Educational Byte: What is a Proof-of-Concept (PoC) and How to Make One?

In the world of cryptocurrencies, the term Proof-of-Concept (PoC) often appears in a lot of projects. Unlike other similarly-written concepts like Proof-of-Stake (PoS) or Proof-of-Work (PoW), this one isn’t a consensus mechanism on a certain network, and it’s also applicable outside decentralized money. That’s because a PoC is only a preliminary demonstration to verify that an idea, project, or method is feasible and practical.

In other words, if you have a concept in your mind, and you think it’s actually a good idea to put into practice, you can build something small to test its value and performance. In crypto, a PoC refers specifically to an early demonstration that tests the feasibility and functionality of a new distributed network, decentralized system, coin, or protocol. It’s used to validate ideas, test assumptions, and identify potential issues before full-scale development and deployment.

A lot of interesting projects have started from a simple PoC. So, if you have an original idea to start building something that improves a certain field or system, this would likely be the first station in your journey.

How to make a PoC?

Depending on the scale or complexity of your project, you may need more than one party and some budget to start. Let’s say that we’re trying to build a  decentralized voting system in Obyte. The primary goal would be to demonstrate that the Obyte network can enhance electoral transparency and security, addressing issues like fraud and lack of trust in traditional voting systems.

The project starts with identifying the problem, focusing on improving the integrity and transparency of voting procedures. Obyte is chosen for its secure and censorship-resistant Directed Acyclic Graph (DAG) architecture. The design phase is next and outlines the technical structure. That could include data handling, vote recording, and selection of Dapps or specific features to use. Autonomous Agents on Obyte could manage vote registration and counting securely, for instance. Rigorous testing, including security audits and simulated elections, would ensure the system's reliability and address potential vulnerabilities.

Finally, feedback from stakeholders, such as election officials and tech experts, is essential for refining the PoC, improving the user interface, and enhancing security features. Documenting the entire process provides a comprehensive overview, and presenting the PoC to its intended audience highlights its features and potential applications, paving the way for full-scale development.

Considering the above so far, we can divide the process into six steps: define the project's goal, choose a proper decentralized network, design or select the technical structure, conduct rigorous testing and security audits, gather feedback, and document the process. Remember that, even if it doesn’t work as intended in the end, other builders may find it useful for their own ventures.

Some PoCs in Obyte

Previous PoCs on Obyte, in collaboration with the Bosch Connectory in Stuttgart, have demonstrated the versatility and effectiveness of this network in various applications. One PoC, for example, involved an Autonomous Agent (AA) managing a Dutch auction, where items are sold in a reverse auction format.

In this case, sellers input auction details, such as start price and price drop intervals, via an Obyte chatbot. Buyers place bids, and the AA handles the entire process, including confirming sales, shipping items, and releasing payments upon receipt, all while updating reputation ratings.

Another PoC utilized Obyte to demonstrate the functioning of an onsite vending machine filled with power tools at a construction site. Workers would rent tools on a pay-by-use basis, scanning a QR code to pay with Bosch Coins —a customized token also developed in Obyte. The vending machine securely generates new deposit addresses via an Extended Public Key, ensuring the funds' safety even if the machine is damaged or stolen. This setup also provides real-time payment notifications to administrators.

A third PoC involved booking conference rooms using Bosch Coins through the Connectory Member Portal App. Users would book rooms and other services, paying with these tokens. An autonomous agent tracks and distributes Bosch Coin allowances for each department, facilitating efficient inter-departmental charge reconciliation and preventing overspending on Bosch Coins.

These are nice samples of past years, but now it's up to new innovators to explore and develop their own Proofs of Concept. With its powerful and decentralized features, Obyte is a good place to start doing it.

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