COTI CEO and CTO on Discord (AMA 11/7/18)
We had a Q&A session with COTI CEO Shahaf Bar-Geffen and CTO Dr. Nir Haloani on Discord yesterday. Here are all the questions and answers from the session:
Q: Can you explain your "trust chain" a little more than the 60 second video on your site? More towards the security of it and how you're going to stop people from gaming the system to become a trusted node. It seems like it wouldn't be too difficult to ensure your node(s) were probable to be chosen to confirm transactions
Yeah, I'd like to hear more since the trusted nodes also become mediators....theoretically, I could buy something, dispute, and mediate my own transaction
A: COTI is developing its own base-layer protocol in the form of a directed acyclic graph-based (DAG) ledger, built from transactions connected through time, by harnessing trust-based algorithms. Trust is based on a combination of buyers and merchants historical behavior data as well as objective information about them. As such, COTI takes this into consideration when calculating trust using a unique machine-learning algorithm. Trust is used in the Trust Chain Algorithm to validate and confirm transactions faster and for less fees. Trust Chains grow as new transactions attach to two prior transactions which have similar degrees of trust as themselves. This results in an innovative consensus-based confirmation mechanism, where every user is incentivized to have a high level of trust while engaging in trust-building behavior due to the benefits associated with having a high level of trust (i.e. faster confirmation times and almost zero fees).
... In our Trust Chain protocol every transaction is associated to the DAG with both the sender’s Trust Score and the POW (Proof of Work) needed to confirm that the transaction is correlated to it. Therefore, low trust score (which is more prone to spamming the network) requires more POW for the transaction to get confirmed - this method is used to stop users from spamming the network. Highly trusted transaction requires less POW to get confirmed as these type of users are more trustworthy and most probably won’t try to spam the network. In addition, the Trust Chain also applies Trust Score to network nodes, meaning the network topology as well as behavior is monitored and identifies bad nodes in the network.
We have also built mechanisms to monitor, detect and defend against possible attacks, ensuring network security. An example of such a mechanism is COTI’s Double Spend Prevention Nodes. COTI also introduces novel protocols to address disputes between merchants and consumers that may arise when sending transactions, which is a much required feature that is not possible with other cryptocurrencies.
For more information you can check the following:
COTI’s Algorithm Simulation Explained - https://medium.com/cotinetwork/cotis-algorithm-simulation-explained-3519f778c1b8 - which gives more information about DAG consensys and attachment algorithm and the math behind it.
The COTI Cluster explained- https://medium.com/cotinetwork/the-coti-cluster-explained-a-live-dag-simulation-with-cotis-software-engineer-440f6df874f8
Trust Chains: the Future of Online Payments - https://medium.com/cotinetwork/trust-chains-the-future-of-online-payments-34c9c132e0ac
...
Q: I'd like to hear more since the trusted nodes also become mediators....theoretically, I could buy something, dispute, and mediate my own transaction
A: There is a bit of a confusion here as Trust Nodes are effectively operated by users wishing to operate a Full Node to do POW and earn the fees (COTI) for doing the work. Trust Nodes can’t be mediators in the network. Trust Protocol mediators are highly trusted consumers or merchants that are in the system and picked randomly from the pool of mediators and together with other mediators which are assigned to the case. None of the mediators knows one another and the effect of one mediator for a given dispute is in relation to the case amount, stake and the majority votes. In a sense, it serves as a sort of objective “Jury.” If a mediator chooses to practice biased and none trustworthy behavior it will probably be against the majority and will be reflected by reducing his Trust Score - mediators which have a tendency to vote against the majority in several cases might be downgraded to a stage they won’t be able to participate in future disputes and in the mediation process altogether.
Q: As a new, smaller coin, the opportunity is there for an attacker to position themselves on the network
A: Owning a big stake in the currency does not give any special capabilities to the owner nor will it allow him to dominate the network. The only possible way to try and manipulate the network is by operating one of the network nodes and trying to post fake transactions onto the network - this behavior is monitored and protected by the Trust Scoring concept which tracks all network participants (including nodes). It also prevents the ability to attack the network with 51% attacks as well as prevents any attempts to dominate the network with centralization as it is not possible to do so on the COTI infrastructure.
Q: Being completely honest, your internal exchange for merchants and offering of a debit card just scream scam.
A: The internal exchange (COTI-X) is not limited for merchants but is also for consumers The internal exchange is built to also offer a gateway to introduce new coins into the COTI infrastructure. Meaning that anyone who wishes to use the COTI infrastructure for his own use case will also be able to introduce their own coin built into the COTI network through the use of COTI-X. In a way, if our protocol is the rail roads, the COTI-X is the station where people can hop on and off from COTI.
We believe that the integration of a debit card (which has numerous benefits which you can read about in our whitepaper) is a great way to incentivize pass adoption in order for COTI to become the true global payment mechanism.
Q: What are your thoughts on Minerva? It seems like you're competing in the same space but using two different tactics? It speaks volumes to hear opinion's of your competition
A: Minerva and COTI are actually very different as Minerva is an application built on the Ethereum blockchain and its cryptocurrency is ERC20 while COTI is built on its own infrastructure and protocol based on DAG. COTI is more comparable to Ethereum itself in this sense as they both offer a platform on which many applications (like Minerva) can be developed. Additionally, Minerva’s system scalability is bound to Ethereum which is has a relatively low TPS. COTI has developed our Trust Chain infrastructure protocol which can be used for many use cases and can be applied to all types of industry requirements - not just payments. COTI can handle 10 000 TPS and increase exponentially with increased users - Unlike other chains such as Bitcoin and Ethereum which face scaling issues.
Q: I saw it mentioned that you have an alpha launch in August, why is this not shown through COTI's git repo?
A: Currently, all work is done in a private git repository which will be shared on our public git repo once the Alpha Net is released - which is expected to be at the end of August.
Stay tuned and prepare to be dazzled!
Q: When reviewing the core team, it seems you have no blockchain experience. How will you deal with the learning curve?
A: We have many advisors and development teams assisting our core team to deal with the learning curve. To name a few, we are working with Decent Crypto (https://decentcrypto.com/about/) which is a software development and consultancy firm specializing in Blockchain technology who are specifically assisting us with COTI POW. We work with Isazi Consulting which is a company specializing in advanced algorithms and optimization protocol who are assisting us in research and development of the Trust Score nodes. We have a team of around 30 members, half of which are from the payments industry and the other half are from the software engineering industry..
Further information on our team and advisors can be found here: https://coti.io/en/team.html
Q: Will the coti exchange platform have different crypto pairings (partnerships with different cryptocurrency)
Ie: binance exchange has BNB/BTC , BNB/XRP etc.. how will this play with the liquidity of the token.
A: Yes, COTI’s exchange (COTI-X) is going to support crypto pairings as well as fiat pairings. The liquidity of the exchange is secured and integrated with Bitfinex. The purpose of the exchange is to provide users and merchants with a quick, efficient and user friendly opportunity to obtain COTI tokens to facilitate their transactions.
Q: How does COTI protect itself from hackers? Can a trusts score be manipulated?
A: Trust score can’t be manipulated as none of the participants in the network can dominate it. Additionally, we have several layers of protection such as: DSP nodes, Mediation Layer, COTI POW and an onboarding process which requires KYC from network participants. The Trust Score takes into account many behavioral aspects and our network is monitoring all transactions in a semi-random fashion. Spamming the network is prevented by applying POW to every transaction. Double spending is prevented by using our DSP Nodes protocol. Seed/Address generation is done with a vulnerability-proof method combining elliptic curve method with several hashing methods. Consumers have a chargeback/dispute protection by using COTI’s mediation layer.
Q: How would you break down coti technology to a non tech person in the simplest terms. (Or I should say a non crypto person)
For instance we see Brad Garlinghouse on the news explaining in very simple terms the process of xrp.
(If you were to go on BBC or CNBC or Bloomberg etc... )
A: Our vision at COTI is to empower users to be able to exchange value as simply as it is to exchange information Internet - Exchanging value across the globe should be as easy as sending an email. Today, it is a costly and slow process. To solve this, COTI has built a technology that eliminates the middleman (banks, credit card companies) from such transactions, saving a lot of time and money in the process. It’s like Paypal, but without the associated costs.
also, here is a very simple video:
Q: Will the launched product be available in the US, Singapore, and China, and if so, how will you have to comply with US regulations? Have you been in contact with regulatory bodies to discuss this?
A: We have been discussing the payment solution with regulators around the world. We are working on a global licensing scheme, jurisdiction by jurisdiction. We’ll have a license to transmit value through cryptocurrency in EU first (a DLT license) and we would then focus on next jurisdiction, where Asia would be next and then the US.
Q: Are there any updates on the regulation development with Canada and Japan?
A: Not yet. We focus our efforts on the DLT license first.
Q: Is decentralisation like Bitcoin, ie complete or is there a central control point(s)? Does DAG's vulnerability depend on the how long the DAG runs or on how many people are part of the DAG?
A: In COTI’s case, there is full decentralization as all nodes can be operated by anyone and we don’t have any central control point in the network. For the second part I am not sure I understand what “DAG's vulnerability” refers to.
Q: COTI has a great reputation. Even though gambling is legal, and I have no doubt COTI would be regulated, would COTI risk its reputation by adding gambling sites? This is a genuine question. I would still support COTI though.
A: Thank you! We believe that illegal gambling or non regulated gambling is completely out of the question. However, regulated and reputable companies are legitimate in our eyes as this is how regulators and governments see them, alongside a lot of people. We don’t pass our own moral judgement on that. With that in mind, we won’t deal with the adult industry, regulated or not.
Q: I would like to know from the COTI team what the accuracy of the info in this image is?
A: The information is correct with the exception of TPS which is currently based on mathematical simulation that we have performed and still require our team to finalize the work towards our main net.
Q: Also, are there any noteworthy/respectable partnerships that COTI has entered into? And more importantly, what are these partnerships actually going to bring to the table?
A: We have entered into many partnerships such as processing.com, giving us access to over 10,000 merchants. We have partnered with Nakamo.to, giving us marketing access to Europe’s crypto capital (Berlin). We have partnered with Bancor, giving us instant liquidity. We have partnered with Decent group and Isazi SA, to enhance our R&D capabilities. We have partnered with TLDR and Hexa Labs for advisory. We have partnered with the Wings foundation and STOX for prediction markets around COTI.
We have been negotiating with various market makers and have already signed one (Fingenome).
The list goes on...
Q: What is COTI doing about identities? Will we be able to pick decentralized identities, instead of having to log into everything separately? I am looking forward to no more passwords without compromising ownership, privacy, and decentralization.
A: The idea in COTI is not to pick a decentralized identity, but rather, to generate a decentralized seed address associated with each account holder and transact using the seed address alone. There won’t be any need to login to everything separately as all network component are automatically synced via the seed/address.
Q: "Currency of the Internet" but you compare yourself to Visa and want to launch a card...I get those things can be used online, however, a majority of transactions are occurring IRL in brick & mortar stores...I guess this isn't a question but a red flag I noticed and would like to see be addressed
A: Our focus is indeed for online payments. With that in mind, acquiring a merchant or a consumer these days couldn’t be easier, as all it takes is downloading an app.
Q: Will you be creating protocol, some sort of Software Development Kit for others to get use of your trust chain?
A: Yes, the intention is to provide such SDK tools to easily integrate and build apps on our TrustChain infrastructure.
Q: How is COTI planning on staying relevant in the future? I mean, what COTI offers right now is revolutionary but with possible future competition and improvements in the payments industry, will its technology be relevant in the future like it is now?
A: We have a good mix of a strong Research & Development team as well as experienced business skills. Both Nir and I are entrepreneurs and have stayed in the game for the past 20 years by disrupting the status quo, being agile and innovative. We will do our utmost to stick to that in the coming years and keep developing COTI’s Trust Chain protocol. We have a strong community that can help us with that and we are not alone in this journey.
Q: and is COTI offering an open protocol to devs?
A: Yes. The project will be available by the end of Aug in a public git-repo and all protocol nodes and algorithms are going to be available for the open public.
Q: Is platform integration a businesses responsibility or will COTI have an integration team?
A: The integration is the business responsibility but for merchants the integration is as simple as integrating Paypal “Pay Now” button on their website. In addition, we are going to provide SDK for simple integration with our Trust Chain protocol.
Q: What do you think separates you from other competitors?
What specific problems are you trying to solve?
A: We are both an innovative blockchain (infrastructure) and the first application on it. Usually it’s just one of the two.
Scalability - Created by the DAG structure - we can do 10,000 TPS vs other protocols that don’t scale as much. This opens the ability to operate in industries such as the financial services industry, IOT, Data transmit and storage, supply chain and logistics as well as any other industry that needs high throughput.
Cost effectiveness - It costs less to transact with COTI thanks to our consensus algorithm
No centralized mining!
Arbitration and user protection - With COTI, you can file a dispute if something went wrong during the transaction process (Error, Fraud, etc) and a decentralized group of mediators (like a Jury) can vote to reverse the transaction.
Q: Trustchain Protocol, will this be available for devs where they can create their own tokens on COTI's infrastructure?
A: Yes. Once the Trust Chain protocol is going live with mainnet other devs will be able to create their own token through our exchange platform (COTI-X), similar concept to ERC-20 and use our infrastructure for their own use case.
Q: My Ma and Pa shop focuses on both in-house sales as well as e-commerce. We focus on dealing in high-value art (paintings, sculptures, and custom designs). How can I be sure mediation protects me as a seller? Alternatively: as a buyer? Can this be utilized in-shop or just through e-commerce?"
A: Mediation protects you as mediators have a real incentive to judge truthfully the dispute in place - they other make or lose money accordingly. Naturally, with an app installed, COTI can be used in-shop as well. However, our core focus now is ecommerce.
Q: Also, you keep saying that your fees will change the world and will be low-to-ZERO, but you should give us some exact numbers - What fees can we expect in the COTI network?
A: For consumers:
- Network fees
- Transaction fees
For merchants:
- Mediation fees
- Network fees
Q: What are the incentives for merchants to use COTI?
A: Low to Zero fees
Instant settlement (better cash flow)
A fair chargeback process
New audience (people with no credit cards)
Security
Q: Has an agreement been formed or agreed upon with Rakuten out in Japan?
A: This was our first meeting with Rakuten so it is a too early to tell. We stay in touch.
Q: What is the likelihood of becoming a mediator? and if one mediates correctly, will they earn a reasonable amount of tokens? Since there is no mining and no fees... mediation is the only way correct?
A: There are several ways to earn fees in the network:
1. By being a mediator - a mediator is chosen based on his Trust Score. Only highly trusted members can apply.
2. By operating network nodes - Each full node in the network can define his own rate (free market) and for each transaction and POW executed the confirm a transaction the FN will earn the fees associated with it.
Q: I have seen that you have been travelling to a lot of blockchain events (Japan, Korea, etc). Has this helped develop partnerships and obtain funding for the project?
A: For sure this has been a great opportunity to present COTI to developers, influencers, exchanges, partners and investors. I’d say that this has been key in what we do.
Q: What are you going to do about merchants that are from forbidden countries? Will you open yourself to the problematic countries as you mention in your vision you want to globally and open?
A: Generally speaking, I don’t like the concept of “forbidden places” and there is no easy answer your question. For sure that in the case where countries are forbidden for token sales but are OK for usage - we will operate there.
Q: any updates concerning merchant integration tools including what hardware solutions will be available, and for an update of specifics regarding COTIs solution to solve the value stable currency problem
A: Merchant integration consist on having an online shop which can add "Pay with COTI" button - a code embedded on the merchant site and callback defined by merchant for handling the IPN of confirmed/unconfirmed transactions. So the integration is very similar to Paypal "Buy Now" button. Merchants will also need to open their wallet to be able to receive funds from consumers.
Q: Any new partnership coming into play?
A: Yes, we will soon announce an alliance with some other (well known) scalable protocols for the promotion of scalability.
We will also reveal another partnership with a larger payment processor, giving is access to more merchants
Q: Any new merchant service agreements in play coming up soon?
A: Selected merchants have recently received a merchants’ agreement.
Q: What process will be in place to ensure mediators cannot communicate with each other coordinating/manipulating results in their favour?
Since mediators are not regulated and incentivized in COTI similar to staking, it would be a conflict of interest if those mediators communicated with each other at all imo. In fact what's to stop them setting up forums for the purpose...
The system has to be robust as hell, else no one will use it.
A: The Mediators jury is selected randomly after the Mediation system received the claim and allowed it. Mediators work independently to validate real world information pertaining to transaction disputes and then cast votes on a mediated outcome. Mediators receive case data and cast their votes using the mediator client. They are not able to communicate with one another and are unaware of how many other mediators are involved in resolving a dispute.
Q: Do you find a project like yourself to benefit from removing overall volatility both positive and negative?
If the answer is yes, what entices people to invest in COTI? For example, my project in the space has volatility mitigation methods but our tactic doesn't prevent upswings, however, it positively combats whale manipulation from mooning the price just before purchasing occurs for the purpose of falsely increasing their purchase power.
The follow up question is how do you plan on combating volatility without full project centralization? Are you decentralized? Because there are employable methods to combat volatility without becoming centralized (like XRP) but it seems the solution isn't something companies tend to use.
A: We will be revealing the next version of our token economy soon, dealing exactly with that. The short answer is that we don’t stable the whole economy but just a small part of it: merchants that choose to hedge the value of certain transactions for 30 days. This is a smaller and more doable challenge. We solve it with an array of market makers and a reserve fund.
Q: I see 'banking the unbanked' as a common phrase for currency and remittance projects. How do you (COTI) actually combat this? Especially if the payment solution seems to be more e-commerce focused.
A: By design, COTI doesn’t require a bank account. More so, your score is not based on credit but on your actual behavior, opening the service to anyone trustworthy.
Thanks for hosting us @ThePinkCrypto. COTI represents the next generation of digital currencies. This is a cryptocurrency and a payment platform that is simple, transparent, trustworthy, instant and scalable. It brings the current standards of the financial services industry into the digital sphere. If there’s any further questions, comments or scrutiny - please feel free to raise this with us in our telegram channel. Thank you and have a great day!
The COTI community is continuously growing at a rapid rate. If you have any questions, you are welcome to get in touch with us on Telegram or via email. We will be providing further updates in the near future.