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Dispatch Labs CTO Zane Witherspoon Explains How His Platform Created an Innovative Incubator Model

Dispatch is a platform promising zero transaction fees and a speed of tens of thousands of transactions per second (TPS). Is this platform a theoretical pipedream or worth a look? Find out more in this exclusive Merkle interview with Zane Witherspoon, co-founder and CTO of Dispatch Labs.

The Merkle: Can you tell us briefly about Dispatch Labs and how you got involved?

Zane Witherspoon: Dispatch Labs is a new chain built as a platform for data-driven DApps.

I was organizing the San Francisco Ethereum meetups when I met Matt McGraw and Patrick Wickstrom for the first time. We started talking about an idea of theirs for royalty leakage tracking using blockchain. It was probably the most boring thing you could do with such a new and exciting technology. We kept in touch, and started thinking about music. I’m a musician and Matt and I both have many artist friends, making us very familiar with the problems of artists and distribution costs.

We set out to make a content marketplace built on the blockchain, empowering artists to distribute their own music without middlemen taking a cut [of] their profits and bringing music to consumers for less. When we looked at platforms, we realized no blockchain could handle this quantity of data. That’s when we started working on building an underlying protocol and [it’s] how Dispatch Labs was born. A platform with speeds robust enough to support streaming music also had many other possible uses: AI, IoT, machine learning, streaming video, health records and data transfer, and more.

Both Matt and Patrick saw the bigger picture faster than I did, and as we built the platform, they brought up the idea of a consultancy. Patrick had spent years as a consultant at [PricewaterhouseCoopers] and Matt had helped many startups find major success, and [they] wanted to bring in people we could support as a consultancy and also introduce to our platform. I was so against it at first, but I couldn’t have been more wrong. We ended up forming a governing organization called The Bureau with Constellation Labs, a DAG protocol based on reusable smart contracts.

The Bureau became our innovation hub and governing organization, and our underlying protocols, Dispatch Labs and Constellation became the spokes. The Bureau lets us work with interesting blockchain projects, [supporting] their success as startups. In this structure, the Bureau builds out our connections, Constellation’s DAG works well at data intake, and Dispatch powers data collection and processing.

The Bureau at work inside Dispatch Labs’ San Francisco office

The Merkle: What kinds of partnerships does Dispatch have for getting new users and businesses on its platform? I saw you recently partnered with Utopi, offering a streaming video service.

Witherspoon: While we’re pretty blockchain-agnostic as far as how our Bureau clients develop their projects, many of them are excited to build on Dispatch because of the resources we can provide them and the influence they can have in the development of the protocol.

Nanovision is putting open medical data on the blockchain. This shared data would help to bring faster FDA approval for new prescription drugs. Nanovision also partnered with ARM processors to offer nanochip devices that could store your personal molecular health data on Dispatch.

Bucket seeks to remove coins from the fiat economy. Metal change like coins create a wasteful transportation cycle for companies to cash out at banks, and coin counter machines take a huge cut of consumers’ money for their service. 

The Merkle: You came up with a unique protocol known as Delegated Asynchronous Proof of Stake. How is this different from traditional Proof of Stake, and why was it necessary?

Witherspoon: Traditional blockchains have a hard cap [on the number of] transactions per second. This means the number of transactions is always limited by the number of blocks per second and the number of transactions per block. DAGs are one solution, but they are hindered by the shared quantity of data needed to be stored. DAGs like Nano and IOTA require you to keep a copy of the chain, meaning each individual has their own chain and keeps track of everyone else’s transaction.

Our solution was to apply a hybrid decentralized solution like Delegated Proof of Stake (DPoS), with a smaller quorum of elected validators, to a DAG structure to prevent bottlenecking like we see on traditional blockchains. We DAG-ized DPoS, removing the TPS bottleneck. In Delegated Asynchronous Proof of Stake (DAPoS), the bottleneck becomes the validators themselves. So as validator algorithms and hardware get better, the TPS of the network can scale up with them.

The Merkle: What kind of security auditing are you doing to make sure the Dispatch platform works as intended?

Witherspoon: One of the markers of [the] immaturity of [the] crypto space is there’s virtually no Quality Assurance (QA) on any crypto project. We have a dedicated QA team in our engineering department focused on testing our product. We hired a team of brothers, Dennis and Dimitri Molchanenko, who invented Redwood HQ, one of the most popular QA frameworks used by the US Department of Defense and others. We’re working on our own QA, and trying to encourage the rest of the crypto community to start thinking about it early on in projects as well. We’re also planning on [having] outside code auditing closer to launch.

The Merkle: What’s the most exciting thing about working on new protocols and projects in crypto right now?

Witherspoon: I get to talk about technology and business a lot, but one of the things I’ve learned as a 21 year old CTO [is that] the tech is one thing, but so much of the time it’s the energy of people that’s the magic behind something. I know my career is young, and I constantly feel amazed and blessed to be on the founding team I am, and that Matt and Patrick have taken me under their wing. I love these guys.

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EOS and Ethereum: One DApp Platform to Rule Them All?

Does the market have room for two thriving DApp platforms? Ethereum and EOS represent two distinct approaches to carrying out smart contracts and supporting more than 1,500 DApps.

DApps coming to EOS (image by Raleigh Felton and EOSTribe)

Ethereum holds an advantage as the first native DApp platform, but EOS is proposing a much faster consensus model. Is there going to be one clear winner and loser, or does the marketplace have room to support both platforms thanks to their different strengths? There’s reason to believe both platforms can be successful; however, both have their work cut out for them.

A Brief Comparison

Ethereum has already established itself as the most popular DApp platform, attracting massive amounts of developers thanks to its support for an easy-to-use programming language, Solidity, as well as a bevy of ICOs with ERC-20 tokens. It also boasts the most functional use cases of any crypto project in history, with more DApps coming to its mainnet each week.

EOS, meanwhile, held the largest ICO to date (US$4 billion) to support its development. The promises for its launch this weekend are substantial, and many are predicting everything that could go wrong. EOS plans to offer fee-less transactions and fast consensus right out of the gate, making it a tempting alternative if it can follow through.

EOS proposes several other changes separating it from Ethereum’s platform model, as shown below. Depending on your thoughts on governance models versus trustless architecture and security, they represent either benefits or drawbacks.

Ethereum EOS
  • Functional and successful DApp community, ICOs, ERC-20s
  • Theoretical, for now
  • Currently supports 10 TPS up to about 16 TPS
  • Lazy code costs consumers gas fees
  • Dynamic pricing means devs – not consumers – pay for gas
  • Straightforward transactions
  • Option for transaction timelock delays, allowing cancels
  • Solidity and Vyper for Python using EVM
  • C++ and programming languages using WASM
  • Immutable smart contracts – led to the Ethereum Classic fork
  • Smart Contracts can be updated without causing the network to fork, but it’s potentially a security risk if a developer or central authority can do this
  • On-chain governance from day one
  • Favors cryptoeconomics – reduces the number of social trust assumptions needed to operate
  • Favors a voting system that could be subject to bribery but may cast out bad actors
  • Highly decentralized – slow to reach finality as a result
  • Somewhat centralized – 21 block producers
  • Casper and sharding would add staking with a target of 20,000 TPS
    • If met, that would be enough to handle enterprise-level software
  • Needs to reach or surpass Visa’s 2,000 TPS average to be competitive with EOS
  • 3-day staking period to vote locks up coins
  • Will use “interblockchain communication” as sharding to handle enterprise-level software
  • Compares favorably against Visa’s 2,000 TPS average – if it works
  • Enforcement unclear
  • Private keys can be lost or compromised, and there’s no way to reset them
  • EOS provides an owner key that can reset a private key if it’s lost or compromised
  • Protocol change is slow but methodical – will it be too late?
  • Big promises and elaborate governance – will it work?

So, what will it take for Ethereum and EOS to achieve success?

Moving Forward: ETH and EOS

Ethereum needs scalability if it’s going to maintain its current huge role. Moreover, it’s going to require an immediate shift to compete with EOS’s promised capabilities. If EOS is able to do what its team says it will and also attracts a competitive volume of traffic, Ethereum could lose its stronghold. Fifteen transactions per second (TPS) isn’t going to cut it for mass adoption, so switching from a Proof of Work (PoW) model to a faster solution is urgently needed.

The results of EOS’s mainnet launch remain to be seen. The platform could thrive as a faster and more cost-effective alternative to Ethereum, but it also could suffer from its design, as Vitalik Buterin pointed out, criticizing its DPoS model for potential bribery in its voting structure.

EOS is structured to rely heavily on voters and a small group of block producers in order to achieve its promised millions of transactions per second. This model is a test: Will token holders actively govern its consensus mechanism, picking the right candidates and punishing bad actors? Will block producer candidates stick around, leveraging their massive CPUs to support EOS over the long term?

EOS token holders are powerful if they register their tokens and continually stake them to vote for block producers. But if staking proves to be too much hassle, only a fraction of the EOS community will be making these decisions, effectively centralizing them among a small, but perhaps highly informed group of active voters. This could be representative democracy at its finest, or a flop indicating insufficient interest in the platform. Will token holders embrace Dan Larimer’s requirement that they stake coins for three days without being able to convert them for the privilege of voting?

Ethereum

Ethereum is a top choice for DApp releases today, as well as a safe place to tokenize virtual and real property. CryptoKitties has already proven to be a successful virtual tokenization, and MakerDAO’s Dai is a stablecoin that’s showing success on the Ethereum platform. Other projects like Augur and Digix are set to launch on the Ethereum mainnet soon, reflecting the continued growth of the Ethereum platform.

Despite all this exciting news, Ethereum has yet to scale past 15 TPS, and it needs to do so soon if it’s to remain the leading DApp platform against EOS as well as competitive with Visa’s 2,000 TPS average.

Casper FFG – Bringing Staking to Ethereum

The Casper testnet was released in January and is predicted to run on the mainnet beginning this summer or fall. Casper FFG (the Friendly Finality Gadget) is touted as an improvement providing explicit finality so developers can better design DApps while wasting less gas. Casper isn’t a TPS solution, but it would allow the Ethereum blockchain to remain decentralized to a greater extent than EOS, while also reducing its total energy use by curtailing wasteful spends.  

Casper also opens Ethereum to staking, allowing holders of 32 ETH or more (since the Mauve Paper) to stake tokens for a 5% annual return plus regular appreciation. This will free up massive amounts of ETH and produce more liquidity on the network, speeding up transactions.

Sharding

Sharding would pivot Ethereum away from its current Proof of Work model in which every single computer has to calculate and verify every transaction on the network. Ethereum’s massive popularity with respect to ICOs and DApp development has created a strong ecosystem, making it the most decentralized project in crypto’s history in terms of node volume. Ethereum currently has over 25,000 nodes, more than any other blockchain and more than three times that of Bitcoin. This massive decentralized network has come at a price, however: slow consensus.

Sharding separates nodes to interact only within small subgroups or shards, like tiny separate islands, according to founder Vitalik Buterin:

In Ethereum sharding, there’s no notion of shards being mapped to specific long-term node clusters or geographies etc; it’s not like there’s a Shanghai shard, Toronto shard, etc. All shards take their (frequently reshuffled) validator sets from globally dispersed nodes.

Each group interacts only with accounts in the same shard, decreasing the amount of time needed to form consensus by simply sharing receipts amongst trustless nodes that are all able to come to the same conclusion in regards to the money flow. Casper’s PoS model will help make sharding easier to manage, as it will require secure mechanisms to be sure which node has implemented which shard.

Once Ethereum launches Casper, sharding is supposed to be its next stepping stone toward faster transaction speeds, and it could very well beat EOS’s timeline if each step towards sharding goes smoothly.

DPoS from a Security Standpoint

Launching EOS with Delegated Proof of Stake right from the start, if successful, would give it a big advantage. DPoS creates a blockchain validated by a small group of ranked delegates known as block producers. EOS’s distributed operating system doesn’t rely on a massively decentralized supercomputer because it only needs a small consortium to validate its transactions.

Governance

While Ethereum is just starting to add governance features to its platform, EOS will launch with a governance model built in from the start. From a security standpoint, this makes it very difficult for EOS to fork. It also clarifies voting rules. For example, 15% of token holders need to vote in order for a chain to be considered valid. EOS has been criticized for having overly lax punishments when it comes to malicious violators.

Whereas Ethereum’s Casper would remove a validator’s stake for putting “nothing at stake” on two different chains, EOS has few repercussions. A validator on EOS would lose reputation, which could cost them their chance to be voted in as a block producer. Some critics feel a potential loss of earnings isn’t enough of a deterrent compared to getting tokens burned for bad behavior.

Criticism like this series of Twitter posts cites problems with the governance model and how these tasks will be moderated. EOS will need to demonstrate that its governance is a functioning model, responsive and adaptive in real time, not just a theoretical model as things stand now.  

Conclusion

While EOS has promises to fulfill and Ethereum has updates in the works, both platforms have much work ahead. Whether you’re a strong supporter of Ethereum, EOS, or both, innovation is key to pushing the crypto economy forward, and both platforms have their work cut out for them.

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Hyperledger and the Enterprise Ethereum Alliance Face Off

The fight between Hyperledger and the Enterprise Ethereum Alliance seems destined to be an all-out battle that will determine which platform will rule the day. Just like the old days when the struggle between video machine formats led to the advancement of one over the other and the demise of the losing platform, so too could be the battle between Hyperledger and the Enterprise Ethereum Alliance (EEA) platforms.

In the famous video machine battle, the Sony platform, Betamax, was in a fight with the video cassette recorder, better known as the VCR. While many believed that Betamax was the better platform, it was the VCR that won the battle and took over the market. It was a sad story for the Sony Betamax, which was shortly thereafter relegated to the same place that eight-track players had found themselves just a few years earlier.

Are we now in for the same kind of fight for market share in the blockchain space, and will we soon see the demise of one once the market has determined which would make for a better investment, use of time, and energy? Maybe not. This battle could actually end up in a tie, and that might be the best result moving forward when it comes to blockchain technology.

The fundamental difference between the two platforms is their user bases. Ethereum targets applications that are easily distributed, while Hyperledger is targeting business applications where flexibility is key. Ethereum, for instance, is not able to shield its transactions from some while granting access to others, which is something that business applications will undoubtedly require. Hyperledger allows for this, while giving its user base a bit more flexibility.

The reason this could end in a tie is that there are some heavy hitters like BNY Mellon, JP Morgan, and others that have put their resources into both competing technologies, and could possibly push both ends toward the middle and get these two entities to work together toward a common goal.

Brian Behlendorf, the director of Hyperledger, has said that no one in his group believes that belonging to one excludes the other, and no one has canceled their membership. Monax will want to use Eris to link with EEA, and if the standards are compatible, it could mean cooperation between the two, which could make for some good news on both fronts.

Behlendorf was also quoted as saying, “There could be others in the future. Or someone could even create the right complements for the fabric to work with EEA standards. Beyond technical collaboration, we would look at whether there would be interest in working together.”

So, in the end, it is really a matter of whether or not the two groups want to work together or not, and that has yet to be determined. As for the technical aspects of merging the two, it will probably only be a matter of time before it is possible, as long as the will to collaborate is present and flowing.

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New Vehicles in Norway Are Now 50% Electric, Favored over Gasoline Cars

The market share of electric cars, which was only a fraction of that of gasoline cars a few years ago, has reached 50 percent in Norway. Over the past 12 months, an identical number of electric vehicles as gasoline cars have been manufactured in Norway, demonstrating the country’s exponential adoption of electric cars.

Electric Cars Favored Over Gasoline Cars

In Norway, a liter of gasoline costs around $2, a rate that is substantially higher than in other places such as South Korea and Japan that are also known to have expensive gasoline. In contrast to high gasoline costs and taxes on conventional vehicles, the Norwegian government does not impose tax on the sale of electric vehicles, allowing consumers to obtain electric cars at around 50 percent of the cost required to purchase gasoline-powered vehicles.

According to a report by the Norwegian government entitled “Sales of Petroleum Products,” the demand for petroleum products have fallen for the first time in history, primarily due to the rapid adoption of electric vehicles and the drop in demand for gasoline and fuel.

“Motor gasoline sales declined by 2.9%, dutiable diesel fell by 2.7%, and duty-free diesel declined by 2.6%. This decline follows sales that were flat in 2014, and then grew by 1% in 2015 and 3.2% in 2016. Overall petroleum product sales declined by 2.2%, although some categories of consumption, such as heavy fuel oil, jet kerosene, and other petroleum products all showed higher consumption,” the government’s report read.

The embrace of electric vehicles in Norway can be attributed to newly implemented policies of the Norwegian government, and its intent to ensure all vehicles sold in the country are electric from 2025 onwards.

Irina Slav, a consultant with Divergente LLC, a consulting firm that collaborates with companies in the eBits, noted that the Norwegian government has also provided generous incentives to drivers of electric vehicles, including free parking, substantially lower taxes, and no toll charges.

However, experts in the oil industry are not yet convinced that the increase in demand for electric vehicles is enough to impact the oil sector. Slav revealed that despite the decline in demand for petroleum products, Norway’s domestic oil production has been increasing.

“After all, oil exports account for 15 percent of its GDP, and although this figure is not as high as it is in oil-dependent economies, it is still substantial enough to motivate measures to hike production,” wrote Slav.

Energy specialist Robert Rapier further explained that peak demand for electric vehicles has not occurred in Norway as of yet, and it may take the government imposing a ban on gasoline vehicles by 2025 to enact a major change in the oil industry, which is highly unlikely. Rapier said:

“If Norway tells us anything, it’s that even rapid EV growth isn’t going to lead to peak demand as quickly as proponents think. It isn’t even clear that peak demand is yet occurring in Norway.”

Progress is Being Recorded

Similar to the growth of the internet, cryptocurrency, blockchain, AI, VR, Internet of Things, and other emerging technologies, there exists an adoption curve for electric vehicles. While the rapid increase in the adoption of electric vehicles has not been sufficient to hugely affect the oil industry, it has been enough to demonstrate the possibility of eliminating gasoline vehicles in Norway in the long term.

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