One Million Solutions and Growing…all about XYO’s Proof of Origin and Bound Witness Technology

You understand the basics of how cryptocurrencies work. Blockchain technology no longer completely baffles you. Self-driving vehicles, package delivery drones, and smart cities excite you.

Like many people, you are half curious and half chomping at the bit to take part in a next generation technology revolution. But before diving in, you still have many questions and parts of the equation you need to understand so that you can become an informed member of a burgeoning movement, especially if you’ve entertained thoughts of investing your hard-earned dollars into the crypto-universe. For most people, this means investing in crypto-currency in some fashion, or in the technologies that will capitalize on the advancements that are making it all possible.

Cryptocurrencies and blockchain technology are highly disruptive, and like any disruptive product or concept introduced to the masses, they come with limitations, challenges and growing pains.

However, where others may seek roadblocks, XYO Network sees opportunity.

XYO has not only identified a major barrier to growth in blockchain, but is already working on the implementation of a solution that could bring a fundamental change in location-reliant trade markets that generate more than $11 trillion in economic activity per year.

Understanding the Big Picture

One of the core concepts of blockchain technology is to eliminate a centralized entity, such as a bank, from controlling the flow of location data. Much like any other disruptive industry, the idea is to create a faster, cheaper, more efficient, and safer way of conducting business for consumers and businesses ranging from mom and pop operations all the way up to multi-national corporations.

Blockchain technology has already enjoyed some noteworthy successes, most notably with the arrival of Bitcoin in 2009. Bitcoin is a currency, much like dollars or Euros traded on international currency markets. But what makes Bitcoin different is that it was strictly a digital currency. Early adopters became enamored with the thought of the transformative nature of Bitcoin and millions of people have invested in it and in other crypto-currencies, driving the total value of digital currencies to more than $400 billion by the end of 2017.

Digital currencies have flourished due to blockchain technology. Those who are new to blockchain technology sometimes tend to confuse blockchain technology and link it exclusively to crypto-currencies. While has been responsible for the advent and growth of crypto-currencies, the fact is that blockchain technology is a separate and distinct entity that is making significant inroads for many other types of transactions.

Enter Ethereum

In 2013, a new blockchain platform called Ethereum was introduced. It allowed crypto-users to move beyond crypto-currency transactions by allowing developers to create new apps that could stretch across the entire spectrum of online transactions.

To help achieve this, one of the main features built into Ethereum’s functionality were “smart contracts” which allow the payment and execution of an agreement into a single action.

Smart contracts are written in computer code and executed when terms of an agreement are met. They run on decentralized Ethereum client nodes, meaning that you do not have to rely on a third party to facilitate a transaction. Middlemen, and their fees, are eliminated.

However, while the smart contracts themselves have been executed using a decentralized network, they still need a centralized third-party for verification of the terms of the contract. This centralized third-party is known as an oracle. A single, centralized oracle is vulnerable to hacking, meaning that a hacker could go in, change the information used to verify the smart contract, and thus affect the execution of the smart contract.

To remove the threat of hacking, Ethereum technology has come to rely on multiple oracles to build consensus related to the information needed to execute the smart contract accurately. The only way the smart contract can be executed is by checking several oracles to ensure there is a uniformity of the information. When all oracles are in agreement, the smart contract is executed and the transaction can be completed, pretty much making the smart contract hack proof.

Moving from online to real world applications

Because Ethereum is app-based, developers can create their own custom applications that don’t rely on a centralized third-party authority. These decentralized apps are known as DApps.

Until recently, crypto-currencies, blockchain technology advancements and the development of DApps have been limited to the online realm. While the online economy is considerable, the econmy of thereal physical world still dwarfs it, with a global level of activity measured in trillions of dollars. Merging the advantages of blockchain technology with the sheer size of the physical commerce represents a tremendous opportunity to usher in the next generation of how business is conducted throughout the world.

And that is exactly what XYO Networks is focused on achieving.

For the past several years, XYO Networks has been diligently building a bridge between the online and offline worlds, making offline transactions programmable and accessible to smart contracts.

There have been challenges along the way, but the mission has remained constant and intact. XYO’s goal is to create a trustless, decentralized system of location oracles that are resistant to attack and that can produce the highest certainty possible when queried for available data.

One million solutions…and growing

To create a decentralized system of location oracles, XYO set about creating a location-based consumer product business that focused on tapping into an extraordinarily large network of Bluetooth and GPS tracking beacons throughout the world. To date, XYO has built a network of more than 1 million location beacon devices, creating the single largest such network in the world. XYO has achieved a critical mass of sorts, but there is still a need for ongoing massive growth to strengthen this crypto-location network and add even more viability to the concept.

But XYO has done more than just build a 1 million device network. The company has also developed ground-breaking crypto-location technology so that transactions are no longer limited to the online world. Through years of research and innovation, XYO has become the leader in the world of online findable technology, using their global network of devices that now allows consumers to track real-world items in real-time directly from their smartphones.

The basics of Proof of Origin and Bound Witness technology

The XYO Network provides users access to the network of more than 1 million location beacon devices when they issue a query, which is a request to retrieve a piece of location data on any blockchain platform possessing smart contract functionality. This is the first step in tapping into Proof of Origin technology.

Traditional trustless systems rely on a private key for signing transactions or contracts in a system. This works well when it can be assumed that the node on the network that signs the data is physically and virtually secure.

However, if the private key is compromised, then the ability to prove origin falters. When applying trustless concepts, it must be assumed that edge nodes on the network are not physically or virtually secure. To create a truly trustless system, edge nodes need to be judged by the data produced without the use of unique IDs.

With a physical network comprised of untrusted nodes it is possible to determine the certainty of data that has been provided by edge nodes on a zero-knowledge proof that two or more of the pieces of data originated from the same source. When these data sets are combined with other similar data sets, and the knowledge of at least one node’s location, the absolute location of the other node can be determined, providing Proof of Origin.

Proof of Origin relies on the concept of a Bound Witness. Assuming that an untrusted source of data to resolve a digital contract is not useful, it is possible to increase the certainty of the data by first establishing a bidirectional proof of location. This mean both parties can validate the occurrence and range of an interaction by cosigning an interaction.

Because data is bidirectional, the ability to validate the data is much easier, since both parties have a copy of the information. The nodes producing this data, are in effect, witnesses, and every node in the network constantly produces location data and stores it in a binder in time-sequential order, never being allowed to delete any of them. This establishes a proximity recorder for each edge node that can be cross referenced with recorders of the other edge nodes.

Because all nodes are considered witnesses, this allows data relayed from one node to another to be bound, creating the concept of Bound Witness.

A closer look at the components of XYO’s network

After queries are made, XYO Network aggregators listen to these queries and then fetch the answers that have the highest accuracy from the network’s decentralized set of devices. Cryptographic Proof of Origin is relayed back to the aggregator which then feeds answers to the smart contract after determining the best answer. This makes it possible to determine if an object was in a specific place at a specific time with the most trustless certainty possible.

To accomplish this, the XYO Network has for primary components:

Sentinels (The Data Gatherers)

Sentinels are location witnesses.

They observe data heuristics and vouch for the certainty and accuracy of the heuristic by producing temporal ledgers. The most important aspect of Sentinels is that they produce ledgers that other components can be certain came from the same source. They do this by adding Proof of Origin to a relay chain of cryptographic proofs.

Given that the XYO Network is a trustless system, Sentinels must be incentivized to provide honest location information. This is done by combining a reputation component with a payment component. A Sentinel is rewarded with XYO Network Tokens when their information is used to answer a query. To increase their odds of being rewarded, they must create ledgers that are consistent with that of their peers and provide Proof of Origin to identify themselves as the source of the location information.

Bridges (The Data Relayers)

Bridges are location data transcribers.

They securely relay location ledgers from Sentinels to Archivists. The most important aspect of a Bridge is that an Archivist can be sure that the heuristic ledgers that are received from a Bridge have not been altered in any way. The second most important aspect of a Bridge is that they add an additional Proof of Origin.

Given that the XYO Network is a trustless system, Bridges must be incentivized to provide an honest relaying of heuristics. This is done by combining a reputation component with a payment component. A Bridge is rewarded with XYO Network Tokens when the information that they have relayed is used to answer a query. To increase their odds of being rewarded, they must create ledgers that are consistent with that of their peers and provide Proof of Origin to identify themselves as the relay of the heuristic.

Archivists (The Data Storers)

Archivists store location information from Bridges.

They do this in a decentralized form with the goal of having all historical ledgers stored. Even if some data is lost or becomes temporarily unavailable, the system continues to function, just with reduced accuracy. Archivists also index ledgers so that they can easily return a string of ledger data if needed. Archivists store raw data only and get paid XYO Network Tokens solely for retrieval of the data and its subsequent use. Storage is always free.

Archivists are networked, so asking one Archivist will result in that Archivist asking other Archivists for data that it does not contain. An Archivist can optionally store any ledger information that is returned to it.

This will most likely result in two types of Archivists: ones that are at the data production edge of the “cloud” and the ones that are at the data consumption edge of the “cloud.” Archivists in the middle will be hybrids. The choice to store data is not enforced, but can easily be done through IPFS or another decentralized storage solution.

Each time data is handed off from one Archivist to another, additional Proof of Origin is appended to track payment, since all Archivists get paid. For a retrieval, a minimum Proof of Origin level can be set to increase validity. The interests of Sentinels, Bridges, and Archivists must be aligned to prevent data bloat.

Diviners (The Answer Aggregators)

The overall goal of a Diviner is to fetch the most accurate data for a query from the XYO Network and relay that data back to the issuer of that query.

This makes Diviners the most complex part of the XYO Network. Diviners poll the applicable blockchain platform (i.e. Ethereum, Stellar, Cardano, IOTA, etc.) for queries issued to the XYO smart contract. Then, they find the answer to the query by interacting directly with the Archivist network to fetch the answer with the highest accuracy/confidence score. They do this by judging the witness with the best Proof of Origin chain.

To establish a decentralized consensus mechanism among Diviners, the XYO Network relies on a public blockchain known as the XYOMainChain that stores query transactions along with data gathered from Diviners and their associated origin score.

The Diviners that fetched the answer with the best score in the shortest amount of time will have the ability to create a block on the main XYOMainChain through Proof of Work. Queries are prioritized by reward size and complexity, so the more XYO offered for an answer, the higher in priority the query would be.

Other Diviners reach consensus on the validity of a block and digitally sign the block. The Diviner that was the coinbase address in that block will then send a transaction to the smart contract containing the answer along with its accuracy score. It also sends a list of other Diviners’ signatures to prevent an attacker from issuing fake information into the blockchain by pretending to be a Diviner. The smart contract can then verify the integrity of this information by checking the payload’s signature list.

The XYO Network is designed to interact with any smart contract capable, public blockchain such as Ethereum, Bitcoin + RSK, EOS, NEO, Stellar, Cardano and others.

To interact with the XYO Network, users on Ethereum, for instance, can issue queries to an XYO smart contract and pay in XYO Tokens. The Diviners in the XYO Blockchain are constantly polling Ethereum for these queries and will be rewarded with XYO Tokens, which is the native currency of the XYO Blockchain.

The Proof of Origin Chain

The accuracy score for an answer is called the Origin Chain Score and is determined through a set of zero-knowledge proofs known as a Proof of Origin Chain. Each component along the query’s path generates its own Proof of Origin.

These proofs are then chained to each component that it relays data to, building a chain of cryptographic guarantees along a path of relayers. This guarantees two or more pieces of data originated from the same source, without revealing any underlying information, and offering a high confidence of real world data.

This Proof of Origin Chain creates confidence in a piece of location data all the way down to the very first devices that gathered the data.

Putting it all together…how the system works

Here’s a step-by-step example of how the XYO Network system works.

1. Sentinels gather real world location heuristics and prepare their own Proof of Origin to be chained to nodes above them.
2. Bridges gather data from Sentinels and append the Proof of Origin to their chain. Bridges then make themselves available to Archivists in the Network.
3. Archivists index and assemble data from Bridges that are then kept on decentralized stores along with a location heuristic index.
4. Diviners poll for queries sent to the Ethereum smart contract. They then decide to begin the answer formulation process.
5. The Diviner collects data from the Archivists, taking on a query by fetching the appropriate information.
6. Diviners choose the best answer to the query from the Archivist network that contains the Best Origin Chain Score.
7. Diviners propose blocks on the XYOMainChain containing the query, the answer and the XYO Tokens paid through Proof of Work. Other Diviners on the network sign the block’s content. Once a concensus on a valid block is reach, the coinbase Diviner’s account is updated to showcase its Proof of Work.
8. Diviners return results to the query initiator, including the Origin Chain Score and the set of digital signatures, and sends them to an adapter component that securely connects to the XYO smart contract. After integrity has been confirmed, the coinbase Diviner is paid for its efforts.
9. XYO Network components are paid for their involvement in fetching the answer to the query.

Tying it all together…a couple of real world examples

The big advantage of using the XYO Network is that developers can create unlimited applications that can encapsulate a wide variety of situations in most any industry.

Here’s a couple of examples that demonstrate real world uses of the XYO Network’s crypto-location technology.

The ecommerce application

An ecommerce company can offer premium customers payment upon delivery services. Using the XYO Network, the company could write a smart contract and then track the location of the package being sent to the consumer at every step of the fulfillment process, from the warehouse shelf, to the shipping courier and finally to delivery to the customer’s house or business. This would allow the ecommerce business to verify that the package had not only appeared on the customer’s doorstep, but also safely made it inside their location.

Once the order arrived at the customer’s location (as defined by a very specific XY coordinate) the shipment would be considered complete and the payment to the vendor would be released. Using the XYO Network would protect the merchant from fraud and ensure that customers only pay for goods that actually arrive in their home.

A service industry review application

Another possible way to use the XYO Network could be in the reviews of location-based services. In this case, one example might be a hotel review site, with the problem that their reviews are not always trusted. This is a problem because hotel owners are incentivized to improve their reviews as it can have a tremendous impact on their future bookings and bottom lines.

In this case, to greatly improve the trust factor associated with a review, what if it could be proved with very high certainty that a customer flew out of San Diego to a resort property in Bali, stayed two weeks, returned to San Diego and then wrote a review about their experiences. The review would be regarded well by readers, especially if it was written by a serial reviewer who had written many reviews with highly verifiable location data. In other words, it could be easily proven that the review was legitimate, using crypto-location technology, instead of the review being undermined by a lack of legitimacy because it could not be proven that the reviewer actually took the trip and stayed onsite.