Blockchain 3.0 — Aeternity, an alternative or something bigger than Ethereum
After the article about alternatives to Ethereum, I think that now we can take a closer look at one of them, which I think has great potential. As part of the GlobalizeIT team, a software company whose core business is developing and consulting blockchain projects, I decided to take a deeper look at Aeternity and write an article about the platform.
Aeternity is a new platform for decentralized applications (dapps), which launched its test network in 2017 and expected to go on mainnet in August this year. Interesting in this project is the great Bulgarian participation and the fact that the creator of this project is one of the “godfathers” of Ethereum. Aeternity successfully launched a Contribution campaign in 2017 for its AE token and raised approximately 28 million CHF. This amount could have been much greater if there was no bug in the Parity Multi-sig Wallet, which was used by them to store their investments.
Aeternity is not just another blockchain, it’s more than that and I will explain its aspects, differences and advantages over other blockchain networks. What makes it different and innovative is all that Aeternity offers — state channels, decentralized oracles, a memory bound proof-of-work and many more.
State Channels
State channels allow smart contracts to run out of the blockchain network. They do not go through a blockchain unless you have to transfer some value or make a decision. Just because they are out of the chain, the state channels can be extremely effective. There is no need to pay any charges to the network every time a calculation is made. The state channel network allows exchange of value with anyone in the world without the need to trust a third party.
Through these channels, participants have the opportunity to interact with each other in a private way. For example, we have two companies that do not want the data they exchange to be seen by others besides them. Transactions are extremely fast, even instantaneous. In the case of a large amount of data, transactions would still go without any problems.
If there is a disagreement in the contract of the channel, the contract is returned to a blockchain to resolve this disagreement. The contract remains a secret, through zero knowledge proof, which allows a blockchain decision to be made without the need to know the content of the contract. In this way, the block acts as a blind legal system for smart contracts.
Consensus mechanism
Aeternity offers a unique management system that achieves consensus through Proof of Work (PoW) and Proof of Stake (PoS)
PoW establishes a consensus on the Aeternity platform. Miners are checking new blocks similarly to the current Bitcoin and Ethereum model. However, Aeternity uses light variations to optimize the proof of scalability algorithm. The Cuckoo Cycle is a new graphical-theoretical Proof-of-Work work algorithm that combines the scalable memory requirements with an immediate check. The Cuckoo Cycle stimulates devices with dynamic RAM, which means you can mine Aeternity tokens from a mobile device.
PoS controls the management of the Aeternity ecosystem. Holders of AE Token can vote for development suggestions and changes based on the share of AE they hold, the more tokens you have, the heavier your voice is.
Decentralized oracles
The oracle connects real world data with smart contracts. Aeternity has oracles in blockchains, as real first-class objects. For example, if you need information to save on a smart contract, such as weather conditions, a currency pair price, or other public information from the real world, the oracle can provide data that is not tampered with and for which contracts can work.
A decisive role in many business applications plays things like election results, asset prices such as gold or currency pair prices, weather conditions, sport event results, and many other real-world data that can not be calculated with a computer.
Smart contracts and decentralized applications
Aeternity platform allows the development of functional smart contracts. The parties to the contract are responsible for maintaining the state of the program so Aeternity does not support stateful programming (this means that there is memory of the past, previous transactions are remembered and may affect the current transaction). They would then provide and confirm the state as part of the inputs for the contract. Up to now, however, separating functional and stateful demands is an important trend in smart contract scalability. Functional programs are easy to scale.
Aeternity will introduce a new, more secure language for writing smart contracts called Sophia — a strongly typed, functional programming language resembling ML and Reason languages. It is compiled on the Aeternity virtual machine — a high-level machine called FTWVM (Functional Typed Warded Virtual Machine). Sophia’s main use will be in the level of system programming, or in other words, more sophisticated applications. Another language that will be able to write smart contracts is the language Varna, which resembles Bitcoin’s scripting language, but without loops and a fixed price of gas. It uses its own virtual machine — HLM (High Level Machine). Varna is designed to be used for fast, everyday smarter contracts. And the last language for smart contracts to write is the well-known language in blockchain community — Solidity.
Ecosystem
Aeternity is not limited to being just a blockchain that everyone wants — a platform for decentralized applications. Aeternity is more than that, it is an entire ecosystem of a wide range of applications.
One of all the applications has recently launched — Aeternity Ventures. This is a decentralized incubator for blockchain startups. In the beginning, 17 projects have been selected and have been mentored for one week, with a demo presentation day at the end, where they have been preselected and only 10 left after voting. These 10 projects have been helped develop and improve their ideas, and after only a month have made a complete transformation. After the final presentation day, one project has been selected to take the $250,000 prize + 6-month mentoring and the remaining teams split $1,000,000.
In addition to this incubator, Aeternity, in the face of their Marketing Leader Vladislav Dramaliev, who organizes Sofia Crypto Meetup — a monthly gathering and discussing the hottest topics of the blockchain and the crypto community, supports this endeavor. Another indicator that Aeternity supports and develops the blockchain community is that they make partnerships with companies from different sectors, whether for education (SoftUni), innovative blockchain startup (TraDEXsocial) and many more.
Unique Governance
Aternity is governed by its stakeholders, meaning that miners, token-holders and others with a stake in the blockchain have the ability to make decisions together on proposed changes. Aeternity provides tools enabling participants to govern themselves effectively.
It is essential to note that governance is very much a human problem that most likely cannot be “solved” purely by technical means. Aeternity’s governance is implemented via delegated voting, weighted by the amount of tokens the account holds.
Conclusion
All things considered, Aeternity is one of the most innovative and most exciting blockchain platforms. It’s here with a praiseworthy mission to improve the industry of blockchain and crypto and it does so valiantly by moving smart contracts off-chain and by improving scalability, as well as by cutting down on those inconvenient price fluctuations usually associated with all cryptocurrencies.
The team behind Aeternity looks stable, and their proposed technologies appear to have a sound footing. The real challenge ahead of them is the scale of their aspirations. It’s a long climb from an Contribution Campaign to becoming the world’s first choice smart contract platform.
In my opinion, the Aeternity platforms has great potential and I expect in the near future to be one of the most used platform for decentralized applications.
