On Tuesday 25th February 2020 the hubii team took part in CryptoDiffer’s Telegram AMA (Ask Me Anything). We were delighted to receive over 100 questions as part of the event, of which we were able to answer around 30 within the 3 hour slot. Given the excellent response from the community, we decided to continue the AMA on our own Telegram group for a further 9 hours.
Our community requested that the responses be collated into a longer FAQ-type document. We’ve cleaned up the formatting and some of our answers in the document below. Please note that this is only the first part of our summary — we will respond to the additional questions in a second blog post coming soon.
Prizes were available for the ‘best’ five questions. The winning questions are highlighted in bold and we will contact them individually in the coming days. Each winning question will receive 100,000 NII tokens, delivered directly to their on-chain Ethereum wallet. Please note that all prizes are subject to final approval from CryptoDiffer, as winning entries will be checked to ensure compliance with their competition rules.
Introductory Questions from CryptoDiffer
Can you introduce yourself to the community? What is your background and how did you join hubii/nahmii?
Jacobo — CEO & Founder of hubii. Background in Software Engineering. We started hubii 12 years ago doing content aggregation and distribution serving up to 50m users a day. Approximately two and a half years ago we started focusing on Blockchain and we soon saw an opportunity to build an scalability and interoperability protocol — nahmii — as none of the other competitors had a working product. We deployed nahmii in early 2019.
Mark — COO of hubii, I’ve been around the blockchain space since 2011. Working on scaling since 2013 on Bitcoin, then recently worked on Plasma with OmiseGo and then joined hubii in 2017
Jens Ivar — CTO of hubii, been with hubii for about a decade. I manage our dev resources and infrastructure, and code contracts and services.
John — Product Lead, I’ve been working with hubii for almost two years after helping with the ICO in 2017. Since then my role has focused on nahmii, our scaling and interoperability solution for blockchain. I’m also usually the person writing our blog posts and technical documentation.
Can you briefly describe what is nahmii in 3–5 sentences? What technology stands behind nahmii and why is it better than the existing solutions?
We’ll answer that question in two parts:
What is nahmii? nahmii is a layer-2 scaling and interoperability protocol for blockchain, which is currently live on Ethereum. The protocol is designed to fix the four main performance problems with blockchain today: throughput (increased TPS), fees (predictable and low), latency (minimal) and finality (instant). In addition, nahmii is also intended to make developing blockchain-based products easier; that’s why it comes ready with a full set of developer tools: CLI, SDK and a suite of APIs.
In terms of the unique technology behind nahmii, we have two main advantages over the competition. First, unlike our closest competitors, nahmii is built and ready to use today. Second, nahmii is designed to address all of the key blockchain performance questions. That might sound like a trivial point, but we think that our competitors have ignored important requirements like latency and finality. Our ‘secret sauce’ is how nahmii works as a package.
What are the major milestones you have achieved so far?
nahmii’s White Paper was published in July 2018 and we deployed our first smart contracts to the Ropsten testnet in the same month. Mainnet deployment of nahmii began in December 2018 and continued in phases until April 2019, at which point the full deposit — payments — withdrawal life cycle was then live on Ethereum. It is worth noting that we started building nahmii much later than our competitors, yet we have beaten them to market by at least a year.
Alongside the key nahmii deployment milestones, we have also integrated nahmii into hubii core — our wallet management tool. Another important milestone will be reached on 1st March 2020 when the first nahmii ‘accrual period’ closes. After this date, nahmii token (NII) holders can claim their share of the transaction fees from the protocol for that period.
NII tokens are distributed through a monthly airdrop, called the nahmii airdriip. We have delivered 15 airdriips to far.
We have also signed a number of key partnerships over the last year, including Microsoft, Liquid (who list the NII token), NBX (Norwegian Block Exchange) and NEO. We have been focused mainly on commercial adoption, less so crypto-hype.
Community Questions (Part 1)
What are some of the more exciting potential applications for nahmii in your eyes? (As in, not another exchange/wallet/gambling app)?
IoT, Supply Chain Management, Gaming (NFTs), Loyalty Rewards, Tokenised Physical Assets… There are a huge number of use cases on top of the classic crypto use cases — financial services.
Additionally, blockchain will revolutionise video games in terms of how players own and value their virtual assets. In terms of global impact, nahmii will be important for blockchain-backed financial services (including much improved DeFi-type products) but the applications really are endless.
This is maybe the most exciting aspect of nahmii — we’ve designed a generalised protocol which can replicate any normal blockchain transactions but at scale. Any built on blockchain will benefit from nahmii
nahmii promises to scale at a rate of 15 transactions per second, per wallet. How does this work? Are these active wallets? Do people need to have Hubii Core open for this?
The registration of transactions is done in nahmi’s back-end systems, hence it is not subject to the base layer constraints of block frequency and finality. People do not need to have hubii core open for this to happen. Naturally the sender of the transaction will need to do this through a nahmii client, e.g. hubii core or nahmii CLI.
Adoption is one of few things that play a big role too, without adoption/user base, projects end up in a dead end, can you tell us more about how do you plan to increase the adoption and increase awareness in the cryptofield about nahmii?
Adoption is indeed key; however, our target is corporate clients and products with established customer bases. No other blockchain scalability/interoperability project can target these projects currently, simply because they cannot deliver the performance or service level required. Our ambitions don’t revolve around creating a DApp with 1,000 daily active users, instead we target ‘real-world’ products at scale. In that sense, we hope to get recognition in the crypto industry by demonstrating nahmii’s value through real use cases.
I notice that there are some double “i” characters in nahmii, Hubii, driips, NII. What is the meaning of this naming and does “ii” represent the number 2 in ‘layer-2’ solution?
This is a fun question, thank you! The name ‘nahmii’ comes from the Thai word for water, ‘nahm’, and it references the idea that nahmii will help transactions flow more easily through the blockchain ecosystem (it also ties in to the Japanese for ‘small wave’). The ‘ii’ style came from the company name, hubii, which was established over a decade ago — long before we moved into the blockchain industry. Given that nahmii is now hubii’s main product, we like the idea that the ‘ii’ represents the Roman numerals for ‘2’. Maybe we should start claiming that was our plan all along!
DeFi is one of the hottest topics in the blockchain space right now. Can you share your opinions on DeFi with us? Do you think that DeFi will disrupt the existing financial system? What is nahmii’s approach towards the DeFi sector?
Correct, DeFi is the latest hot topic in this ecosystem. We don’t try to follow these trends too much, nor do we need to because nahmii is a generalised protocol that can handle any type of transaction and smart contracts. We do think DeFi will both disrupt and complement the existing financial system and eventually they will exist side-by-side.
Again, talking about our ambition, we envisage solving real problems that exist today, such as financial access, identity management, efficiency of finance and self-sovereignty of one’s funds. We do not particularly see huge value in the majority of DeFi projects today, as they are mostly focused on feeding speculation in the industry. As we have seen recently, there is significant risk in lending funds in a DeFi product especially when the creators of such products do not appreciate the risks themselves and aren’t really well trained in the field of finance. We see a lot of frightening and vulnerable products around, some of which are the largest in our fragile ecosystem. There is no significant return without risk and many of the developers in this space are playing fast and loose with other people’s funds.
nahmii itself can also be considered a DeFi product, of course. Token holders will participate in elements of the security of the protocol. As a reward for doing so, they trustlessly earn transaction fees from the network. Another method of earning fees for contributing is that soon we will allow users to provide other users with liquidity for ‘instant’ withdrawals. This does not involve risk, it merely allows people to extract the time-value of money.
It is also important to understand that financial products might benefit from some element of decentralisation, whilst also needing to obey regulations. nahmii can satisfy regulations, such as KYC/AML where required, but also be anonymous where appropriate. We can implement privacy methods on nahmii too. Again, nahmii is designed to satisfy as many needs as possible.
DeFi and DApps are 2 pillars primed to rule 2020. What roles will nahmii play in the innovativeness of DeFi and DApps? As a developer I know SOLIDITY, Java and C, can I build DApps on nahmii? How do you seek to convince developers to switch to nahmii?
As mentioned previously, DeFi is the latest buzz word or trend. Before that came DApps. So far none of these products have had success at scale, primarily because they have major downsides for users which are caused mainly by the limitations that come with blockchains. They also don’t yet in general solve real problems, with the exception of a few projects like BAT/Brave.
When making a decision to build on nahmii as a developer, we think it is currently an easy choice assuming you want to be able to scale to meet the needs of thousands or millions of concurrent users. That is the role that we want to play in the blockchain space, providing developers with access to an ecosystem which can serve enormous numbers of users. Developers are not only accessing their own users, but can benefit from every other project built on the protocol.
To solve the blockchain scaling problem, there are many layer 2 solutions such as State Channel, Side Chain, Off-chain Computation. We have seen many projects claim to resolve these problems but there are no efficient solutions out there. Why does nahmii choose State Channels to be built on and how will nahmii be different, be unique compared to existing layer 2 projects out there?
Uniquely, nahmii lies somewhere in the space between state channels and side-chains. It is most closely related to state-channels, but we borrow the best from both methods. We think commercially it is a necessity to solve the issues of throughput, latency, finality, ease-of-use, and fee-predictability. Side-chains (including Plasma/rollups) can only help throughput, making everything else worse in general. State channels solve more issues, but introduce other problems such as capital inefficiency.
As a result, we borrow a little from side-chains, but more from state-channels. We are the only team with this approach, perhaps because our team has such a wide range of experience across the wider tech ecosystem; we know what products at scale need.
Are you targeting large corporate clients or small blockchain projects and startups?
We have always positioned nahmii as a solution for commercial-grade blockchain scaling; in other words, we’re targeting large companies and commercial-scale adoption. At the same time, we understand that there is potentially enormous value in supporting new blockchain projects — that’s why nahmii has an easy-to-use set of developer tools: our CLI, SDK and suite of APIs.
There are 4 core issues prevalent in crypto and blockchain: Excessive Volatility, Security, Scalability and Interoperability. How do you plan to overcome these issues?
Another good question! Let’s take each point in turn:
- Excessive volatility — generally speaking, volatility isn’t a problem for nahmii. Users can choose whether to make transactions in volatile currencies or more stable alternatives, either way the process will be easier, faster and cheaper with nahmii. For the most volatile currencies, a nahmii-powered exchange can potentially reduce spreads and improve liquidity. This will not necessarily solve the problem of highly-volatile currencies, but it should help.
- Security — building on top of blockchains as a layer-2 protocol, we believe that nahmii’s security can approach or even match the security of the baselayer.
- Scalability — we have designed nahmii to offer a minimum performance of 15 transactions per second per wallet, with no limit on the number of wallets that can be served by the protocol. While 15 TPS might not sound like a lot, remember that it is per wallet. Ten wallets therefore gives a throughput of 150 TPS, one thousand wallets 15,000 TPS and so on.
- Interoperability — nahmii’s backend requires almost no customisation to run on other blockchains, leaving only the task of porting the smart contracts across. For Ethereum forks, this is relatively trivial. For other blockchains (including Bitcoin), we can leverage platforms like RSK to port nahmii across. Generally speaking, the task of porting nahmii to any compatible blockchain is relatively simple because our backend is blockchain-agnostic. Importantly, interoperability through nahmii will allow for trustless trading between blockchains — this is a major benefit of our approach.
How can we recover if we lose access to the Nahmi CLI tool? How is the application ID created on Hubii’s identity server protected?
Is the configuration file stored in data records?
It depends what is meant by ‘lose access’ to nahmii-cli. There are essentially two components, one being the pair of keystore file and its secret, the other one being the pair of app ID and app secret.
The nahmii-cli configuration is stored in your home account, i.e. in file ~/.nahmii/config.yaml. Subsequently namii-cli expects keystore files to be located in directory ~/.nahmii/keystore. The user will have to manage his keystore and secret as stored in ~/.nahmii/config.yaml and take the necessary back-up precautions for this. We do not manage these essential credentials for you.
On the other hand the app ID and app secret are credentials that we issue for the interaction with our back-end. If you lose these we’d be happy to issue a new pair.
Be aware that we advise that nahmii-cli be used first and foremost as a tool for the development of solutions on top of nahmii, for prototyping and as a reference on how to interact with our SDK. It is not considered the optimum choice for production systems based on nahmii.
What’s the main mission & targets of nahmii project and what did you actually want to build?
We wanted to build and deploy a protocol that would make Ethereum ready for commercial adoption. That was our main mission, which we believe has now been accomplished.
Moving ahead, our next objective is to turn nahmii into a key piece of infrastructure used by companies across the world when building their blockchain-based solutions. This includes bringing nahmii to other blockchains, providing interoperability between them.
What are the main benefits of nahmii to developers? Which features & facilities are provided by nahmii to developers?
nahmii is built from the ground up with developers in mind. That’s why nahmii comes complete with a full developer toolkit: CLI, SDK and APIs. Our goal here is to lower the barriers to entry for blockchain-curious developers, in turn this will ease adoption and help developers to be as productive as possible in little time.
What does the nahmii ecosystem include? What is the role of NII token in the entire nahmii ecosystem?
We’ve noticed a number of questions about the NII token itself, but our answer here should cover the key points. We’ll also address hubii’s business model and the development of nahmii.
The NII token is a token which confers rights to partake in the security of the protocol. NII holders earn almost all transaction fees from the protocol for doing this. This is hubii’s business model; owning a percentage of the nahmii tokens, but not enough to have absolute control of the system. In this way we guarantee that hubii can’t commit fraud, even if we tried or were compromised ourselves. If a user owns 1% of the NII tokens, then they will earn approximately 1% of the transaction fees in the network.
What this means is that NII holders receive transaction fees from nahmii, which will actually exist in a basket of all currencies transacting in the ecosystem. This is another important point, in that users don’t need to hold ETH or NII in order to transact in nahmii. Transaction fees are paid in the currency being used. This is one other user experience blocker with base-layer blockchains and other ‘scaling’ solutions.
NII is released every month, but in a defined way. People can view transaction fees being accrued trustlessly on the Ethereum base-layer. As such, people can determine a fair price for the token, which can be estimated from anticipated future cashflows. This will set a floor price for the token, which will grow as products are launched on nahmii and develop transaction fees. In turn, as NII value grows, so does the security of the protocol; though we are not beholden to the price of the token alone in terms of security.
Regarding the highlights of nahmii and reasons to choose this system, we have covered that across the answers to the other questions. We would question the definition of ‘growing strongly’ though, as we are yet to see a blockchain product achieve anything close to mass adoption (except perhaps for exchanges and gambling sites). Our ambitions are in providing services to products with huge numbers of users.
nahmii is built and deployed in the Ethereum mainnet do you have a plan to build your own mainnet?
No, we do not at this time. Instead, we will focus on porting nahmii to other blockchains to enable interoperability. Importantly, nahmii is not limited to running on public blockchains — we are also considering porting the protocol to private and permissioned blockchains.
While many smart solutions can be implemented with the existing central systems, why should countries turn to blockchain-based solutions while they have technological infrastructure?
All those smart solutions you refer to rely on a central system and operator, therefore trust must be placed on that actor.
There are many use cases where a blockchain-based solution can help to reduce trust on 3rd parties and there is immense value on that.
As an investor and early adopter, I find it difficult to access/value a project in the short term and require longer periods of time to fully understand, recognise and value it. So, to help my understanding, can you tell me what plans are set in motion to add value to nahmii ?
We agree — it does take a long time and, due to all the noise surrounding the industry, assessing the value of new blockchain products can be difficult.
Our first objective was to develop nahmii and reach the market before our competitors. We achieved that objective.
Our next objective to add value to the protocol is to focus on adoption. To do that we work with companies such as NBX, Microsoft and NEO. It is worth noting that you cannot enforce adoption nor accelerate the natural process for an industry to mature. You can, however, position yourself strategically place to facilitate adoption.
Give us 1 or 2 reasons why we need nahmii?
Two reasons: one, because — despite what you might read or others say — blockchain today is not commercially viable without nahmii. Reason two, because the other proposed scaling solutions being built by our competitors will not solve this problem.
What efforts are you making to continually improve on the scaling solution you provide? How will this help you avoid becoming obsolete in the future?
Good question. Our approach towards scalability is very different than our competitors. Our focus is more holistic: alongside scaling, nahmii offers interoperability (to make it scalable from an adoption point of view) and powerful developer tools. Moving forward, our approach will consist of working closely with our partners and the developer community to make sure nahmii contains the features needed so those players can build the products they require.
According to your website, nahmii is a layer-2 scaling protocol for Ethereum Blockchain, but what will happen if Ethereum launches ETH 2.0? Is there any effect on namhii from ETH 2.0 ?
This question is answered in more detail later in this document. We are not aware of any aspects of ETH 2.0 that will affect nahmii negatively.
As an investor, what are the benefits of nahmii tokens(NII) & why should i invest in nahmii?
Any NII holdings you have will make you eligible to claim accrued fees from the protocol. If you hold 1% of the released NII during an accrual period you are eligible for approximately 1% of fees paid during that accrual period. This eligibility to claim fees from your NII holdings, combined with an expectation that the value of NII tokens will increase because of the above incentive, provides a compelling reason to invest in nahmii .
Basically nahmii is layer 2 to Ethereum base chain but nahmii also supports multiple chain interoperability over its own layer 2. As a result, can we call nahmii a one-of-a-kind multi-layer sidechain crypto currency?
We simply say that nahmii is a scalability and interoperability protocol. Because of the architecture of nahmii we can easily port it to other blockchains that support smart contracts. Then, yes, within nahmii’s layer-2 we can enable interoperability between blockchains.
Is nahmii limited to only Ethereum or it will work on other blockchains also? If eth 2.0 comes with all solutions that nahmii providing what will be the use cases of nahmii?
Yes, it will work on other blockchains.
It is difficult to assess all the features that Ethereum 2.0 will bring and, most importantly, when Ethereum 2.0 will be completed. It might take years to arrive.
Having said that, we can confidently say that nahmii has features that Ethereum 2.0 will never have. One example is the ability to build solutions that are fully compliant with KYC/AML regulations. More importantly, we do not expect that Ethereum 2.0 will scale to the levels required for commercial adoption.
With the level of efficiency that Nii is proposing, what will the next 5 years look like if you could have your way and your solutions were fully implemented?
Our goal is to provide the infrastructure that powers the upcoming blockchain revolution. In five years time, we see nahmii powered products running everything from financial inclusion projects in Africa to NFT gaming token exchanges. Many of these products can only be built on nahmii, as there is no other way to fix the problems of compliance and performance on blockchain today.
How are traditional businesses accepting your proposals today compared to say 2 year ago? Are you finding them more receptive or at least more informed about the benefits you’re proposing?
Compared to two years ago, almost every business we deal is now genuinely interested in blockchain. That is a marked improvement, most notably in the seriousness with which they are considering the technology. Two years ago in the bull market, blockchain was synonymous with cryptocurrencies. Now it seems that companies are more educated to the extent that they understand the difference between cryptocurrencies and blockchain. This is clearly a positive development for hubii, nahmii and the industry as a whole — it is a clear sign of a maturing market.
“All transactions using nahmii will be processed initially by hubii, who will act as the Operator of the protocol”. This gives me concern about the security of the transactions. How reliable is hubii in carrying out this activity? Won’t there be a breach in the security of the transactions if they need to be initially processed by hubii or how do you ensure a trustless transaction with this process?
First, let’s point to what has been stated elsewhere — that at present nahmii is operating in a ‘trusted’ mode. In this mode, hubii is the only operator of nahmii. Currently, the receipts from nahmii transactions (known as ‘driips’) are not yet broadcast outside of our hubii controlled back-end.
So at present hubii’s reliability should be gauged by how we operate our setup, including the effectuation of driips. On a similar note, operator misbehaviour is risky for hubii as receipts from these driips can be used to call into fraud detection smart contract functions — this effectively stops nahmii from effectuating new driips.
We will, however, go out of trusted mode where driip receipts may be obtained from other registers outside of nahmii. Your latest driip receipt is all that you need in order to settle your nahmii balance through the interaction with nahmii smart contracts. Once we move out of trusted mode, there will be nahmii operators other than hubii who will be able to process driips. Finally, the ability to configure parameters of nahmii smart contracts will eventually be handed over to the nahmii Foundation. This is all part of our clear path towards a more decentralised version of nahmii.