Nvest Labs https://www.nvestlabs.com NvestLabs | Blockchain Training Institute Wed, 13 Nov 2019 08:20:49 +0000 en-GB hourly 1 https://wordpress.org/?v=5.3 https://www.nvestlabs.com/wp-content/uploads/2019/10/cropped-nvest_labs-32x32.png Nvest Labs https://www.nvestlabs.com 32 32 Polkadot – part 1 https://www.nvestlabs.com/2019/11/13/polkadot-part-1/ https://www.nvestlabs.com/2019/11/13/polkadot-part-1/#respond Wed, 13 Nov 2019 08:20:49 +0000 https://www.nvestlabs.com/?p=927 Polkadot is a platform that allows diverse blockchains to transfer messages, including value, in a trust-free fashion; sharing their unique features while pooling their security. In brief, Polkadot is a scalable, heterogeneous, multi-chain technology. Polkadot is heterogeneous because it is entirely flexible and makes no assumptions about the nature or structure of the chains in […]

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Polkadot is a platform that allows diverse blockchains to transfer messages, including value, in a trust-free fashion; sharing their unique features while pooling their security. In brief, Polkadot is a scalable, heterogeneous, multi-chain technology.

Polkadot is heterogeneous because it is entirely flexible and makes no assumptions about the nature or structure of the chains in the network. Even non-blockchain systems or data structures can become parachains if they fulfill a set of criteria.

Polkadot may be considered equivalent to a set of independent chains (e.g. a set containing Ethereum, Ethereum Classic, Namecoin, and Bitcoin) except with important additions: pooled security and trust-free interchain transactability.

Unlike previous blockchain implementations that provide a single chain of varying degrees of generality, Polkadot provides a Relay Chain upon which a large number of verifiable data structures may be hosted. We call these data-structures “parallelized” chains or parachains. Polkadot provides a networking and consensus layer that allows blockchain developers to focus on creating a state machine with unique features, such as formal verification or anonymity.

Polkadot consists of many parachains with potentially differing characteristics. Transactions can be spread out across the chains, allowing many more transactions to be processed in the same period of time. Polkadot ensures that the security of all blockchains in the network is robust and that any dealings between them are faithfully executed. All parachains share security and state, meaning if one chain has a message reverted, all chains get reverted. It is also possible for independent chains with their own validators to be linked to Polkadot via bridges, thereby foregoing Polkadot’s shared state and security system. These chains can benefit from Polkadot’s interoperability without being hosted on the platform, examples of these would be Bitcoin and Ethereum.

Polkadot makes blockchain experimentation possible in the same way Ethereum made decentralized application (DApp) experimentation possible. Polkadot is designed to facilitate faster innovation cycles, particularly when experimenting with new state transition functions. There are many trade-offs to consider when building a blockchain, and it’s clear from the number and diversity of the various Web3 projects that nobody has a framework that encompasses all chains. Polkadot is a vehicle that can get us to a general framework faster.

 

WHY DO WE NEED AN INTEROPERABLE BLOCKCHAIN?

 

A primary use case for Polkadot is enabling interoperability between chains, regardless of their features or their status as a private or public chain. Interoperability lets diverse chains perform arbitrary messaging, including value. This interconnectivity could encompass privacy-oriented projects, forks, permissioned chains and more. Polkadot allows all parties to take public and private chains and “plug them in” to a shared connectivity layer. Chains can choose to maintain their own validator set or utilize Polkadot’s pooled security system to verify their transactions via the Relay Chain. With Polkadot, the features of one chain can be leveraged on another. In other words, where there is innovation for one, there is innovation for all.

 

DOTs

DOTs will be the token created and native to Polkadot for the purpose of carrying out three key functions in Polkadot, namely (i) providing governance for the network, (ii) operating the network, and (iii) creating parachains by bonding DOTs.

The first function of DOTs will be to entitle holders to complete government control over the platform. Included in this governance function is determining the fees of the network, the addition or removal of parachains, and exceptional events such as upgrades and fixes to the Polkadot platform. These functions are not formally granted to the holders of DOTs, but rather the underlying code of Polkadot will enable a holder of DOTs to participate in governance.

The second function of DOTs will be to facilitate the consensus mechanism that underpins Polkadot. In order for the platform to function and allow for valid transactions to be carried out across parachains, Polkadot will rely on holders of DOTs to play active roles. Participants will put their DOTs at risk (referred to as “staking” or “bonding”) to perform these functions, which acts as a disincentive for malicious participation in the network. The DOTs required to participate in the network will vary according to the activity undertaken, the duration DOTs are staked for, and the total number of DOTs staked.

The third function of DOTs will be the ability to add new parachains by tying up DOTs (referred to as “bonding”). Outdated or non-useful parachains are removed by removing bonded tokens.

 

Functions the owner of DOTs will have?

Holders of DOTs will have certain functions within the Polkadot platform, including:

  • the ability to act as a validator, collator, nominator or fisherman;
  • the ability to participate in the governance of Polkadot;
  • the ability to participate in the decision-making process in relation to adding or removing parachains; and
  • the ability to participate in the decision-making process in relation to global upgrades and/or changes to Polkadot.

 

Value of DOTs?

DOTs are designed to fulfill certain functions within Polkadot and do not act as a currency per se. The Web3 Foundation makes no comment at this stage as to the current or future value of DOTs.

DOTs are largely illiquid by design. Following the deployment of the Polkadot genesis block, it is expected that a large proportion of all DOTs in issue at any point in time will be staked for the purposes of supporting the Proof of Stake consensus mechanism that underpins Polkadot, and consequently will be illiquid and will not be capable of being transferred or traded.

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SECRET SHARING AND ENCRYPTION https://www.nvestlabs.com/2019/11/12/secret-sharing-and-encryption/ https://www.nvestlabs.com/2019/11/12/secret-sharing-and-encryption/#respond Tue, 12 Nov 2019 20:06:39 +0000 https://www.nvestlabs.com/?p=903 Now and again, blockchain applications are not attempting to intervene with the transfer of digital assets, or record identity information, or process smart contracts, and are rather being used on more data-centric applications: timestamping, high-value data storage, proof of existence (or proof of inexistence, as on account of certificate revocations), and so forth. A common […]

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Now and again, blockchain applications are not attempting to intervene with the transfer of digital assets, or record identity information, or process smart contracts, and are rather being used on more data-centric applications: timestamping, high-value data storage, proof of existence (or proof of inexistence, as on account of certificate revocations), and so forth. A common refrain is an idea of using blockchains to build systems where “users are in control of their own data”.

In these cases, it is once again critical to note that blockchains do NOT solve privacy issues, and are an authenticity solution as it were. Hence, putting medical records in plaintext onto a blockchain is a Very Bad Idea. Nonetheless, they can be joined with different technologies that do offer privacy so as to create a holistic solution for some industries that accomplish the desired goals, with blockchains being a vendor-neutral platform where some information can be stored so as to provide authenticity guarantees.

So what are these privacy-preserving technologies? All things considered, on account of simple data storage (for instance, medical records), the simplest and oldest one of all can be used: encryption! Documents that are hashed on the blockchain can first be encrypted, so even if the data is stored on something like IPFS only the user with their own private key can see the documents. If a user needs to allow somebody else the right to see some particular records in the decrypted form, but not every one of them, one can use something like a deterministic wallet to derive an alternate key for each document.

Another valuable technology is secret sharing (depicted in more detail here). The idea is that one party has a secret which it distributes among n other parties in a way that none of the n parties alone can recover the secret. In actuality, the secret is shared such that the information of at least t of the n parties is expected to recover the secret, where t is a predefined threshold. Any endeavor by less than t parties to recover the secret will fail and they won’t learn anything about the secret.

THE FUTURE OF PRIVACY

There are two major challenges with privacy-preserving protocols in blockchains. One of the challenges is statistical: in order for any privacy-preserving scheme to be computationally practical, the scheme must only alter a small part of the blockchain state with every transaction. In any case, regardless of whether the contents of the alteration are privacy, there will definitely be some amount of metadata that isn’t. Subsequently, statistical analyses will always be able to figure out something; almost certainly, they will be able to fish for patterns of when transactions happen, and in many cases, they will most likely be able to narrow down identities and figure out who communicates with whom.

The next challenge is the developer experience challenge. Turing-complete blockchains work very well for developers because they are very friendly to developers that are completely clueless about the underlying mechanics of decentralization: they create a decentralized “world computer” which looks simply like a centralized computer, as a result saying “look, developers, you can code what you were planning to code already, except that this new layer at the bottom will now make everything magically decentralized for you”. Obviously, the abstraction isn’t perfect: high transaction charges, high latency, gas and block reorganizations are something new for software engineers to battle with, however, the barriers are not that huge.

There are partial solutions for explicit use cases, and quite often these partial solutions offer a high level of flexibility, the abstractions that they present are quite unique from what developers are used to. It is not insignificant to go from “10-line python script that has some code for subtracting X coins from the sender’s balance and adding X coins to the recipient’s balance” to “exceedingly anonymized digital token utilizing linkable ring signatures”.

Projects like Hawk are welcome positive steps in the right direction: they offer the guarantee of converting an arbitrary N-party protocol into a zero-knowledge-ified protocol that trusts just the blockchain for authenticity, and one explicit party for privacy: basically, combining the best of the two worlds of a centralized and decentralized approach.

In coming years differential privacy will be widely used in the real-time applications to protect data and bring efficient balance between privacy and utility of data.

CONCLUSION

Cybersecurity threats emerge every day, while older threats still linger around and wait to be exploited once again. Blockchain technology won’t be the holy grail of cybersecurity, yet it is an incredible tool which can help to harden systems. Blockchain plays its strengths very well; if the system which it is disrupting is a centralized system with only one point of failure. If higher transaction speeds are possible, blockchain is a technology with use cases extending from smart grids over the Internet of Things to a universally deployed and utilized currency system and smart contracts.

 

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Waves https://www.nvestlabs.com/2019/11/12/waves/ https://www.nvestlabs.com/2019/11/12/waves/#respond Tue, 12 Nov 2019 07:22:08 +0000 https://www.nvestlabs.com/?p=924 WAVES is a decentralized blockchain platform focusing on custom blockchain tokens operations. National currencies exchange is maintained on the WAVES blockchain through compliant gateway operators. Decentralized token exchange facilitates fundraising, crowdfunding, and dealing of financial instruments on the blockchain. Lightweight clients provide an easy installation procedure and a flat learning curve for end users. Waves […]

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WAVES is a decentralized blockchain platform focusing on custom blockchain tokens operations. National currencies exchange is maintained on the WAVES blockchain through compliant gateway operators. Decentralized token exchange facilitates fundraising, crowdfunding, and dealing of financial instruments on the blockchain. Lightweight clients provide an easy installation procedure and a flat learning curve for end users.

Waves center around different employments of blockchain tokens — those which are often ignored in favor of the low-level opportunities which blockchain technology might provide, such as smart contracts. There is very solid untapped potential in a classical colored coins approach, and the WAVES platform is designed to realize this to its fullest extent.

Smart contracts, being a natural improvement of Bitcoin scripting, are inevitable and will be one of the cornerstones of blockchain technology. Then again, certain features are much easier to implement using other approaches. Custom tokens operations acknowledged as an attachment to blockchain transactions are very flexible and can be used in a variety of applications, from national currencies transfer over the blockchain to decentralized trading. An emphasis on such operations might well complement the approach introduced by Ethereum.

Two-tier architecture and lightweight clients.

The exemplary Bitcoin approach is essentially a way to synchronize a distributed system through common transaction logs. It necessitates that each network node store the full copy of the transaction history. Clearly, this does not scale well, since eventually, not every node will be able to store the full history. There are distinctive ways to mitigate this — a simplified payment verification procedure that allows storage of only that data essential for a given node; off-chain transactions; bidirectional payment tunnels; reducing blockchain bloat; working directly with the system state. With the simplest methodology, where all nodes are equal at Genesis block, centralization may emerge as low-capacity nodes have to rely on full, high-capacity nodes that can afford to store the full blockchain. Feasibly, a two-tier architecture emerges.

Does this make the framework inherently centralized? No, since a new node can always enter the network and become a full node if it has adequate resources.

Of course, developing centralization brings trust issues, since lightweight nodes have to trust the full nodes and can become a victim of a rogue full node. However, there are approaches to mitigate this, such as polling several nodes, maintaining trusted nodes lists, and so on.

WAVES platform authorizes an approach that might at first seem extreme to a classic cryptocurrency advocate. Lightweight nodes do not download the blockchain at all, rather relying on full nodes for payment verification and network interaction. The approach depends on the SuperNET lite client that has successfully been run on the Nxt platform for over a year.

WAVES is built on the Scorex platform, which develops an approach based on using the current network state as an alternative to full transaction history. A simplified payment verification procedure will be realized for the lightweight node, adding another security layer. System state can be downloaded by a lightweight node, and simplified payment verification procedures based on this.

Proof-of-stake consensus, stake leasing.

The Proof-of-Stake protocol was picked as the consensus algorithm for WAVES. This decision is based on its successful use in Nxt, as well as on certain theoretical considerations. At the same time, an enhancement to the PoS protocol was proposed, which should provide for reduced transaction times and increased transaction throughput — Leased PoS (LPoS).

In a PoS system, every node that holds a balance in the main network token has a chance (proportional to its balance) to produce a block. In the two-tier architecture, it is logical to move payment processing onto the full nodes alone. At the same time, all nodes with non-zero balances still have to be qualified for staking rewards.

The hypothetical issue of reduced security caused by fewer nodes staking can be addressed through explicit balance leasing from lightweight nodes to full nodes. By leasing their balance to a trusted full node a lightweight node actually expands its chance of collecting transaction fees, since it does not have to stay online, and the full node has an increased chance of producing a block due to its increased balance.

Account leasing is not equivalent to balance transfer; a lightweight node can still exchange its balance to another node and conduct other operations. By leasing out their balance, lightweight nodes effectively select which full nodes will carry out most of the system’s payment processing. Diminishing the number of nodes that can potentially produce blocks allows for faster confirmation times, lower latency, and higher system throughput.

Lightweight nodes realization and browser plugins.

The lightweight node is recognized as a browser plugin written in JavaScript. It interacts with Scorex-based full nodes. The plugin is installed from the app-stores. Since no blockchain download is needed a client obtains a fully-fledged blockchain-powered wallet immediately following a simple installation procedure.

The wallet interface takes after traditional online banking/brokerage interfaces. Integrated national currencies allow for native value transfer designated in fiat. Exchange of national currencies into and out of the blockchain is completed by a trusted provider. Once a client has completed the national currency token purchase she can transfer it to another user or trade with it on a decentralized exchange.

Asset-to-asset trading makes it possible to provide a stock market-similar trading interface, by allowing trading against USD, EUR, CNY, and so on. All in all, the platform interface is closer to conventional financial interfaces than to a normal cryptocurrency client. It is important to provide an interface to which most users are already well accustomed, at the same time as empowering it with blockchain technology. Clients can do things they were unable to do with traditional financial platforms, but the learning curve remains flat, which is a key to mass-market adoption.

Additional key WAVES features.

WAVES target in the first place community-based development and projects. To that end, decentralized voting and messaging are implemented. It will allow for a DAO-like experience in managing community projects, whilst remaining simple from a technical point of view.

WAVES will permit payment of network transaction fees in custom tokens (assets). Along with the transaction in question, an order to trade the asset into the main network token is sent to the decentralized exchange, and the transaction can be included in the next block only after that order has been executed.

Conclusion.

WAVES platform is being built with mass support in mind from the start. In this general overview, we show the technical solutions that may be used to give the end-user previously unseen opportunities and to pave the way for the rapid adoption of blockchain technology.

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Block Chain with Medical https://www.nvestlabs.com/2019/11/11/block-chain-with-medical/ https://www.nvestlabs.com/2019/11/11/block-chain-with-medical/#respond Mon, 11 Nov 2019 19:18:15 +0000 https://www.nvestlabs.com/?p=920 In today’s digital world, different systems interact with each other for data and information exchange. We expect each interaction / transaction between the systems to be secure and reliable. Blockchain is a new technology that promises an efficient, cost-effective, reliable, and secure system for conducting and recording any transaction without the need of middleman. A […]

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In today’s digital world, different systems interact with each other for data and information exchange. We expect each interaction / transaction between the systems to be secure and reliable.

Blockchain is a new technology that promises an efficient, cost-effective, reliable, and secure system for conducting and recording any transaction without the need of middleman.

A Blockchain database is a distributed database that records and stores transaction data in the form of time stamped “Blocks” linked to each other in such a way that no one can alter any transaction data. Members of the Blockchain network who validate the transactions
are called nodes.

Blockchain technology allows different types of nodes to enter Blockchain Network using specialized software such as Ethereum performing different functions Mining nodes in the
blockchain network will be assigned a secret private key and a public key pair. Public key acts as “Public Address” which is visible to all participants.

Private and Public key pair is cryptographically linked such that identification is possible in only one direction using

OVERVIEW OF BLOCKCHAIN TECHNOLOGY

The private key. A message which is encrypted using aprivate key can only be read by any node with a public key which is linked to the private key, thus limiting the number of users to access or read an encrypted message or data.

Any action on blockchain is a function of network, so to alter any transaction data the hacker should modify the same data in all the nodes in the network. It basically means hacking into all the systems in the network at a time, which is practically impossible to do. Blockchain is consensus- based; every transaction needs approval from more than half of the participants or nodes before execution.

Every transaction in blockchain is public but access to content of each transaction can be limited or restricted based on the sensitivity of the transaction. Today blockchain is finding applications in every field. like finance, healthcare, economics, legal, etc. Some examples from healthcare sector use cases where blockchain can be used are: EHRs, drug traceability from manufacturer to consumer, clinical trials to eliminate fraudulent data modifications and interoperability Blockchain provides us with a tremendous opportunity to overcome challenges that exist in the healthcare industry today, including interoperability, security,
integrity, traceability and universal access.

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E-Commerce-Block Chain https://www.nvestlabs.com/2019/11/11/912/ https://www.nvestlabs.com/2019/11/11/912/#respond Mon, 11 Nov 2019 06:53:59 +0000 https://www.nvestlabs.com/?p=912 The winter of 2017 catapulted cryptocurrencies and their symbiotic relationships with blockchain into the public consciousness, and with it came a widespread realisation of the potential that both technologies could hold in the future of online transactions. On December 17th 2017, Bitcoin reached a peak value of $19,783.06, successfully dumbfounding its critics in the financial sector and making […]

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The winter of 2017 catapulted cryptocurrencies and their symbiotic relationships with blockchain into the public consciousness, and with it came a widespread realisation of the potential that both technologies could hold in the future of online transactions.

On December 17th 2017, Bitcoin reached a peak value of $19,783.06, successfully dumbfounding its critics in the financial sector and making sure that the crypto-market could no longer be ignored.

Rapid transactions

The future for blockchain in eCommerce is a bright one, after all, blockchains are designed for storing transactional data securely. This storage can go way beyond financial information and can pertain to any action that requires an immutable record.

One of the biggest perks for blockchain within eCommerce is the efficiency of its rapid transactions. Ethereum-based payment processing company Monetha has claimed that while traditional payment processing systems may contain up to 16 different steps that bring fees ranging from two to six percent, blockchain transactions are completed on a single network.

Because of the single network, blockchain transactions greatly reduce the need, if there’s any at all, for intermediaries while processing payments. This means that the pace of transactions within eCommerce will be limited only by the speed of the network and that by which new blocks can be created.

Blockchain is still a developing technology, and while Bitcoin was initially capable of processing up to seven transactions per second, the true power behind the cryptocurrency revolution can be seen in the Lightning Network – which is a payment system that’s so powerful it promises to be capable of processing millions of transactions each second.

Watertight security

A recurring problem in eCommerce is a lack of security. As technology develops, so too does the tools at a hacker’s disposal to access shoppers’ credit and debit card information.

Blockchain helps to counter this with far greater security. While the nodes within blockchains are created automatically, are impenetrable and untamperable, the cryptocurrencies that they support behave more like cash than cards.

 

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How blockchain used in education system? https://www.nvestlabs.com/2019/11/10/how-blockchain-used-in-education-system/ https://www.nvestlabs.com/2019/11/10/how-blockchain-used-in-education-system/#respond Sun, 10 Nov 2019 18:28:28 +0000 https://www.nvestlabs.com/?p=908 What is blockchain? Can it be used in education? In 2001, I designed and implemented a Napster-like system with no central storage or control that distributes learning content across a network for non-competing public-sector bodies. Everyone who created content could share it. It didn’t work because, despite being non-competitors, the public sector organisations just didn’t […]

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What is blockchain? Can it be used in education? In 2001, I designed and implemented a Napster-like system with no central storage or control that distributes learning content across a network for non-competing public-sector bodies. Everyone who created content could share it.

It didn’t work because, despite being non-competitors, the public sector organisations just didn’t like innovation and stuck to their institutional silos. They were fixed in their old ways – with massive duplication of content and no sharing, which is as true today as it was then. The same fate, I fear, could happen to Blockchain technology – but let’s explore its potential.

 What is it?
Technically, Blockchain is a distributed database, spread across many computers with no central control that could transform governance, the economy, businesses and the functioning of organisations. And by the way, it’s already here, not only in Bitcoin, but in many other services and commodities – badges, credits, and qualifications.
Each ‘block’ is transparent but tamper-proof. A ‘block’ has a timestamp for recording transactions and offers indelible proof of all of them. Rather than relying on third parties, it’s a frictionless method for transacting with others.
In normal speak, the basic idea is that you cut out the middleman. There is no central database as everything is distributed, public, synchronised and encrypted. All transactions are logged with a time, date and other details – then verified by some very smart maths. Consensus decides, and every transaction is public.

What this promises is a more efficient, secure and transparent way of handling transactions. This could save a huge amount of administration, bureaurocracy, effort and time. The Internet of things may release its potential.

Who can use it?

Blockchain can be implemented within individual educational institutions, groups of educational institutions, and both national and international educational bodies. In fact anyone wanting to securely store badges, credits, and qualifications – and make educational data that matters available to others – could consider using blockchain technology.

 Why does it matter?

As education becomes more diversified, democratised, decentralised and disintermediated, we still need to maintain reputation, trust in certification, and proof of learning. The increased focus on relevance and employability may also push us in this direction, as we also need more transparency. Blockchain could provide just such a system: a massive open, online, secure database.

How can it be used?

1.Single institution

One school, Holburton School in San Fransisco, a software school that offers project-based education as an alternative to college courses, has already used blockchain to store and deliver its issued certificates. It’s seen as a measure to stop fake certification. Encryption and two-factor authentification are used to create, sign-off on and place the certificate into the blockchain database. The school still gives students paper copies, but a system-created decentralised clearing number (DCN) is generated that allows authentification by employers.

I can see Holburton’s point, as this approach demonstrates to employers that this school certainly knows its stuff on IT. MIT is doing similar things, as is the University of Nicosia.

  1. Groups of institutions

As educational institutions cluster and co-operate, the need for shared repositories of certification and achievement become real. An example is the group of universities, Delft, EPFL, Boston, ANU and UBC, that recently formed a codeshare-like agreement on certification. It could also be used by affiliated organisations that form a global alliance or a global group of schools. Whatever the constellation of institutions or bodies, blockchain gives them a cheap, shared resource.

  1. National blockchain database

Education is curiously nationalistic. Even in the EU, it is a devolved issue. Within a country, however, there is a great need for a shared approach to the range of credentials that are being produced at all levels in the system: schools, colleges, universities, institutes, examination boards, trade associations, employers, and so on. There is a real need for something that sits above them all. That solution could be blockchain technology.

  1. Global assessment

The current system of certification is not really fit for its purpose. A paper system is subject to loss, even fraud. With an increasingly mobile population of students and workers, a centralised database of credentials and achievements makes sense, whether you’re moving to another educational institution, a new job, a new country – and for refugees who have no copy of their degrees. Some sort of secure, online repository would be helpful.

 

Assessment would appear to be the first obvious application for blockchain. At present, it’s a mess, waiting to be cleared up by a smart operator. One player is Sony Global Education, who have a blockchain-based platform to house assessment scores. They want schools and universities to use the service so that individuals can share the data with third parties such as employers, LinkedIn, etc. Their aim is to offer a global service.

  1. Blockchain and badges

So let’s up the stakes with a wider initiative around Open Badges. Open Badges gather evidence for credentials. What could be better than a tamper-proof system for their storage? If a blockchain system can offer a massive way to deal with authentic accreditation, then the problems of openness, scale and cost for badges disappears (see Doug Belshaw’s blog).

To see how Open Badge chains can be converted to blockchain, see Serge Ravet’s blog. MIT has been using Bitcoin blockchain for certification and have open sourced the code.

  1. Blockchain and MOOCs

Interestingly, there’s a MOOC on Bitcoin and blockchain by Princeton University on Coursera. Despite the carping, people keep on making and taking MOOCs. They are genuinely changing the way education is delivered and acting as a real catalyst for change, forcing universities into a rethink.

The certification issue, though, remains a little vague. Each separate MOOC provider issues certificates. With some imagination, the real demand for MOOCs could be boosted by secure certification in the form of agreement among the major MOOC providers. It could even open up MOOC certification for actual degrees. MOOCs are about decentralisation and widening access, so there’s every reason to suppose that organisers will want to decentralise and increase access to their certification.

  1. CPD

Always a problem, continuing professional development (CPD) is difficult to deliver, often fragmented, and poorly tracked. Imagine a blockchain system that really did this within a profession, taking issued CPD data from conference attendance, courses, and other forms of learning. Teachers and other professionals could get inputs from trusted providers and thus be incentivised to do more CPD, if those experiences and learning opportunities were securely stored in a reputable system.

  1. Corporate learning

Companies deliver huge amounts of training to their employees, but storing achievement is not easy. Current learning and talent management system technologies, SCORM, et al, are a bit old and tired. What’s needed is a more open but secure system for use not only internally, but also by employees when they leave an organisation.

  1. Apprenticeships

Vocational education is now big business, as governments around the world recognise the folly of relying too heavily on purely academic institutions to deliver post-school education. In the UK, a system of three million apprenticeships is to be funded through a levy on payroll. It’s a complex business, as employers will play a stronger role in their management and delivery. How are they going to manage the process and certification? Blockchain is a real possibility, as it could offer a centralised but neatly distributed national database for the authentification of both process and certification.

  1. Bodies of knowledge

This one’s more obscure, but imagine something like Wikipedia or Khan Academy, academic journals, OER, even research bodies, issuing proof of learning from their systems. Thanks to John Helmer for the idea of authenticating identity for access to subscription-controlled, academic content from libraries. Current systems (Open Athens, Shibboleth) use centralised ledgers and are seriously dysfunctional. Blockchain could be used here to provide a more robust authentication infrastructure.

Blockchain could be used for a myriad of learning experiences from various sources. It requires a small transaction model, and this could be where ‘eXperience API’ (xAPI), which can be used to gather evidence from micro-learning experiences, comes in handy. It is open source, the natural successor to SCORM, and stores data in Learning Record Stores. This seems like a natural route to the use of blockchain.

Another is providing education with an easy method of micropayments. Traditional financial transactions use expensive third parties who charge fees. Blockchain allows free transactions between parties. This could open up micropayments for the use of educational resources, courses, etc.

All in all, it frees up the system, makes it more open and flexible. And who would argue that this is not a good thing?

 Conclusion

Blockchain is a technology that clearly has applications in the world of learning at the individual, institutional, group, national and international levels. It is relevant in all sorts of contexts: schools, colleges, universities, MOOCs, CPD, corporates, apprenticeships, and knowledge bases.
Rather than the old hierarchical structures, the technology becomes the focus, with trust migrating towards the technology, not the institutions. It is really is a disintermediation technology.

Traditionally institutions have been a source of trust: universities, for example, are trusted “brands”. In finance, where blockchain is nowadays a ubiquitous hot topic, banks exist to enact transactions, creating an environment in which blockchain’s advantages are readily obvious.

In education, however, there needs to be trust beyond the technology. We are looking, I think, at a hybrid model rather than a wholesale blockchain takeover. Reputation will still matter, and this will continue to be derived from the quality of the instruction, teachers, research, and so on. However, blockchain can play a role here, too, as one could imagine a sort of web of teachers and learners that deploys blockchain to cut out institutions. This, in my view, is not impossible, but it is unlikely.

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RING SIGNATURES https://www.nvestlabs.com/2019/11/10/ring-signatures/ https://www.nvestlabs.com/2019/11/10/ring-signatures/#respond Sun, 10 Nov 2019 06:22:31 +0000 https://www.nvestlabs.com/?p=887 An innovation which is moderately technically complicated, however very encouraging for both token anonymization and identity applications, is ring signatures. A ring signature is basically a signature that proves that the signer has a private key corresponding to one of a particular set of public keys, without revealing which one. The two-sentence explanation for how […]

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An innovation which is moderately technically complicated, however very encouraging for both token anonymization and identity applications, is ring signatures. A ring signature is basically a signature that proves that the signer has a private key corresponding to one of a particular set of public keys, without revealing which one. The two-sentence explanation for how this functions mathematically is that a ring signature algorithm incorporates a mathematical function which can be computed normally with only a public key, but where knowing the private key allows one to add a seed to the input to make the output be whatever specific value wanted. The signature itself comprises of a list of values, where each value is set to the function applied to the previous value (in addition to some seed); creating a valid signature requires using knowledge of a private key to “close the loop”, forcing the last value that was computed to equal the first. Given a valid “ring” created in this way, anybody can verify that it is without a doubt “ring”, so each value is equivalent to the function computed on the previous value in addition to the given seed, however there is no way to tell at which “link” in the ring a private key was used.

 

There is also an upgraded version of a ring signature called a linkable ring signature, which adds an extra property: if a sign is done twice with the same private key, that fact can be detected – yet no other data is revealed. On account of token anonymization, the application is fairly basic: when a user needs to spend a coin, rather than having them give a regular signature to prove ownership of their public key directly, public keys are combined together into groups and ask the user to simply prove membership in the group. Due to the linkability property, a user that has a single public key in a group can just spend from that group once; clashing signatures are rejected.

Ring signatures can also be used for voting applications: instead of using ring signatures to validate spending from a set of coins, they are used to validate votes. They can also be used for identity applications: if one wants to prove that he belongs to a set of authorized users, without revealing which one, ring signatures are well-suited for just that. Ring signatures are more mathematically involved than simple signatures, but they are quite practical to implement; some sample code for ring signatures on top of Ethereum can be found here.

The structure of a ring signature, using Monero for instance, essentially works as follows:

  • Alice needs to send Bob 10 Monero so she starts a transaction through her Monero wallet to Bob.
  • Alice’s digital signature for this transaction is a one-time spend key that begins with an output being spent from her wallet.
  • The non-signers of the ring signature are past transaction outputs that are arbitrarily picked from the blockchain and go about as fakes in the transaction.
  • All ring members are conceivable signers of the transaction and it is computationally infeasible for an outsider to identify the actual signer.
  • The majority of the ring signature together make up the input of the transaction.
  • The creator of the transaction (Alice) is provably eligible to spend the specified transaction amount without distinguishing her identity from the others in the ring.
  • Despite the fact that Alice’s public key is used in her own transaction, it might be arbitrarily used in other transactions in the Monero network as a tangling factor.

Further, the automatic creation of unique one-time keys prevents transaction linkability and is made possible through an optimization of the Diffie-Hellman key exchange.

A problem with having anonymous transactions across a privacy-focused cryptocurrency network such as Monero is that prevention of double-spending would be very difficult and thus make the network useless as a digital currency if full double-spend protection wasn’t ensured. This is keenly solved with the use of key images related to the ring signature scheme.

 

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Future of Waves Blochchain https://www.nvestlabs.com/2019/11/09/future-of-waves-blochchain/ https://www.nvestlabs.com/2019/11/09/future-of-waves-blochchain/#respond Sat, 09 Nov 2019 18:07:22 +0000 https://www.nvestlabs.com/?p=898 Cryptocurrencies go through their ups and downs in the digital market and one thing they aim for are consistent gains. One crypto with such potential is Waves (Waves).  Waves has consistently performed well for the past few months. Further, there are a number of factors that could see the value of Waves (Waves) rise significantly. […]

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Cryptocurrencies go through their ups and downs in the digital market and one thing they aim for are consistent gains. One crypto with such potential is Waves (Waves).  Waves has consistently performed well for the past few months. Further, there are a number of factors that could see the value of Waves (Waves) rise significantly.

Designed from scratch for storing, managing, and supplying digital assets, Waves (WAVES) is an open source decentralized blockchain platform that enables anyone to create their own internal digital currencies. Building on techniques implemented by NXT to make adding new transaction types possible, WAVES approaches this practice via plug-ins that do not require an update to the core software but instead may be installed as extensions on top of it. As a result, clients not running software with these additional plug-ins may still relay custom transaction types without the need to support a mandatory hard fork of the core code.

In the near-term, Waves (Waves) is likely to be boosted by the upcoming Vostok airdrop. Vostok will be doing a 1:1 airdrop to the Waves holders in April. Averaging of waves accounts for snapshots is already going on.

As this airdrop gradually approaches, more people will jump into Waves for free cryptos. This would mean the value of Waves rise sharply all through this quarter, and going into Q2.

Besides this airdrop, Waves (Waves) will be boosted by the growth in popularity of the Waves (Waves) DEX. Waves decentralized exchange is so popular that it has been ranked one of the top 4 DEXs to watch out for in 2019. Considering that overall interest in decentralized exchanges is growing, for security reasons, Waves (Waves), which is the native token to the Waves ecosystem is likely to keep growing in value in the future.

Then there is the development of projects launching on the Waves blockchain.  The Waves blockchain is scalable and secure, which makes it perfectly suitable for the launch of Dapps. Besides, Waves is going the extra mile of encouraging good quality projects launch on the waves blockchain through grants. For instance, a project called “Tumblex Mixer” has already received a grant to facilitate its launch on the Waves blockchain.  As per the Waves Lab blog, they have now obtained more than 50 grant applications, and they are still in the process of reviewing them.

As more and more projects launch on the Waves blockchain, the value of the Waves token will rise significantly as well. It has a good chance of emerging as a top gainer this year, 2019. If the entire market turns bullish, it would be a welcome boost and could see the value of Waves hit its all-time highs this year. The future of Waves (Waves) looks good.

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0x Protocol https://www.nvestlabs.com/2019/11/09/0x-protocol/ https://www.nvestlabs.com/2019/11/09/0x-protocol/#respond Sat, 09 Nov 2019 06:03:29 +0000 https://www.nvestlabs.com/?p=891 Now that there are hundreds of blockchain based cryptocurrencies, and more being added every month, the need to exchange these assets is compounding. With the emergence of smart contracts, it is possible for two or more parties to exchange blockchain assets without the need for a trusted third party. A decentralized exchange is an important […]

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Now that there are hundreds of blockchain based cryptocurrencies, and more being added every month, the need to exchange these assets is compounding. With the emergence of smart contracts, it is possible for two or more parties to exchange blockchain assets without the need for a trusted third party. A decentralized exchange is an important advancement from the ecosystem of centralized exchanges for a few key reasons: decentralized exchanges can provide stronger security guarantees to end users since there is no longer a central party which can be hacked, run away with customer funds or be subjected to government regulations. Hacks of Mt. Gox, Shapeshift and Bitfinex have demonstrated that these types of systemic risks are evident. The decentralized exchange will abolish these risks by allowing users to transact trustlessly – without a middleman – and by placing the burden of security onto individual users rather than onto a single custodian.

0x is an open protocol for decentralized exchange on the Ethereum blockchain. It is delibrated to serve as a basic building block that may be combined with other protocols to drive increasingly sophisticated dApps. 0x uses a publicly available system of smart contracts that can act as shared infrastructure for a variety of dApps. In the long run, open technical standards are bound to win over closed ones, and as more assets are being tokenized on the blockchain each month, we will see more dApps that require the use of these different tokens. As a result, an open standard for exchange is critical to supporting this open economy.

A hybrid implementation, which we refer to as “off-chain order relay with an on-chain settlement,” combines the orderliness of state channels with the near-instant settlement of on-chain order books. In this approach, cryptographically signed orders are broadcasted off of the blockchain; an interested counterparty may inject one or more of these orders into a smart contract to execute trades trustlessly, directly on the blockchain. Friction costs are minimized for market makers because they can signal intent off chain and transactions only occur when value is being transferred. This approach is extended by allowing anyone to act as the exchange and by making the protocol application-agnostic.

When Will Warren and Amir Bandeali co-founded the 0x Project in October of 2016, they did so in hopes of a world that allows for every asset’s representation as part of the Ethereum blockchain. Ideally, the included assets would have everything from digital game items to stocks to gold and fiat currencies. With so much tokenization, there will be thousands of different types of tokens, requiring a trustless exchange for users. While the co-founders appreciate the developments of decentralized exchanges, they saw an opportunity for improvement. With 0x, they hope to address the inefficiencies of decentralized cryptocurrency exchanges as well as the inability of various exchanges to work together.

 

SMART CONTRACT

The exchange protocol is implemented within an Ethereum smart contract that is publicly accessible and free to use (no additional costs are imposed on users beyond standard gas costs). It is written in the Solidity programming language and contains two relatively simple functions: fill and cancel. The entire contract is approximately 100 lines of code and it costs approximately 90k gas to fill an order.

 

Signature Authentication

The exchange smart contract is able to authenticate the order originator’s (Maker’s) signature using the ecrecover function, which takes a hash and a signature of the hash as arguments and returns the public key that produced the signature. If the public key returned by ecrecover is equal to the maker address, the signature is authentic.

address publicKey = ecrecover( hash, signature( hash ) );

if ( publicKey != maker ) throw;

 

Fills & Partial Fills

The exchange smart contract stores a reference to each previously filled order to prevent a single order from being filled multiple times. These references are stored within a mapping; a data structure that, in this case, maps a 32 byte chunk of data to a 256 bit unsigned integer. Passing the parameters associated with an order into the Keccak SHA3 function produces a unique 32 byte hash that may be used to uniquely identify that order (the odds of a hash collision, finding two different orders with an identical hash, are practically zero). Each time an order is filled, the mapping stores the order hash and the cumulative value filled.

A Taker may partially fill an order by specifying an additional argument, valueFill, when calling the exchange smart contract’s fill function. Multiple partial fills may be executed on a single order so long as the sum of the partial fills does not exceed the total value of the order.

 

Expiration Time

An order’s expiration time is specified by the Maker at the time the order is signed. The expiration time is an unsigned integer value that represents the absolute number of seconds since the unix epoch. This value cannot be changed once it has been signed. Time within the Ethereum virtual machine is given by block timestamps that are set each time a new block is mined. Therefore, the expiration status of an order does not depend upon the time at which a Taker broadcasts their intention to fill an order, instead it depends upon the time at which the fill function is being executed in the EVM by a miner. A miner cannot set the block timestamp of the current block to be earlier than the timestamp of the previous block.

 

Canceling Orders

An unfilled and unexpired order may be canceled by the associated Maker via the exchange smart contract’s cancel function. The cancel function maps an order’s hash to the order’s maximum value (valueA), preventing subsequent fills. Canceling an order costs gas and, therefore, the cancel function is only intended to serve as a fallback mechanism. Typically, Makers are expected to avoid on-chain transactions by setting their order expiration times to match the frequency with which they intend to update their orders. One issue with this approach is that it can create situations where a Maker attempts to cancel their order at roughly the same time a Taker is attempting to fill that same order. One of the two parties transactions will fail, wasting gas, depending upon the sequence in which the two transactions are mined. Uncertainty regarding the sequence in which transactions are mined could lead to undesirable outcomes at times. This uncertainty could increase if the Ethereum blockchain were to experience a significant backlog of pending transactions.

 

ZRX TOKENS

Another aspect of the 0x Project is the unique 0x Ethereum token, known as ZRX. This token is how users pay Relayers’ trading fees. It is also a decentralized form of governance for the 0x protocol’s upgrade system. Essentially, those who own ZRX have input in the protocol and improvements to make that is proportional to the amount owned.

There is a fixed supply of one billion ZRX, and the token launch was recent, on August 15, 2017. 50 percent of the tokens were released during the launch with 15 percent retained by 0x, 15 percent going to the developer fund, 10 percent going to the founding team, and 10 percent going to the advisors and early backers. The tokens allocated for founders and advisors as well as staff members will be released over the course of four years, while those bought during the launch event were liquid immediately.

 

CONCLUSION

The 0x seems like a sensible step from decentralized cryptocurrency exchanges, effectively taking care of many of the flaws those exchanges contain. Due to its versatility and the ease of availability of the protocol, it is not far-fetched that 0x will grow quickly, providing the basis for other similar exchange systems using the Ethereum blockchain.

 

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LOW-TECH APPROACHES OF DIFFERENTIAL PRIVACY https://www.nvestlabs.com/2019/11/08/low-tech-approaches-of-differential-privacy/ https://www.nvestlabs.com/2019/11/08/low-tech-approaches-of-differential-privacy/#respond Fri, 08 Nov 2019 17:51:46 +0000 https://www.nvestlabs.com/?p=880 One way to take when trying to expand privacy on the blockchain is, to begin with very low-tech approaches, utilizing no crypto beyond simple hashing, encryption, and public key cryptography. This is the path that Bitcoin started from in 2009; though the level of privacy that it provides in practice is quite difficult to quantify […]

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One way to take when trying to expand privacy on the blockchain is, to begin with very low-tech approaches, utilizing no crypto beyond simple hashing, encryption, and public key cryptography. This is the path that Bitcoin started from in 2009; though the level of privacy that it provides in practice is quite difficult to quantify and limited, it still clearly provided some value.

The simplest step that Bitcoin took to fairly expand privacy is its use of one-time accounts, like Zcash, so as to store funds. Just as with Zcash, each transaction should totally empty at least one account, and make one or more new accounts, and it is prescribed for users to create another private key for each new account that they intend to get funds into (though it is possible to have various accounts with the same private key). The main benefit that this brings is that a user’s funds are not linked to each other by default: if 50 coins are received from source A and 50 coins from source B, there is no chance for other users to tell that those funds belong to the same individual. Additionally, if 13 coins are sent to someone else’s account C, and thereby create a fourth account D where the remaining 37 coins from one of these accounts as “change” are sent, the other users can’t even tell which of the two outputs of the transaction is the “payment” and which is the “change”.

 

However, there is a problem. If at any point in the future, a transaction is made consuming from two accounts at the same time, then those accounts are irrevertibly “linked”, making it obvious to the world that they come from one user. And, what’s more, these linkages are transitive: if, at any point, A and B are linked together, and then at any other point A and C are linked together, and so forth, then a large amount of evidence is created by which statistical analysis can link up the entire set of assets.

 

Mike Hearn, a Bitcoin developer, came up with a mitigation strategy that decreases the likelihood of this happening called merge avoidance: essentially, a fancy term for trying really hard to minimize the number of times that the accounts are linked together by spending from them at the same time. This unquestionably helps, but even still, privacy within the Bitcoin system has turned out to be highly porous and heuristic, with nothing even close to moving toward high guarantees.

A somewhat further advanced technique is called CoinJoin. Basically, the CoinJoin protocol works as shown below:

  1. N parties come together over some unknown channel, eg. Tor. They each give a destination address D[1] … D[N].
  2. One of the parties creates a transaction which sends one coin to each destination address.
  3. The N parties log out and then separately log in to the channel, and each contributes one coin to the account that the funds will be paid out from.

If N coins are paid into the account, they are distributed to the destination addresses, otherwise, they are refunded.

 

If all participants are honest and give a single coin, then everybody will put one coin in and get one coin out, however, nobody will realize which input maps to which output. If at least one participant doesn’t put one coin in, then the process will fail, the coins will get refunded, and every participant can attempt once more.

So far, just token anonymization is talked about. Shouldn’t something be said about two-party smart contracts? Here, the same mechanism as Hawk is used, except the cryptography is substituted with simpler crypto economics – namely, the “auditable computation” trick. The members send their funds into a contract which stores the hash of the code. When there comes time to send out funds, either party can present the result. The other party can either send a transaction to agree on the result, enabling the funds to be sent, or it can publish the genuine code to the contract, at which point the code will run and circulate the funds accurately. A security deposit can be used to boost the parties to participate honestly. Consequently, the system is private by default, and only if there is a debate does any data gets leaked to the outside world.

 

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