The rise of the distributed ledger platforms

An overview of the current non blockchain type crypto platforms aka DCTP*

Lucas Huber

*  DCTP (distributed crypto transaction protocols), Yet there is no common term for this very new type of non blockchain distributed ledger platforms. Others referring it as Digital contracting.

The term distributed ledger platform was introduced by Richard G Brown in the introducing R3 Corda blog article.

There were few revolutionary developments in the blockchain space in the few years after Satoshi Nakamoto published his paper on the subject on 31 October 2008 to give birth to the bitcoin currency.

But since 2015, the space has exploded. Now in 2016 we can look back and see a pattern of evolution beginning to take shape. Beginning with Bitcoin and its Altcoin offshoots, all variants of the blockchain used for some sort of currency, 2015 has seen the rise of platforms such as Ethereum and Eris that use the blockchain to enable smart contracts. The next step emerging from this evolutionary process at the beginning of 2016 appears to be non-blockchain based crypto platforms that promise to deliver their functionality without the need for the shared distributed ledger that is the blockchain.

To understand how incredibly quickly this evolution in crypto platforms has occurred over the last two or three years, I’ve subjectively divided this progress into three phases.


Generation

Consensus mechanism

Implementation examples

Other characteristics / remarks

1

Proof of Work

Bitcoin / Altcoin

Non Turing complete, very limited scalability, focused on currency transactions

2

Proof of Stake

Validating servers (Ripple)

FBA/SCP (Stellar)

Ethereum / Eris (Tendermint)

[Ripple and Stellar not Turing Complete, no smart-conctracts]

Turing complete, scalable (still limited), smart-contract enabled, multi-purpose use cases (in this generation a very broad range of platforms with different technologies can be listed)

3

Paxos like,

or not applicable

Ceptr, Fermat, Pactum, Corda (R3)

[Interledger, BigchainDB]

No shared ledger, Cryptographically interlinked and signed protocol between each node or endpoints

The caveat to this chart is that because none of the phase 3 “non blockchain crypto platforms” or protocols are available in a stable version and therefore far from being used in the real world, it’s not really possible to comment on their pros and cons as well as how they differ in terms of scalability, security and other service level characteristics.

But what we CAN comment on are the intended aims of each of these phase 3 platforms. Ceptr represents what its developers call [or is this your term?] “Distributed Receptor-Based Computing”, a term for what they believe is a promising approach to defining executable instructions as part of an agreement between two or more parties in more natural human language and with the capability to perform this computing in a fully decentralized way. Fermat appears to be the first platform that will deliver a complete development framework for non-blockchain crypto platforms. In other words, it aims to have the capability to embed instructions into the ledger agreement in a Turing complete language. In this sense it can be compared to the Ethereum network but without the need of one single shared ledger. However, though Fermat is decentralized it cannot run fully disconnected since it still requires a network of server nodes to running whatever applications are distributed across it’s nodes, and these nodes still must coordinate using a Proof of Work consensus mechanism, particularly since at the moment they are still using the forked Bitcoin blockchain for all Fermat token transactions, though they plan to integrate other Crypto and FIAT Currencies as well at a later date.

Pactum, initiated by the founder of Bitsapphire, exists for the public only as a vague concept. But there is a inofficial whitepaper. Pactum shares some similarity with the Interledger protocol, described below, but is is not designed to transact asset but designed to build all purposes platforms as Fermat. Pactum assumes the existence of a Content Centric Networking system such as IPFS. On top of this it builds a decentralized Merkle tree (not stored in one blockchain instance) with Pactograms, as building blocks, could turn in something versatile as Ceptr or Fermat too,

This scheme shows a part of a simple (horizontal) merkle tree. Each information block in Pactum can reside on an other state-machine (node) and data between are packed in Pactograms similar as TCP in the Internet. In cryptography and computer science, a hash tree or Merkle tree is a tree in which every non-leaf node is labelled with the hash of the labels or values (in case of leaves) of its child nodes.

However, Corda is a special case whose purpose is mainly to transact assets and contracts between Banks or other financial institutions. So it is understandable that the range of use cases will be quite limited. Likewise, Interledger is solely designed as a protocol to move assets between ledgers. As such it is not strictly comparable with the other third generation platforms. Being a protocol in the first place and not a platform, [I like to call it an “interwoven crypto-platform enabler”.


BigchainDB is also not a platform. Instead it is the first highly scalable blockchain implementation built upon BigData (NoSQL) technology. Though for scalability BigchainDB doesn’t share all ledger data on every node, at the same time the underling consensus protocol avoids any compromises to security that would result from allowing the ledger data distribution to be dependent on the business or data exchange logic. Unlike other blockchains where every (full) node has a full copy of the entire blockchain, BigchainDB nodes only have a subset of the blockchain (a "shard"). Each shard is stored on a primary node, and it can be copied (replicated) on other nodes. So there is some replication for fault tolerance. The amount of replication is dependent on the configuration of the replication factor.

Each of these upcoming phase 3 platforms are in their early stages so any prediction regarding how any of them will evolve is highly speculative. In fact, we are only now seeing the first smart-contract apps are going into productive use on phase 2 platforms. There are still many issues to be addressed before these applications can be brought to the off-chain world of phase 3 platforms.

However, an excellent overview of what smart-contracts are and are not capable of can be found at this article here: https://www.linkedin.com/pulse/smart-contracts-now-aron-van-ammers?trk=hp-feed-article-title-like.

Here is an overview of all so far known to the author of 3rd generation platforms:

Name

URL

Use cases

Other characteristics / remarks

Ceptr

http://ceptr.org

Potentially unlimited

Distributed Receptor-Based Computing

Fermat

http://fermat.org

Potentially unlimited

Complete platform agnostic clients available. This clients enabling the communication of the apps to the network.

Pactum

?

Potentially unlimited

No shared ledger, cryptographically interlinked and signed protocol between each node (endpoints)

Corda (R3)

http://r3cev.com

Transaction of assets and contracts

Bank consortium

Interledger

http://interledger.org

Connecting ledgers

W3, Community Group to create an open, universal payment scheme built on Web standards

BigchainDB

http://bigchaindb.com

Payment, High capacity (Big Data) blockchain

Scalable high throughput blockchain, Interledger protocol is integrated

Openchain

https://openchain.org

Enterprise blockchain

Instead of one single central ledger, each organization controls their own Openchain instance. Instances can connect to each other.

D-Cent

http://dcentproject.eu

Potentially unlimited

(community related)

D-CENT is a Europe-wide project creating open, secure and privacy-aware tools for direct democracy and economic empowerment.

Backfeed

http://backfeed.cc

Potentially unlimited

(community related)

Build for decentralized value distribution system to support large scale, free, and systematic cooperation

For an introduction explaining what a smart contract is, take a look at this video here: http://moneygrid.net/slides/slide/simple-introduction-to-smart-contracts-on-a-blockchain-9

In my next article I talk about how these phase 2, and upcoming phase 3 platforms might be utilized, to develop “smart contracted money creation” applications into a moneygrid style currency network. The moneygrid network allows exchange between genuinely not compatible currency exchanges (ledgers) with the help of a protocol as Interledger.


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