Coin Spotlight: æternity
Blockchain technology designed to deliver unmatched efficiency, transparent governance, and global scalability.
What is æternity?
æternity is a distributed, open-source blockchain platform featuring smart contracts for the creation and management of decentralized applications (æpps). The æternity mission is to create a truly scalable æpps platform that can interact with the real-world. The scalability and flexibility of the platform result from two primary features of the network: state channels and an oracle system.
æternity is designed to interface with real-world data through a technology called “oracles”. Oracles enable users to provide data (for example, election results, weather, insurance claims, or delayed flights) from the physical world and deliver it to smart contracts that can be executed based on it.
æternity was founded by Yanislav Malahov, the self-proclaimed “Godfather of Ethereum,” and is currently being developed by a team of developers with combined programming experience of more than 300 years.
The Tech Behind the Platform
State Channels
State channels are a key component of the æternity blockchain allowing for smart contracts and transactions to be executed off-chain. They are essentially bi-directional lines of communication between users and allow for the free transfer of data, tokens, and information in a private environment. Opening and closing a state channel requires only two on-chain transactions. All transactions inside the channel are done in real-time and are completely free. By moving the majority of transactions and contract executions off-chain, æternity achieves high scalability without sacrificing decentralization.
By running a smart contract in state channels, parties could potentially execute billions of transactions that would normally need to be recorded on the blockchain. A high volume of transactions usually results in a congested network and increases the cost of transactions and smart contract execution. With state channels, the network is much less likely to be overwhelmed.
Privacy is an additional benefit of state channels. The execution of transactions and smart contracts between the two parties in a state channel is completely private. This versatility allows companies to interact without having their sensitive information stored on the main chain.
In the case of a dispute, the latest state signed by both parties can be moved to the main chain, closing the state channel and crediting/debiting the main chain AE token accounts of the two parties.
Oracles
An oracle in æternity’s ecosystem is a specific type of transaction that can be used to request or provide information. Any user can become an oracle operator or query an oracle operator. This built-in mechanism allows for real-world information to be reliably integrated onto the blockchain. It is expected that oracle markets will develop on æternity, enabling all types of information to be provided upon request. External data is an important component of smart contract and æpp development since it provides the “trigger” for the execution of blockchain-based programs and various types of transfers. Oracle operators are rewarded for the information they provide in AE tokens.
Here is an example of the utility an oracle provides. You can purchase a ticket for a baseball game and buy cheap insurance in case it rains. After the date of the game, a group of oracles provides information on whether it has or has not rained. Depending on the weighted average of the “yes”/”no” answers provided by the oracles, the insurance claim is automatically completed or not. There is no need to trust a centralized insurance provider. Moreover, most insurance providers will not provide such a service anyway.
Consensus
The æternity platform features a hybrid consensus protocol that plans to combine proof-of-work (PoW) mining and proof-of-stake (PoS) for Sybil attack protection in the future. Currently, consensus is reached via BitcoinNG consensus and Cuckoo Cycle mining. BitcoinNG is a Cornell University modification of the original and battle-tested Nakamoto Consensus used in Bitcoin today. The Cuckoo Cycle PoW is a new graph-theoretic algorithm that combines scalable memory requirements with instant verifiability.
The æternity team is currently working on a Hybrid Voting æpp that will enable transparent and fully verifiable on-chain governance. All AE token users will be able to provide a formal opinion on various improvement proposals by signing a transaction and associating their token balances with a specific answer (for example — “yes”/”no” or multiple options). The on-chain voting results in a transparent decision-making process that is designed to prevent disagreements caused by miscommunication and incorrect information.
Applications
The æternity infrastructure has a wide range of applications. The full technological stack addresses important scaling issues, reduces the cost of use for decentralized applications, and improves æpps user-friendliness.
Because æternity has incorporated oracles and is infinitely scalable, information markets could become an important use case. The concept involves applying the wisdom of the crowd or a group of experts in a specific field to predict the probability of certain events happening. This can be used for price predictions of financial securities, real-world events like elections, political moves, and even trivial things like levels of traffic congestion, crop yields, security breaches, and even natural or ecological disasters.
The æternity network can also be used to simplify complex business processes where blockchain-based programs (“smart contracts”) interact constantly with the network’s oracles. Procurement orders can be fulfilled based on inputs such as cheap prices for raw materials or if workers update the database showing low inventory. The smart contract would be able to execute orders should one of these situations arise.
Decentralized stable coins like the DAI, decentralized exchanges, and decentralized insurance and crowdfunding services can all be developed on æternity. They will run more efficiently on AE infrastructure. Governance applications, certain financial services, self-sovereign identity, oracle markets, and social responsibility projects can all be developed on æternity. It is really mainly a matter of imagination.
Through its startup incubator program called “Starfleet,” æternity has already identified a few promising use cases. Some of the projects that have been backed relate to tokenizing digital art (YAIR), decentralized energy trading (AmpNet), a decentralized hero management game (Cryptic Legends), a decentralized exchange (WeiDex), a satellite ground-station-as-a-service platform (HomePort), decentralized freelance marketplace (CryptoTask), and an open community governed ticketing platform (Abend). There are more, but the list will get too long :)
Coinplan is very excited to feature æternity because they are on the cutting-edge of blockchain scaling and flexibility due to their unique stack of technological features. The ability to interact with events occurring outside of a self-contained blockchain opens up a world of possibilities.
This past March, the æternity core development team successfully performed the first scheduled upgrade of the æternity protocol. The Minerva hard fork took place on March 7 and transferred all AE tokens (ERC20 -> Mainnet) migrated between November 25, 2018 and February 15, 2019. No issues were identified during and post fork activation.
The core dev team also announced the features and improvements that will become available after the next scheduled protocol upgrade (Fortuna). Those include:
- Significant improvements to the VM, enhancing smart contract usability and efficiency;
- Introducing generalized accounts, a superset of Schnorr signatures;
- Virtual state channels, which enable off-chain opening of state channels between peers;
- Stratum support in the æternity node;
- Better transaction monitoring;
- On-chain governance and first community vote (to be announced).
The Fortuna fork will take place on May 28, 2019, with the second Phase of token migration (ongoing) scheduled to end on May 7, 2019.
During the past few weeks, the æternity SDK and Middleware teams continued to make it easier for app developers to start building on æternity. The Phyton SDK developers focused on enabling state channels support as requested by the community. The GO SDK team is working on enabling oracles support and to showcase æternity’s integrated oracle features. The JavaScript devs are incorporating the new compiler that was introduced by the Minerva upgrade. Finally, æternity’s Middleware is being developed to provide infrastructure similar to Infura and Alchemy.
The Documentation Hub was also launched, enabling easy access for developers to information about æternity’s protocol, node, SDKs, Middleware, APIs and guides.
You can view AE inside Coinplan’s Platform Portfolio here.
To learn more about æternity, please take a look at these helpful links:
