Tezos, the generic self amending crypto-ledger

in #crypto-news5 years ago (edited)

What is Tezos?

Tezos is a generic technology which it's developers claim can intatiate any blockchain ledger. The developers claim that it can represent Bitcoin, Ethereum, Cryptonote and perhaps more. How does it accomplish this? It appears to have a modular design and is totally programmable. Tezos could be a next generation blockchain technology to compete with Tauchain and it is worth taking a very close look at.

Some details on how Tezos works

Tezos uses purely functional programming (Ocaml to be specific) and in terms of governing it takes a similar approach to Tauchain. A quote from the whitepaper states:

Most importantly, Tezos supports meta upgrades: the protocols can evolve by amending their own code. To achieve this, Tezos begins with a seed protocol defining a procedure for stakeholders to approve amendments to the protocol, including amendments to the voting procedure itself. This is not unlike philosopher Peter Suber’s Nomic[4], a game built around a fully introspective set of rules.

This is a very important design decision among others by the Tezos developers. First they went with a functional programming languange but not just any. They chose Ocaml which has strong typing, and is one of the better functional programming languages they could have chosen in terms of security and ease of development. This gives Tezos an immediate advantage over something such as Ethereum with Solidity but there is also another critical design decision which is they put a focus on long term evolvability by putting in place a Nomic style of governance.

The under appreciated benefits of the choice of a Nomic layer

Tauchain will also be using this Nomic style of governance and one of the major practical benefits to this is that it's entirely self defining yet has the potential to be stable. The way a Nomic style governance system works is that the initial participants decide on the rules for making rules, and through that there can be a process which can lead to future design decisions and or governance.

Rationalia is a basis for governance recently popularized by Neil Degrasse Tyson with this statement:

“All policy shall be based on the weight of evidence”

To reiterate, another way of saying this might be that all policy must be evidence based. This is an example of an initial rule for making rules. This one rule could be the initial rule in a Nomic style governance structure. In order for developers to claim for example that a lower block size is a protection against DDOS vulnerabilities the developers would have to supply some data which can prove their claim or at least provide evidence which can be quantified in a standard risk/benefit analysis.

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This Nomic layer combined with the initial rule of "evidence based policy only" would allow for an evolving consensus which is aligned with reason, science, and ideals from the Enlightenment era. At the same time this consensus would also lead to evidence based design so that changes (edits) are not made unless there is data to show from some source that the consequences would be aligned with expectations. Of course this is not perfect but the point is to use Rationalia as an example of a primary rule in the rule tree which shapes the evolution of all other rules and edits to consensus.

Tezos is abstract and has a novel Proof of Stake mechanism

Code can also be amended with Tezos using a very modular design. This is made possibly based on the fact that Tezos is an abstraction which mathematically models the blockchain as described in this quote:

A blockchain protocol can be decomposed into three distinct protocols:
- The network protocol discovers blocks and broadcasts transactions.
- The transaction protocol specifies what makes a transaction valid.
- The consensus protocol forms consensus around a unique chain. Tezos implements a generic network shell. This shell is agnostic to the transaction protocol and to the consensus protocol. We refer to the transaction protocol and the consensus protocol together as a “blockchain protocol”.

Additionally Tezos utilizes Proof of Stake as it's mechanism. The Tezos Proof of Stake algorithm is very novel. We can see a quote below to have an idea:

Each block is mined by a random stakeholder (the miner) and includes multiple signatures of the previous block provided by random stakeholders (the signers). Mining and signing both offer a small reward but also require making a one year safety deposit to be forfeited in the event of a double mining or double signing.

The protocol unfolds in cycles of 2048 blocks. At the beginning of each cycle, a random seed is derived from numbers that block miners chose and committed to in the penultimate cycle, and revealed in the last. Using this random seed, a follow the coin strategy is used to allocatemigning rights and signing rights to a specific addresses for the next cycle.

For more details on how Tezos will work you can watch this interview:


Dana thanks! Keep going! I would like to understand differences with Tendermint :-)
Also I would like to understand all fundamental differences in opensource permissioned blockchain solutions.

I collected everything from the internet, but to be honest I still don't understand how this things should be evaluated:

  • Eris - by Eris Industries. Derived from Ethereum; Go
  • Graphene - built for BitShares and Steem by Cryptonomex. C++
  • BigChain DB - built by awesome community. Ascribe behind. Lightweight. C++
  • Scorex - by Alex Chepurnoy. Scala
  • Open Blockchain - by IBM. Go
  • Juno - by JP Morgan. Haskell
  • Multichain - by CoinScience. Bitcoin compatible; Java
  • Openchain - by Coinprism team. Bitcoin compatible; C#
  • Sidechains - by Blockstream; Bitcoin compatible; C++
  • Ripple - by Ripple Labs. C++
  • Stellar - by Stellar Foundation. C++
  • Hyperledger - acquired by Digital Assets Holdings; now Linux foundations. Go
  • Mijin - NEM based; Java
  • Lisk Dapps - Sidechains using Lisk. NodeJS
  • Tezos - Self-amending cryptographic ledger. OCaml

I really would like some ideas! Do you have?

It seems like you cover a lot of the known technologies being developed but perhaps you could add Iota, Jinn, Storj,SAFE Network, Siacoin, Filecoin IPFS, Ceptr, Solid.

I could do a compare and contrast briefly between Tau and Tezos. Tau is a general purpose programming language with features which are far more ambitious and go far beyond anything Tezos is trying to do. Tezos is a specific fit for purpose generic self amending crypto ledger which utilizes Ocaml for smart contracts while Tau itself is a programming language competing with Ocaml.

So Tau is a programming language and it's developers seek to make it the best in it's class of functional languages. They seek to make it both faster and easier to use than any other known language with similar capabilities like Idris. In addition, it will be very powerful because it will have a semantic layer which Tezos will not have at least at the start and while Tezos could probably build up with smart contracts it still currently isn't being designed for that.

Tezos is in competition with Ethereum, SAFE Network, Bitcoin, or they could decide to implement these various blockchains within it which might be smarter than direct competition. How you should evaluate really depends on what you value but if you value security then you should look toward smart contract platforms where smart contracts are written in strongly typed functional languages, where formal verification is mandatory. Ocaml is actually a great choice between ease of development and security but Tau has the potential to be much easier and even more secure.

Thanks Dana for explanations. That will help me.
Let me comment on your suggestions:

  • SAFE Network is not blockchain technology at all. AFAIK you will never be able to observe the whole state of a network.
  • Storj is just a protocol on top of Bitcoin and Counterparty for storage of immutable chunks of unstructured data. Its not about transactions at all.
  • Sia is designed to have very simple set of smart contracts which allow to do the same thing as Storj is intended for. It allow to transact only using core token.
  • Filecoin based on IPFS exist only on Juan's paper. I didnt hear about any implementation.
  • Iota is a quite new beast and I don't understand nor how it works neither what it is best for yet. AFAIK Jinn is a hardware chip with ternary logic with the same people behind.
  • I was not able to find Solid on Github. I am interested in open source only.
  • Thanks for Ceptr. Will look into it.

SAFE Network has a blockchain data structure called SAFE Consensus.

Solid on Github: https://github.com/solid/solid-apps

i thought i share what i found on reddit here.Overall, I was biased to like the project, and have participated in ICOs for 50% of all smart contract platforms that have launched to date. I love that they have an MVP, have done the work, and are bright.
But the last couple months have been profoundly disappointing to me wrt Tezos. Here are my concerning negatives.
If their uncapped ICO raises $100mm+, it will be 4x larger than any ICO to date. It says a lot about the Breitman's character that they are ignoring cryptocurrency self-policing and standards and not capping it below $30mm like every other project, many of which could have broke away from community standards and raised much more than they did. It's frankly reckless. It's their project, it's their choice, but nothing happens in a vacuum. (They also get cash directly from this ICO, 8.5% of the fiat proceeds, that doesn't go to the Tezos Foundation but to their own entity, which is a first I think).
This is the first ICO to my knowledge in which the founders get 8.5% of the fiat proceeds in cash in addition to 10% of the tokens. This means if things go well, they will be extremely wealthy even if their projects fails in 1 year. This 8.5% is through the Breitman controlled US entity, DLS. I wonder how many potential ICO participants do not understand that this ICO is endowing not just the Tezos Foundation (10% of tokens, plus fiat), handpicked by the Breitman's and "philosophically aligned" with them, but also the Breitman's via DLS (8.5% of the cash, 10% of the tokens). The conflicts of interest are many and the structure is murky. This also will put heightened regulatory scrutiny on the Breitmans personally and Tezos in general. If we can't self-police, the SEC may do it for us. And the largest ICO ever, one that solicited US investors and funneled cash to a US entity, seems like the most obvious target to date. Unlike TheDAO, which was a disembodied pooling of capital and in which no one gained any money whatsoever, Tezos has actual targets who are actually raising money. Slock.it was considered greedy but never saw a dime from their ICO the way it was designed. The Breitman's will walk away from their ICO as ultra high net worth individuals (UHNWIs for people who love lingo). If Tezos ever becomes as successful as Ethereum is today in terms of market cap, the Breitman's will be billionaires. That doesn't seem like the appropriate out-of-the-box incentive structure for a decentralized technology platform.
The character of the Breitmans is a concern. Any blockchain project is in part a social project, one that takes its cues from the leaders. You can see this in a million ways but the difference between Ethereum and ETC is one example of how important leadership is and how communities build around their thought leaders. You can see it in Augur, Monero, Synereo, Bitcoin, Steem, Maker, Digix -- the leaders and the team set the tone and the community evolves around that seed. I have seen the Breitman's be overconfident, dismissive, and rude to potential investors while they are trying to raise $10-200mm. The structure of their raise alone is reckless for themselves and the cryptocurrency/blockchain space.
In the real world, when a mgmt team has a Jeff Skilling moment, it's just a big red flag. It's great that you are the smartest guy in the room -- but that's not enough, character matters, and being able to work with people and build a community matters. EQ is as important as IQ. I asked a critical question and his response to me was "this feels like a negotiation" and then he questioned my motives and responded that Tim Draper disagreed with me (appeal to authority, so it goes. TD also has a different opinion on Theranos than I do). It didn't leave me with the warm and fuzzies. I was pretty shocked when he insulted another potential investor, one I know to be reasonable and diligent and helpful to others, and then said "kthxby." It was a low EQ move, the kind of thing that if it happened in the real world would crater a fundraise. I've met with unicorns and big real world companies' mgmt teams during fundraising processess, including one very large logistics unicorn famous for being difficult who proved it to my face -- and yet that unicorn's hubris was less than what I've experienced from Tezos. My takeaway has been: is this someone you want to be in control of $100mm? Are they ready as leaders? Do they have what it takes? We are learning in project after project that character and the quality of the team are integral.
The scope of their roadmap is ridiculous and belies that investors should not have confidence that the team will use the raised money well. The plans are massive and random and the team doesn't have the necessary expertise to handle the variety. Scope is way too big. This looks like empire building and it's frankly, an unfocused, shoddy plan. The detail in the plan reads fake to me. Pretty obvious that it comes from smart, talented people without much experience but with a lot of confidence. It's not as bad as when TaaS said they would be making a "Bloomberg competitor" on top of running their CEF but it's not far off. They are scope drunk. In my experience with companies, mgmt teams who wants lots of money or a blank check, and have little tangible plan with what they will do with the cash other than "good things" and "humbling scope" burn cash quickly and don't create value. Span of control issues will be rampant here, and it's evident that the Breitmans don't have the experience to even know what span of control is. I like ambition and this whole space is rife with dreamers. But most are not asking for $100mm++ and derisking themselves with cash payments upfront. Examples (note that there were also a lot of spelling mistakes on their roadmap -- a document to justify why people should give them $100mm+):
"Negotiate with a small nation-state the recognition of Tezos as one of their official state currency, which would immediately give Tezos favorable treatment in terms of financial regulation. Attempt negotiations to purchase or lease sovereign land."
"Purchase a banking license and deploy the Tezos blockchain as a backbone for business operations. Experiment with automation using a blockchain for basic processes.
"Acquire mainstream print and TV media outlets throught [sic] token issuance to promote and defend the use of cryptographic ledger in society."
"Sponsor a leading computer science department with endowed professorships and extensive grants to graduate students in the field of formal verification."
Why won't this evolve into just Breitmanchain or Oligarchchain?
We know from the most similar decentralized project, TheDAO (gathered a lot of money, most ever, was a decentralized organization, was in the spotlight, attracted endless scrutiny) that voter apathy is real and quorums are hard to reach. In TheDAO, this would have let to an inert, unwieldy blob of a closed end fund if it had not unwound.
Tezos has been positioned as a reaction to TheDAO and the overall Ethereum governance fallout of TheDAO and to governance problems in Bitcoin. It can adjust the quorum down to solve for voter apathy, amongst many improvements. Breitwoman started this comparison when she penned her TheDAO op-ed in Feb'17 and they've played up the governance failures of TheDAO (they are ignoring other learnings from TheDAO like ICOs should not be uncapped, and if things go wrong, you're better not having a centralized recipient of crowdsale proceeds around as a traget with legal standing in the US...). But conceptually, how won't Tezos fundraising structure and adjusting quorum lead to centralized capture by the large holders Day 1? The lower the quorum adjusts to, the easier it is for a large holder to dominate the governance.
And the design gives a 20% block to "philosophically aligned" entities. The Foundation does not seem independent enough to disagree with the Breitmans in a substantive way, given the foundation was picked by the B's. Why create a decentralized governance solution and then endow the creators with stakes that look like they will dominate voting?
How won't the most endowed, most influential two people not control the governance? Why in a decentralized solution do some people seem more equal than others out of the gate -- the B's have alluded to having an uncapped sale so that people like Olaf and Tim Draper can get in (ironically these people already have benefited from preferential access, so this rationale rings hollow) suggests that some potential Tezos holders are more equal than others and certainly more desirable. Why won't Tezos be captured by oligarchs and the connected? Why use blockchain to recreate existing power structures? It stands out that an oligarch has already bought in and been used to market Tezos.
It's because of these last set of fears that the characters of the Breitmans really matter. They need to act fair, be pragmatic, and foster a decentralized open community for Tezos to succeed. But they will be rich in fiat, the largest Tezzie holders, and they will have already communicated to the public that some Tezzie holders are more equal than others. What's the point of blockchain?

Will Tezos really bring a big splash in the marketplace?