ELASTOS: The Ultimate Operating System Powering the New Internet of Value
First network operating system that uses the internet as a base layer and builds its own secure infrastructure on top
The mood at Microsoft’s headquarters in Redmond, Washington is euphoric.
This video of Bill Gates, Steve Ballmer, and a bunch of nerds dancing awkwardly to the Rolling Stones has become a classic internet meme.
This was the apex of Microsoft.
The gala launch event for Windows 95 that day put operating systems on the map. It turned Microsoft into a household name.
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Bill Gates’ address was transmitted live to 43 simultaneous events in cities across the globe — a major technical feat in 1995.
More than 70,000 people watched the live event via satellite.
A giant Windows 95 logo was projected onto the Empire State Building in New York City.
And the first day Windows 95 became available, people lined up for blocks outside of computer stores to buy it — more than a decade before Apple achieved the same feat with the launch of the iPhone.
Today, Microsoft products are used by 1.9 billion people in 192 countries. And that gala in 1995 is what really kicked it all off.
In fact, the Windows operating system is primarily what for many years made Bill Gates the richest man on the planet… countless early Microsoft employees multi-millionaires… and early Microsoft investors a fortune.
You can see this last point for yourself in the chart below. If you’d put $1,000 into Microsoft in January 1995, you’d be sitting on about $47,685 today.
Now, we are on the cusp of another step in the evolution of operating systems… this time, on the blockchain.
The average person may not know how blockchains and operating systems work. But they know what they want: an honest internet free of censorship, payment restrictions, and viruses.
And the company I’ll tell you about in this month’s issue is here to deliver on that.
This is your chance to become an early investor in what might become the Microsoft Windows of the Blockchain Ecosystem.
In fact, as you’ll see, we get to follow in the footsteps of a man who was heavily involved in the creation of Windows.
So let’s dive in, starting with the man behind it all…
Introducing the Bill Gates of Blockchain
Behind the scenes at Microsoft in the early 1990s, a Chinese man was working side by side with Bill Gates developing the core modules that eventually became Windows.
His name is Rong Chen, or as I like to call him: The Bill Gates of Blockchain.
Rong Chen was one of the pioneers of the internet as we know it today — even before he joined Microsoft.
In 1987, for example, he helped build a U.S. supercomputer network using satellites. This supercomputer network experimented with displaying multiple windows on a PC… And it led to the creation of the web browser.
Rong Chen joined Microsoft in 1992. And he spent eight years working on the Windows operating system there.
Within a few years, Windows 95 became the most popular operating system on the market. In fact, it’s the first operating system most people older than millennials remember.
What Is an Operating System?
You might not know it, but you rely on an operating system (OS) on a regular basis.
Put simply, it’s the fundamental software component of any computer, smartphone, or intelligent device.
It’s the part that “talks” to the hardware and creates the environment that all other applications run on.
Together with new graphical web browsers like Netscape and Internet Explorer, Windows 95 sparked the explosion of the internet.
Now, Rong Chen is working on the internet’s next evolution.
Taking on the Internet’s Flawed Architecture
After he left Microsoft, Rong Chen returned to China to build his vision of the next generation of operating systems.
You see, he wasn’t happy with the web. It bothered him that we are still using the fundamentally flawed internet architecture from the 1970s.
As a Blockchain reader, you likely understand Rong Chen’s frustration. After all, our focus here is to find the blockchain projects that are solving the limitations of traditional systems — including the internet.
One of the biggest problems with the current internet is that data is centralized.
Big corporations own your data and store it in big server farms where hackers constantly attack and often successfully steal and exploit it.
You probably remember the Equifax data breach, for example.
Equifax is one of the three major credit reporting companies in the U.S. And in 2017, a hack of its network exposed the personal information of 145.5 million customers.
That information included Social Security numbers, addresses, credit card numbers… even tax identification numbers.
And that was just one case. In 2018 alone, there were over 1,200 data breaches in the U.S. And over 446.5 million records were exposed.
But the problems with the traditional web don’t end there. Users themselves also have to defend against countless viruses, malware, and phishing attacks.
And piracy of digital content is rampant on the internet — be it movies, books, or music.
Then there’s the problem of accessibility…
Large online platforms like YouTube, Amazon, Facebook, and Twitter heavily manipulate access to information and censor users.
In fact, internet service providers and governments in many countries filter web traffic and even block access to entire segments of the internet. The “Great Firewall” of China is just one prominent example that comes to mind.
Importantly, this goes far beyond your ability to browse the web… or to prevent people from spying on your emails.
With the growth of autonomous cars and the Internet of Things, this flawed security architecture of the internet can even become life-threatening.
Simply put, the internet the way it is today is unfit for safety-critical applications — like autonomous cars, where your life depends on the security of the network.
This is no longer just a matter of technology. So much of our lives are now spent online in one form or another. These issues are affecting the human society as a whole.
Blockchains have created a secure environment for transactions, but the rest of the internet is still vulnerable to attacks, censorship, and piracy.
That’s where today’s hero-project comes in.
It’s creating a secure network for everyone and any kind of application. And it’s giving rise to what we call the Internet of Value — where ideas, content and digital assets can be freely and securely traded.
The Ultimate Operating System Powering the New Internet of Value
The Internet of Value is still in its infancy, but it will eventually become so enormous it is hard to fathom. And Elastos (ELA) has the potential to grab sizeable market share.
That’s because Elastos is the first network operating system that uses the internet as a base layer and builds its own secure infrastructure on top. Any other blockchain or application simply uses the internet directly.
In other words, the Elastos operating system creates a completely safe online environment. All network traffic is routed through its own universal peer-to-peer carrier network that sits on top of the internet.
The Elastos operating system is totally separate from the current internet and extends all the benefits of blockchains to the entire web with full scalability to billions of users.
Let’s take a closer look at why this is revolutionary… starting with a little bit of internet history…
A Global Free Market for Digital Content
The popularity of Windows 95 exploded with the growth of Web 1.0, the basic information internet.
Then came Web 2.0, which refers to the growth of social media.
We are now in the early growth stages of the decentralized web, also known as Web3.
Elastos is an operating system custom-tailored for this next step in the evolution of the web.
This new network operating system enables a worldwide, private economy for the digital world… a smart economy where the user not only has full control over his own identity and data but also his digital content.
Bitcoin first solved this problem by making digital money scarce using a blockchain.
In a similar way, Elastos makes everything else on the web into a scarce digital asset that can be securely traded.
For example, if you buy a digital book through Elastos, you can sell it to someone else after you have read it.
With e-books, music, video files or any other digital content, that’s not possible at the moment. But it works on a smart economy like Elastos’, because your digital copy is unique.
Here’s how it works.
Say an author decides to publish 10,000 e-book copies of his new work. These 10,000 copies are unique digital assets on the Elastos smart web. They can be freely bought and sold creating a free market for digital goods that resembles the physical world.
Just like you’d only be able to sell the copy of the book you have in your possession, through Elastos, you’d only be able to sell the digital copy that you own. You would not be able to distribute an endless number of copies at will — only the person who owns the rights can.
And that’s just one example.
Filmmakers can raise money for a project through crowdfunding, where every investor gets tokens for the project. A smart contract would then distribute a proportionate share of the fees to investors every time someone watches the movie.
Independent game developers can also sell games directly to players without having to go through expensive middlemen. They can even sell limited-edition games.
There are countless use cases for a private digital economy.
In short, the Elastos operating system guarantees a secure, global network free from censorship, viruses and hackers where anyone or any smart device can trade freely with anyone else.
It creates financial opportunities for both creators and consumers, which incentivizes more people to use Elastos. This creates a positive feedback loop and a growing economy… which, of course, is good for early investors.
Let’s take a closer look at the technology that makes this possible.
Let's have a look at key points like Technology, Team, Tockenomics, and Traction of Elasto.
As you know, blockchain technology is evolving.
Bitcoin is the first generation of blockchains and basically just a trustworthy ledger.
Ethereum is the second generation of blockchains. It added basic computing capabilities to the blockchain. Thanks to this, simple decentralized applications running on Ethereum can use a virtual computer to run basic programs called smart contracts.
As I’ve said many times before, third-generation blockchains (like. Zilliqa (ZIL), QuarkChain (QKC), and RChain (RHOC)) significantly improve upon the speed and computing limitations of Bitcoin and Ethereum.
But Elastos goes beyond even third-generation blockchains.
It is a full network operating system.
This means it can run on computers, smartphones, game consoles, TVs, AR/VR headsets, internet routers and almost any other smart device.
Programmers are not limited to basic smart contract programming languages. They can use several traditional, complete languages. Put simply, this means they can write complex programs that make full use of all features of the hardware Elastos runs on.
In other words, the Elastos operating system is much more sophisticated and enables more complex applications and business models than just a basic blockchain.
If you’re wondering what that means exactly, you’ll understand what I mean in a moment.
As you’re about to see, there are three key elements that make Elastos superior to traditional blockchains…
The Three Pillars of the Elastos Operating System
The Elastos ecosystem is a truly private, borderless, digital economy.
It consists of three fundamental building blocks that together form the complete network operating system.
- Elastos Runtime makes the operating system work on any device and provides the rules.
- The Elastos Blockchain handles identities and gives the network trust and a value-exchange mechanism.
- And Elastos Carrier provides secure networking.
I call these Elastos’ “Three Pillars.” Let’s take a more detailed look at each of these building blocks.
Pillar №1 — Elastos Runtime
Elastos Runtime is a lightweight virtual operating system. It’s the base computing layer that all applications on the Elastos network is run on.
It can be installed and run on almost any device that’s connected to the internet. It doesn’t matter if it is a Windows or Apple computer, or an iPhone or Android device.
The Elastos operating system looks like any other app. You’d download it from Apple’s App Store or Android’s Google Play Store, for example.
The Elastos app then becomes your gateway to the Elastos ecosystem.
Whenever you open the Elastos app, the first thing you will likely see is a home screen with all previously downloaded apps. There will also be an app store for decentralized applications.
In essence, the user experience will resemble what you are already familiar with. This is important because it makes it easy for average users to adopt Elastos.
Another important concept is that Runtime prevents applications from connecting directly to the internet. All connections run through Elastos’ own network.
This is key because it makes the network environment completely secure from hackers, malware and viruses.
It also allows developers to focus exclusively on creating high-quality decentralized applications. They don’t need to worry about any of the networking aspects because they are completely taken care of by the Elastos operating system.
Connecting Elastos to the Internet and the Blockchain Ecosystem
Developers on the Elastos network use something called a software development kit (SDK).
An SDK is basically a set of tools that makes it easy for developers to integrate Elastos’ functionality into existing apps and other platforms.
In other words, non-Elastos apps like Android, iOS or Windows apps can access the Elastos ecosystem through the Elastos SDK. A user can, for example, store data from non-Elastos apps on his Elastos cloud storage.
Existing smart contract virtual machines like Ethereum and NEO can be ported to Elastos Runtime. This way, an Ethereum app can run directly on Elastos instead of running on the slow, congested Ethereum blockchain.
This feature gives Elastos true interoperability between all kinds of different blockchains and makes for a tight integration of Elastos with the overall Blockchain Ecosystem.
Next, let’s look at Elastos’ blockchain.
Pillar №2 — Elastos Blockchain
The Elastos blockchain is the element that makes the entire network operating system trustless and immutable, and that guarantees all interactions.
Here’s how it works…
Elastos uses one main blockchain and multiple sidechains.
This means the main blockchain is extremely light and fast because it only has two responsibilities:
- Managing identities of users and devices.
- Managing the sidechains.
Every application built on Elastos can create a separate sidechain that is easily customizable, so it can be optimized for different uses.
This dual design is another key concept. It allows Elastos to easily grow to an almost unlimited number of devices and users.
Another important thing to understand is this: On Elastos, applications don’t sit directly on the blockchain.
There is no way a network can grow to a global scale with billions of users like that. And it’s one of the limitations we’ve run into with traditional blockchains.
With conventional blockchain projects, everyone uses the same basic virtual computer on the blockchain.
This is the main reason why blockchain technology cannot be applied to the larger internet. It would be impossible to stream a high-definition movie over a blockchain, for example.
Elastos is aware of this pain point.
That’s why, with the Elastos operating system, everyone uses the full computing power of their own devices.
Anything else running on a smart contract that has to be on a blockchain will be on a unique sidechain just for that application.
Put simply, it’s a hierarchical design that makes perfect sense for achieving a truly global network with unlimited reach.
How Elastos’ Blockchain Works
You can see how Elastos’ hierarchical design works in the graphic below. In the middle is Elastos’ main chain. Like I said earlier, all this blockchain does is manage identities and the sidechains.
Working off the main chain are sidechains, which I described above. And there is also something called friendchains — in other words, other blockchains.
As you can see below, Elastos’ design allows other blockchains to connect to its main blockchain and vice versa. That way, users from other blockchains can use services on the Elastos blockchain, and Elastos users can use services on other blockchains.
The main Elastos blockchain uses a process called “merged mining” with Bitcoin. Merged mining allows a miner to mine more than one blockchain at the same time.
This doesn’t cost any extra mining resources and gives Elastos the same strong level of security as Bitcoin.
The sidechains, in turn, can use the computing power of the main chain to ensure their own security. But a sidechain can also use a completely different consensus mechanism if that makes more sense for the application that runs on that sidechain.
This gives Elastos strong security and great flexibility. It’s also a very resilient design because each sidechain can be modified and upgraded independently of the main chain.
There is one last crucial element to the Elastos blockchain — something called Decentralized IDs (DIDs)…
Decentralized ID: The Dawn of Data Ownership
Elastos is building a decentralized digital economy where each device, individual, website, and the digital asset has a unique DID assign to it by the Elastos blockchain.
Put simply, this solves the problem of ownership of digital assets.
The way it works is each asset has a DID that is linked to the DID of the current owner.
Every time someone tries to access a file, Elastos Runtime verifies the DID records on the Elastos blockchain and checks if the person or device has access rights or ownership.
This completely eliminates all piracy. But for the user, everything stays the same.
For example, if you buy a movie through the Elastos network, you can watch it from your phone, TV, or computer. That’s because Elastos Runtime works on any device, and the network automatically checks that you have ownership of that content.
Unlike digital content you access through traditional internet services like Amazon Prime or iTunes, Elastos comes with an added bonus: Its network is secure, free of censorship, and it doesn’t come with high fees.
This brings us to the last pillar — Elastos’ carrier…
Pillar №3 — Elastos Carrier
Elastos Carrier is a completely decentralized peer-to-peer network. The carrier takes care of all network traffic between applications and devices on the Elastos network.
This works similar to the file-sharing program called BitTorrent, which you may be familiar with.
Just like on BitTorrent, there is no central server on the Elastos network. And because all connections are directly peer-to-peer, the network is also infinitely scalable.
Any network connection requires a DID, which I mentioned earlier. These Decentralized IDs are issued by Elastos’ blockchain.
Put simply, the DID prevents any attacks on the Elastos network and makes it 100% secure.
All traffic is also completely encrypted. And without a central authority, there is no censorship and no interference.
Since there is no central authority, the Elastos ecosystem will be powered by its users.
Each user on the Elastos ecosystem is what we call a “node” in the Elastos network. As a node, you can choose to contribute to bandwidth, processing power, and storage space. Contributors are rewarded with Elastos’ token, ELA.
Now that you have a better idea of how Elastos works, let’s take a look at the team behind it.
I already introduced you to Rong Chen, the Bill Gates of Blockchain.
Before joining Microsoft, he graduated from the Department of Computer Science and Technology at China’s prestigious Tsinghua University in 1982. He then came to the United States to study operating systems at the University of Illinois for seven years.
He has been working on operating systems since 1984. And he is the visionary who came up with the Elastos idea.
Feng Han is one of the cofounders of Elastos and like Rong Chen a graduate of Tsinghua University.
Feng Han is a well-known investor in China. He has a large network and was instrumental in bringing in key investors during the Elastos initial coin offering (ICO), which I’ll tell you more about in a moment.
He also has a strong academic background in applied physics, and he founded the blockchain research wing at the Massachusetts Institute of Technology (MIT). Plus, he’s the blockchain advisor for Huawei, the largest telecommunications equipment manufacturer in the world.
Han’s main focus is on business development and strategic partnerships.
Kevin Zhang is building the developer community for Elastos. He has worked in software development for 24 years and was involved in several startups.
Kevin spent 10 years working in China and 14 years in the U.S. and Canada. He’s based in Silicon Valley and fluent in English and Mandarin. He is an excellent choice to bridge the cultural gap between the East and the West.
Elastos has a large team of over 100 engineers and many qualified managers to oversee the different development teams that work on the Elastos technology.
I’m not going to spend too much time profiling the many different team members here. Suffice it to say that the team is qualified and well-connected, and Elastos has a lot of human resources to advance quickly.
What’s more, Elastos also has several advisors at the highest levels of the blockchain industry.
They include Jihan Wu, cofounder of Bitmain, the largest cryptocurrency mining equipment manufacturer on the planet… and Da Hongfei, founder of NEO, one of the top 15 cryptocurrencies by market capitalization.
The ELA token is the native currency of the Elastos ecosystem.
It’s used for many things, including file storage… application fees… and issuing tokenized digital content like music, videos, and e-books.
The fact that ELA tokens are used in everyday transactions on the Elastos network creates a natural demand for them, which is good news for investors.
The ELA token is currently trading at $2.75, and there are a little over 15 million tokens in circulation. This gives us a market capitalization of about $41.3 million.
However, it’s very probable that Elastos’ treasury is worth a lot more than the entire current market capitalization of the project. In other words, it’s very undervalued.
The first indication of this is that Elastos raised $94.1 million in an ICO last January.
Second, in 2013, Elastos received a sponsorship grant for research and development of 200 million renminbi ($29.8 million) from Foxconn Technology Group.
[Foxconn is the world’s largest contract electronics manufacturer. It makes products for Apple, Sony, Intel, Microsoft, Dell, Google, Cisco, Motorola, Amazon, Nokia, Huawei, and many others.]
Compare that to what Elastos is spending each year…
Elastos just released an audited financial statement detailing its expenses for 2018.
Expenses were in Bitcoin and ELA, so it’s impossible to say how much the dollar equivalent is. We also don’t know the exact asset mix of the Elastos Foundation’s treasury. But a rough “back of the envelope” calculation puts the yearly spending at around $10 million.
Considering the above, I believe the project has several years’ worth of expenses in its treasury. That tells us it can aggressively develop and grow the project with its large team.
And of course, that growth will be good for tokenholders. There’s also the advantage that Elastos has a relatively small token supply, so the price will appreciate quickly as more users come onboard.
The Elastos team has made good progress since their ICO a little more than one year ago.
The main blockchain is already live and there are over 1 million Elastos Carrier nodes from more than 84 countries.
Compare that to Bitcoin’s 10,200 nodes or Ethereum’s 8,700 nodes.
At any given moment, there are more than 300,000 Elastos nodes online. Remember, that’s 300,000 users. Not bad considering only roughly 0.3% of the world’s population is involved in cryptocurrencies today.
You can see Elastos’ live network statistics here.
Beyond a large userbase, Elastos has several key partnerships going for it.
I mentioned Da Hongfei of NEO and Jihan Wu of Bitmain earlier. They are both early investors and advisors.
Elastos also has an agreement with Bitmain — which, like I mentioned, is the largest cryptocurrency mining equipment manufacturer on the planet — to redirect hashing power from Bitcoin mining to Elastos.
Elastos has a few other partnerships, too.
One of these is with SAIC Motor, a Fortune Global 100 company and the largest automaker in China. SAIC is using Elastos’ technology in the development of autonomous driving for its smart cars.
This is a big opportunity for Elastos, considering the smart car market in China alone is projected to be half of all new car sales by 2020 and worth tens of billions of dollars.
Outside of SAIC, Elastos is in discussions with Alibaba, Huawei, Tencent and many smaller projects regarding partnerships.
Let me say here that I generally don’t give too much importance to big-name partnerships. It’s impossible to say how meaningful they are and how much impact they will have.
However, the fact that leading companies like the ones I mentioned above are interested in Elastos is a good sign. And it’s not the only thing working in Elastos’ favor…
You’ve likely heard of the much talked about Bakkt exchange. Bakkt is a crypto platform operated by the Intercontinental Exchange (ICE), the owners of the New York Stock Exchange.
What’s significant about Bakkt is that it will be an institutional-grade crypto exchange. And ELA is also one of the few tokens that will be listed on it when it launches.
Elastos is off to a decent start. But just like with our “New Ethereum” picks, a lot depends on the size of the community and ecosystem of apps Elastos can attract.
Many meaningful apps will have to be built on Elastos to reach escape velocity… in other words, for it to become a dominant ecosystem.
The Internet of Value is still in its infancy, but eventually it will become so enormous it is hard to fathom. Elastos is a serious contender and has the potential to grab sizeable market share.
The average person may not know how blockchains and operating systems work, but they know what they want: an honest internet free of censorship, payment restrictions and viruses. The current internet is broken and Elastos is here to fix it.
A thousand-bagger — an increase of your investment into Elastos by 1,000 times — would put Elastos’ market capitalization at $41.3 billion.
This is small compared to companies like Apple ($890 billion), Microsoft ($897 billion) or Facebook ($472 billion).
But it’s a realistic possibility over the next three to five years, and it might turn out to be conservative if the Elastos Smart Web really takes off.
This is the kind of rare speculation that can turn a thousand dollars into a million bucks.
It’s an opportunity akin to investing in Microsoft in the early 1980s… and profiting from the rise of a new operating system.
In fact, with many more computers and smartphones in existence today than in the 1990s — when Windows 95 was at its peak — and with a much larger global economy, this opportunity is even bigger.
Binance: Offers mobile app and probably the fastest growing exchange. If you need to pick only one, this is the best and #1 in 2019.
Kucoin: One of the strongest exchange that also offers a mobile app (Android and iOS). They have been constantly updating their mobile app to make it one of the best in the industry.
Gate.io: One of the best exchange for low cap coins. They also have mobile apps for both Android and iOS.
Thanks for reading! Feel free to check out some of my similar Cryptocurrency related post below.
- How to Earn Crypto Income From Komodo (KMD)
- “Lock” Your BIX Tokens Today to Continue Receiving Your BIX Incentive Reward
- How to Earn ONG From Ontology (ONT)
- Zilliqa : Progress and Update, June 2019
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