In our first DNA
The review will consist of two parts:
Part 1: Concept behind the V SYSTEMS
Part 2: Code review
Key features that V SYSTEMS brings to the table:
▪️ SPoS (Supernode Proof-of-Stake) – new innovation, a major pillar that V SYSTEMS is built upon. SPoS is designed with enough incentives for supernodes to upgrade hardware and therefore continuously improve the network performance to support large scale growth of decentralized applications. Supernodes receive leased coins from coin owners to perform minting function, and share minting rewards back to coin owners, creating a self-governance ecosystem.
▪️ Minting Economy (no monopoly economy) – equal minting right of the minting slots gives the supernodes equal standing and
▪️ Blockchain as a Database – one of the keys to adopting blockchain technology lies within the migration from traditional database structure to this new decentralized framework.
▪️ Mainchain-Sidechain Model – the platform introduces its own model for mainchain and sidechain, in which sidechains could enable specialty activities to take place without involving the whole blockchain, thereby greatly extending the functionality.
▪️ A bench of cool features – modular design with pluggable components to let developers easily create blockchains. The platform also has cloud features, toolsets to set up blockchain for applications, smart contracts tools etc. to improve scalability and usability.
Let’s deep dive into each of these features.
SPoS (Supernode Proof-of-Stake)
What is PoS (Proof-of-Stake)?
Proof of stake (PoS) is a type of algorithm by which a cryptocurrency blockchain network aims to achieve distributed consensus. In PoS-based cryptocurrencies, the creator of the next block is chosen via various combinations of random selection. In contrast, the algorithm of proof-of-work-based cryptocurrencies such as Bitcoin uses mining – the solving of computationally intensive puzzles to validate transactions and create new blocks.
Sunny King (technological lead of V SYSTEMS) created a proof-of-stake (PoS) consensus with PeerCoin in 2012 to break the link to computer power resource consumption — instead, it allocates a weighting relative to the quantity of coin holdings participating in the consensus activity. PoS reduces overall system operating costs — and with reduced cost comes lower barriers to entry, enabling a much more diversified blockchain ecosystem. It is no longer proof of effort expended, but of the participant’s stake in the transaction. PoS consensus now is one of the most used in the whole industry. Ethereum is a great example, it connects PoW and PoS in a special, original way: the network began functioning from the classic Proof-of-Work and currently through a series of hard forks gradually moving to Proof-of-Stake because of PoS effectivity.
Minting and Mining
In an energy-free consensus system, the process of block generation named as minting, in contrast to the energy intensive process of mining.
▪️ Minting – the more coins you have, the higher chance you get to find a block.
▪️ Mining – the more computing power you have, the higher chance you get to find a block.
The Proof-of-Stake consensus not only eliminated the cost associated with mining in order to form distributed consensus, it also greatly expanded blockchain’s ability to scale-out, paving the future for the diverse applications of the technology. That is why PoS tech has found application in the most modern blockchains.
What is SPoS (Supernode Proof-of-Stake)?
More efficiency and cost-reduction can be introduced to blockchains through what V SYSTEMS is calling Supernode Proof-of-Stake (SPoS), which is the next logical evolution of the PoS concept.
What is Supernode?
Simply put, nodes are the individual servers making up the distributed network that hosts a blockchain, each of nodes is regarded as equal despite how much (or little) work they do; On the other hand, Supernodes are high-performance versions which take on much more of the heavy lifting in the network. The Supernode is not a shareholder but a minting pool in the system, which means it carries out functions both for the system and for minters. The minters’ activities take precedence in consensus weighting as their activities create value: they are rewarded for supporting and protecting the network while passive holders of coins do not.
Supernodes are very stable by design as they produce blocks at a constant rate, rather than randomly like previous nodes, making it inherently more scalable. Adopting a SPoS consensus algorithm can deliver high-volume transactions-per-second (TPS) and reduce the operating cost of the whole system while also solving the energy consumption problem.
SPoS creates Minting Economy and Self Governance
Supernodes minters produce blocks using both their own coins and coins leased by other users. A reward in the form of interest will be paid to the holders of leased coins. Since equal minting right gives supernodes equal standing and output, an equilibrium exists as a built-in force to equalize the ecosystem and thus solves the threat of centralization as seen in Bitcoin and other PoS ecosystems.
By introducing a pioneering account balance measure known as Minting Average Balance, V SYSTEMS is able to support stake liquidity and resolve busy contention attacks. The high liquidity removes the entry barrier for users who would like to participate in minting while ensuring the security of the network. Which means No Barrier to Participate in Minting.
The stake that participates in minting includes the coins owned and not leased out by the minter, as well as the coins leased by other users to the minter. The term lease refers to the relation that minter typically acts as a minting pool and is expected to pay some interest back to the owner of the coins. The ownership of the coins is never transferred in the lease relation, so there is no way for the minter to spend or transfer the leased coin.
Equal minting right of the minting slots gives the Supernodes equal standing and minting output in the network. This is in contrast to Bitcoin’s mining design where there is no built-in mechanism to deter the formation of monopoly in the mining pool market, which has been shown to be a practical threat to the decentralization goal of the system.
The equal minting right of minting slot serves an essential role in the economy of minting. Supernodes form a market of minting pools. The minting market will then form an interest rate for leasing. Since stake owners have a reasonable preference to lease to a supernode paying higher lease rate, and the additional lease to a high paying supernode will lower its lease rate due to the constant minting output of the supernode, an equilibrium exists as a built-in force to equalize the lease rates of supernodes.
The fee destruction model of Peercoin has also been adopted to serve the purpose of lowering inflation while eliminating the conflict of interest between minters. The hardware resource requirement of a supernode is standardized and promoted through community effort outside the scope of the consensus protocol.
Blockchain as a Database
Traditional databases are subject to strong access control, almost all data is restricted to authenticated accounts. Moreover, account creation is also centralized in traditional databases, where database administrator grants the user an account for access. A blockchain is actually a database because it is a digital ledger that stores information in data structures called blocks. With blockchains, conversely, key pairs are generated freely by anyone, without the need for centralized administration. The data is then considered public access unless it is stored in encrypted form on the blockchain. This applies even for private blockchains within an organization’s own LAN, unencrypted data should still be considered as publicly accessible, due to the unavoidable breach into the LAN. Instead, privacy is protected by the anonymity of the virtual identities. This is in fact arguably stronger privacy protection compared to a centralized model, where the loss of customer data happens often due to hacking.
For applications that require some form of central administration, it is achievable through the business logic inside the client/node software. Privileged key pairs known as administrators can be built into the client software. Administrators can then choose to mark those key pairs in violation of the service agreement as violators. Administrators can also mark specific data for censorship. The data of the violators or specific data that is inappropriate or illegal can then be disregarded by the node software. However, it is worth noting that this type of central censorship is of a weak form since the violator data is still allowed to enter the blockchain, it is just not recognized by the official node software.
As for customer identification, it is typical for applications to require users to pass an identity verification at the account opening process before the account is activated for use. This can be achieved as well inside the client/node software. A whitelist of public keys that have passed the identity verification will be introduced, and only data from this list of public keys are recognized by the software
With the above concepts in mind, a significant portion of the world’s databases in use today are suitable for migration to blockchain databases.
V SYSTEMS will imply the next three features:
▪️ Advanced Database Features – the platform plans to introduce advanced database query features. A Query is a request for data or information from a database table or combination of tables. This data may be generated as results returned by Structured Query Language (SQL) or as pictorials, graphs or complex results, e.g., trend analyses from data-mining tools.
▪️ Database Migration – migration features are extremely important for a database. As a database scales, it would be more cost effective to migrate it to a separate blockchain of its own, so the blockchain fees can be lowered specifically to the application itself. The platform plans to provide migration tools to move a database from one blockchain to another easily.
▪️ Modularity Goals – is an important design goals to lower the system complexity and reduce future development and maintenance cost, not only for the platform itself but also for the individual blockchains running applications in the ecosystem.
V SYSTEMS blockchain is backed by Mainchain-Sidechain Model. If a Sidechain of another blockchain satisfies:
▪️ Awareness – full nodes of Sidechain are also full nodes of Mainchain and process the entire blockchain of Mainchain.
▪️ Synchronization – Sidechain observes abstract clock synchronization to Mainchain. Abstract clock synchronization deals with the ordering of blocks between the two blockchains. Imagine the blockchain as an abstract clock, where of each block in the chain is a clock tick. It is called abstract as it has nothing to do with the local timestamps written into the blocks. Timestamps are local values that can not determine the correct ordering of events globally. Instead, block number inside blockchain can determine a global time sequence. Observers can safely say events in a previous block always happen before events in a later block regardless of their timestamps.
When a Sidechain block is generated, it links to the latest Mainchain block as its Mainchain parent. Multiple consecutive Sidechain blocks are allowed to share the same Mainchain block as their Mainchain parent. This Mainchain-Sidechain parent-child relationship must also be order-preserving.
This model of mainchain-sidechain allows V SYSTEMS to develop a proprietary communication method between the two blockchains. Unlike Blockstream’s proposal, V SYSTEMS model does not require pegging on Sidechains, thus giving Sidechain projects much more freedom to innovate.
▪️ Cloud Features
The platform plans to provide toolsets to set up blockchain for applications. Blockchain template preparation allows a user to choose from different protocol parameters and pluggable components such as the consensus model. Once the template and options are selected, the platform provides a toolset to deploy a new blockchain for the application, possibly even before a specific business logic needed for the application is developed.
▪️ Smart Contracts
Smart contracts allow parties to create binding agreements without a third trusted party. V SYSTEMS platform plans to support compatible implementations of Ethereum and EOS style smart contracts. They are developing the next generation of smart contracts through facilities for non-fungible assets, registered assets, implementation verification requirements for different situations, and support for more complex situations. Virtual machines will be implemented in a modular fashion so that applications can choose to enable a preferred style of smart contracts. As more competing smart contract systems are developed by the industry, they would also be evaluated and considered.
▪️ Enterprise DApp Support
V SYSTEMS platform will fully implement Enterprise Decentralized Application (DAPP) support with a full privacy protection layer for smart contracts, databases, and cloud development on mobile devices. An Enterprise DAPP’s back-end code will run on V SYSTEMS’ decentralized peer-to-peer network, unlike conventional apps whose back-end code runs on servers. V SYSTEMS uses a number of innovations including ’zero-knowledge proof’, ‘bullet proof’ and support for multiple signature algorithms. Business data and operational records will be cryptographically stored in V SYSTEMS’ public decentralized blockchain with protected privacy layer to avoid any central points of failure, providing robust, scalable App-based functionality.
A great deal of effort has been put on solving the scalability limitations on a single blockchain. The platform will allow applications to be run in separate blockchains if necessary, achieving complete scalability isolation to other application systems in the same ecosystem.
V SYSTEMS plans to develop both browser-based wallet and mobile light-weight wallet for smartphones, all while having modern user experience and high security in mind.
It is important to mention that V SYSTEMS is led by Sunny King, a legendary blockchain developer and creator of PoS consensus. Ethereum founder Vitalik Buterin called Sunny “the single most original altcoin developer out there,” complimenting his creation of PoS.
Moreover, V SYSTEMS has a team of data experts who’ve previously held senior roles in global companies including Oracle, Accenture, VMWare, Google, Nomura, UBS etc. Over 80% of the team is specializing in R&D.
▪️ The genesis block created 5,142,858,000 VSYS Coins.
You can check all transactions in V SYSTEMS explorer https://explorer.v.systems/
▪️ The annual inflation rate is around 5%, issued through supernode minting. VSYS Coins will be burnt during the transaction, and deflation may occur as a result.
▪️ The price is currently around $0.03, and with over 5.1billion coins in the genesis block, so V SYSTEMS estimated Market Cap is over $150million, which could amount to around top 35 among cryptos (24 Jan).
V SYSTEMS (VSYS) is listed on two notable exchanges:
V SYSTEMS platform is aimed to significantly lower the cost of blockchain technology and massively increase the competitiveness of blockchain as a database platform compared to traditional database systems.
V SYSTEMS is a kind of project that most of us missed since there were no public sale and hype games instead the team has definitely proved that they are capable to deliver. Although there is not much hype surrounding the project it has a great supportive community and recently has been listed on KuCoin and Bitfinex. We are definitely interested in the future updates of V SYSTEMS and are really happy that there are still projects that
Our team will continue to follow the progress of the team and will definitely reflect everything in the updated DNA report in 6 months.