Nexus Records Supply Chains by Design ~ Creating Digital Ecosystems

Nexus Records Supply Chains by Design ~ Creating Digital Ecosystems

Transparency is imperative to building meaningful relationships. With Nexus, the recording of information is naturally transparent. As such, through the use of the Supply API, interactions between many different groups, such as producers, manufacturers, carriers, standards organizations, vendors, and consumers can be recorded transparently. This enables different parties to share information in order to build digital ecosystems or decentralized standards organizations (DSOs) that provide greater visibility into the standards of production across various sectors. 

Traditional supply chains are unable to support the growing interconnectedness that is required to produce the increasingly complex goods of today, while maintaining high levels of quality. They are managed through centralized services, and are often verified by costly third-parties that are required to be trusted. 

Nexus supply chains not only benefit large organizations with complex global operations, they can also be used to build digital ecosystems to support local economies by connecting producers, vendors and consumers within local peer-to-peer networks, reducing the dependency on large distributors. Nexus open source technology automates many processes and is available at a very low cost, thereby revenues to independent producers can be increased, while the cost to consumers decreased. 

First we will introduce some of the use cases of supply chains on Nexus, and then the technology that supports them. These use cases include benefits of increased trustworthiness of certification standards, protection against the sale of counterfeit goods, increased safety of products, provision of the life cycle of a product, real time data collection and tracking, integration with IoT systems, improved efficiency and security of operations and logistics, auditability, and the replacement of escrow services. 

Use Cases

Decentralized Standards Organizations (DSO)

Today, many standards organizations issue certificates, such as organic, sustainable, recycled, fair trade, no animal testing, vegan, biodynamic, non-GMO, ethical labor, and quality assurances for electronic goods and components. Logos, labels, holograms, QR codes, and more recently SmartLabels, are used to inform the consumer and vendors of these standards, however these methods are susceptible to forgery.

With Nexus, a digital certificate can be issued to the producer which is recorded on the blockchain. Furthermore, with the DAO (Decentralized Autonomous Organization) technology that we are developing, a DSO (Decentralized Standards Organization) formed of various voting groups, could help the organization of existing standards bodies.

Different DSOs could issue certificates for the following products for example:

  • Agricultural Produce & Fish
  • Minerals
  • Timber
  • Livestock 
  • Textiles & Leather
  • Renewable Energy 
  • Electrical Goods and Components
  • Vehicles

Below we will outline an example for a DSO called ‘FlyOrganic’, comprised of voting groups such as inspectors, consumers, ecologists, nutritionists, animal welfare, vendors, and farm owners, which would issue annual organic certificates to producers that reach the standards of the DSO. 

  1. A certificate is issued by the DSO i.e. Flyorganic, to an individual organic producer, such as a farm ‘Orchard Organics’. This could contain information such as location, farm name, address, acreage, produce, annual quantity of produce, practices, etc. 
  2. The newly certified farm can then issue their own product certificates that would be linked to the DSO issued certification. The farm would be authorized to create product certificates for the duration of the DSO certificate, which would require annual renewal.
  3. With the help of an IoT device the weight and the coordinates of the container could be recorded, and this information added to the mutable fields of the digital certificate to record ongoing data about the product.

The data format of the digital certificates could be standardized by the DSO ‘FlyOrganics’ to record metadata such as:

Product Certificate:

Certificate: 0x8060836f57ad22cb737b

Serial Number: 1F-92835473829

Certifier: FlyOrganic

Producer: Orchard Organics

Item: Organic Pink Lady Apple

Harvest date: 5th October

Sell by date: 15th October

IoT GPS: 40.741895/-73.989308

IoT Weight: 1,000kg

At the point of purchase, a consumer using a smartphone could scan the SmartLabel to retrieve the history of the product back to the issuance of the organic certificate, in order to check whether the product holds its advertised standard. Consumer apps could be developed that enable people to personalize their individual standards, and therefore receive personal product listings.

Authenticity 

Brand authenticity or quality assurance for high value goods can also benefit from digital certificates, in order to prevent the sale of counterfeit or fraudulent goods. Certificates could be issued by luxury brands, by quality assurance standard bodies for electronics, pharmaceutical companies, or by societies and guilds for arts and antiques. 

To support the resale of goods, the certificates would be transferable between parties, allowing buying and selling on secondary markets. Certificates on the blockchain would also reduce cases of theft, as people would be less likely to buy a good without a certificate.

Renewable Energy

Certificates can be issued to renewable energy producers. For example, a digital ecosystem can be built to allocate surplus electricity from renewable sources within a local power grid, enabling people to trade electricity without having to go through a central provider. 

Circular Economies

Supply chain technology can also be used to increase transparency and history of used goods, such as motor vehicles, by recording their lifecycle, providing many benefits to purchasers wishing to resell an item, and also to the recycling and remanufacturing industry. For example, vehicle registrations could record the entire past ownership of a vehicle plus any additional information provided by garages regarding services, modification or repairs.

Safety 

Traceability on the blockchain can aid the identification of the origin of contaminated foods in order to improve the accountability of food producers and reduce foodborne illnesses. Likewise, the technology can be used to identify the source of faulty electrical components.

Real Time Data Collection, Tracking & IoT systems

Items can have mutable data fields enabling important data to be uploaded to the blockchain along the supply chain, such as chemical and temperature readings, and pallet weights, without affecting immutable fields, such as the Serial Number. Containers can also have tracking devices which can intermittently upload GPS coordinates. 

The integration of IoT devices would replace the need for some manual data entry, reducing errors and fraud. A system of IoT devices could be used to create a distributed oracle system, to automatically cross reference collected data which could be used to streamline the work performed by DSOs.

Operations & Accounting

Supply chains combined with QR codes, SmartLabels, RFID tags and IoT systems, can provide organizations a very transparent and accurate account of their entire operation, including data on stock inventory, and state of goods, such as sell by dates etc. 

Supply chain data can be used for analysis and modeling for the purpose of managing or automating warehouse space allocation, distribution to meet consumer demand, shipping routes, upstream purchases, and financial projections. An accurate and automated supply chain can reduce the possibility of overproduction, the spoiling of produce, double handling and returns, erroneous stock accounting, and theft by employees. Overall, increasing the speed of production and delivery times, lowering the end cost to the consumer.

Auditability 

A certificate on Nexus naturally provides an audit trail. Each transaction, and delivery or sale along the supply chain is recorded, displaying an accurate history and sequence of events, making the process of auditing efficient and less prone to error.

Customs

Supply chain data can also be used to provide data to produce a receipt given by a carrier to a consignment of goods. With legal recognition, a bill of lading (BoL) could be issued using the information provided by Nexus for goods being shipped by sea or air, such as type, quantity, origin, and destination. 

Automatic Payments & Information Flow

With Nexus, a digital ecosystem would be the foundation of an automatic payment system. The end payment would have to be made using NXS or a cryptocurrency supported by Nexus. Payments for each item would then be instantly dispersed to the participants of the supply chain (i.e shop/carrier/producer/manufacturer/charitable cause etc). 

This would serve to improve the chain of payments which today requires manual transfers. By reducing the cost of the payment process, everyone in the supply chain receives a better deal.

Traditional supply chains use vertical payment systems, where the funds flow downstream from the consumer. In a horizontal payment system, the participants would be able to claim a percentage of the total revenue, through the tokenization of product certificates. In blockchain terms, this means that there is a shared revenue in the sale of the good that would be realized at the final point of sale. The certificate and applicable token would represent a source of revenue associated with a specific product, creating frictionless cooperation between all participants.

Automatic payments create an instant and transparent informational flow regarding sales, allowing easier coordination of harvesting produce, ordering supplies, assembly of manufactured products, packaging, and the orchestration of carrier and shipping routes.

Exchange of High Value Goods

With the exchange of high value goods, there is a requirement for the digital certificate to be transferred to the purchaser. In a conditional contract, the payment would be a prerequisite for the execution of the transfer, releasing the certificate when the payment is claimed by the vendor. This is one example of how Nexus can benefit the exchange of goods without the requirement of trusted intermediaries.

Nexus Technology 

We have designed a seven layered Software Stack with one layer able to record everyday items as digital items. This is the ‘Register’ layer which allows items to be transferred between users by a technology called ‘Signature Chains’.

The native functionality of Nexus contains the state and history of an item, enabling the recording of supply chains by design, without having to maintain a complex state and history in a single contract as do other blockchain based contracts. The technology is easily accessible through an API designed specifically for supply chains. Below is a list of our notable innovations that power supply chains on Nexus.

Supply Chain Application

For the creation of a successful digital ecosystem, different groups along the supply chain will require custom applications. On Nexus, all that is required is the development of the interface and logical layers, i.e an application integrated with the Supply Chain API, that interprets the items relevant to each type of group who interacts with the supply chain. 

If you would like to view a demonstration application for supply chains, you can view it here on our source code repository:

Github


Supply Application Programming Interface

Programming a supply chain with the Supply API is designed to be intuitive and very simple. A basic supply chain could be created with the following commands:

  1. supply/create/item – This initiates the item by the recording of meta-data. Parameters to this command are omitted.
  2. supply/transfer/item – This transfers the item to another user (sigchain).
  3. supply/claim/item – This allows the recipient of the transfer to claim official ownership of the item.
  4. supply/history/item – This provides a list of events associated with the item, including updates to the register, and change of ownership (sigchains) along its lifecycle.

The history of an item includes data fields such as created, modified, operation, and owner. It displays transparent data on the series of events along an item’s supply chain and life cycle. The functionality of supply chains is built into the design of the Nexus software stack; Nexus records supply chains by design. 

Registers

Nexus is built to facilitate the peer-to-peer exchange of any item. Items are recorded as registers, which are a data storage system that maintain an immutable record and history of an item, including its current and previous states. Registers record items as meta-data stored in a programmable object register. 

A register can be used to issue a digital certificate with immutable data for the purpose of certification or a quality assured standard, or as a certificate of authenticity. Some data fields can be made mutable to enable the modification and recording of data (such as GPS location) to be changed through the production supply chain by authorized accounts or IoTs. Mutable fields can also be used by the current owner of an item through its life cycle, to update notes regarding repairs on a vehicle registration, for example. Other data fields in a register, such as a certificate, could have mutable quantity fields, for recording and tracking a variable amount of items represented by one register.

It is also possible for fungible tokens to be issued from a register, for example to represent 1,000 semiconductors. This would provide the benefit to the consumer of having a ‘proof’ of the item through the ownership of the fungible token, which would be linked to the certificate produced by the manufacturer. This would aid the merging of supply chains for different materials that are required for complex products such as a Smartphone. The division and quantity of these tokens together would form the basis for the components of the device.

Signature Chains 

One of our most important Nexus technologies is the Signature Chain (sigchain), which is a decentralized blockchain account, accessible through a username, password, and pin. This pseudo-anonymous identity layer is important for the verification of all authorized accounts.

A register, being on the layer above the ledger where sigchains operate, is transferred across the sigchains that represent the accounts of the producers, vendors, and end consumer. Therefore, by design the transfer and claiming of registers between sigchains provides a history of a chain of custody, and any modifications or notes added to the mutable fields of a register. 

Sigchains replace the need for physical signatures and paperwork, and ensures authorization systems securely prove the identity of all participants or accounts. In our opinion, sigchains are a very important step for mainstream adoption across all use cases, given that users will no longer have the burden of storing private keys (as is the case with applications using other blockchain based contracts). Other benefits come from the efficiency gained by reducing the requirement of storing a large array of signatures on disk, generated through high transaction volume.

Contrarily, legacy blockchain designs rely on the safe keeping of the private key associated with an account or smart contract, which if lost could lead to broken links in supply chains, reducing overall system integrity. This renders legacy systems susceptible to human error, boding for the need for complex hardware designed specifically to store private keys securely. Though these devices are a step towards user friendliness, they are still at risk of being lost or stolen, and therefore are not reliable replacements for conventional authorization systems that exist in centralized systems. Please see Signature Chains for more information.

Contracts

There are many supply chains use cases that can use Nexus contracts to automate processes, increasing their efficiency and accuracy, thereby lowering the costs for producers, vendors and ultimately consumers. 

The majority of Contract functionality comes from the interaction of operations and registers, which are made immutable through the ledger layer. Operations are instructions that act on registers, and define contract logic. They include primitives such as ‘Debit’ and ‘Credit’, and conditions that reside as a contract between the parties.

These conditions disclose an agreement between participating parties, by outlining a set of requirements that must be met for the transaction to take place. They are the building blocks that allow users to engage in contracts with one another, such as contract expiration or the exchanging of items. More advanced forms of non-custodial escrow are also possible, which are discussed below. Please see Contracts for more information.

Escrow

Escrow on Nexus is achieved through ‘Arbitration Triangles’ which function as non-custodial escrow services between a buyer and a seller. Ultimately reducing the need for trust that is required for the delivery of high value goods between consumers, manufacturers, and suppliers.

An Arbitration Triangle at its most basic level, requires two out of three signatories to unlock the funds and item of an exchange, e.g between a buyer and seller of a good, or any link in a supply chain. Since the third signatory or arbiter (shipping company or carrier) does not have custody of the digital certificates or funds, they act only as a neutral arbiter to resolve conflict between the buyer and the seller. In the case of a dispute, the arbiter settles the disagreement, essentially facilitating the function of an escrow service. Any organization with a supply chain or transaction involving three or more parties can benefit from this unique technology.

For a high value item such as a laptop bought online, the item could be issued a certificate of authenticity. The non-custodial agent, such as the carrier would then assume the role of arbiter, as the item and purchase funds are placed in an Arbitration Triangle. The carrier delivers the package to the buyer, receiving an electronic signature from them, fulfilling their role in arbitration by signing that the package was delivered. This would release the certificate to the buyer, and the funds to the seller, all without the carrier ever having custody of the certificate. 

This means that the carrier never has possession of the certificate (register). Therefore, certificates of authenticity validate ownership rather than physical possession of an item, eliminating problems experienced in shipping with regards to manual paper signatures, theft by carriers, fraudulent claims, and erroneous deliveries. 

Insurance

Following on from the example of the Organic farm in the use case section, the payment for the carrier, (paid for by the farmer) and potentially a deposit from the carrier to ensure that they fulfill their part, (especially if the goods are of a very high value) are held in an escrow contract. The vendor would sign to release the funds to the carrier. If the vendor does not sign, they don’t receive the goods, nor does the carrier get paid. The carrier will possibly lose their deposit unless the goods are returned to the farmer (only the farmer can return the deposit back to the carrier on return of the goods). 

Similarly, an arbitration contract can be made between a shipping and carrier service to incentivise good behaviour, whereby deposits from both parties are held in a contract to ensure that they carry out the service that they have been consigned to. In the event that one of the parties does not fulfill their part of the service, the arbiter, such as a supplier, would decide which party would claim the deposit. This type of peer-to-peer depositing system holds the potential to change the way we view insurance services, and possibly reduce the requirement for them.

LISP

LISP (Location Identifier Separation Protocol) is a protocol designed by a small group of Cisco engineers who are responsible for many of the protocols that power today’s Internet. It provides important advancements to the Network Layer, and many necessary features for secure access schemes for hybrid networks. 

Most Internet devices use IPv4 addressing (the Internet equivalent of phone numbers), which is limited to around 4 billion devices. To accommodate the growth of Internet-connected devices, IPv6 was developed, though even decades later it still has not been widely adopted. On the contrary, LISP is able to use IPv6 as an overlay, since it does not suffer from the compatibility issues of underlay devices. The capacity of IPv6 is 2^128 devices, providing ample capacity for the growth of IoT devices. Please see LISP for more information.

Hybrid Networks 

Organizations that work closely together, such as producers, vendors and service providers, sometimes want to share information. However, they often wish to provide different levels of transparency to one another. Hybrid networks utilize technology that enables the granting of secure control access schemes, giving businesses the ability to privately share information with partners or alliances. These access schemes give specific accounts or applications access to various parts of the overall data, thus creating a ‘Hybrid’ of a public and a private network. Please see Hybrid Blockchain for more information.


DAO Technology 

Nexus is currently designing technology that can be used to create Decentralized Autonomous Organizations (DAOs). DAOs will provide more opportunity to people to shape the management of organizations by way of voting and interacting in working group structures. We envision this will empower many people to get involved in creating ethical, sustainable and regenerative practices, so that we can together build a resilient global community for the future.

August Newsletter 2019

August Newsletter 2019

August was a month of debugging, testing, and hardening code. The security audit is now complete. The feedback was that the quality of the code was very high, well structured, and designed. Five vulnerabilities were identified of which only one was assessed as high and one as medium, though no issues were found that could cause a delay to the release of Tritium. Independent Security Evaluators (ISE) have also provided us advice about keyloggers which is discussed below. They will be conducting a final assessment to provide a seal of approval that the above issues are resolved, after which we will announce the release date of Tritium and the corresponding activation timestamp. For more information on the details of the audit, please watch our latest Zoom meeting.

Zoom Meeting 20th August

Upgrade Procedure 

We have officially decided to end support for all v2.5 versions of the Legacy Qt Wallet. Please move to the Tritium wallet as soon as possible. When Tritium activates on the main network, you will no longer be able to stake with a legacy wallet, you will have to stake using your Signature Chain. The upgrade procedure will be as simple as loading the new wallet. You will be able to migrate your trust to your new Signature Chain by using the command line API, or via a migration button in the Nexus Wallet.

Wallet Update

Version v1.2.2 was released to fix small issues with the transaction page refresh, time filter, and some adjustments to the overview page. This update also includes two high priority security updates. These have been made in conjunction with the security audit. Please download the new wallet here:

Nexus Wallet

Testnet

The new Tritium testnet number will be 13 which will go live on Monday, September 2nd. If you would like to join the testnet, add -testnet=13 to your config file or command line, and your node will automatically connect and sync to the test network. Please pull the latest code from the ‘merging’ branch when joining the testnet https://github.com/Nexusoft/LLL-TAO/tree/merging. We would also encourage you to join the #tritium-testnet channel in the community slack where you can post questions or provide feedback/bug reports. 

Network Attack

On Friday 9th August, the Nexus network was subject to an attack allowing the attacker to generate blocks with an arbitrary coinbase reward. At approximately 8am UTC, the team was made aware of reports that Tritium nodes on the network had dropped out of sync at block 2778365. We started our investigation and found that this was due to the error “block 2778366 ambassador signatures invalid”. This check makes sure that the ambassador rewards — which are included with each coinbase block — are paid to one of the 13 hard-coded ambassador keys. The error suggested that the block had simply been constructed with an invalid ambassador public key in the coinbase, but upon investigation of the data, this was not the case — the ambassador key in block 2778366 appeared to be valid. For more information please read the article below. 

9th August Network Attack

Keyloggers 

We protect against viruses that read your wallet’s memory by encrypting your Signature Chain in memory. Even though this technique is useful, the threat of keylogging still exists if a virus is monitoring keystrokes. Due to this, we have been looking at solutions to protect your wallet against keylogger attacks. After a discussion with the security team at ISE, we were informed of different techniques that could be used to protect Signature Chain credentials. We have requested that this information be compiled into an easily digestible report to aid us employ some of these methods to further secure Signature Chains against keyloggers beyond the use of password managers. 

Signature Chains 

Below is new content published to the website about ‘Signature Chains’ which are used to create a decentralized blockchain account, accessible through a username, password, and pin. They are the foundation of a Digital Identity for managing assets, while maintaining pseudo-anonymity for privacy. In our opinion, Signature Chains are an important step for mainstream adoption of blockchain, given that users will no longer have the burden of storing private keys.

Signature Chains 

Digital Rights Management 

With Tritium, any type of digital asset can be registered on the Nexus Blockchain. Our new technology includes, digital licensing, Signature Chains, digital watermarking, tokenization, a Decentralized Exchange (DEX), and automatic royalty payments.

These collectively support agreements between a digital asset owner (licensor) and a purchaser (licensee). This true peer-to-peer exchange will provide a more efficient, accurate and secure way for exchanging value in the creative industry, and could possibly result in higher revenues to creators. Read more in the article below:

Digital Rights Management ~ Royalties & Licensing of Digital Assets

Fees

Discussions have taken place regarding the fee structure for Tritium. The below fees are close to being finalized, so please submit your input or requests for changes in the economics working group before the final Public Testnet (September 2nd, 2019). The suggested fees are as follows: 

Creating an unnamed account = FREE

Creating a named account = 1 NXS

Creating an asset/item (any object register storing user defined data) = 1 NXS

Creating a token:

The fee for creating a token is based on the number of divisible token units in the token supply. The token fee is still undecided, below we present two models. The first model is exponential, the second is linear. 

The exponential approach is 1.5 NXS per figures cubed:

Token Units

100 = 12 NXS

1000 = 40 NXS

10000000 = 514 NXS

100000000000 = 1996 NXS

1000000000000000 = 5062 NXS

10000000000000000000 = 10288 NXS

Fee = log10(nSupply)^3 * 1.5 NXS

The linear approach would charge 100 NXS for each significant figure above 100:

Token Units

100 = 0 NXS

1000 = 100 NXS

1000000 = 400 NXS

10000000000 = 800 NXS

100000000000000 = 1200 NXS

1000000000000000000 = 1600 NXS

10000000000000000000 = 1700 NXS

Fee = log10(nSupply) * 100 NXS

The above term ‘token units’ is defined as the number of figures used, meaning that the registration of a token with max supply of one whole token that is divisible to two decimal places would translate to 100 token units. 

Registering a local name (including when creating a named account or any named object) = 1 NXS

Registering a namespace = 1000 NXS

Registering a global name = 2000 NXS

Debit/Credit transactions = FREE

Transfer/Claim transactions = FREE

Object Register Update transactions = FREE

Q&A With Alex El-Nemer

Alex El-Nemer, director of the U.K. Embassy is holding a Q&A session in Slack at 1pm PST, Friday August 30th, 2019. He will be answering questions about how the Business Development team is progressing, so please make sure to drop in Slack if you’d like to speak to him!

Twitter Giveaway 

The winners of the Twitter giveaway were yugioh, cryptolegend10, ladjjn & cryptoBison. Thank you for your brilliant tweets, and a big thank you to mikecasey for funding the prizes, and jayden for his support.

We all appreciate your continued support and encouragement, 

The Nexus Team.

Digital Rights Management ~ Royalties & Licensing for Digital Assets

Digital Rights Management ~ Royalties & Licensing for Digital Assets

With the release of the much anticipated Tritium network upgrade, any type of digital asset can be registered on the Nexus Blockchain. Our new technology includes, digital licensing, Signature Chains, digital watermarking, tokenization, a Decentralized Exchange (DEX), and automatic royalty payments.

These collectively support agreements between a digital asset owner (licensor) and a purchaser (licensee). This true peer-to-peer exchange will provide a more efficient, accurate and secure way for exchanging value in the creative industry, and could possibly result in higher revenues to creators.

Digital assets include, but are not limited to:

  1. Music , Audio Books, E-books
  2. Graphics & Photography 
  3. Film, TV shows
  4. Games, Software and Apps

Digital Licences

When a digital asset is recorded on Nexus it is witnessed by a distributed consensus on the Nexus Blockchain. This makes the proving of asset ownership easy, and introduces the added functionality of digital licensing. The benefits of licensing on Nexus are threefold: Digital assets can be watermarked and traced for authenticity, license agreements can be executed in a genuine peer to peer interaction, and payments can be tokenized to distribute revenue between asset owners. All of these are facilitated through the interaction of three key architectural components: Signature Chains, Registers, and Conditions.


Signature Chains

A Signature Chain is a decentralized blockchain account that is accessible through a username, password, and pin. This identity layer is important for the managing of assets and digital licenses, whilst maintaining pseudo-anonymity for privacy. 

In our opinion, Signature Chains are an important step for mainstream adoption of blockchain technology, given that users will no longer have the burden of storing private keys. Please see Signature Chains for more information.


Registers

Registers are a data storage system that maintains an immutable record and history of all its current and previous states. Registers can act as assets, accounts, tokens, or any other object that requires a persistent state to be maintained. An asset is in essence a register with specific data formats. E.g:

Image ID: 108629084398374

License Type: Enhanced 

Image title: Arizona Sunset 

The above example displays a simple meta-data format for a photographic asset that is stored in a programmable object register. This format can be augmented with mutable and immutable type specifiers, meaning that a field such as ‘Image Title’ in the example above, could be mutable and able to be modified, while the other fields would remain immutable.


Conditions

Conditions are statements that are at the heart of a contract. Conditions generally disclose an agreement between the two pseudo-anonymous parties via Signature Chains, and outline a set of conditions that must be met for a transaction to be executed. This provides the building blocks of Nexus contracts, which stipulate the requirements for the contract to be fulfilled.


Digital Watermarking

With traditional methods of copyrighting, once a digital asset has been licensed, it is difficult to track infringement or misuse. Post-purchase, any digital asset (audio, film, text, software) can be registered to the blockchain, and contain an embedded watermark pertaining to a digital license. Watermarks can then be linked to a contract on the Nexus Blockchain, providing a way for purchasers to prove that the use of a digital asset is within the terms of their license agreement. With the use of a digital watermark reader, this technology can provide evidence of license violation. 

Though watermarked digital content is not a new innovation, linking said watermarks to licenses recorded on a blockchain is. This is a major step towards improving the overall security of watermarked content. In order for this technology to be of benefit to content creators, compatible media players, photo viewers and websites will need to be capable of verifying these watermarks. 

In the case of applications that do not support watermark verification, the watermark does not interfere with the quality of the original digital media, maintaining backwards compatibility with all existing media applications. Likewise, a reduction in quality or security will not be experienced by watermark enabled media players.

If you would like to view a demonstration application for watermarks, you can find it here on our source code repository:

Github-Watermarks

The intention of this technology is to provide independent creators and responsible consumers the tools to self-regulate, and ultimately rely less on third parties.


Legal Recognition

To see widespread use for blockchain enabled digital licensing, these assets and their ownership will require legal or common law recognition. Fortunately, the future looks promising, given that in some US states such as Arizona [Coindesk], a digital signature on the blockchain is already legally recognized.

Royalties 

Until now, tokens have mostly been used to raise capital in the form of Initial Coin Offerings (ICOs). Conversely, Nexus Tokens can either represent a store of value such as NXS, or enforce partial ownership in order to facilitate the payment of shared revenues for any asset. 

In the case of the creative industry, this tokenization model enables the automatic distribution of royalties to multiple owners of a digital asset. Examples of token holders include: musicians, models, actors, editors, producers, directors, scriptwriters, songwriters, writers, charities, graphics artists, seed investors, or anyone who had a share in the creation of the digital asset.

This will improve the process of distributing revenue to the relevant token holders, in a direct peer-to-peer manner, enforced by mathematics. This is in direct contrast to centralized intermediaries, whom often add both costs and time to facilitate transactions.

Please see Contracts and Tokens for more information.

Empowering Creators

Our new aforementioned innovations enable true peer-to-peer exchange by replacing traditional distribution channels. Our hope is that consumers will be provided with greater levels of transparency and flexibility, and that creators will have a greater say as to how their work is used, and be fairly rewarded.

A Vision of the Future

We see the future of digital licensing containing apps that allow anyone to look up an image (using technology like Google’s advanced image search), or an audio file (using technology such as Shazam), to find the available licensing, and with the click of a button the license is paid and distributed to all content creators. This will improve not only the mechanism for these licenses to be paid, but also the accessibility and transparency for the everyday user. Our innovations will ultimately bring creators and consumers closer together.

Read more:

The Nexus Ecosystem

API 

Nexus Contracts

June & July Newsletter

June & July Newsletter

During the month of June Nexus released the Nexus Wallet, a product of years of work culminating into one of the fastest crypto wallets available, being 20x faster than the legacy version. 

Our developer team has been busy testing and optimizing the code of Tritium, which began security audits with ISE on July 22nd. We expect this audit to take at least 4 to 5 weeks. After the completion of the audit, we will assess how much work is required for full deployment, and at this time we will announce the official Main Network release date. This release will be a mandatory upgrade for all nodes, which will contain an activation timestamp of 2 to 3 weeks, in order to give all nodes and exchanges ample time to upgrade.

Galactic Sky

Many of us got involved with Nexus due to our vision of placing satellites into LEO, and the pursuit of the decentralized management of hardware that powers the Internet. Back in 2016, in a famous tweet, Jim Cantrell stated: “The deed is done, Bitcoin in Space”. As this dream has experienced a few delays, we would like to inform you of the current outlook. 

Galactic Sky is a software defined satellite platform by which you can upload any type of software to the constellation, in order to provide greater access to satellite technology without the cumbersome requirement to deploy, manage, and operate a constellation. Think of it like AWS (Amazon Web Services) in space. As this is a very unique technology, naturally Vector has obtained patents, and thus is the only company in the industry capable of deploying it. As many of you know, in mid 2017, Nexus signed an MOU with Vector to pursue a technical partnership with not only a focus on satellites, but also the application of blockchain technology for the management of the constellation. Some of the current areas of exploration include:

  1. Hosting Nexus on the constellation to provide greater access to Nexus, while adding additional redundancy to the network.
  2. Utilizing Nexus as a means to tokenize the ownership of Galactic Sky to manage split revenue payments from fees earned. 
  3. Using Nexus to improve the process of authorizing access to the constellation.

Vector has just closed its Series B financing round, and is rapidly moving closer to their final C round before their first launch scheduled later this year. Galactic Sky is set to deploy its first 6U satellites in late 2020, which will begin the important move towards realizing the potential of software defined satellites. We are very excited to be working with Vector on such an important milestone in the satellite industry.

Zoom Meetings

Two Zoom meetings took place, where the fee model of Nexus was discussed, and a demo of the DEX was shown. To view the recordings, please follow the links below:

Zoom Meeting June 5th, 2019

Zoom Meeting June 20th, 2019

Recently we have held fewer zoom meetings as the team has been very busy polishing the code for submission to the security auditors.

Nexus Wallet

The Nexus Wallet passed its first security audits, and was released on June 26th, 2019 at 4:44 PM GMT – 7, with many stating that it is one of the best wallets they have encountered in crypto. We are grateful for such a positive reception!

The Nexus Wallet provides a platform to install and create modules using APIs that will be released with Tritium, giving access to features such as Contracts, Tokens, Assets, and Decentralized Exchange. Modules can also be built using other available APIs, such as those for trading dashboards or alternative cryptocurrency wallets.

To download the latest version (1.1.0), please follow this link:

Nexus Wallet

Economics 

Over the last couple of months, there has been discussion surrounding the Nexus fee model. The current view is that part of the fees earned from decentralized solutions provided by Tritium will go to validators, the other would be locked up in a reserve, the release of which will be voted on by the Nexus DAO. We welcome anyone who would like to contribute to this field to join the economics working group. 

Transacting

Nexus is developing many decentralized solutions such as supply chain tracking, secure data recording on a hybrid network, watermarking, and a new backend for web services. Other services, such as the recording and the exchange of assets, and the licensing of digital media, and music royalties, will depend on the exchange of NXS. It is necessary that the exchange of assets priced in terms of NXS is variable relative to BTC or Fiat, in order to make transacting viable. The seller of an asset or token will be able to peg the required NXS to a field in an object register that their wallet updates to reflect the NXS price in terms of BTC or Fiat. The buyer would then be the “check and balance” that decides if the price is fair.

Component Based Web 

Currently, our website (nexusearth.com) is a combination of many facets, spanning Technology, Enterprise, and Community. As a movement towards a more decentralized management of content, we have begun to separate the main site into three core components namely: develop.nexus.io, enterprise.nexus.io, and community.nexus.io. 

Each of these components will operate independently of one another being managed by their respective teams. We see this as an important step forward in tailoring content to groups that hold specific sets of values.

The current website will become the enterprise component. The next component to be released is community.nexus.io. If anyone would like to help with the community website, please join the website working group. The final component will be develop.nexus.io, which will be focused on how to develop on the Tritium Software Stack, including documentation, code examples, and tutorials to build with contracts. If anyone would like to help with the developer website, please join the developer working group.

All three subdomains will link from a bridge or landing page, nexus.io. The eventual goal is to use the L5 stack, standing for ‘Linux Lower Level Library & LISP’, to serve as the foundation for our component based design.

TNS Integration with nexus.io

TNS (Tritium Name System) is a global naming system that will provide the opportunity to purchase a global namespace, which could be compared to owning a specified domain extension, such as *.io or *.com on the Nexus network. Names can then be created in this namespace, that point to IP addresses, or accounts, in order to transact without having to use large hexadecimal addresses such as: 

0xa2918d3942a14bd98ceb0f1be4c8675cc833eda354665167140050eee935b1a2

An example would be, send coins to nexus::checking

Namespaces can also be local to the username which can be created for free without a limit. This would be accessed by using a single colon, such as send coins to viz:checking. 

TNS will serve the above mentioned component architecture, which will be used through the nexus.io domain name to register subdomains in the nexus.io namespace. The result of this will be a decentralized DNS management of subdomains or components of nexus.io, which will further decentralize the content management and ownership of the main nexus.io domain. This serves two main purposes:

  1. Integration of TNS into existing DNS systems through the use of bridge domains like nexus.io
  2. The decentralized management of components built on the L5/TAO framework, that uses Nexus as an authorization and permission system.

Though this is a longer term implementation, it holds great promise to improve the dynamics of content contribution for websites like Wikipedia, blogs, and social media sites.

The DAO

Our main Tritium++ feature, the DAO (Decentralized Autonomous Organization), will govern project funding through a democratic vote. The feature will be released as a post-Tritium hard fork. This technology is necessary for a stronger community, consensus-oriented fund allocation, and improvements to the overall governance of the network. The DAO will prevent governance issues such as hard forks (Bitcoin vs Bitcoin Cash), and it will create a stronger ecosystem through community participation in decision-making, resulting overall in a more resilient and secure public network. 

The DAO has been discussed in recent Zoom meetings to gather input and to explain how it could function. We welcome anyone who would like to contribute to join the social working group. The underlying architecture is in its final design phase, and currently we see it following the below principles.

  1. You will be able to abstain, vote, or withdraw your support for a contract (the frequency of voting is yet to be decided). Votes will be weighted by Trust and Stake. Therefore, your power to vote will be determined by your total NXS staked, combined with your Trust. This protects against gaming of the voting system by short term holders of NXS. Likewise, anyone with an adequate amount of Trust, will be able to submit a contract.
  2. Voting will be done in groups, where the values of people and the resources that they contribute to the network define the group. The first two voting groups will be: Trust and Ambassador. More groups will be defined and added over time.
  3. The Trust group will decide the percentage of funds allocated to each of the contracts. Voting is zero-sum, meaning that contracts can only gain voting weight, by another losing it. You will have a total voting weight, which can be allocated by percentage to the contracts you wish to support. An example would be 35% to the U.K., 35% to AUS, and 30% to the US Embassy. 
  4. Contracts will become active when they exceed a voting threshold, creating resilience to individual gaming if one voter happens to have a large voting weight.
  5. When the round of trust voting has finished, the Ambassadors of the contracts can then vote to either endorse the support for their contract or to redistribute funds to other contracts. This will allow Ambassadors or Embassies to reallocate part of their funds to other contracts, if they choose to do so.

This is an important step towards the longer term sustainability of the Nexus Ecosystem, and the creation of direct accountability of those who are paid to complete work on behalf of the community. In order to fully maintain an active contract, Ambassadors or Embassies will be required to uphold the utmost transparency, accountability, and performance necessary for continued public support. This will prevent the mismanagement of funds, corruption, coercion, and complacency that can arise in a large organization making the management of the funds of Nexus open, and mathematically enforced. 

Tritium Wallet Features 

Tritium will introduce many new features to the wallet, most notably the move to account based transactions provided by Signature Chains. Below is a reminder of what is to come. 

Signature Chains 

A signature chain is a personal blockchain accessible by a username, password, and pin. This means you can access your wallet anywhere, simply by downloading the app and logging in. Logging in to a Signature Chain will be like accessing a banking app, without the requirement of providing a centralized service with your personal data (birth name, birthdate and passport details) in order to set up an account. 

Digital Identity 

Signature Chains allow a user to create a digital identity on the Nexus Blockchain, and to transfer and prove ownership of assets (tokens, titles, certificates, licenses, domain names etc) through Contracts.

Increased Security 

A PIN is requested every time a transaction is made (unless the wallet is unlocked) to increase security, much like using a bank card.

Password Recovery 

The wallet will have a password recovery system, where you can set a ‘master seed’ or a ‘recovery phrase’, (either 10, 20 or 100 words). The master seed phrase provides extra assurance, enabling one to recover their account in the event of a forgotten password or compromised account. You will only be able to change the master seed phrase if you know it.

Speed and Scalability

Signature Chains replace the clunky UTxO (Unspent Transaction Output) architecture, and are a fundamental component of the Nexus 3D Chain. Along with this, our blocks decouple transactions resulting in them only holding a hash (32,263 transactions per 2MB block) for each transaction. Together these innovations produce lightweight, efficient and extremely fast transacting, without the requirement of off chain, centralized scaling solutions, or a large block size. Nexus also removes the need for a wallet.dat for key storage that is commonly required in legacy blockchain systems.

Quantum Resistance

The key pair to your Signature Chain is changed with every transaction and the public key is hidden until used. The result of this is a high security standard with support for multiple signature schemes such as FALCON, and hardware password managers for increased Quantum Resistance. In the future the wallet will also be able to support biometric usernames.

Prevention of Sending to an Invalid Address 

The Nexus Wallet already verifies addresses upon entry, though this doesn’t confirm that an address is in existence. However, with the implementation of Signature Chains, transactions are required to be claimed (signatures are required from both sender and receiver), resulting in a two-step validation process. This is to prevent people from losing funds that are sent to non-existent accounts, and the burning of NXS. 

A sender is required to set a time window in which the transaction has to be accepted. This can be configured for each transaction, or alternatively a certain time window can be set as default. All that is required from you to acknowledge a transaction is to login to your Nexus Wallet during the time window, and accept the transactions you wish to receive in the notifications page of the wallet. Alternatively, you are able to set the wallet to automatically accept and claim new transactions, and specify which accounts to credit to. 

In a case where the time window expires, the NXS is claimable by the sender, which prevents NXS from being lost if either sent to an invalid address, or if the recipient doesn’t accept the transaction within the set timeframe. Transactions will be reversible if the recipient has not claimed within the set timeframe. The sender then redeems the funds by claiming the transaction back to themselves.

Educational Content 

There has been quite a lot of content written over the past few months, in an effort to educate people on the importance of the technology of Nexus. We are now focussed on writing content detailing the decentralized solutions provided by Tritium, and welcome anyone who would like to help in this area to join the use case working group. Below is a summary of the new content that has been published on the website. 

The Three Dimensional Chain

Fundamental to the scaling of contract processing is the seven-layered Nexus Software Stack set to be released with the Tritium upgrade, which introduces the first iteration of the 3DC as the Ledger Layer. The 3DC is a promising candidate to solving the “Blockchain Trilemma”, an opinion that only two of the three qualities, Security, Decentralization and Scalability, are achievable concurrently. We call it the “Three Dimensional Chain (3DC)” which transforms the Ledger into a multi-layered processing system, in order to scale the protocol securely with a high degree of decentralization. 

Three Dimensional Chain

Quantum Resistance

With the rise in the power of classical computers and the emergence of quantum computers, public keys are becoming increasingly vulnerable. Most cryptocurrency addresses are created by hashing or obscuring the public key, however, once a user transfers funds from this address, the public key is then revealed on the blockchain. In the realm of classical computing there is little risk with this method. However, a Quantum Computer running Shor’s algorithm could break most public key cryptography in little to no time at all, resulting in funds being stolen. Though most conjectures range from five to ten years before security could begin to break, Nexus has prepared by integrating a number of cryptographic innovations that support increased levels of quantum resistance.

Quantum Resistance

LISP

LISP (Location Identifier Separation Protocol) is a protocol designed by a small group of Cisco engineers who were deeply involved in the creation of the internet. It provides important advancements to the network layer, and many necessary features for ease of use, decentralization, security, and scalability.

LISP

The last few months have been very productive as the launch of the Tritium Main Network nears. We invite all to get involved with our social media channels, keep an eye out for tweets, and to make suggestions if you believe Nexus can be improved in any way. Together we continue to design decentralized solutions, and work to build a shared vision of the future.

The Nexus Team

The Three Dimensional Chain (3DC)

The Three Dimensional Chain (3DC)

Nexus is implementing an architecture that is a promising candidate to solving the ‘Blockchain Trilemma’, an opinion that only two of the three qualities, Security, Decentralization and Scalability, are achievable concurrently. We call it the ‘Three Dimensional Chain (3DC)’ which transforms the Ledger into a multi-layered processing system, in order to scale the protocol securely with a high degree of decentralization. It chains together cryptographic primitives into a three-dimensional immutable object (a 3D block), and has three core dimensions: reputation channels (X), immutability or authenticity (Y), and time (Z). This architecture is being deployed through the TAO framework.

Fundamental to the scaling of contract processing is the seven layered Nexus Software Stack set to be released with the Tritium upgrade, which introduces the first iteration of the 3DC as the Ledger Layer. 

Scalability

The architecture of legacy blockchains is comparable to driving a car on a single lane highway – as the volume of cars increases, traffic occurs. Nexus views ‘scalability’ as a requirement, not a feature. Therefore, we design protocols that scale as more nodes join the network, processing unhindered even with the increase of resource requirements. 

Using ‘Signature Chains’, ‘Aggregation’ and ‘Computational Sharding’, the 3DC creates parallel lanes of transaction processing to produce the L1 layer, the base layer of the 3DC. Data is then stored between many nodes using what we term ‘Data Sharding’, which eliminates the need for synchronizing and storing the entire blockchain. ‘LISP’ (Location Identifier Separation Protocol) and the ‘LLL’ (Lower Level Library) together form the common interface for this, which results in an increase of data storage as more nodes join the network providing longer term scaling potential. 

Why is this important for scaling? The Ethereum Blockchain is over 1TB

Signature Chains

Nexus transactions no longer use the UTXO (Unspent Tx Outputs) architecture, where you have outputs from one transaction being inputs to another, resulting in a large amount of expensive signature verifications for even small transactions. Though UTXO was an important cornerstone of the Bitcoin architecture, it has proven to be outdated and vulnerable to many different types of attacks and scaling limitations. 

Why is this important to avoid? 50% of Litecoin’s UTXO is unspendable

As a move away from Legacy Blockchain architecture, Nexus has designed and implemented an architecture named Signature Chains, which act as personal user-level blockchains that contain all of your data as one unique chain. This architecture provides higher scaling characteristics, as only one signature needs to be verified per transaction. Conversely, a single UTXO transaction could contain 1000’s of inputs (and therefore require 1000’s of signature verifications), in order to transact even a small amount of coins (< 0.00001). Additionally, Signature Chains don’t require wallet files, as they are accessible by login credentials (username, password and pin). This verifies authenticity and identity of individuals (through reputation) on the network, without sacrificing privacy.

Aggregation

Transactions in legacy blockchains are not only referenced in a block, they are also transported with it. Though this does contain some positive characteristics for processing, it limits scale as transactions require transport twice, once when created, and again when the block itself is broadcast. In order to combat this inefficiency, the Tritium protocol stores the transaction object separately from the block object, and references its txid inside the block. This is the first form of ‘Aggregation’, that means that a single reference can represent the entire transaction, which reduces the data that is transported in blocks. This results in better levels of scaling, and improved security by lowering the probability of successful Finney attacks on the network. 

What’s a Finney Attack? Hal Finney Discovered it in 2011

Computational Sharding

Computational Sharding is necessary for the division of work between specific types of nodes, to create ‘lanes’ which process data in parallel comparable to multiple lanes of a highway. Though computational Sharding is powerful, it can be insecure if implemented incorrectly. The reason is that a ‘shard’ is easier to dominate than an entire network, as it is smaller. The way to resolve this is through the use of a multi-layered ledger (explained in Security) inherent in the 3DC. Layers of consensus allow the shards below to be smaller in size than those above, and ensure that conflicts can be resolved to prevent attacks. 

Data Sharding

Data Sharding is the division of data to be stored between many nodes. This can be thought of as having many warehouses to store packages (data) after they have been transported (computation). Due to every object being ‘verifiable’ by its index hash, the 3DC can provide Data Sharding with limited trust in remote nodes.

The difficulty is, how is the state of so many objects and shards managed? The use of LISP solves this problem. The method by which the 3DC performs Data Sharding, a ‘network’ is created that exists everywhere, where instead of ‘IP’ addresses, you have ‘Hashes’. This could be compared to typing in a txid in your web browser, and receiving that transaction. Using LISP in this manner, we would enable the browser (or LLP in network terms) to open a connection to a hash, which would point to the group of nodes that held that particular piece of data. 

The end result of this is, a user can login to their node that has never communicated with the network before, generate their ‘genesis-id’ from their username and open a connection to this hash, which would then use the existing internet to route to the node that contained this particular piece of data. The beauty of this is that the network itself doesn’t need to add superfluous data synchronization across nodes to know where data is held. Nodes use the overlay to route requests to other nodes, resulting in IP addresses as hashes of data that exists in the wonderful world of Nexus.

Data sharding is an essential facet of the 3DC in order to achieve long-term scalability. Amine will provide the opportunity for nodes to run in ‘shard mode’, lowering their disk and memory usage even when the network is experiencing high load. Data sharding in Obsidian will extend to critical network functions, resulting in nodes being required to store only a portion of the entire chain. 

Multicast

Additional to the cryptographic structures, the Internet, must be capable of routing efficiently. We utilize what is termed ‘IP Multicast’ which allows a single broadcast of a message to be initiated by a node, rather than every node needing to replicate the message as it is verified. This can be likened to a public speaker broadcasting a message to an audience (multicast), rather than having a one-on-one conversation (unicast), where the message is gossiped from one person to the next. You can imagine how this would not only improve the scalability, but also the integrity of the message (as gossip doesn’t always reflect the original conversation). Packets and transactions will route in constant time no matter how many nodes are part of the system. 

Learn more about LISP

Lower Level Library (LLL)

The LLL is the foundation of the TAO Framework, which powers many of the protocol’s subsystems. It includes three core components.

The Lower Level Database (LLD) is Nexus’ fast and modular storage engine, which to the best of our knowledge, is capable of outperforming most existing embedded database engines. Our average results are around 0.33 seconds for 100k writes and reads to disk (one then the other). This rivals other storage engines such as Google’s LevelDB.

The Lower Level Protocol (LLP) is a fundamental component of the Network Layer, a light and fast protocol that allows a developer to customize their packet design and message interpretation. It gains scalability through simplicity, and is capable of managing a large number of concurrent connections. 

The Lower Level Cryptography (LLC) is a light and efficient library that contains many useful cryptographic functions such as Post-Quantum Cryptography, AES and Argon2. The library provides an easily accessible set of high performance cryptographic functions to ensure maximum scaling potential. An example would be our benchmarks of FALCON (used in the TAO) that verified 150k signatures/s on a consumer grade apple laptop, where ECDSA (used in Bitcoin, Ethereum, etc.) performed only 4k signatures/s.

Security

Nexus employs multiple consensus systems that ‘check and balance’ one another. Diversity strengthens the gene pool of the human species, likewise it is an equally important property for the security of a decentralized system.

The 3DC is designed as multiple layers of transaction processing or ‘consensus’, and each of the layers aggregate data from the layer below. The nodes performing work on L2, resolve any conflicts in L1 shards, using ‘Stake’ and ‘Trust’ as the ‘Weight’ to determine consensus. In the event that there is a conflict, it is resolved through the validity of data, which is defined as (Trust + Weight). The L3 layer will consolidate hashes from L2 to create the final 3D block.

Nexus considers the use of cryptography very seriously, as a flaw in these functions could render the entire network insecure. We only employ well tested and thoroughly peer reviewed cryptography, all of which have survived at least the first round of crypto-analysis at NIST competitions. 

Trust and Weight 

Trust is defined as the total time a specific user (Signature Chain) has been contributing to the network. This time is measured by the consistency and availability of a node to validate transaction data.

Weight is defined as the real time resource contribution that a given node has provided for a one time transaction process. This can be measured in computing cycles through Proof-of-Work (PoW) or other resources such as ‘Stake’ that incurs a cost to provide.

Reputation based Consensus ~ Simplified

Tritium Trust Whitepaper

pBFT + Reputation Channels (L1)

As transactions are received by the network, nodes start verifying them immediately. The transaction speed of L1 channels will vary based on the risk that a merchant wishes to assume, ranging from sub-second speeds to five seconds. For higher value transactions, it will be recommended that they receive additional weight from validation on the next consensus layer: L2, reducing transaction speed to 15 seconds plus.

pBFT + PoS Trust Network (L2)

As an extension to the existing Proof-of-Stake system, L2 will form the second layer of consensus above L1. The L2 layer ensures safety and liveness, cross-shard communication, and resolves conflicts from the L1 layer. It represents the horizontal chaining of L1 channels, and is a major step towards a truly decentralized and scalable ledger.

Decentralized Mining Pool (L3) 

This layer will use PoW based mining shares computed from the work performed by the nodes of L2. Consensus will be determined by the largest value of shares + Trust, in order to reach a final agreement on the most valid 3D block.

Checking and Balancing

In order to have the highest degree of security, decisions cannot be concentrated in one form, as this creates the ability for ‘coercion’. If there is only one form of cost that provides security, the system can be easily dominated due to limited ‘checking and balancing’. Bitcoin is a prime example of a victim that is suffering from resource domination or ‘centralization’.

Bitcoin Hashrate Distribution 

As can be seen from the link above, four organizations control more than 51% of Bitcoin’s hashrate, meaning, that the entire security of Bitcoin is reliant on them and the decisions that they make. This situation is an example of centralization resulting from resource domination, which has lead to proposed solutions such as UASF (User Activated Soft Fork) and multiple Bitcoin forks such as Bitcoin Cash, Bitcoin SV, Bitcoin Gold, etc.

Though promising, UASF was unable to reach a level where it could be effective, as the required percentage of miner’s consent was too high. 

Cryptography

The copy/paste mentality of source code used to create many cryptocurrency projects has led to many critical flaws in security. Below is one such example that created a pandemonium for hundreds of projects that inherited a flaw from Zcoin.

Fatal Flaws may be embedded in all Privacy Coins

Nexus employs the following cryptographic functions: FALCON (a second round contender for the NIST Post-Quantum cryptography competition), Argon2 (winner of the password hashing competition, and a superior alternative to S-Crypt or B-Crypt), and Keccak (winner of the SHA3 competition). 

We also do not rely on the security of only one cryptographic function for the security of the entire system, and treat every public key as disposable once used. This means our security uses many different layers of redundancy to provide protection, in the event that one of them becomes vulnerable. Relying on a single private key for security is a ticking time bomb, though this approach is largely used by most blockchain applications.

Cryptographic Flaws found in IOTA

Signature Chains decouple key management from the user account, meaning that with the click of a button, you are able to change the type of key that your account uses. This gives users the option to use Post-Quantum cryptography such as FALCON, or the option to use more time-tested Brainpool curves. If there were any flaws found in either of these cryptographic schemes, you are able to change with ease your key type.

These safeguards are important in order to protect systems over time, as ongoing crypto-analysis are always finding vulnerabilities and attack vectors that will begin to break cryptographic standards.

Large Bitcoin Collider Finds Another Bitcoin Private Key

Decentralization

Many protocols have moved away from PoW due its large energy requirements Its very competitive nature also leads to an increasing amount of resources in order to search for a block, as the traditional model of PoW only rewards the winning miner of each block, which incentivizes miners to pool resources. 

An alternative is EOS’ Delegated Proof of Stake, though it relies on only twenty-one block producers, yielding a low degree of decentralization. There are several solutions that have been proposed for the scaling of a blockchain: Bitcoin’s Segregated Witness and Lightning Network, and Ethereum’s Plasma. Though promising, both essentially depend on off-chain solutions to provide scaling (a more centralized approach). They create payment channels or ‘side chains’, that rely on a small group of verifiers to recommit updated balances. Younger protocols have proposed multilayered systems, though we are unaware of any designs that place as much emphasis on Decentralization as the 3DC.

The 3DC aims to improve decentralization through many methods that include; L1 Reputation Channels, Decentralized Pools on the L2 and L3 layers, Reputation Incentive Structures, and Peer Discovery.

L1 Reputation Channels

L1 Reputation channels are designed to require a low amount of resources in comparison to the L2 and L3 layers. This is to enable the use of smaller mobile devices which in turn will provide higher levels of decentralization. This is possible as the L2 consensus layer above adds weight to ensure the security of the channels below. Reputation is the final ingredient that the 3DC employs to maintain security while achieving high levels of decentralization. It is aggregated through all three layers of the 3DC, to quantify the ‘validity’ of the 3D block.

Decentralized Staking Pool (L2)

The L2 layer is the core of the 3DC that manages data aggregation and contract processing. This layer also receives shares from the miners on the L3 layer above, in order to accumulate their work and reward the miners collectively. The more shares that are included from the L3 layer, the greater the accumulated Weight and Trust will be for the given 3D block. Therefore, the 3DC incentivises L2 validators to include as many shares as possible to ensure that their 3D block is accepted as the most valid in the 3D chain.

The L2 layer is driven by a ‘Proof-of-Stake’ weighting, that identifies all nodes in the consensus process as contributors, and therefore produces a higher degree of decentralization compared to existing Proof-of-Stake (PoS) protocols. The 3DC will require a lower minimum balance in order to stake with than the current PoS protocol. 

Decentralized Mining Pool (L3)

Instead of miners having the authority to determine the next block by finding the winning hash, mining will become a group-wide activity forming the L3 layer of the 3DC. Miners who submit hashes to the network perform work that locks the L2 cross links. This provides the infrastructure for a more decentralized consensus process, while also inheriting the positive properties that mining offers. 

Peer Discovery

Any blockchain relies on the ability of nodes to connect directly (peer-to-peer) to maintain a decentralized and evenly distributed topology. Therefore, nodes must be able to be discovered by their peers, by being able to accept connection requests. Though this is not a novel concept, it is pivotal to peer-to-peer networks and yet is seldom achievable, due to the need for NAT (Network Address Translator) traversal logic which is why Bitcoin has only a meager 10% of nodes that are discoverable.

Alternatively, Nexus uses the LISP Overlay for ‘NAT traversal’ to maintain higher levels of node availability. LISP uses static Endpoint Identifiers (EIDs) that can even be reached when roaming between different networks (WiFi, cell towers, etc.). This gives nodes higher levels of mobility, allowing them to be located anywhere on the internet, behind NATs in residential environments, in cloud providers, and behind mobile carriers while still being discoverable. 

Reputation Incentive Structures 

Reputation is an important requirement for the functioning of decentralized systems, in order to create a healthy global network. We will implement reputation on all three layers of the 3DC, as a secondary component to Weight to improve the overall Byzantine Fault Tolerance. Of equal importance, reputation can improve the decentralization through incentive structures facilitated through variable rewards to nodes that have earned a higher reputation. Longer term contributors to a system can be awarded a higher reputation, and therefore a higher return for their contribution, giving rise to a long standing view of Nexus that:

“Not everyone has money, but everyone has time”

Learn more about Reputation

Decentralized Solutions

We are currently unaware of any other multi-layered architectural design that combines both PoS and PoW, that integrates the LISP Overlay, that is able to provide data sharding, or any technology similar to that of Signature Chains. Combined with the seven layered Software Stack, the 3DC holds promise to be a highly scalable, secure and decentralized contract engine fit for global adoption. 

The Software Stack, set to be released with Tritium, provides an easy to use API interface to build with Contracts that can be used for a variety of decentralized solutions, including the registration of digital assets and certificates, supply chain management, graphic licensing, educational certificates, royalty payments and Securitised Token Offerings (STOs). We envision that this technology will aid in the distribution of resources to more people, so that they can benefit from all the exciting innovations that blockchain is able to provide. 

Metatron’s Cube 

The architecture of the 3DC is inspired by ‘Metatron’s Cube’ that depicts the five platonic solids, which are geometrical forms that are said to act as a template for all life.