Obyte Precursors: Who Helped to Create Our Decentralized Ecosystem?

“If I have seen further, it is by standing on the shoulders of giants." This old metaphor, attributed to Bernard of Chartres, can describe the current situation of all inventions. We’re in this technology stage thanks to the advances made by our predecessors, and Obyte (all cryptocurrencies, indeed) is no different.

Without computers, the Internet, specialized software, and cryptography, the whole crypto world wouldn’t be here. If we look more closely into the software and cryptography realms, numerous milestones had to be achieved before the appearance of decentralized money. Then, afterward, some others would come to make the Obyte ecosystem possible.

We’re in debt to experts from all parts of the world and their previous creations. The Obyte whitepaper gives them credit at the end, but do you know who they are and what they really did? Let’s check a bit of history and interesting inventions.

Satoshi Nakamoto

Of course, this is the more obvious one. Bitcoin was the first cryptocurrency ever, and someone named Satoshi Nakamoto created it. We know little about him, though. He reportedly was born on April 5, 1975, he’s known as a brilliant programmer and a recognized cypherpunk —online activists behind decentralized tools. Beyond this, there are more questions than answers about his persona. Or their personas. We don’t even know if that’s his real name because he (or they?) chose the path of complete privacy.

Bitcoin, on the other hand, is the first and most adopted cryptocurrency so far. This piece of software operates on a peer-to-peer (P2P) network, enabling direct transfers without intermediaries —besides the miners. Transactions are verified by network nodes through cryptography, and recorded in a public ledger called the blockchain. It’s not fully decentralized and has its own set of issues, but it’s the start of the cryptocurrency world.

We took a lot of the Bitcoin original system in Obyte, including the P2P transparent crypto-network and the goal to eliminate middlemen. However, we don’t have miners or “validators”, as we don’t have a “blockchain” but a Directed Acyclic Graph (DAG) structure. This way, all transactions sent to the DAG are truly censorship-resistant and not dependable on third parties.

Sergio Demian Lerner

He describes himself this way: “In short, my name is Sergio Demian Lerner. I’m a Cryptofan, Independent Security Researcher, and Bitcoin specialist since 2011.” It could be an understatement, though. Lerner is an Argentinian programmer who has created and participated in a lot of cryptocurrency projects, and more importantly for us, he’s the original designer of DAG-like coins. He even mentions Byteball (now Obyte) in his personal story.

He’s helped to fix over 8 vulnerabilities in Bitcoin and has been involved in projects like Copay (now BitPay), Bitshares, Counterparty, Ethereum, and Monero. Interestingly enough, the Obyte wallet UI is based on Copay. Lerner has collaborated in open-source crypto projects for years (and for free), but he’s not exactly a cypherpunk. Among others, he co-founded the blockchain auditing company CoinFabrik in 2014, and the Bitcoin-based sidechain ecosystem Rootstock (now RSK / IOV Labs) in 2015. Additionally, he’s considered a pioneer of atomic swaps, also mentioned in the Obyte whitepaper.

As for the DAG, Lerner described it as “a cryptocurrency without blocks,” where every user would be a “miner” —in the sense that they wouldn’t need miners, but create the chain themselves**,** with every transaction. We took this idea to create Obyte, and added Order Providers (OPs) as mere waypoints to order transactions, without them being powerful middlemen as miners or centralized companies.

Serguei Popov

While Lerner first described DAGs to create cryptocurrencies, he never coded the project himself. However, other developers were interested in the idea and started to propose (and create) new ecosystems around it. Serguei Popov and the IOTA team were likely the first ones back in October 2015. Popov is a Russian-Brazilian mathematician in charge of the conceptual side of the IOTA crypto project.

After receiving his Diploma and Ph.D. from the Department of Mathematics and Mechanics of Moscow State University in 1997, he left for Brazil to start an academic career as a professor. He became interested in cryptocurrencies by 2013, first in Bitcoin and later in the altcoin Nxt. By sharing his own calculations about that network on Bitcointalk, he got to meet the Nxt founder, Sergey Ivancheglo.

Then, in late 2015, Sergey and David Sonstebo invited him to contribute to the theoretical side of IOTA —and that's how the Tangle whitepaper was born, inspired by the previous work by Lerner. IOTA is a cryptocurrency designed for the Internet of Things (IoT). It utilizes the Tangle, a DAG network, just like Obyte. Users validate transactions by confirming two previous ones, promoting scalability and feeless microtransactions. However, unlike Obyte, their network is still controlled by their foundation, and not by the users.

Tom Holden

Some months before the release of Obyte (Byteball, back then), a Bitcointalk member known as Tom Holden proposed another DAG-like system to create an improved cryptocurrency. He named it Transaction Directed Acyclic Graph (TDAG). It utilizes a structured DAG that must form a bounded lattice, ensuring a unique root node and childless node. Each transaction references previous ones, like in every DAG. Besides, it offers incentives such as transaction fees and fee burning.

We don’t know who Tom Holden really is, or what he does. However, his early proposal is connected to the DAG-like ecosystems and probably urged us to think about and fix some potential vulnerabilities that this type of system may bring.

Tony Chryumov (Tonych), the Obyte founder, participated in that thread and pointed out a potential attack vector where an adversary could construct a shadow DAG, including double-spends, and spend more on fees in the shadow DAG than in the legitimate DAG. The attacker could then publish the shadow DAG, leading users to switch to it as it appears more profitable due to higher fees spent. Obyte solved this issue with the creation of witnesses (Order Providers).

Stuart Haber and W. Scott Stornetta

They also appear in the Bitcoin whitepaper as the proponents of Linked Timestamping, a cryptographic method that involves associating a timestamp with a piece of data or information, establishing a chronological order of events (or transactions). This process creates a chain or link of timestamps, where each timestamp is linked to the previous one, forming a secure and tamper-evident sequence registered in a difficult-to-alter and widely observed platform, such as a printed newspaper or a public ledger.

In other words, they are the creators of the first “blockchain,” so to speak. Both Americans, Haber is a cryptographer and computer scientist, while Stornetta is a physicist —like Tim May was. They met while working for the communication company Bellcore (now Iconectiv), and co-authored the paper "How to Time-Stamp a Digital Document” in 1991. Currently, Haber is an advisor member of the cryptocurrency Kadena and Yugen Partners, a private equity firm for crypto projects. Meanwhile, Stornetta is a partner and Chief Scientist at the latter one.

The order in a DAG is different than in a blockchain, but Obyte took the idea of publishing transactions in a widely observed system, such as a newspaper, and created the witnesses. They serve the same function as the newspaper in our first example: they’re well-known and trusted to post serially, which is equivalent to not publishing two versions of the same issue of the newspaper. Light clients in Obyte rely on witnesses to prove that a transaction exists. By default, light clients select Order Providers as their light client witnesses.

Bonus: 1984

Also mentioned in our whitepaper, "1984" by George Orwell, published in 1949, is a dystopian novel that explores a totalitarian society ruled by an oppressive government led by the Party and its enigmatic leader, Big Brother. Set in an alternative year, 1984, the story follows Winston Smith, a low-ranking member of the Party who becomes disillusioned with the oppressive regime.

The novel delves into themes of censorship, surveillance, and the manipulation of truth, portraying a bleak future where individualism is suppressed, history is rewritten, and the concept of reality is distorted. This is a world where nobody would like to live, and sadly, it’s also not that far from what some modern countries have become, to varying degrees.

Mass surveillance, totalitarian regimes, democratic censorship, and unjustified control of everyone’s money are now realities everywhere. That’s why activists like cypherpunks are dedicated to creating freedom tools, and that is (or that should be) the raison d'être of cryptocurrencies. Obyte was created as a freedom tool as well, even more decentralized than its predecessors. We’re working hard to create a free world for everyone, everywhere. Ready to join us?

Featured Vector Image by storyset / Freepik