Penguin FA — Masari ($MSR)
This article was first released to the CryptoBirb Exclusive Moon Club.
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Table of Contents
Overview
Masari is an open source fork of Monero that was launched in September of 2017. This means that Masari inherits the privacy granted by the Cryptonote protocol and Monero’s Ring Confidential Transactions. Its main distinguishing feature at the moment is its focus on developing scaling technology and its miner-friendly algorithms.
Initially started by Thaer Khawaj as a way to have a project that he could implement his ideas on without having to wait for consensus from Monero’s community, Masari has since started making a name for itself with its implementation of features like WWHM and uncle mining, and plans for some potentially groundbreaking features like Blocktree scaling and Simple Private Tokens.
Developments and features include:
- WWHM and LWMA algorithms for flash mining and attack protection
- CN-Fast and I/O Bound Proof of Work for ASIC resistance
- SECOR and Uncle Mining for increased security and decentralization
- Blocktree Sharding for scaling
- Simple Private Tokens for increased utility
- Real-Time Authorization for fast transactions
For those who are interested, each of these features will be explained in further detail. It is recommended that you at least read up on Masari’s Blocktree scaling solution. Otherwise, feel free to skip ahead to Token Economics.
WWHM and LWMA: Flash Mining and Attack Protection
Masari’s WWHM and LWMA algorithms help the project ensure that the chain remains safe from mining attacks.
When Masari was first released in September 2017, it used Monero’s difficulty adjustment algorithm to make sure that mining difficulty was appropriate for the available hash power. However, because Masari was a new coin, it was backed by far less hash power than Monero.
Soon after the project’s launch, Masari developers realized that a single mining pool was ‘stealing’ blocks through flash mining. Using their high hash rate, the mining pool quickly mined blocks until the difficulty rose in response, then left to mine something else. The remaining miners’ hash power was unable to deal with this increased difficulty, resulting in increased block times, slower transaction speeds, and reduced profitability for miners.
In response, Masari first tried to use SumoKoin’s difficulty adjustment algorithm in their October 5th 2017 release. Unfortunately this implementation failed to solve Masari’s problems.
This led to Masari lead developer Thaer Khawaj’s decision to be the first to implement the Weighted-Weighted Harmonic Mean (WWHM) algorithm as designed by developer Scott Roberts (zawy12). WWHM gives more recent blocks greater weight than older blocks, allowing the algorithm to react more quickly to present conditions.
As can be seen in the picture above, the WWHM algorithm significantly reduced the amount of ‘stolen’ blocks and hash attacks (pink lines in the graph) on Masari. It also allowed them to get very close to their target solvetime. This implementation was a success and helped the crypto community to develop a better difficulty adjustment algorithm. Thaer even submitted an upstream pull request for Monero to implement his WWHM code.
Masari has since moved on from the WWHM algorithm and is instead using the LWMA algorithm which was also designed by Scott Roberts (zawy12).
CN-Fast and I/O Bound Proof of Work: ASIC Resistance
Masari started out using Monero’s version of the Cryptonight proof of work algorithm. Setting up a coin to use the same algorithm as Monero allows smaller projects to easily benefit from Monero’s efforts to combat specialized ASIC miners such as the Cryptonight variant 1, Cryptonight variant 2, and Cryptonight-R releases.
However, using the same algorithm also makes small projects (that aren’t backed by as much hash power as Monero) vulnerable to attacks from any mining pools, rented hash power, and possible ASIC miners that are already optimized to mine Monero. To combat this, many small projects have decided to use modified versions of the Cryptonight algorithm to make it harder for unscrupulous miners to target them.
This is what Masari is also doing. In June of 2018, Masari switched over to their own CN-Fast algorithm, a modification of the Cryptonight variant 1 (v7) algorithm with fewer iterations. The reduced work requirement results in faster hashing speeds, hence the name CN-Fast.
In January 2019 they upgraded to CN-Fast 2, which is Cryptonight variant 2 (v8) with the same lower iteration modification. Since Monero recently released their new Cryptonight-R algorithm, Masari will probably release a another new version of CN-Fast soon.
Masari isn’t going to keep simply modifying Monero’s updated algorithms though. They plan to create a new I/O bound proof of work algorithm that is limited by memory rather than processing speed. This should theoretically give general consumer devices like mobile phones and normal computers a more level playing field when competing with ASICs. No specific details or white paper have been released for Masari’s I/O bound proof of work yet, so for the foreseeable future they will probably continue updating CN-Fast.
SECOR and Uncle Mining: Greater Decentralization and Security
After the introduction of the SECOR protocol in their January 2019 update, Masari became the first Cryptonote coin to support ‘uncle mining’, which rewards miners who submit orphan blocks.
An orphan block is created when two miners submit valid blocks at similar times. Normally the first of these two to get a new block attached to it will become the ‘winner’ and rewarded, while the other will be discarded as an orphan block with no reward given. This gives miners or mining pools with greater hash power an advantage over solo miners.
With uncle mining, Masari rewards the miner of the orphan block and adds it to the chain. This gives the chain more ‘weight’, which is now used by Masari during block reorganization. It also encourages decentralization as individual miners can also get rewarded for their work even if they are not part of a mining pool. The added security introduced by uncle mining has also allowed Masari to reduce their blocktime from 120 seconds to 60 seconds.
Simply put, the uncle blocks are used by Masari to help secure the blockchain and the miners are rewarded for it.
Uncle mining rewards are given independent of the regular block reward. Uncle blocks receive a reward equal to 50% of the normal block reward while nephew blocks (the block after the ‘winning’ parent block) receive an additional 5% on top of their regular block reward.
Blocktree Sharding: Blockchain Scaling Solution
In order to handle a large number of users, a blockchain needs to be able to scale. If you tried to send a Bitcoin transaction at the height of its popularity near the end of 2017, you may have experienced high transaction fees and excruciatingly slow transaction times. This happened because miners were unable to process the large amount of transactions waiting in the mempool. Masari aims to solve this scaling issue by developing their Blocktree sharding technology.
Blocktree is a proof-of-work sharding solution that will allow Masari to split their blockchain into multiple sub-chains if a large backlog is detected in a certain number of recent blocks. Instead of everybody working on the same chain, miners divide the work among multiple sub-chains. Each sub-chain will be responsible for processing transactions that meet different criteria. Once the number of pending transactions goes back down, the number of chains can be reduced again.
If splitting chains increases transaction speeds, why would Masari want to go back down to fewer chains?
Splitting transaction processing among sub-chains is faster, but it also forces the hash power to be divided rather than focused on securing one chain. This is why the first version of blocktree will require periodic checkpoints to help protect subchains from attacks.
Dividing the hashing power can also result in one sub-chain being more secure than another if miners do not evenly distribute their power among the chains. To prevent this, mining difficulty will be adjusted to make mining on the ‘weaker’ chain more profitable than staying only the ‘stronger chain.
To summarize, Blocktree will allow Masari to split miners’ processing power when required and massively increase their ability to scale. This should be the next major development to watch out for. If they are successful, Masari could become a real on-chain privacy-preserving payment solution that can actually handle real world use.
Blocktree sharding is currently in development. A white paper for Blocktree is due to arrive in Q1 2019.
Simple Private Tokens: Increased Utility
After increasing the network’s scaling capacity through blocktree, Masari plans to allow users to create their own Simple Private Tokens, which can then be used while under the protection of Masari’s privacy features. These tokens will be simple because they will not be smart contract-enabled.
The intention is to enable users to easily create tokens in their wallets that can be used to represent anything that they want, without having to learn how to code. Everybody from companies trying to issue shares to ticket sellers will be able to easily benefit from the security of blockchain technology without compromising their privacy.
Fast Transactions: Real-Time Authorization
Masari also has plans to create a real-time authorization solution that would allow merchants to accept payments that have been received by certain amount of nodes but have not yet been completed on the blockchain. This would make it less secure, but the tradeoff would allow users to make payments without waiting for minutes or several hours for confirmation.
Real-Time Authorization would be a further step towards making Masari ready for real-world use. However, unless another developer decides to pick this up, Masari’s focus will likely not be on RTA for the rest of 2019.
Token Economics
Masari started with no ICO and a small pre-mine that comes to about 100,000 MSR or 0.5% of total supply. The small pre-mine comes from mining done primarily by lead developer Thaer before it was announced on Bitcointalk. This means that we can be reasonably assured that the developers do not have an unequal share of the coins. However, because of Masari’s privacy tech, we are unable to look at addresses to get an exact idea of the current token distribution.
Masari’s emission curve is basically the same as Monero’s, with some differences due to uncle mining rewards. The max supply will be approximately 18.5 million MSR which will be reached in 10 years. There is currently over 10 million MSR in circulation. Once the max supply is reached, Masari will continue to produce more coins with a small tail emission of 0.3 MSR per minute or less than 1% inflation per year. This tail emission will give miners a reason to continue securing the Masari blockchain.
The current reward is about 8.25 MSR per block, with an extra 55% of the block reward being created whenever uncle mining occurs. Updated block reward numbers can be found at the Masari Web Wallet page.
Overall Masari has relatively low inflation, though long term holders may want to keep an eye on the team’s anti-ASIC and flash mining efforts to ensure that nobody is getting an uneven share of MSR tokens.
Token Utility
MSR is currently used to reward miners and help fund development. For example, 15k MSR was sold in July 2018 to help pay for development costs.
It can currently be used as a currency for private transactions. If they complete Blocktree then MSR will be able to be used for large amounts of fast private transactions.
Future developments like Simple Private Token technology may require the use of MSR in some way.
Team
Thaer Khawaja
Lead Developer
Masari’s lead developer Thaer Khawaja has a Bachelor’s degree in Computer Science and has worked in software development and data engineering since 2014. He did not have any blockchain-specific experience prior to launching Masari.
Thaer declared on Twitter that he would be working on Masari full-time starting September 3rd 2018. However, his money ran out and he was forced to get a full-time job in January 2019. This leaves him with less time to focus on developing Masari and forces him to prioritize development of key features like Blocktree over others.
He currently works as a Senior Software Engineer at Postmates Inc., an on-demand logistics service.
While Thaer’s background in software is somewhat reassuring, he is relatively lacking both in terms of blockchain and leadership experience, though he has somewhat proven his skill with his ability to implement the WHM difficulty adjustment algorithm.
Cryptochangements
Back-End Developer
Cryptochangements has been working on Masari ever since its launch in September 2017.
He has no LinkedIn profile available but his Github is fairly active and shows that he constantly helped Thaer with development of Masari’s code.
He has also been involved with the Monero Integrations project, helping to develop ways to easily accept Monero payments online through plugins and platforms like WooCommerce and Wordpress. This experience should prove helpful when Masari decides it is ready to further expand its own integrations.
Gnock
Front-End Developer
Gnock also has no LinkedIn available so we will have to analyze his Github, which started showing serious activity in 2018.
He worked on the Masari Explorer and Mobile Wallet, and also worked with Cryptochangements on projects like the Masari web wallet, WooCommerce extension, and Masari oneclick miner. He is also developing Ledger hardware wallet support for Masari.
Nicholas Quick
Communications Director
Nick studied science and business and administration in college. His work experience is in various retail, hospitality, and business positions.
Nick recently put together plans for solar-powered mining services in self-storage facilities for his former employer. While putting this together, he talked with local miners in Denver to talk about their needs and gauge their interest. Though these plans were never actually set in motion, this does show that Nick has some understanding of cryptocurrency and mining. This experience and knowledge should also come in handy when trying to promote Masari to the mining community.
Nick helped to design Masari’s Collaboration Corner, an initiative to help decentralize the leadership of Masari’s development and encourage cooperation between different groups in the community.
BazookaJeff
Marketing Director
BazookaJeff has no LinkedIn profile available. He coordinates and works on Masari’s marketing efforts, creates promotional graphics, manages the Masari subreddit, and also contacts exchanges to try to get Masari listed on more markets.
Overall Team Evaluation:
Although the Masari project was launched with no real blockchain experts on their team, they still managed to develop some features that were Cryptonote firsts, like the WWHM difficulty adjustment algorithm and uncle mining.
The team is relatively small and all developers are currently working on a part time basis. The next step on their roadmap, Blocktree Sharding, is their most important one and will truly distinguish Masari from its competitors.
With Thaer being forced to go back to a full-time job though, development on other features like Simple Private tokens or the new proof of work algorithm will be slowed down significantly. Cryptochangements and gnock, though immensely helpful, also need to fulfill obligations at their day jobs in order to pay the bills. Unless MSR prices rise sharply or more skilled developers decide to join the project, progress on Masari’s promising planned features will not be as fast as they could be.
Masari posted on Twitter in February that there was 12,000 MSR in the dev fund, which at current prices is only just over $900 USD. This will not be enough to attract new developers or allow anybody to work on Masari full time. On the other hand, Masari’s dev fund was never very large to begin with. Additional funds can still come in through donations from mining pools and the community.
Despite this lack of funding, the Masari project has already been able to make significant progress through the dedication and efforts of its core team members and community. As a community driven project, continued work on Masari will either have to be funded by donations or done by developers who truly believe in the long term vision of the project rather than those looking for short term employment.
Roadmap
So far Masari has already released many features and applications.
Completed milestones and features include:
- WWHM and LWMA Difficulty Adjustment Algorithms
- Android Mobile Wallet
- Web Wallet
- CN-Fast and CN-Fast 2 Proof of Work
- Uncle Mining
However, they still have many significant milestones that will require much more coding to achieve, including:
- Ledger Integration
- Blocktree Sharding
- Simple Private Tokens
- Real-Time Authorization
- I/O Bound Proof of Work
The closest upcoming price catalyst to look out for is the release of Masari’s Blocktree Sharding white paper, followed by the release of Blocktree. The team has already been able to accomplish a lot, but a successful implementation of sharding on Cryptonote is no small feat. If they are successful, the value of MSR should increase greatly.
Competition
As Masari’s main focus is on being a scaleable private coin, we should compare it with other major and scalability-focused private coins. Here is how Masari compares with some of the competition.
Masari forked from Monero and still incorporates Monero’s updates in its code (e.g. creating Cn-Fast by modifying Monero’s Cryptonight releases). It has also proposed an upstream contribution back to Monero. This is a sort of mutually beneficial relationship where both teams can help each other develop so they aren’t strictly competitors, but someone looking to conduct private transactions or mine a privacy coin could pick Monero over Masari.
Monero is a well-established privacy coin at this point, with a large community that can help contribute to development and fund proposals. It was launched in 2014 and is still here, which gives it a lot more credibility. It also has a large amount of miners helping to secure its blockchain, as can be seen in the large difference between Monero’s network hash rate compared to Masari’s. However, the large size of its community means Monero can be slower to adopt new changes.
Compared to Monero, Masari is a relatively small project with a small community. It has fewer contributing developers and less available funding. Masari also has far less hash power than Monero, though miner friendly features like uncle mining and flash mining protection should help to attract more people from the mining community. Masari’s small size also makes it easier to adopt new changes or pivot to a different technology if required. If planned features like Blocktree Sharding and Simple Private Tokens are achieved, it could draw more attention and start to become a real contender in the space. As a relatively young project, Masari has greater potential for growth and may be more interesting to those looking for a long term investment with greater potential return.
Aeon is a fork of Monero that launched in 2014 and focuses on usability. Headed since April 2015 by Monero developer iamsmooth, Aeon has a more lightweight blockchain and allows for pruning to keep the blockchain size small. It also has the option to turn privacy off for faster and cheaper transactions.
Recently, Aeon has been having difficulty attracting more contributing developers and development has stagnated somewhat. Aeon developers are currently considering abandoning ASIC resistance and moving to a more ASIC-friendly proof of work, which would help to distinguish it from Monero. Embracing ASICs should increase the hash power backing Aeon but may make it more centralized.
Monero will enable pruning soon with release 0.14.1, which means Masari will be able to have pruning as well. Combined with the addition of Blocktree sharding, Masari should become far more scaleable unless Aeon comes up with some other new tech.
Zcash launched in 2016 with the goal of enabling private transactions through the use of zk-Snark technology. They have an impressive team of scientists and engineers working to constantly upgrade and improve it. The project is well funded through a Founders’ Reward that awards them 20% of block rewards for the first 4 years.
Zk-snarks has been criticized as being too computationally expensive, which discourages users from using Zcash’s private transactions, though their Sapling upgrade has improved this greatly.
They are currently researching several ways to improve scalability, including the Lightning network inspired Bolt for off-chain private transactions and succinct blockchains.
Zcash is a very well-established player in the privacy coin space implement quite cutting-edge privacy technology. It has a large dedicated team of professionals working on it and sufficient funding to sustain development. With its smaller development team, it is unlikely that Masari will completely overtake Zcash, but a scaling solution like Blocktree is not yet something the Zcash team have been able to implement.
In terms of investment, Zcash is definitely the safer choice but Masari offers the potential of a greater return on investment if they manage to achieve their goals.
Mimblewimble Coins: Grin and Beam
Mimblewimble is a protocol that allows for privacy with hidden amounts and no addresses. It also greatly increases scalability by discarding information from past transactions. However, the lack of addresses means that both the sender and receiver have to be online in order for a transaction to work.
Mimblewimble made a big splash in January 2019 with mainnet launches coming from two projects focused on implementing this protocol— Grin and Beam.
Grin has a decentralized, community-based model of development and will strive to be ASIC resistant. They do not yet have an official way for users to send transactions without both parties being online. It has no maximum supply with its constant emission rate, which means it is designed to be used rather than hoarded.
Beam received VC funding and will be receiving a share of block rewards for five years in order to repay investors and incentivize the team. They plan to be ASIC resistant for only 12–18 months. Beam developed an SBBS system to get around requiring both users to be online for transactions, though transactions currently time out after 2 hours. It also has an opt-in Auditability feature to allow users to reveal transaction information to auditors.
By launching on a protocol that has an inherently lightweight design, Grin and Beam have a head start on Masari in the scalability department.
Beam’s VC funding will give it a significant advantage over both Grin and Masari in terms of development speed.
Masari’s Cryptonight and RingCT-based privacy is arguably more secure than Mimblewimble, but not as fast. Monero is looking into eventually implement Mimblewimble as a sidechain to give users the option of faster transactions with lower security. Since Masari incorporates Monero updates, this could mean that Masari could also eventually get Mimblewimble capabilities in the future.
Conclusion
Masari is a relatively small player in the privacy coin space focusing mainly on scaling and usability. They have accomplished a lot considering their small development team and limited funding. Their plans, if fully completed, would result in a privacy coin that would be much better able to handle real-world use than many competitors.
To date, they have managed to implement some innovative ways of securing their blockchain and increasing decentralization of mining, but have not yet completed the features that would make them truly unique, including their Blocktree scaling solution and Simple Private Tokens.
Masari has a promising vision but development progress could be somewhat slow since the project does not have enough funds to support full-time developers or pay for marketing and exchange listings unless the community funds them. However, the team have demonstrated their commitment by continuing to work steadily on Masari over the past year and half. At this point their main focus this year will be on completing Blocktree.
If you are interested in investing in a privacy coin, Masari has the potential to provide some great returns. In the short term, a white paper for Blocktree is due soon and is a potential price catalyst. Medium to long term investors should be looking mainly for any progress Masari makes towards completing Blocktree sharding.
Recommended Resources
Masari Official Introduction Post:
Hashing it Out Podcast #14: Thaer Khawaja
https://thebitcoinpodcast.com/hashing-it-out-14/
Interview with Thaer Khawaja
https://btcmanager.com/interview-with-thaer-khawaja-lead-developer-of-the-masari-project/
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