Chapter 2: About Eidoo

I explained, in Chapter 1, BHB Network’s clear, consistent and linear approach towards clients. Eidoo is currently a client of our consulting branch. It’s a Swiss-based company, focused on retail digital products. We met Digital Identity, the company behind the Eidoo project, several months ago, and they offered us a consultancy job on a project they were working on: a decentralized exchange based on an Ethereum dapp.

BHB’s response was extremely clear, as usual. We told them we are not interested in (and professionally against to) working with Ethereum for production purposes (we did something for research or experimental use), nor we would have helped them following models that have similar limits in terms of security, privacy, immutability, scalability and censorship resistance, and we would have suggested against any investment scheme naively based on the concept of “appcoin”, even if it’s very popular today.

This client could have, as others before, just ignored our opinion, going ahead on its previous road, possibly with the help of other consultancy companies. Instead, Eidoo people decided to put our “contrarian” vision in competition with the mainstream and fashionable one. In fact, Eidoo decided to challenge two different groups to compete on their visions and methodologies, sponsoring both development efforts.

As we do accept without any problem to be paid by other clients, even if we don’t share (and sometime, in fact, we publicly oppose) other parts of their “blockchain” strategies, in the same way we do accept without any problem to be paid by clients such as Eidoo, that are willing to listen to our objections to the prevalent model and that ask us to prove our professional opinion through code other than just words. We think that it’s rational and wise, in their position, to hedge against different scenarios, to put opposite views from different “experts” in competition, to be agnostic about strong and controversial technical opinions.

This doesn’t obviously mean that, from the moment we start working with them, we start supporting visions and evaluations that we professionally oppose. Quite the opposite. Eidoo assigned the implementation of their “vision” (a digital asset wallet with an integrated exchange) to two different teams: an internal team of Ethereum developers on one side(working on an Ethereum mobile wallet with an hybrid exchange of ERC20 assets, leveraging a solidity contract, and on an “appcoin” scheme as an investment and funding scheme) and our BHB Network on the other.

To be more precise: Eidoo agreed to sponsor with a important amount of money our non-profit effort to research some new interesting ideas and to build free open-source public libraries, with the objective of using that open code in a future iteration of their wallet, leaving full professional and technical freedom to every involved developer. An initial payment for this project has already been executed, but we are well aware that part of the money for this donations will come from future Eidoo’s revenues, that will also include token sales (just like we are well aware that part of the payments we receive from banks come from economical activities linked to legal-tender fiat money, that we ethically and technically dislike).

Our answer to this challenge will consists in a good, standard, secure, state-of-the art Bitcoin wallet library (built on top of “libwally”), a new revised version of the old “colored coins” idea, a model for a decentralized asset exchange realized using “colored” assets channels over one of the existing Lightning Network implementations.

According to our style and principle, we explained them that we will never be able to be competitive in terms of costs and timing (even just a secure Bitcoin wallet, based on open-source standards and industry best practices, will take several months and an important budget to be developed). Also, we explained that our main goals will be: censorship resistance, scalability, privacy, interoperability, safety.

In particular, an important part of the effort will be invested the new protocol for “smart” assets on Bitcoin, that we named “RGB”. The idea itself is ambitious, considered all the past failed attempts (various types of meta-coins and colored-coins) and the general skepticism displayed by all the major Bitcoin developers about the concept itself of “issued asset over Bitcoin” (a skepticism that we consider absolutely justified and motivated). But if we criticize the trivial use of ERC20, we think is on us to try to show an alternative.

The underlying idea on how to overcome the limitations met by previous attempts has been initially developed by the internal BHB Network team together with the team of the partner startup Eternity Wall. We then started discussing it with various developers from different projects, in order to understand how the protocol could be made completely compatible with the new Lightning Network layer, inheriting its privacy and scalability properties.

This was followed by another discussion with the developer Peter Todd, in order to add another piece to the puzzle: an implementation, integrated with the RGB model, of its “Proofmarshal” idea, in order to add even more privacy and scalability to the concept. Peter’s research work is actually about a wider and more general concept, not necessarily linked with this specific application, but he agreed to work with us (informed by us about the origin of the sponsorship and the nature of the agreements) to give a demonstration of how his idea can be integrated in the context of a “issued asset” protocol on Bitcoin. This research project has been budget and contractualised with a DPL licence and almost complete “creative” freedom for him.

Finally, I’ve started collecting interest manifestations from other partner startups (Italy-based Inbitcoin and Chainside, Canada-based Catallaxy) in the further development of this RGB project, and in its integration in the context of a state-of-the-art Bitcoin wallet as an actual proof of concept. Feedbacks have been positive and enthusiastic, with verbal agreements from respective company executives: Marco Amadori, Federico Tenga, Simone Bronzini, Francis Pouliot. I reported these feedbacks to the client. Contracts with this companies are still undergoing discussion. No specific formal agreement was in place about the public disclosure of this kind of collaboration.