æternity is a public, open-source, blockchain-based distributed computing and digital-asset platform that builds upon decentralized cryptographic P2P technology. Real-world data can interface with smart contracts through decentralized "oracles". Scalability and trustless Turing-complete state channels set æternity apart from other Blockchain 2.0 projects.
æternity provides a virtual machine which can execute scripts using an decentralized global network of public nodes maintaining the blockchain. State channels enable smart contracts to remain private and scalable as long as there is no disagreement between the counterparties. Inherently integrated in æternity is a value token called an "æon" or "AE token", which can be transferred between participants and is used to compensate participant nodes for computations performed. AE tokens are used to pay for space and computation time on the virtual machine and prevent spam on the network while allocating storage and computation time proportionally to the incentive offered by the request.
Video Æternity
Purpose
æternity's blockchain is governed via a hybrid Proof-of-Work and Proof of Stake consensus mechanism. Tokens can be transferred between parties of a smart contract through channels without storing the code of the contract on-chain. The public blockchain resolves dispute inside state channels, acting like a crypto-court.
æternity can program complex relationships for large numbers of users and handle high volumes of products and information in parallel. Only the parties who participate in a state channel smart contract know of its contents. When a channel is settled on-chain, it only changes the blockchain state by changing account balances. No contract state is stored on-chain, so all channels are independent from each other. Transaction speed is limited only by bandwidth, so the æternity system can scale as well as or even better than known centralized solutions available today.
Large throughput and relative privacy enables the use of æternity by enterprises, and it can be the main vector of micro-transactions needed for all internet-of-things use cases. In the same time this will make smart contracts easier to analyze and faster to process, with no substantial loss in functionality.
æternity held a first contribution campaign round in which the team collected 121,212 Ethers and 324 Bitcoins, the rough equivalent of 5,400,000 USD at the time, in exchange for AE tokens. A second round was scheduled for 29 May 2017, in which the team's ambition was to raise a maximum capped amount of 21,000,000 CHF (21,500,000 USD) via BTC and ETH.
A launch of the æternity main-net is scheduled for Q2 2018.
Maps Æternity
Innovation
æternity is a new blockchain technology with features including:
- Industrial-grade code base. æternity core is written in Erlang, which is a highly scalable, fault-tolerant language for writing distributed systems allowing to achieve superior operational stability and performance.
- Smart contracts allow decentralized highly available, non-stop applications.
- State channels enable highly scalable, trustless transactions of value and purely functional, easily verifiable Turing-complete smart contracts.
- Integrated Naming Systems, which are both decentralized and secure, while still supporting human-friendly, memorable names.
- Oracles, which are a crucial feature for most contracts, are the ability to refer to values from real-world data.
- Identity Accounts, which allow for one to create and own identity on the æternity network to use on the web, in real-life, or voting systems.
- the "Cuckoo Cycle" mining algorithm, which is a memory-hard mining algorithm that improves the ASIC problem. It provides great decentralization potential. Mining can be done even through low-powered devices such as smart-phones.
Technology
State channels
State channels are a new development of æternity's blockchain technology. They are based on the idea of payment channels. State channels come from the realization that, for most purposes, only the actors involved in a smart contract are required to know about it. Two or more actors lock a state and a contract on the blockchain and then perform signed transactions between themselves, off of the public network (or off-chain). The final state is then written to the blockchain. If the end result is disputed, the series of signed off-chain transactions can be uploaded to the blockchain for verification or dispute resolution.
The state channel design enables off-chain verification of data and smart contracts. This permits a high transactional throughput and parallel processing of smart contracts by allowing for their independence from the network. æternity's strengths lie in programming complex relationships for many users and the parallel handling of high volumes of products and information. State channels allow for increased privacy because parties participating in a smart contract know about the contents of that smart contract. When a channel is settled on-chain, the only information being put onto the Blockchain is the end result of the transactional value that was exchanged. No contract state is stored on-chain, so all channels are independent of each other. Transaction speed is limited only by bandwidth, so æternity's scalable smart contract systems improves upon all the centralized and de-centralized scaling solutions that are available today.
Decentralized Oracle
An oracle is a mechanism that tells the blockchain facts about the real-world we live in (e.g. the weather, the closing price of Apple shares on a particular date, sports events, or human deaths). æternity's oracle system uses the same governance mechanism as the æternity blockchain itself, it does not require a separate governance layer on top of the æternity main-net (as with Augur on top of Ethereum).
Typed oracles as primitives on the blockchain provide a well-defined way for smart contracts to interface with data from the outside world. Data-feeds from individuals or institutions can directly interface with the blockchain and provide data for smart contracts.
Prediction markets (as smart contracts) can be used to determine the likelihood of an oracle providing trustworthy information, or to bet on the event.
Mining and Governance
Proof-Of-Work Mining
The validation of blocks on the æternity blockchain is done by a Proof-of-Work consensus mechanism, leveraging the "Cuckoo Cycle" Algorithm. The "Cuckoo Cycle" PoW is more power efficient and indirectly useful, as it encourages the development of better dynamic RAM (DRAM) chips. Even low-power devices such as smartphones, tablets and laptops can efficiently mine new tokens. This achieves a decentralization and geographical distribution of the mining power, which is crucial for the decentralization of blockchains (as time-stamping service).
As such, æternity mining is designed to be more egalitarian and inclusive compared to crypto-currencies where mining is dominated by large mining pools which use application-specific integrated circuit ("ASIC") chips designed specifically to take advantage of a particular PoW algorithm. This wider distribution of the mining incentives contributes to even wider use and adoption of æternity.
Proof-Of-Stake Governance
Currently in public blockchains whenever a system upgrade needs to be done, a "hard" fork is required. This leads to heated discussions among value holders. Even simple changes, such as correcting set variables in the source code, obvious in the block size debate in Bitcoin, or the " DAO" issue in Ethereum, seem to be very hard to agree on in a system where not all the users' incentives are aligned with those of decision makers. This can cause deep schisms in the community, which can sometimes endanger the value and reliability of any Blockchain.
The decision-making process for a protocol upgrade or change is not yet well-defined, lacks transparency and uses legacy mediums, like forums, discussion websites or even requires sometimes physical meetups to reach consensus. It is neither decentralized nor done on the blockchain. æternity aims to improve this process and thus gain an important competitive advantage.
Any AE token user can participate in the governance on aeternity blockchain via (delegated) voting, weighted by the amount of tokens the account holds. This governance can be used to update variables of the blockchain (e.g. blocksize) and in extreme cases also to overwrite faulty state, e.g. because of a buggy smart contract or because of a corrupted oracle.
Via participating in prediction markets the users can additionally express their opinion on events (e.g. oracle results or hardfork) and create additional income. On-chain voting in combination with prediction markets could be the solution to public blockchain governance and allow for a novel way of organizing society and global economic interactions.
Uses cases and possible applications
Prediction Markets
Prediction markets (oracles) are one of the most anticipated use cases for Blockchains. They can make possible the harnessing of the wisdom of the crowds in a decentralized and transparent manner.
Ethereum has Augur trying to build prediction markets on top of it, each with its different systems and currency. æternity integrates the oracle into the blockchain consensus.
Any user may create an oracle by posing a question or statement, staking coins and providing a binary or a scaled answering option. æ coins can be used to acquire stakes of those specific outcomes. The more sure a user is about the outcome, the more stakes he may acquire and hence more likely (he thinks) the outcome will be correct. Applying the wisdom of the crowd to all participating users of the prediction market, it is possible to:
- statistically predict the probability of a future event occurring
- verify historic data from legacy systems or other blockchain
- verify API data from legacy systems or other blockchains
meaning any data outside of the blockchain can be translated into a deterministic value that can be used in æternity smart contracts, making data accessible and actionable. In æternity, this source of information comes from inside the blockchain, instead of an outside entity built on top of it. This makes the source of information more reliable, more decentralized, and not relying on a 3rd party company (including Augur).
Supply Chain Management
The supply chain management can be trusted to a smart contract that is constantly interfacing with the oracle on æternity. The demand for any product can be fed to the smart contract through the oracle. That will trigger the contract to send procurement orders to suppliers, and raw materials providers, taking into consideration the normal delays of each item in procurement. In the meantime, the smart contract's information being fed through the oracle can be regulated to increase or decrease the quantity of the orders in real-time, thus eliminating waste of overstocking of storage facilities.
High-level concept of supply chain management automation with Smart Contracts, Prediction Markets, and Oracles.
Digital insurance
In order for insurance on the blockchain to work, two features must be technologically achievable:
- Identity of the insured that can be attached to a unique address (in the case of the Bitcoin blockchain or human-readable digital identity), the private key of which is protected by password and/or 2FA solution. User reputation can be fully managed on the blockchain through digital identities (electronic signatures), and that's exactly what the "bookies" (insurers) need.
- Insurer/bookie setting the odds: a prediction market is a way of determining the odds of an event occurring and providing that information to users. Public blockchain solutions existing today do not offer integrated prediction markets. This service can only be provided by "attached" systems, which leads to increased complexity and inefficiencies, raising the cost of use. In the case of Ethereum, a prediction market service may be provided by Augur. For Bitcoin, Hive-Mind is considered the most promising project.
A prediction market is a market where users can bet on outcomes and set odds for markets that they create themselves.
In æternity, individuals may 'bet' on natural disaster, death, industry-killing technological innovations, crippling regulatory activities, pandemic, disruptive weather or any other events. The insurer or "bookie" is anyone willing to bet on the outcome of an event by setting the odds, and paying if they occur.
Then photographically-secured smart contracts eliminate any trust-related risk. If an event happens, as determined by the consensus of the oracle machine, execution is immediate and irreversible. There is no room for interpretation or selectivity in the enforcement of the insurance contract. The æternity blockchain incorporates all that is required for a scalable, secure, stable, open and efficient insurance platform.
Toll API
Today most websites' and servers' APIs are either publicly available to call or secured with a username-password-scheme or unique access tokens. The æternity payment channels allow for a third kind of API, where the requesting user has to pay a micro transaction for every call to the API, possibly every HTTP-request. Paying to access an API solves the DDoS attack problem, by providing a counter-incentive to sending large amounts of requests to overload servers. This makes it easier to build APIs that are always available for a small fee. API responses that require a payment are fundamental for the creation of as-of-yet impossible types of businesses and can play an important role in the emergence of the decentralized economy, the Internet-of-things and the Internet-of-value. Payment also creates strong incentives for information technology owners to make otherwise private data publicly available.
Insured crowdfunding
Crowdfunding can be made trustless and more transparent by using dominant assurance contracts. These are smart contracts that are used to raise money for a public good or other commercial project. Part of the funds can be locked for development and other parts of the fund are locked to provide an ROI for investors.
The release of funds can be set on several milestones. Once a milestone is cleared and approved, the contract will release the funds allocated to that specific milestone. Several methods can be used to verify the completion, including oracles. If an oracle concludes that the milestone is not reached, investors get their investments with interests back.
Dominant assurance contracts differ from traditional assurance contracts like Kickstarter, in that they make it a dominant strategy to participate. If the good is produced, all participants get their æons back plus interest, so they are insured against reducing their liquidity without receiving the good. Using an oracle, we can ensure that the provider of the good or service only gets paid if he or she provides the goods as promised. This enables a leap of transparency and trustless investment opportunities in ICOs and startups, where the investors' funds are safe from mismanagement or fraud by the project's founders. This can be implemented on any other exchange of services between multiple parties, thus decentralizing the freelancing and business-to-business sectors.
Cross-chain atomic swaps
æternity's blockchain architecture can enable cross-chain "atomic" swaps to allow for trustless exchange of æons for bitcoins or any other crypto-currencies. These can be implemented using a zero-knowledge-contingent payment hashlock that locks the transactions on both blockchains under the same value. This makes the cross-chain exchange of currencies decentralized, without having the single point of failure of the current exchanges.
Assets and portfolio replication
æternity's smart contracts can be used to program synthetic assets that stay at nearly the same price as a real-world asset does. For example, an asset can follow the price as gold. Synthetic derivatives are created created in equal and opposite pairs; for one user to have an asset that moves up with gold, a different user will have to have an asset that moves inversely to gold. This enables the "blockchainization" of all the real-world assets (or financial derivatives) and their exchange in a decentralized stock market. For example, Alice can make a contract with Bob so that Alice owns 1 gram of gold. Out of the money in the contract, 1 gram of gold's worth in æons will go to Alice, and the leftover money goes to Bob. The contract has an expiration date, at which point the price of gold will be remeasured and the funds are distributed to Alice and Bob accordingly.
References
External links
- Official website
Source of article : Wikipedia
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