How This Company Is Pushing The Limits Of Blockchain Technology To Achieve Scalability
Momentum is gaining among blockchain proponents that the next generation of applications, free from the centralized data monopoly of big tech, is just over the horizon. At the core of the race towards more scalable, decentralized applications (dApps) is the hope that recent advances in the underlying technology, ranging from sharding to proof-of-stake, can provide the type of infrastructure that these dApps need to become widely adopted.
One of the platforms pushing the envelope in the underlying technology is Elrond, a high-value transfer network that relies on secure proof-of-stake consensus and a bleeding-edge integration of sharding with a public blockchain.
Sharding is an ambitious take on scaling public blockchains at the convergence of decades-old technology for horizontal database partitioning and decentralized networks. Elrond has made some significant headway producing a working sharding implementation, and already has a testnet live with an early version of their platform.
I had a chance to speak with Beniamin Mincu, CEO of Elrond, on the progress and future direction of the technology, along with its potential industry-wide implications.
Joresa Blount: Can you give a high-level overview of the technology (i.e., sharding & proof-of-stake) that underpins your network?
Beniamin Mincu: Elrond is a new blockchain architecture, designed from scratch to bring a 1000-fold cumulative improvement in throughput and execution speed. To achieve this, Elrond introduces two key innovations: a novel adaptive state sharding mechanism and a secure proof-of-stake (sPoS) algorithm.
The key insight with sharding is that you can partition the network into smaller networks to enable parallel transaction processing. Once you can do that, a new performance paradigm opens up. There are 3 levels of sharding, each posing a more difficult challenge that needs to be solved: transaction sharding (level 1), network sharding (level 2), and state sharding (level 3). After more than one and a half years of work, Elrond has validated the technical model proposed in its technical paper, and has come with a practical solution to the most difficult of the problems that can radically increase performance.
The adaptivity of our sharding model means that unlike other networks, in Elrond, as more nodes join, the network can expand and contract in real-time. In other words, as more nodes join the network to reap validator rewards, new shards are formed based on a clever binary tree model, and scalability increases even further.
The second key innovation in Elrond is its secure proof-of-stake algorithm. Elrond has attempted to depart from the energy-intensive and unsustainable proof-of-work and come up with a solution compatible with a globally scalable architecture. Thus, we employ proof-of-stake to significantly improve energy efficiency and prevent Sybil attacks, random sampling of the consensus group to make it very secure, unpredictable and use of a PBFT consensus variation for breakneck execution speed.
The implication of these improvements is hard to overstate, and businesses are starting to pay attention because, for them, they make all the difference.
Joresa: You recently partnered with Chainlink, a decentralized oracle service that made headlines for its partnership with Google. Can you elaborate on the integration of Elrond and Chainlink?
Beniamin: The Chainlink network provides reliable tamper-proof inputs and outputs for complex smart contracts on any blockchain. Chainlink’s decentralized oracle network offers the same security guarantees as smart contracts themselves. By allowing multiple Chainlinks to evaluate the same data before it becomes a trigger, Chainlink eliminates any single point of failure and maintains the overall value of a smart contract that is highly secure, reliable, and trustworthy.
Elrond is the first blockchain architecture to integrate smart contracts on a state sharded architecture through an asynchronous and secure scheme. This means any user can call any smart contract, independent of which shard the smart contract and the users account resides.
Adding on this, Elrond aims to integrate Chainlink to amplify the utility and functionality of its smart contracts by enabling them to interact with real-world data feeds securely. By providing developers with more flexible and sophisticated tools to build on, we aim to take smart contracts to the next level and transform them into the de facto choice of digital contracts.
By integrating with Chainlink, we extend this vision, enabling developers to access real-world data securely and efficiently.
Joresa: Blockchain metrics sites that evaluate dapp usage highlight how the most popular current dapps are those that focus on gaming, decentralized exchanges, and gambling. As the underlying technology improves, what do you view will be the next area (e.g., finance, IoT, etc.) that you think will bring in the next wave of users?
Beniamin: Interestingly enough, we think that gaming dapps, decentralized exchanges, and betting dapps will be the first ones leveraging the improvements to gain significantly more users during the coming period. Many interesting trials have been done in internet payments (i.e., finance) and machine-to-machine transactions (i.e., IoT) but the infrastructure has simply been unable to accommodate real-world performance demands.
Elrond can be leveraged to solve both IoT transactions and internet payments. We are in discussion with several companies on these subjects, looking forward to the results.
Joresa: Network effects play a pivotal role in the long-term sustainability and community development of projects in the crypto space. With so much developer talent focused on networks like Bitcoin and Ethereum, how do you think Elrond can help users gravitate towards the platform in a competitive field of competition?
Beniamin: The blockchain space is still very young. There are roughly 50 million people in the space, and indeed, most projects focus on them at the expense of ignoring the elephant in the room — 4.2 billion people on the internet. At Elrond, we understand that it’s only by escaping this small niche group, and finding a compelling way to bring new people in, that we can see the next wave of meaningful blockchain adoption.
So while we are starting with a focus on developers, we intend to move one step beyond that, abstracting away complexity and bringing the most useful blockchain features to the end-users.
In our experience, developers look for 3 things: performant infrastructure, flexible tools, and perhaps most importantly, an audience. We have built the most advanced state sharded proof-of-stake architecture at this point, have also built a Meta VM based on K Framework to support 3 VMs at the same time, and will now focus on offering a concentrated audience through a dApp store.
Once we can offer an audience, developers will receive an offer they simply cannot refuse.
Joresa: Your mainnet launch is scheduled for Q4 2019. Can you provide some updates on the progress and hurdles with your testnet and the next steps in the run-up to your official launch?
Beniamin: Elrond has reached some significant milestones during June. First, we released a public testnet boasting >10k TPS with 5 shards and 5 seconds latency — this itself is a breakthrough for the whole blockchain space. Second, we have made the code open source for peer review and community feedback. Third, we have closed a $1.9M private round with some strategic investors like Binance Labs (Binance’s investment arm), Electric Capital, Neo Global Capital, Maven 11, and Woodstock Capital.
Right now we are preparing for an exciting community competition called “Battle of Nodes,” where community members can start running validator nodes, attempt to penetrate and stress test the network, and receive rewards while doing so. Additionally, we have released the first version of the Elrond explorer, the Elrond wallet, and are preparing to release a first dApp game built on Elrond.
Given that the testnet is launched, we have begun a concentrated business development marathon focused on South Korea, Japan, Singapore, and Dubai. After so many empty promises, you can really see the light in people’s eyes when they discover all this performance is available on Elrond right now.
Joresa: You recently joined the developer and enterprise ecosystem Trusted IoT Alliance, which seeks to combine IoT devices, blockchain technology, and smart contracts for building a digital economy. Can you explain your role in the Trusted IoT Alliance and the impact you think that it can have moving forward?
Beniamin: Yes, Elrond is focused very much on providing a fully scalable blockchain able to real world use cases. By joining we will be working with leading world-known enterprises part of the Trusted IoT Alliance as core enterprise participants and are driving proofs-of-concept and testbed initiatives for IoT.
The main value proposition is that within this alliance we will be offering the Elrond platform to be used in hackathons that are meant to solve real-world problems for these large enterprises.
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