Author: Gamals Ahmed, CoinEx Business Ambassadorsubmitted by CoinEx_Institution to Coinex [link] [comments]
ABSTRACTThe effects of the web by a number of companies have seduced a large number of users as these companies keep their data to prevent them from searching for alternatives. Likewise, these huge platforms have attracted applications to build their highest ecosystems before either severing access or actively opposing their interests when the applications became so successful. As a result, these walled gardens have effectively hindered innovation and monopolized large sections of the web. After the emergence of blockchain technology and decentralized cryptocurrencies, the need for applications to support decentralization has emerged. Several blockchain-based companies, applications and platforms have appeared in decentralization. In this research report, we will explain the approach adopted by the NEAR decentralization platform in designing and implementing the basic technology for its system. Near is a basic platform for cloud computing and decentralized storage managed by the community, designed to enable the open web for the future. On this web, everything can be created from new currencies to new applications to new industries, opening the door to an entirely new future.
1. INTRODUCTIONThe richness of the web is increasing day by day with the combined efforts of millions of people who have benefited from “innovation without permission” as content and applications are created without asking anyone. this lack of freedom of data has led to an environment hostile to the interests of its participants. And as we explained in the summary previously, web hosting companies have hindered innovation and greatly monopolized the web.
In the future, we can fix this by using new technologies to re-enable the permissionless innovation of the past in a way, which creates a more open web where users are free and applications are supportive rather than adversarial to their interests.
Decentralization emerged after the global financial crisis in 2008, which created fundamental problems of confidence in the heavily indebted banking system. Then the decentralized financial sector based on Blockchain technology has emerged since 2009.
Decentralized Blockchain technology has made it easy for decentralized digital currencies like Bitcoin to exchange billions of dollars in peer-to-peer transfers for a fraction of the price of a traditional banking system. This technology allows participants in the over $ 50 billion virtual goods economy to track, own and trade in these commodities without permission. It allows real-world goods to cross into the digital domain, with verified ownership and tracking just like that of the digital.
By default, the Internet where freedom of data enables innovation will lead to the development of a new form of software development. On this web, developers can quickly create applications from open state components and boost their efforts by using new business models that are enabled from within the program itself rather than relying on parasitic relationships with their users. This not only accelerates the creation of applications that have a more honest and cooperative relationship with its users, but also allows the emergence of completely new business built on them.
To enable these new applications and the open web, it needs the appropriate infrastructure. The new web platform cannot be controlled by a single entity and its use is not limited due to insufficient scalability. It should be decentralized in design like the web itself and supported by a community of distributors widely so that the value they store cannot be monitored, modified or removed without permission from the users who store this value on their behalf.
A new decentralization technology (Blockchain), which has facilitated decentralized digital currencies like Bitcoin, has made billions of dollars in peer-to-peer transfers at a fraction of the price of the traditional banking system. This technology allows participants in the $ 50 billion + virtual goods economy to track, own and trade in these goods without permission. It allows real-world goods to cross into the digital domain, with verified ownership and tracking just like that of the digital.
Although the cost of storing data or performing a calculation on the Ethereum blockchain is thousands and millions of times higher than the cost of performing the same functionality on Amazon Web Services. A developer can always create a “central” app or even a central currency for a fraction of the cost of doing the same on a decentralized platform because a decentralized platform, by definition, will have many iterations in its operations and storage.
Bitcoin can be thought of as the first, very basic, version of this global community-run cloud, though it is primarily used only to store and move the Bitcoin digital currency.
Ethereum is the second and slightly more sophisticated version, which expanded the basic principles of Bitcoin to create a more general computing and storage platform, though it is a raw technology, which hasn’t achieved meaningful mainstream adoption.
1.1 WHY IS IT IMPORTANT TO PAY THE EXTRA COST TO SUPPORT DECENTRALIZATION?Because some elements of value, for example bits representing digital currency ownership, personal identity, or asset notes, are very sensitive. While in the central system, the following players can change the value of any credits they come into direct contact with:
A typical user will trust a typical centralized application, despite its potential vulnerabilities, with everyday data and computation. Typically, only banks and governments are trusted sufficiently to maintain custody of the most sensitive information — balances of wealth and identity. But these entities are also subject to the very human forces of hubris, corruption and theft.
Especially after the 2008 global financial crisis, which demonstrated the fundamental problems of confidence in a highly indebted banking system. And governments around the
world apply significant capital controls to citizens during times of crisis. After these examples, it has become a truism that hackers now own most or all of your sensitive data.
These decentralized applications operate on a more complex infrastructure than today’s web but they have access to an instantaneous and global pool of currency, value and information that today’s web, where data is stored in the silos of individual corporations, cannot provide.
1.2 THE CHALLENGES OF CREATING A DECENTRALIZED CLOUDA community-run system like this has very different challenges from centralized “cloud” infrastructure, which is running by a single entity or group of known entities. For example:
2. NEARNEAR is a global community-run computing and storage cloud which is organized to be permissionless and which is economically incentivized to create a strong and decentralized data layer for the new web.
Essentially, it is a platform for running applications which have access to a shared — and secure — pool of money, identity and data which is owned by their users. More technically, it combines the features of partition-resistant networking, serverless compute and distributed storage into a new kind of platform.
NEAR is a community-managed, decentralized cloud storage and computing platform, designed to enable the open web in the future. It uses the same core technology for Bitcoin and Blockchain. On this web, everything can be created from new currencies to new applications to new industries, opening the door to an entirely new future.
NEAR is a decentralized community-run cloud computing and storage platform, which is designed to enable the open web of the future. On this web, everything from new currencies to new applications to new industries can be created, opening the door to a brand new future.
NEAR is a scalable computing and storage platform with the potential to change how systems are designed, how applications are built and how the web itself works.
It is a complex technology allow developers and entrepreneurs to easily and sustainably build applications which reap the benefits of decentralization and participate in the Open Web while minimizing the associated costs for end users.
NEAR creates the only community-managed cloud that is strong enough to power the future of the open web, as NEAR is designed from the ground up to deliver intuitive experiences to
end users, expand capacity across millions of devices, and provide developers with new and sustainable business models for their applications.
The NEAR Platform uses a token — also called “NEAR”. This token allows the users of these cloud resources, regardless of where they are in the world, to fairly compensate the providers of the services and to ensure that these participants operate in good faith.
2.1 WHY NEAR?Through focus, we find that Platforms based on blockchain technologies like Bitcoin and Ethereum have made great progress and enriched the world with thousands of innovative applications spanning from games to decentralized financing.
However, these original networks and none of the networks that followed were not able to bridge the gap towards mainstream adoption of the applications created above them and do not provide this type of standard that fully supports the web.
This is a result of two key factors:
Fixing these problems requires substantial and complex changes to current protocol architectures, something which existing organizations haven’t proven capable of implementing. Instead, they create multi-year backlogs of specification design and implementation, which result in their technology falling further and further behind.
NEAR’s platform and organization are architected specifically to solve the above-mentioned problems. The technical design is fanatically focused on creating the world’s most usable and scalable decentralized platform so global-scale applications can achieve real adoption. The organization and governance structure are designed to rapidly ship and continuously evolve the protocol so it will never become obsolete.
2.1.1 Features, which address these problems:1. USABILITY FIRST
The most important problem that needs to be addressed is how to allow developers to create useful applications that users can use easily and that will capture the sustainable value of these developers.
2. End-User Usability
Developers will only build applications, which their end users can actually use. NEAR’s “progressive security” model allows developers to create experiences for their users which more closely resemble familiar web experiences by delaying onboarding, removing the need for user to learn “blockchain” concepts and limiting the number of permission-asking interactions the user must have to use the application.
1. Simple Onboarding: NEAR allows developers to take actions on behalf of their users, which allows them to onboard users without requiring these users to provide a wallet or interact with tokens immediately upon reaching an application. Because accounts keep track of application-specific keys, user accounts can also be used for the kind of “Single Sign On” (SSO) functionality that users are familiar with from the traditional web (eg “Login with Facebook/Google/Github/etc”).
2. Easy Subscriptions: Contract-based accounts allow for easy creation of subscriptions and custom permissioning for particular applications.
3. Familiar Usage Styles: The NEAR economic model allows developers to pay for usage on behalf of their users in order to hide the costs of infrastructure in a way that is in line with familiar web usage paradigms.
4. Predictable Pricing: NEAR prices transactions on the platform in simple terms, which allow end-users to experience predictable pricing and less cognitive load when using the platform.
2.1.2 Design principles and development NEAR’s platform1. Usability: Applications deployed to the platform should be seamless to use for end users and seamless to create for developers. Wherever possible, the underlying technology itself should fade to the background or be hidden completely from end users. Wherever possible, developers should use familiar languages and patterns during the development process. Basic applications should be intuitive and simple to create while applications that are more robust should still be secure.
2. Scalability: The platform should scale with no upper limit as long as there is economic justification for doing so in order to support enterprise-grade, globally used applications.
3. Sustainable Decentralization: The platform should encourage significant decentralization in both the short term and the long term in order to properly secure the value it hosts. The platform — and community — should be widely and permissionlessly inclusive and actively encourage decentralization and participation. To maintain sustainability, both technological and community governance mechanisms should allow for practical iteration while avoiding capture by any single parties in the end.
4. Simplicity: The design of each of the system’s components should be as simple as possible in order to achieve their primary purpose. Optimize for simplicity, pragmatism and ease of understanding above theoretical perfection.
2.2 HOW NEAR WORKS?NEAR’s platform provides a community-operated cloud infrastructure for deploying and running decentralized applications. It combines the features of a decentralized database with others of a serverless compute platform. The token, which allows this platform to run also, enables applications built on top of it to interact with each other in new ways. Together, these features allow developers to create censorship resistant back-ends for applications that deal with high stakes data like money, identity, assets, and open-state components, which interact seamlessly with each other. These application back-ends and components are called “smart contracts,” though we will often refer to these all as simply “applications” here.
The infrastructure, which makes up this cloud, is created from a potentially infinite number of “nodes” run by individuals around the world who offer portions of their CPU and hard drive space — whether on their laptops or more professionally deployed servers. Developers write smart contracts and deploy them to this cloud as if they were deploying to a single server, which is a process that feels very similar to how applications are deployed to existing centralized clouds.
Once the developer has deployed an application, called a “smart contract”, and marked it unchangeable (“immutable”), the application will now run for as long as at least a handful of members of the NEAR community continue to exist. When end users interact with that deployed application, they will generally do so through a familiar web or mobile interface just like any one of a million apps today.
In the central cloud hosted by some companies today like: Amazon or Google, developers pay for their apps every month based on the amount of usage needed, for example based on the number of requests created by users visiting their webpages. The NEAR platform similarly requires that either users or developers provide compensation for their usage to the community operators of this infrastructure. Like today’s cloud infrastructure, NEAR prices usage based on easy to understand metrics that aren’t heavily influenced by factors like system congestion. Such factors make it very complicated for developers on alternative blockchain-based systems today.
In the centralized cloud, the controlling corporation makes decisions unilaterally. NEAR community-run cloud is decentralized so updates must ultimately be accepted by a sufficient quorum of the network participants. Updates about its future are generated from the community and subject to an inclusive governance process, which balances efficiency and security.
In order to ensure that the operators of nodes — who are anonymous and potentially even malicious — run the code with good behavior, they participate in a staking process called “Proof of Stake”. In this process, they willingly put a portion of value at risk as a sort of deposit, which they will forfeit if it is proven that they have operated improperly.
2.2.1 Elements of the NEAR’s PlatformThe NEAR platform is made up of many separate elements. Some of these are native to the platform itself while others are used in conjunction with or on top of it.
1. THE NEAR TOKEN
NEAR token is the fundamental native asset of the NEAR ecosystem and its functionality is enabled for all accounts. Each token is a unique digital asset similar to Ether, which can be used to:
a) Pay the system for processing transactions and storing data.
b) Run a validating node as part of the network by participating in the staking process.
c) Help determine how network resources are allocated and where its future technical direction will go by participating in governance processes.
The NEAR token enables the economic coordination of all participants who operate the network plus it enables new behaviors among the applications which are built on top of that network.
2. OTHER DIGITAL ASSETS
The platform is designed to easily store unique digital assets, which may include, but aren’t limited to:
The core platform, which is made up of the cloud of community-operated nodes, is the most basic piece of infrastructure provided. Developers can permissionlessly deploy smart contracts to this cloud and users can permissionlessly use the applications they power. Applications, which could range from consumer-facing games to digital currencies, can store their state (data) securely on the platform. This is conceptually similar to the Ethereum platform.
Operations that require an account, network use, or storage at the top of the platform require payment to the platform in the form of transaction fees that the platform then distributes to its community from the authentication contract. These operations could include creating new accounts, publishing new contracts, implementing code by contract and storing or modifying data by contract.
As long as the rules of the protocol are followed, any independent developer can write software, which interfaces with it (for example, by submitting transactions, creating accounts or even running a new node client) without asking for anyone’s permission first.
4. THE NEAR DEVELOPMENT SUITE
Set of tools and reference implementations created to facilitate its use by those developers and end users who prefer them. These tools include:
3. ECONOMICPrimarily economic forces drive the ecosystem, which makes up the NEAR platform. This economy creates the incentives, which allow participants permissionlessly organize to drive the platform’s key functions while creating strong disincentives for undesirable, irresponsible or malicious behavior. In order for the platform to be effective, these incentives need to exist both in the short term and in the long term.
The NEAR platform is a market among participants interested in two aspects:
3.1 NEAR ECONOMY DESIGN PRINCIPLESNEAR’s overall system design principles are used to inform its economic design according to the following interpretations:
1. Usability: End users and developers should have predictable and consistent pricing for their usage of the network. Users should never lose data forever.
2. Scalability: The platform should scale at economically justified thresholds.
3. Simplicity: The design of each of the system’s components should be as simple as possible in order to achieve their primary purpose.
4. Sustainable Decentralization: The barrier for participation in the platform as a validating node should be set as low as possible in order to bring a wide range of participants. Over time, their participation should not drive wealth and control into the hands of a small number. Individual transactions made far in the future must be at least as secure as those made today in order to safeguard the value they modify.
3.2 ECONOMIC OVERVIEWThe NEAR economy is optimized to provide developers and end users with the easiest possible experience while still providing proper incentives for network security and ecosystem development.
Summary of the key ideas that drive the system:
Reposting after was mistakenly removed by mods (since resolved - Thanks)submitted by xSeq22x to CryptoCurrency [link] [comments]
A frequent question I see being asked is how Cosmos, Polkadot and Avalanche compare? Whilst there are similarities there are also a lot of differences. This article is not intended to be an extensive in-depth list, but rather an overview based on some of the criteria that I feel are most important.
For better formatting see https://medium.com/ava-hub/comparison-between-avalanche-cosmos-and-polkadot-a2a98f46c03b
CosmosCosmos is a heterogeneous network of many independent parallel blockchains, each powered by classical BFT consensus algorithms like Tendermint. Developers can easily build custom application specific blockchains, called Zones, through the Cosmos SDK framework. These Zones connect to Hubs, which are specifically designed to connect zones together.
The vision of Cosmos is to have thousands of Zones and Hubs that are Interoperable through the Inter-Blockchain Communication Protocol (IBC). Cosmos can also connect to other systems through peg zones, which are specifically designed zones that each are custom made to interact with another ecosystem such as Ethereum and Bitcoin. Cosmos does not use Sharding with each Zone and Hub being sovereign with their own validator set.
For a more in-depth look at Cosmos and provide more reference to points made in this article, please see my three part series — Part One, Part Two, Part Three
(There's a youtube video with a quick video overview of Cosmos on the medium article - https://medium.com/ava-hub/comparison-between-avalanche-cosmos-and-polkadot-a2a98f46c03b)
PolkadotPolkadot is a heterogeneous blockchain protocol that connects multiple specialised blockchains into one unified network. It achieves scalability through a sharding infrastructure with multiple blockchains running in parallel, called parachains, that connect to a central chain called the Relay Chain. Developers can easily build custom application specific parachains through the Substrate development framework.
The relay chain validates the state transition of connected parachains, providing shared state across the entire ecosystem. If the Relay Chain must revert for any reason, then all of the parachains would also revert. This is to ensure that the validity of the entire system can persist, and no individual part is corruptible. The shared state makes it so that the trust assumptions when using parachains are only those of the Relay Chain validator set, and no other. Interoperability is enabled between parachains through Cross-Chain Message Passing (XCMP) protocol and is also possible to connect to other systems through bridges, which are specifically designed parachains or parathreads that each are custom made to interact with another ecosystem such as Ethereum and Bitcoin. The hope is to have 100 parachains connect to the relay chain.
For a more in-depth look at Polkadot and provide more reference to points made in this article, please see my three part series — Part One, Part Two, Part Three
(There's a youtube video with a quick video overview of Polkadot on the medium article - https://medium.com/ava-hub/comparison-between-avalanche-cosmos-and-polkadot-a2a98f46c03b)
AvalancheAvalanche is a platform of platforms, ultimately consisting of thousands of subnets to form a heterogeneous interoperable network of many blockchains, that takes advantage of the revolutionary Avalanche Consensus protocols to provide a secure, globally distributed, interoperable and trustless framework offering unprecedented decentralisation whilst being able to comply with regulatory requirements.
Avalanche allows anyone to create their own tailor-made application specific blockchains, supporting multiple custom virtual machines such as EVM and WASM and written in popular languages like Go (with others coming in the future) rather than lightly used, poorly-understood languages like Solidity. This virtual machine can then be deployed on a custom blockchain network, called a subnet, which consist of a dynamic set of validators working together to achieve consensus on the state of a set of many blockchains where complex rulesets can be configured to meet regulatory compliance.
Avalanche was built with serving financial markets in mind. It has native support for easily creating and trading digital smart assets with complex custom rule sets that define how the asset is handled and traded to ensure regulatory compliance can be met. Interoperability is enabled between blockchains within a subnet as well as between subnets. Like Cosmos and Polkadot, Avalanche is also able to connect to other systems through bridges, through custom virtual machines made to interact with another ecosystem such as Ethereum and Bitcoin.
For a more in-depth look at Avalanche and provide more reference to points made in this article, please see here and here
(There's a youtube video with a quick video overview of Avalanche on the medium article - https://medium.com/ava-hub/comparison-between-avalanche-cosmos-and-polkadot-a2a98f46c03b)
Comparison between Cosmos, Polkadot and AvalancheA frequent question I see being asked is how Cosmos, Polkadot and Avalanche compare? Whilst there are similarities there are also a lot of differences. This article is not intended to be an extensive in-depth list, but rather an overview based on some of the criteria that I feel are most important. For a more in-depth view I recommend reading the articles for each of the projects linked above and coming to your own conclusions. I want to stress that it’s not a case of one platform being the killer of all other platforms, far from it. There won’t be one platform to rule them all, and too often the tribalism has plagued this space. Blockchains are going to completely revolutionise most industries and have a profound effect on the world we know today. It’s still very early in this space with most adoption limited to speculation and trading mainly due to the limitations of Blockchain and current iteration of Ethereum, which all three of these platforms hope to address. For those who just want a quick summary see the image at the bottom of the article. With that said let’s have a look
CosmosEach Zone and Hub in Cosmos is capable of up to around 1000 transactions per second with bandwidth being the bottleneck in consensus. Cosmos aims to have thousands of Zones and Hubs all connected through IBC. There is no limit on the number of Zones / Hubs that can be created
PolkadotParachains in Polkadot are also capable of up to around 1500 transactions per second. A portion of the parachain slots on the Relay Chain will be designated as part of the parathread pool, the performance of a parachain is split between many parathreads offering lower performance and compete amongst themselves in a per-block auction to have their transactions included in the next relay chain block. The number of parachains is limited by the number of validators on the relay chain, they hope to be able to achieve 100 parachains.
AvalancheAvalanche is capable of around 4500 transactions per second per subnet, this is based on modest hardware requirements to ensure maximum decentralisation of just 2 CPU cores and 4 GB of Memory and with a validator size of over 2,000 nodes. Performance is CPU-bound and if higher performance is required then more specialised subnets can be created with higher minimum requirements to be able to achieve 10,000 tps+ in a subnet. Avalanche aims to have thousands of subnets (each with multiple virtual machines / blockchains) all interoperable with each other. There is no limit on the number of Subnets that can be created.
ResultsAll three platforms offer vastly superior performance to the likes of Bitcoin and Ethereum 1.0. Avalanche with its higher transactions per second, no limit on the number of subnets / blockchains that can be created and the consensus can scale to potentially millions of validators all participating in consensus scores ✅✅✅. Polkadot claims to offer more tps than cosmos, but is limited to the number of parachains (around 100) whereas with Cosmos there is no limit on the number of hubs / zones that can be created. Cosmos is limited to a fairly small validator size of around 200 before performance degrades whereas Polkadot hopes to be able to reach 1000 validators in the relay chain (albeit only a small number of validators are assigned to each parachain). Thus Cosmos and Polkadot scores ✅✅
CosmosTendermint consensus is limited to around 200 validators before performance starts to degrade. Whilst there is the Cosmos Hub it is one of many hubs in the network and there is no central hub or limit on the number of zones / hubs that can be created.
PolkadotPolkadot has 1000 validators in the relay chain and these are split up into a small number that validate each parachain (minimum of 14). The relay chain is a central point of failure as all parachains connect to it and the number of parachains is limited depending on the number of validators (they hope to achieve 100 parachains). Due to the limited number of parachain slots available, significant sums of DOT will need to be purchased to win an auction to lease the slot for up to 24 months at a time. Thus likely to lead to only those with enough funds to secure a parachain slot. Parathreads are however an alternative for those that require less and more varied performance for those that can’t secure a parachain slot.
AvalancheAvalanche consensus scan scale to tens of thousands of validators, even potentially millions of validators all participating in consensus through repeated sub-sampling. The more validators, the faster the network becomes as the load is split between them. There are modest hardware requirements so anyone can run a node and there is no limit on the number of subnets / virtual machines that can be created.
ResultsAvalanche offers unparalleled decentralisation using its revolutionary consensus protocols that can scale to millions of validators all participating in consensus at the same time. There is no limit to the number of subnets and virtual machines that can be created, and they can be created by anyone for a small fee, it scores ✅✅✅. Cosmos is limited to 200 validators but no limit on the number of zones / hubs that can be created, which anyone can create and scores ✅✅. Polkadot hopes to accommodate 1000 validators in the relay chain (albeit these are split amongst each of the parachains). The number of parachains is limited and maybe cost prohibitive for many and the relay chain is a ultimately a single point of failure. Whilst definitely not saying it’s centralised and it is more decentralised than many others, just in comparison between the three, it scores ✅
CosmosTendermint consensus used in Cosmos reaches finality within 6 seconds. Cosmos consists of many Zones and Hubs that connect to each other. Communication between 2 zones could pass through many hubs along the way, thus also can contribute to latency times depending on the path taken as explained in part two of the articles on Cosmos. It doesn’t need to wait for an extended period of time with risk of rollbacks.
PolkadotPolkadot provides a Hybrid consensus protocol consisting of Block producing protocol, BABE, and then a finality gadget called GRANDPA that works to agree on a chain, out of many possible forks, by following some simpler fork choice rule. Rather than voting on every block, instead it reaches agreements on chains. As soon as more than 2/3 of validators attest to a chain containing a certain block, all blocks leading up to that one are finalized at once.
If an invalid block is detected after it has been finalised then the relay chain would need to be reverted along with every parachain. This is particularly important when connecting to external blockchains as those don’t share the state of the relay chain and thus can’t be rolled back. The longer the time period, the more secure the network is, as there is more time for additional checks to be performed and reported but at the expense of finality. Finality is reached within 60 seconds between parachains but for external ecosystems like Ethereum their state obviously can’t be rolled back like a parachain and so finality will need to be much longer (60 minutes was suggested in the whitepaper) and discussed in more detail in part three
AvalancheAvalanche consensus achieves finality within 3 seconds, with most happening sub 1 second, immutable and completely irreversible. Any subnet can connect directly to another without having to go through multiple hops and any VM can talk to another VM within the same subnet as well as external subnets. It doesn’t need to wait for an extended period of time with risk of rollbacks.
ResultsWith regards to performance far too much emphasis is just put on tps as a metric, the other equally important metric, if not more important with regards to finance is latency. Throughput measures the amount of data at any given time that it can handle whereas latency is the amount of time it takes to perform an action. It’s pointless saying you can process more transactions per second than VISA when it takes 60 seconds for a transaction to complete. Low latency also greatly increases general usability and customer satisfaction, nowadays everyone expects card payments, online payments to happen instantly. Avalanche achieves the best results scoring ✅✅✅, Cosmos with comes in second with 6 second finality ✅✅ and Polkadot with 60 second finality (which may be 60 minutes for external blockchains) scores ✅
CosmosEvery Zone and Hub in Cosmos has their own validator set and different trust assumptions. Cosmos are researching a shared security model where a Hub can validate the state of connected zones for a fee but not released yet. Once available this will make shared security optional rather than mandatory.
PolkadotShared Security is mandatory with Polkadot which uses a Shared State infrastructure between the Relay Chain and all of the connected parachains. If the Relay Chain must revert for any reason, then all of the parachains would also revert. Every parachain makes the same trust assumptions, and as such the relay chain validates state transition and enables seamless interoperability between them. In return for this benefit, they have to purchase DOT and win an auction for one of the available parachain slots.
However, parachains can’t just rely on the relay chain for their security, they will also need to implement censorship resistance measures and utilise proof of work / proof of stake for each parachain as well as discussed in part three, thus parachains can’t just rely on the security of the relay chain, they need to ensure sybil resistance mechanisms using POW and POS are implemented on the parachain as well.
AvalancheA subnet in Avalanche consists of a dynamic set of validators working together to achieve consensus on the state of a set of many blockchains where complex rulesets can be configured to meet regulatory compliance. So unlike in Cosmos where each zone / hub has their own validators, A subnet can validate a single or many virtual machines / blockchains with a single validator set. Shared security is optional
ResultsShared security is mandatory in polkadot and a key design decision in its infrastructure. The relay chain validates the state transition of all connected parachains and thus scores ✅✅✅. Subnets in Avalanche can validate state of either a single or many virtual machines. Each subnet can have their own token and shares a validator set, where complex rulesets can be configured to meet regulatory compliance. It scores ✅ ✅. Every Zone and Hub in cosmos has their own validator set / token but research is underway to have the hub validate the state transition of connected zones, but as this is still early in the research phase scores ✅ for now.
CosmosThe Cosmos project started in 2016 with an ICO held in April 2017. There are currently around 50 projects building on the Cosmos SDK with a full list can be seen here and filtering for Cosmos SDK . Not all of the projects will necessarily connect using native cosmos sdk and IBC and some have forked parts of the Cosmos SDK and utilise the tendermint consensus such as Binance Chain but have said they will connect in the future.
PolkadotThe Polkadot project started in 2016 with an ICO held in October 2017. There are currently around 70 projects building on Substrate and a full list can be seen here and filtering for Substrate Based. Like with Cosmos not all projects built using substrate will necessarily connect to Polkadot and parachains or parathreads aren’t currently implemented in either the Live or Test network (Kusama) as of the time of this writing.
AvalancheAvalanche in comparison started much later with Ava Labs being founded in 2018. Avalanche held it’s ICO in July 2020. Due to lot shorter time it has been in development, the number of projects confirmed are smaller with around 14 projects currently building on Avalanche. Due to the customisability of the platform though, many virtual machines can be used within a subnet making the process incredibly easy to port projects over. As an example, it will launch with the Ethereum Virtual Machine which enables byte for byte compatibility and all the tooling like Metamask, Truffle etc. will work, so projects can easily move over to benefit from the performance, decentralisation and low gas fees offered. In the future Cosmos and Substrate virtual machines could be implemented on Avalanche.
ResultsWhilst it’s still early for all 3 projects (and the entire blockchain space as a whole), there is currently more projects confirmed to be building on Cosmos and Polkadot, mostly due to their longer time in development. Whilst Cosmos has fewer projects, zones are implemented compared to Polkadot which doesn’t currently have parachains. IBC to connect zones and hubs together is due to launch Q2 2021, thus both score ✅✅✅. Avalanche has been in development for a lot shorter time period, but is launching with an impressive feature set right from the start with ability to create subnets, VMs, assets, NFTs, permissioned and permissionless blockchains, cross chain atomic swaps within a subnet, smart contracts, bridge to Ethereum etc. Applications can easily port over from other platforms and use all the existing tooling such as Metamask / Truffle etc but benefit from the performance, decentralisation and low gas fees offered. Currently though just based on the number of projects in comparison it scores ✅.
CosmosCosmos enables permissioned and permissionless zones which can connect to each other with the ability to have full control over who validates the blockchain. For permissionless zones each zone / hub can have their own token and they are in control who validates.
PolkadotWith polkadot the state transition is performed by a small randomly selected assigned group of validators from the relay chain plus with the possibility that state is rolled back if an invalid transaction of any of the other parachains is found. This may pose a problem for enterprises that need complete control over who performs validation for regulatory reasons. In addition due to the limited number of parachain slots available Enterprises would have to acquire and lock up large amounts of a highly volatile asset (DOT) and have the possibility that they are outbid in future auctions and find they no longer can have their parachain validated and parathreads don’t provide the guaranteed performance requirements for the application to function.
AvalancheAvalanche enables permissioned and permissionless subnets and complex rulesets can be configured to meet regulatory compliance. For example a subnet can be created where its mandatory that all validators are from a certain legal jurisdiction, or they hold a specific license and regulated by the SEC etc. Subnets are also able to scale to tens of thousands of validators, and even potentially millions of nodes, all participating in consensus so every enterprise can run their own node rather than only a small amount. Enterprises don’t have to hold large amounts of a highly volatile asset, but instead pay a fee in AVAX for the creation of the subnets and blockchains which is burnt.
ResultsAvalanche provides the customisability to run private permissioned blockchains as well as permissionless where the enterprise is in control over who validates the blockchain, with the ability to use complex rulesets to meet regulatory compliance, thus scores ✅✅✅. Cosmos is also able to run permissioned and permissionless zones / hubs so enterprises have full control over who validates a blockchain and scores ✅✅. Polkadot requires locking up large amounts of a highly volatile asset with the possibility of being outbid by competitors and being unable to run the application if the guaranteed performance is required and having to migrate away. The relay chain validates the state transition and can roll back the parachain should an invalid block be detected on another parachain, thus scores ✅.
CosmosCosmos will connect Hubs and Zones together through its IBC protocol (due to release in Q1 2020). Connecting to blockchains outside of the Cosmos ecosystem would either require the connected blockchain to fork their code to implement IBC or more likely a custom “Peg Zone” will be created specific to work with a particular blockchain it’s trying to bridge to such as Ethereum etc. Each Zone and Hub has different trust levels and connectivity between 2 zones can have different trust depending on which path it takes (this is discussed more in this article). Finality time is low at 6 seconds, but depending on the number of hops, this can increase significantly.
PolkadotPolkadot’s shared state means each parachain that connects shares the same trust assumptions, of the relay chain validators and that if one blockchain needs to be reverted, all of them will need to be reverted. Interoperability is enabled between parachains through Cross-Chain Message Passing (XCMP) protocol and is also possible to connect to other systems through bridges, which are specifically designed parachains or parathreads that each are custom made to interact with another ecosystem such as Ethereum and Bitcoin. Finality time between parachains is around 60 seconds, but longer will be needed (initial figures of 60 minutes in the whitepaper) for connecting to external blockchains. Thus limiting the appeal of connecting two external ecosystems together through Polkadot. Polkadot is also limited in the number of Parachain slots available, thus limiting the amount of blockchains that can be bridged. Parathreads could be used for lower performance bridges, but the speed of future blockchains is only going to increase.
AvalancheA subnet can validate multiple virtual machines / blockchains and all blockchains within a subnet share the same trust assumptions / validator set, enabling cross chain interoperability. Interoperability is also possible between any other subnet, with the hope Avalanche will consist of thousands of subnets. Each subnet may have a different trust level, but as the primary network consists of all validators then this can be used as a source of trust if required. As Avalanche supports many virtual machines, bridges to other ecosystems are created by running the connected virtual machine. There will be an Ethereum bridge using the EVM shortly after mainnet. Finality time is much faster at sub 3 seconds (with most happening under 1 second) with no chance of rolling back so more appealing when connecting to external blockchains.
ResultsAll 3 systems are able to perform interoperability within their ecosystem and transfer assets as well as data, as well as use bridges to connect to external blockchains. Cosmos has different trust levels between its zones and hubs and can create issues depending on which path it takes and additional latency added. Polkadot provides the same trust assumptions for all connected parachains but has long finality and limited number of parachain slots available. Avalanche provides the same trust assumptions for all blockchains within a subnet, and different trust levels between subnets. However due to the primary network consisting of all validators it can be used for trust. Avalanche also has a much faster finality time with no limitation on the number of blockchains / subnets / bridges that can be created. Overall all three blockchains excel with interoperability within their ecosystem and each score ✅✅.
CosmosThe ATOM token is the native token for the Cosmos Hub. It is commonly mistaken by people that think it’s the token used throughout the cosmos ecosystem, whereas it’s just used for one of many hubs in Cosmos, each with their own token. Currently ATOM has little utility as IBC isn’t released and has no connections to other zones / hubs. Once IBC is released zones may prefer to connect to a different hub instead and so ATOM is not used. ATOM isn’t a fixed capped supply token and supply will continuously increase with a yearly inflation of around 10% depending on the % staked. The current market cap for ATOM as of the time of this writing is $1 Billion with 203 million circulating supply. Rewards can be earnt through staking to offset the dilution caused by inflation. Delegators can also get slashed and lose a portion of their ATOM should the validator misbehave.
PolkadotPolkadot’s native token is DOT and it’s used to secure the Relay Chain. Each parachain needs to acquire sufficient DOT to win an auction on an available parachain lease period of up to 24 months at a time. Parathreads have a fixed fee for registration that would realistically be much lower than the cost of acquiring a parachain slot and compete with other parathreads in a per-block auction to have their transactions included in the next relay chain block. DOT isn’t a fixed capped supply token and supply will continuously increase with a yearly inflation of around 10% depending on the % staked. The current market cap for DOT as of the time of this writing is $4.4 Billion with 852 million circulating supply. Delegators can also get slashed and lose their DOT (potentially 100% of their DOT for serious attacks) should the validator misbehave.
AvalancheAVAX is the native token for the primary network in Avalanche. Every validator of any subnet also has to validate the primary network and stake a minimum of 2000 AVAX. There is no limit to the number of validators like other consensus methods then this can cater for tens of thousands even potentially millions of validators. As every validator validates the primary network, this can be a source of trust for interoperability between subnets as well as connecting to other ecosystems, thus increasing amount of transaction fees of AVAX. There is no slashing in Avalanche, so there is no risk to lose your AVAX when selecting a validator, instead rewards earnt for staking can be slashed should the validator misbehave. Because Avalanche doesn’t have direct slashing, it is technically possible for someone to both stake AND deliver tokens for something like a flash loan, under the invariant that all tokens that are staked are returned, thus being able to make profit with staked tokens outside of staking itself.
There will also be a separate subnet for Athereum which is a ‘spoon,’ or friendly fork, of Ethereum, which benefits from the Avalanche consensus protocol and applications in the Ethereum ecosystem. It’s native token ATH will be airdropped to ETH holders as well as potentially AVAX holders as well. This can be done for other blockchains as well.
Transaction fees on the primary network for all 3 of the blockchains as well as subscription fees for creating a subnet and blockchain are paid in AVAX and are burnt, creating deflationary pressure. AVAX is a fixed capped supply of 720 million tokens, creating scarcity rather than an unlimited supply which continuously increase of tokens at a compounded rate each year like others. Initially there will be 360 tokens minted at Mainnet with vesting periods between 1 and 10 years, with tokens gradually unlocking each quarter. The Circulating supply is 24.5 million AVAX with tokens gradually released each quater. The current market cap of AVAX is around $100 million.
ResultsAvalanche’s AVAX with its fixed capped supply, deflationary pressure, very strong utility, potential to receive air drops and low market cap, means it scores ✅✅✅. Polkadot’s DOT also has very strong utility with the need for auctions to acquire parachain slots, but has no deflationary mechanisms, no fixed capped supply and already valued at $3.8 billion, therefore scores ✅✅. Cosmos’s ATOM token is only for the Cosmos Hub, of which there will be many hubs in the ecosystem and has very little utility currently. (this may improve once IBC is released and if Cosmos hub actually becomes the hub that people want to connect to and not something like Binance instead. There is no fixed capped supply and currently valued at $1.1 Billion, so scores ✅.
All three are excellent projects and have similarities as well as many differences. Just to reiterate this article is not intended to be an extensive in-depth list, but rather an overview based on some of the criteria that I feel are most important. For a more in-depth view I recommend reading the articles for each of the projects linked above and coming to your own conclusions, you may have different criteria which is important to you, and score them differently. There won’t be one platform to rule them all however, with some uses cases better suited to one platform over another, and it’s not a zero-sum game. Blockchain is going to completely revolutionize industries and the Internet itself. The more projects researching and delivering breakthrough technology the better, each learning from each other and pushing each other to reach that goal earlier. The current market is a tiny speck of what’s in store in terms of value and adoption and it’s going to be exciting to watch it unfold.
For more information see the articles below (each with additional sources at the bottom of their articles)
Avalanche, a Revolutionary Consensus Engine and Platform. A Game Changer for Blockchain
Avalanche Consensus, The Biggest Breakthrough since Nakamoto
Cosmos — An Early In-Depth Analysis — Part One
Cosmos — An Early In-Depth Analysis — Part Two
Cosmos Hub ATOM Token and the commonly misunderstood staking tokens — Part Three
Polkadot — An Early In-Depth Analysis — Part One — Overview and Benefits
Polkadot — An Early In-Depth Analysis — Part Two — How Consensus Works
Polkadot — An Early In-Depth Analysis — Part Three — Limitations and Issues
suddenly be incentive to hold iota?to generate Mana
It's still possible to send transactions even without mana - mana is only used in times of congestion to give the people that have more mana more priorityu/Hans Moog [IF] Im sorry Hans, but this is false in the current congestion control algorithm. No mana = no transactions. To be honest, we havent really tried to make it work so that you can sent transactions with no mana during ties with no congestion, but I dont see how you can enable this and still maintain the sybil protection required. u/Luigi Vigneri [IF] What do you think?📷
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