Hackernoon logoEmotiq AG ICO Review - The Latest Gen Blockchain Straight Outta CryptoValley… by@michaeldraper

Emotiq AG ICO Review - The Latest Gen Blockchain Straight Outta CryptoValley…

Michael Draper Hacker Noon profile picture

@michaeldraperMichael Draper

iPhone X is the latest and greatest iPhone coming straight outta Apple…

As it stands in crypto we’re up to “Blockchain 3.0” now — if not 4.0!

Blockchain 1.0 was grandfathered by the big mack daddy Bitcoin when Satoshi Nakamoto released Bitcoin’s whitepaper in 2008 shortly after the iPhone 3G came out…

The release of Bitcoin coincided with the iPhone 3G

Blockchain 2.0 was led by Ethereum and is joined by several other smart contract blockhains that sit within the top 10 market caps of crypto projects.

Ethereum’s whitepaper was unleashed into the wild around the same time the iPhone 6+ was released to the public waaaaay back in 2014.

Ethereum’s whitepaper release came out same time as the iPhone 6 (Plus)

In 2018 we have Blockchain 3.0s encompassing the next wave and generation of blockchains that are seeking to revolutionize and innovate on top of their founding fathers.

Today, Emotiq enters into the Blockchain 3.0 ranks as one of the latest and most promising blockchains to date.

Emotiq Chilling with the iPhone X (what’s next? 9, XI, X2?!)

Before we dive into Emotiq and everything “Blockchain 3.0" related, lets take a step back so we can survey the lay of the blockchain land and see where everything currently stands.

Crypto Blockchains in 2018

If you’ve been paying attention to crypto markets, you may have noticed one category of projects that have consistently outperformed everything and everyone else: Blockchain Projects.

In particular, projects aimed at solving blockchain’s scalability issue such as Zilliqa, and more recently QuarkChain and IoTeX along with several others have seen significant gains upon release.

This is for good reason as lack of scalability and capacity for increased transactions in big hitting blockchains such as Bitcoin and Ethereum are acting as severe bottlenecks in the wider adoption of blockchain technology.

To put it simply, if the speed of the internet never surpassed 56k (i.e. download speed of 56 kilobytes per second!), the internet would NEVER have gotten as big as it did and revolutionized the world as we know it today with global trade, communication, eCommerce, and much more…

Gimme some of dat 56k please.

More, More, and Even More Transactions Per Second!!!

Because of this scalability bottleneck everyone has their eyes fixated on “blockchain scalability”. Greater amounts of transactions per second for blockchains will open a wide plethora of use-cases and also open up the amount of people who can actually use and adopt the technology.

There is one issue I’m seeing with all of this though.

It seems that many projects are falling victim to “cognitive tunneling”, a psychological term used to explain when people get too focused on a single goal, task, or problem that causes blindness to EVERYTHING else that is happening.

Crypto projects and investors are heavily focused on reaching the next highest blockchain transaction per second; from 100,000 to 1 million and now even 10 million transactions per second!

It’s all well and good if a blockchain has the capacity to process that many transactions, however, higher transactions per second isn’t the only missing piece when it comes to blockchain scalability…

What Happens Once You Get a High Throughput Blockchain?

1. You Might Lose Out On Decentralization

If you get a scalable blockchain that CAN process over 10,000 transactions per second, you may find that the blockchain starts to become more centralized.

Because the blockchain processes SO MANY transactions each second now, this means a LOT of data must now be transmitted, as well as stored, thus resulting in the blockchain being unscalable in a decentralized manner.

You either need:

  1. Massive centralized data servers that have storage capacity to keep track of the blockchain’s ledger; and
  2. Insane internet download speeds of megabytes/terabytes per second to handle the vast amount of transactions processed, as noted in Algorand’s test prototype.

2. Other Features Barring Adoption Must Be Addressed

Considering for a second that there is a blockchain that allows for:

  1. Higher transactions per second; and
  2. Whilst maintaining an acceptable level of decentralization.

We now face the next problem of how can we get more people to adopt and use this blockchain?

Well, IMO one of the most pressing issues with current blockchains is the sheer lack of privacy due to the open transparent nature of public blockchain ledgers where amounts that are transacted between senders and receivers of cryptoassets can be easily traced, tracked, and analyzed by every man, their dog, and their pet guinea pigs.

Fun fact: Dogs and Guinea Pigs can be best friends

Privacy is a MASSIVE TRENDING topic worldwide. You may have noticed Europe’s GDPR privacy policy kicking in in May resulting in in a vast trove of emails sent out around changes in privacy policies.

Personal privacy also encompasses financial privacy, which is arguably an even more taboo topic. In many countries today it isn’t an acceptable norm to openly speak about money, how much someone earns, or has saved.

For blockchains to reach wider adoption, at least from a financial standpoint, I would argue that financial privacy is a necessity, especially if enterprise companies and institutions will even consider looking at adopting public blockchain technology.

Bitcoin transactions being traced and tracked.

3. You Need People To Adopt and Use The Blockchain!

Even if you had the best blockchain in the world that solved the blockchain trilemma of decentralization, security, and scalability, is it of any use if NOBODY uses it or even knows about it?

No, it wouldn’t be of much use or value at all.

You could have a crypto exchange boasting the best user experience, interface, design, customer support that listed every single crypto project instantly, however if no one uses it, it’s USELESS.

One of the key attributes of a crypto exchange is having LIQUIDITY and this is provided by having a lot of users who trade with each other.

When it comes to blockchains, one of their key attributes for providing and having functional utility and value is having USERS and DEVELOPERS participating within the network, otherwise there are minimal network effects or possibility for significant utility and value to be gained.

Building a Blockchain from Scratch

I recently stumbled across this excel sheet compiling blockchain projects that have been or are being built from scratch.

One of the key advantages for projects building a blockchain from scratch is that they can work based off of first principles, meaning they can essentially pick the land their house gets built on, design it with their specifications, lay down the foundation, and then get to building it exactly as they envisioned it.

This is akin to designing a “dream house”, however in this case we are considering how to best design a “dream blockchain”.

What’s the best possible design for a blockchain that could take crypto to that next elusive level of mainstream adoption?

This is the question that Joel Reymont (CEO and Founder of Emotiq) has asked and answered with the creation of Emotiq.

Emotiq’s Vision

Reymont believes that by 2019 most blockchains will no longer face scalability issues, if this is true, how will these scalable blockchains differentiate themselves from one another?

This is a clear example of reasoning from first principles and longer-term thinking, as opposed to people who simply chase the current and hottest trends in search of wealth.

Reasoning from first principles provides a distinct advantage in all arenas of life, and this applies just as much when it comes to blockchains.

By thinking of an incorporating the different elements that are most important in the design of a blockchain, this allows a project to create the underlying code and architecture of the blockchain such that it is designed and integrated with the best features all in one.

This is the opposite of slapping duct tape on top of everything hoping that things will be fixed, which could arguably be said about Bitcoin and the Lightning Network.

So what is Emotiq’s answer as to the best design of a well built blockchain?

Glad you asked because I’m gonna tell you, whether you want me to or not!

Sharding + Horizontal Scalability

Building on proven blockchain architecture OmniLedger, Emotiq incorporates sharding to enable horizontal scalability for higher amounts of transaction throughput.

Privacy

Zero-knowledge proofs, or specifically bullet proofs, will be used to ensure transaction anonymity for users that receive and send tokens on Emotiq.

Emotiq’s CEO Joel Reymont ensuring privacy of transactions using zero knowledge proofs.

Blockchain Adoption and Usability

Emotiq has chosen to implement a natural programming language called Ring for their smart contracts. The use of Ring aims to allow any normal lay person without technical know-how or coding knowledge to write, read, and create smart contracts easily.

The Ring language is aimed to remove barriers so that people don’t need to approach special programmers to write up smart contracts. This could be compared to the utility value of Wordpress for bloggers and people looking to create new websites easily.

Instead of these people having to learn how to code and build a website from scratch, or hire someone to do this for them, Wordpress makes it as easy as clicking a button to set up a brand new website.

After the one-click install of Wordpress is finished, users can start posting their writing, articles, and blogs immediately.

This is similar to the creation of personal computers providing greater access to computing power and programming for individuals worldwide.

Want to make a bet with a friend that the Cavs will take the NBA finals in 7 games? No worries! Just write up a new smart contract using Ring in a few minutes then get you and your friend to sign it!

Lebron James with his favorite Cleveland Cavalier’s teammate JR Smith

The Main Tech Features of Emotiq

Built on OmniLedger

OmniLedger is a secure, scalable decentralized ledger that has been tested to scale up to 13,000 transaction per seconds with 1800 nodes using sharding and other cryptographic innovations.

The only two other projects building on top of OmniLedger’s technology are Zilliqa and Harmony.

Proof of Stake + Practical Byzantine Fault Tolerance (pBFT)

Emotiq’s consenus model is based off pBFT with the addition of strong consistency so there are no possibility of forks allowing for quick finality and confirmation of transactions (sub 10 seconds).

Proof of Stake uses a weighted proof of stake model where validators (or nodes) stake their EMTQ tokens and have a chance of being selected as a “lead” validator based on the percentage of tokens they stake relative to the total amount staked. This percentage chance then goes via cryptographic sortition to choose a “lead” validator for each block, with the lead validator rewarded in transaction fees for the block they ultimately create.

Don’t Change The Status Quo — Leverage It!

The top dog of smart contract blockchains is undoubtedly Ethereum. As a result, Emotiq will be incorporating machine translation so that any and all existing Ethereum contracts can easily be deployed on Emotiq’s platform.

Solidity (Ethereum’s smart contract language) to Ring (Emotiq’s smart contract language) machine translation will be available allowing for wider spread adoption.

Solidity will be translated to Common Lisp — Emotiq’s native blockchain programming language — and then will go from Lisp into Ring’s virtual machine for testing of any and all ported smart contracts.

Top Doge and Ethereum!

“I talk with a Lisp.”

Lisp is the high level programming language chosen and used to build Emotiq’s blockchain.

Whenever something falls outside my field of knowledge I refer to experts in that field to school me; if you want to read about Lisp from an expert refer to Paul Graham’s essay here.

The main takeaway is that developers who program in Lisp are highly capable and Lisp is a functional and efficient coding language that allows for flexibility and quick code to be whipped up. I am unaware of any other blockchains that are currently built using Lisp.

I don’t know what the hell this “thing” is.

Bitcoin’s Unspent Transaction Output (UTXO) Model + MimbleWimble!

Emotiq follows the UTXO model of Bitcoin allowing for the integration of MimbleWimble, which helps achieve true privacy and greater scalability.

Referring to outside experts once again I’ll get Andreas to quickly explain MimbleWimble to you:

Bonus Tech

There’s even more cryptographic solutions and innovations that Emotiq has incorporated however honestly, the majority of them goes far over my head, and some are yet to be addressed in-depth by Emotiq.

Some of the additional tech features include:

  • Collective signing signatures with a cosigning protocol
  • Use of Boneh-Lynn-Shacham (BLS) Signatures over Schnorr Signatures
  • Oracles to connect to the external world (to be elaborated upon by Emotiq)
  • Cryptographic Sortition for the selection of leaders and roles played by users in the network
  • In-built decentralized exchange for EMTQ tokens and child tokens (ERC20 equivalent for Emotiq), as well as Bitcoin and Ethereum Bridges, so you can easily buy and sell EMTQ and/or child tokens for BTC and ETH.

For further details, I refer you to Emotiq’s yellowpaper :)

Now, Show Me The Team!

  • Vladimir Lebedev, VP Engineering: Serial entrepreneur with 25 years of high level management experience for fintech, telecom, and media companies.
“David is literally a rocket scientist. Trained in theoretical and observational astrophysics, in addition to computer science, he brings an incomparable and extraordinary five decades of unique programming expertise to the table.”
  • Shannon Spires, Systems Engineer: 25 years of Lisp programming experience.
  • Paul Tarvydas, Electronics and Microprocessor Guru: Senior Director of Software Development for 25 years.
  • Mark David, Software Architect: 35 years experience as Lisp programmer.
  • Mark Evensen, Software Architect: 25 years programming experience with Lisp, Python, Java, and C.

I don’t generally like going over teams as I would much prefer shouting “ALL STAR” and be done with it, but this team is clearly more than capable from a programming and development standpoint with DECADES of programming experience under their belt.

What the team seems to be lacking in are people with a strong marketing and/or business background.

Code, Code, Code.

Emotiq’s Github has seen consistent commits made since February of this year with 6 major contributors updating the Github almost daily.

Andre Cronje has reviewed Emotiq’s code and provided two thumbs for approval, which goes to show the team’s credibility and capability as strong programming developers.

In Emotiq’s Telegram channel it was noted a testnet would be live within 3 to 4 weeks time. All up, I have to say it’s a refreshing change to see a project that’s actually committed to building and shipping code.

These guys aren’t just sitting around on their asses twiddling their thumbs.

Potential Considerations:

1. Team has strong dev experience however haven’t demonstrated a capability to commit to projects for the long-haul based off their past experiences.

This brings up the question as to how long and whether the team are truly committed to building out and supporting Emotiq over the long-term.

There is an 18 month lockup of team members tokens and this sits on the average side when it comes to lockups.

2. Lisp as Emotiq’s primary programming language faces pros & cons:

Pros:

Cons:

  • As there is a smaller pool of developers when it comes to Lisp, if any team members leave it may be difficult to find other similarly capable developers to fill their place.
  • Lisp can act as a barrier to entry for outside developers who are seeking to pitch in and/or help with any open source efforts for Emotiq.

3. Use of a “natural” smart contract programming language is untested

Contracts written in normal everyday English may arguably pose problems.

If anyone can write their own contracts, it’s possible the contracts may ultimately end up quite vague, ambiguous, or be prone to errors.

There is however a definite market opportunity available for contracts that are readable, clean, intuitive and well coded, as long as it follows good conventions and practices that avoid common pitfalls of “bad” contracts.

The simplicity of writing contracts in plain English can also drastically reduce the attack vector and surface of smart contracts, as has been witness in various smart contracts such as:

With added complexity comes larger vulnerabilities and attack surfaces rendering some smart contracts simply too risky to ever be practical.

4. No Crowdsale!

“when ico, when moon, when lambo?”

Emotiq had a crowdsale planned earlier in the year however have since cancelled it due to regulatory risks and concerns. They will only be undergoing a private sale for their $39M raise for 51% of their tokens.

As they are using a weighted Proof of Stake system, it could be said that this is a general case of:

“the rich get richer and the poor get poorer.”

I don’t believe we’ll be seeing any #occupyemotiq protests anytime soon due of this however this could be a potential loss when it comes to building a strong community around Emotiq facilitating wider spread adoption.

Bankers Protesting in NYC at Consensus 2018

5. Competition

There are a TON of blockchain projects striving to be the blockchain that rules them all. Everyone is taking a different stance and approach as to what they believe is the best mix of features and design for a well built and widely adopted blockchain.

Ethereum and Bitcoin are the front runners when it comes to adoption and strong communities, however they are lagging behind when it comes to areas such as privacy and scalability.

They face a tougher challenge of building and developing their protocols out as they are already up and running, whereas newcomers such as Emotiq have the benefit of building with a clean slate to get the foundations just right, however community support and adoption is where blockchain 3.0’s will be sorely lacking.

So… Where To Now?

Emotiq is scheduled for release of mainnet by Q4 2018 and will not be issuing an ERC20 token in the interim. Once their mainnet is live, native EMTQ tokens will be unlocked and available for trading and making transactions.

They are currently raising $39M for 51% of their tokens through several rounds of private sales and rumors have been circulating that there may be a potential Telegram airdrop for early supporters of the community due to the cancelled crowdsale, nothing however has been officially confirmed by the team.

To round off this writeup, I will leave you with a quote from another expert in their field, Emotiq’s CEO, Joel Reymont:

Emotiq aims to be the most accessible and friendly blockchain of them all — the Apple to other blockchains’ Android and Windows.
Emotiq aims to provide a blockchain interface so friendly and natural, even kids can use it. Emotiq smart contracts are written in Ring, a plain English programming language that’s as easy to read as a newspaper.
Emotiq delivers a powerful blockchain engine, uses zero-knowledge proofs for transaction privacy, and scales through sharding.
Emotiq’s blockchain is kept small and maintainable by applying MimbleWimble for cryptographically secure purging of spent transactions.
Emotiq gives you a blockchain engine as powerful as a Formula 1 race car, with an interface so easy to use that you can drive with no training required!” 
- Joel Reymont, CEO of Emotiq

Further Information & Resources:

Emotiq’s Telegram Group: https://telegram.me/emotiq

Official Website: https://emotiq.ch/

GitHub: https://github.com/emotiq/emotiq

Medium Blog: https://medium.com/emotiq

Whitepaper & Yellowpaper: https://emotiq.ch/#whitepaper

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