Introducing Oracles Network
Open, public, permissioned network based on Ethereum protocol with Proof of Authority consensus, reached by independent pre-selected validators.
Oracles Network Is Coming…
Welcome to Oracles Network Medium. In this blog, we will share the project’s updates, our vision, mission, as well as the thoughts on the industry’s developments, potential threats and opportunities.
But first things first…
We are excited to announce our project, Oracles Network, and we are releasing our first draft of the whitepaper for the community to review.
Oracles Network is open, public, permissioned network based on Ethereum protocol with Proof of Authority consensus, reached by independent pre-selected validators. We envision Oracles Network as a first step towards realizing our vision of horizontal blockchain scalability by creating a swarm of blockchains with Proof of Authority consensus, connected by interledger protocols, like Polkadot. Designing such ecosystem has a potential to resolve the issues of transactions speed, blockchain throughput, and cost of networks.
Yes, but why:
Let’s do some simple math. By 9/27/2017 miners generated 22,839,884.9 ETH as Mining Block Rewards and Mining Uncle Rewards combined for securing the network. There have been 62,343,133 transactions on the network. So, on average, security of a transaction in the main Ethereum network costs around 0.36ETH (22,839,884.9/62,343,133). It would be a gross overstatement to use the number as any kind of benchmark, given that ETH-denominated reward per transaction has significantly decreased over time while the ETH price has increased. However, if we can assume that the miners tend to hold on to their mining rewards in ETH, the fiat value of such rewards, including on per transaction basis, is non-trivial. Though also not a perfect method, calculating average transaction rewards for each specific month with relevant USD/ETH exchange gives a range of $2.5-$34.9 cost per transaction.
As the number, of course, is changing overtime, and, though an average transaction value is currently around $9K (9/27), the median transaction value of $15 (9/27) puts an interesting perspective on the security costs.
Oracles Network is our vision of solving the problem of public networks’ expensiveness, while also improving their speed. Oracles Network makes smart contract platform cheaper and faster than Proof of Work predecessors.
We can think of Ethereum as a plane that everyone wants to get on. For the comparison’s sake, let’s ignore the complications that regulations of specific countries place on airlines and look at it from purely market perspective. The plane is secure, but it can take only that many passengers on board. As the result, the tickets are expensive.
There are a few ways to solve this issue:
First, make a bigger plane. It will take more people, but the maintenance and security costs of such a plane will increase as well. So the price of a ticket will not necessarily go down. And soon, as more people want to travel, even a bigger plane will not be enough, and we will find ourselves dealing with the same problem again. This is an equivalent of a larger block.
Second option — let more planes fly. This would allow more traffic through the air, but some planes would definitely be less secure than others. Moreover, if they all fly by their own rules and cannot communicate with each other, that would be a mess. This is an equivalent of creating more chains or altcoins. In his talk about “The Data Availability Problem” at Stanford, Vitalik Buterin said that scaling blockchain by creating altcoins is an incomplete scaling paradigm.
“The problem is each and everyone of these chains is going to have … lower security. If you look at the TrumpCoin where the market cap is something like six hundred thousand dollars probably any single one of you could, if you really wanted to, afford the money to personally run 51% attack on the network.”
And finally — create the unified rules that govern how planes fly. If many planes can follow the common set of rules and have their pilots’ identities and qualifications known, that would mean we can fly more planes with more people. And implementing realms of chains with Proof of Authority algorithm, connected by interledger protocols, is our vision of that.
We believe that a group of private actors on public duty can secure consensus of open permissioned network.
Proof of Authority:
Proof of Authority (PoA)(not to be confused with Proof of Action or Proof of Asset) is a straightforward and efficient form of Proof of Stake, which uses a set of “authorities” — nodes that are explicitly allowed to create new blocks and secure the blockchain. Ethereum testnet (Kovan) runs on PoA consensus algorithm.
In PoA, a validator is not required to hold a stake in the network. He or she is required, however, to have a known and verified identity. By staking this identity to secure the network in exchange for the block rewards, a validator is dis-incentivised to act maliciously or to collude with other validators. With on-chain governance in place, malicious actors can be removed and replaced. Existing legal anti-fraud guarantees are used to protect participants of the open network from malicious actions of validators.
In the Oracles Network, PoA consensus is based on the special kind of independent validators. Each of them is required to have an active notary public license within the United States. Public notaries undergo verification via the Oracles identity DApps, followed by the initiation ceremony to receive the keys, allowing them to secure the network. Any new specialized network on top of Oracles Network can use the same validators or have its own set of validators with any other other kind of verifiable license.
To better understand the validators’ role and the consensus mechanism, watch the video interview of Oracles Network founder, Igor Barinov with one of the validators, Dr. Jeff Flowers:
Here is what you can create with Oracles:
Oracles Network’ core layer is comprised of (initially) twelve respectable individuals securing the network. It is designed as a general application blockchain. I.e. what can be done on Ethereum network, can also be done on Oracles Network. Organizations can quickly and inexpensively build other specialized networks on top with the same or different set of validators, based on Oracles Network’s ceremony and governance. Developers can deploy DApps using our PoA chain. We support cross chain transactions using Parity bridge. The first app to implement Ethash — PoA bridge is the ICO Wizard. We envision the most immediate use cases of PoA based open networks in identity (obviously, because it’s a part of our consensus), tokensale campaigns, real estate transactions just to name a few. You can check out some of the DApps we have already built to support the setup of the network here: https://oracles.org/apps
Enabling a quick creation of multiple networks governed by the similar rules, Oracles Network hopes to become a horizontal scalability solution and a building block for the internet of blockchains.
We are looking forward to sharing more details about the consensus mechanism, our roadmap, long-term vision, and our exciting partnerships. Stay tuned!
In the meantime…
Join us here:
- Oracles Network Forum — we discuss our progress updates, answer questions, reply to your feedback;
- Follow our official updates via Twitter ;
- Let’s chat on Telegram
We welcome ideas and feedback from the community and are open to collaborations!