16 – Scaling: Notary Nodes, Resiliency & Privacy

Telegram discussion with jl777 on scaling solutions, Notary Node roles, resiliency, and optional privacy. Thanks to Regnar for collecting these Q&A

Simon – KMD vs Aeternity? Competitors or place for both within the market? I’ve asked about the project and they say KMD doesn’t have state channels or oracles, making it inferior…. Can anyone address this

jl777 –  KMD has notary nodes which can create data that performs the function of an oracle, ie. notarizations, MoM, that enables the cross chain contracts. As far as state channels go, what exactly is meant by that and what functionality does it enable that is not possible otherwise?
To my thinking being able to execute arbitrary complexity computations in a dedicated blockchain (nodes validating that chain) and then using the result of that in any other chain, is quite a flexible architecture that is able to implement essentially any decentralization solution. After we get the basics in place we will demonstrate this with a decentralized poker solution. Instead of working on fancy buzzwords, we simply are working on solving the actual problems of scaling.
There are so many projects that are solving a subset of what needs to be solved. Scaling without security is not any scaling solution. To my knowledge no other scaling solution is using full bitcoin protocol transactions, ie. even atomic swaps, that ends up with BTC level security. In addition to arbitrary scaling, BTC security, we get zcash privacy, and again I am not aware of anybody that does even 2 of the 3: Scaling, Security and Privacy. And all the other platforms require locking into the main coin’s usage. While in the short term this might look good, it is not sustainable long term. After all, who wants to pay $5 for a $1 transaction, just because some game app is being popular at the time.
The other scaling solutions start from one large blockchain and are trying to shard it into different pieces (how is each piece secured?). With KMD there never is any single large blockchain, things start out in their own dedicated blockchain, so there is no need to solve the sharding problem, it is already segregated into the different blockchains that contain only info that is of interest to that blockchain.
dPoW and notarization of the MoM data then allows doing cross chain contracts between any chains in a cluster of chains. Basically KMD achieves the Scaling + Security + Privacy solution with a minimum of new cutting edge tech that might or might not stand the test of time. Even the cross chain contracts are using SPV techniques known from the original Satoshi whitepaper. The independent blockchains are using time tested bitcoin protocol codebase (as forked by zcash).

Matt Watt – Privacy is getting slashed and unwanted by govs and regulators, sadly enough.

jl777 – Yes, that is why KMD is using optional privacy. Using KMD doesn’t force people to use the privacy so that should keep it one step away from the regulators, especially since there are lots of other uses for KMD than “just” privacy, even if privacy will become as important as security in the coming years.

Simon – So it’s there in the background, able to be used, but also able to be left if long term regulations see privacy as a pitfall. Thank you for all the info you provided. Really appreciate the detailed write up!

jl777 – The privacy is there for the people who feel that it is important to them, but it is totally optional, so using KMD does not mean you are using privacy, since some (most?) countries view privacy as the equivalent of having committed crimes.

LAP V – I have a question. If 32 of the 64 public notary nodes are hacked, will not dPoW be hacked? Or what happens if a hacker owns 32 notarized nodes? Is this a weakness of dPoW?

jl777 – Hacked notaries still cannot make illegal notarizations, as all nodes validate all notarizations. The most that can be done by compromised notarizes is to withhold notarizations. so it isn’t a hack per se, but a disruption, that being said the notarization algorithm requires just 13 to be online to notarize, but if more than 13 are online, then a highly randomized process is used to select the 13. Something like 50 notaries of 64 would need to be compromised to prevent the remaining to create notarizations. Due to the extremely small chance of this happening and even if it does happen, it is obvious from the lack of notarizations, I wouldn’t call this a weakness as any system that is 75%+ compromised will likely not work too well. Notarization is not about creating blocks, but rather for 13 randomly selected notaries to agree on a recent blockhash and saving it to the BTC blockchain, in addition to the KMD chain.

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