trusted third party that mediates all of those interactions.”

CryptoTapas: How did you and Dr. Leemon come together to collaborate on Hedera?

Mance Harmon:
Dr. Leemon and I have been working together for 26 years, since 1993, when we were both young officers in the United States Air Force, on a team of five, researching machine learning, specifically reinforcement learning.

We became great friends and we have been working together ever since.

We both taught computer science at the Air Force Academy. I was a course director for cyber security at the Air Force.

We went out and did independent contracts separately, but ended up working together in 1999-2000 and started our first company in the field of identity and access management.  Since then, we have sold two companies in the identity space to Fortune 500 and private equity.

This is our third venture together.

CryptoTapas: That sort of profile is hard to find in this space. For my next question, what is your elevator pitch for Hedera?

Mance Harmon:
Unfortunately, the elevator pitch for Hedera is not short.

The world is used to databases, and there are some databases with multiple masters. What multiple masters database means is that you have the same copy of the database on multiple systems. There are algorithms that help keep all of these databases to stay in sync with one another.

The assumption has always been that a single organization is responsible for all of those master databases.

For example, Amazon has lot of multi-masters databases. They would never dream of giving Google rights to their master database in their system.

But when you take that leap of giving away the master so that anybody, even anonymous people, can copy the master database to their systems, then you are dealing with a whole new set of security concerns to address.

That is the leap that the Bitcoin blockchain took for the very first time.

The Bitcoin blockchain showed that it is possible to have multi-master database system where each master is run by a different party, and do it securely.  That is the original innovation of the Bitcoin blockchain.

What hashgraph does is takes that original concept and simply expands on it and makes it more secure.

This is what I call a Multi-Master and Multi-Party Database.

CryptoTapas: Can Bitcoin, Ethereum, and other protocols co-exist with Hedera?  Or will success of Hedera negatively impact the other protocols?

Mance Harmon:
It’s interesting.

There is a difference between a brand living on and technology persistence.

Ethernet is a great example of that. Original protocol standards for Ethernet are not what we use today.

Will blockchain as a technology continue to persist?  I don’t know. Blockchain as a brand or term used in the market very well may.

Will the Proof of Work blockchains that exist as first-generation technology continue to exist in the long-term?  I suspect not.

It is not just because of the costs associated with the technology both in terms of transaction cost and the real impact on our environment, but there is no good reason for that to continue when you have alternatives that can solve the same problems without the negative side.

I think Proof of Work blockchain will eventually go away.

Whether Bitcoin as a cryptocurrency and a brand (and for that matter Ethereum and other blockchain protocols) continue as an ongoing concern will depend on whether or not the underlying technology is able to evolve over time.

CryptoTapas: You mentioned about creating ecosystems in which individuals can carve out a space for themselves within the big Hedera system. Will these ecosystems built within Hedera be interoperable and able to interact with other networks?

Mance Harmon:
The vision that Dr. Leemon has necessarily requires a hybrid of private and public networks.  When we talk about carving out a space for yourself, it could be as simple as inviting them to a game.

It is not difficult to imagine a scenario where 20-30 people from different private networks playing a game together in an environment of very high throughput and low latency that ensures great performance.

The public network layer then helps connect these private networks as a single source of truth for all of the game assets from the private networks that all the networks are able to reference and update on the public blockchain that acts as the directory.

So, to achieve the original vision, we need this technology to be absolutely interoperable.

It will take a little while for the industry to develop standards for the inter-ledger protocols, but I absolutely expect that to happen in time.

CryptoTapas: Is it a stretch to say that you took the best of Bitcoin, Ethereum, Hyperledger protocols and improved upon them?

Mance Harmon:
It’s an interesting question because in some sense you could say that we have been able to take the best of different projects.  That’s how it would appear. The reality of it is that the technology has led us on a particular path.

What we have is a platform that has very high throughput and very low latency, and fantastic security compared to the other platforms in the market.

When you have that combination, then the question becomes, ‘What is the sweet spot of services you can provide?’

The sweet spot turns out to be the Hedera Consensus services we have just announced this summer in conjunction with IBM.

We jointly published a whitepaper with IBM.

The way to think about the Hedera Consensus Services (HCS) is essentially providing ABFT as a service, and nothing like that exists in the market today. 

Another way to think about it is, it’s a twitter service in some sense of distributed consensus.  Developers can build applications (DApps) and submit transactions with a topic (like a hashtag).

You can have a lot of client software submitting with a topic name.  The consensus service takes all of those and puts them into consensus order using the public network (Hedera).  Developers can then filter the stream using the topic name.

That service makes it possible to unify the best of public and private networks.

You can have the advantages (like security and privacy) of a private network and avoid the downside of a public network, like cost and time involved in running the smart contracts; Hedera consensus brings the best of both networks to one single platform.

We did not look at Hyperledger, Ethereum, or Bitcoin to pick the best features, absolutely not.

What we did is we started out with our principles first to realize the potential of ABFT, and that led us to build a system that turned out to solve a lot more than what we set out to.

Hedera Consensus Service caters to the enterprise needs of keeping certain information private while still leveraging the trust from a public network, without compromising the performance required and keeping the costs at a fraction of what it would have been on a public network.

CryptoTapas: Do you think Hedera is quantum computing-resistant?

Mance Harmon:
There are two parts to that answer.

One is about the consensus algorithm itself.  Hashgraph as a consensus algorithm is not susceptible to future quantum computers, in sort of breaking the ABFT properties.  So, there is no problem with quantum computers in terms of the hashgraph ABFT consensus mechanism.

However, it is the case when you create the transactions using cryptography. So, when it comes to the crypto side of the equation, we designed hashgraph such that the signature technology can be swapped out for quantum computing secure signatures in the future.  That is easy to do since we have built our technology to accommodate for that possibility.

For the hashing side, we already use SHA384, which is expected to be secure against quantum attack.

CryptoTapas: What about the impact of 5G networks on Hedera?

Mance Harmon:
When the node software itself is running on 5G, it won’t impact the network of Hedera. From a security perspective, our network stack sits on top of the Internet stack. Our software makes API calls to the operating system, and as long as the operating system stack (TCP/IP) can handle the 5G, it would be transparent to us. We wouldn’t even know that the software was running on a 5G because of how high-up we are on the stack hierarchy.

CryptoTapas: What are your two favorite use cases for Hedera?

Mance Harmon:
Generally speaking, the whole gig economy is ripe for disruption.

For instance, when you think about platforms matching services with service providers like Uber or Fiverr, etc.

These are effectively, centralized systems that take bids and asks in the most general sense.  Someone is offering a service or product of value, and others in the market are wanting to consume those services or products.

That could be distributed.

There is a lot of value to the community and to the world.  The amount of money that these service providers, for example Uber, takes off of the table from drivers that they could have received if the central component was taken out, is substantial.

That’s what our economy is moving to.

Hedera as a platform to support these kinds of economies is ideal because one thing we have not talked about is how fair hashgraph is.

Hashgraph, for the first time, makes it possible to know for sure that a single node in the network is not unduly influencing what the network as a whole will agree on or what the right order of a transaction is.

For instance, with Bitcoin, miners are collecting all the transactions and putting those transactions into a block, and miners can individually decide on the order of those transactions.

A single miner could dictate the order of transactions in the network. That’s not fair.

Most protocols in the market today each have this problem manifesting in a different way.  All lack fairness.

Hashgraph’s fairness aspect is important if you are building an economy for a matching platform where bids and asks are flowing in and no single party can prevent someone from getting into the network.

CryptoTapas: In your example you referred to Uber. However, Uber charges 20% from drivers because it is providing a platform for people to trust.  If something goes wrong, I know who to go after.  In a decentralized economy where there is no ‘central authority’, what happens when something goes wrong?

Mance Harmon:
What do you do in terms of recourse?

If you take each of these entities and break them down into their individual components, you will see that they each have a very separate function.

When the technology stack matures over time, these individual components can be specialized so that companies can spring up to provide services to address that particular component.

This gives individuals the ability to choose from the best of vendors for various components of the service.

CryptoTapas: What is your second favorite use case?

Mance Harmon:
I think micro transactions. The ability to have Alice pay Bob a fraction of a cent and do so economically is a capability that will change business models and the way the Internet works.

I don’t know how long it will take. It’s not a market that necessarily exists today, but I can see a lot of value in having that kind of capability.

For example, if we look at Wikipedia, its business model depends on charitable contributions. Instead of asking for donations, we could have a system where anyone who browses Wikipedia, for each article they read, they pay out a penny automatically.

In that case, Wikipedia will have an alternate source of income, which could be far better than relying on charitable contributions.

Users may not mind paying a penny for the value they consume.

Another use case could be that, in a business-to-business transaction, every business in the world is sitting on data that could be monetized, but the friction associated with taking that data and monetizing it is huge.

If we can simply make a micro payments gateway that sits on these databases, every time a particular data is consumed then an automatic payment is processed without any third-party intervention.

The transaction can happen in real time; value transfer can happen in real time and without any friction.

CryptoTapas: Was there a specific reason why Hedera was not made available to the general public through an ICO model?

Mance Harmon:
We focused on the SEC and SEC compliance in taking the coins to market. From the very beginning we understood that for this technology to go mainstream, we had to work with the regulators to help them understand the function of Hbars and why we do not believe they are securities

We have been very conservative in our approach to the market.  We started talking to SEC for about 18 months ago and kept the ongoing dialogue going with SEC since the beginning of 2018.

My goal is for the SEC to never be surprised by anything we do.  Not just SEC, we don’t want any regulators be surprised by anything we do.

That meant that when we raised money through SAFT (Simple Agreements for Future Tokens), we had to do so assuming that SAFT itself was a security instrument and that then implied that we had to follow Reg D rules.  This required us to adhere to the accredited investor standards.

CryptoTapas: Are there any opportunities for people to get hands on Hedera without buying them?

Mance Harmon:
We have had, in December of last year, our first round of community testing, which presented the opportunity to earn HBAR (our native coin). We closed that round and opened a second round of community testing in May of this year. That’s been paused at this point.

CryptoTapas:Based on the information from the Hedera coin economics whitepaper, you raised about 124 million dollars, and using the last SAFT rate of 12 cents per coin, Hedera is a 6 billion dollar (factoring 50 billion total supply) company from the get-go.   What kind of responsibility does that put on you being a billion dollar company in the blockchain space?

Mance Harmon:
I don’t even think about the valuation of the company in those terms.

Our goal from the very beginning has been to build a company that is going to be around for 100 years.

The decisions you make towards that as your goal as opposed to decisions you might make if you are simply wanting to build something for a few years and cash out, they are very different decisions.

And you can see those decisions at every step of our journey.

From our regulatory posture, to decisions we made personally in lockup position of our coins and taking a leadership role to lead by example and delaying more than three quarters of our coin release and delaying our compensation coins until 2020, these kinds of decisions reflect our long-term perspective.

Hedera Tokenomics
Hedera Hashgraph Coin Distribution

CryptoTapas: What are the two big hurdles coming the way of blockchain adoption?

Mance Harmon:
When we started Hedera we talked about four big hurdles in blockchain adoption. We put these hurdles into two categories; one is tech and another is governance/stability.

On the tech side, performance and security are the hindrances that avoided mainstream adoption.  We checked both those boxes with the hashgraph algorithm itself.  When we open access to our the platform on September 16th, we will be launching the beta version of the product with performance severely throttled at 10,000 transactions per second for cryptocurrency, and 10 transactions per second for smart contracts and file storage. That throttled performance is still fantastic compared to what we have in the market.  From a latency perspective, we are using ABFT and you cannot do better than that.

On the governance and stability of the platform, if you are a business manager thinking to spend 3 million dollars to build a DApp on a public network, that’s going to be important for your business in some way. Then you notice that these public networks are quite frequently forking into competing networks and competing cryptocurrencies, and you understand the technical and market implications that it might have on your product, it represents risk.

You have to address that risk.

We addressed that risk by creating legal and technical controls that eliminates the possibility of Hedera ever forking. That’s the promise we made.

In our model, we designed governance such that it represents the entire market use cases on a global basis, and it doesn’t stagnate, it changes over time.

We have the Hedera Governing Council, which will ultimately have 39 global blue-chip organizations. Each organization represents the very best in their field in terms of expertise and size in their industry.

We want representation from 18 market sectors, and we want them to be geo-distributed.

Their term is limited.  They cannot stay as governing council members forever; they have a maximum of six years (two three-year terms) and then they have to rotate out.

We have announced our first 10 council members. Boeing, IBM, TATA Communications, Deutsche Telekom, DLA PIPER, FIS, Magalu, Nomura, Swisscom Blockchain, and Swirlds.

This is a company that members of other corporations are a member of.  They are not just marketing partners; they are co-owners of the organization.  It’s structured as an LLC to provide liability protection and at the same time designed to be more like a not-for profit entity. There are no dividends paid to the members, for example.

They run the initial set of nodes and help govern all the aspects of the network.  So, it’s a board-level oversight in one sense and a standards body at the same time.

We encourage people to keep an eye on all the communication we release on Hedera.com or join our Telegram group.

What you will see in the next 12 months is the focus on building out the council and announcement of the solutions we bring to the market.

CryptoTapas: Thank you very much for giving this opportunity, it was a pleasure talking to you.
___________________________________________________________________________
Thank you for reading the article.

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Interview

“Coda is world’s lightest Blockchain,” an exclusive interview with Emre Tekisalp of Coda Protocol

Published

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Coda Protocol Interview

What happens when the miners decide to pull out their support of a public network? What
happens when nodes find a project not-profitable and they abandon the project?

It makes the blockchain network weak and vulnerable to attacks. In theory, all public blockchain
networks that rely on network strength to sustain face this existential threat.

Coda Protocol “addresses blockchain’s scalability problem at its source by utilizing recursive zk-
SNARKs to ensure the blockchain never exceeds the size of a few tweets, making it the world’s
lightest blockchain.”

Coda wants to provide a viable scalable solution without sacrificing the decentralized nature of
blockchain.

We asked Emre Tekisalp, Director of Business Development at O(1) Labs, the team behind
Coda Protocol, a lot of questions about Coda Protocol and his answers are below for anyone
wanting to learn about Coda Protocol.

Emre spent two years at Coinbase’s Business Development team where he led a number of strategic programs during a period when the company grew 10x. Before Coinbase, Emre was a Product Manager at Intel’s wearable devices group. Originally from Istanbul, Turkey, Emre has an MBA degree from Columbia University.

Q&A with CryptoTapas

In a world of 1000’s of blockchain projects and protocols, how do you envision Coda
making its mark?

Coda addresses blockchain’s scalability problem at its source by utilizing recursive zk-SNARKs
to ensure the blockchain never exceeds the size of a few tweets, making it the world’s lightest
blockchain.

Legacy blockchains like Bitcoin and Ethereum are incredibly heavy chains from a data
perspective. The heavier the chain, the greater the data processing requirements placed on
nodes, which limits the number of nodes eligible to participate. As the pool of potential nodes
diminishes, decentralization declines, jeopardizing the strength of the network.

Decentralization is not a sacrifice blockchains should be willing to make, yet this is
precisely the danger facing blockchains that focus solely on scalability. Coda confronts this
problem by using recursive zk-SNARKs to encapsulate the entire history of the chain in a single,
lightweight zero-knowledge proof.

To ensure sufficient decentralization upon mainnet launch this summer, we launched Genesis, a
token program to prepare members of our community to be block producers. With more than
500 users joining our testnet, Coda is now one of the largest layer 1 testnets by peer count. It’s
the strength of our technology and commitment to our community that differentiates us from
other protocols.

What would you say to convince the team of a project that is already on another protocol,
say Ethereum or Tron, to move to Coda?

Coda is designed for developers and for projects to use it as an easy tool to enable value
exchange in their existing apps. It is incredibly lightweight and prioritizes decentralization and
security. Already more than half of all web traffic can be attributed to mobile, and so it is
absurd to believe any blockchain system that does not work on mobile will be able to meet
the needs of the increasingly mobile digital economy. Coda’s inclusive and lightweight approach
will allow the protocol to be useful for the existing mobile internet ecosystem.

Who is behind o1Labs.org? How big of a team is working on Coda?

Emre Tekisalp founder of coda protocolCo-founders Izaak Meckler and Evan Shapiro created Coda with the goal of solving the
scalability problems that have plagued blockchain since its inception. We now have 28 full-time employees and hundreds of dedicated community members. The first cohort of validator teams participating in our Genesis program includes Bison Trails, Figment Networks, dsrv labs, and Sparkpool.

Coda Protocol Team

[CryptoTapas Side note: Bison Trails is a Libra Network member]

How does SNARKs make Coda better than other projects, can you explain in a way that a
non-blockchainer can understand?

The basic idea of zk-SNARKs is that they allow one to verify the result of any computation
without having to redo or acquire any detailed information about said computation. For example
you can prove “you are who you say you are” to a website without sharing any sensitive
information like a password. Coda uses zk-SNARKs to enable anyone to easily connect to the
blockchain from any device just by downloading a couple kilobytes of data. In contrast,
traditional blockchains like Bitcoin require expensive desktop machines to download hundreds
of gigabytes over many hours.

In the whitepaper, we read “The resulting consensus protocol is consistent and
responsive as long as at most 1/2 of the mining power is malicious,” can you elaborate
what this means?

In order to function, blockchains require all nodes connected to the network to periodically come
to consensus regarding the latest state of the world. The way this consensus is achieved varies
from blockchain to blockchain.

Coda Consensus

Bitcoin, for example, also requires at least half of the nodes participating in consensus to stay
honest. Unlike Bitcoin, which is a Proof-of-Work network, most Proof-of-Stake networks like
Cosmos or EOS require at least two-thirds of the nodes to stay honest. This higher requirement
makes such networks less resistant to attacks. The specific consensus mechanism we use in
Coda, a variant of Ouroboros, allows Coda to stay secure as long as half of the nodes are
honest, similar to Bitcoin. This is one of the factors that allows Coda to be more decentralized
than other blockchains out there.

Will there be a token sale? What will be the maximum supply of Coda?

We have not disclosed any plans for a token sale before the mainnet release of Coda. Coda will
not have a maximum supply, as it will have ongoing inflation per our Economic Whitepaper. At
mainnet launch, Coda will have an initial supply of 1 billion tokens.

Can non-technical members become Genesis Founding members? How many of your
1000 slots are still available?

Absolutely! We see Coda as a decentralized network and currency built by its participants, and
this includes users with many different sets of skills. The majority of the 1,000 Genesis
Founding Member slots are still open, so hop on over to our website to start getting active on
our testnet.

If you were to meet all of your goals, what would Coda look like in 5 years? What kind of
clients would it have on board and what kind of social impact does Coda have in the
blockchain space?

Coda is built first and foremost for developers.

In 5 years we see Coda enabling internet users to exchange value from any app. This will allow
any developer and business owner to easily accept money and new novel types of tokens from
anyone around the world from any device. We recognize that such a future is not built just by
one company. This is why we emphasize inclusivity above all else and are encouraging people
of all backgrounds to participate at this early stage through our Genesis program. Only by
supporting diverse participation today can we be sure the system will be equipped to serve the
diverse, global population of internet users.

CryptoTapas wishes all the best to Coda Protocol.

Thank you for reading and sharing this article and if you have spare satoshis lying around – consider donating.

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Interview

“The Asensys system delivers 1,000 times the throughput and 2,000 times the capacity of the Bitcoin and Ethereum networks” Says Dr. Brendon Wang, founder of Asensys

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Asensys AMA with CryptoTapas

There are over 5100 crypto projects that are listed on CoinMarketCap. This is not a complete list though, there are 1000s of other blockchain/crypto projects that are out there that are not listed on CMC yet for various reasons (one big one is they may not have their own cryptocurrency to trade). 

With 1000s of Crypto projects already existing – it is difficult to get excited about new projects.  However, when you hear about a project that is conceived and built by a Lead Researcher who lead the team at Microsoft on Distributed Systems, you want to learn more.  

Brendon WangDr. Brendon (JiaPing) Wang, along with Co-Founders Minghao Pan and David (Xiaobing) Zhang, has conceived of an idea that could increase the current transaction speeds by 1000s of times that of Bitcoin or Ethereum. The exciting part about Asensys is its performance increases with the user base. The more users who use the network the faster the network becomes.

This counterintuitive novelty could give Asensys the edge in the blockchain space.  But, is it all hype or is there mettle in this project?

We wanted to find out directly from the founder.  This exclusive Q&A with Dr. Brendon Wang is geared to provide great insight to the reader about Asensys.

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CryptoTapas Q&A

1) How would you describe Asensys to an already confused novice with 2000 odd projects in the market?  What sets it apart?

To understand Asensys, you first need to understand the problem we are solving. Bitcoin revolutionized finance by introducing the first peer-to-peer electronic cash system. Its brilliance lies in the fact that two individuals can exchange value without verification from a third party intermediary, upending the system we’ve relied on for centuries that gave undue power to trusted, centralized entities like banks and governments to validate transactions and provide legitimacy to currency itself. The way Bitcoin circumvents the need for trusted, centralized validators is by outsourcing verification to a decentralized web of computers, called nodes. This means that every transaction and action on the network needs to be broadcast and replicated by all nodes, a process that takes time—too much time to meet the needs of the fast-paced digital economy. This issue of how Bitcoin and all blockchain networks can scale has been one of the biggest roadblocks to adoption of cryptocurrency and blockchain systems to-date.

One obvious way to improve the speed at which blockchain networks can process transactions is to decrease decentralization. The more centralized a system, the fewer nodes need to be communicated with to replicate the action. However, decreasing decentralization compromises the security of the network, making it more vulnerable to a 51% attack—when a majority of nodes collude against the whole to update the chain of transactions in their own interests (AKA: cheating). Incentives are designed to deter nodes from weakening the network, as they stand to benefit from a fully-functioning blockchain, but most members of the crypto community believe weakening security is a bad idea. Furthermore, decreasing decentralization is contrary to the spirit of cryptocurrency that drew so many of us to cryptocurrency in the first place. 

What we’ve done with Asensys is introduce a way to dramatically reduce over-redundant actions across the network (the main culprit contributing to blockchain latency). Our novel solution utilizes Asynchronous Consensus Zones to essentially “divide and conquer” all intra-network tasks into “mini” networks, which are independent and parallel zones.

Dividing workload produces substantial performance lift for the entire network, but it raises two problems: cross-zone transaction handling, which is when a user in one zone transacts with a user in a different zone, and mining power dilution. Asensys addresses the efficiency issue of cross-zone transactions with eventual atomicity and the security threat of mining power dilution with Chu-ko-nu mining.

Eventual atomicity enables transactions to be verified and executed in the zone where the transaction’s first state was initiated. Groups of operations are then conveyed to other zones in relay transactions, but the data pertaining to the transaction remains in the zone in which the initial state resided.

Chu-ko-nu mining protects each zone and the entire network against a 51% attack by incentivizing miners to create multiple blocks for different zones with a single nonce, which enforces even distribution of mining power across zones.

2) Most projects do well in a test environment but fail miserably when it comes to real world application – what factors contribute to this variance and how is Asensys going to circumvent these very issues?

We have conducted an in-house experiment to simulate how Asensys will scale as more users are added to the network and greater capacity and throughput are required. The results demonstrated that performance by the Asensys protocol increases proportionately to the community size. This means that as the user base grows, Asensys becomes even more efficient at processing transactions. In a test including 1,200 virtual machines worldwide to support 48,000 nodes, the Asensys system delivers 1,000 times the throughput and 2,000 times the capacity of the Bitcoin and Ethereum networks. The below graphs are from our whitepaper.”

Linear scaling

cross zone transactions

3) Your claims are in line with companies like Credits, Hedera Hashgraph, etc., all of which have raised substantial capital to fund their projects.  How big is your team to gain traction for Asensys and how are you going to fund it?

I lead a global team working from the United States, China, and Germany. Co-Founders Minghao Pan and David (Xiaobing) Zhang are based in Frankfurt and Shanghai, respectively. Michelle Chuang leads Audience Engagement and Customer Experience for Asensys. She comes to us with over 20 years of experience in marketing and customer engagement and has led key initiatives for companies such as Starbucks, Chevron and Staples Inc. We have funding from angel investors who are also high-profile leaders in technology, news that we will be [releasing] very soon.

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4) Will you have your native currency on Asensys?

Asensys will have its own currency just like Bitcoin and Ethereum to incentivize miners to add blocks of transactions to the chain. Ultimately, however, Asensys intends to be the underlying system powering a decentralized web of applications, each capable of issuing their own tokens.

5) Is your network designed to support micro transactions, and will it be blockchain platform (bitcoin/ethereum/ripple/etc.,) agnostic? 

Asensys is its own infrastructure layer, distinct from Bitcoin, Ehtereum, Ripple, etc.

6) How does Asensys’s unlimited scalability translate to a real world business use case, can you give an example that can be understood by a non-technical business person?

Asensys will be the system powering the decentralized web, which will be comprised of dapps for entertainment, finance, healthcare, e-commerce, education, and more. Just as developers can build on Ethereum, they will be able to build on Asensys without concern for its capacity to scale as the number of users grows. Asensys has a programming language, Parallel Relayed Execution Architecture Language (PREAL), specifically designed for blockchain systems and based on asynchronous consensus zones (just like nVidia has CUDA language to GPU programming). PREAL is based on a functional programming model that allows developers to describe transaction logic without concerning themselves with the underlying parallel blockchain system. 

7) We only saw Academy research reference on your site, is there a white-paper or document that describes Asensys and contrasts it with existing projects?

If you’d like to learn more, please refer to our whitepaper, which describes the details of our system in great detail. This research was also presented at the prestigious NSDI’19 conference. We are continuing to add to our website and build our community. Feel free to follow us on LinkedIN and Twitter channels for updates on news and developments:

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IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

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A Crypto Crimes Database Is Here, and It’s On to Something

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Crypto Crimes regulations

If you have ever seen crime shows from the 90s or early 2000s, you inevitably saw a frustrated detective wring his hands and say, “there is no record of the crimes from the other state.”

Even to this day, a national crime database is not a thing in many countries.

In the United States, there is no simple search system to scoop records from national, state, county, and federal databases. These databases operate on a different search parameter.

However, blockchain and crypto space may be able to circumvent the painful lessons from this lack of a single-source reference.

Murphy & McGonigle, a financial services law firm with a focus on blockchain and crypto litigation, has built a database to act as a single-source reference for specific case laws, verdicts, and fact patterns.

Blockchain Litigations Expected to Rise

Daniel Payne, Murphy & McGonigle

              Daniel Payne

As more and more companies are now venturing into the blockchain space, Daniel Payne, a shareholder in Murphy & McGonigle’s FinTech & Blockchain Practice expects an uptick in the number of cases in the space and for the relevance of the database to be more prominent. “As the economy drives toward a blockchain future, we think the litigations in the space will follow,” Daniel said.

The database tracks the trend line of litigations in the space. For instance, the 2017 and 2018 trend line shows a massive increase in blockchain litigations, which has subdued in 2019 as illegal and unauthorized ICO’s died down.

According to a report by Murphy & McGonigle, securities-related fraud lead the litigation list, while Texas leads the charts for the most number of blockchain-related litigations in the US. The report also notes that “the SEC issued a warning that it has put market participants on notice and is now focusing on non-fraud violations.”


Comprehensive Search Functionality

CryptoTapas had the opportunity to preview the Blockchain Litigation Database with Daniel Payne. The search criteria are quite comprehensive, with options to search for a specific case by plaintiff, lawyer, code, verdict, or any number of parameters. All the charts and statistics on the database are hyperlinked, helping to take the users straight to the details of whatever information interests them, depending on their search.

The database lets users narrow down their searches to the minutiae of a specific type of complaint. For example, if you want to see only criminal cases within a broad category, you can do that. You can further narrow down the search to a particular jurisdiction. You can even find cases by law firm or attorney. “One interesting aspect of the database is it helps you find the law firms that dealt with specific case types,” said Daniel. “One of the interesting aspects is that a particular attorney in Florida has been very active in finding plaintiffs to file a specific type of litigations.”

“Our database helps tie the incidents together that lead to a case,” Daniel said. “A case is otherwise just a case; however, learning about the incidents helps us advise our clients so that they don’t fall into the same pitfalls.”

Bitcoin and the Blockchain Litigation Database Have Common Roots

The idea behind the database came from the mortgage litigations the firm dealt with during the 2008 financial crisis. To help the clients they represented, Murphy & McGonigle started tracking all the mortgage litigation cases, whether their clients were involved or not. This database gave them the edge in terms of finding case laws and rulings to leverage in their cases.

The utility that the firm drew from tracking mortgage litigations sowed the seeds for the Blockchain Litigation Database. Bitcoin was also born during the recession, which was primarily caused by the subprime mortgage crisis.



Smart Contracts Are Legally Binding

“Smart contracts can absolutely be legally binding, and because of that, parties entering into smart contracts need to be careful,” Daniel said. “They should consider getting the legal advice they need before entering the contract.”

All the aspects of a legally binding contract are present in a smart contract. For instance, an offer, conditions, an acceptance, and an execution are all part of the smart contract’s protocol, and as such, they can be just as binding as any other contract.

“Parties should be aware of the ramifications of entering into a smart contract before they enter into them,” warned Daniel.

Education Is Needed in the Space

“I do not think that the attorneys or the courts have the full understanding of this new technology necessary to get questions right that are being presented to them in every case,” Daniel said. “However, we have seen that many of the verdicts on the cases we are tracking are absolutely correct.”

Daniel said that there is a need to educate the individuals working in the blockchain space, especially in terms of the law. “We have seen instances where failure to really understand the technology has led to the decisions that we question,” Daniel clarified.

There is no one to blame here because this technology is so new that many people do not have the required understanding. This lack of understanding is part of the growing pains that any new industry goes through. It is part of the evolution.

“Many of the undertakings of the companies within this space fall within the purview of the existing laws, while few specific aspects need some updates,” Daniel said.

Talking about the efforts made in the space by the blockchain community, Daniel said, “I am happy with the efforts by the blockchain communities in educating the Congress so that they have the background necessary for dealing with the issues that come before them.”

The database is not available for public viewing, but they do offer subscriptions for those who want access.




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IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

About the author

RK Reddy holds two Masters degrees, one in Accounting and another in Business Administration with over 15 years of experience in the financial services industry.

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