As educators of newbies to the crypto space we (The Self Love Sisters) often get asked which is the best blockchain or which is the best cryptocurrency and the answer will always be – it depends. It depends on what results you want from using a blockchain or cryptocurrency.
Bitcoin is acknowledged as the first blockchain and it solved the Byzantine Generals Problem with a proof of work mechanism that gave us our first taste of a trust-less system. It is also widely recognised as the longest standing cryptocurrency.
Bitcoin offered us security, decentralisation and speed that was revolutionary leap.
When the Ethereum blockchain was developed, it added the benefit of smart contracts to the blockchain and incrementally improved on the speed of transactions.
Since then there have been many different blockchains, or distributed ledgers that have emerged, all seeking to improve on past iterations.
Today we are going to explore 3 different projects to demonstrate some of the differences in blockchain applications.
NEO is a non-profit, community drive blockchain project and is the first open-source blockchain platform developed in china. Â It was established in 2014 under the name of AntShares and has sometimes been referred to as “China’s Ethereum”. The name change occurred in 2017 as the organisation rebranded themselves which represented a new, more professional direction for the organisation.
NEO’s tagline is ”An Open Network for a Smart Economy” and what this looks like in application, is that NEO is creating smart contracts by collaborating with certificate authorities in China to map real world assets. Part of this smart economy includes digital ID verification of individuals, organisations and other entities in an electronic form which is an integral element in their smart economy ensuring that any misuse of the system can lead back to a legally-binding entity.
The NEO platform uses two different tokens first, the NEO coin, interestingly these can only be transferred whole, unlike bitcoins which can be divided into increments, or satoshis (each bitcoin is made up of 100 million satoshis, just like each dollar is made up of 100 cents). Secondly, like Ethereum, the fees to use or fuel the network are GAS and GAS coins can be divided like bitcoins.
NEO’s programming is inclusive and allows for many programming languages in order to foster a wide community of developers.
The NEO blockchain utilises a Delegated Byzantine Fault Tolerance mechanism (dBFT) which allows participants to delegate certain nodes as bookkeepers. NEO currently has 7 nodes:
- NEO Foundation maintains 5 of the nodes
- CityOfZion maintains 1 node
- KPN maintains 1 node
Having the NEO foundation maintaining 5 of the 7 consensus nodes means that decentralisation is non-existent.
WaltonChain is a blockchain based in china. It was established in 2016 and is built on the ethereum network, WaltonChain is aiming to create a business ecosystem by integrating blockchain with RFID and the Internet of Things (IoT).
The WaltonChain project was named for the RFID inventor Charles Walton, and was established in 2016.
WaltonChain is disrupting the retail supply chain in four significant ways:
- Production: an RFID tag is produced for a particular product and is recorded at each child node of the production process. There is a scanning device at each interval which uploads the data about that particular phase of the product journey, and this is recorded on the blockchain.
- Warehousing: Storage of the product is tracked by RFID tags, in much the same way the data for warehousing is uploaded to the blockchain and information can include climate control for heat sensitive products.
- Logistics: The status of the product is tracked during transportation for a complete view of the product during its journey from manufacturer to retailer. This information is also useful for maximising efficiencies and accuracy of scheduling with retailer delivery windows.
- At store level: Information can be tracked on consumer preferences and purchase information which becomes part of a feedback loop for greater efficiency for step one of the process: Production ensuring that items produced are what consumers desire.
In the video below you will also see a demonstration of the “grab rate” of clothing that is tracked on the blockchain.
The major difference that blockchain brings to this space is that by utilising blockchain’s immutable ledger manufacturers and retailers can guarantee authenticity of products and eliminate the $500BN counterfeit industry.
This technology could also be applied to such things as car rentals or airline baggage etc.
WaltonChain offers another way of applying a digital presence to physical assets, which is different to NEO’s.
How the WaltonChain blockchain works:
The RFID tag has a chip that integrates asymmetric cryptography which allows the data of the hash value of the current block to sync online to ensure specific binding of the label and entity, for example when the labelled product moves from the manufacturer to transportation the label is scanned and information synced – this is where we see the combination of IoT and blockchain working harmoniously.
WaltonChain is working towards creating a living library of information as it relates to products, however this is not a public library. The parent chain is WaltonChain, built on the Ethereum blockchain, and the parent chain has child chains for each industry for example:
- Freyrchain, the art collection chain; uploading to blockchain and transmission of all kinds of collection data
- Huodull logistics child chain; uploading to blockchain and transmission of all kinds of online logistics data
- KALTENDIN clothing child chain; uploading to blockchain and transmission of all kinds of clothing industry data.
Waltonchain aims to create more child chain domains and upload data from different industries to the blockchain for circulation within the WaltonChain ecosystem, hence the living library is only accessible to members of WaltonChain ecosystem.
Dolla is a blockchain project that was established in 2017 and is positioning itself as a “Next Generation Cryptocurrency” with the capacity to handle 10,000 transactions per second, with instant finalisation and almost free fees (only 1 cent). Dolla is advancing what bitcoin set out to achieve – fast transactions, worldwide payments and low transaction fees.
Dolla has created a purpose built blockchain to overcome the challenges of transaction speed faced by the earliest iterations of blockchain technology.
The video below describes how Haskell works to increase productivity and accuracy of the work done by programmers.
The core aim is for Dolla to be used as a currency and for that to be achieved it has to have real world applications and uses and in order for this to happen, certain characteristics need to be inherent in the Dolla blockchain.
High security from the ground up: This is why the programming language Haskell was chosen.
Fast Transaction confirmation: The Dolla blockchain confirms transactions in 1 second.
High Throughput: Dolla Blockchain is capable of 10k transactions per second
Below is a brief comparison table of the different projects.
Each of the examples above use blockchain to take advantage of aspects of the different benefits that blockchain offers; security, speed and decentralisation.
However, as mentioned earlier with the NEO Foundation maintaining 5 of their 7 nodes the NEO blockchain is essentially centralised.
WaltonChain, while built on the decentralised Ethereum platform has private child chains, so again, this is not achieving the ideal of being decentralised.
Dolla is similar to NEO in the use of operator nodes, however they achieve decentralisation by having an increased number of nodes (aiming for 100) with diversity across geographic locations, political and economic regions and Dolla is offering node operator licences to a range of fiscally diverse participants from large organisations through to individuals.
Node operators are screened through an application process to ensure diversity and reduce the possibility of collusion. These node operators become publicly known entities who are held accountable for upholding the goals of Dolla by risking their stake should they behave as a bad actor.
So you can see that when comparing blockchains, cryptocurrencies and projects there are a variety of differences that need to be taken into consideration. The key aspects you should be thinking about if the project is expecting mass adoption are:
Security – how is the project maintaining a secure blockchain? Traditional programming languages can easily introduce bugs when performing maintenance.
Speed – for mass adoption the blockchain will need to be able to handle a high volume of transactions per second, ideally on-chain for maximum security.
Decentralisation – Proof of Work has proven to be the most effective form of decentralisation, however it comes at the cost of speed and also has implications for energy consumption. I believe the next best option is adBFT with adequate nodes distributed to ensure diversity and transparency to ensure that we get the best results for speed and decentralisation.
What are your thoughts on these projects and the trade-offs made for speed, security and decentralisation?
Let us know in the comments below.