Cyber Physical Chain — IoT 4.0

Blockchain Capital Amsterdam ( is extremely bullish on the prospects of this incredible project. Sometimes, ICO’s or presales are based on nothing but an idea and a short whitepaper. In the case of CPChain however, the presale is the result of many years of research and cooperation between different members of the team. Ten years ago, two of CPChain’s team members already published an academic paper together about the future of Internet of Things (IoT). Also, the proposed IoT infrastructure has been researched by the team for several years and is based on patents owned by one of the team members. As argued below, the proposed architecture of CPChain is unique, solves the current IoT problems, and promises to revolutionize the IoT landscape. Add this to incredible partners of the firm and a post-pre sale market cap of currently $40 million; we believe there is plenty of room to grow as well on the short- and long-term.

Quick introduction

CPChain is a new and innovative distributed infrastructure that integrates blockchain with Internet of Things (IoT). The network of connected “smart” devices that communicate seamlessly over the Internet (IoT) — is transforming how we live and work. This is an enormous and very promising market as it expected that it would reach up to possibly 11.1 trillion dollar worldwide by 2025 (Alsen et al., 2017).

By combining the three technologies; blockchain, Internet of Things (IoT), and distributed encryption storage and computing, CPChain tends to build a new infrastructure that will tackle several severe problems hindering the current IoT-environment. Moreover, CPChain focuses on multi-party data transactions and IoT-big-data-based Artificial Intelligence (AI) decision-making applications, establishes multi-faceted trust and heterogeneous data interconnection, thereby solving the three main pain points in the industry that will briefly be discussed now.


Costs of device connectivity

Existing connectivity solutions are insufficient and expensive. Currently, different IT systems have their own tools and databases, resulting in isolated ‘islands of information’. This inefficient infrastructure will not be satisfying in an era in which billions of devices will be connected. Moreover, IoT devices have long life cycles, but up until today do not generate much profit. Therefore, it becomes uneconomical to maintain such infrastructures. Subsequently, the IoT environment currently is not able to life up to its full potential.


A secure IoT environment should be build on trust. We have seen several hacks in recent history that are alarming. For example, a Jeep was hacked whilst driving (Bonderud, 2015). Imagine the damage that the hacking of cars can cause. Hacks can also result in the leakage of data and preventing data leaks should be the backbone of a secure IoT environment. Preserving personal information becomes more important as more devices are connected and the privacy concern asks for severe measures to retain this security. Blockchain will be the solution in the CPChain infrastructure and will additionally make sure that people in fact own the data they create with the interaction of their connected devices. With the decentralized architecture, the blockchain will create a new ‘open is secure’ interconnection of all things.

Data value

With such a large amount of connected devices interacting with each other, it is expected that huge amounts of data will be generated. The value of this amount of data will be unprecedented and this enormous amount of data will have applications in both commercial and academic fields. However, to reap the fruits of this data, one should get rid of the previously discussed isolated ‘islands of information’. A blockchain based IoT-system is a peer-to-peer decentralized network where data can be shared equally and safely. Besides, solely connecting devices to the Internet is unsatisfactory in the current environment. For the IoT to prosper, comprehensive analysis of big data is needed. As blockchain has shown its great potential in solving data and security concerns, it is one of the most promising directions in the innovation of IoT.

CPChain proposes a three-part system that will become the backbone of future IoT infrastructure (Long et al., 2018).

‘CPChain adopts the two-layer consensus protocol solution, designs the dynamic committee security election mechanism, solves the low throughput and the high delay problem, enhances the data consistency and the system security. In addition, CPChain is oriented to the characteristics of the Internet of things industry and adopts a cross-chain architecture. That is, based on the main chain, CPChain provides industry-oriented side chain network function expansion for diversified practical application scenarios’

Three-part system

Parallel distributed cloud computing and storage

The parallel architecture solves the current IoT scalability problems of data storage and sharing. Due to the parallel distributed computing, the pressure on the main chain is lowered, something that is essential for IoT to flourish, as it is estimated that IoT will entail around 75 billion connected devices in 2025 and currently the amount of connected devices already outnumbers the worldwide human population (Columbus, 2017). In the CPChain architecture, the data layer is separated from the control layer as can be seen in figure one. This parallel architecture provides open data sharing while protecting user privacy and adopts a distributed storage scheme. The user data is encrypted and uploaded to the cloud to reduce the burden of data storage prevailing in the current IoT landscape.

In the physical layer, data is collected through the use of smart devices. These devices join the CPChain network by either running a blockchain node or by communicating with the blockchain network.

Simultaneously, the node also deals with encryption of data (in the data layer) and participates in the consensus protocol (in the control layer) and other tasks needed to run the CPChain environment. Even more, the data provided by nodes in the data layer does not have to be uploaded to the control layer. Only hash values, which can act solely as identification of the uniqueness of data is uploaded to the blockchain, ensuring un-tampered data while not slowing down the control layer, which occurs if the encryption happens there. Although only the hash values are uploaded to the blockchain, the control layer does have access control over the data.

‘Parallel distributed architecture separates the data layer from the block chain, which not only preserves the security and decentralization of the block chain system, but also improves the scalability and greatly reduces the block size’.

For data hashing, CPChain uses distributed hash table (DHT)-based distributed encrypted storage, in which each node only saves a random part of the data. Consequently, malicious nodes have only limited impact. DHT-based encryption is useful for the scalability CPChain tries to achieve. This mechanism is highly scalable because data is automatically and randomly distributed to new nodes. More nodes will therefore result in more (random) distribution, which makes the system more secure and faster. A disadvantage of DHT is verifying data integrity and searching for data as it is randomly distributed among nodes. Especially since CPChain wants to enable the sharing of data, it is paramount that an effective data authorization access mechanism is designed. To tackle these problems, CPChain proposes a modified DHT, which is patented by one of the founders of CPChain, Bin Zhao ( In this mechanism, the correspondence between the key-value pair of data and the data block is recorded, where the key is used at the data encryption level. A key-value pair is a set of two linked data items: a key, which is a unique identifier for some item of data, and the value, which is a pointer to the location of the data. The combination of encrypting both the key-value pair along with the data block makes this solution secure and it enables the sharing of data as well. This modified DHT encryption is unique and will be revolutionary in this field. Also, contrary to current encryption mechanisms in other blockchain applications, data only needs to be encrypted one time in the CPChain infrastructure, which is referred to as one-to-many-authorization. In doing so, CPChain intends to combine symmetric and asymmetric encryption based on re-encryption technology. In this fashion, the encryption as well as the decryption will use the same secret key (symmetric encryption). Consequently, the correspondence between the encrypted data block and the secret key will be recorded in the distributed hash table. To partially resolve the security problem of data sharing in a parallel-distributed architecture, the re-encryption (one-to-many authorization) is done using asymmetric encryption, as will be explained now.

Each encryption interval needs to update the secret key, so that not all encryption is done with the same key. Consequently, there is a different secret key to encrypt data in every single encryption interval. Every time data needs to be re-encrypted, it is done by asymmetrically encrypting the initially used secret key (which was done with symmetric encryption). As this secret key is different for every encryption interval, data authorization is limited to a certain encryption interval. This makes the data sharing more secure.

To effectively use the data for smart contracts, the CPChain infrastructure will use homomorphic encryption, which enables modifying encrypted data without the need of decrypting it. In this way, the encrypted data in the CPChain infrastructure can be used and modified to make the data compatible with smart contracts. This is a very important aspect, as the interoperability of smart contracts with IoT devices will give the combination of blockchain and IoT much more applications. In the infrastructure of IOTA for example, it is much more difficult to have devices compatible with smart contracts. In the Tangle (DAG) of IOTA, only a partial order structure exists, contrary to a blockchain in which everything is time stamped in a correct time order of events, as is the case in the proposed infrastructure of the data in the CPChain infrastructure (Popov, 2017). Without timestamp accuracy, smart contract compatibility will not be possible. This is a huge disadvantage for DAG-based projects like IOTA and a huge advantage for blockchain projects like CPChain. According to CPChain founder Dr. Long, there are several other disadvantages to IOTA’s DAG model. First, the DAG model of IOTA has some incentive problems in which IOTA is solely in an initial stage of overcoming this. Another problem not yet solved by IOTA is the vulnerability to DDOS attacks in case of new nodes that are not yet identified on the DAG map (

Moreover, to enhance the speed in the proposed parallel infrastructure of CPChain, only basic smart contracts are positioned in the control layer; other functions that require contractual interaction are located in the application layer (Long et al.. 2018).

‘The combination of encryption technology and blockchain technology will achieve more secure and more efficient data sharing and services’.

Double consensus mechanism

Next, CPChain offers an innovative hybrid consensus protocol for large-scale blockchain infrastructures based on optimization of computing and communication. The problem that needs to be solved is; which nodes are allowed to complete the data collection, add chains to the block, and how block data security is achieved. Some earlier proposed solutions include Practical Byzantine Fault Tolerance (PBFT) for example, but this is not scalable for the architecture of IoT as it relies heavily on communication for consensus. In an IoT environment with the possibility of failing nodes, this is not a good solution. Therefore, an innovative double consensus mechanism is proposed that is derived from the original Byzantine Fault Tolerance. In the two-layered consensus, a local electoral algorithm will be held when a block is added to determine the amount of nodes participating in the two rounds. The role of an elected node in the elected committee in the second round (block data collection, packaging, and new block creation) will be determined by its credibility. To prevent malicious nodes from affecting the whole network, the electoral algorithm will be partially based on randomness. Consequently, a malicious node does not know what nodes to attack in order to affect the whole network. Needless to say, divergent behavior of elected nodes will result in removal from the committee. Even more, the committee will be re-elected regularly, enhancing the security of the whole system (Long et al., 2018).

Side chain consensus system

As the requirements for worldwide IoT applications differ per application, CPChain will offer a lightweight side chain consensus protocol to meet these requirements. In this consensus system, the data gateway is used for data processing and encryption computation because it generally has more hardware support and the power of the device is not limited. Moreover, using the gateway in the proposed way will prevent a computing delay as a result by data processing of nodes thereby prolonging the lifetime of these nodes. This approach is very innovative and based on severe research by Dr. Zhao Bin. Currently, a patent for dr. Zhao Bin of this technology is currently reviewed.

The consensus of IoT transactions will be embedded in different communication technologies currently available in the IoT landscape. Embedding consensus in these communication protocols enables information interaction in consensus to take place outside of the data layer. Moreover, CPChain will develop a cooperative incentive and security mechanism. This will be based on directed acyclic graph structure. Noteworthy, only this mechanism will be based on the DAG as the DAG itself has some limitations, which are previously discussed in the parallel distributed cloud computing and storage part of this paper (Long et al., 2018).


CPChain has an incredible team with renowned members in the Chinese and international IoT and Academic sphere. Although the team consists of more members, the three key figures will be shortly highlighted.

Dr. Long, Chengnian is a renowned professor at the prestigious Shanghai Jiao Tong University with a PhD in Electrical Engineering. He published over 50 influential academic research papers on IoT, some of them together with one of the other team members Bin Zhao ( He is an expert in the areas of Security Estimation and Control in Cyber-Physical Systems, Mobile Internet of Things, and MIMO Wireless Systems. Dr Long has won several awards and honours, among which ‘New Century Excellent Talents’ (granted by Ministry of Education, China, 2011), ‘Pujiang Scholar’ (granted by the Commission of Science and Technology of Shanghai Municipal, China, 2009), ‘First Prize of University Natural Science Award’ (granted by Ministry of education, China, 2007), and several other awards (Shanghai Jiao Tong University, 2018).

Dr. Bin Zhao has several years of experience at the IoT department of Alcatel-Lucent. Furthermore, he has done several years of research on IoT and owns several patents where some of these patents are used in the CPChain infrastructure. During his time at Alcatel-Lucent, he worked intensively with the three major Chinese IoT platform carriers and has build up numerous government relationships. Dr. Bin Zhao has been the chief engineer of Internet of Things in the Shanghai Bells. This (Alcatel-Lucent) Bell Lab in Shanghai is one of the few enterprise-focused labs dedicated to basic scientific research in the world. In its area, it is one of the most prestigious scientific labs, as numerous Nobel Prize laureates are from the Shanghai Bells (I believe eight!!) and a lot of computer science theory is founded in the Bell Labs.

Shi Qingwei is an early participant in the blockchain industry and founder of Shared Finance, a well-known blockchain and digital currency news platform in China. He has been involved in several blockchain projects, among others the highly innovative company high performance blockchain (

Other team members: Shaowei Liu (scalable blockchain system architect), Lijun Wei (distributed consensus protocol engineering), Yan Huang (consensus algorithm engineering), Zinan Zeng (Large scale data processing), Min Zhou (system security engineer), Jose Luis Calderon Choy (application engineer), Muhammed Sohail (big data engineer), and Shiyao Ma (software engineer).


Currently, the team has one advisor. His name is Bo Li and he is Professor in the Department of Computer Science and Engineering, Hong Kong University of Science and Technology ( He holds a bachelor degree in computer science (summa cum laude) and a PhD. in electrical and computer engineering. He has written many highly cited academic papers, has won three best paper awards from IEEE, and won the young investigator award from the National Natural Science Foundation of China (NSFC).

He has worked at the IBM Networking System Division and has been an adjuct researcher at Microsoft Research Asia-MSRA as well as visiting scientist at Microsoft Advanced Technology Center. Moreover, he has been THE pioneer worldwide in peer-to-peer streaming. Quite an advisor to have on board we would say.


The partners and early investors of CPChain are truly impressive and include Vechain, Qtum, High Performance Blockchain, ETP Metaverse, Torque Capital, Shanghai Automotive Industry Corporation. Do your research on those investors and remember it is better to have those firms investing in you than only partnering up with as investing money comes with more risk than solely partnering.


Currently, CPChain has successfully completed the research and development of the key technologies underlying the proposed infrastructure. The team has been developing the distributed data storage and computing as well as the double layer consensus for several years now. Moreover, Dr. Bin Zhao and Dr. Long collaborated already ten years ago with an academic article about the optimization of IoT ( and co-authored five academic articles together. The CPChain infrastructure currently enters the implementation phase. A pilot has started within the Shanghai Automotive Industry Corporation (SAI) to put 200 electronic vehicles on the campus of the Shanghai Jiao Tong University to use as a testing platform. SAI is one of the biggest state owned companies and as cars will become an important pillar in the IoT network, this one of the best partners CPChain can have (

Currently, Chinese New Year is over and the team is fully back on track in their work. In the b=end of January, Dr. Chengnian Long and Shi Qingwei participated in the Blockchain Connect Conference in San Francisco. Moreover, together with the team of HPB (one of their investors), they visited the Berkeley Blockchain laboratory at University of California, Berkeley. Here, the first talks about joint laboratories occurred and a preliminary cooperation intention was reached. Also, the team visited and talked about similar topics during the American trip with Stanford University.

In the near future, such joint efforts will really help the company in further developing the products as well as for foreign expansion. Moreover, there are some big things going to happen that currently cannot be disclosed. The team is in talk with four new exchanges to list the coin and the team disclosed that they are having many meetings with big companies. In Q4 2018, the main net should be up and we expect gigantic things from the team and the company even before that.


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