Lead application engineer at Namecoin, Jeremy Rand, put forward a presentation on the value of alternative blockchains at QCon 2017 in London, UK. While acknowledging that some alternative blockchains currently in existence do not have legitimate utility, there are areas where these blockchains can be used to meet specific demands and neutralize certain challenges.
The Existence of Alternative Blockchains
Bitcoin’s network is the oldest and most established blockchain. It has been revolutionary as a store of value and as a payment system since its creation in 2009. It is the most secure blockchain, has the largest transaction volume and market capitalization as well as the highest mining hash rate. It also possesses the largest network of developers as well as academic and coder reviews.
However, the number of alternative blockchains is growing though many of these networks do not have major differences in utility to Bitcoin‘s network. Rand reckons this phenomenon is explained by recognizing that these alternative networks are created as ‘ethically dubious money making schemes.’
Explaining further, he states: “This is a thing because blockchains are difficult to understand. In particular, they are a really weird chimeric combination of a bunch of different fields. Cryptography, distributed systems, economics, and game theory. And as a result of this investors, journalists, and users pretty much almost invariably cannot evaluate the details of blockchain technology products.”
This combination of factors makes the blockchain field ripe ground for scammers who will exploit the existing low levels of understanding in order to acquire investors as well as users for their profit-driven blockchains.
Legitimate Use Cases For Alternative Blockchains
Although there exists a number of scammy alternative blockchains, Rand believes there are actual legitimate use cases for alternative networks. Alternative blockchains can be used to mitigate certain challenges.
To begin with, naming systems are one use case for alternative blockchains. The Domain Name System (DNS) is the protocol through which things, like computers, mobile phones, and websites, that are connected to the internet are allocated a name. This name is attached to an Internet Protocol (IP) that is made up of numbers and is generally difficult for a human to remember. DNS combines this numerical data with an easily recognizable word to create a name.
Though DNS is an essential part of the Internet, it faces various challenges. Domain names can be easy pickings for criminals who will aim to steal or hijack the name while corrupt governments can forcefully take over a domain name in order to further their agendas. In the case of dispute over domain names and their ownership, the dispute resolution process that usually occurs through the courts is costly and time-consuming.
In addition, domain names are vulnerable to Distributed Denial of Service (DDoS) attacks. This refers to an attack where a number of malfunctioning systems converge on a single system leading to a Denial of Service (DoS) attack. These attacks affect the functioning of the domain and can take a while to resolve.
Related to the naming system use case is Public Key Infrastructure (PKI). PKI refers to the system that facilitates the secure transfer of data over the Internet. Amongst other protocols, the system utilizes a process named Transport Layer Security (TLS). However, this protocol is flawed. In order to adequately function as a facilitator of secure data transfer, TLS protocols must trust certain pages on the Internet. These pages are known as Certificate Authorities (CA). CA’s are vulnerable to attack and can malfunction.
Zooko’s triangle, formulated by Zooko Wilcox, refers to three aspects that a naming system (such as DNS) must have in order to function adequately. These properties include a decentralized system, global names, and human meaningful. Global names mean that a name should refer to the same thing everywhere while human meaningful denotes that the names are chosen by humans. Similar to decentralized consensus, this was deemed impossible until the advent of blockchain technology.
Early Bitcoin community members saw the blockchain as a path to fixing the shortcomings witnessed in DNS and PKI systems. Appamoto, a proponent of this idea, believed Bitcoin’s network could be used to store names and other values through the addition of non-currency systems to its blockchain. The resulting blockchain would be named BitX and would include bitcoin, BitDNS as well as other systems.
Bitcoin’s pseudonymous creator, Satoshi Nakamoto was against the idea stating:
“Piling every proof of work quorum system in the world into one dataset doesn’t scale. Bitcoin and BitDNS can be used separately. Users shouldn’t have to download all of both to use on or the other.”
Instead, he proposed a modified system know as Auxiliary Proof of Work (AuxPoW) that would allow multiple blockchains to co-exist. This system, also known as merge-mined sidechains would ensure the chains would not be a danger to each other.
Namecoin is the implementation of the DNS proposal. It is a fork of Bitcoin Core and utilizes AuxPoW in order to create a naming system. Namecoin adds a few lines of code to the scripting language used by Bitcoin’s network so as to generate names. “The data attached to a name consists of a name argument and a value argument. The name update upcode can either change the name the value of the name, or it can transfer the name to a new owner,” explained Rand.
Names typically expire 250 days, which is about 36,000 blocks, after the most recent name update. However, it is easy to update a name by simply inputting the update upcode and setting it the same value it already has.
Namecoin operates within certain consensus rules. First is the global uniqueness of unexpired names meaning there no same names can exist and second is the immutability of the name field. One cannot change a name on the blockchain; rather one must register a new name.
However, it must be noted that the name spaces and their semantics do not form part of the consensus rules but are agreed upon purely by convention. This allows the blockchain to be flexible enough to accommodate domain names, human identities as well as any new use cases that may arise.
Namecoin makes a case for itself as an example of an alternative blockchain that is solving real world challenges. Using blockchain technology to back the authenticity of records is an innovative way of utilizing the inherent features of the technology that have made it a disruptor since its release.