FUJAN CRYPTO REPORTS
Whitepaper
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Introduction
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Previous Work
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All solutions so far have been lacking in at least one of the following respects: governance, scalability, scripting safety and cheap access to real-world data
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Aeternity Blockchain
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Problems
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the currently prevailing stateful design makes smart contracts written for the platform hard to analyze, and statefulness combined with sequential transaction ordering complicates scalability
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the high cost of bringing real- world data into the system in a decentralized, trustless and reliable way complicates or outright prevents the realization of many promising applications
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the platforms are limited in their abilities to update themselves, in order to adapt to new technological or economical knowledge
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Tokens, Accounts, Blocks
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Access Token Aeon
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Aeon are used as payment for any resources one consumes on the platform, as well as the basis for financial applications implemented on the platform
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Accounts
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Each account has an address and a balance of aeon and also a nonce which increases with every transaction and the height of its last update
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Each account also has to pay a small fee for the amount of time it is open
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Name System
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Æternity features a name system that is both decentralized and secure, while still supporting human-friendly names
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State Channels
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only the people affected by a transaction need to know about it
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allows for transactions to be conducted as fast as information can be transmitted and processed by the parties, instead of them having to wait until the transaction has been validated—and potentially finalized— by the blockchain’s consensus mechanism
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On Æternity, the only state update that can be settled on the blockchain is a transfer of aeon, and the only aeon that can be transferred are the ones that the transacting parties already deposited into the channel
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The blockchain is only used to settle the final outcome or to resolve conflicts that arise, roughly analogous to the judicial system
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Smart Contracts
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Æternity still features a Turing-complete virtual machine that can run “smart contracts”
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Contracts on Æternity are strictly agreements that distribute funds according to some rules, which stands in stark contrast to the entity-like contracts of e.g. Ethereum
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One important thing to note is that contracts on Æternity don’t maintain any state of their own
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Contract interaction and multi-step contracts
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hashlocks make it possible for users that don’t share a state channel to trustlessly send each other aeon, as long as there is a path of channels between them
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For example, if Alice and Bob have a channel and Bob and Carol have a channel, then Alice and Carol can transact through Bob
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Metered execution
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Contract execution is metered in a way similar to Ethereum’s “gas”, but Æternity uses two different resources for its metering, one for time and one for space
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Consensus Mechanism
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Æternity uses a hybrid Proof-of-Work and Proof-of-Stake consensus mechanism
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feasible to mine with a smart phone
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In addition to agreeing on new blocks for the blockchain, it also agrees on both answers to oracle questions and the values of the system’s parameters
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Originally Aeternity intended to be a 100 percent proof-of-stake blockchain. We don’t think anymore that a decentralized 100 percent PoS system is possible
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Oracles
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A crucial feature for most contracts, whether encoded as text or as code, is the ability to refer to values from the environment, such as the prices of different goods or whether a certain event occurred or not
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Thus, we propose to conflate the two consensus mechanisms into one, essentially reusing the mechanism that we use to agree on the state of the system, to also agree on the state of the outside world
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Governance
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the decision-making process for a protocol up- grade or change is not well defined and lacks transparency
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It uses prediction markets to function as efficiently and transparently as possible
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Scalability
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Sharding trees
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It is possible to run the blockchain even when each user only keeps track of the part of the blockchain state that they care about and ignores everyone else’s data
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can shard this data across arbitrarily many nodes so that each node’s load is arbitrarily small
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Light Clients
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Light clients don’t download the entire blocks
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State channels and parallelism
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State channels have immense throughput and most transactions inside them are never executed or even recorded on the blockchain
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the fact that there will never be any complex concurrent interaction suggests that sharding this blockchain architecture should be relatively easy
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Transactions per second at a given memory requirement
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32 transactions per second (fast enough to sign up every human within 8 years)
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Applications
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Blockchain essentials
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Identities
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Users can register unique names, and link names to the Merkle-root of a data structure
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Wallet
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One can use the wallet to send channel transactions, and use apps in the channel network
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Proof of existence
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System participants can use the headers to prove that the data existed at that point in time
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State channel applications
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Toll API
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API responses that require a payment are fundamental for the creation of as of yet impossible types of businesses and can play an important role in the emergence of the decentralized economy
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Insured crowdfunding
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These are smart contracts that are used to raise money for a public good, like a new bridge, a school or a market
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Cross-chain atomic swaps
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Cross chain atomic swaps allow for trustless exchange of aeon for bitcoins
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Stable value assets and portfolio replication
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We can use smart contracts to program synthetic assets that stay nearly the same price as a real world asset
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Event contracts
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Event contracts pay when an event happens and don’t pay when an event does not happen, as per the oracle’s telling
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Insurances
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expensive music event tickets can become worthless if the weather goes bad. However, if the concert-goer receives money if the oracle decides that it rained on the day of the event, the investment can be protected so that one can afford to find an emotionally- adequate alternative
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Whistleblowing
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we could bet on the event “Information indicating that Company A has used illegal pesticides was released on or before January 24th, 2017”. Any person with access to such information would be incentivized to first bet that the event will happen and then release it
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Prediction markets
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A prediction market works by letting users bet on whether a future event will happen
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They are the most accurate way to measure the future at a given price
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use prediction markets to predict which updates to the software will be beneficial, and which will be harmful
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Market with batch trading at a single price
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Implementation
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Virtual machine and contract language
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The VM supports functions instead of gotos, making its semantics relatively simple to analyze
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Adoption via web-integration
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We will provide easy-to-use web-development tools, such as JS- libraries and JSON-APIs for the core features of the Æternity blockchain
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Open source modules
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the software will be written in MIT-licensed modules, such as a consensus module, that can be adapted to specific needs
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Usability and UX design
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we will make sure that who controls the identity, keys and transactions is clearly established
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Roadmap
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Team
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Yanislav Malahov - Founder
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The "Godfather of Ethereum" envisioned in 2013 to have powerful algorithms on blockchains
Marion Vogel – Director + CMO
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Management Trainee for Porsche – 11 months
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Director Junior Gbr for Mercedes – 2 years 4 months
Emin Mahrt – COO
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Frontend Developer and Magazine Layouter for Catcha Group – 2 years
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​Catcha Group holds over 60 investments, either directly or indirectly, as sole, majority or minority shareholders
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Nikola Stojanow – CBDO
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Advisor to AdEx Network – current
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​AdEx is a blockchain-based ad exchange aiming at disrupting the existing online advertising landscape and address its significant problems: advertising fraud, privacy and consent to receiving sponsored messages, etc. Partnered with FBG Capital
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Strategy Advisor for LockChain – current
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​LockChain is a Blockchain powered marketplace & technology, where hoteliers and property owners can rent their property globally, collect money and manage bookings without paying any commissions to middlemen. Advised by the President of Bulgaria
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Business Development at STADA – 2 years 11 months
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​Stada Arzneimittel AG is a pharmaceutical company based in Bad Vilbel, Germany which specializes in the production of generic and over-the-counter drugs. In 2014, revenue totaled €2.06 billion. Market cap of 5.1 billion
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Masters from Warwick Business School
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​Warwick Business School is the largest department of the University of Warwick. 42% acceptance rate
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Ulf Wiger – Core Developer
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Lead Developer for Genivi Alliance – 2 years 6 months
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​GENIVI® is a nonprofit industry alliance committed to driving the broad adoption of open source, In-Vehicle Infotainment (IVI) software and providing open technology for the connected car. Members include BMW Group, Honda, hyperloop, Hyundai, Jaguar, Land Rover, Nissan, Volvo, and more
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Senior Software Architect for Ericsson AB – 13 years 1 month
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​Ericsson is a Swedish multinational networking and telecommunications company headquartered in Stockholm. 23.16 billion dollars in revenue
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Tobias Lindahl – Developer
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Consultant, Senior Developer and Software Developer for Klarna – 9 years 4 months
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​Klarna Bank AB, commonly referred to as Klarna, is a Swedish bank that provides online financial services such as payment solutions for online storefronts, debt collection, credit payments and more. 314.9 million dollars in revenue
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Masters from Uppsala University
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​In recent years, Uppsala University has almost without exception been among the 100 best universities in the world in the three largest international rankings: Times Higher Education (THE), QS World University Rankings and Academic Ranking of World Universities (ARWU/Shanghai).
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TEAM of 48
Partners & Backers
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Erlang Solutions
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​We’re a talented team of software experts, passionate about Erlang & Elixir and with an unwavering belief in the open-source future. Trusted by AOL, Whatsapp, Grindr, oovoo, and more
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SoftUni
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Software University with over 70 technical partners including Hewlett Packard, Microsoft, and more​
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Articles
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https://techcrunch.com/2017/04/27/how-to-fix-the-blockchain-fail-whale-problem/
https://www.ccn.com/aeternity-blockchain-development-lab-announces-public-testnet/
https://blog.aeternity.com/the-future-looks-bright-ed2b83714537?source=search_post---------5
https://globalcoinreport.com/will-aeternity-ae-stay-for-eternity/
Videos
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https://www.youtube.com/watch?v=6vQcaFWFsAU
https://www.youtube.com/watch?v=8tNX9oSk8QM
https://www.youtube.com/watch?v=DUvLxB6jxYY
CoinCheckUp
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Conclusion
I would give Aeternity a C- rating. I think that Aeternity is clearly a better and more innovative project then ETH. However there is nothing about it that strikes me unique enough to be a top 10 future project. Their transaction per second is only 32 and they seem pretty happy with it. There are better projects out there that are just as efficient and scalable, but can do hundreds and thousands of transactions per second. They do however work with oracles and prediction markets as a governance mechanism which is slightly more unique then projects such as ETH, NEO, LISK, etc. There are aspects of the project that could make it successful but its hard to see. The team does not strike me as that highly impressive, the CEO does get a lot of attention in the crypto market and even deemed himself as “the God Father of Ethereum.” The partners aren’t huge or amazing, overall this project has the ability to be successful, but before I put any money Into it I need to see a lot more.
