Elastos Weekly Updates — 16 November 2018

This week Elastos hosted a Compliance Meetup and proved that the legal side of the industry.

View this email in your browser "If you want to determine the nature of anything, entrust it to time: when the sea is stormy, you can see nothing clearly."        – SENECA What is the one issue that unites the (divided) blockchain and cryptocurrency communities and the one issue we all must be united on? Compliance. This week Elastos hosted a Compliance Meetup and proved that the legal side of the industry is becoming one of the most interesting and most important for everyone involved in this space. In the mood for a dive into some of the deeper questions surrounding Elastos itself? Read Elastos Ecosystem Director, Shijun Song's thorough Q&A in our Interview Series below. Weekly Report Read now Commentary Read now Meetup Join Useful links: A Developer Beginner's Guide Developer Portal in Cyber Republic Developer Documentation on Github Elastos Smartweb Alpha Elastos Community Elastos Community Global We are happy to announce that Elastos is live on Delta Direct! All the latest ELA updates will now be directly available on Delta! Make sure to enable notifications for our Direct updates so you never miss out! Donnie's commentary on this week's general market-wide fluctuations was featured in many notable publications. Please see below for links. Yahoo Finance – What you need to know in markets Thursday Mashable – Crypto's black Wednesday: Where do we go from here? The Independent – Bitcoin Price Crash: Cryptocurrency Loses 10 Percent of its Value In Sudden Sell-Off   November 10 Elastos co-founder Feng Han appeared on the Xue Ba Shi San Mei Elastos Series Broadcast to present "From Encrypted Software to Trustful Computing." November 10-11 Elastos joined the DoraHacks Hackathon hosted in Tokyo. During the hackathon competition in Tokyo, Japan, three teams chose to try to solve Elastos' challenge. The team that selected decentralized social media won first place; second place was won by the team solving anonymous voting; and the team who selected to use Elastos DID won an extra special prize from Elastos of 100ELA. November 15 Elastos hosted a Compliance Meetup in San Francisco. The evening started with advisor Steven Nam giving an opening speech and followed with two panel discussions that included representatives from Stellar, 0x, HBUS, Circle, and Bitflyer. The speakers, all experts in their field, had fascinating and informative information on how compliance is an issue that the entire space shares and that the entire space is waiting for clarity on. A full article on the event will be published next week. Elastos Ecosystem Director, Shijun Song gave a Q&A at a recent seminar on blockchain technology hosted by Beijing University of Posts and Communications. Below is a transcript of student questions and Mr. Song's thorough answers on a wide range of topics pertaining to Elastos. 1. Mr. Song, when enterprise beta software scans user data, encrypting personal data, then transmits it, how can this problem be dealt with? It is true that once the data has been transmitted to the back end and enters the company's database, in principle, it can be copied and sold. From a technological standpoint, we might not be able to solve every single problem, but we might be able to solve the majority of problems from an economics standpoint. Companies can trust that this data is effective because they are signed by their own beta software and they can pay a high price to users. But when it resells the data, there is no way to prove whether the data has been diluted or changed, nor can its source be verified, so it is difficult to sell it for a high price. Usually, companies won't take legal risks for a low reward, so an economic model might be able to solve the problem of data resales. At Elastos, network access is restricted during the process of testing and evaluating software. You could even say that programs operating in a trustful operating environment don't have internet access, in the traditional sense. They can only access the user's personal spaces, including personal cloud storage and personal servers. These cloud storage spaces and servers all log in using the identical user DID. Elastos also has an infrastructural technology called Carrier. It is an identity-based P2P communication system, which guarantees that any app can only connect to terminals with defined identities. When users download the beta software, they can differentiate company identities and once beta programs purchase user data, users can differentiate whether beta program's terminal is the same identity as the company, and with this, they can decide whether to grant communication permissions. 2. If individuals create content, how will other people find it? Doesn't there still need to be some kind of centralized distribution mechanism? Song: "Decentralized" and "Centralized" are not mutually exclusive concepts and in real life, a choice must be made according to each application scenario. By using mechanisms similar to IPFS or other P2P communication mechanisms, decentralized advertisement and distribution can also take place. But when we gain something, we must also lose something: after decentralization, efficiency and experience may become worse, so when we are selecting a protocol, we have to weigh the pros and cons. Websites online are dispersed and each company's content is on each company's server, which is the reason why we have both Yahoo and Google. 3. Hi, Mr. Song. There are many questions that I want to ask you. (1) What would you do if one of the documents that store your private keys were stolen? Guessing from your words, what you mean by "stolen" is that someone else has obtained a copy of your private key. In that case, your private key would still be there, so you'd better hurry up and get all your money out. If your private key has been lost and you don't have a backup, then you just don't have it any more. Important private keys must be backed up, but if you have too many backups, then it would be easier to leak. This is the paradox of our world. It is recommended that private key documents are stored on offline media, like CDs or thumb drives. Do not store seed phrases on online drives, in online notebooks, or in other centralized data storage centers. When creating a wallet and obtaining private keys, it is recommended to add a password to seed phrases and Keystores. When inputting the seed phrase, you would also need to type in the password for the seed phrase and the Keystore. This way, even if someone obtains the seed phrase, they still would need to break the seed phrase password to obtain your private key. (2) How would you divide the values in a blockchain that are far smaller than its target object, such as a loan, which is much smaller than the value of a block? Bitcoin is currently the most expensive coin. Its smallest value is 0.00000001BTC, which was $0.0002USD at Bitcoin's highest price of $20,000USD. If it needed to be even smaller, then you could exchange to a cheaper coin. Imagine, how would we calculate the price of goods in the real world if we have values much lower than one cent? You'd need to use units like a bundle, a box, a dozen, or a ton. (3) Is it possible to divide up the value of a single block? One "block" generally refers to a collection of transaction records and is a storage concept. "Value" seems to indicate monetary value. They really are two different things. (4) How much information can an individual block store? Could it store existing digital vouchers, such as receipts or digital data from bank turnover? Different blockchain projects have different limits; for Bitcoin, it is one megabyte. In theory, it can only store BTC transaction information, but it can have other information attached. Other blockchain projects are similar in that they can store the content that you are talking about and can also store other content at random. 4. The superiority of POW public blockchains over consortium blockchains lies in their sufficient decentralization, but the current state is that several large mines have monopolized the hash rate. How can we combat the harm that is done by mines forming consortiums? In theory, the threat of this is real. We haven't yet found a suitable way to prevent this situation, but considering from the economists' perspective of personal profit maximization, why do they want to do harm? Could one double spending attack obtain a greater profit? At the same time, I should also say that currently, any consensus has different vulnerabilities, not just POW. At its height, Bitcoin reached $20k USD per coin, but still never fell victim to harm done by a consortium. Elastos uses a combined consensus model of POW+DPOS, which might be able to improve this issue. Coin-holders are unable to choose mines, but they can choose their arbitrator and the right is in the hands of the money-holder. 5. If transactions are anonymous, how can we investigate its development prospects from a security perspective? Transaction anonymity doesn't affect security. If we are talking from the perspective of welcoming oversight, it is possible to carry out real-name registration on transaction addresses, making it possible to carry out tracking and surveillance. There is the real-life example of IP addresses that everyone uses to go online with, which can all be linked to a specific user. 6. The characteristics of blockchain systems, such as transparency and the inability to falsify data are completely applicable to areas such as student credit reporting and management, academic advancement and employment, academics, professional certificates, and industry-university collaboration, possessing important value for the healthy development of education and employment. But compared with areas such as finance, the education domain has stronger uniqueness and complexity. The successful application of blockchain technology in education will face many challenges, such as difficulty with promotion and operation, confusion with ownership of education data, limited data storage space, and student-teacher privacy security risks caused by the hidden security dangers of blockchain technology itself. Mr. Song, how do you think that current technology or technology that will arise from current technology will solve these sorts of problems? I feel like this question is asking about how blockchains that record "financial data" solve ownership of "application data" on the blockchain. At Elastos, I am responsible for the establishment of and collaboration on Elastos ecosystem applications and this is a problem that I face every day. There is no established theory that we can use to answer this. Usually, we process it using a combination of specific scenarios. One of the fundamentals of blockchain is game theory. The "game" can only exist in real application scenarios, and only in real application scenarios can algorithms be designed to solve double- or multiple-sided conflicts. 7. Hello, Mr. Song. Are there currently any breakthroughs with blockchain for supply chain applications? Is it feasible for businesses practicing centralized management to transform into a decentralized business to apply blockchain? Within the scope currently permitted by policy, using blockchain to solve the question of trust in the process of multi-party transaction data is rather practical. For example, when paper forms, such as traditional contracts, orders, bills of lading, and receipts, are transmitted to third-party organizations, it is difficult to have them be acknowledged, and a lot of manpower and time must be spent on checking and confirming the contents. If the paper forms are transmitted several times, then they are rechecked several times, while at the same time, there is no way to avoid falsification. This greatly limits the speeds at which business can be conducted. Through blockchain, traditional stamps and signatures can be turned into blockchain-validated information, which cannot be falsified or counterfeited, and which can be denied by no one. The computer is responsible for determining its validity, greatly increasing the speed of business processes, a notion for which blockchain-based supply chain finances is a case-in-point. Right now, we are only in the initial period of application, and the effect isn't very obvious, but as adoption continues to rise, the effect will be more and more significant. If it is the enterprise on their own, there is no need for them to adopt blockchain. The classic blockchain scenario usually includes multiple parties who do not trust each other. 8. When a user has a lot of order data, won't cloud and program interaction face a high volume of data transmission and processing? Applications can access users' personal spaces, and personal storage space can be on either the local disk or an online cloud. This is equivalent to the problems faced by the large amount of data transactions that cell phone apps conduct with the back end. We haven't changed the original technical realization protocols, we just fit the space where all user apps operate inside of a "trustful operating environment," where permissions for everything are controlled by the user's DID, avoiding data leaks. But the back-end processes of today's apps are platform account log-ins, where data is controlled by the platform and in a physical sense, it has already been leaked once. 9. How can the problem of fake personal data be solved? Data is produced by the app, and the app provides a signature; it is impossible for the user to falsify a signature and it is impossible to falsify data. 10. What are you going to do regarding off-chain resales of tokens? If it is just token resales, that is a normal action. Whoever has the token is able to use it. If it is digital content, the "trustful operating environment" puts an end to users directly accessing the data content, guaranteeing that users can't steal the data content. 11. What would you do if your personal data were stolen? If it were data inside the "trustful operating environment," then it would be under the protection of the sandbox, which is not easily compromised. Data content would itself be multi-encrypted. If in the unlikely event that it was stolen, you would do what you had to do in today's world to handle it. The bi-products mentioned, such as copyrights, the authors publish a work, the publisher profits, but industry price fixing, malicious competition, whether you have considered these things enough to evade them, these are normal market activities. If you aren't sure, just consult the business law in the real world. 12. Applications for blockchain are increasing in depth every day. Can you please answer the question of whether this trend will promote the progress of humankind towards data decentralization, or even replace some functional departments in managing data? Yes, it will. The appearance of cities and nations was meant to harmonize people on a larger scale and to enable humankind the ability to collaborate with each other to solve bigger problems. Computers can run all kinds of rules, transmit information, and aid in decision-making. Adding on the immutability and traceability of the blockchain, it will be able to replace some organizations. 13. How do apps earn money? It is no different from the traditional internet. In addition to those methods, there is still one additional way: help users produce valuable data. Profits from the realization of personal data can allow participation through small bonuses. 14. Hello, Mr. Song. I would like to ask how could a multi-chain architecture deeply solve the problems of traffic and high concurrency that blockchains have? One chain can be seen as a database, and multiple chains can be seen as multiple databases. Library-splitting and sub-tables are some solutions to handle high concurrency in traditional computing. Multiple chains is a similar solution. 15. Currently, many public chains utilize super nodes to increase TPS, but this causes insufficient decentralization. An example of this is EOS: if rights are concentrated on 21 super nodes, is there really any superiority over consortium blockchain? I personally feel that the greatest difference between public blockchains and consortium blockchain is the degree to which they are open. The difference in openness determines the difference between business models. Open public chains are completely open and allow all people to join without permission, obtaining profit according to a set of transparency rules. This produces multiple consensus models in order to balance effectiveness and the cost of trust. VBFT, the main part of what we introduced today, is an innovation in this area. But consortium blockchains are only open to a few certain nodes where there is a certain foundation of trust and only need to reach a consensus within a small circle. They already have a complete set of business and profit off the chain, and the blockchain is just supplementation, and is a kind of digital manifestation of the united business relationship. The former needs to incentivize unrelated people to join, so it must have a coin to act as the incentive; the latter only adds blockchain to the existing relationship and does not need a coin to maintain the consortium blockchain. On the whole, I think between EOS and consortium blockchain, neither is better or worse. 16. How can Gas consumption be eliminated? Bitcoin has operated autonomously for ten years and the reason that it has been able to continue like this is because it relies on Gas. If you remove Gas from the blockchain, then you would need to look for another off-chain solution to drive its continuous operation, like a consortium blockchain. 17. How can personal data create value and how is the price set? How is it acquired by companies? Alibaba, Facebook, and Google all rely on collection of user data to make profits. After individuals control their own data, they can use similar methods, or directly sell to them. The difference is that before, they were able to obtain the data free of charge, but today, we want it to be clear that they must pay to use it. This requires that apps use a sharable data format. In order to thank apps for generating sharable data, a portion of the profits made when individuals sell their data will go to the app. Blockchain's core economic model is that labor is rewarded. 18. When will the product go online? We are currently in the process of slowly completing the infrastructure from the bottom to the top and have already announced the BTC merge-mined main chain; the sidechain that shares a Bitcoin hash rate with the main chain; the DID sidechain; decentralized encrypted communication database; the runtime environment demo; the next step is to continue to push forward secure storage and trustful computing. They won't come online randomly or suddenly, but will come online according to the roadmap. You can go online to learn more about that. 19. What is the greatest challenge facing the popularization of blockchain? As a technology matures, there must be sufficient market capacity and developers, neither of which there are currently enough. This is similar to Arabs attempting to promote the Bible in the past: not only does the language need to be right, understanding needs to slowly be established. 20. How can non-copying double spending be achieved and how can off-line data double spending be prevented? Digital content that has been encrypted and stored in an individual's cloud storage can only be used inside of the trustful operating environment. The trustful operating environment is sandboxed and cannot be accessed randomly. 21. Without data, will there still be free apps? Yes it is possible, free apps can be provided through advertising. 22. How can personal data be locked while making it so that your apps can't cache or backup apps? Inside the trustful operating environment, traditional network and storage functions don't exist where normal apps are just stand-alone computer systems. This is similar to Bitcoin cold-storage wallets: it is not possible for them to access the internet. Elastos Runtime provides a trustful and secure operating environment for DApps to run inside of. This operating environment is just like a virtual machine and inside, network access is prohibited, DApps cannot transmit data, and document systems inside the virtual machine are guaranteed to be unable to copy data to host machines. An individual's data is locked inside of the virtual environment and if data from an app needs to be read, then permission from the user is required. 23. What are the future prospects for IPFS? IPFS combines the characteristics of Bt and Git, making a really great engineering project. But there is no incentive mechanism and it is difficult to automate it de-centrally. It is more suitable as a distributed storage protocol. In addition, the business position is also a problem, as it is unsupervised and impossible to delete, which could cause it to move towards a gray area, ultimately making it impossible for it to blend into traditional business society, further blocking it from finding a profit model. 24. What are the security problems for P2P taxi services? There is no intermediary verifying the identity of either party, increasing the risk of identity fraud. If there a decentralized taxi service truly existed, it might generate the need for an identity verification service with which to provide an identity verification service for drivers, so that riders can select drivers with verified information and high ratings. At the same time, this could be integrated with biological recognition technology. Before riders get in the car, they can verify whether their driver is the person whose identity is logged in. 25. Is there real application value for data preventing double spending? If you want to sell digital content on the traditional internet, it is necessary to search for a closed commercial system, such as iQiyi, Tencent, or Qidian Literature. Inside of their app system, content is guaranteed to not be stolen or leaked, but the price you pay is that the monetary price of your content and fees are completely up to the platform to decide, placing the majority of content creators in a weak position. If you use the Elastos system, it is free (no fees are charged except for basic mining fees), open source, and provides freedom, giving you the ability to take all the profits. The digital books, films, music and games that we all consume today can be protected in this way. I still believe that after this model is successful, even more digital content will appear than we could ever have imagined. Just as the emergence of online retailers changed the circulation of physical goods, this means that levels one, two and three of traditional retail channels will be scrapped, changing the rules of wealth distribution. Digital content based on this kind of technical foundation can also realize similar circulation methods that are free from middlemen and free from channels. 26. What techniques is Elastos using to prevent data double spending? Through issuing tokens with unique identifiers for digital content and by linking the operating environment to the tokens, use is limited to token-holders. Then, through blockchain technology, it is guaranteed that there is no way to double spend tokens. 27. What is the value of tokens inside of it? Tokens are the symbol of digital assets in the world of blockchain, whether it is a movie, a book, or a piece of news. It is just as if you were going to buy an article of clothing in the real world: you would pay money to the merchant, then you could take the item of clothing. In the digital world, we pay in digital currency, and then we can have the right to view a film. Tokens are products that can be sold, which can be freely resold, and which can be used in transactions. Furthermore, just as in the real world, they can be used to produce scarcity, just as limited quantities of a book might be available, maybe only ten thousand tokens are sold, creating the possibility that the price will go up. 28. Without a large amount of user data, how do you suggest to design and optimize an algorithm? Purchase data from users. 29. Talking about managing your own data, do users need to copy and transfer their data from their cell phone to their computer? That depends on the user scenario. They might need to, but they might not. If they frequently share data with other people, they could opt to sync manually. If not, they could choose to not sync. Copyright © 2018 elastos foundation, All rights reserved. Want to change how you receive these emails? You can update your preferences or unsubscribe from this list.