A new blockchain-free cryptocurrency is in its initial launch preparations by a seasoned researcher that’s behind two influential papers in the field of crypto-economics.
Yonatan Sompolinsky’s new project aims to solve the industry’s biggest obstacles: the speed at which transactions are dispersed and recorded by distributed ledger systems. Sompolinsky plans to release this unnamed project in the later months of 2018. He is also the author of the GHOST protocol and co-author of SPECTRE protocol.
Founders of the developing project include the researcher Ethan Hileman, who worked in the team behind Tumble bit and SPECTRE’s co-author Yoad Lewenberg. Business expert and former CEO of the bitcoin mining firm Spondoolies-Tech, Guy Corem, has linked with the project and brings value as he raised $12 million in venture funding for his last project.
The group has organized a new startup called DAGlabs, which plans on raising $15 million in their series A round.
However, the project’s vision is the standout here and how they plan on executing it.
The public cryptocurrency won’t be using a blockchain system, rather, it will operate via a system called a direct acyclic graph (DAG). Sompolinsky’s technology is fixed as a way to finally create a viable payments rail with distributed ledger concepts.
In an interview with CoinDesk Sompolinsky states:
“We want to change blockchain into blockDAG. Whether you buy coins or not, you should think about this technology as the next step, releasing the blockchain from the naivety of the chain structure. You will feel this is the natural step towards using a real system.”
The new cryptocurrency will use a proof-of-work mining algorithm in which anyone who purchases the hardware can compete for its rewards. With that said, Sompolinsky doesn’t view bitcoin and the other proof-of-work cryptocurrencies as its competition. He feels their new platform is very niche, specific, and well defined.
Sompolinsky, states that their new project is also an analysis of the current state of blockchain development. He feels it is being held back by hidden conflict amongst developers in the community.
In his interview with CoinDesk, he cited a particular experience in which he encountered arguments about capacity levels on Bitcoin. He explains that scalability solutions are pushed without a change to the first layer and foundation of the system, the blockchain itself. Last year he attended the Satoshi Roundtable summit, an invite-only event in Cancun, Mexico and recalls a situation in which he was floored by the chaos of the conversation.
“Cancun was an eye-opener for me. In Mexico, everyone was fighting about 1MB to 2 MB… no one was talking about increasing on-chain scalability,” he stated.
Sompolinsky is devising the new cryptocurrency to be a “vehicle” to enable researchers to take the necessary steps to evaluate this line of exploration. He thinks it will highly benefit from being tested under open market conditions.
On years of accumulated research, he is differentiating his project on their way of soliciting market funding. They plan on taking a different route from the ICO model used for untested concepts.
“There are not 800 projects that implement a concept like DAG. Very, very few, maybe less than five that I know of, try to scale up the layer one. There are not 800 projects that say we should abandon the concept of the chain in favor of a graph of blocks,” he states
When all is said and done, the finalized network should appeal to anyone wanting to use a cryptocurrency with “very fast confirmation and low fees.” According to Sompolinsky, there are still plenty of items up for debate.
He is still open-minded as to how they will structure and are strongly considering the Zcash model where investors are given tokens in stages of their continued support.
However, even the seasoned vets in the world of cryptocurrency may see this concept a bit odd. The “underlying blockchain technology” was praised as the real superstar, after the cryptocurrency hype died out.
In Sompolinsky’s earliest work, his main focus was on better optimization of the process of ordering transactions into blocks and then selecting one to add to the chain. In his SPECTRE concept, blocks are created at the rate of 10 per second. All of these blocks are referenced in a “DAG” and various interwoven threads of blocks are created. Then, the most valid transaction history is “voted” in by miners selecting the most inter-referential block graph.
This process allows high-quality transactions to be performed and thus, the transaction history will not be permanently stored. Rather, the history will only be stored for a limited amount of time and once validated it will be removed.
The DAGLabs team intends on addressing potential congestion and bandwidth complications but building incentives encouraging participants to behave justly.
The foundation of the project is in motion but there are a few obstacles needing to be fleshed out by the team before the cryptocurrency can be taken to market.
The final protocol will be showcased in an upcoming white paper named SPECTRE2. The new technology will begin testing in the fall of next year and by winter, the new cryptocurrency should be launched to the public.
They are excitedly working on combining the SPECTRE cryptocurrency with MimbleWimble, the private cryptocurrency that has been buzzing around the community. DAGLabs also would like to implement DAG-based smart contracted to be embedded in their platform.
The “big picture” they are veering towards is as enthusiastic as the cryptocurrency itself. Once they have the cryptocurrency functioning, they have the vision set on allowing their DAG software to assist in “merged mining.” They hope it could be the underlying hardware able to support a number of cryptocurrencies all at once.
The way Sompolinsky intends on launching this project with years of research and deep bedded engagement with the open source community is what he wants to be the focal point of consideration. He views the approach as a “respectable” path to market.
He concludes his interview with CoinDesk by saying:
“The easy path for me was to do an ICO; way easier than what I’m doing now. I’m going for the more respectable path of an equity.”
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