bloXroute Team
Mar 4 · 19 min read

This past month the bloXroute team participated in 2 AMA’s. Our Co-Founder Professor Emin Gün Sirer synced up with our Chinese-speaking community on the 8BTC Forum, and our Co-Founder and Chief Architect Professor Aleksandar Kuzmanovic, Strategy & Operations Manager Eleni Steinman, and Marketing Associate Brooke Walter connected with blockchain enthusiasts on the DBCrypto Telegram group.

There were many great questions asked so we wanted to share our answers with the rest of our community on Medium. For some of the questions, we expanded upon our answers and edited for clarity and brevity.

The questions are organized into four sections: Tech, BLXR, General, and the Blockchain Ecosystem.

Tech

Can someone explain the “magic gateways” a little more? Is this patented and closed source tech?

  • “Magic gateway” is a small piece of code that sits on a machine running a blockchain node with one side speaking the blockchain “language” with the node, and on the other side speaking bloXroute “language” with our Relays. It also shrinks blocks from the nodes to the Relays, propagates transactions etc. Yes this has been patented for a simple reason — the work was initially done at a University, hence we had to license (our own work) from the University. That’s how it works. While we patented the system, we are going to open source the Gateways.

When will the source code be released?

  • The source code for the Gateway software will become available from Day 1, i.e., as soon as we start testing with miners. The source code for the rest of the system, i.e., Relays, will become available soon after.

From reading the whitepaper it seems as though on-boarding bloXroute can take a bottom up approach. I.e. it sounds like crypto miners can start using the bloXroute network right away, without needing to integrate software into the bloXroute servers or get any approval from the developers of the crypto project? Is this right?

  • That’s right! Any miner can start using bloXroute on its own without any approval. We will provide open source code that miners download, we call magic gateways, that is run on the same machine they mine on. Miners send blocks to the gateway like they would any other peer node. And that’s it. Since bloXroute BN lets you hear about and send blocks faster, miners who use it are obviously at an advantage.

Will the blockchain be able to test bloXroute’s net neutrality? If yes, how? Will bloXroute’s net neutrality testing ability be on the developer or miner level?

  • Certainly! Net neutrality is at the heart of bloXroute, and something I am personally passionate about. Net neutrality mechanisms (please see the WP for details) will be enabled from day one. Everyone, including miners and developers, will be able to test, in real time, bloXroute’s network and its behavior.

How can bloXroute be decentralized and trustless? Does it rely on servers? If we can’t find a better way to solve block propagation problems other than bloXroute, then obviously nodes (especially mining nodes)have to completely rely on bloXroute. If bloXroute has any problems, the whole network will be at risk.

  • Excellent question that gets to the heart of bloXroute’s core contribution. bloXroute is a unique solution that is *centralized yet trustless*. It consists of a network of servers operated very efficiently by a centralized entity — this is how it achieves its high performance. At the same time, the technology is constructed such that these servers *cannot* misbehave. They cannot discriminate on the basis of transaction content, and they cannot selectively censor. So, the overall network is efficient because it’s centralized, like Akamai’s content distribution network, and it’s also trustless, like Bitcoin’s underlying network. Also, by open-sourcing our entire codebase (once the system reaches some maturity) we enable everyone to run a backup network to take over in case bloXroute is shut down by any means, preventing it from becoming a single-point-of-failure.

Also, I remember that ‘bloXroute will keep neutrality by encrypting blocks’, but what if somebody uses bloXroute to send spam? Will it be a problem?

  • Indeed, we have implemented various measures to handle the spam issue. In particular, the bloXroute network keeps and propagates provenance information, allowing the system to limit the traffic a node sends based on their usage of the system. Keep in mind that all large networks, whether it’s Google’s, Facebook’s or Akamai’s, are under constant spam attacks. We use well-established techniques from that domain to ensure that spammers can be efficiently identified and limited.

What is a sufficient number of servers?

  • Our V1 is going to have around 15 servers on 5 continents, roughly. Blockchain traffic currently isn’t particularly large. We hope to change that!

Is it advantageous for miners to be in relative close proximity to a BloXroute server?

  • Yes. But the difference is very small. A really dramatic difference will be between bloXroute-enabled vs. non-bloXroute enabled miners.

Could you elaborate on the servers a bit more? I heard Uri talking about utilizing trusted organisations to do this. I know my concern is that this may create some level of centralised power.

  • We are fully aware of this concern. This is why we are making sure to utilize a large number of independent providers. This is creating a lot of operational issues on our end (because different providers use different software environments) but this is a top priority for us.

How quickly will idle backup networks be operational/online in the case of a main bloxroute network fatal failure? Does this backup network set-up require some work/adjustments on the client/nodes side?

  • The backup will be automatic, such that the effects of a possible failure on the mainnet is minimized. Given that the process will be automatic, no adjustments will be needed on the client side.

Have you established an “ideal” number of independent providers to reduce such concerns? Or is this something still being established?

  • There’s no magic number, the more the better!

I assume having servers in different geographical regions is important. The EU for example could outlaw BloXroute servers. I assume it would be way too expensive for a regular person to setup a BloXroute server?

  • I am hopeful the EU would not do that! :) But the point is that even in absence of servers in a particular region, things can still work pretty well for users in that region.

If that was the case, will they be disadvantaged as the message will need to be relayed further?

  • Necessarily so. But the system would still be operational, and would be able to operate at a fairly high TPS rate.

From both a tech and adoption level, what are some of the biggest difficulties bloXroute faces?

  • Technical difficulties are present on a daily basis, but we are coping with them. As a technical person, I simply know we will resolve them all. I am also convinced that a number of blockchain communities will adopt our system. But if you ask what a bigger challenge is, I think adoption.

BLXR

Does bloXroute have native tokens? If yes, when will the tokens be released? Is it an ERC20 token? Will it be listed on exchanges? What can the tokens do on your network?

  • Yes, bloXroute will have BLXR tokens, which will be listed on exchanges. The BLXR tokens are security tokens that entitle the holder to a share of the revenues of the company. Of every future dollar that bloXroute makes, a proportion goes into a pot, and this pot is divided among the BLXR holders. Think of it as instant, auditable dividends in perpetuity. And BLXR tokens thus act like a fund, where the fund’s contents change over time to track whichever coins are using bloXroute more. If BCH miners use bloXroute, BLXR will have more BCH in it; if ETH adopts bloXroute, then it’ll swing towards ETH, etc. So the tokens can serve as a blanket bet on adoption and use of cryptocurrencies, kind of like how Akamai was a play on Internet content being in demand. I will leave it up to the company to announce its projected dates. I’m focusing mainly on the technology behind the scenes.

Is it correct that you plan to go down the STO path or simply the security token path and the BLXR will be a security token?

  • Yes, BLXR is a security token. The good thing is that we’re clear about this from the very beginning. Hence we were able to cope with regulations on time.

When do you plan to do the STO?

  • Our team of lawyers is working very closely with the SEC to take all of the required steps to ensure everything we do is in compliance with regulations. We hope to have all necessary approvals for an STO in Q3 / Q4 2019.

That’s really great that you’ve been working with the SEC. Does that mean you plan to sell the BLXR token to American citizens?

  • We hope that to do as wide of a sale as possible, so not just Americans.

How does this work? What jurisdiction have you chosen to setup this token etc? Or is this all still being figured out?

  • It has to do with the regulation you file under. Some regulations require that you only raise from accredited investors and others let you raise from anyone.

Will accredited investors only be able to participate in the the BLXR token sale or is there a plan to try an include non-accredited investors as well?

  • The plan is to make it as wide of a sale as regulation allows. We (our lawyers) are working hard so it’s not just accredited investors.

You have recently changed your BLXR security token from 50% revenue reserve model to 100% revenue direct dividend model. How direct will it be? In what time frame or frequency will BLXR token holders will receive their pro rata share of collected revenues to their wallets?

  • 100% of the fees associated with the cryptocurrencies using bloXroute’s BDN become immediately available for withdrawal by BLXR token holders. Right now the plan is for a calculation to run once every 24-hours to update what we call an “Owner balance” — this is how much crypto is available for withdrawal for a given BLXR holder based on their pro-rata share. To withdraw one’s dividends, a BLXR holder must provide a wallet address in the same currency as the crypto they wish to withdraw. The owner balance will then instantly update to reflect this outflow.

How will bloXroute operations be covered in this new direct dividend model?

  • In the new model 100% of the revenues will go to token holders. bloXroute, as a token holder, can use the revenues it receives for its ownership portion to fund operations.

With BLXR being an ERC-20 token, does Bloxroute plan to set up the benefits of the token (accumulation of relative % of fees for projects using the network) so that it can be accumulated by the owner whilst also possibly locking BLXR in a MarkerDao CDP?

  • Dividends will accumulate in a reserve account and be available for withdraw. Our current plan is for Owner Balances to be updated every 24 hours. BLXR holders can transfer their dividends to their wallets and use them as they wish. :)

General

I understand that one of the benefits of bloxroute for the ecosystem is users will have a much lower fee to pay for their transactions. Will users be able to get this much-lower-fee benefit from bloxroute only through wallet(s) they use by choosing to pay a *tiny* fee to bloxroute instead of a *large* fee to miners or can they also get that benefit in some other way?

  • To start, users can use bloXroute immediately as the first 100 TPS are always free. Only after 100 TPS can a user choose to pay bloXroute a tiny fee to reduce her overall fee (albeit a user would only choose to pay bloXroute if this is true). All users benefit from bloXroute on day one as the first 100 TPS are always free. Users do not have to use wallets that partner with bloXroute to take advantage of the fee reduction service, but it’ll certainly be the most streamlined method. Any user that knows bloXroute’s public address can include in their transaction an additional output that pays bloXroute’s public address to reduce her overall fee.

Typically, how many X tps improvement should we see for the various major blockchains that bloXroute will target?

  • We are targeting approximately 3,000 TPS for Bitcoin and Ethereum.

In terms of technology, what is bloXroute’s core competitiveness? How many people are on your team?

  • Our core competencies are as follows: (1) we have some of the world’s foremost experts on blockchain and network scaling, (2) we have innovated across all aspects of the emerging blockchain stack in the past and bring that experience to bear on the chain scaling problem, and (3) we are the first group to identify Layer-0 as a scalability bottleneck, the first to apply network neutrality techniques to blockchains, and thus the group with the most extensive track record on how to build efficient and trustless systems. The team is just over 20 employees, it is hard to keep track now because, in addition to our headquarters in Chicago, we also have a satellite office in Tel Aviv, Israel and two need employees start this week. We are currently building our platform. Though the core of the platform has been in operation for 2.5 years already on the BTC and BCH networks, we are extending it to other systems, e.g. ETH, and adding new features.

How does bloXroute’s solution work on different blockchain networks?

  • bloXroute’s solution has been operating continuously for the last 2.5 years. In that time frame, it has been deployed on Bitcoin (BTC) and Bitcoin Cash (BCH). It has ferried every transaction and every block found in that time frame. To this, we recently added the ability to support Ethereum. And we recently announced a partnership with a large miner. In all of these cases, bloXroute provides an additional fast-path to existing coins for the delivery of financial data, just like Akamai added a fast path for the delivery of regular content on the Internet. It’s optional, opt-in, and completely voluntary. It’s just a faster way to deliver blocks and transactions. In return for ferrying this financial data, bloXroute collects transaction fees, and BLXR tokens receive these collected feeds.

With bloXroute already forming a partnerships with mining companies, do you plan to establish more relationships with similar organisations? If so, given the obvious concerns about the environmental impact of traditional mining, does bloXroute aim to establish/support relationships with mining companies who utilise renewable and sustainable energy?

  • We hope to establish relationships with all miners :) In regards to environmental concerns, our BDN actually helps miners more efficiently utilize their power consumption. Since miners hear about blocks sooner, they can immediately start mining the next block, and thus more efficiently utilizing their resources.

When will you start v1 testing with miners?

  • Early to mid March.

Will the v1 testing be predefined (for preselected miners/mining pools) or it will be possible to join the testing on the go? How can a miner apply for the testing?

  • Yes, the V1 testing will happen with a predefined group of miners. If you’d like to join, please send me an email (support@bloxroute.com) and I’ll follow up.

Will the v1 testing be with one or with multiple blockchains? Will there be BTC and/or ETH miners in the v1 test pool?

  • It will be with multiple blockchains and yes, we connect with both BTC and ETH (and BCH) miners in V1.

Will bloXroute produce better results (TPS) for PoW or for PoS consensus protocols?

  • We are currently working with PoW and we are seeing some great results (still can’t share publicly). We should definitely see a comparable performance with PoS, but we currently have no empirical data.

Are there any difficulties you faced trying to convince major blockchains like btc, eth etc to increase block size?

  • We view ourselves as providers of networking that removes the scalability bottleneck. It is up to each community to take advantage of that efficiency how they see fit. That said, we already know some communities want scale. For example BCH has 32 MB blocks because after 32MB the thing breaks (i.e. they hit the scalability bottleneck). With bloXroute, I’d expect them to increase their blocksize.

Which pipelines of blockchains likely to come on board 1st on bloXroute in 2019?

  • In V1 we will provide support for BTC, ETH, and BCH. We are talking to many other blockchain communities, and will provide an open API allowing any blockchain to use bloXroute.

If 10% of the blockchain miners/pool have 10% of the hash power (which results in approximately a 10% probability of mining a block) and they start using bloxroute while the other 90% of miners/hash power do not use bloxroute yet (gradual deployment), how does the usage of bloxroute benefit the 10% of miners vs. the other 90%?

  • Good question. The benefits for early-adopting miners start to kick in immediately. In your example, the probability of the 10% of miners that use bloXroute increases above 10% the probability to win a mining round. This is because they “waste” (much) less time on mining blocks that will not eventually get “on chain”.

Does the TPS order of improvement through bloxroute depend on the network size and distribution of nodes (decentralization level) of particular blockchain?

  • It necessarily does. The larger and more decentralized a network is, the TPS rate decreases. The big difference is that without bloXroute, the TPS decreases exponentially, i.e., very quickly. With bloXroute, we are seeing sublinear, i.e., marginal, degradation in TPS as the network size increases.

Are you partnering already with some wallets? If yes, with which ones? If not, is it too early to disclose?

  • Our first goal is to gain adoption. Once we have adoption, we plan on working with wallets to add in an option to streamline the process of including a bloXroute fee. We expect wallets to include such a fee to have an advantage because it offers their users lower overall fees compared to competitors. It would be up to the wallet to decide to show an “bloXroute transaction” feature or simply show lower fees. That said, we are very well connected to some of the most successful wallets in the crypto ecosystem, and have already discussed the matter with some of them.

Do you foresee users migrating to wallets that partner with bloXroute from the ones that don’t?

  • Users do not have to use wallets that partner with bloXroute to take advantage of the fee reduction service, but it’ll certainly be the most streamlined method. Any user that knows bloXroute’s public address can include in their transaction an additional output that pays bloXroute’s public address to reduce her overall fee. Our first goal is to gain adoption. Once we have adoption, we plan on working with wallets to add in an option to streamline the process of including a bloXroute fee. We expect wallets to include such a fee to have an advantage because it offers their users lower overall fees compared to competitors. It would be up to the wallet to decide to show an “bloXroute transaction” feature or simply show lower fees.

Will it be easy for a wallet to integrate bloXroute or it will require deeper dive?

  • Integration with wallets should be equally straightforward, from the technical point of view. We plan to actively work with open-sourced wallets to help them implement the change. The change includes a UI update to prompt the user and ask if they want to use bloXroute or not, and if they do, update the transaction to commit a tiny fee to a publicly-known bloXroute address.

Are you on track with your roadmap?

  • We are only a few weeks behind on our roadmap (we wanted to do our miner test for end of Feb and now it is early march) but I think for the tech world that’s still pretty good!

Did crypto winter changed your roadmap in certain aspects?

  • The crypto winter I think actually helped us. We are a free service to make miners more money. That has to be appealing in this environment.

When will the Proof of Concept be released?

  • The PoC should come at a similar time like V1, maybe a couple of weeks later, we’ll see.

What is the biggest challenge you’ve encountered after starting the company? What has helped you overcome challenges and stick to your goals?

  • Biggest challenge we have faced is finding talented individuals who understand this technology. The area is brand new, and it’s difficult to find qualified engineers, builders, and business folks. What makes me really motivated every morning is looking at the world and noticing just how antiquated our current systems are, how much they operate based on trust, and how much better they would be if they were open to all and auditable by anyone.

The white paper doesn’t give a full description of bloXroute’s tech, instead it gives a very simple explanation. Do you have concrete plans on how your project will be applied?

  • Our technology has been in operation for 2.5 years. Writing a whitepaper is a difficult task, trying to make a complex technology accessible to the masses. That said, I am pretty sure that we covered the core of our plans, and we have more papers in the pipeline describing the operation of the system for an academic audience.
    [Check out our resources page for detailed explanations about our technology]

Blockchain Ecosystem

People are talking a lot about Layer-2 scaling solutions in recent years. Compared with layer-0, will layer-2 be a better scaling choice? Or does it depend on different scenarios?

  • When it comes to scaling, there is no “one good layer to scale.” To reach really large numbers of transactions per second, one needs to tackle the bottlenecks at all levels. And Layer-2 cannot actually be made secure unless Layer-1 has enough space to on-board new users, as well as settle the transactions from existing channels. This all cannot be done at 3 tps. To support 1,000,000 tps and above, the underlying chain has to offer high throughput. So it’s absolutely essential to examine Layer-0 solutions.

You said currently there’s no crypto that can be truly decentralized. You also believe PoS is better than PoW. Does that mean that you think bitcoin is not decentralized? What’s the problem with bitcoin’s PoW mechanism?

  • Bitcoin’s blockchain today is created by around 19 mining entities. Some of these are pools, but nevertheless, these are individuals that came together and are operating in unison towards a common aim — they may not have corporate paperwork filed, but they are indistinguishable from any other corporate entity at this point. Just 4 of these command the majority of the hashpower. That’s it, the sum total of Bitcoin’s decentralization. EOS has 21 block producers. Ethereum has 11 miners now, and will reach around 60 with Casper. These are all tiny numbers. The big elephant in the room that no one dares to talk about is precisely how centralized most coins are today.

Do you find there is enough awareness about the block propagation as one of the major (if not the major) scalability bottlenecks within the crypto community/blockchains?

  • The short answer is no. Many people have heard about scalability being a hot topic in crypto/blockchain, but almost no one knows exactly what or where the bottleneck is. That’s why one of the most important parts of telling our story is educating at the same time. The blockchain community has many different types of people with varying levels of knowledge, so it’s a balance to develop a voice that speaks to everyone. In response to this challenge we have developed an educational Youtube series where we give detailed explanations about topics in crypto and blockchain. We hope it will provide tools to have more technical understanding and meaningful conversations about our product and the ecosystem in general.

During the BCH Hash War there was a block propagation bottleneck real case scenario on the mainnet when BSV tried to mine large blocks — something like 40MB and later 64 MB, but at both trials they failed on block propagation as it took too long and forks occurred. The large blocks were orphaned so the experiment clearly failed. As bloXroute’s focus is on this exact scalability bottleneck, block propagation, you came out as a *winner* from the hash war according to Professor Sirer. Have you experienced some benefits of being a winner, such as a larger awareness and interest in your project within the crypto and blockchain community?

  • We are having a lot of communication and open discussion with a lot of blockchain projects out there. We did indeed notice an increased interest after the events that you mention above.

What if industrial giants launched their own public chains one after another, what do you think the community should do?

  • This is exactly what we are going to see, with Facebook leading the way. I’m not too worried about these corporate approaches. While these companies have immense resources, they are starting quite late and do not have the kinds of thought leadership we possess on building peer-to-peer systems. All of these big behemoths are experts at building centralized client-server systems, which are the exact antithesis of what we are building with cryptocurrencies. So I don’t think we should be worried or do much: let them build out, welcome their efforts, and treat them the same way we treat every other altcoin. They will play a big role in onboarding new users into crypto, and they will help make the space more healthy and exciting for all of us.

What different scaling challenges are Ethereum and Bitcoin facing now? What do you think of these challenges?

  • The scaling problems faced by these two systems are slightly different. Bitcoin is a payments system. As such, it is concerned primarily with point-to-point value transfers. And it is facing a basic capacity problem: if everyone in Venezuela were to switch to Bitcoin today, every adult would get to transact only once per month! That’s clearly nowhere near the dream that has been sold to the masses. And it’s not clear what Layer-2 can achieve, because its capacity depends on the emergent network. At the moment, most attempts to send $1000 over LN fail. The challenge in Bitcoin and similar systems is to retain the security of the underlying protocol, avoid forks, and at the same time, increase the number of transactions per second. Naive attempts to do this, for instance, by arbitrarily increasing the block size to really large numbers, are not a good idea. We have seen that BSV is going down this route, and it is leading to excess centralization. bloXroute can help avoid centralization, and help drive protocol scales up by orders of magnitude. The challenges faced by Ethereum are slightly different. The interactions with smart-contracts tend to be multi-point to multi-point, that is, they involve multiple parties. So we see a different, more difficult problem emerge. And Ethereum is driving its network to its limits at the moment. The Ethereum mining network is beginning to show signs of centralization. ETH’s current set of block size and block frequency parameters are a little bit aggressive, and we are seeing signs that would indicate an advantage for mining centralization. bloXroute can help reverse this process and enable the protocol to be driven even more aggressively.

Ethereum researchers claim that their sidechain snark handles 17,000 TPS, do you think we can achieve higher capacity while the network is absolutely safe?

  • We can, and need to, achieve far higher numbers if the blockchain revolution is going to be anywhere near as big as it can be. If IoT devices go online, we will need 1M tps. On the other hand, I’m highly skeptical of all performance claims. BTC achieves around 4tps today, while ETH achieves 15 on a good day. Achieving 100–500, sustained in the real world, is actually very difficult. Any time I hear a number in excess of 10,000 tps, and the technology involved still uses LevelDB, I know that the numbers are obtained in laboratory conditions. That said, I believe this announcement was referring to a sidechain with a small number of trusted peers. In such a setting, sure, one can do anything because the trustlessness is not an issue. I’m concerned about public blockchains, where the nodes do not and cannot trust each other. We can only get to 10,000tps and above by re-thinking Layer-1, as we are doing with Avalanche, and re-doing Layer-0, as we are doing with bloXroute.

Thank you again to everyone who participated ! If you have more questions for our team, feel free to ask us on the bloXroute Telegram channel or our Reddit page.

— — —

We’re always looking for good people!

If you’re equally excited to solve the scalability bottleneck for all blockchains, consider joining our team! We are always looking for passionate partners to help us on this important journey. Check out our available positions to work with us in our Chicago offices.

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bloXroute Labs

Scaling blockchains to thousands of on-chain transactions per second. Today.

bloXroute Team

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Scaling blockchains to thousands of on-chain transactions per second. Today.

bloXroute Labs

Scaling blockchains to thousands of on-chain transactions per second. Today.

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