Qitmeer Open Class I: Why MEER chose BlockDAG!

In response to our community’s invitation, we’re starting a four lecture series today. The lecture is about some of Qitmeer’s core technologies and expertise. Part of the topic covers some of our thoughts in the middle of technology selection as well. By the end of the lecture series, we hope you will have a deeper understanding of the Qitmeer network and the underlying public chain technology.

We were thinking about which technological path would be most adaptable to future evolution. This path might either intersect with or break past the blockchain impossible triangle. With the technical team, the foundation, and many commercial groups, we conducted a long exploration and discussion on the commercial applications of Qitmeer Network. Most of them said that we should choose POW or blockchain. Some said that we should choose parallel chain technology. Some individuals advocate, for example, that we pick this two-layer chain technology, with the base public chain following Bitcoin or Ether, like the technology we are now employing in Poca. We focused on the second layer to accomplish scaling, or scaling outside the chain; we explored all these possibilities and weighed the benefits and drawbacks before deciding on Block DAG.

About Block DAG Technology and History

Block DAG is on top of this foundation of DAG. The original BLOCK DAG concept proposed by a laboratory in Israel named DAG Labs was published in 2016. This paper by DAG Technology discusses that it can be the blockchain or the underlying public chain. This is under the premise of security and evolution in the zone. It is possible to enhance high performance without sacrificing security or decentralization and this decision is a choice made on the premise of following the consensus of Satoshi Nakamoto or the consensus of Bitcoin.

You might think why should we pursue security? Why should we pursue high performance? Why are we pursuing decentralization? It’s because the blockchain is, after all, a distributed ledger system, whether it’s a chain structure or a graph structure.

The distributed ledger system establishes that to achieve dispersion, decentralization, or polycentricity, efficiency must be sacrificed to reach commercial or scale-level applications. When your blockchain bottom only does an asset reserve or asset transaction, it may not require high TPS. However, when you transform it into a commercial system, such as a platform system, or when you want to make payments in this type of network, the network needs are quite high. That’s why we were working with our foundation, business partners, and our own theoretical research. We decided to employ the DAG directed acyclic graph technique to break through the de-blockchain impossible triangle after a comparison. The development of DAG has gone through three stages from the history of blockchain or cryptocurrency development. The technology of DAG itself has gone through three eras of development, from the beginning of the 12th year to the first decade of the present time.

The first era is to IOTA and Byteball as the representative of the DAG technology. The TPS is very high, but what is the biggest drawback of DAG technology is that it is particularly easy to centralize. The second generation of DAG technology is Fantom. Ether is the representative of the DAG technology. The DAG technology has a certain degree that avoids centralization, but the performance isn’t improved. Ether, for example, is a DAG unique structure, but it did not allow the parent block of this expansion rate to neuter all the uncle blocks at the same time. In fact, the Ether is DAG itself, and its Ghost (Ghost protocol) is actually the main chain in the middle of the DAG. The following summarizes the third generation of DAG technology development. Block DAG is also the same as BlockChain because it also has blocks. The blocks store information and send it along by taking over the information from the preceding block. We have inherited the theory of our predecessors and the experience of previous blockchain projects. Then we chose Block DAG, a technology that can guarantee decentralization and security under the premise of Block DAG. Why do we say this is easy, but why do we keep pursuing to improve TPS on the premise of ensuring security and ensuring decentralization? This is because blockchain cannot possibly triangulate this puzzle. Public chains projected all over the world are solving it but are in the process of solving it. There are many BFT projects, such as the one we know as NEO and Libra, which has some domestic or has been hot for some time. The DPOS consensus method is the same as the Byzantine protocol, which sacrifices decentralization with the goal of efficiency. This method of choice is not wrong. It’s just that we don’t endorse it. Why? Because every project is positioned differently.

Block DAG Technology Model Selection

In addition to our technological decision, we picked Block DAG from the start for Qitmeer as a network. Aside from technical performance, another important consideration is the resources of Qitmeer Foundation practitioners, and the future market we aim for is the field of payment, particularly micro-payment and cross-border payment because the core function of a crypto-digital currency or blockchain network is still the transfer payment function, but as a payment network. Whether you go to solve the problem of micro-payment or solve the problem of cross-border payment, your core is you want to do a payment network infrastructure or underlying network. Your network must be bitcoin secure although with low efficiency. Although the performance degree of Ether is high, the underlying layer is secure enough. Assume I send you a large quantity of money. It may take a few days for the money to arrive, the account transfer network may be ineffective, and my costs may be excessive, but my money will not be lost. If I transfer a sum of money, but there is a possibility that my money can be lost, who would dare to use your payment network? For example, we currently utilize Alipay and WeChat, as well as UnionPay payments; certainly, it is really fast and easy, but would you continue to use it if your money was lost or transferred incorrectly one day? I’d rather transmit money slowly, whether for institutional or ordinary customers, even if the efficiency is lower and the charge is greater.

We choose to not lose money, so for the positioning of this payment, the underlying network is the first pursuit of security. Secondly, why should we pursue decentralization? The pursuit of decentralization is because of the public chain network, just as your underlying assets. We guarantee the underlying network by using this Token to transfer, trade, or move assets. I can safeguard the transfer in a variety of ways, including centralized and decentralized methods. Use a centralized office, such as DPOS, or a consensus process.

Qitmeer’s technical architecture and future application scenarios don’t mean taking the underlying MEER to make payments. Actually, you do the actual production life of the payment. It must be a stable coin currency to be able to do the payment. For example, if I do this in micro-payment, then I eat in a restaurant, if you use Alipay to WeChat, and then convert WeChat to Alipay, the price is fluctuating. As a result, the boss has no way to charge you money. You eat before a bowl of noodles 20 yuan, after eating your price falls to 19 yuan. Then how can the boss collect money and how can the user pay? So, Qitmeer’s network of micro-payment requires our underlying network or its payment structure. It doesn’t reflect that the underlying MEER itself is doing the actual payment but, it is based on the Qitmeer network to issue a variety of stable coins. Stable coins, specifically fiat stable coins, or even the central bank digital currency in this form to do the payments. As a result, the underlying network, in addition to security, requires decentralization, because the network in the future will not be a person or an organization in a nation. We hope that more institutions and organizations will come to the Qitmeer network. We expect that they will offer compliant and stable goods, as well as micropayments, cross-border payments, and financial inclusion initiatives. When everyone comes to your network to conduct applications, it’s not an issue that your underlying network isn’t governed by one or more institutions. POW, as long as the block nodes are sufficiently distributed, then no one can sufficiently control your underlying network. Through the POW consensus mechanism, results for the block nodes to further decentralization. When the underlying network and the node distribution is very uniform, and the block nodes and full nodes in the global have enough distribution, then the network will be more and more secure, which will result in it being more decentralized. As a result, everyone can use it even in a region or a small country.

Quitmeer Application Scenarios

Let’s take the WA State, we are doing this mobile payment system for WA State. This state is a highly autonomous region in Myanmar, and its economic volume is about the same as the GDP of a county-level city in a central province of China. Even for such a county-level autonomous region with a population of 600,000, it wants to run its payment system on a network. It also wants the underlying network to be secure and decentralized. If WA can use it, will Thailand, Vietnam, Cambodia or Myanmar be able to use it in the future? It is not because they have to use this system, but because with the blockchain payment system, we can let them solve the construction of a payment system at a very low cost. We can then use the blockchain network to ensure the stability and security of their payment system. This is not controlled by a person or an organization. As a result, everyone can be assured to play above you. My country or organization is thinking that I want to do my currency issuance or payment system on a network. That is a very serious matter for a country and a regime, or for a large financial institution because the right to mint money is one of the core powers of a sovereign government. I can put my payment system on a public network or a public chain network, that is the first thing that must be considered. First of all, you have this thing security, controllable or not. Then, the next consideration is efficiency followed by the cost issue. In the first big countries like Nigeria and Africa, they issued a central bank digital currency and they also considered the coalition chain IMB this way. Although they found this central bank digital currency is very difficult to use and also very slow, they also found that if you use the open-source network, there may be certain uncontrollable things. They may also begin with the coalition chain and then gradually transfer to the public chain via the stable coin, or they may combine the public chain stable coin and the coalition chain to promote this item. Therefore, the first element of the underlying network for a payment system is security. Then the next is polycentric, and then to do the performance improvement.

If Qitmeer only uses the traditional BlockChain solution, no matter whether you use POW consensus or POS consensus, you do not achieve high performance with security and decentralization. So how can you compete with the existing public chain network? We combined Qitmeer’s business resources with our research on the technical route and finally chose Block DAG. In addition to security and decentralization, we improved the performance that is according to your future networks ecosystem application and resources. Not to blindly choose high precision technology, nor to purely show off the technology, but because this business scenario, or this business scenario of micro-payment, or this business scenario of cross-border payment has huge potential. Blockchain technology, if used in future application scenarios, has a relationship with this real business. Whether blockchain technology or public chain technology can survive and develop, you inevitably have to give value to this network, and your value or Qitmeer’s value. We look at this application scenario, that is, in the field of micro-payment and cross-border payment. In the payment to make micro-payments, you must identify ways to increase performance in addition to security and decentralization. Why do you want to improve performance? It is because if you are doing an underlying asset, the transfer of your assets you do not have high requirements for efficiency, and then you cross borders, even if you do cross-border business. You are not particularly demanding on the efficiency of this payment, you are only demanding on the cost. But if you want to do daily payments or do small payments, you have to be both fast and cheap. So, if these little businesses near you can take USDT for payment, why would you use it to buy things? If you can accept USDT for payment, why would you go out and buy anything if you can accept USDT for payment? In fact, most of us have moved to TRC20 on the wavefield or the BSC chain in the current circumstances, and its performance has substantially increased. But why do we have to go after this TPS? It is because, in addition to your security and decentralization of these two premises, transfer speed must be fast, and at the same time your cost should be below.

Consider the following scenario: If your USDT can make daily payments, payments at your downstairs convenience shop, and payments at your breakfast location, then you can pay a bill to someone. If you go to a restaurant, if you use USDT with ERC20, it takes longer to pay the bill. Time would be at least a few dozen seconds or even a minute or so. If the network is clogged, your ERC20 USDT may be clogged for a few minutes or even a few hours. If you have an ERC20 USDT and are eating at a restaurant or buying anything at a convenience shop, and you pay someone else for an extended period of time. You may have bought a bucket of instant noodles, but you’re paying someone else for this and you have to wait so long afterwards. You definitely won’t want to, and neither will the convenience store collector, right? This is the case if you still use this method in buying in your local convenience store. Another example, if you buy a bottle of water, the cost of your bottle of water maybe two dollars. If you still use the old ERC20 USDT, and you now transfer two dollars, your costs may have to be dozens of dollars, or several hundred dollars if it is expensive, you will not use this USDT network to pay for it, and you will absolutely not use it.

Highly Efficient Payment Experience

So to do micro-payments, the requirements of the underlying public chain must have two core requirements. The first is that your speed is fast enough. Even if you can not reach Alipay or WeChat in seconds, the user experience can not be too bad, you can not say that it takes dozens of seconds or even a few minutes to account, which you can not do micro-payments. The second is that your micro-payment transfer fees, GAS fees need to be low enough.

Many users before just in the centralized exchange head Use U to transfer in and out, each time the exchange deducts your fees are deducted from the U, so you do not feel involved in DeFi after. You’ll know that the GAS fee you consume for each U transfer is not calculated in U. Rather, your fee is calculated in terms of each network’s own underlying coin, just like our current users transferring money on BSC. All your transfers above the transfer of each batch of U, the network deducts the fee, but when you are using centralized trading, the exchange has ease of use and calculation. Overall, it is subtracting you a U, two U, or a dozen U, and it is utilizing the expense of deducting your U sufficiently to already cover his GAS. The GAS fee is not deducted from the Ethereum foundation. Also, the BNB GAS fee is not deducted to the coinan smart chain team or to the exchange or to Zhao Changpeng, but on our every single transfer on the chain. So, whether we’re using POS, POS, or DPOS, our transfer fees go to the miners who create the blocks and broadcast them to the network, and our GAS costs go to the miners who maintain the books and broadcast the information to the network. Based on a block size of one MB, a block can contain roughly 1000 normal transfers.

Let’s take our current BSC, the BSC is about one block every three seconds, then one block can contain about 1,000 transfer messages, which means about three seconds to process 1,000 transfer messages, but this is the TPS. For our daily or low user volume, this case may be possible to use, but if like for tens of thousands of users using hundreds of thousands of millions or even tens of millions of users at the same time using your payment system, then the performance of your network must be high enough. To ensure that this network can be used properly, our blockchain network, which is itself a distributed system, its TPS, its performance. It does not depend on the configuration of the server. It’s not on the bandwidth, but on the performance of the network itself, that is, the efficiency of synchronization between your distributed nodes. So, it is inherently impossible for it to reach the speed of centralized WeChat and Alipay. Like our Double Eleven Alipay can reach more than one million. Like our Spring Festival red envelope can reach more than one million. The current underlying functional technology can be put to ensure the security and decentralization of the premise which can do TPS on the thousand is already a very impressive thing.

Many people or many of us ordinary users do not understand the concept of TPS. TPS can reach more than 100,000 and that TPS can reach tens of thousands is basically a false statement. If you want to talk about TPS, it must be to talk about the settings, that is, how can you ensure the security of how to ensure that the premise of decentralization you then talk about how much TPS. If there are no two settings in front of you, just simply talk about how high the TPS is. Then you can go and Alipay then WeChat payment to compare, you can be able to reach a million.

Security of the Underlying Network

We all know that from last year to this year there is a particularly hot project called Solana, which uses a consensus mechanism of POH, a time-stamped proof. The consensus mechanism of time-stamped proof is not a problem, but Solana is not a blockchain network or a distributed network, but a centralized project. This means that all transaction information or network processing information is first gathered on Solana’s own super server, and then through this Solana has only a dozen supercomputing servers and only one core data processing server. So, when we use Solana, say it can reach 10,000 in one second or it can even reach 15,000 to 16,000. We also see that Solana has been down three times from last year to this year. According to the normally distributed network or the official blockchain distributed network, there is no such thing as downtime. Only if your node is not blocked, you can’t follow the distributed network to synchronize its data. But if the Solana network is down, if there is a problem that all the data or all the nodes are not out of the block and the data cannot be synchronized, it is not a real or strictly distributed network. At the same time, we are now using the network bsc. It isn’t true that during your use of the bsc network, you often fail to transfer money or say that you are packing, or even when the BSC chain first went live we developers would laugh and say that your cryptocurrency would get stuck on the server. What does this mean? It is that its underlying network is supernodes. DPOS model is 21 nodes, and all these 21 nodes are controlled in the hands of Binance. We do not care about the security and decentralization of the underlying network, because I am an ordinary user. I just want to transfer money fast. I just want to have it at a low cost. But why are there no large organizations that put a lot of assets on the BSC chain? Why is it that the TEDA stable coin has issues? Because they discovered through the use of wavefield or BSC, because the underlying layer of it is DPOS, 21 super node model, no large institutions put a lot of assets on the BSC chain, or why TEDA issued 80 or 90 billion of stable coins without issuing on the BSC chain, and even TEDA destroyed 20 billion of USDT issued on the wavefield chain and transferred it back to the Ethernet network.

If Sun Yuchen and Binance want to do evil, they can double-spend a certain large transaction above you. The project party’s assets can be frozen on the BSC chain, is this way good or bad? We can all have our own perspectives, but at the very least, it breaches the blockchain’s decentralized system, because the true control remains in Binance’s hands? They don’t do evil doesn’t mean he can’t do it, it’s just that they have an aura and endorsement which makes it easier for people to trust them. But if they really want to do evil, what can you do with them? Everyone’s trust in the blockchain is derived from this security, which is built by a distributed network with a consensus mechanism to control the network. We all follow this consensus mechanism and run in accordance with this consensus to generate this trust, rather than saying who is more powerful. How powerful is Sun Yuchen? Or is Zhao Changpeng more powerful? What we believe is the mechanism and the rules of the code, which are not controlled by a single person who can just change them if he wants to. The community, all the participants, all the people who have the right to participate in this network, together decide the security of this network, but rely on our distributed network and build up this game mechanism to ensure the security of this set of networks rather than believe in what we call. Some centralized institutions or some important institutions so is the Ethereum network. Why is the market capitalization so high, it has so many ecological applications on it. Whether it’s DEFI or NFT or stable coin or chain tour, various applications. Including the particularly expensive NFT transfer, NFT synthesis, and NFT transactions, people are still willing to transfer money on the Ether, because the underlying layer of the Ether is completely decentralized. It is a highly distributed network. It is safe enough and decentralized enough, so people prefer to spend more on Ether. I can live with a little slower money transfer, but it is also more reliable than those unsafe networks, because the unsafe network has a security incident, either by an attack or by doing evil to cause you the loss is the difference between yes and no, not that you will lose 80%, 60%, 40%, or directly to zero. This is why the Qitmeer network underlying the choice of Block DAG, because Block DAG can be based on our POW consensus to allow us to the underlying network. To begin, verify that the underlying network is secure, next guarantee that it is entirely decentralized or as decentralized as feasible, before pursuing TPS. Only when we achieve this impossible triangle at the same moment will we be able to map or migrate to this decentralized underlying infrastructure to operate the business apps above, as well as the business resources we have or have. The value of this network can only be realized when the volume of operations and the efficiency with which everyone operating on it is increasing.

R&D of the Underlying Network

Right now this network is just getting started. Many people do not understand why we want the underlying network to last so long. The underlying network development takes so long to develop, saying that we are scratching, or that we are dilly-dallying or deliberately trying to delay, why don’t we choose DPOS why don’t we get a side chain? Why don’t we get a different consensus? We have been researching for so long in the bottom layer after the selection is made? The development was done to do the engineering implementation. After the implementation, we carried out a year and a half of test network testing. The actual data run out of the TPS actual arithmetic power runs out of the transfer transactions and the actual transfer speed was tested to test out our performance. We dare to go on the main network, and many public chains or many projects say that the TPS just sets up two server nodes in the laboratory, and then nodes transfer money to each other, this kind of measured TPS can not be used. The only one in the Ethernet network is the POS, which has a TPS of 15–20, and the value of the whole ecology is so high. It is not only because of its smart contract platform, it can guarantee the transfer between each other without error, to ensure that they can arrive safely. The reason is that it has a powerful underlying network. If there is no strong POW network on the bottom of Ether, these various applications running on top of Ether, no matter if it is a stable coin, DeFi, decentralized exchange, lending, NFT, GAMEFI various applications may go to zero instantly. It is like an empire-building, its foundation is particularly strong and solid. It can still support you to build a skyscraper on top. If your bottom layer is not secure enough, there is not enough decentralization. Then, the business development above you is prosperous and flourishing again, you may also be a smoke in the eye or a flash in the pan because a security incident can bring all your assets to zero, and there is no security in the blockchain. There is no such thing as saying that my assets may go wrong, and after a security incident, I can still keep 60% or 30% left. We have spent so long to build the underlying network with the support of the Foundation and the joint efforts of our community to build such a solid network for the purpose of our applications above. Whether our applications will be transformed into the underlying network itself for the government to use or if we use it for a smart contract platform, it can support our underlying network or support the value of our public chain network. Only when you have a solid foundation of the underlying network, your security is good and your decentralization is high, then your TPS above is meaningful and your infrastructure of these things is meaningful, you can breed and develop the ecology.

About Qitmeer

Qitmeer is the next-generation public chain based on BlockDAG which is dedicated to serving the ecosystem of Islamic Finance, ethical finance, and socially responsible investment, thereby enhancing financial inclusion and creating social impact.

In contrast to the competition model, BlockDAG’s collaboration model in the mining achieves a desirable balance of typical blockchain metrics among the security, openness, fairness, and scalability.

Qitmeer adopts a classic POW consensus and UTXO data model and designs a unique asset issuing mechanism which requires the reserve of native currency, which is in line with core ethical financial values.

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