Disruptive technologies are taking a quicker course than expected. And blockchain is definitely a proof of this, as it is set out to revolutionize all industries. Being the power source of cryptocurrency, its convenience and uses have proved to be seemingly endless. From asset management and trade processes to government processes and healthcare - blockchain’s hundred-fold forms of application have spawned the emergence of platforms and protocols with a vision to penetrate a variety of businesses and institutions.
Through the birth of Bitcoin, an industry awash with talks of the blockchain technology and its potential impact has emerged. Bitcoin is indeed the cryptocurrency - a visionary platform that has forever transformed disruptive technology and has summoned the rise of other cryptocurrencies, such as Ethereum, Litecoin and Ripple, among others. However, despite its heavy influence, there are still gaps to fill in on the current blockchain technology, including the Bitcoin revolution itself.
To answer this need, many have taken the shot for a more cutting-edge alternative to the current trends in blockchain technology. The call for a more secure blockchain platform has echoed globally, thus giving birth to platforms and protocols that aim to be where Bitcoin has never been to yet - a noble ambition for a financially orthodox world that is in need for a deeper understanding and confidence in blockchains and cryptocurrencies.
In this same endeavour, Ociter was developed upon continuous research in order to build a more efficient, secure, and scalable blockchain platform.
Cryptocurrencies and blockchain technology are playing an increasingly important role for a myriad of institutions. Its intricacy is not to be undermined. However, through thorough efforts, a global understanding of blockchain technology can take disruptive technologies to a higher level of human understanding.
To decode the future of blockchain is the ultimate Ociter purpose.
"To become a fast, if not the fastest, superblockchain platform."
The Ociter vision started two years ago. It was designed carrying an understanding of both a technical and more importantly, on a human level. During its beginnings, and in its motivation for greater knowledge in using cryptocurrencies, engineering a platform that aims to utilize only the best of the blockchain technology is the driving force for Ociter, with core values to help shape the future of blockchain.
Ociter believes that a secure, flexible, and scalable blockchain platform for use as a potential possibility. To achieve major innovation that will balance the needs of users and members of the integrated system is what Ociter envisions. In order to do so, a scheme of regulated computing shall be utilized in order to bring larger financial involvement by providing open access for all to a fair and just financial service.
However, to create the future of blockchain, an understanding of its history and significance is needed.
Cryptocurrency is the coexisting entity to Satoshi Nakamoto’s greatest contribution to financial technology - the Bitcoin. Bitcoin is a peer-to-peer electronic cash system which enables decentralised consensus. Cryptocurrency is a part of this innovation; a medium of exchange, stored in the blockchain that uses encryption techniques.
What fuels cryptocurrency is the blockchain - a decentralised database that stores cryptocurrency transactions. Its name is derived from the clustering processes of transactions into blocks. During the process, each block, except for the first, backtracks to a previous block. Each node in the network has its own copy of the blockchain and is synchronized with other nodes using a peer-to-peer protocol.
However, since the blockchain is decentralised, a false version of a transaction can be produced without the user’s knowledge. Thus, it requires certain techniques and algorithms to ensure security when transactions are in process. For example, Bitcoin uses a Proof of Work (PoW) algorithm as a security protocol where “miners” (cryptocurrencies are “mined” in order for transactions to take place under this algorithm) need to solve a complex mathematical problem in verifying transactions. In turn, the first miner to crack the puzzle will be given a block reward.
Ociter, on the other hand, employs a Proof of Stake (PoS) algorithm in verifying transactions on the blockchain. In equivalence to PoW’s “miners”, the “forgers” (sometimes called “validators”) create new blocks in a method that relies on the forger’s significant amount of stakes. Instead of block rewards, transaction fees are forwarded to the forgers once a transaction has been validated.
A blockchain attack will only be successful when the attacker influences the system by manipulating the consensus, controlling 51% of the total computing power.
Currency is powerful. And it is further advancing. From the humble processes of barter trade to the ever-changing value of coins and banknotes, currency demands to be recognized.
Today, the world is acquainted with cryptocurrencies - the most recent evolution of money and one of the most astounding products of technology. The use of cryptocurrencies and the familiarity to blockchains have proposed a certain notion that one day, banking through traditional monetary systems may face obsolescence.
Time-honoured currencies in the form of coins and banknotes have gone a long way in the world’s commercial functions. Their exchange values continue to rise and their physical merit is viewed reliably in the processes of trade and commerce. Hence, fiat currencies have found and established their position in human reality.
The emergence of blockchain technology and cryptocurrencies is seen as a brute force in the field of orthodox financial systems. With the speed that it is currently moving, many international legislative bodies have debated whether or not there is a need to regulate the use of cryptocurrencies and their disruptive properties.
Regulations reflect a certain stand on the use of cryptocurrencies. Currently, cryptocurrencies are banned in six countries, including China and India. Consequently, instead of submitting to legislation, the option to design a platform that bypasses common financial principles and regulations to let cryptocurrencies flow freely without restraints can be dangerously tempting.
Towards the rise and popular use of cryptocurrencies is a certain stigma that has been caused by its even more popular flaws and failures in the past. The blockchain is nothing more than a fad in the world of financial technology. Additionally, many understand the frailties that one can fall into in blockchain transactions, including sudden system hacks and the cryptocurrency market’s still young history that still has a long way to go.
Upon questioning whether or not cryptocurrencies must undergo a certain regulation, Ociter shall equalize the benefits of the individual to that of the market. Ociter understands that certain considerations shall not be bargained for the purpose of serving an irrational financial system.
As part of the Ociter promise, it shall take into account an individual’s exposure to unwanted coincidences that may constantly arise during transactions and assure his confidence in the security and efficiency of cryptocurrencies. Ociter will bend to the winds of change if needed, in order for human adaptability to the unavoidable take place and fulfil the purpose of a blockchain platform designed to function for the people.
This includes an individual’s exclusive access to his funds, the incorruptibility of transaction histories and the fluid circulation of values in the crypto-market. One’s exclusivity of access is the most sacred form of security that a blockchain platform must provide and must never be compromised. Ociter believes in the strict enforcement of an individual's security as a premise to building confidence towards the world of cryptocurrencies and as a campaign against dubious institutions.
Ociter stands with two guiding principles as earlier stated; to carry out its functionalities through scientific approaches, and further develop the platform with human practicalities for a better, global understanding of blockchain.
Bitcoin and Ethereum are the standard representations of blockchain and a decentralised future filled with limitless potential. However, this potential is held back by lack of imagination, doubt, and inaccessibility.
Ociter introduces an innovative and advanced blockchain platform that furthers any protocol yet to be developed. Expert engineers led the extensive research to designed Ociter from square one. The motivations and vision behind Ociter have already been explicitly specified in this paper. In this section, the Ociter implementation method is addressed.
Blockchain is a digital, decentralised, cryptographically secured, immutable, and distributed ledger. Each block contains a hash which links to the previous block, a timestamp, and the transaction data.
Ociter has a tiered scheme to separate the value and the computation aspect of the transaction. This scheme is designed to accommodate the social aspects of cryptocurrencies. The explicit isolation of the value from the computation enables flexibility in the design, privacy and implementing smart contracts.
The Value OciTIER is a standalone blockchain. It is a cryptocurrency, also named Ociter, which is based in Haskell code and follows the Proof of Stake (PoS) protocol, called Caduceus, as opposed to Bitcoin’s Proof of Work (PoW).
Proof of Work (PoW) is the process of solving mathematical equations based on cryptography. This protocol requires an extensive amount of computing power and electricity. The level of difficulty increases as mining surges. Additionally, the energy cost per transaction in this protocol makes it inefficient. Also, miners need not be loyal users of the cryptocurrency and hence, can mine any profitable coin. This lures miners to exploit the protocol for profit-making and opportunism.
Proof of Stake (PoS) is PoW’s alternate in validating transactions. The cryptographical calculations are much simpler to solve. In PoS, the new block creator is randomly assigned depending on the value of the stake. People who own a significant chunk of the total coins will earn more. The miners in this protocol are the "forgers" and mining is referred to as "minting".
Block rewards do not exist in the validation. The forger thereby only takes the transaction fees. To mint coins, the forger needs to keep the wallet open and connected to the internet, but he is only limited to minting a percentage that is reflective of his stake.
Proof of Stake also has its own problems. However, the power is in the hands of the players with large stakes on the cryptocurrency. PoS is much more scalable and can handle more transactions than PoW. It is considered more secure since blockchain attacks are expensive. Whoever attempts an attack and takes control over the network would own a majority of the coins. Therefore, the attacker would be sabotaging himself.
Moreover, cryptocurrency mining increases environmental damage from the electricity it uses. It has been estimated that the annual electricity consumption of mining is at 23.07 terawatt per hour, which is approximately the annual consumption of Ecuador.
VOT is a Value Ledger, and the first piece of the Ociter platform. It will be an improvement over traditional blockchains. Owning an Ociter token is required to perform a transaction in the VOT. Ociter token will be the native token to be used in applications built on the VOT. It is integrated with the Command Tier which runs the smart contracts. It ensures that evaluation and computation are done correctly.
The Computation OciTIER is where the transaction is processed. If the VOT records the value, the COT provides the mechanism to enable asset transfer which involves terabytes of data, multiple signatures and special events. Ociter took into consideration the challenges behind modelling the reasons and conditions of its two-tiered scheme; the VOT and the COT.
The VOT shall contain only the record of value, so users should have no legal or moral objections towards maintaining it. In this case, Ociter secures decentralised networks from potentially concealing illegal activities. In some jurisdictions, the users maintaining the network may find themselves liable.
This issue comes into play when expanding the functionality of the COT, but only for the particular COT where it is running. The VOT only acts as a reference point.
In order to enforce a provable validity between transactions of addresses in a ledger, it has to be executed through a script. A poor scripting language could cause an unqualified person to access funds or accidentally send value to a dead address, making the funds irretrievable.
Existing scripting languages - either for program or for read - are often unmanageable. In a recent release, Solidity addresses these issues, but at the expense of extent complexity.
Designing a scripting language that supports most of the elements in a financial transaction may be difficult, but it is possible. Thus, Ociter designed the new language, Hector, after the namesake of its creator, Hector Turla. Hector is developed without the unnecessary complexity.
Fortifying security and execution is a primary advantage. Hector eliminates issues such as creating money from nowhere and double spending. But this is not to be overly regulated, as extensions can be added via softforks once new functionalities are required.
The idea of developing Hector is to bring immense benefits from simplistic. But there will always be a need to connect VOT to overlay protocols, legacy financial systems, and special - purpose servers.
Based on concepts of functional language from Haskell, Thoth - a general purpose smart contract language that is interoperable - is born. It is designed to write custom transaction scripts. It is used by VOT for complex transactions that are required in order to add support for other tiers that need to be connected, such as Ociter’s sidechains scheme.
Sidechains are an extremely important innovation for cryptocurrency. Its idea is to create a compressed representation of a blockchain that is interoperable between blockchains. Ociter supports this sidechain protocol to allow a secure and non-interactive movement of funds from Ociter Tiers or other blockchain-supporting protocols.
Sidechains are programmed to enable transfer to a different node despite complexity while retaining security and privacy. VOT is effectively equipped with regulatory essentials, private operations, and vigorous scripting languages in every ledger recorded. Additionally, this tier enables user-awareness upon accounting and has the ability to recall funds once a computation is completed.
Digital signatures have become increasingly secured through the implementation of more advanced cryptography and improved signature schemes.
Using the most advanced signature scheme, an added layer of security such as connecting the public key to the funds together with the private key will guarantee the most direct and reliable way of securely moving a value. There are merely hundreds of schemes with different security conditions but all to improve the blockchain’s signature system.
Preserving privacy and sustaining performance on a blockchain are two important features in signature scheme. A collection of signature schemes is a digital signature that supports making signatures on a number of different messages generated by many different users. Using aggregate signatures, the size of the signature could be shortened by compressing multiple signatures into a single signature.
Ociter employs a new signature scheme based on an aggregate signature and elliptic curve. There is also an interest in adding SECP256k1 to enhance interoperability with legacy cryptocurrencies, such as Bitcoin.
Ociter will provide a strong balance between preserving privacy and performance. Choosing these methods of developing a signature scheme means accepting that a number of current schemes can be broken and that some entities would not be able to use cryptocurrency due to legal or industry restrictions.
As blockchain assets have breached the $100-billion milestone in total market capitalisation, some blockchain platforms have begun to reach their capacity limits. For other platforms to deal with this growing number, there is an observance of market fee for a blockchain space. Although it can be argued that $100B is still far from a significant scale in the world economy. With an ever-moving adoption, an urgent focus on blockchain scalability is outlined.
Current blockchain technologies have been pondering a few options to provide a relief from recurring network congestion. Amongst the proposed approaches, Segregated Witness would use different accounting methods for various types of data in the blocks. This would lead to a modest, short-term block capacity increase.
Currently-existing cryptocurrencies in the market were not built for scalability. The nodes containing full copies of the blockchain data should be implemented with security and availability. The number of nodes required to keep a full copy increases as more users join. Therefore, additional nodes do not provide additional resources.
For Bitcoin and Ethereum to compete with more mainstream systems like Visa and PayPal when it comes to transaction times, a better scalability scheme is direly needed.
PayPal manages 193 transactions per second, while Visa manages 1,667. Ethereum does only 20 transactions per second while Bitcoin manages a whopping 7 transactions per second.
These limitations illustrate a core conflict that is relevant to the blockchain sector. A valuable platform will rise in market capitalisation until it reaches a point of stagnation. It is difficult to experiment on projects which are valued at several billion dollars. It becomes hard to change fundamental building blocks and to leave behind the weight of a legacy blockchain.
These market dynamics make it unlikely that any platform will remain at the forefront of progress until a peak of innovation has been reached.
Ociter believes that blockchain technology will mature on additional layers, beyond the basic technology. The first layer of blockchain technology has been explored extensively, albeit without conclusively solving the scalability issue. Ociter answers this by moving complexity up to a second and third layer solution that is clever and simple in their design, similar to Satoshi’s original blockchain architecture.
One of the goals of Ociter is to kick-off an extensive debate about how a decentralised project achieves accountability and measures. Other cryptocurrencies would resort to having an independent trusted third party to provide analysis and accountability.
Ociter believes in the key task of auditing the work being done; to enforce a solid reassurance that the study of academia and script behind the protocol are well thought out, analysed and shall function as designed.
In order to examine the feasibility of the protocol code, Ociter shall:
Ociter ensures a levelled standard over the development of protocols and to inspect every Ociter-relevant operation that is centred around coding, updating, and adding. The Ociter development team consists of diverse individuals with expertise in specific key areas and protocols. Through this method, the development efforts can lead to better, reliable, more varied results.
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