Start-up Devvio claims its blockchain can handle 8M transactions a second

The new blockchain protocol, Devv, was demoed at CES; backers say it outperforms other distributed ledger technologies and traditional financial networks such as VisaNet. Analysts are skeptical.

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"There's a lot of work happening in terms of off-chain protocols," Litan said. "It's a little like the ATM networks avoiding having to go through all the central banks. At the end of the day they settle up at the central bank level..., although there's no central bank in blockchain and they don't settle up nightly."

The problem with Proof of Work

PoW algorithms force computers to expend CPU power to solve complex cryptographic-based equations before they're authorized to add data to a blockchain-based cryptocurrency; those computer nodes that complete the equations the fastest are rewarded with digital coins, such as bitcoin. The process of earning cryptocurrency through PoW is known as "mining," as in mining bitcoin.

The problem: the PoW process chews up a lot of electricity, both from running processors 24/7 and the need for cooling server farms dedicated to mining operations. Those mining operations are siphoning off so much electricity that cities and even countries have begun clamping down on mining operations.

Computerworld / Bitcoin: Proof of Work [diagram] Computerworld / IDG

PoW protocols can also be extremely slow due to the lengthy process involved in solving the mathematical puzzles; so approving a new entry on a distributed ledger or cryptocurrency network such as bitcoin can take 10 or more minutes.

In contrast, one of the newer protocols being experimented with is a Proof-of-Stake (PoS) consensus algorithm, which can complete new blockchain entries in seconds or less.

"Proof-of-Stake algorithms definitely have the potential to overtake Proof of Work," said Vipul Goyal, an associate professor in the Computer Science Department at Carnegie Mellon University (CMU). "However, there are still some significant research challenges that need to be overcome before that happens."

For example, last year Ethereum introduced a PoS mechanism on a testnet called "Casper" (as in Casper the friendly ghost). The PoS consensus protocol creates "bonded validators," or users who must place a security deposit down before being allowed to serve as part of the blockchain consensus or voting community. As long as bonded validators act honestly on the blockchain, they can remain in the consensus community; if they attempt to cheat the system, they lose their stake (their money).

Ethereum's Casper PoS system would enable a consensus mechanism to process new transactions in about four seconds.

While PoW algorithms are relatively simple to employ, PoS protocols face a number of subtle challenges, the most difficult of which is what is known as "posterior corruptions," according to Goyal. Those corruptions could undermine the authenticity of a blockchain.

"The way we handle collusion is different from Proof of Work. So there can be the threat of 51% of our computers all being hacked at the same time, but that's also a strength of bitcoin – it's a really difficult attack vector," Anderson said. "It's similar in that it's fault tolerant up to 51%."

Devvio's blockchain protocol is both permissioned and public, Anderson said, alluding to the fact that validators certify new blocks and every entry is seen by every node. But the blockchain is not overseen by a central authority, as a permissioned or private blockchain is.

"I'm skeptical of private blockchains because you're losing half the value of blockchain in general. Blockchains are good at two things and only two things: they're robust and difficult to hack and they're trustless," Anderson said. "So, a private blockchain is not trustless; someone oversees the blockchain."

In order to meet business needs, any blockchain needs three things:

  • To be public, ensuring authenticity because when two people can see a transaction online, they can independently audit the transaction and independently audit the entire chain of blocks;
  • To be immutable, where every transaction is directly tied to the previous one and any change creates a new chain of transactions;
  • And to be decentralized, so that the record of transactions reside on many nodes or computers.

"If you have those three things, then you have a trustless computing," Anderson said.

Copyright © 2019 IDG Communications, Inc.

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