Will the Public Chain Have a Future or the Alliance Chain Have a Future

Time:2019-9-30

Classification is inevitable when we discuss block chains. We have all heard of the words “public chain, alliance chain, private chain, license chain, no license chain.” Although we are familiar with them, there is no accepted definition of these terms. In our discussions, we can only use these nouns to refer to concepts that are roughly the same and actually somewhat different from each other, which makes it difficult to communicate as above. This article will analyze these nouns from the most basic latitude.

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Dimension 1: License Chain / No License Chain

Permissionless block chain

Network participants can join and quit freely, that is, the cost of joining or quitting the network is close to zero. When I hear about “public chains”, “public chains” or “basic chains” in the discussion, I generally think it’s saying that there is no license chain.

This type of block chain includes Bitcoin/Litecoin/Peercoin/Monero/ZCash/Ethereum and so on. Bitcoin is the pioneer of license-free chains. It ingeniously implements the world’s first license-free distributed system through PoW. Block chain projects before 2015 basically fall into this category. Nervos CKB does not require a license chain, and the first phase uses the PoW consensus.

The decentralization of license-free chains is the highest, and their development is also highly dependent on community autonomy, which is the most potential type of block chains for global infrastructure.

Permissioned block chain

Network participants need to obtain some form of permission before they can join or quit the network. The cost of joining or quitting the network is more than zero. The “licensing chain” is often mixed with the “alliance chain” in the discussion. We will see the difference between the two later.

The idea of licensing chain emerged in 2014, when financial institutions had discovered the new continent of digital money, smart contracts and block chains, and began to think about how to introduce block chain technology into their businesses. The registration and transaction needs of registered assets, as well as the needs of KYC/AML in financial business, make people begin to realize the necessity of identity and the possibility of reconstructing the block chain. Identity can naturally solve the problem of witch attack without the need for license chain headache. Therefore, PoW can be avoided and traditional BFT consensus can be used to achieve lower energy consumption and better performance. Earlier companies such as Eris Industries (now renamed Monax) were established in 2014 and pioneered the licensing chain. R3 was also established in 2014, and although Corda calls itself a distributed book rather than a licensing chain (and indeed not just a chain, but a network of no blocks, woven by transactions), it is clearly a product of the licensing chain. Hyperledger Fabric and CITA designed and developed by ourselves are licensing chains.

The licensing chain is generally designed, implemented and promoted by industry alliances or technology companies, and has the performance of approaching centralization schemes, focusing on financial and enterprise scenarios.

Refine

If we divide network participants into block nodes, full nodes and users (access to services provided by block chains through wallets)[3], we can further refine the classification of license chains and license chains that are not required.

Will the Public Chain Have a Future or the Alliance Chain Have a Future

I label combinations that seem to have no practical value as Nonsense, without discussion.

User License Chain

In the user license chain, no permission is required for nodes to join, exit or participate in consensus, but users need to obtain permission to use the services provided by the block chain. Although we haven’t seen an example of the user license chain yet, I think the user license chain is a very interesting and worth exploring. If the node belongs to the network layer, it constitutes the foundation of the block chain. User space exists in the account / common knowledge base that the node maintains together, which is the upper layer of the block chain architecture. The permission-free base layer and the permission-free upper layer are a harmonious combination: the base layer does not need permission, no matter what kind of node can participate, the network nature is neutral, maintaining the global infrastructure properties of the permission-free chain; the upper layer needs permission, and the user has some form of identity, which is more suitable for the needs of the body. Various business and financial scenarios

Will the Public Chain Have a Future or the Alliance Chain Have a Future

There are also many problems to be solved in the user license chain: how to realize a decentralized identity authentication service? How to support this identity protocol at the basic level? After identifying the identity, the basic layer needs to choose whether to provide services for users according to certain rules. Who will make these rules? How to make such rules? How to maintain the neutrality of rules?

Exit license chain

The out-of-block license chain only requires that the out-of-block node be licensed. Since all nodes can join freely, the history and current state of block chain will not be monopolized by out-of-block nodes. All nodes can verify and decide whether to accept new blocks. The whole system is still transparent and verifiable, and its reliability (forgive me for using a vague “reliability” to refer to including availability, security, etc.). Among the various properties, the following is the same) higher than the centralized system and lower than the user license chain/no license chain. If the number of licensed outgoing nodes is small, the system performance will be very good.

It is worth pointing out that if we relax the definition of “license”, the block license chain will contain some items which we often call “public chain” – POS based on token mortgage or token voting. Essentially, token is used as a license to limit the number of block nodes and reduce the message complexity of consensus process. The goal of improving system performance. Such a kind of PoS block chain exhibits properties closer to the out-block permission chain and farther away from the no-permission chain. The main difference between the out-block license chain and the full license chain is whether the whole node and the user need to license, and the main difference between the out-block license chain and the no-license chain is whether the size of the out-block node set is fixed or dynamic.

Node license chain

Both the outgoing node and the whole node of the node licensing chain need permission. At this time, only the node with permission can copy and verify the block chain data. Users can not obtain an independent copy of the account/common knowledge base, nor can they verify independently. Such a system is less reliable than the block license chain, slightly higher than the centralized system, and its performance is close to the block license link. Because data can only be replicated on a small scale, data privacy is better.

According to different deployments, CITA, the core of Miao Technological High Performance Block Chain, can be either a block license chain or a node license chain.

Dimension 2: Public Chain / Alliance Chain / Private Chain

Let’s change the dimension and classify it according to the service object of the block chain.

Public block chain: A block chain that serves the public.
Consortium block chain: there is an entity alliance outside the block chain, which only serves the members of the alliance.
Private block chain: There is an entity outside the block chain that only serves the members of the entity.

The public chain is translated from public blockchain, and the literal translation of public should be “public, public”. I think the reason why it was translated into “public chain” is probably that the early public blockchain had an internal currency mechanism, and the user was the holder of the token, so it was also not inappropriate. But from today’s perspective, public blockchain is more appropriate to understand as “public chain”. Public chain provides services to all the public indiscriminately, but the public is not necessarily the owner of “public chain”. I still use the word “public chain” in my discussion, but what I use it to refer to is actually “public chain”.

There are different license chain options in the implementation of alliance chain/private chain: node license chain, block license chain or full license chain, which will have corresponding advantages and disadvantages, and will not be repeated here. What these different options have in common is that all out-of-block nodes need permission, the scope of consensus is limited, and reliability is sacrificed for better performance and privacy. If the future alliance chain/private chain can be based on trust without license chain, its reliability and credit can also be increased to the level close to the link without license, which will actually become the help of the chain expansion without license. This is the direction that Nervos CKB team and Cryptape Research are exploring. With the help of cross-chain protocols, alliance chains/private chains can be interoperable at low cost, and the liquidity of assets in alliance chains/private chains will be increased to a level close to that of assets in license-free chains, which is the direction Cryptape CITA team is exploring.

Will the Public Chain Have a Future or the Alliance Chain Have a Future

Public permissioned block chain

Considering the relationship between dimension 1 and dimension 2, it is easy to find that both alliance chain and private chain imply identity restrictions on users and nodes, so they must be license chain. The interesting question is: does the public chain necessarily need no license chain?

According to the definition of public chain above, there is no implicit restriction on the identity of users in providing services to the public. The public chain can provide services to the anonymous public or to the identifiable public indiscriminately. Whether the nodes in the public chain need permission does not affect whether a block chain provides services to the public. So in my opinion, a block chain can be both a public chain and a license chain. There is no contradiction between the two. I call the block chain which is both public chain and license chain Public License chain [4].

When we talk about the public chain, we often think that there is no license chain, but in fact, many public chains are closer to the scope of the public license chain, the most typical example is Ripple. There are many possible implementations of public license chain. The license chain, block license chain, node license chain and user license chain discussed above can all be public license chain. Because of the existence of identity, the public license chain has the advantages of the license chain, and its applicable scenario complements the non-license chain. It is believed that the public license chain will play an important role in the future encryption economic ecology.

Summary

The common criticism of alliance chain, private chain and licensing chain is the lack of endogenous economic incentive design, so “it is not a block chain at all”. We disagree with this view. Firstly, there is no contradiction between the design of economic incentives and the scope of service objects and the need for permission. We just haven’t seen a sample of internal economic incentives at present. Secondly, whether endogenous economic incentives are the necessary conditions to become a block chain is still a question worth discussing.

Finally, answer the question at the beginning of the article: there will be many kinds of block chains and non-block chains coexisting in the future. They will cooperate with each other, promote each other, guarantee each other and jointly weave an efficient and reliable digital economic network.