Molecule blockchain: why we need cryptocurrency and blockchain

Abstract:

The three big mountains tell the pain point of Chinese society;
The three transitions along with blockchain and crypto currency
The three challenges of crypto currency adoption
The three role models referred when designing the molecule
The two choice of scaling blcokchain
The one innovative idea from Molecule
Molecule designing framework

I. The three big mountains tell the pain point of Chinese society

Before liberation, the three big mountains used to be imperialism, feudalism, bureaucratic capitalism, today it stands for monopolistic finance, centralized Internet and inferior entertainment. This could be an interesting topic.

Monopolistic finance

There is a recent official news in china, someone cash out her 44 years old deposit of twelve hundred RMB, it is twenty-six hundred eighty four RMB, one hundred twenty four percent increase, sounds great! We examined the purchasing power change for last forty-four years. For egg and pork of 1973, in the event of egg, price increased from 0.003 $ to 0.15 $, 50 times, while for the pork, from 0.04$ to 2.3$, 60 times. Hence essentially she is exploited; we want to reason why and how.

1. You have no option but to use the fiat currency of RMB
2. Because of the RMB, you have to put them into the stipulated bank
3. When you put in to the bank, bank has a large reserve of cash
4. Property developer get loans from the bank and buy land from government
5. Developer mortgage the land with further cash to build the grounds of future housing
6. Then the property developer sells you the future housing; you pay 30% cash to build your future house, the rest of them with Equal monthly install for another 30 years,
7. The same logic can be applied for everything we buy, cars, TVs, Mobiles etc.
8. Your fiat currencies help you get exploited
9. Bankers, venture capitalist, employers, wall street are all able to get loans from banks, the bigger they are the cheaper the interest rate will be, Only you cannot get loan other than being a consumer.

And crypto currency is a cue to monopolistic fiat currency; people can create, own and invest the digital asset, for instance , people invest their Bitcoin into Ethereum ICO, they gained the value through out the lifecycle of Ethereum. Same logic to all other ICOs. ICO is a way of democratizing the monopoly of investment, and the quadrillion-derivative market will be finally belong to the people, other than elite banker, capitalist or wall street.

The centralized Internet:

Baidu craw all the websites including your own, but will charge you when you want your own customer to reach out to you.
Wechat use everyone’s contact and contents and will monetize their users with advertisement and games, but users get no share of what have to contributed for building the wechat , namely , contact and contents.
Alibaba enable million of products and every product has product description, with that description as content, with millions of such description, Ailibaba have the topmost authoritative weight against others when a user search a product in search engine. Comments are end-users’ effort that made it significant, but unfortunately those mammoths blue chip companies have nothing to do with its creators, users and sellers incase of alibaba.

For Weibo , recently there is a notorious fight between weibo and its users on who has the rights of the user generated content on their platform, User or the platform ? What is your view?

We are building the Internet today, but vulnerable to the centralized Internet companies.

With the help of UXTO from blockchain, people can claim what they have created , for instance on www.steemit.com , user are reward for what they have created, with the steem coin to be converted to Bitcoin or fiat currency on exchange, user’s are sharing the ownership of their own digital asset. Hence an decentralized Internet.

Inferior entertainment

Inferior entertainment, Toutian, an algorithmic news app, has roughly 100million monthly active users of low income , low IQ , low education. toutian has been criticized to be an information chrysalis, where you only get to read what your interest is, losing the opportunity to know unknowns. You don’t know what you don’t know are most valuable to its people. There is a KOL, Larry H.P. Lang , he is famous for bitocion resistant, during one reality show, Host said if someone give you 100 bitcoin for free , will you accept it , he publicly denied it by saying , “don’t give it to me , I will not have it , as it is no value”. There is also some other KOLs like him, famous for creating jargon like “ you need to run fast in order to stay at the same place “ KOL are good at misleading fans for better monetization. There is another app, call Kuaishou , which has 400million download, full of ridiculous and disguising videos. While people are wasting significant time on those inferior content. If someone wants to make full of people, they don’t need Confucius or declaration of freedom at all, they simple throw those entertainment app to people.

The Cryptonians community is on the other hand, having a completely different outlook, they have been creating meetups on the eventbrite.com, they discuss the decentralization, democratization and the total benefit of financial revolution. There global epidemic of blockchain phenomenal

II.Three transitions

a. Digital asset to crypto currency to internet of value
Since the birth of Internet till today, human being has created huge digital, asset, some of them have supported the billions dollar company, like Google and Facebook. The reviews and likes, music, videos, chats, data basically everything we do today on Internet are digital asset, but they has nothing to do with us. Until the crypto currency, which is an ownership of certain digital asset or digital service, people are able to claim for what they do.

A crypto currency following certain definition:

1. Peer to peer, hence apple and amazon credit are not;
2. Cryptographically secured;
3. Total supply is fixed;
4. Contracting hence inflation resistant;
5. Ownership of certain digital asset and service

Content Internet will be transcended to value Internet, since value is able to transfer over the Internet with the help of smart contract. We will be able to see new type of internet companies, Steemit , Revain, Status and so on with beginning of a new era.

b. Information symmetry to disintermediation to decentralization

Internet has provided vital facilitation for information symmetry with the content flowing freely, which yahoo and AOL used to do, thereafter the disintermediation with ecommerce, O2O, and social network site like Facebook and twitter. Now Internet will decentralize everything with the help of blockchain and crypto currency.

c. “Household contract system” to “opening up and reform in 1978” to “ tokenize everything”

Pretty similar for the land to the agrarian age, the peasants could not figure the value of land until the landlord captured all of them, and startd to enslave them with the possession of land as production resources, in history chinese people used to live in a team squad, where they farm the land together, but the land belong to the country, the prototype of communism, it didn’t do well, until the household of contract system of land is being implemented, where the land is temporarily belong to the people where people decide what to do with it , a decentralized decision along with personal possession of production resource, the second milestone for the chinese recency is the reform and opening-up policy by Deng xiaoping in 1978, it did pretty much the same to commerce and manufacturing industry as compared with the agriculture, liberalize commerce and everyone is allowed to setup factory to make product , and freely do business with anyone, in the past people can not do business as doing business used to be a behavior of capitalism , extremely prohibited. Hence another reform of relationship between productivity and production resources. Look at today’s Internet, another reform is forming the shape, which is blockchain , remove the bottleneck between the productivity versus the production resource here ,which is digital asset. There is nothing wrong with ICO, everyone is able create and posses and invest their digital asset.

III.Three challenge of blockchain;

a. Technically, the blockchain’s bottleneck comes from the block size and rate, which is a tradeoff between security and scalability by design. You can’t have too frequent blocks as it may produce more chance of forks, with 10 minute block of 7 transactions tps, where visa has 4700 tps, Hence far less than what is required to be a global transaction enable payment network.

b. Financially, it is costly to transact with Bitcoin or Ethereum now, with Bitcoin it is averaging 100 bucks, 2 dollars above for Ethereum, with approximately 30% failure rate, mean the transaction fee has been taken away by the miner, further push the transaction fee unacceptable. It means the less you transfer the more infeasible to choose Blockchain, if crypto currency goes mainstream, this has to be settle down.

c. Societally, with the above constraints only 24 million Bitcoiners out of 7 billion world wide population, and mainly people hold Bitcoin for investment purpose only. For the crypto currency goes into mainstream, we need to face those challenges.

Which means how to build Lighting fast and micropayment enabled blockchain is a priority, which is the vision of Molecule.

IV.The three role models referred when designing the molecule

Now let’s look at the Molecule blockchain designing principal with reference to the three role model：

The fundamental building block of Bitcoin transaction is an unspent transaction output or UTXO. Which is one of the greatest genuine inventions out of Bitcoin. It is mined through nowhere by miners after a win secured with computation of cryptographic puzzle, in this way Bitcoin complete the process of money issuance.

EVM and smart contract, Smart contract further expand the five type of standard Bitcoin script to more broad usage, like prediction and tokenization, while EVM constitute a safe sandbox environment for the smart contract code execution

As of today, the mainstream consensus mechanism is POW; the challenge of POW is miner centralization and energy wastage. POW is being developed by peercoin and further reinforced by blackcoin, eventually QTUM put POS in a smart contract environment, we appreciate the certain supremacy of POS, hence we also chose the POS3.0 as the consensus on Molecule

V. The two choice of scaling blcokchain

DAG (aka Direct Acyclic Graph)

IOTA and Byteball are few attempts to settle the scalability issue with DAG, these solution are good for payment, but not for smart contract as it potentially not very safe, hence need to be placed in closed environment.

The SPECTRE protocol is a somewhat better usage of DAG than IOTA when it comes to innovating on top of Blockchain technology. The assumptions are better laid out, it presents a legitimate technique for deciding between double spends, and is actually realistic and doesn't offer false promises. And they honestly called BlockDAG other than blockchain.

While there is no perfect technology per se. It depends on where it is to be used. DAG solution could be better solution for micropayment but never be the case for smart contract; hence it is not an option for us to build decentralized economy on mobile.

Lighting network
A decentralized system is proposed whereby transactions are sent over a network of micropayment channels (aka payment channels or transaction channels) whose transfer of value occurs off-blockchain. Lightning network use Multitsig, payment channel and HTLC (aka Hashed Timelock Contract), which is that by deferring telling the entire world about every transaction, doing net settlement of their relationship at a later date enables Bitcoin users to conduct many transactions without bloating up the blockchain or creating trust in a centralized counterparty. An effectively trustless structure can be achieved by using time locks as a component to global consensus.

Lightning network has been accepted as mainstream solution for the block scalability conundrum:
Litecoin’s embrace lighting network by Charlie Lee through his vision and First BTC-LTC Lightning Network Swap Completed, Huge Potential .
Ethereum’s roadmap involve lightning network in Casper with POS.

All in above, Molecule adopt lightning network as a solution for scalability. But there is risk and a challenge of implementation as indicated in the Thaddeus’ white paper:

The risk is being highlighted:

“For Core nodes and possibly some merchants to be able to route funds, the keys must be held online for lower latency”

The challenge is
Current generation desktop computers will be able to run a full node with old blocks pruned out on 2TB of storage

Who should be the ideal custodian of keys with the corresponding hardware prerequisite? Definitely not a working PC and not a PC at Net café, as a matter of fact the PC are diminishing and are not safe enough for such a massive nodes

VI. One innovative idea

Since the beginning, we have researching and developing a technology of adopting home Wi-Fi router as the node in lighting network for below reason

1. It is always online
2. Home based with a perfect scenario of store the private key of family members
3. Linux core capable of Embedded Systems
4. Idle of capacity and computation power

We are into a technology of embedding node into Wi-Fi router that storing the private key of family members, to be an ad hoc of off-chain lighting network, simultaneously get paid via undertaking router of payment channels

VII. The Molecule design

a. Firstly we inherit the UXTO from Bitcoin and EVM as well as Smart contract from Ethereum.
b. We employ the POS 3.0 to eliminate miner centralization and energy waste
c. The application of lighting network will available the mass support for micro payment
d. At last we enable the Home wifi router as the node for LN, to build a decentralized decentralized blockchain

Progress as seen on
https://github.com/Moleculeproject