Introduction
On August 8th, RainChain Media invited Peijiang Zhu, PalletOne Co-Founder, to share his opinions about Blockchain and Token Economy in PalletOne wechat group. This article is revised based on his verbatim.
Insight into Blockchain
Blockchain is a kind of infrastructure of a value network. Its core is that the mechanism is transparent, traceable, and individual or entity cannot tamper with the operating mechanism and data. It provides a transparent and collaborative tool that is recognized by all the participants. Therefore, people can trust blockchain, define and use valuable data and targets on it.
The core idea of the blockchain is to provide a rule recognized by all the participants, and the rule is solidified and guaranteed by the computer system and software code. On this basis, we can see the characteristics of credibility, de-intermediation and trustlessness. The frequently referred decentralization is only a guarantee for the credibility and consensus of the blockchain system.
Types of Blockchains
Nowadays, blockchains can be roughly divided into the following three categories based on system access:
Public blockchain — Open read/write, nodes are controlled or uncontrollable;
Consortium blockchain — Permissioned read and/or write within multiple organizations, nodes are controlled;
Private blockchain — All nodes are controlled by single organization, permissioned read and/or write within the organization, nodes are controlled.
The boundaries between the public blockchains and consortium blockchains is blurred, and some consortium blockchains have gradually become public blockchains. Meanwhile, many public blockchains also evolve from consortium blockchains with permissioned nodes but open read/write to access. For example, EOS nodes are elected through community poll now. If the generation of these nodes is not based on voting but on the rules of the federated nodes, then EOS will become a consortium chain with permissionless access.
Problems with Public Blockchain
Underlying Public Blockchain:
Performance Bottleneck
Currently Bitcoin’s TPS is 7 and Ethereum’s TPS is 20\30. Many underlying blockchain systems have also made a lot of attempts to improve performance, mainly based on consensus algorithms. But based on the current situation, the performance bottleneck problem is not necessarily the problem of all application scenarios.
Solutions:
Blockchain system technology: Improve consensus algorithm and establish multi-chain, main chain plus relay/ side chain.
Combine the centralized system and the blockchain system, and hand over the frequent operations with lower requirements for depository receipt and value to the centralized service system. And leave operations with high demand on depository receipt and value to blockchain.
Security Issues
Blockchains have security issues with the underlying supply, especially smart contract security. We can see that since 2016, significant events have taken place in blockchain world including DAO attack, parity hack and BEC attack. These events are caused by big data attacks and underlying code-level bugs.
Solutions:
Conduct security audit and testing before contract deployment.
Set safer contract programming rules.
Develop new contract execution system.
Blockchain Fork Problem
Due to security issues, community fragmentation, and interest claims, there is fork in the blockchain. The famous hard fork of Bitcoin is BCH and ETC.
Solutions:
Pay attention to community governance and consensus to ensure that the accounting nodes do not do evil.
Submit various proposals to modify system parameters according to the running state of the token economy system.
Blockchain as an Application Platforms
Limited by Underlying Public Blockchains
First problem is platform lock-in, which also occurred when computer just appeared. Since the hardware, operating system, application software were bounded, they cannot run and use across platforms. Similarly, the current self-built blockchain applications also have corresponding problems, limited by the structure, performance bottleneck and security of underlying blockchain systems. In addition, since the applications and underlying chains are bounded, the developers need consider incentives for consensus nodes and application users. As a result, the design of token is rather complex with 2 or 3 layers.
High Service Charge
When using the applications, the user need to pay the application token as well as the token of the underlying public chain, for example ETH. Or the user need to hold token of the underlying public chain as basis to use computing resources, taking EOS as an example. In short, the service charge is high and user experience is poor.
Difficult Development
For the application development team, they need to develop and transform the underlying chain system and it is difficult to guarantee secure upgrade of the underlying technology of the blockchain and avoid system bugs. The problem of value transfer and information intercommunication between different blockchains is hard to solve.
PalletOne ‘s Solutions
Performance
PalletOne adopts DPOS consensus mechanism to improve performance.
PalletOne develops a system based on consensus partition, similar to a multi-chain system.
Security
Token abstract layer of PalletOne provides a variety of token models and corresponding attributes, facilitating the definition of issuance of customized tokens and reducing the possibility of errors.
PalletOne token is based on UTXO model, which decouples the token definition and smart contract to ensure the security.
PalletOne provides smart contract models for the developers and there are incentives for the developers to promote the application development and keep system security.
Service Charge
The token-based consensus partition mechanism can support the application token as regard to payment. Users needn’t hold tokens of underlying chain.
In this term, the application developer can focus on token economy and business model instead of studying the underlying blockchain technology. In conclusion, PalletOne system is friendlier to users and developers.
For more information:
Official website: https://pallet.one/
E-mail: contact@pallet.one
Telegram: https://t.me/PalletOneOfficialEN
Github: https://github.com/PalletOne
Twitter: https://twitter.com/PalletOne_org
Wechat official account: Pallet