Blockchain technology has a potential to revolutionize the tech world. However, current consensus algorithms used in industry have their limitations, which severely limit their scalability. Almost every blockchain startup is suffering from scalability issues.
Conventional technology is mostly focused on centralizing, as it makes control and scrutiny over data far easier to maintain. Blockchain, however, believes in the exact opposite. It is focused on decentralizing ownership in order to avoid a central monopoly over how the data is manipulated and handled. Blockchain believes in pure consensus, by forming a network of users where every decision, every transaction is carried out through the consensus of every node (user) in the network.
To describe the Proof of Human (PoH) consensus mechanism, we have to revert back to Proof of Stake (PoS), which has recently received a lot of discussion in the context of blockchain scalability issues. Without going into details about its advantages over Proof of Work (PoW), Proof of Stake eliminates the need to spend a huge amount of electric power to validate blocks and establish consensus. Instead, blockchain participants with the most stake in the network are selected by algorithm for the right to validate the blocks. The assumption behind Proof of Stake is the following: those who hold a stake in a network are incentivized to act in its interests. All other things being equal, the bigger stake one has, the higher should be his or her interest in preserving the system and to follow the protocol rules. The big vulnerability of such a concept, however, is the fact that the same size stake may be valued differently by different actors.
This is where Hybrid Blockchain comes into play. This new breed of blockchain can resolve the blockchain scalability issues by introducing their Proof of Human consensus algorithm.
How blockchain platforms are solving scalability problems
Ethereum network is currently seeing two main off-chain solutions to overcome the scalability problem: The Raiden Network and Plasma. In the Raiden Network, the blockchain would not need to be involved in each and every transfer. Such off-chain transactions are faster and cheaper than the on-chain ones. The other solution, Plasma, increases transaction speeds by handling larger datasets in a unit time. This is achieved by broadcasting only those transactions to the public chain which have been completed. The Raiden Network and Plasma work together to enable faster and cheaper transactions.
Blockchain-based startups are also experiencing the same problem and are looking into ways to overcome this issue. For example, take the blockchain platform Zilliqa. The platform addresses the scalability issue by implementing sharding. Sharding is aimed at improving scalability, I/O bandwidth and the overall performance of the system. It splits the network nodes into shards – parallel chains. Each of these chains is responsible for processing only a portion of all transactions. All shards then produce micro-blocks that are merged together at the end to form one complete block. Unlike other networks like Bitcoin, Zilliqa does not use Proof of Work as a consensus algorithm to mine every single block as it makes the mining process much more complicated.
Another blockchain-based body working to improve scalability is the Bank of China. The bank is looking into ways to compress blockchain data which will lead to a more scalable financial network. The system will compress the clients’ transactions and pack the respective block into a “data block”. This compressed block will then be stored into the network’s storage system. The methodology also ensures the security of the entire compressing process by passing the compressed blocks through a hash function.
How Hybrid Blockchain resolves scalability issues
Last year in Ethereum ecosystem, the issuance rate of Ether was 14.75%. Roughly five Ethers per block are issued. Because Ethereum rewards Uncles it means that there may be more or less than five Ethers.
In 2017 the issuance rate of Ether was 14.75%. Roughly five Ethers per block are issued. Because Ethereum rewards Uncles it means that there may be more or less than five Ethers. By 15/03/2018 miners generated 24,590,422.41 ETH as Mining Block Reward and 1,604,216.75 Mining Uncle Reward. For securing the network, they received a total of 26,194,639.1 ETH. Using the 15/03/2018 price of $594.18, security of the network costs 26,194,639.1 ETH * $594.18 = $15,564,330,660.4. There are 183,439,589 transactions on the network. Therefore, security of a transaction in the main Ethereum network costs are about $84.85 at the current rate. The counting based on https://etherscan.io/stat/supply
Following figures would never allow emerging economies to enter digital market sphere. That is why startups focused on unbanked are seeking the solution. Recently, Humaniq announced to be the first project with complete hybrid blockchain. We architecture the solution which allow for HMQ token not only to remain transparent and accessible on the Ethereum main-net, but also to provide inexpensive consensus to secure the network. So that our users will be able to perform transactions on Humaniq Network and spend as much as zero on transaction fees.
Unlike private and public blockchains, hybrid blockchain is still a fresh concept. It enjoys characteristics of both the other two extremes. Our hybrid blockchain is based on the underlying Ethereum blockchain. It uses Humaniq tokens, which are based on the standard ERC20 contracts. The whole process comprises of three blockchains, which are the following:
· External (main-net) Ethereum Blockchain
· Internal main HMQ Blockchain
· Internal blockchain for the specific country: Uganda, Senegal, Zimbabwe, Tanzania and Rwuanda
Based on the Ethereum blockchain, our project gets to enjoy Ethereum’s high level security. Entire process of verification and authentication will be carried out through the main Ethereum Blockchain. Furthermore, to enhance efficiency and lower transaction costs, we provide users with a digital wallet as well. This wallet will facilitate users by performing transactions with other Humaniq users, for a considerably less amount, close to zero.
In order to eliminate the risk of fraud and unauthorized transactions, our users have to pass through a biometric verification protocol where there will be asked to take pictures of themselves with different emotions. All of the verifications are carried out by the Humaniq app. It asks the user to take a picture and then analyzes the user’s expressions. This process takes place repeatedly for different pictures with different facial expressions and emotions.
By detecting and analyzing the emotions of the users, we ensure that only genuine users be able to join the Humaniq network. Over 100,000 users have downloaded the Humaniq application by now.
How Humaniq works
As explained above, every user has to be biometrically verified before they are allowed to access a secured wallet.. After being verified, the users will gain access to a digital wallet, bio ID, and a secure messenger, which users can use to efficiently communicate with each other.
Our application is extremely secure and allows users to communicate quite easily with each other and carry out transactions directly from their conversations. We plan to create a network comprising of different blockchains working together to create a unified, efficient network. This hybrid network makes it extremely easy to carry out transactions between different countries at a very low cost.
The whole process rides on the ability of the three main blockchains to interact and exchange transactions with each other. How the applications goes on to achieve is, that, first of all, it checks if the given wallet that is the receiver of the transaction, is in the Humaniq blockchain or not.
If the digital wallet does not exist in the central Humaniq blockchain, then the application accesses the external Ethereum main-net blockchain for authentication and verification of the transaction.
Our goal is to develop a world-wide blockchain for every country. This is to make the Humaniq network more systematic and the transactions much easier to process. This would provide Humaniq, not only the safety of the Ethereum blockchain, but also the speed and efficiency that was initially promised by cryptocurrency enthusiasts.
We are currently saving significant amounts on commission fees for our users who can enjoy free transactions. We are aimed at further expansion of this project into a global trans-country and trans-blockchain implementation. Humaniq has an open API with up to 100 endpoints available to developers to use over REST. Therefore, 3rd party developers can easily use the functionalities provided by Humaniq and integrate them into their own applications.
While developing the whole system, we want to give control to the 3rd parties. This would give way to creativity and innovation. Which is why, when developing the architecture of the application, the gateway app should be the only service exposed to the public. A strict criterion has been set for the gateway app and the gateway should be able to be scaled horizontally. It should be able to combine requests and invoke microservices asynchronously. Moreover, the gateway should be able to verify the authenticity of the authentication token.
Humaniq’s goal
Our main aim of the Humaniq team is to fill the gap in blockchain industry that has been created by scalability issues. To do so, we present a practical and innovative solution. Our project holds enough potential to revolutionize the blockchain space and its idea seems to be a very practical application of how blockchains will allow cross-border transactions, almost instantly, with minimal costs.