Folks,you are welcome today,we have a very important topic to discuss before us,lets discuss the future of blockchains and how Avalanche is positioning itself to be a key leader,when the first blockchain[bitcoin] actually appeared on the scene,many were marvelled by this invention, economists,cryptographers, cyberpunks were dumbfounded at this blockchain thing because it solved a 50 year old distributed systems problem,so what is the unique thing about this bitcoin system,before bitcoin,there were lots of works been done around digital currencies,we have the likes of David Chaum with his digicash invention and we have other people who have tried to create one form of e-money and all that but there was some reasons why they failed,things like who gets to control the money and a lot of things.
Pre-Bitcoin(classical consensus)
Before us,there are two families of consensus protocols,we have the Pre Bitcoin,the Bitcoin and Post Bitcoin consensus,if you are familiar with distributed systems in computer science,you will discover that there are some consensus that belongs to the Lamport family,the Lamport consensus or classical consensus(you will agree that we have different systems in a distributed fashion,every node in this network has to know each other,another thing is that the classical consensus does not scale,there are reasons why it does not scale.)
Bitcoin(Nakamoto Consensus)
But there was a brilliant guy or group of brilliant guys that came with the bitcoin consensus(Nakamoto Consensus),so this system is robust and suitable for open settings, it’s permissionless(you don’t have to know all the members in the network) and you get some benefit for actually joining and contributing to the network but this system is not really effective as it does not scale with increasing members,there are many drawbacks, there is low transaction throughput(imagine bitcoin doing < 10 TPS,it’s not even up to VISA levels which is a centralized counterpart),it’s not lightweight,there is a increasing storage problem(the bitcoin network is currently over 250GB and it’s growing on a day to day basis)
and then you have things like environmental concerns(so for you to actually be part of this network,you need Heavy mining rigs,constant electricity, and the energy consumption level required per transaction is out of this world),the stats are shocking.
source: https://digiconomist.net/bitcoin-energy-consumption
Post bitcoin
With all these drawbacks with bitcoin and its counterparts,the need to have a better version drove many developers and professionals to explore and invent other consensus protocols and blockchains.
To prevent sybil attacks in bitcoin,it borrows ideas from Adam Back Hashcash proof of work(those days if you sent out email to people,to prevent spam,you would have to attach the hash of some computations to the email)
Our main concern today is to discuss the Avalanche
How about we get the best of two worlds,you take the pros of classical consensus plus the pros of Nakamoto consensus,so if you add these things,you will get the AVALANCHE consensus,it uses random network sampling to reach consensus,it’s secure,decentralized,democratic,it’s interoperable,flexible and portable(so what this means,lets say a blockchain already has stuffs like state,transactions,balances),it supports many blockchain platforms,smart contracts languages,VMs etc.
ARCHITECTURE
image credit : https://www.comparitech.com/net-admin/ultimate-guide-tcp-ip/
One of the things about Avalanche is that it resembles the internet,if you look at the internet,there is a network of protocols that sits at the middle,there are a couple of protocols like the HTTP/TLS/IP/TCP and a host of other protocols,but when you look at blockchain systems like bitcoin,initially the system was created to be used for payments but there is evolution of demands,you can do this and that,so the Avalanche protocol was built from the ground up to be customizable,modular and extensible.
It is a construction kit, or LEGO if you like, for digital assets! — Prof. Emin Gun Sirer
The Avalanche architecture consists of SUBNETS,so there is a network inside a network,According to Avalabs
In just a few steps, you can provision new private, public, permissioned, or permissionless DLTs (blockchains), called subnets, and that obey specific rules, covenants and riders. Subnetworks can choose to be firewall-ed from the rest of the network or interoperate with other subnetworks on the AVA ecosystem.
This is the Avalanche blockchain,you can easily create and deploy your own,and say well I want something that suits things like gold,this is the kind of VM I want,I want something that is tailored towards real estate,,I want something that is tailored towards payments,,I want something that is tailored towards XYZ,so you create a virtual machine that supports that subnet.
And these subnetworks are actually interoperable with other subnets.
Another thing is the issue with virtual machines,they define the operations of a blockchain or a network,how do computations run,what can be executed and what cannot be executed,one of the things I want to point is that when you are making subnets,in your subnets you can define a lots of things,you can define who gets to be a validator,what are the rewards,what can be transacted,what data can be stored and other rules.
The Avalanche team plans to have a marketplace for virtual machines,so probably in the future you will want to run computations that ,someone will actually build a virtual machine to solve your problem,according to them
AVA supports the development of a rich marketplace of virtual machines that can enjoy strict compliance rulesets, privacy, and innovative new features.
The next thing is how do you bootstrap the network
For bootstrapping,there are things like how do you discover new members who joined the network,how do we know state,transactions and network balances and how do we control Sybil attacks.
Like the conventional bitcoin,you will have to have a DNS(domain name system) for bitcoin you only need one form of seed node but for Avalanche,it requires multiple of it.
Network and State discovery : who just joined the network,we talk about validators,the current state of the network.
Let’s talk about things like Sybil Resistance
One of the reasons why you should pay attention to Sybil resistance is that,Let’s take for example,this is a website,if you don’t buy service packages that protect you against DDoS attacks,there are people who could hijack several computers and launch distributed denial of service attack against your website,so your website is not available to genuine users because someone who have taken control of multiple computers is sending false request to the system,so for that not to actually happen in a blockchain network,there has to be some defined Sybil resistance mechanism,now don’t confuse Sybil resistance mechanisms with consensus protocols,so the conventional blockchains,they have a something called “Skin in the game”,so it means that for you to actually be able to partake in,you have to have something from you that is at stake, it could be computation power,some tokens,storage or identity etc.
image credit : https://101blockchains.com/
They are many of them out there,one of them has to be proof of work,in PoW you are talking about hash computations,PoS(you have to stake your coins,there is an economic factor there),PoET(proof of elapsed time,),PoST(proof of space and time you put some storage space on the line),PoA(Here you put in your identity on the line) but considering that everything has its own pros and cons,Avalanche is making use of proof of stake,anyone can join,protect the network and earn rewards.
But this is not like the conventional proof of stake that evokes slashing,Avalanche believes that members should not be punished for uptime issues that could be caused by systemic failures,malware attacks etc.
How does staking in the system works
Minimum stake : There is a minimum amount that any member must have or surpass.
Staking period : There is a staking period,so there is a minimum time and maximum time,so you can’t just come in stake and leave any time you like,you are bounded by time limits.
Staking key :Users still have control over their coins even after they have staked them,they only have to give the staking key to the network,so also in the face of loss of this staking key,users can still get access to their coins.
Staking time :You define when you wish to start validation through your stake.
Smart contracts in AVA
Upon launch,Avalanche will support smart contracts written in the solidity programming language and in the future will seek to support smart contracts that supports the following
Parallel execution: what this means is that you could literally write a smart contract that is in one subnet and it can actually interact with another smart contract in another subnet while doing so concurrently irrespective of the language it is written in,it will also support Off-chain executions and on-chain verification in the future
Avalanche plans to also supports smart contracts that will be written in Solidity++ and also provide support for other execution environments like DAML,WASM etc.
Token system
The Avalanche token hardcap is 720,000,000 tokens,upon mainnet 360,000,000 tokens will be available and the token is neither deflationary nor inflationary,rather it is subject to prevailing economic situations per time.
In Bitcoin,there is something called halving,so assuming that the original total supply of bitcoin is denoted as X,of this X,Y number of coins have been minted,let Z represent yet to be mined tokens
image credits : https://www.investopedia.com
X(total supply) = Y(existing coins) + Z(yet to be mined coins)
Z gets halved every 4 years,it may get to a point in the bitcoin network where probably the value of bitcoin does not commensurate with the mining rewards,so lets take for example that the bitcoin that is been paid to miners per transaction is $2 and miners service cost(staff salaries,electricity,water bills etc per transaction) is $1,these miners may be tempted to be involved in malicious acts,they conspire or collude with other members in the network and could rollback the network,and should this happen,it’s going to be very bad for blockchains at a large.
Avalanche seeks to prevent all these by avoiding putting minting rules that are rigid and unchangeable,rather the rate of minting in the network is hinged upon certain predefined economic considerations called Levers,they include staking rewards,airdrops and fees.Those who have a stake in the network may propose changes that are relevant per moment.
Token Use
Payments : Avalanche is of the opinion that tokens should be able to process payments irrespective of their numbers or amount,a lot of people believe that bitcoin is not good for payments,they argue that it’s a digital gold and at such should not be used for transactions but rather be hoarded and stored but forget that nothing in itself gets value only be hoarding.
If bitcoin is just a cryptocurrency that you could only hold,I hold it so does grandma and everyone,the question that is left unanswered is “Can something become valuable in the midst of uselessness”
Imagine we have houses in our cities that are not habitable,there is no one living in them,so no demand for them,how then can the prices of such houses increase. Avalanche is targeting VISA level payments,the network so far has recorded 5000 tps running 2000 AWS nodes on a geo-distributed setting across the globe.
Staking and securing the network :The network is secured by stakers who get rewarded for such activity.
Atomic swaps : you can bring your assets,swap them AVA serves as a global unit of exchange
Client types in Avalanche
The network supports all kinds of members irrespective of their device
Archival clients :This client store everything,they possess network data from the genesis block,all subnets data and smart contracts.They help in bootstrapping new members in the network.
Full clients :They basically store the current(active/UXTO) state of the network.
Light clients :They basically prove that a transacted has been logged to the blockchain without needing to download or synchronize with history.
Team
Avalabs is headed by Prof Emin Gun Sirer with other co-founders and a staff numbering 20+ and currently hiring.
A professor of computer science at Cornell University,he created one of the earliest virtual currency called Karma,he is the co-director Initiative for CryptoCurrencies and Contracts.
Learn more
Website|Whitepaper|Telegram|Reddit|Medium|Twitter