Solana

March 4, 2022

How do Blockchain Platforms Differ?

A quick glance at the largest cryptocurrency tokens reveals a host of diverse offerings, each with markedly different approaches when it comes to their underlying use of blockchain. From those that focus on being investment vehicles to others that specialize in hosting distributed applications, how exactly do these blockchains differ in their approach?

Bitcoin

Even the most casual follower of technology will be familiar with Bitcoin, which for many might also be practically synonymous with cryptocurrencies in general. That’s reflected in the fact that other cryptocurrencies are commonly grouped together as “altcoins” versus the monolith that is Bitcoin.

Its popularity stems partly from its first-mover advantage. Its journey to becoming by far the largest cryptocurrency started with its release in 2009. Developed by a mysterious person or group known as Satoshi Nakamoto, the currency is well known for its significant price fluctuations (topping out at around $69,000 in November 2021) as well as its pioneering use of blockchain technology.

While we won’t dive too deep into the specifics of how blockchains work, in the case of Bitcoin the work of joining together the eponymous, unalterable blocks is done via a process known as mining. To ensure that new data is permanently stored on the blockchain, computers on the network compete to solve increasingly complex mathematical problems. The miner who successfully solves the problem is then given Bitcoin as a reward. The chance of winning is directly correlated to the amount of work that can be done on the problem – hence the emergence of gigantic Bitcoin farms in areas where energy prices are low.

Bitcoin’s prominence means many of the negative headlines regarding blockchain technology (such as its outsized impact on the environment) involve the cryptocurrency in some way. It’s also recently been the centre of controversy after the nation of El Salvador adopted it as legal tender – a move the IMF condemned.

Ethereum

Where Bitcoin is focused on digital currency, Ethereum sets itself apart by virtue of its programmable nature. The open-source platform has become well known for its support of decentralized applications, smart contracts, NFTs (non-fungible tokens), as well as the ubiquitous cryptocurrencies.

That’s all accomplishable thanks to the fact that Ethereum is a so-called “Turing Complete” blockchain. What that means is that it can be coded to perform any task required of it via decentralized applications (dapps). Dapps include things like games and exchanges, all running securely on the blockchain. As a result, they gain all the security and uptime benefits of the technology – with all their code and data hosted, secured and verified by computers on a distributed network.

Then there are smart contracts, programs deployed on the blockchain that automatically execute agreements based on the rules that are coded into them. Thanks to that, they can be used as infallible intermediaries for executing transactions, ensuring that everyone involved is certain of the outcome once the prerequisite conditions are met. Ethereum is also well known for powering NFTs (non-fungible tokens), which use the blockchain to confer proof-of-ownership onto digital items such as digital art, video game items, music and much more besides. The principle is much the same as cryptocurrency, only an NFT points to a unique asset, while any given unit of cryptocurrency is identical.

Like Bitcoin, Ethereum only functions thanks to the energy-intensive process of mining – as they share the consensus mechanism known as “proof-of-work”. However, the platform is currently planning a raft of upgrades to move to another form of validation known as proof-of-stake. The platform is hoping that will solve scalability problems hampering its dapps. Currently, Ethereum can only handle somewhere between 15-45 transactions per second. To ensure that transactions get through such a congested system, exorbitant transaction or gas fees have to be paid by users. With upcoming upgrades the blockchain is targeting 100,000 transactions per second, meaning those associated fees should fall.

Like Ethereum, Solana is a generalist blockchain, supporting cryptocurrencies, decentralized applications, smart contacts and NFTs. It was founded in 2017 and is operated by the open-source Solana Foundation based in Geneva, Switzerland.

Solana’s blockchain emphasizes throughput – with transactions-per-second around 2500 compared to Ethereum’s 30. It achieves this via a process known as proof-of-history, whereby every transaction is given a cryptographic timestamp. That ensures there is a verifiable sequence of transactions without requiring the work of every node to validate it, meaning less computing power is required and lower gas fees have to be paid.

Unlike Ethereum and Bitcoin, however, it utilizes a proof-of-stake consensus mechanism. That sees users staking cryptocurrency to become validators. They are then randomly chosen to create new blocks as well as check and confirm blocks created by others. The tokens they have staked can be taken away if they approve fraudulent transactions, incentivising them to validate correctly – at which point they receive tokens and the transaction fees within a block.

Terra

Finally, South Korea-based Terra was founded in 2018 by Do Kwon and Daniel Shin. The Terra blockchain specializes in facilitating so-called “stablecoins”. These are cryptocurrencies that track the price of real-world fiat currencies. The blockchain supports two main complementary types of cryptocurrency tokens known as Terra and Luna respectively. The Terra tokens are pegged to the price of real-world currencies (TerraUSD being pegged to the United States Dollar).

That’s achieved thanks to the Luna token, which serves to stabilize the price of Terra stablecoins. Users must “burn” Luna to mint Terra and vice versa. The system algorithmically incentivises one process over the other to keep the currency stable. While the price of Terra is maintained, as the use of the blockchain grows the price of Luna increases.

In line with all this, the Terra network touts its decentralized finance (DeFi) credentials, a movement to remove third parties from financial transactions. As such it supports decentralized applications including decentralized savings protocol Anchor.

Summary

Even in the relatively early days in which we live, the inherent flexibility of blockchain technology has resulted in a broad swathe of use cases. While the blockchains we have discussed are leading the market at present, disruptors with pioneering new approaches to using the technology can be expected to join the pantheon at any time – with services like Chainlink’s oracle platform being just one potential bet.

February 17, 2022

NFT-based Playable Novel Quantum Noesis Launches in March

Looking for the next blockchain-based play-to-earn videogame that combines a deep narrative with puzzle-solving? Well, next month developer Synesis One will be rolling out browser-based video game Quantum Noesis, an NFT-based graphical novel that uses the Solana blockchain.

Quantum Noesis‘ story takes place only a few short years into the future, in the year 2035, at a time when the first true artificial intelligence (AI) is on the cusp of achieving sentience. That worries a few folks who want to see the AI destroyed. You’re there because EVI (short for Electronic Virtual Intelligence) has gamified parts of her security transforming vulnerabilities into audiovisual puzzles in the process, thus making the fight easier for humans.

As the novel plays out you’re challenged to solve 36 ever increasingly difficult puzzles, winning SNS tokens if you’re the first to solve a given puzzle, complete one of the twelve ‘chapters’, or finish the entire title. Over 1,000,000 Synesis tokens will be awarded, with 8,000 possible rewards for players to claim including a grand prize of 100,000 SNS.

“We wanted to create a unique experience,” explains game designer and producer Tracy Spaight. “In Quantum Noesis, you have to use your wits and creativity to solve puzzles to advance the story, which is told in the visual language of a graphic novel.”

Even though Quantum Noesis is a browser-based videogame, like most blockchain titles a buy-in is required. Synesis One explains: “To access the game and claim rewards, players need a Solana-based wallet and a Kanon NFT or an equivalent amount of SNS tokens.”

Built on Unity, Quantum Noesis is due to be released on March 31, 2022.

When it comes to blockchain gaming there is a growing collection of titles available, all of which gmw3 will be covering. So far these include Blankos Block Party and Splinterlands. For continued updates on this new gaming medium, keep reading gmw3.

January 18, 2022

NFTs and blockchain key to metaverse future, crypto boosters claim

Virtual scenes from the Facebook Horizon. (Image courtesy Facebook.)

Blockchain technology, used to power cryptocurrencies and other decentralized record-keeping systems, has been struggling to find practical use cases outside ransomware and speculative projects like Bitcoin and NFTs. There have been a number of pilot projects in a variety of industries, but they’ve rarely turned into anything with significant business impact because of issues related to security, scalability, efficiency, and cost.

Now crypto proponents are looking to the metaverse as an area where the blockchain can make an impact.

NFT proponents say it is a better way of personalizing art and content in the metaverse, and say that the blockchain is a technology that can decentralize and secure metaverse content.

However, NfT’s actual use as part of the core infrastructure of the metaverse will likely be limited given those same issues of privacy, security, and inefficiency, plus the lack of legal oversight.

The most successful implementation of blockchain is cryptocurrencies, which are mainly used for speculative purposes. Like cryptocurrency, most people will be using NFTs in the metaverse for speculation, said Anndy Lian, a founding member of Influxo and Asia chairman of BigONE, a top global digital asset exchange.

And the fact that there’s a lack of legal oversight could actually be a benefit for its adoption, he said.

“Indeed, away from the hype about NFTs as high priced art work, one of their chief attractions within the crypto space is that they’re not considered securities for regulatory purposes,” he told Hypergrid Business.

There are privacy concerns regarding the blockchain. Although cryptography is involved in the sense that each transaction that’s added to the blockchain is digitally signed, the actual content of the blockchain is in plain text, unencrypted, available for anyone to read. That means that the public can, for example, trace cryptocurrency payments from wallet to wallet.

However, because of the legal limbo that crypto is currently in, there are no “know your customer” requirements such as those in place for all other types of financial activity.

For this reason, proponents of blockchain say it can prevent the kind of user privacy violations that Facebook — now rebranded as “Meta” — has been criticized for.

And since the blockchain relies on decentralized storage — every participant has their copy of the entire blockchain — there is no central control.

Through tokenization of physical assets for sale in the metaverse platforms, blockchain and NFTs can unlock commerce because this way, they facilitate exchanging of goods digitally, that could not be digitally transacted before, he said. For instance, digital passports such as those promoted by ARCx, can help with credit scoring, collateralized lending, and decentralized commerce in the metaverse, he said.

NFTs are already being used in existing metaverses such as Decentraland, but there are a lot of forgeries and duplication.

Blockchain can assure authenticity

According to proponents, the blockchain’s digital signature mechanism and distributed nature can help creators prove that they are the actual owners of particular content, and help users demonstrate that they are legitimate users.

Using blockchain could reduce NFT forgeries in the metaverse because each node verifies the status and ownership of all assets on the network, hence preventing them from being duplicated or changed, said Cynthia Cao, creator of CC is Dreaming, who is a NFT personality and a leading figure in virtual reality in entertainment.

And it’s not just about digital goods, she added.

“In the future, when people upload their consciousness into the metaverse, we cannot ensure that their memories are not tampered with or controlled by anyone without the verification and authentication that blockchain provides,” she told Hypergrid Business.

Storing metaverse content, data, NFTs, images and other arts on the blockchain can ensure permanent storage of that data as it becomes immutable.

This can prevent illegal tampering of anything of value stored in the metaverse, said Luke Stokes managing director at Foundation for Interwallet Operability.

The FIO protocol is enabling artists to sign their work with an easily readable address that acts as a unique signature for their work, hence preventing NFT forgeries, he told Hypergrid Business.

But there are risks, he added.

“There is also the potential for user error, where people miscopy long complicated addresses or suffer man-in-the-middle attacks that could potentially result in millions of dollars being sent to the wrong address or stolen forever,” he said.

Many existing metaverses and virtual worlds succeed by gamifying social and business experiences.

Metaverse platforms that use blockchain have better digital-based rewarding mechanisms for such gamification, for instance through tokens and in-world digital currencies, said Dinis Guarda, who is author, founder, and non-executive chairman of LynKey, Citiesabc.com, and Openbusinesscouncil.org.

“The metaverse will empower peer-to-peer experiences that will offer jobs, financial empowerment, lending, and trading, he said. “The metaverse and NFTs certification solutions will take on the role of a virtual business-empowered financial system.”

This gamification will lead to further growth of art, fashion, collectives, history, cities, property in the metaverse, he said.

Cryptocurrencies are also being used to trade goods and services, for gaming rewards, betting, and for value speculation in metaverses. In Decentraland, for instance, users can buy NFTs with cryptocurrencies or platform token MANA.

Other examples include Citiesabc.com, a metaverse for cities, and LynKey, a virtual and augmented reality platform using crypto for trading NFTs in property and smart tourism.

Unlike fiat currencies like the US dollar or the Euro, crypto enables very cheap transactions in digital worlds, said Daniel Logvin, CEO at LedgerByte.

“We can actually use blockchain to manage in-metaverse currency,” he told Hypergrid Business. “This provides us with security and transaction verification for our purchases and trades, thus ensuring a solid and transparent economy.”

There have even been grids that used Bitcoin in OpenSim, such as YrGrid back in 2015, though none of these projects ever took off due to the high management and overhead costs of using the volatile Bitcoin currency for in-world payments.

Although gaming and art will continue to lead in adoption of metaverse and NFTs, remote working and virtual living — which increased due to COVID, will play a role in popularizing metaverse, NFTs because even the non-tech world is getting interested.

“I think we are entering a really exciting time for the mainstream adoption of NFTs,” said Influxo’s Lian. “Certainly the rise of NFTs for football fans around the world to capture unique moments and to follow their favorite players is a testament to the maturing of the NFT marketplace.

The dark side of the blockchain

Turning an image or another digital asset into an NFT does not actually create any value, said Maria Korolov, editor and publisher at Hypergrid Business. Since it’s stored on the open blockchain, there is no security for assets. In fact, there’s already an epidemic of people simply “right-clicking” on NFTs to save their own copies, with no repercussions, since the block chain no legal weight behind it. Plus, anyone can add anything to a blockchain, whether or not they are the legal owners of that content.

NFTs are thus nothing more than virtual Beanie Babies, she said.

“NFTs by themselves don’t protect intellectual property,” she said. “Anyone can claim to own IP and put it on the blockchain. And the blockchain itself is notoriously susceptible to being hacked.”

Crypto companies are high-profile targets for attackers. Hackers go after exchanges, virtual wallets, and even the blockchain itself. For example, one approach is the “50 percent hack.” The blockchain is decentralized, and if there’s a conflict between transactions the blockchain automatically opts for the transaction that’s supported by the majority of the participants. Hackers have hijacked blockchains repeatedly by using botnets to create participating nodes and then stealing millions of dollars worth of currency. This vulnerability is built into the fundamental design of the blockchain, and there is currently no known fix.

Hackers steal money from blockchains right, left and center, she said.

Finally, blockchains are inefficient compared to centralized data storage because the data is duplicated in multiple locations, and new transactions require progressively larger amount of computing power, resulting in adverse environmental impact.

“That’s why no major organization has replaced its databases with blockchains,” she said. “Blockchains are inefficient, insecure, and basically unmanageable,” she said. “A bunch of companies have done pilot projects. They issued press releases about the pilot projects. But then when they looked at how those pilot projects actually worked out, they quietly abandoned the whole thing and never mentioned it again and wrote off the money they wasted as a learning experience.”