On Private Blockchains, Technically

Blockchain Hackathon Moscow

Alexander Chepurnoy

On Private Blockchains, Technically

My Background

● Java then Scala development

● Distributed / P2P systems development

● Nxt Core Developer

● SmartContract.com / Secureae.com cofounder/dev

● Consensus Research member

● Scorex project

Fields of Interest

● Distributed & P2P systems

● Blockchain Tech

● Functional Programming (Haskell / Scala)

● Formal Methods (model checking / Coq)

● Finite State Machines and some other topics in CS

The Design of a Cryptocurrency

● P2P Network

● Persistent distributed fully-replicate database (aka Blockchain)

● Transactions operating with tokens grouped within blocks, a block is a database version

● Consensus algorithm

● Optional: additional layers on top of transactional layer(mesages, colored coins, code)

A Blockchain Structure

Consensus About Blockchain

● Proof-of-Work

● Proof-of-Stake

● Hybrid: Proof-of-Work+Proof-of-Activity, Proof-of-Stake+Proof-of-Activity

BlockTree

Blockchain As A Database

● Persistent(versioned) database

● Genesis state – initial verion of the database

● Block as state modifier: State(h) * Block → State(h+1)

● Very weak consistency!

PoW-based Trustless Database

If adversarial hashing power is less than 50% :

● replicated log and state

● a probability of transaction exclusion from a blockchain is going down exponentially with time

● a probability of valid trransaction non-inclusion into a blockchain is going down exponentially with time

● node's state divergence from a canonical one(majority has) is going down exponentially with time(if exists)

● dependless on who mined a concrete block

Private Blockchains

● want to get maximum from the trustless db model

● have non-monetary purposes, usually

● limited number of participants(or just miners)

Private Blockchains

are proposed for:

● art objects ownership history

● real estate ownership history (chain of title)

● Inter-banks procedures(clearing etc)

● etc

Implementation

● consensus protocol

● transactional model

● incentives model

Consensus – PoW

● Not fair(richer parties will take control over a network soon)

● Attacks via outsourcing work to Bitcoin miners

● Why art gallery or real estate agency needs for a lot of expensive special hardware in addition to the database software?

Consensus - PoS

● Generation rights

● Predefined distribution of generation rights

● Works in practice for few years

● Some security investigations are done...

but more needed! As well as formalizations.

Trusted Random Beacon

● Bitcoin / Nxt / other public blockchain could be used as a trusted source of randomness, to chose next block generator

● Blocks frequency is the same in both chains

● (SPV) client is needed to be inbuilt in a node

Byzantine Agreement Scheme

● A lot of well-known formalized solutions to the distributed commit problem

● Up to ~5000 participants

● Verification could be costly

Transactional Model

● Should be suitable for max performance

● Min transaction size

● Prunable state

● Bitcoin's transactions with multiple inputs & outputs and scripts attached to both sides probably isn't the most suitable model for many non-monetary cases

Incentives Model

Long-term security

● Why to participate in a network?

● Why to run a fullnode?

● Why to generate a block?

● Why to include transactions in a block?

Better Quality of Blockchain Impls

● Modular approach

● Safer languages(Scala/Ocaml, Haskell, Idris/Coq)

● Formal methods usage

● Prototypes before products

SCOREX

● The cryptocurrency engine in less than 4K lines of Scala code

● To make proof-of-concepts FAST!● Compact code● Not production-ready● CC0 license

Lagonaki Release

● 100% Proof-of-stake

● Simplified account-based transaction model

● Simple payments only

● Curve25519 for signing

● JSON API

● Command-line client

Under The Hood:

● Scala

● Akka

● MapDB

● Spray

● Play Json

● Scalatest

● Logback

Questions?

● Articles:

● „On Private Blockchains, Technically“ http://chepurnoy.org/blog/2015/11/on-private-blockchains-technically/

● „On the Way to a Modular Cryptocurrency, Part 1: Generic Block Structure“ http://chepurnoy.org/blog/2015/10/on-the-way-to-a-modular-cryptocurrency-part-1-generic-block-structure/

● „A Cryptocurrency Architecture“

http://chepurnoy.org/blog/2015/08/a-cryptocurrency-architecture/

Mail: [email protected]