Waves, a global public blockchain platform founded last year that completed its Initial Coin Offering (ICO) in June 2016 raising over $16 million (c.30,000 bitcoin (BTC)), is implementing new technology to enable the network to process “thousands of transactions” per minute and become the fastest decentralized blockchain platform in the world.
The innovation is touted as bringing blockchain technology to the “next level of evolution”, enabling the platform that was the brainchild of a Moscow-based physicist to compete with mainstream payment processors and to achieve mass-market adoption.
“Waves-NG”, a next-generation technology and consensus algorithm designed and based on the Bitcoin-NG proposal made by Cornell Computer Science academics Emin Gün Sirer and Ittay Eyal.
It increases effective bandwidth and speed of block creation, which is described as being “especially significant for businesses” using the Waves platform since it allows for conducting micro transactions – without any delays that are typical with traditional blockchain systems.
Furthermore, it allows the platform to withstand high loads, such as distribution of tokens following crowdsales and airdrops of bonus tokens. The speed of processing trading transactions on Waves decentralized exchange (DEX) is increased as well.
The prototype for the development of Waves-NG was Bitcoin-NG, a protocol developed for Bitcoin by Gün Sierer, Co-Director of the Initiative for Cryptocurrencies and Contracts at Cornell.
“In recent years, we have seen blockchain technology show the world its unique capabilities and amazing promise. As well, we have seen it hit a wall when it comes to scalability,” said Gün Sierer, who holds Ph.D. & M.S. qualifications at the University of Washington and B.S.E. from Princeton University.
He added: “If blockchains are to conquer the world, they need to scale. The Waves team is at the forefront of this race to scale. And, with NG, Waves has adopted the cutting edge of blockchain protocols for on-chain scaling.”
Current Blockchain Systems
The problem with current blockchain systems is that in many decentralized systems, nodes are scattered around the world, and their synchronisation entails significant delays.
So, for example, if you create a large block and starts sending it, while waiting for it to reach the rest of the network’s participants, one of them may have time to create a new block. And, due to this problem, forks will occur.
That is one of the reasons why, in the bitcoin community, there are constant debates about whether to increase block size. Waves explained that if one increases the size of a block in the bitcoin network by four times, “only 90% of participants will have time to download it before creating a new one. If you increase it to 36 MB, then only half of participants will have time.”
Specifically, NG enables blockchains to minimize latency and maximize throughput. According to Gün Sirer the Waves team has shown that they have an “innovative platform that incorporates the best-known technology and is ready for challenges of the next generation of demanding applications.”
NG is a protocol change that allows an increase in the number of transactions per block without increasing the number of forks.
The information necessary to start generating the next block is delivered to all nodes quickly after the previous one is generated. And, only then does the miner send the transactions that will fill the block to the network, submitting them in several tranches (i.e. microblocks).
Bitcoin-NG is a blockchain protocol, which serializes transactions in much the same way as Bitcoin, but allows for better latency and bandwidth without sacrificing other properties.
The protocol divides time into so-called epochs. In each epoch, a single leader is in charge of serializing state machine transitions. And, to facilitate state propagation, leaders generate blocks.
It introduces two types of blocks: (1) Key blocks for leader election, and (2) Microblocks containing the ledger entries. Each block has a header that contains the unique reference of its predecessor, namely, a cryptographic hash of the predecessor header – among other fields.
Traditional Blockchain Model Versus NG Model
In a traditional blockchain model, blocks are discovered at roughly similar intervals and the most recent transactions are processed once a miner has earned the right to submit them to the network. As such, this places fundamental limits on the capacity of the blockchain. Bitcoin, for example, has a theoretical maximum of roughly 3 tps.
By contrast, in the NG model, the next miner is selected in advance. The miner creates a “key block”, which is then immediately filled with microblocks containing transactions, which requires no further proof-of-work.
Whilst maintaining the open structure of the protocol, it enables transactions to be confirmed “as fast as the network will allow.” Waves’ proof-of-stake approach is said to further improve speed, and thereby increasing capacity by a “factor of a hundred or more”, it is claimed.
Alexander Ivanov, CEO and founder of Waves, commenting in relation to the development said: “As a platform of mass adoption, it is critical that we should be able to support a high throughput of transactions, whilst maintaining robust security. NG lays the foundations for our next phase of growth and a step-change in the size of the ecosystem we can support.”
A word of caution though. We should be minded to take on board recent comments by a TechCrunch commentator that the crypto community has made a nasty habit of over promising and under delivering when it comes to projects that have real value for the world.
And, with the price of Bitcoin hitting ever new heights, some pundits are predicting a big correction in the offing amid all the hype in the landscape of crypto assets – from the fund raising potential of ICOs to particular use cases for Blockchain technology.
Brian Patrick Eha, a journalist and author of How Money Got Free: Bitcoin and the Fight for the Future of Finance based in New York, speaking earlier this week on a panel at the DECENT ‘Unchained’ Blockchain event in Hong Kong I attended, noted: “I think even the word Blockchain itself is at risk of becoming a mere buzz word, a kind fairy dust that shady entrepreneurs or even outright scammers can sprinkle on projects that will never pay off.”
The public stress test for Waves, which began on November 8 2017, requires the community to help stress test it. For Q&A sheet on Waves NG see this link and a 16-page whitepaper titled ‘Bitcoin-NG: A Scalable Blockchain Protocol’ can be accessed here.