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Baltic Honeybadger 2017 • November 25-26, 2017

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Ethereum’s Annual Conference: Devcon Three Focuses on Scalability

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Ethereum’s Annual Conference: Devcon Three Focuses on Scalability

Ethereum’s annual developer conference, devcon three, concluded one week ago in Cancun, Mexico, with well over a thousand attendees. The four-day event included some intriguing talks such as numerous presentations highlighting the humanitarian use cases of blockchain technology, details on the scaling approaches for Ethereum and progress in the wider Ethereum ecosystem. Here we detail highlights from devcon three. While the content was interesting and engaging, the organization of the event was not up to standard, with some people missing from the ‘list.’

Humanitarian Use Cases of Blockchain Technology

The Data Mechanisms of Saving the Planet

Regen.network plans to use Ethereum as part of a vision to reverse global climate change and incentivize the global agricultural community to directly engage in regeneration. The concept relies on a mechanism known as ‘reverse mining;’ with the neoliberal agenda against developing economies regarding trade liberalization, this had led to the degradation of the Earth’s natural beauty, putting profit above sustainability.

Gregory Landua said:

“I’m a farmer, grounding this whole conversation as our whole life depends on farmers. Farmers are the only ones who can change the world and save the planet from climate change, via carbon sequestration. The challenge is verifying what is happening on the ground, the world’s soil. With carbon emitted into atmosphere, to balance it out, we need to put carbon back into the ground.”

To do this, Ethereum will help to provide ‘Proof of Regeneration,’ along with farm IoT sensors, satellites, drones, smartphones, allowing verification without a centralized entity. Streamr comes in on the data side since the network requires lots of data from various sources. By drawing down carbon from the atmosphere via biological methods, the aim is to rebalance the relationship between agriculture and the environment. Tokens will only be available to those who can verify they have engaged in proof of regeneration.

The purpose of the network is to create a number of consensus mechanism to verify various regeneration efforts whether they be the sequestration of carbon or the growth of soil. While similar to a carbon credit, tokens will be traded into a Decentralized App (DApp) that issues certificates that are a regenerative carbon credit. As tokens represent regeneration, the supply will increase over time, and will only be created through verifiable change in the state of the ecosystem of farms and other land management systems. If a company or municipality would like to participate they can do so through the regen.network VRCSC DApp.

In line with the major theme of the conference, the number of dapps means that scaling is an imperative issue. Landua stated that the network will have to be sharded, as proof of identity and location are a core part of the protocol. As for more technical details on the blockchain stack, you can see some early details from regen.network’s whitepaper.

The project is moving along with a scheme in Ecuador coming soon after an early trial in the US, holding a lot of promise for a technological approach to solving climate change and the sustainability of farming.

DAO – Integral Platform for Climate Initiatives

A similar initiative focused on carbon credit and decentralizing this process was put forward by Anton Galenovich Ph.D. Galenovich emphasized the fragmented nature of carbon credit markets; one and the same basic asset and liability is characterized by dozens of markets and instruments. For example, there are about 40 different carbon compliance units representing what is, fundamentally, the same asset. To bring them all under one instrument, the DAO plans to use IoT along with Ethereum network validators.

Smart contracts packages are functioning already for carbon credit markets, which have been tested with real participants and aim to build the first service for reducing your carbon footprint with only carbon credits based on Ethereum.

The idea is influenced by the Coase theorem, which revolves around a hypothetical situation relating to social costs. Imagine you have a doctor living above a residential apartment. The noises from the dentists is causing a nuisance, namely the form of noise pollution. The doctor will have to pay X for quieter equipment, while the resident will have to pay Y to sound proof his living space. Assume, Y<X, who should take action to prevent pollution?

Well, it is the resident, since it is more efficient to have him pay Y, which is less than what the doctor would have to pay. Bargaining is also important and the interaction of the two parties would lead to this outcome, i.e. Y is paid, maybe with some cooperation between the two parties. Transactions costs must be negligible for the theory to hold, and the DAO ICPI brings alive the concept of a decentralized peer-to-peer and public evaluation of negative impact, distribution of liability, and settlement by means of mitigation outcomes.

The concept claims to ‘blockchainize’ article 6 of the Paris agreement providing a digital environment to execute a global market-based interaction protocol. Most of the smart contracts are already in place. The GHG emission rights and ‘carbon credits’ become fungible, in the form of Mitigation Tokens (or MITO’s), serving as a digital CO2 cost equivalent.

You can find out more from the whitepaper.

Blockchain for Humanitarian Assistance

Houman Haddad of the World Food Programme delivered an update on how Ethereum and blockchain technology is furthering progress in areas of aid in the ‘Building Blocks’ program. He spoke of the pilot scheme in Pakistan that served as a testbed for the project, which was highly successful and lead onto the food distribution scheme in Jordan, which BTCManager reported on in May.

Haddad outlined several reasons why the blockchain is so beneficial in such a setting. Most obvious, is that it enables aid agencies to cut out the banking intermediaries completely, making the distribution of aid much easier and more efficient. The WFP representative also talked about the importance of dignity, and having the ability to directly transfer wealth to refugee communities instead of hand outs, so that they have the freedom to purchase what they want. Not only that, but it has the economic benefit of driving a multiplier effect in local economies.

Another reason why the technology is so useful is that current methods lead to fragmentation and duplication. Several agencies may oversee a certain zone where there are refugees in need of help. This means that the same person may be dealing with several different agencies, all with their own banking channels. With the blockchain acting as an immutable record of all transactions, several UN agencies can interact with the same blockchain and oversee the recipients and local businesses.

Under the ‘Building Blocks’ program, which lasted five months, the UN agency was able to help more than 10,000 people, distributed $1.6 million with a 98 percent fee reduction compared to traditional methods (Haddad was confident this could be even higher closer to 100 percent), no information on recipients were shared with third parties, and demonstrated high speed and flexibility.

In the future, it is expected the blockchain will be more than just a tool for payments, but its coverage will be widened to include financial history. Using the blockchain, since it is immutable, refugees will be able to build a credit history, something that is very difficult in the existing, fragmented financial system. Furthermore, educational achievements could also be part of the identity, allowing refugees to travel freely and bring their credit and education history with them.  

GivETH

Another humanitarian application of Ethereum that stood out was GivETH, who setup a stall in the conference giving out free t-shirts and frisbees for attendants to enjoy on the sunny, white-sand beaches of Cancun. The Giveth Donation Platform is currently in testnet and aims to bring more accountability and transparency to the charity sector. Using the Ethereum blockchain, you can see where your donations go, in real-time. A ‘Decentralized Altruistic Community’ will ensure many campaigns to help for specific causes.

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Giveth Frisbee

Day four also had other speakers in the field of charity such as Alice.si, with an updated whitepaper.

Ethereum Protocol

Vitalik Buterin outlined the Ethereum protocol and upgrades brought about by Byzantium. Buterin provided the analogy of a calculator as how many blockchain protocols were designed; a single-purpose tool, however, Ethereum is described to be more like a smartphone, allowing a variety of applications.

“Instead of a blockchain protocol supporting just a very small suite of applications, instead we have a blockchain protocol that supports a programming language that gives you the ability to create applications.”

A few of the privacy features recently added to Ethereum with the Byzantium fork include ring signatures, zk-SNARKs and big number exponentiation. Buterin noted that these are three most interesting things enabled by the new features of Byzantium, allowing developers to write contracts verifying ring signatures, zk-SNARKs, and RSA keys. In short, the cryptography as part of the hard fork upgrade opens the door to powerful privacy-preserving applications, for instance, a zk-SNARK reputation system, an example provided by Buterin to indicate the quick-moving progress in this field.

To conclude, Buterin stated that the future direction of Ethereum will revolve around Casper, sharding, EVM and other smaller protocol upgrades.

Vlad Zamfir also focused Casper during a November 1 talk, which was delayed and the break brought forward due to some technical issue, discussing consensus protocols, which are fundamentally all about nodes in a distributed network making the same decisions. Zamfir explained Capser the Friendly Ghost, a blockchain-based consensus protocol which, “Finalizes every block with asynchronous BFT consensus safety the way traditional consensus mechanisms do, but able to do this with the overhead of proof of work blockchains… and it kind of represents the best of both worlds; both finalized decisions and hyper-low network overhead.”

The Ethereum developer went on to outline the Abstract Consensus Safety Proof which comes with the key insight that states will have a common future as long there are not many Byzantine faults in their joint views of the protocol. Nodes with common futures have consensus safety for decisions on safe estimates. If there are not more than too many Byzantine faults, nodes have consensus safety for decisions on safe estimates.

Plasma Overview

Joseph Poon spoke on Plasma, the scaling solution for Ethereum:

“A project that is right now being architected and will be written, co-authored by Vitalik. Plasma at its core is about building a blockchain on top of a blockchain. Write a smart contract inside Ethereum, you can initialize it by taking a library and modifying to whatever particular use you need, for example, a social network, some decentralized exchange or a private blockchain…”

He further explained that by binding to Ethereum as a base chain, all private networks could one day interact with each other accordingly.

If any of the blocks are invalid within a Plasma blockchain, anyone can submit a proof of fraudulent state transition to roll back the blockchain. So, the basic idea is to initialize a Plasma blockchain, writing smart contracts which are submitted to the root blockchain, so they are defined within Ethereum consensus rules with its own individual consensus rules.

This way a large amount of transactions can be propagated through the creation of decentralized applications.

The Plasma chain periodically commits block hashes onto the Ethereum blockchain, but is not proof of existence. If you create an invalid block, it can be penalized and rolled back, allowing lots of transactions, given we have data availability.

The unique concept with Plasma is the ability to exit, in the case of data unavailability. Contracts are pre-designed so that all Plasma blockchains allow for orderly exits, since you cannot prove when someone is withholding data. So, if you discover blocks being withheld, you can exit to another Plasma blockchain or the root blockchain as soon as possible.

The solution would allow for computational scaling activity not just in financial activity, but also for centralized data services like reddit or twitter, and see a capacity increase to a significant degree.

It is a three-party transaction, making sure only two of the either parties have access at a time. The sender will send a transaction, and send another to signal that they saw the first transaction go through. The two parties make a plasma chain, and this is carried over to the Ethereum chain. Data from the plasma block, both see there has been a payment, but both can claim. Now, the sender commits to seeing a transaction. Sender cannot claim it or will get penalized. The receiver will see the commitment and they can now enforce the payment.

In the case of a malicious withdrawal, they must submit a transaction to Ethereum chain. Sender can take the proof that the transaction hit the block and a commitment, submitting to the Ethereum blockchain, in which the receiver takes the bond and their money.

“Two-stage commitment process is basically making attestation on information availability. So, the goal is to make it to have attestation correctly and scale to perhaps make the blockchain the ultimate arbiter.”

Ecosystem

Introduction to WALLETH: the Ethereum Android Wallet

Marcus Ligi presented WALLETH, an Android wallet for Ethereum. In the talk he explains the Why, What, and Where of the wallet. Ligi emphasized that blockchain technology is primarily about people; and Android mobiles are a nice vehicle to bring Ethereum to people, as there are two billion monthly active devices. Also, in emerging countries, people do not really use PC’s, they use mobile phones.

For existing wallets, users do not own their own keys, which is encouraging centralization.

Secondly, the use of Libre software. Even if users hold their private keys, many wallets are closed source software, meaning that keys are not genuinely in the hands of users according to Ligi. He stressed that the app and the platform must be open source.

Thirdly, another reason why WALLETH was created was down to the user experience. Ligi explained that other wallets ask for a password, which hurts the user interface. Instead, the user story should be different, where if you want to try things out you can do so easily without setting a password; after playing around with the app and once you have some significant funds in the wallet, it would be good if an app would then allow you to create a password. But even then, to be secure, a password is not desirable, what is needed is a real hardware wallet. A password does not really add much, especially with Android, where all apps are in a sandbox, giving a false sense of security.

Various functions can be performed by the scan button – importing JSON addresses, offline transactions, ERC 20 support. First Ethereum wallet with Trezor support, hardware wallets key for security – if they have a hardware wallet, it is really their key. Use of common symbols for a nice experience for users.

Ligi stated he wanted to get the user experience nice first, then if light clients become more feasible on mobiles, then integrate Geth light client by default (which makes mobiles really hot). Below we can see a preview of the WALLETH interface and the wallet is currently available in alpha version.

Building a Decentralized Sharing Economy on Ethereum

Slock.it’s Christoph Jentzsch demonstrated the organization’s minimum viable product, known as The USN, or Universal Sharing Network, opening up new possibilities for the decentralized sharing economy.

The Slock.it co-founder demonstrated to the audience with a microwave, showing how people could rent items and pay for them using a simple app with some cryptocurrency (or even Paypal). The demonstration showed mock items around the International Convention Centre setup on the app’s location screen, such as a bike.

You can find out more and participate in the alpha here.

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