Blocknet as an innovation project hits on many points I find personally interesting, from dex and blockchain interoperability to unique masternode utility. Blocknet is a complex project with many moving parts … I set out to interview the team in continuing my research into masternode cryptocurrencies.
Who is Blocknet?
Simply put, Blocknet is the internet of blockchains. Just like computers in the 80’s, blockchains are extremely useful but limited in capability due to them being closed systems. Once the internet came about, computers were able to communicate allowing for the development of the systems and applications that exist today.
“This is what Blocknet enables for blockchains – the ability to interact and communicate with each other allowing for the development of real-world applications that aren’t currently possible.”
PIVX was forked in 2017 to adopt their masternode, governance, and self-funding systems. Blocknet is different now from PIVX in having the ability to facilitate communication between blockchains by utilizing the masternode structure and converting them into what we call Service Nodes. Service Nodes host full nodes of the blockchains the Blocknet Protocol is compatible with, manage and cross-verify the orderbooks, and verify interactions between peers.
Blocknet is now compatible with over 100 blockchains with a projected 300+ by the end of the year and is working on Ethereum/ERC20 compatibility. We plan to integrate all blockchains and platforms and make them accessible through a simple, easy-to-use API. The integration of these blockchains is being done in an agnostic and general-purpose manner, so that the likelihood of a blockchain being compatible increases with the number of blockchains that are already compatible. When using the Blocknet Protocol, there is no dependency on the Blocknet blockchain, as the protocol is a second layer solution rather than an integrated component, as is the case with solutions such as Aion.
In the future, nodes will also support XRouter, SPV, and XCloud functionality, which consists of acting as a blockchain router, submitting pre-signed packets to the other blockchain networks. and hosting services monetized through the Blocknet blockchain.
Blocknet is founded on the principles of openness, transparency, and maintaining a high level of decentralization. There is no company or foundation behind the project. Instead, Blocknet is self-governed by its stakeholders, meaning that stakers, token-holders, Service Node operators and others with a stake in the blockchain have the ability to make decisions together. The project is also open-source, meaning anybody can contribute. From development, to content creation, to tools and services, we welcome all to take part. Blocknet is also paving the way to create the first decentralized multi-blockchain SPV network.
At Blocknet, we take pride in the level of decentralization the project and protocol maintains.
Why is the realization of an “internet of blockchains” a radical achievement in crypto?
“Blockchain interoperability is incredibly important for enabling the ecosystem to evolve and be able to support real world blockchain-powered applications.”
At the moment, there are many projects that try to provide as many features as possible in a single blockchain, resulting in a blockchain that’s inefficient and bloated. This is called monolithic architecture and is generally considered poor practice in software development.
The Blocknet Protocol would allow an ecosystem of single-purpose microservices and blockchains that perform one task really well and are secure, reliable, and efficient. These blockchain-agnostic microservices can then be consumed by dApps and other blockchains to build more complex, yet modular, services. For instance, if building a dApp on Ethereum that required a storage solution, the dApp will be able to use the protocol to communicate with Siacoin, Storj, or any other storage blockchain to consume their services. If the dApp needed to perform heavy computations, Golem or Sonm could be used. If the dApp had a payment aspect, payments can be made in Bitcoin or Litecoin, which are more widely supported by vendors.
From another perspective, in today’s world each company and business has their own software stack. This will be the case for the future of blockchain as well where each business is using their own blockchain or set of blockchains. For example, in supply chain there will be multiple blockchains being used at various steps of the process much like there is today with traditional software stacks. The Blocknet protocol would allow information to be accessible between these different blockchains. Pharmaceutical manufacturers have strict regulations to follow and need to provide certain information and assurances. Being able to access lot information from the raw materials being consumed, temperature and humidity information during transportation, and final destinations are all important. The Blocknet protocol would enable this communication to occur in a trustless matter, which is important to ensure validity of the information.
Another example would be the ability for a healthcare specific blockchain and a health insurance blockchain to interact and communicate details about patient data.
Blocknet is creating a shift from monolithic architecture to microservice architecture. Why is this important?
A shift from monolithic architecture to microservice architecture is important for scalability and development of blockchains.
If developing a dApp, in the current state of the ecosystem a developer must choose between either developing on an existing platform (such as Ethereum), forking a project with similar traits, or building a blockchain from scratch. However, with the use of the Blocknet Protocol, it makes development blockchain-agnostic. This means development can occur on any chain and the features needed can be pulled in from other blockchains. For instance, if building a dApp on Ethereum that needed a storage solution, the dApp will be able to use the protocol to communicate with Siacoin or Storj or any other storage blockchain to consume their services. If the dApp needed to perform heavy computations, Golem or Sonm could be used. If the dapp had a payment aspect, payments can be made in Bitcoin or Litecoin, which are more widely supported by vendors.
The protocol enables the use of services from other chains similar to the way libraries are used in traditional software development, allowing developers to focus on the business logic of the application. This also helps monetize blockchain services as these blockchains are consumed.
“Another benefit to microservice architecture is that it will allow concentration of resources on core microservice blockchains, rather than development mind-share being divided among different projects trying to reinvent the wheel.”
Again, this is similar to the core libraries used in traditional programming. Research and advancements can be made for these microservice blockchains to perform one task really well and be more secure, reliable, and efficient.
ARK’s Smart Bridges are similar to Blocknet’s XBridge in that they connect distinct blockchains and facilitate communication between them. How does Blocknet differentiate itself?
Blocknet and ARK are different in how the technology functions. To the best of our knowledge, with ARK, blockchains are either required to include a vendor code in their codebase or pass through a relayer which inserts this vendor code. This puts a burden on developers of other blockchains to include this vendor code. Alternatively, if the vendor code isn’t included, the relay nodes act as middlemen in any interactions.
With Blocknet, all integration is done on our side without the need of other blockchains to change their codebase. As a result, the more blockchains that are integrated, the greater the chance that the next blockchain tested will already be compatible. This makes the protocol much more adoptable.
Blocknet also doesn’t act as an intermediary in transactions. Funds are always in the control of the user at all times.
“Unlike other interoperability services in development, Blocknet is its own blockchain, performs all integration for other blockchains, does not require codebase updates to those blockchains, is not a middleman in the interaction, does not use proxy tokens, does not mess with the token supply of the blockchains, and does not have a bloated design. Blocknet is simply an un-opinionated connector.”
Beyond being a cryptocurrency, once Blocknet realizes it’s current vision, what will be the use-cases?
Infrastructure for a not-yet-existing ecosystem presents some difficulties to the imagination. “What is this for?” is the single most common design-focused question asked, and the correct answer is something like “anything that can benefit from a token ecosystem” – which is most things. For a less abstract answer, here is a short list of use-cases for the Blocknet:
- Decentralized Exchange
- Blockchain Router
- Inter-chain Messaging
- Multichain Mobile App
- Near-Perfect Coin Mixer
- Decentralized Marketplace App
- Fee-Converter for Ethereum Smart Contracts
- Truly Decentralized Stablecoin
- Self-sovereign ID and Personal Information Manager
- Supply Chain 2.0
- IoT Infrastructure
- Advertising Services
- P2P Storage Solution
- Permissionless ICO Platform
- Distributed Budget Management
- Integration to ERP, CRM, PLM Systems Across Companies
- Infrastructure for the Internet of Value
The Blocknet Protocol is a development tool that will allow the ecosystem to evolve and create real world applications that can replace current centralized systems. Everyone outside of crypto will soon be using applications powered by blockchain and they may not even know it. What is important is that interactions in their daily lives will be made more secure as behind the scenes middlemen/intermediaries will be removed along with any components that involve trust.
How does Blocknet plan to bring users to the platform and improve adoption?
Aside from blockchain interoperability, Blocknet does offer decentralized and trustless exchange capabilities. While there are many other projects that tout themselves as a DEX, in reality most are hybrid exchanges as they contain centralized components.
“Unfortunately the term DEX has been abused by any use of atomic swaps while ignoring other components of decentralized exchange including decentralized storage of funds, orderbooks, and order matching.”
Blocknet plans to bring in users to the platform in a few ways. First and foremost, Blocknet is a development tool. This is important to acknowledge because any service that builds on Blocknet will have shared liquidity so the more services built using the protocol, the more liquidity there will be for exchange. There are a few projects that discussions are ongoing with to build on the protocol, with concepts including a decentralized Shapeshift-like service, private exchanges, escrow services, and multi-chain architecture applications.
To lead this effort, Blocknet has created Block DX, a decentralized exchange, as the first dApp on the protocol. This was created to showcase what kind of applications could be built using the Blocknet Protocol. User experience is very important to us and the users so we plan to create a trading experience that mimics that of a centralized exchange and make Block DX as simple to use as possible.
Many issues of a centralized exchange revolve around the centralized components such as creating accounts, wallets being frozen, hacks, etc. For other issues, such as how to select a trading pair, create an order, take an order, and other function, we are creating text and video tutorial for. If a user needs additional help, there are multiple team members to offer support as well as the community, which is extremely helpful. Issues are usually resolved in a few minutes.
Blocknet also worked with world-renowned design agency, VSA Partners, to create the Block DX user interface and user experience. We are always looking for ongoing improvements to user experience though. A few items we have in the pipeline are being able to place orders by price(as a ratio), view the orderbook pricing of any coin pair in BTC pricing, and a setup and configuration wizard that reduces setup to just a few clicks.
Tell me about the Blocknet marketing strategy.
Blocknet’s mission statement is “Blocknet serves as a connector between blockchains, markets, and communities.” and while the development team is focused on creating technology that connects blockchains and markets, Blocknet’s marketing team is about connecting communities through a unifying message.
We put the majority of our effort into creating relationships with other communities and producing content and resources that bring communities together. Our marketing initiatives span from turning our website into a hub of tools for other communities, to having Social Media Teams around the world, in multiple language, running official Blocknet social media accounts. Though we have done traditional marketing, such as paid advertisements, we get more value out of taking on campaigns that empower community involvement, leading to organic growth. Our Q3 Marketing Plan and initiatives can be seen here.
We recently did an internal study for our community on the effects of the bear market has had on crypto marketing in 2018. Though general crypto web traffic has fallen by over 70%, Blocknet’s growth on web traffic and Twitter did over 40% better than other comparable projects. The bear market is affecting every crypto project’s growth and the vast majority of projects are seeing a sharp decline in growth, but we are very happy with the resilience Blocknet has shown despite the bear market.
“By focusing on serving other communities and laying a infrastructure for greater community participation, we expect to keep up the momentum regardless of the state of the market.”
In 5 years, Blocknet will be a staple development tool in blockchain development. Blocknet will have all blockchains and subsequent tokens integrated and compatible with the network and a thriving development community contributing to maintain and improve the network and supporting tools that complement and enhance the development experience.
Blocknet will be utilized by millions of people, by providing the underlying technology connecting various blockchains. All this will be happening behind-the-scenes, without any direct interaction with end-users of hundreds of applications.
The future for the Internet of Blockchains looks very bright!