Tech Tuesday Development Update - 2019 Week 8: Bear Market Blockchain Innovations

This series of posts is called the Tech Tuesday Updates.

In case you’ve missed a previous edition and want to catch up, you can find all the previous Tech Tuesday updates here.

Interested in Game dApps development? Komodo's ecosystem has many GUI requirements, two exciting ones are - blockchain poker (CHIPS) and blockchain rogue-like game (ROGUE).

Bear Market Blockchain Innovations - Part 1

Leading blockchain innovations in 2019 are dominated by the implementation of a Turing-complete smart UTXO model known as the Custom Consensus Framework, originally a cryptographic encoding format from IETF. Komodo lead developer jl777 saw great potential in the technology and worked with polyglot developer libscott through 2018 to continue and establish an ongoing list of open source innovation:

Create a blockchain and set Custom Consensus framework interoperability to off/on/scaling/cross-chain

When first developed and deployed to the ecosystem, backwards compatibility was for new blockchains to have no Custom Consensus framework support (e.g. -ac_cc=0). To enable the Custom Consensus framework, create a blockchain with the -ac_cc=1 parameter.

Komodo's Custom Consensus framework features in the blockchain scalability solution of Komodo's multi-chain architecture (a.k.a. cluster) incorporating MoMoM technology. To enable a clustered multi-chain scaling solutions, -ac_cc parameter needs to be set between 2 & 100. All chains with the same seed nodes, same name, same supply and same -ac_cc parameter will function as a multi-chain cluster.

To gain the blockchain interoperability features of MoMoM technology, the -ac_cc parameter needs to be set at 101 or greater. Chains with the same ac_cc parameter will be able to reference transactions in the other chains sharing the same ac_cc parameter value. What types of transactions? Normal UTXO transactions as well as smart-UTXO based Custom Consensus transactions.

Cross-Chain Fungibility

The scaling and cross-chain capabilities of Komodo technology (a.k.a. sharding) introduces the problem/solution of cross chain fungibility. The #kmdlabs discord channel first began testing the fungibility after we ran our first tests of 25k & 40k transactions per second on AWS infrastructure. Using "only" 64 chains in mid 2018 for these results, there was a small bug which needed to be fixed before aiming for 1 million tx/s and ways to validate them.

The cross chain transaction visibility was solved re-using insight explorers with some modifications and some further enhancements to transaction tracing. Testing began in week 37 2018 - many weeks of cross chain testing for 100% success rate and ability for public to view their transactions move across chains.

More public tests with easy to understand transaction origination and fungible migration are possible using modern web technologies. Look out for these public tests in the coming months as we gear up for 1 million transactions per second!

Ethereum Notarizations & ERC20 Migrations

Komodo began investigating ethereum implementations for a broader blockchain interoperability in the future. The first Ethereum notarization happened on Friday August 31 2018, and a channel was dedicated to this testing. The BTC pubkey of a Komodo Notary Node Operator was included in a mandate contract, which were the keys that could do this ETH->KMD notarization.

Unfortunately the bear market hit for longer than many expected, and the failure of many ICO projects compounded the lack of demand for further development.

There is some good news though, recently, a fintech startup called O Crypto Union has been migrating their initial investors from ERC20 to a Komodo blockchain solution.

Oracles Custom Consensus Module

First introduced in week 37 2018 as a way for an oracle to publish off-chain data to be used in blockchain applications, a data provider sends updates to an oracle. Updates to the oracle are referenced by a "baton" transaction, and this set of updates acts like a linked-list in programming terms. The most recent update is at the top of the list. For sybil protection (spam), querying the oracle can be set up to have a cost for queries.

The following week, the oracles are being used for testing BTC price feeds for another Custom Consensus module innovation (coin gateways). However, in the same week, the oracles are being used in another dApp testing round - for looking up blockhashes for transaction data. These are covered in the next section on "Instant Blockchain Payments, Bitcoin Hashrate Secured".

Through the latter half of the year, an ecosystem developer started a pet project to track his dog using an oracle and location services provided by a GPS recorder on his dog's collar. Dragon Hound was born.

Less exciting supply chain proof of concepts and certifications stored on-chain. More recent developments with the blockchain gaming technology that Komodo's Custom Consensus framework has enabled further research into on-chain certification solutions.

Instant Blockchain Payments, Bitcoin Hashrate Secured

Throughout 2018, there was much hype about lightning network solving bitcoin's scalability problem. jl777 created an on-chain solution to instant payments which is secured by Komodo's Blockchain Security Service which is available to any blockchain. The problem with lightning is that it is very complicated. How can we say this? Komodo has an ecosystem project that implements lightning for in-game microtransactions for poker.

The simplicity of a Channels Custom Consensus module allows it to be backwards compatible with all existing wallets and infrastructure like explorers.

The very basic explanation in three steps is:

Set up a payment channel with your denominations (10k satoshi in this case)
Optionally, wait for the payment channel to be notarized by Komodo onto Bitcoin for bitcoin level security
Send out transactions to those payment channels to be spent like any other type of transaction, one at a time or in multiples, to the destination of your choosing

If you need to send 50k satoshi, authorize the release of 5 of those 10k payments by sending the the payment details to the person’s destination address.

Coin Gateways & Stablecoins

Tokenizing crypto coins (like BTC, but not as proxy tokens, binding tokens to the underlying asset) and then use the tokens to transact/swap against the tokenized crypto. Enforcing is done by blockchain enforcement, a 1:1 peg between a specific token and BTC (or any other peg) as well as an automated deposit/withdraw mechanism. This allows one to trade virtual BTC without any delay or expensive tx fees. Redeeming the token will unlock the BTC used to create the token. All blockchain enforced – across blockchains where necessary. Redeeming implies a lock between two different transaction types – the asset-token and the gateway.

This mechanism described above is from week 39 in 2018 and with it is a business use case for a coin gateway. Another use case for this mechanism is a stablecoin, which follows a similar workflow as the business use case linked to. We will cover this use case next Komodo Tech Tuesday, with more information about Komodo's asset tokenization capabilities including non-fungible tokens. The above section on ERC20 migrations features a stablecoin that has been created in the Komodo ecosystem. Here is a brief on that fintech project leaving Ethereum and their stablecoin.

That's the end of part 1, any questions ask in the discord - lots of people keen to help you

KMDLABS discord channel (#kmdlabs) is dedicated to testing innovations, upgrades, new features and is a great way to get the necessary skills and knowledge for being a competent Notary Node operator.