Blockchain implementation predictions for Swace Dapp
In the modern world, where digital communication is rapidly becoming as important as live interaction and where people are increasingly wary of centralized power, the natural direction for technology and finance to take is towards a crypto-economy based on blockchain technology, whose main pillars are transparency and decentralization. However, blockchain in its current form is not universally applicable.
Its dependence on fees for every transaction makes it practically unscalable to platforms built around micropayments, as users are unprepared to be charged for every action they perform on the platform. Besides, the transaction speeds available now are unacceptable for a micropayment scenario. This means that projects such as Swace, which wish to be decentralized but are based on micropayments, must find third-part solutions for adapting blockchain to their needs.
The first issue to grapple with when launching such a project is whether to create a new blockchain or select an existing one. For Swace, the answer is the latter. We have selected to base our platform on the application layer of the Ethereum blockchain. The reasons for this are centered mainly on resource management.
1. Blockchain is a complex technology and developing one from scratch would require a significant investment of time, work, and funds, whereas Ethereum’s blockchain is ready and functioning, with a well-developed infrastructure and a plethora of third-party solutions already supporting its tokens, which enables a variety of integrations.
2. Furthermore, Ethereum has already earned global trust and influence which it lends to the businesses that use it.
3. It is also flexible — its language is easy enough to learn that it can be adapted to smart contracts as complex or straightforward as needed.
The bottom line is that Ethereum is well-established and we can rely on it.
However, Ethereum, like other blockchains, suffers from limitations in speed and high fees for low-value transactions. This is caused by its running on a proof-of-work (PoW) protocol. It is well-known in the blockchain community that Ethereum’s developers are currently at work on two scaling solutions known as Casper and Sharding.
Casper will be a tool designed to convert Ethereum from PoW to proof-of-stake (PoS). This will make the currencies using it vastly more cost effective. As PoS protocols are less protected from malicious miners, Casper will implement additional validation and security measures. This will enable true decentralization, as opposed to the current situation when in fact most of the power is held in the hands of several large mining groups, and collusion is a real danger.
As for Sharding, the notion arises from database technology. In that field, sharding means dividing a database horizontally into smaller, more manageable databases while still retaining the original structure. Translated to blockchain, this will mean that the chain will be partitioned into smaller shards of nodes, where each shard will retain full functionality while carrying its own responsibility. This will mean that the technology will become subject to scaling.
Until these tools are developed, however, Swace will have to use other solutions. We will use Ethereum’s ERC20 token standard to create the SWACE token (SWA). The ERC20 token interface allows for the deployment of a standard token that is compatible with the existing infrastructure of the Ethereum network like wallets, development tools, and exchanges, and it is supported by the third party solutions we will implement to complete the Swace infrastructure and build a decentralized economy.
With the ERC20 tokens in place, we will launch Swace’s beta DApp on the basis of Ethereum blockchain’s application layer and implement challenges created as smart contracts. The verification of these challenges will be based on crowd votes, and we will seek to achieve full automation of the challenges.
Having analyzed the use case scenarios of up to 100,000 users, we will continue to develop and scale our infrastructure using such tools as Raiden. Raiden’s off-chain framework would be a great solution to implement low-fee, fast and private transactions, including micropayments. Although the off-chain solution is not truly decentralized, it will allow us to complete the Swace infrastructure and give added value to our services until Casper PoS and Sharding arrive.
In addition, the Plasma framework (in development by the Ethereum team) will ensure that smart contracts are implemented correctly within the infrastructure, and, possibly, Bancor (a decentralized liquidity network supporting ERC20 tokens), or another solution, will provide continuous liquidity for the SWA token.
With these solutions in place, we will already be able to create a decentralized app with a fully usable, secure, and reliable economy, even while waiting for more advanced technology to become available. We know what technology we intend to create, and we realize the problems and limitations we are facing. True, there is currently no single solution available to satisfy all of our platform’s needs; many things will need to be researched, developed and implemented. Yet we believe that even now our goal of delivering a blockchain-based product is achievable through the use of the tools we have identified.
