Meet Fantom, the unique cryptocurrency partnered with University of Sydney
Beyond blockchain, interest in DAG ledger technologies is growing.
The University of Sydney has commenced a new research partnership with Fantom. The partnership includes a donation from Fantom – whose June 2018 ICO raised AUD$55 million from prominent cryptocurrency funds – to the university's Faculty of Engineering and Information Technologies.
That donation will support a dedicated research group at the University of Sydney, focused primarily on building automatic bug-checking software for safer smart contract development, along with developing a new programming methodology for smart contracts, extending the Solidity programming language to be safer to use and creating a new and more efficient virtual machine.
Better smart contract scanners would be a major help in the cryptocurrency world, with Fantom chief innovation officer Michael Kong noting that "the need for increased security in cryptocurrencies and distributed ledgers is paramount. From multi-million dollar hacks to wallet freezes, we have seen that poorly-written smart contracts have disastrous consequences for the entire industry."
The entire blockchain industry would benefit greatly from smarter smart contracts.
However, Fantom doesn't actually use a blockchain per se. It's one of just a handful of cryptocurrencies that uses a "directed acrylic graph" (DAG) ledger instead of a blockchain. And within that, it's the only public cryptocurrency project in the world to currently use a recently proposed network design called Opera Chain, with the Lachesis consensus protocol.
The Fantom of the Opera
Scalability is paramount, explains Fantom CEO Dr Byung Ik Ahn. It's one of the main differences between real adoption and pure speculation.
Fantom can reportedly achieve 300,000 transactions per second, which puts it somewhere above the top of the line.
"Since the historic rise of Bitcoin in 2017, cryptocurrencies and blockchain technology have only continued to grow in strength, and yet as the exuberance subsides the industry has struggled to move away from anecdotal accounts and actually bring transactions mainstream," he says. "The same roadblocks persist: the lack of real-time transaction settlement; the question of scalability; as well as concerns of standardisation. It was based on these challenges that Fantom was born."
Like most DAGs, or blockDAGs as they're sometimes known, Fantom was built to scale far beyond the bounds of existing blockchains. Bitcoin by itself tends to putter along at about five to ten transactions per second, and in its current form, Ethereum can do maybe twice that, but both are just not fast enough for wide scale use. Some blockchains have managed to improve on that considerably, but this often comes with some immense sacrifices, such as forgoing decentralisation or opening up new attack vectors, which undermine some of the key benefits of distributed ledger technology in the first place.
The challenge is to achieve the needed level of scalability without these kinds of downsides, rather than just masquerading as a decentralised system.
"At Fantom, we focused on addressing these concerns by presenting a new implementation of Directed Acyclic Graph (DAG)-based consensus through the integration of Lachesis Protocol with the Fantom Opera Chain," Ahn says.
Overture: Opera Chain and Lachesis
"The mechanisms of the protocol differ from normative blockchain mechanisms as it adopts a method where a single event block verifies the previous transactions, and by being verified and processed asynchronously without being approved by the miners as in prior blockchains, this will remove delayed approval or bottleneck effects," Ahn explains.
As with other DAGs, this system can be envisioned as one where transactions can wash through the system, rather than one where they need to be laboriously packed into blocks and put in a queue.
"The marked improvement in terms of both scalability and versatility of existing DAGs enables Fantom to build an ecosystem that could not only create potentially infinite scalability, but also process hundreds of thousands of transactions per second even with large numbers of nodes participating in the network," Ahn says.
This introduces new challenges though.
The point of no return
Some of the key obstacles associated with this type of system are that transactions still need to pass a point of no return to be immutably confirmed, that the network has to find a way of trustlessly maintaining consensus even with transactions washing around it, and that the system needs new ways of fixing the old vulnerabilities that bitcoin, for example, patched up through its proof-of-work and mining system.
"As the OPERA chain processes not only large numbers of transactions at scale but also story and historical data to ensure a high level of reliability, Fantom imposes a strict view on the safety of the information that passes through the network, and has laid out several foreseeable scenarios where the Lachesis Protocol might be subjected to attacks by malicious entities," Ahn says.
"An example where an attacker might make hundreds of OPERA chain nodes in a single computer would be denied by the fact that a single computer can only create a single node, making a Sybil attack impossible within the OPERA Chain framework... Fantom also intends to use highly secure elliptic curve cryptosystem (ECC) technology to enhance security when transmitting data between signatures and nodes.
"Another case in point would be transaction flooding where a malicious participant may run a large number of valid transactions from their account under their control with the purpose of overloading the network. In order to overcome such an instance, Fantom intends to impose a minimal transaction fee under the OPERA Chain, proving a difficult task for malicious attackers due to the tremendous cost involved."
These transaction fees are also intended to serve as a reward for node operators, incentivising them to stay honest. And as long as at least two-thirds of the nodes remain honest, Fantom should remain safe. In conjunction with Fantom's system for protecting against Sybil attacks, it might be a reasonable assumption.
Still, more time, work and vigilance is always needed to better secure distributed ledgers from unforeseen circumstances, such as ridiculous botnets, as they grow larger and start handling more value.
"The digital landscape is an ever-evolving one, and we need to exercise prudence in safeguarding against not only existing forms of attacks but to be a step ahead in anticipating future dangers," Ahn notes. "To that end, Fantom aims to attract a vast number of developers to steer the ship, the first step being adopting Scala, a well known and supported functional programming language."
All I ask of you
A lot of the projects occupying centre stage in people's awareness of blockchain technology today are well known, but potentially don't have the range of some lesser-known projects.
As such, Ahn says, there's still a tendency for people to look at distributed ledger technology as a solution that needs more practice before it can start headlining. In some extremes, this is even causing people to dismiss distributed ledger technology as being inherently unscalable, and therefore a technological dead end. But, as is evidenced by the projects like Fantom waiting in the wings, this simply isn't true.
The key to real distributed ledger adoption might be to create a system that can actually solve the real-world problems that blockchain was created to solve, rather than to repeatedly push flawed systems in people's faces.
"For most companies, the value of blockchain still lies in its potential more than its real-time use, and overcoming this narrative will be one of the technology’s most significant challenges," Ahn says. "Fantom understands that the key is not in building entirely new blockchains but to rapidly develop alternative solutions to the systematic problems that have contributed to the rise of blockchain technology.
"Industry players continue to cite growing pains with complexity, limited speed, and increased expenses. DAGs, often regarded as the younger sibling of blockchain or blockchain 3.0, has seemingly emerged as the solution with its capability of improving the low throughput, high costs, and compromised security that have plagued existing platforms, addressing many of the long-standing issues that have hampered the mainstream adoption of decentralised technologies."
Essentially, Fantom aims to boost uptake by giving people what they actually want, while too many other projects are focusing more on telling people what they should want.
"The key to succeeding in today’s evolving market, whether that comes from DAG technology or otherwise, will be whether or not projects can effectively provide a solution to blockchain’s weaknesses – and those that can do so first," Ahn says.
The direct fruits of Fantom's partnership with the University of Sydney, in the form of easier-to-create and more secure smart contracts, can help a lot. Growing a community might be equally important.
"Our priority is in building up a cohesive community that demonstrates a robust understanding of the benefits our platform has to offer, and part of this points to our continued efforts to host Fantom Meetups across the country in key cities such as Brisbane, Sydney and Melbourne in order to engage with our audience in a meaningful and purposeful manner," Ahn says. "Likewise, Fantom is also on the lookout for advocates to join the Global Ambassador Program to participate in educating and supporting the Fantom community not only within Australia but also on a global scale as well."
And Australia itself was no accident. Fantom emerged in South Korea, but specifically chose Australia as its first international stepping stone, Ahn says.
"There were a number of reasons that Australia was chosen for Fantom’s first foray outside of South Korea; the first being an innovative culture underpinned by a supportive government and the second a strong acceptance of new technologies. These factors go a long way in supporting the company when it comes to appreciating the nuanced differences of a foreign landscape. Fantom is committed to collaboration with different partners to further define and deploy Fantom technology across various industries and has a blueprint in place to onboard Australian businesses to our platform within the next 12 months.
"More importantly, Fantom has also embarked on discussions with payment providers in Australia to utilise the Fantom token, and the conditions lend themselves favorably – Australia has well over 200 merchants who accept cryptocurrency, including the first airport in the world to accept crypto payments."
And now, if you're in Australia, you won't have to go far to find Fantom. It's organising meetups all around the country, and almost one in five Fantom developers are now based in its Sydney office. And through this new partnership it will be sponsoring USYD PhDs, postdocs and professors to help instil academics with the necessary hands-on experience to take distributed ledger technology and cryptocurrency to where it needs to be.
Behind the tarnishing speculative lustre of cryptocurrency, it's worth remembering that rigorous academic research is key to pushing the technology forward. And Fantom's new partnership gets right to the point.