Sun. May 26th, 2019

Chain Curation Research: AERGO

Chain Curation
Chain Curation is An Objective Analysis of New and Existing Blockchains and Distributed Ledgers founded by Charles Read.

Based in London, England, Charles J Read is a multi-faceted Blockchain evangelist who focuses on investment trends, technical research, and assists with user acquisition for emerging technology companies building consumer applications.

AERGO
Before I began to look at AERGO, I found myself first looking into Blocko, the Korean company that are building AERGO and are ultimately responsible for its success.

Blocko is a Samsung backed, award winning commercial Korean blockchain startup founded in 2014, that created Coinstack, a “Blockchain-As-A-Service (BaaS) packaged solution for enterprise clients to benefit from blockchain technology that is easy to deploy. Over 20 leading Korean companies are providing services backed by Coinstack, with partners as big as IBM, Samsung, LG, SK Telecom and Hyundai.

Blocko have had aggressive success since their inception, winning many clients, partners and awards, including recently even winning “Best Brand in Korea” in 2018, and hosting Blockchain Industry meeting for the Korean Ministry of Science and Information Technology.

AERGO takes Blocko’s proven technology stack by transforming it into an end-to-end, open source platform based around hybrid private/public blockchain design. It allows businesses to build innovative applications and services through a shared, trustless, and serverless ecosystem. It allows Blocko to scale even further and to have a much bigger and wider impact on their clients markets they have already proven to affect.

Notable projects Blocko/AERGO are working on:

  • A blockchain-based storage platform for the Korean Ministry of Land, Infrastructure and Transport to connect real estate registries to government network data with a blockchain ledger.
  • A distributed social media platform for partner Cyworld, a South Korean social network service that came out of SK Communication in 2014.
  • A collaboration with government funded Electronics & Telecommunications Research Institute (ETRI) to develop cutting-edge consensus algorithms.
  • Blockchain based micro-payments for Bank of Korea – to assist with the countries settlement infrastructure, allowing for faster, cheaper transactions. This system includes transaction validation, participant authentication, wallet management as well as a create transaction process and mobile implementations centered around micropayments.

Knowing now that Coinstack-based blockchain systems have already been deployed to over 25 million users in over 20 in-production systems, I will now look at AERGO for its own merits.

Like many others, AERGO are intending to advance enterprise blockchain, by allowing mass market usage – Simply put this is another 4th generation blockchain solution that aims to tackle enterprise level. Their intention is to:

  1. provide advanced, friendly and easy to use technology for developers and contractors.
  2. a secure and fast public and private blockchain cloud architecture for businesses
  3. an open ecosystem for third parties and businesses to connect and engage with

I will try to avoid focusing too much on the solution and instead what makes AERGO different to other solutions, as the “4th generation” space is very crowded and competitive.

AERGO is leveraging both public and private chains supported by modern cloud architectures. It’s built around a public chain, called AERGO Chain. This makes it different from private solutions like Hyperledger or Corda, or Blocko’s Coinstack.


This protocol is being designed so it can be used in any combination, public, private, or combined public and private

ONE OF THE NOTABLE FEATURES OF AERGO IS THAT IT SUPPORTS “SQL SMART CONTRACTS” THROUGH AERGOSQL, A “MULTI-PARADIGM SMART CONTRACT ENGINE”

While I initially found this a little strange as SQL is typically used to interrogate and retrieve existing data, it’s an exceptionally common programming language. As I researched further, I found that the coding language itself will not be SQL, but it will be a language with a SQL-like syntax.

This is thankfully as simple as it seems, a proposed data-relational model for storing and accessing data from the chain with simple query language.

Using AERGOSQL will require the AERGO native token, but the AERGO public chain also supports Ethereum Virtual Machine to achieve interoperability between different smart contract operations. This is one of the key factors that I looked for when investigating the AERGOSQL smart contract engine.

AERGOSQL aims to be able to create advanced smart contracts, but with simple SQL-like query language.

I am a sucker for open source. I find that anyone who avoids being open source, opens themselves up to be disrupted by someone who is (unless they are waiting for patent approval of course!). AERGO are on the right side of the market here – making it clear they want to open up their ecosystem to the world by supporting developers who want to use, develop, incubate, and expand their core features and projects on the existing stack. By allowing SQL developers access to smart contracts, there are really endless possibilities.

They acknowledge the importance of attracting talent to build out the ecosystem, which is comprised of 3 parts

AERGO CHAIN – AN OPEN SOURCE BLOCKCHAIN OPERATING SYSTEM / PUBLIC INTERNET OF BLOCKCHAINS

“A protocol consisting of a global public decentralized network of enterprise blockchains run by node providers, aergo chain contains the AERGOSQL smart contract engine. “

AERGO Chain is DPoS (Delegated Proof of Stake). I am typically resistant to DPoS; It opens doors to bribery – vote buying and collusion – such as we have seen with EOS “Cartels” forming – however it has some notable upsides to more enterprise focused networks or those where Nodes are competing businesses. If your Node Operators are enterprises or competitors, they are less likely to collude. This is where DPOS may work out. This is yet to be demonstrated successfully at scale but I’d keep an open mind considering the model it is being implemented into.

(a good example of DPoS: gaming company Ultra will fork EOS and assign competing game development companies as block producers. I can’t see these competing companies colluding with eachother..)

As the node operators form “The Horde” (likely made up of enterprises) and they will govern and have rights within the AERGO stack. Likely a simple rewards model for staking, I’d like to learn more – the AERGO team have announced they will share a more detailed Token Economic Model by Summer, which I eagerly await to review as I intend to stake my AERGO.

The Node operators form “The Horde” (likely made up of enterprises) and they will govern and have rights within the AERGO stack. Likely a simple rewards model for staking, I’d like to learn more – the AERGO team have announced they will share a more detailed Token Economic Model by Summer, which I eagerly await.

The chain is currently processing around 8000 TXPS, before scaling efforts have begun.

AERGO HUB – THE PUBLIC INTERFACE TO AERGOCHAIN

HUB works in harmony with secure dApps to the AERGO Chain. There are two dApp repositories:

  1. Public Repo – a shared, open and decentralized infrastructure for dApps, (similar to GIT Public Repos) used for open source projects.
  2. Private Repo – a private controlled and secure infrastructure for dApps. The focus here is on compliance, performance and quality of service, and will be focused around Enterprise users.

Both of the above repositories inherit tested infrastructure technology that’s been previously used by Blocko’s Coinstack.

Using this repository method, information can be protected in a Git-like manner and only accessible by those who are able.

The HUB aims to offer advanced capabilities such as support for Software Microservices, a serverless database, a gateway for intelligent routing of data traffic & messages to a blockchain, and even an interface for smart oracles, allowing you to connect a blockchain to seperate data sources like external databases (SMS, Active Directory, for example). (Oracles are a subject that interest me a lot, so I’ll be looking into this subject more on ChainCuration)

To deploy dApps or other supporting software or resources on the AERGO chain, they must be first provisioned and managed. This is achieved through “AERGO HORDE” (to be installed by Node Providers)– a public orchestration software framework for anyone who wants to participate in AERGO HUB. Conceptually, this is very similar to a public Cloud Web service.

AERGO MARKETPLACE – ONE STOP SHOP FOR SERVICES OPTIMISED FOR AERGO CHAIN

Also managed by the AERGO HORDE (node operators) the marketplace is self explanatory – a place for software applications, computing resources and other services that were optimised for AERGO Chain. The scale of which is demonstrated above – for businesses of any size, developers, contractors and more.

The idea is to allow service providers, independent software vendors and cloud infrastructure vendors to make their products and services available to all AERGO users.

AERGO also plan to support national and regional government agencies, particularly those aiming to solve very specific problems using blockchain technology. As seen above in recent news, this is already in effect.

The end users of AERGO Marketplace are software developer or businesses of any size wishing to build a blockchain project, but also as mentioned above, those looking find a particular solution using blockchain. As time progresses and the marketplace matures, we can expect to see some really interesting capabilities that may become available, such as:

  • Computing Power (CPU)
  • Storage
  • Machine Learning Algorithms
  • Smart Contract and Smart Oracle Templates
  • Digital Identity Blueprints
  • Blockchain Training!

The vision for the marketplace is extremely grand, and I hope that winning “Best Brand” in 2018 will translate into a friction-less User Experience on the Aergo Marketplace!

SCALING

There are 3 main approaches to solve scalability.

  1. Domain Partitioning
  2. Scale “up”
  3. Scale “out”

Domain Partitioning – Unlike conventional blockchain implementations, AERGO is able to fork and merge its data through branches freely. As a result the ledger can be partitioned both logically and physically through different repositories, similar to how GitHub is able to have tens of millions of repos.

Scale Out – The Scale Out strategy incorporates the AERGOFS (Aergo Filing System) which serves as a storage layer for each node’s blocks and indices. AERGOFS is a Distributed File System, a simple HTTP interface that enables access from both smart oracles on a server (such as SMS or Active Directory) or dApps on a web browser. Where the smart contracts provide smart, structured storage, AERGOFS provides unstructured data storage. It allows each node to store an unlimited number of blocks and indices and act as an “uber-node”

(AERGO smart contracts have to store locators to access files stored on AERGOFS, while I don’t see this as problematic at all, and it is in fact a great pairing, I can’t help but think back to Overledger’s (Quant Network) solution that requires no new imposed blockchains, connectors, or locators to retrieve information from chain.)

Scale Up –AERGOFS seeks to optimise a single node, scaling upward rather than horizontally. While horizontal scaling works well for large amounts of data, it doesn’t meet realistic benchmarks. With fast storage like SSD, optimizing a single node becomes very effective for everyday systems. Blocko learned this through tried and tested methods with Coinstack, which gives me good confidence over some competitors who haven’t had time to test these methods yet.

To aid “Scale Up” – AERGO nodes are equipped with an efficient networking stack and an optimized storage engine for enhanced Input/Output.AERGO networking stack provides a networking fabric able to serve a high number of nodes with complex topology in a bare metal or cloud enviornment.

AERGO TOKEN

A seemingly simple utility token. It is intended to be the medium of exchange on the Aergo Ecosystem. As listed in the whitepaper, the tokens are for the following:

  • running smart contracts
  • DPOS Consensus
  • payment method for Blocko’s tech support on Coinstack 4.0
  • payment method for AERGO Hub
  • payment method for services and assets on AERGO Marketplace
  • payment method for the AERGO domain

The most interesting of the above is indeed time dependant and that is the success of the Marketplace and Hub, now that mainnet has released (15/04/19) we will begin to see growth in the ecosystem.

To be frank, the token economic model at present is rather simple. I would really like to see the full model release, which is intended to be out by Summer. Though simplicity is sometimes the best way to approach a token, I’d like some more information on staking and how node operators are selected and what the requirements are, as well as the parameters for payment. Just how imperative is the token? While it has a clear use case, I’ll be keeping an eye on the mainnet now it is live to see the impact it has.

One thing I am excited about, is how many developers will suddenly have access to smart contracts, with so many people familiar with SQL – the game changes very quickly. The fact these smart contracts are powered by AERGO token paves the way for some interesting demand for the token itself.

AERGO ENTERPRISE

Blocko also just announced that it is beginning a client migration program.

“We’ve been supporting Aergo Organization in the design and construction of the Aergo platform for a full year. After a long and intensive R&D process, we are excited to finally launch our largest product to date,” said Won-Beom Kim, founder and CEO of Blocko. “Our existing customers will be able to complete the migration program with ease and switch to our hybrid, high-performance blockchain network setup to achieve greater levels of security and scalability, while expanding their use cases.”

This effectively reduces go-to market considerably, as all of Blocko’s clients and partners will now be encouraged to migrate over to Aergo. With a list of readily available solutions that Coinstack have built for previous clients, now readily available on Aergo Enterprise, with payment available in Aergo tokens, we may see some demand for the token increase in the coming months.

Some of the services Aergo Enterprise offers:

  • Simplified administration: Familiar, easy-to-integrate, one-click provisioning of custom blockchains, as well as simplified cloud system orchestration.
  • Easy monitoring: Integrated with Hub Enterprise, Aergo Enterprise provides a dashboard, transaction and block history, as well as resources and asset monitoring for independent blockchains.
  • Usable development kits: SQL/PL-like programming and data handling, as well as an integrated development environment for smart contracts.
  • Integrated node management: Extended node management systems for more configurations and settings such as managing permissions and deleting data.
  • Pre-built applications: Fully-developed applications built on Coinstack that are in use by large-scale companies for Identity Authentication, Document Management, Smart Contracts, Payments, and IoT will now be offered on Aergo Enterprise.
  • Around-the-clock support: Providing the same expertise accumulated from working with large clients over the past four years.

I expect that Blocko will almost entirely focus exclusively on Aergo now, given that they aim to become the global blockchain equivalent of TCP:IP, they will likely have to. This move demonstrates their push to get all their clients to migrate over to Aergo Enterprise.

Just this month they completed the following as part of their marketing efforts, with more to come.

  • Video Q&A
  • Bittrex International Listing
  • Upbit Listing
  • Aergo 1.0 Open Source
  • Mainnet Launch
  • Aergo Enterprise Announcement

OVERALL

I am confident in Blocko and Aergo’s ability to execute at scale, and to bring on some big partners and clients. They are being perhaps dangerously ambitious, but with a clear route to market and defining differences from competitors like AERGOSQL – bringing smart contracts to 8 million SQL developers – where Solidity only has a few thousand.

I’d like more information on the token economic model, but I foresee Blocko’s ability to bring value to the Hub & Marketplace that will generate demand for the token, giving it an edge platforms like Ethereum or EOS don’t currently have.

Aergo have been one of the most consistent blockchain startups I’ve seen since their ICO, with regular activity on github & medium, powerful branding and cohesion with roadmap targets.

When they begin shipping Smart Contract templates in AERGOSQL, I think everyone will be surprised at how quick developers begin to build out the ecosystem. This is something that I personally overlooked and now I understand more, I am very excited about.

I’d like to see some more “sister network” style partnerships with other platforms, and I’d like to see some corporate level partners acting as nodes.

PREDICTIONS

Now that Upbit have listed Aergo, it probably won’t be long before it is on Bithumb and/or Huobi. With currency pairings, it’ll likely perform very well. By the end of April, we will likely see another exchange listing. While I do not think more exchanges are particularly essential, they will want to get on board with the events of the past few days, particularly Blocko’s announcement.

I expect a corporate partner like Samsung or another Tech Giant in Korea coming on board to use Aergo Enterprise and to act as node operator.

DISCLAIMERS:

  1. This article was not paid for by AERGO or Blocko and was created in my own time for personal and public benefit.
  2. Most information was readily available in the business and whitepapers, and I have done my best to consolidate that with external information published since then.
  3. Business practice and successes do not necessarily impact token price! An explanation will be made as to where they may in the token section. I am not responsible for token price, nor do I encourage or endorse the purchase of any token on ChainCuration.

REFERENCES

https://www.aergo.io/resources 
https://www.blocko.io 
http://www.ciobiz.co.kr/news/article.html?id=20180828120007
https://www.marketwatch.com/press-release/blocko-collaborates-with-south-korean-government-funded-etri-on-consensus-algorithm-research-2018-11-27
https://m.news.naver.com/read.nhn?mode=LSD&mid=sec&sid1=105&oid=092&aid=0002149937
http://www.etnews.com/20180928000128

The Daily Chain – Inform. Educate. Succeed.

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