How Will the Decentralized Custody and Clearing Infrastructure Reshape the Blockchain Industry
The Internet breaks the barrier of information, allowing people to communicate seamlessly across the world, forming a virtual Internet world consisted of information. This virtual Internet world further connects global information and brand-new applications, such as e-mail, e-commerce, payment, gaming, and social networks. These applications have accelerated the development of human civilization, both economically and culturally.
In recent years, the Internet, which serves primarily as the infrastructure of communication, has slowed down the momentum of driving real world economic growth, however. The fundamental reason is that majority of industries that the Internet is relying on require localized assets, currencies, and trusted intermediaries; meanwhile, the efficiency and cost of any business in these industries in the real world lag far behind that of the Internet itself, which substantially hinders the development of Internet accordingly. The emergence of blockchain has presented people with new possibilities. It brings in new asset classes, new currencies, and trust-free transactions, which help release the economics growth from costly and slow trust-required transactions. Naturally, blockchain opens the next era of economic growth and globalized trading with unlimited potentials. It further completes the virtual world built by the Internet, bringing new business opportunities.
Blockchain technology realizes full decentralization of asset issuance and trading, tackling the problem of trust and fair value of the underlying asset. However, many complex requirements, including the needs of cross-chain transactions, are impossible to be implemented with blockchain technology today due to the limitations of current technology and blockchain performance. As the size and value of blockchain assets grows, these issues are more tangible. In order to solve these problems, a variety of solutions have been proposed. The most common and feasible solution is through centralized Internet platforms. Unfortunately, once blockchain information enters the centralized platform, it consequently loses the credibility and security features brought by the blockchain, which creates various problems, making ordinary users lose belief in the blockchain technology itself, further hurting the development of the entire blockchain industry. The development of blockchain industry will not get back on track before these problems are solved. Taking BTC or ETH blockchain assets as an example, once they are circulated into the centralized trading market, there is an extra layer of security risks that are unsolvable, causing doubts about blockchain assets themselves in return.
Due to the nature of brand-new business models and cross-geographic features, the blockchain industry has not been supervised and regulated effectively, although it has attracted significant attention from regulatory agencies globally. Consequently, participants in the blockchain industry need to build industry infrastructure starting from scratch. Most of these organizations are start-ups. These startups have built up a large number of centralized platforms to offset the lack of infrastructure in the blockchain industry. However, these start-ups are far less mature and reliable, compared to their counterparts in the traditional financial industry who are heavily regulated and have accumulated abundant industry experience. We all observe that in the traditional financial system, assets are managed through regulated and independent custody and clearing institutions, making embezzlement essentially a mission impossible. In contrast, Blockchain assets are completely managed by unregulated industry participants. And not surprisingly, various kinds of misappropriations have been exposed by the media, causing significant losses to both users and the industry as a whole.
For the blockchain systems, the security of the Private Key is the basis and foundation of any level of security. Once the Private Key is placed on centralized platforms, its security and credibility are downgraded. Thus, ensuring the safety of Private Key is the only method of solving the problem. managing Private Key can be very challenging for users. The size of lost assets due to losing Private Key has been continuously growing. Balancing the tradeoff between security and user experience and the potential extendibility of supporting more complex business models is a great challenge to solving these problems.
Bluehelix is a groundbreaking new solution targeting the asset custody and clearing of blockchain assets. It realizes the custody and clearing of blockchain assets through a decentralized model, By design, the private keys controlling blockchain assets cannot be manipulated by any single institution from creation phase to signature phase, due to innovative cryptography technologies. As an open source public chain, Bluehelix can help blockchain start-ups achieve credible asset custody and clearing, reduce development costs, and allow them to focus on their own business model itself; Bluehelix can also help institutions deploy their own private blockchains, or deploy regional consortium chains for regulated purposes; Bluehelix can even help traditional financial institutions hold blockchain assets compliantly, breaking the barrier for traditional financial institutions to enter blockchain industry.
Bluehelix is an open-source public chain with core logic of running the blockchain through community-selected super nodes. Bluehelix is a decentralized custody, clearing, and settlement platform built upon decentralized key management protocol. By opening API endpoints and providing foundational support for financial and commercial services providers, startups and financial institutions will be able to focus on development of their products and applications, instead of worrying about the underlying security and credibility of the system infrastructure.
The core capabilities of Bluehelix platform are composed of Base Capabilities, Clearing Capabilities, and Application Capabilities.
1.Base Capabilities include decentralized private key and address generation, generation and management of custodian investment accounts, verifiable payment and transfer records, and decentralized settlement signatures.
2.Clearing Capabilities include various basic clearing scenarios.
3.Application Capabilities is the application layer of the platform, including calculation of custody and clearing fees, verification of registered accounts of merchants and institutions, provision of open API, and verification of assets security.
Bluehelix utilizes the innovative BHPOS consensus system, making it an open public blockchain platform. Its consensus nodes are running from different places and are maintained by different super nodes. For each transfer transaction and settlement, it has to be approved by most nodes before it can be written onto the blockchain and be executed thereafter. The platform supports cross-chain transactions between different blockchain assets and reduces the high cost on-chain transaction through its clearing system.
Decentralized private key management is the cornerstone of Bluehelix core technology. Currently, Bluehelix system is capable of handling a decentralized system managing private keys with more than 35 nodes; any node holds only part of the key used for signature and a valid transaction settlement request will be sent out to other public chains only when more than 80% of the nodes sign simultaneously, and clearing results determine whether nodes should commit the signature or not.
As a facility to help boost the processing power of other blockchain systems, Bluehelix adopts a transactional model consisting of synchronous trading and asynchronous clearing. Once blockchain assets are custodied on Bluehelix, transactions within one node shard will be processed real time in milliseconds, while transactions generated from cross-node shards will be completed after asynchronous clearing. Fortunately, asynchronous clearing is actually also a relatively fast process.
Bluehelix realizes platform scalability mainly by dividing real-time transactions into shards. Each consensus node is a shard-capable processing cluster, which realizes linear computation growth by placing different custodial units on different shards. This will help to meet the needs of a growing business.
Apart from implementation of technology, community management is crucial to a blockchain platform. The election of super nodes and the design of nodes management mechanisms also determine the future of Bluehelix chain. Therefore, Bluehelix ecosystem will not only select super nodes based on core measures including community voting, their asset size and technical abilities, but also bring in authoritative institutions to participate in blockchain management. Such institutions might be top-tier accounting firms.
Currently Bluehelix testnet is under development phase and we plan to complete testing and launching within 2019. Business collaboration and technological advice are more than welcomed. Let us work together for the future of Bluehelix and the growth of the new Internet economy.
Executive editor： Raymond