A New Approach to Blockchain Interoperability, True Decentralization.

Disclaimer: Speculative Rationality only look closely at and write about projects we believe in, have invested in or plan on investing in. Information below aims to be impartial; however it is not investment advice. Do your due diligence. Good luck!

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Recommended Reading to assist in better informing this post:

Block Collider WhitepaperCollision Course — Emblems & NRG by Ian SimpsonCollision Course — Mining the Block Collider by Ian SimpsonBuilding a Blockchain Singularity with Proof of Distance by Patrick McConlogue

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A close look at the Blockchain space reveals a series of blockchain projects that operate largely in distinct silos. The reality is that blockchain technology is yet to realise widespread real-world adoption, however as we accelerate towards maturity a key infrastructure level requirement will be the ability for information to be transmitted in real time from blockchain to blockchain and even off-blockchain to old world systems. Anecdotally we need to look only as far as the internet to conceive the value that interconnectivity can generate.

“Bridging chains with a multichain is like building roads between buildings. Hypothetically, one could build a building that has everything, but in practice some buildings are built to work in, some are built to live in — as long as citizens want to be in multiple buildings at different points in time, roads are valuable. The crypto community as it exists demonstrates a wide variety of features across blockchains — some chains have quick block times, some chains have expressive smart contracts, some are purely deflationary and an excellent store of value. As long as users need features from more than one blockchain, bridging those chains with a multichain is needed.” — Block Collider Whitepaper (Source)

There are some well known projects that are trying to tackle interconnectivity between disparate chains. Of those known projects, only a few are focused on Interoperability as their core focus — some examples are Polkadot, Cosmos and Ark. A new project which as yet has remained under the radar (by design) has come out with a radically different solution to the issue of interconnectivity between chains: Block Collider.

“A mineable multi-chain protocol for stable coins, decentralized exchanges, and meta contracts.” — Block Collider

Let’s take a quick look at a few of the key interoperability projects within the space:

For more detailed Table of comparison see spec-rationality.com/block-collider

The Multi-Chain: The Advent of Multi-chain Distributed Applications and Meta Contracts

Block Collider is the first true “multi-chain”, which at genesis will connect 6 chains — Bitcoin, Ethereum, Neo, Waves, Lisk and another chain that is yet to be named. Block Collider’s core ledger is the aggregate of all blocks on all member chains, giving rise to the term “multi-chain”. Block Collider’s blockchain is built by “weaving” together disparate chains using PoD* (Proof of Distance — a modified version of Nakamoto consensus), consuming blocks from each chain into a Block Collider block, recording in effect the state of each member chain.

The multi-chain not only facilitates value transfer between chains but more importantly allows these previously “siloed” projects to know the “state” of each other’s chains. Why is knowing the state of other chains so important? True interoperability is much more than just value transfer, it is the ability for different blockchains to work in parallel. This innovation opens the gates to something truly remarkable — multi-chain distributed applications and meta contracts (multi-chain smart contracts).

The above diagram illustrates a simple example of a distributed multi-chain DAPP handling trust funds. This kind of application only scratches the surface of the true potential Block Collider brings to the blockchain ecosystem. The multi-chain functionality is not merely transferring data but proving data relative to another chain.

“…distributed application developers can modularly combine exotic features from blockchains across the ecosystem …. distributed application developers can build in the capability to load-balance work between chains” — Block Collider Whitepaper (Source)

As an aside there is an additional security benefit that results from Block Collider being a multi-chain, an aggregate of member chains. A miner attempting to use bad blocks would not only have to reverse the entire chain on Block Collider but also break the hash power of difficulty of the member chain.

*PoD — Proof Of Distance consensus mechanism is beyond the scope of this article. Please refer to Block Collider Whitepaper — Section 3.2 The Edit Distance Computational Challenge (pp 13) or Building a Blockchain Singularity with Proof of Distance by Patrick McConlogue (Co-founder of Block Collider).

True Decentralisation

“The Block Collider multichain is collaboratively created exclusively by decentralized peer-to-peer miners — with no centralized points of failure, oracles, or validators.” — Block Collider Whitepaper (Source)

One of the core tenets of Block Collider is to provide a platform that is very much in line with Blockchain’s vision of true decentralisation. Block Collider prides itself on the absence of validators in its consensus mechanism and its resistance to centralising elements.

Validators vs no validators

What is a validator? A validator in a blockchain is a “human element” or third party to whom the network cedes some degree of trust. A validator is incentivised by a network to confirm that an event/transaction has occurred on the network. This approach has been/will be adopted by many chains including interoperability chains like Cosmos, Polkadot and Ark who utilise Delegated-Proof-of-Stake (DPoS) or similar consensus models, where there are a set number of validators.

Block Collider does not require validators, it builds it’s blockchain with a mining algorithm (PoD), requiring proof of work to validate events on the blockchain. It in effect removes the requirement to place trust in a fallible party.

Centralisation of Power

A concern in any decentralised network is that power may accrue to a few. We see some commentators point to this occurrence in the Bitcoin network, where there is a centralisation of power around a few mining pools. Power in this context is the governance of the chain and the rewards for block validation. In this situation existing economic power is entrenched and can conceivably lead to the ongoing centralisation of consensus, governance and wealth. However, it is also worth noting one of the advantages that the Bitcoin platform has in comparison to its counterparts who have pursued PoS or DPoS is that it does not require the network to cede any additional trust to validators.

PoS or DPoS and their varying iterations aim to solve for some of the bottlenecks in current blockchain technology, however, these consensus mechanisms still contain elements that can give rise to centralisation. PoS requires that a node stake a sufficiently high bond in order to achieve the status of “validator” and thus PoS is still heavily weighted to those with economic power. DPoS has the added functionality of “democracy” by allowing delegates to vote for a trusted “validator”. Ideally the scenario is one of a democratic approach, however such a system may still lend itself towards centralisation as voting is typically weighted by share of network. Without going into an exhaustive discussion about various consensus methodologies, their strengths and shortcomings, we can nevertheless see that the use of validators presents some departure from trustless consensus without necessarily resolving the centralising effects of economic power.

Block Collider is a mineable chain like bitcoin and faces the same issue of centralisation of power from mining pools but has implemented certain conditions to alleviate the pressure towards centralisation. These include:

1. Splitting the mining of blocks and transactions (Refer Whitepaper Section 3 — Mining on the collider for technical details)

“… by allowing for competition in two spaces, there is reduced risk of centralization, since an actor would have to win the centralization game at both levels.” — Block Collider Whitepaper — Section 3.4

Transaction mining is open to anyone and does not require ASIC hardware to mine. This allows anyone on the network to have an economic incentive to participate in the network whilst achieving greater throughput and greater load distribution, reducing the strain on the network.

2. Emblems — Block Size Bonus (Refer Whitepaper Section 3 — Mining on the collider for technical details)

BC has a unique proposition to implement dynamic block sizes through the use of Emblems. In effect miners can “stake” Emblems which will allow them to expand the size of the block, thereby fitting more transactions into a single block for greater rewards. How does this alleviate pressure towards centralisation? We look to the Co-Founder Patrick McConlogue for answers:

“Block Collider implements game theory to the benefits of mining incentives beyond block/fee rewards. The Emblem bonuses for mining is sublinear (that is, there are diminishing returns for emblem ownership) which balances the economic incentive against centralisation (as the marginal utility of Emblems will be highest for those with fewer emblems).” — Patrick McConlogue

As an example, noting that all metrics are hypothetical, Sue has 10 Emblems and Mike has 100 Emblems. If the optimal number of Emblems required to achieve a desired block size was around 20 Emblems, staking beyond the 20 emblems does not significantly increase the block size. In effect, any additionally staked emblems has a diminishing value in comparison to the optimally staked 20 Emblems. So, in this example Sue’s block size could be “Standard block size + 5” and the optimal block size is “Standard block size + 7”. As staking has a diminishing bonus, Mike staking 100 Emblems would result in “Standard block size + 8”. This is to say those without large economic power can still compete on a near equal footing. In this way Block Collider aims to mitigate the pull of economic power towards centralisation.

What if Mike splits his 100 Emblems to utilise the optimal number of emblems to stake, to run multiple mining rigs concurrently? In this case 20 Emblems to 5 mining operations.

“A miner could absolutely split the Emblem rewards among mining rigs but in order to maximize the rewards from this he/she would have to be connected to the least number of identical peers that the original rig is connected to. In this way they must expand to other regions. This leads to less centralization regionally and increases the overall efficiency + speed of the network.” — Patrick McConlogue

In addition, Mike replicating 4 more instances of the original mining operation would require significant resources.

Interoperability Technology

Member Chain Conditions

One of the greatest breakthroughs that Block Collider has achieved is that it has a very low threshold to incorporate foreign blockchains into its multi-chain. In laymans terms there is no need for modification of member chains to participate in the network.

This is a significant development in the blockchain ecosystem as current and planned future interoperability solutions require some form of compatibility or change to the participating chains. To achieve compatibility Cosmos and Polkadot primarily require chains to be built on top of their infrastructure. Ark on the other hand requires direct changes to existing chains in the form of embedded code.

However, it should be noted though that Cosmos Polkadot, and Ark have alternate solutions to compatibility for existing chains who choose not to be modified. This can be achieved through intermediate zones, peg-zones, bridgechains, smart bridges and encoded listeners. If we are to borrow from the Polkadot whitepaper certain chains (Ethereum) are clearly easier to adapt into intermediate zones but others not so much (Bitcoin):

1. Ethereum — “Due to Ethereum’s Turing completeness, we expect there is ample opportunity for Polkadot and Ethereum to be interoperable with each other, at least within some easily deducible security bounds.” — (Polkadot Whitepaper — Source)

2. Bitcoin — “…. As such we believe it not unrealistic to place a reasonably secure Bitcoin interoperability “virtual parachain” between the two networks, though nonetheless a substantial effort with an uncertain timeline and quite possibly requiring the cooperation of the stakeholders within that network.” — (Polkadot Whitepaper — Source)

The breakthrough by Block Collider should not be understated, the multi-chain by providing a low threshold for member chains to interoperate without the need for validators provides crucial infrastructure for a trustless internet of blockchains.

Scalability and Shared Security for Member Chains

Through comparison of Cosmos and Polkadot, the question may arise does Block Collider provide scalability and shared security for member chains? The simple answer is no.

Block Collider does not provide scalability and shared security primarily because of its conditionless participation for member chains. Block Collider follows the philosophy of Doug McIlroy, the inventor of Unix pipes, “Write programs that do one thing and do it well. Write programs to work together.” In this sense scaling solutions are the responsibility of protocol level chains, interoperability is the responsibility of Block Collider.

Cosmos and Polkadot provide these solutions for member chains that “join” their networks and is a unique and commendable value proposition provided by their platforms. Although it should be noted that for existing chains, using the intermediate zones referenced earlier, does not provide the same scalability and shared security benefits as those built natively on the platforms. This is because the existing chain does not function atop the platform, rather they are bridged to the platform with links (bridgechains or pegzones) built by Polkadot or Cosmos.

Scalability — Size and Transaction Speed

Block Collider as a multi-chain is the aggregate of blocks from its member chains. What does this mean for scalability in terms of size & transaction speed?

Size of the Chain

A valid concern would be that Block Collider which is an aggregate of all blocks on all member chains can be quite space consuming. To combat this Block Collider’s PoD consensus mechanism primarily uses header states and Merkle proofs of other chains to store the chain on the Block Collider network. The headers are less than 1% of the size of the original chains’ block. So, one could imagine without any modifications, Block Collider could merge 100 chains and still only be the size of one Ethereum sized chain.

As Block Collider evolves, we can envision a day when 1000 plus chains are interoperable with Block Collider. So, what then? Block Collider is designed to tackle this growth in two ways, compression as far as possible and then through reverse chain pruning.

“To handle the first part [compression], we start with header states. After which we switch to a signature only model like that proposed in Mimblewimble* (once the Block Collider hash rate is strong enough). Finally the pruning which will be the process of creating a second blockchain which mines backwards. In the second blockchain, “the work” is transactions that should be trimmed from the block. In this way it works like defragmenting your hard drive.” — Patrick McConlogue

*Mimblewimble — an experimental blockchain network

Transaction Speed

Block Collider as the aggregate of blocks from member chains will always be slightly faster than the fastest member chain. This is due to Block Collider having a high block issuance rate that is based on blocks issued on member chains.

Source: Block Collider Whitepaper

In the above example from the whitepaper we see that Bitcoin issues 2 blocks in a set time frame “x”, Ethereum issues 6 blocks and Waves issues 3 Blocks. The first Block Collider block is formed when the 3 chains issue their first block. It should be noted that block times vary across chains and as such member chains will issue blocks at different intervals. At each issuance from a member chain Block Collider will issue its own block containing the new set of blocks from the member chains. In this example 9 Block Collider blocks are issued in the time frame “x”. So the block issuance rate (block velocity) will always be higher than the fastest member chain.

Higher block velocity of course brings up the issue of throughput — the number of transactions per second. Mining has been designed with throughput being the primary mandate. The satisfaction of this mandate was one of the primary motivations for Block Collider splitting block mining and transaction mining into separate processes.

“Unlike other cryptocurrencies, the transactions and the blocks of the Collider blockchain can be mined separately. Transactions being pre-mined makes it easier for a miner to add a transaction to a block it has discovered, which balances the power that miners have in current systems.” — Block Collider

TECH COMPARISON // Multi-chain Protocols (The Internet of Blockchains)

Conclusion

Block Collider has come to the space with a radical solution to the “Internet of Blockchains”, connecting disparate chains whilst maintaining blockchain technology’s vision of being truly decentralised. The mainnet launch will include interoperability between 6 chains, BTC, ETH, NEO, Waves, Lisk and a yet to be named chain.