Hello everyone,
I am Jian Jolly, managing director of Bitkapital, and CBDO of The Blockchain Brokerage. There have been many blockchain use cases I have had in mind for some time, and with the recent active release of Hyperledger’s Fabric, I thought that I might just create a private blockchain to make some experimental attempts on top of it. When I told about this to my colleagues, they asked me to make of this a public project where everyone could benefit from, observe, and contribute to the chain, which sounded to me like a suggestion completely in line with the spirit of the open culture. There we go.
The applications we will be testing are all based on one pivotal concept; hybrid smart contracts. It is basically to take out everything from decentralized smart contracts that could as well be done by centralized methods without harming arguably any of the core values of decentralization, i.e., security, auditability, transparency and immutability. This is not meant to be a detailed technical whitepaper, so I’ll be contented with turning to an example to illustrate what it will look like.
A great application based on an introductory version of this concept is employed by Lykke the semi-centralized digital asset exchange. Simply put, what Lykke does is centralized order matching combined with decentralized settlement of trades. Why do we need centralized order matching? Because it’s extremely fast and scalable! You would normally need at least about 10 minutes to get one confirmation with Bitcoin. This may be very convenient to settle money transfers, but when it comes to decentralized applications, transaction finalization time becomes a larger issue. With Ethereum, for instance, we have blocks with above 10-second intervals. On the other hand, Lykke could execute trades in milliseconds.
Now, what I’m saying is, wouldn’t it be nice to have a platform for everyone to build their own “semi-centralized” applications? I envisage this as a platform with enterprise-grade built-in security measures for the centralized parts, where all the user has to do is to click and install a container to build the applications within. So, it will be the generalization of the idea which Lykke has at its core. But indeed, there’s more to it. While Lykke has the concept of “semi-centralization,” I propose to have “hybrid smart contracts.” It means that the needed parts will still be executed in a totally decentralized way, for instance, the atomicity of the trade orders.
Why is this model superior to the currently prevailing way of understanding smart contracts? Because, as I said, it allows a level of scalability which could only be achieved by centralized solutions. And why is this model superior to doing things in a thoroughly centralized manner? Because the contract participants will still be unharmed in case of a failure or a malicious attempt. Besides, everything will be on a non-permissioned public blockchain so that each and every action taken by the centralized parts will be open for inspection by anyone.
What’s more, what I have been calling “the centralized parts” is not actually designed to work in a centralized way, but as running a distributed application! Thus, there will not be one but a few servers sharing the load. Those servers will each have a key of a multisignature wallet, and the execution will be finalized after enough number of signatures are provided. Hence we reach the concept of hybrid smart contracts, the best of both worlds in decentralized applications.
The above was just an overview of the idea, which has a lot more details and embellishments.
Summary
The idea is to centralize some parts of blockchain smart contracts to benefit from the power of centralized solutions, only to the extent that the centralized parts may give no harm to the decentralized nature of the overall process. This will bring ultimately fast and scalable smart contracts that will allow enterprise applications on blockchain. Hyperledger’s Fabric will be used as the blockchain infrastructure. The attempt is completely experimental and mainly for testing/prototyping purposes, although chances are it turns out to be the next big thing, or at least the first step towards that.
Initial Coin Distribution
I plan on making a small funding round for the initial distribution of the core token of the platform, which will be used to pay fees therein. The details are to come, if I observe enough interest.