As society become increasingly digital, financial services providers are looking to offer customers the same services to which they’re accustomed, but in a more efficient, secure, and cost effective way. Blockchain’s conceptual framework and underlying code is useful for a variety of financial processes because of the potential it has to give companies a secure, digital alternative to banking processes that are typically bureaucratic, time-consuming, paper-heavy, and expensive.
Blockchain is essentially a global public ledger capable of automatically recording and verifying a high volume of digital transactions, regardless of location. Essentially, it’s a shared database populated with entries that must be confirmed and encrypted. In practical terms, this means that all nodes run on the same software, have a local copy of the whole database, and constantly talk to each other to propagate data and validate it. But what’s unique about this database is that every update is final, nobody can tamper with it. Since blockchain operates through a decentralized platform requiring no central supervision, makes it resistant to fraud.
In fact, Bitcoin is only one of several hundred applications that use blockchain technology today. Blockchain technology has applicability to many business areas including government, healthcare, education, manufacturing, energy and supply chain,” according to Gartner’s blockchain trend insight report, released earlier this year. The firm’s report also predicted that “by 2030, the business value added by blockchain will grow to $3.1 trillion.”
Following the Bitcoin, another technology entered the market- Ethereum. At its simplest, Ethereum is an open software platform based on blockchain technology that enables developers to build and deploy decentralized applications. Like Bitcoin, Ethereum is a distributed public blockchain network. The main difference between the two is that Ethreum is able to record other items such as loans, contracts or other currencies. . While the Bitcoin blockchain is used to track ownership of digital currency (bitcoins), the Ethereum blockchain focuses on running the programming code of any decentralized application.
“One of the things that really catalyzed the [cryptocurrency] market last year was actually that ethereum, in particular, kind of got to a place where you could build apps on top of it,” he said. “You could issue new tokens on top of it; you could create new kinds of financial contracts, using the smart contracts technology,” Jeremy Allaire, CEO and co-founder of fintech company Circle.
On May 2017, the China Center for Information Industry Development (CCID), a research unit under the country’s industrial ministry, officially launched its monthly ratings index (link in Chinese) on 28 crypto coins and the blockchains behind them. The CCID said the index is based on three criteria, technology, application, and innovation, but didn’t publish its methodology. Ethereum is the top-ranked crypto in the first issue of its ratings, while bitcoin only came in at 13th place.
The latest breakthrough technology called “branched pipeline” developed by a group of enthusiasts from New Zealand brings revolution to the world of cryptocurrencies. A new cryptocurrency called Cryum introduces an entirely new technology and generation of cryptocurrency.
MIT researchers have developed a new cryptocurrency that drastically reduces the data users need to join the network and verify transactions — by up to 99 percent compared to today’s popular cryptocurrencies. This means a much more scalable network.
MIT researchers develop Vault, a faster, more efficient cryptocurrency
Cryptocurrencies, such as the popular Bitcoin, are networks built on the blockchain, a financial ledger formatted in a sequence of individual blocks, each containing transaction data. These networks are decentralized, meaning there are no banks or organizations to manage funds and balances, so users join forces to store and verify the transactions.
But decentralization leads to a scalability problem. To join a cryptocurrency, new users must download and store all transaction data from hundreds of thousands of individual blocks. They must also store these data to use the service and help verify transactions. This makes the process slow or computationally impractical for some.
In a paper being presented at the Network and Distributed System Security Symposium next month, the MIT researchers introduce Vault, a cryptocurrency that lets users join the network by downloading only a fraction of the total transaction data. It also incorporates techniques that delete empty accounts that take up space, and enables verifications using only the most recent transaction data that are divided and shared across the network, minimizing an individual user’s data storage and processing requirements.
In experiments, Vault reduced the bandwidth for joining its network by 99 percent compared to Bitcoin and 90 percent compared to Ethereum, which is considered one of today’s most efficient cryptocurrencies. Importantly, Vault still ensures that all nodes validate all transactions, providing tight security equal to its existing counterparts. “Currently there are a lot of cryptocurrencies, but they’re hitting bottlenecks related to joining the system as a new user and to storage. The broad goal here is to enable cryptocurrencies to scale well for more and more users,” says co-author Derek Leung, a graduate student in the Computer Science and Artificial Intelligence Laboratory (CSAIL).
Vaulting over blocks
Each block in a cryptocurrency network contains a timestamp, its location in the blockchain, and fixed-length string of numbers and letters, called a “hash,” that’s basically the block’s identification. Each new block contains the hash of the previous block in the blockchain. Blocks in Vault also contain up to 10,000 transactions — or 10 megabytes of data — that must all be verified by users. The structure of the blockchain and, in particular, the chain of hashes, ensures that an adversary cannot hack the blocks without detection.
New users join cryptocurrency networks, or “bootstrap,” by downloading all past transaction data to ensure they’re secure and up to date. To join Bitcoin last year, for instance, a user would download 500,000 blocks totaling about 150 gigabytes. Users must also store all account balances to help verify new users and ensure users have enough funds to complete transactions. Storage requirements are becoming substantial, as Bitcoin expands beyond 22 million accounts.
The researchers built their system on top of a new cryptocurrency network called Algorand — invented by Silvio Micali, the Ford Professor of Engineering at MIT — that’s secure, decentralized, and more scalable than other cryptocurrencies.
With traditional cryptocurrencies, users compete to solve equations that validate blocks, with the first to solve the equations receiving funds. As the network scales, this slows down transaction processing times. Algorand uses a “proof-of-stake” concept to more efficiently verify blocks and better enable new users join. For every block, a representative verification “committee” is selected. Users with more money — or stake — in the network have higher probability of being selected. To join the network, users verify each certificate, not every transaction.
But each block holds some key information to validate the certificate immediately ahead of it, meaning new users must start with the first block in the chain, along with its certificate, and sequentially validate each one in order, which can be time-consuming. To speed things up, the researchers give each new certificate verification information based on a block a few hundred or 1,000 blocks behind it — called a “breadcrumb.” When a new user joins, they match the breadcrumb of an early block to a breadcrumb 1,000 blocks ahead. That breadcrumb can be matched to another breadcrumb 1,000 blocks ahead, and so on.
“The paper title is a pun,” Leung says. “A vault is a place where you can store money, but the blockchain also lets you ‘vault’ over blocks when joining a network. When I’m bootstrapping, I only need a block from way in the past to verify a block way in the future. I can skip over all blocks in between, which saves us a lot of bandwidth.”
Divide and discard
To reduce data storage requirements, the researchers designed Vault with a novel “sharding” scheme. The technique divides transaction data into smaller portions — or shards — that it shares across the network, so individual users only have to process small amounts of data to verify transactions. To implement sharing in a secure way, Vault uses a well-known data structure called a binary Merkle tree. In binary trees, a single top node branches off into two “children” nodes, and those two nodes each break into two children nodes, and so on.
In Merkle trees, the top node contains a single hash, called a root hash. But the tree is constructed from the bottom, up. The tree combines each pair of children hashes along the bottom to form their parent hash. It repeats that process up the tree, assigning a parent node from each pair of children nodes, until it combines everything into the root hash. In cryptocurrencies, the top node contains a hash of a single block. Each bottom node contains a hash that signifies the balance information about one account involved in one transaction in the block. The balance hash and block hash are tied together.
To verify any one transaction, the network combines the two children nodes to get the parent node hash. It repeats that process working up the tree. If the final combined hash matches the root hash of the block, the transaction can be verified. But with traditional cryptocurrencies, users must store the entire tree structure.
With Vault, the researchers divide the Merkle tree into separate shards assigned to separate groups of users. Each user account only ever stores the balances of the accounts in its assigned shard, as well as root hashes. The trick is having all users store one layer of nodes that cuts across the entire Merkle tree. When a user needs to verify a transaction from outside of their shard, they trace a path to that common layer. From that common layer, they can determine the balance of the account outside their shard, and continue validation normally. “Each shard of the network is responsible for storing a smaller slice of a big data structure, but this small slice allows users to verify transactions from all other parts of network,” Leung says.
Additionally, the researchers designed a novel scheme that recognizes and discards from a user’s assigned shard accounts that have had zero balances for a certain length of time. Other cryptocurrencies keep all empty accounts, which increase data storage requirements while serving no real purpose, as they don’t need verification. When users store account data in Vault, they ignore those old, empty accounts
Cryum Network Project LLC. Introduces a technology that is able to transfer funds across continents safely, quickly, anonymously and free of charge. Our ambition was to create a real cryptocurrency based on a new technology that will carry all attributes of a cryptocurrency, except that all transactions will be processed instantly, without fees and without consuming additional energy.
Cryum is engineered according to the branched pipeline technology which has features that typical blockchain cryptocurrencies can’t compete with. It provides a smart and innovative decentralized system technology for managing any kind of digital asset. It’s robust, secure, scalable, independent and, most importantly, completely anonymous. Essentially, Cryum allows instant transactions with average payment settlement not exceeding 2 seconds. It defines new ledger rules that can process thousands of transactions at once and is approximately 310 times faster than traditional cryptocurrencies.
Cryum also takes additional steps to provide protective security measures. It goes without saying that all data that travels or is stored across the network is fully dependent on each other and cannot be changed after storing. The result is permanently stored and cannot be reversed even by a 51% computing power as we know from Bitcoin. The Cryum protocol is designed to never rely on the honesty of its users, unlike blockchain technology.
Cryum offers a new alternative to slow, overpriced transactions and resource demanding mining of first cryptocurrencies that use blockchain technology. The group hopes this technology will start a new trend and improves the concept and use of cryptocurrencies as we know them.
ING releases new blockchain breakthrough: Bulletproofs
ING’s blockchain team has announced its newest cryptographic blockchain development: Bulletproofs. The code is an extension to previous releases that aimed to improve data privacy within distributed ledgers: zero-knowledge range proof (ZKRP) and zero-knowledge set membership (ZKSM).
Launched in 2017, ZKRP enabled numerical data to be validated within a number range. For example, a mortgage applicant could prove that their salary sits within a certain range without revealing the exact figure. A year later, ING took the solution a step further and introduced ZKSM, which goes beyond numerical data to include other types of information, like locations and names. This made the new code, ZKSM, more powerful. For instance, banks could validate that a new client lives in a country that belongs to the European Union, without revealing the country. Simply put, this allows for information to be shared without revealing contextual details.
ING’s newest release, Bulletproofs, is an implementation of research carried out by Bünz et al at Stanford, UCL and Blockstream. The solution is faster than previous zero-knowledge proofs, designed to keep information on a ledger private. Another improvement is that it no longer requires a trusted setup.
“Usually, zero-knowledge solutions require a trusted setup. This means that the secret value is known by the creator of the setup parameters and can be used to the creator’s advantage. It’s one of the reasons why currently there are limited cases of zero-knowledge proofs in production,” explained Mariana Gomez de la Villa, global head of ING’s blockchain programme. “Because Bulletproofs don’t rely on a trusted setup, parameters can be generated without a secret value, providing a higher degree of trust for all the users on the blockchain.”
Bulletproofs code is open-source, which means that other interested parties in the development community are able to use, access and even contribute to the solution.
Photonics Bitcoin Mining Tech
In Bitcoin, transactions are recorded into blocks, and a linked sequence of such blocks is called a block chain. Once
a mining device (miner) compiles a block of transactions, it shuffles through random values of a special input (nonce) in the block until a cryptographic hash of the block is smaller than a predetermined threshold. The security properties of hash functions force a miner to test nonces by brute force until a satisfactory block is found. Such a block constitutes a solution to the cryptopuzzle and is itself the proof of work. Once the block is published, anyone can easily verify that the work was done by calculating the cryptographic hash of the block and checking that it is really below the predetermined threshold.
Proof-of-work is a mechanism that slows the creation of new blocks, requiring about 10 minutes per block in the case of Bitcoin. This delay makes it extremely difficult to recreate an entire blockchain after changing the data of one block. Therefore, a Proof of Work provides a trivially verifiable guarantee that a certain amount of computation was performed to produce it. As Bitcoin has grown over the past decade from a small network run by hobbyists to a global currency, the underlying Proof of Work protocol has not been updated.
Initially envisioned as a global decentralized network (“one CPUone vote”), Bitcoin transactions today are secured by a small group of corporate entities. Due to the increase in the market value of mining rewards over time and competition between miners, Bitcoin mining difficulty has grown exponentially, leading to the industrialization of mining.
The enormous and growing energy use of Proof of Work has led to geographic centralization of mining in purpose-built data centers located in regions with very low energy costs and barred small entities from the mining ecosystem.
Although the exact numbers are disputed, Bitcoin’s energy use has grown steadily with it’s market value, and, today, Bitcoin is estimated to consume over 75 terawatt-hours per year.
Three researchers have published a paper at Cornell University’s arxiv.org proposing a system called Optical Proof of Work (OPOW) to potentially be employed in Bitcoin mining. According to the paper, “heavy reliance on electricity has created scalability issues, environmental concerns, and systemic risks.” The authors state that silicon photonics could be used to shift mining costs away from energy-intensive to hardware-based costs, lowering the economic and environmental impact, adding greater security, and “democratizing” mining.
While in traditional digital hardware, we rely on electrical currents, optical computing uses light as the basis of
its operations. The approach has been around for decades, however recent advances in the telecommunications industry and Artificial Intelligence (AI) have significantly contributed to optical computing development. Indeed, researchers anticipate that integrating optical processing starting with onchip signal routing and ending with optical accelerators for AI can significantly boost processing speed, keeping energy consumption levels as low as possible.
Inspired by the recent advances in silicon photonics for lowenergy computation, we envision a practical PoW system built to complement optical computing. The main goal of such a oW approach is to achieve drastic energy savings. Although, in the long run, it is conceivable that some miners will be built based on other analog architectures, we see photonic coprocessors as holding the greatest potential for high energyefficiency combined with near-term commercial availability. As a result, we propose Optical Proof of Work (oPoW), a PoW algorithm optimized for acceleration with integrated photonic co-Processors.
In its simplest form, oPoW is the Hashcash algorithm with our custom hash function, HeavyHash, designed specifically to run efficiently on optical accelerators while preserving all PoW-necessary cryptographic security properties. A prototype hardware and software implementation of Optical PoW (an oPoW Bitcoin fork and a prototype oPoW silicon photonic miner) was developed with the goal of testing end-to-end functionality.