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Leading Investment Fund Manager Selects #KoreConX Digital Securities Protocol for Offering

Posted by AGORACOM-JC at 8:30 AM on Thursday, April 4th, 2019

3iQ is Canada’s first regulated multi crypto asset portfolio manager and will be utilizing the KoreConX platform

[New York, NY – April 04, 2019] – KoreConX is proud to announce that 3iQ Corp. (3iQ), Canada’s first regulated multi cryptoasset portfolio manager, has chosen the KoreProtocol for their Digital Securities Offering.

Founded in 2012, the company is the first Canadian investment fund manager to fully comply with the terms and conditions with the Canadian securities regulatory authorities to manage a multi-crypto asset investment fund, offering exposure to accredited investors for the first time.

3iQ focuses on educating individuals in disruptive technologies and the crypto asset space and providing innovative investments of institutional quality. Behind the company are the investment industry veterans Howard Atkinson and Fred Pye, both with more than 30 years of experience in the field.

“Moving to Digital Securities is a very important decision in the history of our company, and we need a protocol that is secure and robust, while never compromising compliance,” said Howard Atkinson, Chairman of 3iQ. “We believe KoreConX is not only the right choice when it comes to the Digital Securities Protocol, but also when it comes to management after issuance.”  According to Fred Pye, President & CEO of 3iQ, “through our Exempt Market Dealer we will be able to offer these securities to Accredited Investors.”

In the KoreConX all-in-one platform, companies can not only initiate their Digital Security Offering process, but they can also find a series of solutions tailored to their business needs, including the pre, during and post phases of capital raise. From the Due Diligence and the documentation gathering to Investor Relations with the shareholders, users can find the tools they need to grow their business.

Companies with a growing number of shareholders can also utilize CapTable Management solutions without compromising the safety of their most sensitive information.

“We created the platform with the business’ owners in mind. We created it for the dynamic entrepreneur who needs efficiency and agility when managing their companies so they can focus on perfecting their business,” said Oscar Jofre, Co-Founder and CEO of KoreConX. “We are very honored that an Investment Fund Manager of the magnitude of 3iQ chose our solutions to be the technology behind their Digital Securities Offering and their company.”

About 3iQ Corp.

3iQ is a Canadian investment fund manager focused on providing innovative investment products of institutional quality. 3iQ currently manages the 3iQ Global Cryptoasset Fund, a private investment fund which holds bitcoin, either and litecoin and is eligible for investment by accredited investors in Canada or in reliance on other exemptions from the prospectus requirement. Founded in 2012, 3iQ is currently focused on disruptive technologies and the cryptoasset space

About KoreConX

KoreConX is the world’s first highly-secure permissioned blockchain ecosystem for fully-compliant digital securities worldwide.

To ensure compliance with securities regulation and corporate law, the KoreConX all-in-one, AI-based blockchain platform manages the full lifecycle of digital securities including the issuance, trading, clearing, settlement, management, reporting, corporate actions, and custodianship. KoreConX connects companies to the capital markets and secondary markets facilitating access to capital and liquidity for private investors.

KoreConX is the first secure, all-in-one platform for private companies to manage their capital market activity and stakeholder communications. Removing the burden of fragmented systems and inefficient tools across multiple vendors, KoreConX offers a single environment to connect companies, investors and broker/dealers. Leveraged for investor relations and fundraising, private companies can share and manage corporate records and investments including portfolio management, capitalization table management, virtual minute book, security registers, transfer agent services and virtual deal rooms for raising capital.  www.KoreConX.com

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Media Contacts:

KoreConX

Oscar A Jofre

[email protected]

KoreConX Partners with Investment Fund Management Company, Stratigis

Posted by AGORACOM-JC at 8:30 AM on Thursday, February 28th, 2019

Stratigis Capital Advisors will join KorePartners Ecosystem

[New York, NY – February 28, 2019] –  KoreConX is proud to announce a partnership with Stratigis Capital Advisors Inc. (“SCA”), a Canadian investment boutique with extensive experience in managing Investment Funds.

SCA is registered with the Ontario Securities Commission as a Portfolio Manager, Exempt Market Dealer, and Investment Fund Manager, with the Autorite des Marches Financiers as Investment Fund Manager, and the British Columbia and Alberta Securities Commission as an Exempt Market Dealer.

“The KorePartners Ecosystem was created to provide the necessary environment for companies to not only manage their current business needs but to raise capital and grow,” said Oscar Jofre, Co-Founder & CEO of KoreConx. “And Stratigis, with their extensive work in Fund Management, can be just the link that companies need.”

“Partnering with KoreConX was an easy decision, as we share the same values. Oscar and his team have developed a great tool to allow companies to be on top of the paperwork and maintain compliance with regulation in multiple jurisdictions while issuing their Security Tokens,” said Rob Celej, Portfolio Manager and Chief Executive Officer of Stratigis. “The better managed a company is, the better it is for the investor, and this is what we look for in all we do.”

Stratigis Capital Advisors Inc. has become part of the KorePartner ecosystem, a group of selected broker-dealers, secondary market platforms, capital markets platforms, lawyers, compliance, investor relations, accounting, and marketing firms that support the KoreConX security token protocol and adhere to KoreConX governance standards. KoreConX’s KorePartners are from around the globe and bring the necessary expertise that a company will need to launch a fully compliant security token in multiple jurisdictions.

About KoreConX

KoreConX is the world’s first highly-secure permissioned blockchain ecosystem for fully-compliant tokenized securities worldwide.

To ensure compliance with securities regulation and corporate law, the KoreConX all-in-one, AI-based blockchain platform manages the full lifecycle of tokenized securities including the issuance, trading, clearing, settlement, management, reporting, corporate actions, and custodianship. KoreConX connects companies to the capital markets and secondary markets facilitating access to capital and liquidity for private investors.

KoreConX is the first secure, all-in-one platform for private companies to manage their capital market activity and stakeholder communications. Removing the burden of fragmented systems and inefficient tools across multiple vendors, KoreConX offers a single environment to connect companies, investors and broker/dealers. Leveraged for investor relations and fundraising, private companies can share and manage corporate records and investments including portfolio management, capitalization table management, virtual minute book, security registers, transfer agent services and virtual deal rooms for raising capital.

www.KoreConX.io

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Media Contacts:

KoreConX

Oscar A Jofre

os[email protected]

KoreSummit – Tokenizing Securities Coming to hot Miami

Posted by AGORACOM-JC at 8:30 AM on Thursday, January 24th, 2019

[New York, NY – January 24, 2019] – Following the huge success of the first KoreSummit, in New York this past October, KoreConX is now taking the event to the sunny shores of Miami, Florida, in an expanded version.

“The first KoreSummit was a half-day event and our guests wanted more. So now we are making it a full-day event, bringing in more experts and covering more topics. This is an invite-only educational summit for entrepreneurs, CEOs, CFO,  lawyers, marketers, investors, VC, Family office, shareholders, and advisors to learn more about tokenizing securities,” said Oscar Jofre, Co-Founder & CEO at KoreConX.

The goal of the KoreSummit is to provide much-needed education about all things related to tokenizing securities, including (among others): details of what tokenization entails, legal and compliance aspects, marketing a Securities Token Offering “STO”, investor relations post fundraise, highlights of the role of regulated issuance platforms and secondary market trading.

“Tokenized securities will completely transform the way we do business in 2019 and beyond. While these new technologies can bring much-needed security, compliance and most important efficiencies to the private capital markets, there is still a lot of confusion surrounding these terms,” said Kiran Garimella, Chief Scientist & CTO at KoreConX. “This is why we created the KoreSummit, so business leaders can learn about what is to come, and take full advantage of all the benefits that tokenization has to offer.”

The global securities marketplace is changing, and the future is tokenization. Combining corporate and securities law with tokenization facilitates efficient liquidity and fully-compliant transactions in multiple jurisdictions.

“We have come a long way since the creation of the JOBS Act in 2012. We now have the necessary conditions for every company to tokenize their securities and completely transform their relationship with the capital markets,” said Jason Futko, Co-Founder & CFO at KoreConX. “But it is also important for people to understand the legal responsibilities that come along with tokenization. And that’s our main goal with the KoreSummit Tour: to educate the public.”

The keynote, fireside chats will take place in the main hall, while workshops about topics such as the legal requirements for tokenization, will take place in smaller breakout rooms. The event will start at 8:30 am and will end at 5:00 pm followed by a cocktail hour. Breakfast, lunch and the evening cocktails are included for the convenience of the attendees.

For more information about the KoreSummit Tour and the Miami agenda, visit the KoreSummit website.

About KoreConX

KoreConX is the world’s first highly-secure permissioned blockchain ecosystem for fully-compliant tokenized securities worldwide.

To ensure compliance with securities regulation and corporate law, the KoreConX all-in-one, AI-based blockchain platform manages the full lifecycle of tokenized securities including the issuance, trading, clearing, settlement, management, reporting, corporate actions, and custodianship. KoreConX connects companies to the capital markets and secondary markets facilitating access to capital and liquidity for private investors.

KoreConX is the first secure, all-in-one platform for private companies to manage their capital market activity and stakeholder communications. Removing the burden of fragmented systems and inefficient tools across multiple vendors, KoreConX offers a single environment to connect companies, investors and broker/dealers. Leveraged for investor relations and fundraising, private companies can share and manage corporate records and investments including portfolio management, capitalization table management, virtual minute book, security registers, transfer agent services and virtual deal rooms for raising capital.

www.KoreConX.io

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Media Contacts:

KoreConX

Oscar A Jofre

[email protected]

#KoreConX partners with Agoracom

Posted by AGORACOM-JC at 8:33 AM on Tuesday, January 22nd, 2019

Company created a marketplace to foment discussions inside the small capital investment community

[New York, NY – January 22, 2019] –  KoreConX is proud to announce its partnership with Agoracom, a small cap community that has connected over 5 million investors and public companies in a moderated, smart discussion.

Agoracom is the Web 2.0 online marketplace and forum for citizens of the small-cap investment community. Public and Private companies, shareholders and prospective shareholders amalgamate for the purposes of communicating in a monitored and secure environment free of trolling, profanity, bashing, and spam that have plagued finance communities.

“We are very excited about our partnership with Agoracom, as they provide the necessary environment that companies and investors need in order to connect, with their established platform they are now able to support the private company ecosystem,” said Oscar Jofre, Co-Founder & CEO at KoreConX.

“Partnering with Oscar and KoreConX was an easy decision, as we are both committed to providing small and medium companies with the environment they need to grow their vision,” said George Tsiolis, Agoracom Founder. “We are looking forward to joining forces with them.”

Agoracom has become part of the KorePartner ecosystem, a group of selected broker-dealers, secondary market platforms, capital markets platforms, lawyers, compliance, investor relations, media,  accounting and marketing firms that support the KoreConX security token protocol and adhere to KoreConX governance standards. KoreConX’s KorePartners are from around the globe and bring the necessary expertise that a company will need to launch a fully compliant security token in multiple jurisdictions.

About KoreConX

KoreConX is the world’s first highly-secure permissioned blockchain ecosystem for fully-compliant tokenized securities worldwide.

To ensure compliance with securities regulation and corporate law, the KoreConX all-in-one, AI-based blockchain platform manages the full lifecycle of tokenized securities including the issuance, trading, clearing, settlement, management, reporting, corporate actions, and custodianship. KoreConX connects companies to the capital markets and secondary markets facilitating access to capital and liquidity for private investors.

KoreConX is the first secure, all-in-one platform for private companies to manage their capital market activity and stakeholder communications. Removing the burden of fragmented systems and inefficient tools across multiple vendors, KoreConX offers a single environment to connect companies, investors and broker/dealers. Leveraged for investor relations and fundraising, private companies can share and manage corporate records and investments including portfolio management, capitalization table management, virtual minute book, security registers, transfer agent services and virtual deal rooms for raising capital.

www.KoreConX.io

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Media Contacts:

KoreConX

Oscar A Jofre

[email protected]

Marketing agency specialized in capital raising joins #KorePartners Ecosystem

Posted by AGORACOM-JC at 8:30 AM on Wednesday, January 16th, 2019

E5A Integrated Marketing is partnering with KoreConX to offer a complete solution to companies

[New York, NY – January 16, 2019] –  KoreConX is proud to announce its most recent KorePartner, E5A Integrated Marketing. The New-York-based company specializes in marketing for capital raising, among other things.

E5A helps companies raising capital to target with precision all of the appropriate audiences, including qualified and accredited investors. Their experienced team uses logic and math-based planning combined with positioning and messaging to provide well-informed, interested prospects.

“When we think about the capital raising process, we don’t see it just from the legal or financial point of view. We view the entire capital raising process as a whole and realize that the marketing element is a crucial part,” said Oscar Jofre, Co-Founder & CEO at KoreConX. “We were looking for companies specialized in marketing for capital raises, but also ones that are in tune with all the transformations brought by the digital age. And we believe E5A is a perfect choice here.”

“At E5A, we have years of experience in investor marketing and the fintech industry, enough to know that we need to move at a fast pace and evolve to remain leaders,” said Andrew Corn, CEO at E5A. “And to be able to partner with KoreConX, a company that works with the latest blockchain technology, it is a great opportunity for us.”

E5A Integrated Marketing has become part of the KorePartner ecosystem, a group of selected broker-dealers, secondary market platforms, capital markets platforms, lawyers, compliance, investor relations, accounting and marketing firms that support the KoreConX security token protocol and adhere to KoreConX governance standards. KoreConX’s KorePartners are from around the globe and bring the necessary expertise that a company will need to launch a fully compliant security token in multiple jurisdictions.

About KoreConX

KoreConX is the world’s first highly-secure permissioned blockchain ecosystem for fully-compliant tokenized securities worldwide.

To ensure compliance with securities regulation and corporate law, the KoreConX all-in-one, AI-based blockchain platform manages the full lifecycle of tokenized securities including the issuance, trading, clearing, settlement, management, reporting, corporate actions, and custodianship. KoreConX connects companies to the capital markets and secondary markets facilitating access to capital and liquidity for private investors.

KoreConX is the first secure, all-in-one platform for private companies to manage their capital market activity and stakeholder communications. Removing the burden of fragmented systems and inefficient tools across multiple vendors, KoreConX offers a single environment to connect companies, investors and broker/dealers. Leveraged for investor relations and fundraising, private companies can share and manage corporate records and investments including portfolio management, capitalization table management, virtual minute book, security registers, transfer agent services and virtual deal rooms for raising capital.

www.KoreConX.io

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Media Contacts:

KoreConX

Oscar A Jofre

[email protected]

#KoreConX partners with InvestReady to provide investor verification

Posted by AGORACOM-JC at 8:33 AM on Tuesday, January 8th, 2019

The partnership will facilitate capital raise for companies using KoreconX platform

[New York, NY – January 08, 2019] –  Investors will now be able to use KoreConX all-in-one platform to safely and confidentially verify their accredited investor status.

The new feature was added through a partnership with InvestReady, a company that developed technology to power issuers and platforms with the capability to offer investor verification software right on their site for an efficient and fast verification experience.

Once an investor is verified, they earn a digital, SEC compliant, InvestReady certificate of accredited status. This allows them to instantly qualify for access to participate in investments in a secure and scalable manner.

“Our work at KoreConX is all about making business management effortless, so companies, broker-dealers can focus on growing,”  says Oscar Jofre, Co-founder & CEO at KoreConX. “The type of instant investor verification that InvestReady offers make it easier for companies and broker-dealers to complete the capital raise in a compliant manner.

The partnership also celebrates the values both companies have in common.

“I believe our shared focus on providing exceptional service at scale is a huge factor in this partnership,” said Adrian Alvarez, Co-Founder & CEO at InvestReady. “We’re also both constantly re-tooling and thinking about how we can improve our service.”

InvestReady will become part of the KorePartner ecosystem, a group of selected broker-dealers, secondary market platforms, capital markets platforms, lawyers, compliance, investor relations, accounting and marketing firms that support the KoreConX security token protocol and adhere to KoreConX governance standards. KoreConX’s KorePartners are from around the globe and bring the necessary expertise that a company will need to launch a fully compliant security token in multiple jurisdictions.

About KoreConX

KoreConX is the world’s first highly-secure permissioned blockchain ecosystem for fully-compliant tokenized securities worldwide.

To ensure compliance with securities regulation and corporate law, the KoreConX all-in-one, AI-based blockchain platform manages the full lifecycle of tokenized securities including the issuance, trading, clearing, settlement, management, reporting, corporate actions, and custodianship. KoreConX connects companies to the capital markets and secondary markets facilitating access to capital and liquidity for private investors.

KoreConX is the first secure, all-in-one platform for private companies to manage their capital market activity and stakeholder communications. Removing the burden of fragmented systems and inefficient tools across multiple vendors, KoreConX offers a single environment to connect companies, investors and broker/dealers. Leveraged for investor relations and fundraising, private companies can share and manage corporate records and investments including portfolio management, capitalization table management, virtual minute book, security registers, transfer agent services and virtual deal rooms for raising capital.

www.KoreConX.io

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Media Contacts:

KoreConX

Oscar A Jofre

[email protected]

#KoreConX partners with Middle East consultancy firm

Posted by AGORACOM-JC at 12:00 PM on Sunday, December 9th, 2018

Metis Management Consultancy will work closely with KoreConX’s office in Dubai

[New York, NY – December 09, 2018] – KoreConX, the first all-in-one platform for companies to manage their business activities, is partnering with Metis Management Consultancy, a UAE-grown consultancy firm focused on providing services to SMEs in the MENA region. The company will become part of the KorePartner’s Ecosystem, a group of selected companies that works closely with KoreConX to ensure that small and medium enterprises have all the elements they need to thrive.

In addition to providing businesses with an all-in-one solution for their management pain points, KoreConX also developed its own fully-compliant Security Token Protocol, using IBM’s Hyperledger Fabric, a permissioned Blockchain. Using KoreConX’s platform, companies are able to issue their Security Tokens (Tokenized & Digitized Securities) and raise capital in multiple jurisdictions.

“Blockchain plays a crucial role in everything that we do at KoreConX. Dubai is taking this technology to the next level, by planning to make the city fully powered by Blockchain by 2020,” said Edwin Lee, director of MENA Region. “Dubai is the place to be when advancing into new technologies and Metis is the company that shares our high standards when it comes to providing companies with the best advice.”

The same feeling is shared by Metis Management Consultancy team.

“We always strive to provide companies with high-quality consulting services and access to the latest tools” said Nayef Shahin, Founder and Managing Partner at Metis. “It is only natural to partner with KoreConX, a team with a deep understanding of compliance, securities regulations and the one to create the only protocol that is fully tracked on chain through their transfer agent service.”

In UAE, SMEs account for over 90 per cent of private enterprises and contribute to nearly 47% of Dubai’s GDP and 52% of its workforce. It is therefore a top priority this sector has access to cutting-edge knowledge, technology and funding.

Metis Management Consultancy is part of the KorePartner ecosystem, a group of selected broker-dealers, secondary market platforms, capital markets platforms, lawyers, compliance, investor relations, accounting, and marketing firms that support the KoreConX security token protocol and adhere to KoreConX governance standards. KoreConX’s KorePartners are from around the globe and bring the necessary expertise that a company will need to launch a fully compliant security token in multiple jurisdictions.

About KoreConX

KoreConX is the world’s first highly-secure permissioned blockchain ecosystem for fully-compliant tokenized securities worldwide.

To ensure compliance with securities regulation and corporate law, the KoreConX all-in-one, AI-based blockchain platform manages the full lifecycle of tokenized securities including the issuance, trading, clearing, settlement, management, reporting, corporate actions, and custodianship. KoreConX connects companies to the capital markets and secondary markets facilitating access to capital and liquidity for private investors.

KoreConX is the first secure, all-in-one platform for private companies to manage their capital market activity and stakeholder communications. Removing the burden of fragmented systems and inefficient tools across multiple vendors, KoreConX offers a single environment to connect companies, investors and broker/dealers. Leveraged for investor relations and fundraising, private companies can share and manage corporate records and investments including portfolio management, capitalization table management, virtual minute book, security registers, transfer agent services and virtual deal rooms for raising capital.

www.KoreConX.io

About Metis Management Consultancy


Metis Management Consultancy is a leading SME business advisor consultancy in the region. Their mission is to enhance their clients’ corporate value by providing them access to tier quality consulting services and expertise across their business domains. Metis make sure that each business gets its own tailored solution according to their own wants and needs while providing direction, guidance, and innovative services to turn their clients’ corporate vision and strategy into operational reality and success.

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Media Contacts:

KoreConX

Oscar A Jofre

[email protected]

Technologies of #Blockchain- Part 4: Conclusion

Posted by AGORACOM-JC at 4:28 PM on Wednesday, December 5th, 2018

By Dr. Kiran Garimella

In parts 1-3, we briefly touched on some of the historical foundations of blockchains from computer science and mathematics, including their sub-topics such as distributed systems and cryptography. Specific topics in either of these categories were consensus mechanisms, fault-tolerance, scaling, zero-knowledge proofs, etc.

Obviously, this brief series doesn’t do justice. The history of computing and mathematics is rich, with many interconnections and dependencies. The goal of this series was to provide just enough to make the point that the technologies that power blockchain (whether public or private) were built on a well-established foundation of various topics with contributions from real scientists in both industry and academia. The graphic below depicts the broad brush-strokes of development, clearly showing how current blockchain technologies are based on a wide spectrum of historical developments.

Technologies of Blockchain – Historical Timeline

Conclusion
As you can see, a tremendous amount of development that took place for almost half a century made the modern blockchain possible. Bringing these technologies together—almost all of them based not on just techniques but deep mathematical foundations—into a cohesive whole in the form of a bitcoin application was no doubt a tremendous achievement in itself.

Moving forward, we need to keep in mind the initial motivation for each of these technologies, their strengths, their limitations, and determine how to create different architectures based on business needs. A good example of this is to relax the requirements of anonymity, strengthen safety, incorporate recourse, improve security, and incorporate the enormous complexity of regulatory compliance in securities transactions. Making such trade-offs doesn’t detract from the need for public, decentralized blockchains. On the contrary, this strengthens the use of the blockchain technology ‘horizontally’ across many industries and use cases.

In the near future, we expect to see some innovation in blockchains to improve performance and scalability, which is a special challenge for public blockchains. Along the same lines, there will be new consensus mechanisms going mainstream (such as proof-of-stake). For consensus and validation, blockchain researchers are investigating efficient implementation of zero-knowledge proofs and specific variants such as zkSNARKs.

 

 

Technologies of #Blockchain Part 3: Cryptography, Scaling, and Consensus #KoreConx

Posted by AGORACOM-JC at 4:19 PM on Wednesday, December 5th, 2018

Kiran Garimella

In Part 2, we saw how a simple concept of a linked list can morph into complex, distributed systems. Obviously, this is a simple, conceptual evolution leading up to blockchain, but it’s not the only way distributed systems can arise. Distributed systems need coordination, fault tolerance, consensus, and several layers of technology management (in the sense of systems and protocols).

Distributed systems also have a number of other complex issues. When the nodes in a distributed system are also decentralized (from the perspective of ownership and control), security becomes essential. That’s where complex cryptographic mechanisms come into play. The huge volume of transactions makes it necessary to address performance of any shared or replicated data, thus paving the way to notions of scaling, sharding, and verification of distributed data to ensure that it did not get out of sync or get compromised. In this segment, we will see that these ideas are not new; they were known and have been working on for several decades.

Cryptography

One important requirement in distributed systems is the security of data and participants. This motivates the introduction of cryptographic techniques. Ralph Merkle, for example, introduced in 1979 the concept of a binary tree of hashes (now known as a Merkle tree). Cryptographic hashing of blocks was implemented in 1991 by Stuart Haber & W. Scott Stornetta. In 1992, they incorporated Merkle trees into their scheme for efficiency.

The hashing functions are well-researched, standard techniques that provide the foundation for much of modern cryptography, including the well-known SSL certificates and the https protocol. Merkle’s hash function, now known as the Merkle-Damgard construction, is used in SHA-1 and SHA-2. Hashcash uses SHA-1 (original SHA-0 in 1993, SHA-1 in 1995), now using the more secure SHA-2 (which actually consists of SHA-256 and SHA-512). The more secure SHA-3 is the next upgrade.

Partitioning, Scaling, Replicating, and Sharding

Since the core of a blockchain is the database in the form of a distributed ledger, the question of how to deal with the rapidly growing size of the database becomes increasingly urgent. Partitioning, replicating, scaling, and sharding are all closely related concepts. These techniques, historically used in enterprise systems, are now being employed in blockchains to address performance limitations.

As with all things blockchain, these are not new concepts either, since large companies have been struggling with these issues for many decades, though not from a blockchain perspective. The intuitively obvious solution for a growing database is to split it up into pieces and store the pieces separately. Underlying this seemingly simple solution lies a number of technical challenges, such as how would the application layer know in which “piece” any particular data record would be found, how to manage queries across multiple partitions of the data, etc. While these scalability problems are tractable in enterprise systems or in ecosystems that have known and permitted participants (i.e., the equivalent of permissioned blockchains), it gets trickier in public blockchains. The permutations for malicious strategies seem endless and practically impossible to enumerate in advance. The need to preserve reasonable anonymity also increases the complexity of robust solutions.

Verification and Validation

Zero-knowledge proofs (ZKP) are techniques to prove (to another party, called the verifier) that the prover knows something without the prover having to disclose what it is that the prover knows. (This sounds magical, but there are many simple examples to show how this is possible that I’ll cover in a later post.) ZKP was first described in a paper, “The Knowledge Complexity of Interactive Proof-Systems” in 1985 by Shafi Goldwasser, Silvio Micali, and Charles Rackoff (apparently, it was developed much earlier in 1982 but not published until 1985). Zcash, a bitcoin-based cryptocurrency, uses ZKPs (or variants called zkSNARKs, first introduced in 2012 by four researchers) to ensure validity of transactions without revealing any information about the sender, receiver, or the amount itself.

Some of these proofs and indeed the transactions themselves could be implemented by automated code, popularly known as smart contracts. These were first conceived by Nick Szabo in 1996. Despite the name, it is debatable if these automated pieces of code can be said to be smart given the relatively advanced current state of artificial intelligence. Similarly, smart contracts are not quite contracts in the legal sense. A credit card transaction, for example, incorporates a tremendous amount of computation that includes checking for balances, holds, fraud, unusual spending patterns, etc., with service-level agreements and contractual bindings between various parties in the complex web of modern financial transactions, but we don’t usually call this a ‘smart contract’. In comparison, even the current ‘smart contracts’ are fairly simplistic.

Read Part 1: The Foundations and Part 2: Distributed Systems

Source: https://www.koreconx.com/2018/11/28/technologies-blockchain-part-3-cryptography-scaling-consensus/

Technologies of #Blockchain – Part 2: Distributed Systems #KoreConX

Posted by AGORACOM-JC at 4:11 PM on Wednesday, December 5th, 2018

Kiran Garimella

We saw in Part 1 that linked lists provide the conceptual foundation for blockchain, where a ‘block’ is a package of data and blocks are strung together by some type of linking mechanism such as pointers, references, addresses, etc. In this Part 2, we will see how this simple concept gives rise to powerful ideas that lay the foundation for distributed systems.

What happens when one of the links in the linked list or one of the computers (aka, ‘nodes’) in a distributed system falls sick (and responds slowly), gets taken down (‘hacked’), or dies? How does the full list (or chain) recover from such tragic events? This brings us to the notion of fault tolerance in distributed systems. Once changes are made to the data in one of the nodes (blocks), how do we ensure that the same information is consistent with other nodes? That introduces the requirement for consensus.

Pushing the analogy of the linked list a bit further, algorithms that manage linked lists are carefully designed not to break the list. Appending links to the end or the front, for that matter, is an easy operation (we just need to make sure that the markers that indicate the start and end of the list are updated correctly). However, removing a link (or member of the chain) or adding one is a bit trickier. When it is necessary to remove or insert into the middle of the list, it’s a bit more complicated, but a well-understood problem with known solutions. We won’t go into the specifics in this article because the intent is not to describe these operations but to convey a high-level historical perspective.

In distributed systems, fault tolerance becomes a very important topic. In one sense, it is a logical extension to managing a linked list on a single computer. Obviously, in real-world applications, each of the nodes in a distributed system are economic entities that depend on other economic entities to achieve their goals. Faults within the system must be minimized as much as possible. When faults are inevitable, recovery must be as quick and complete as possible. Computer scientists began studying the methods of fault tolerance in the mid-1950s, resulting in the first fault-tolerant computer, SAPO, in Czechoslovakia.

Besides fault tolerance, when information needs to be added to the distributed system (a bit like adding, deleting, or updating the elements of a linked list), the different parties must agree. The reason for agreement is that the data that goes into the ‘linked list’ is data that arises out of transactions between these parties. Without agreement, imagine the chaos! My node would record that I sent you $90 while your node would record only $19! Or, if I send you payment for a product, I expect to receive the product. There should be agreement, settlement, and reconciliation between the transacting parties. A stronger requirement in distributed systems is that once the parties agree to something, the data that is agreed upon cannot be changed by one of the parties without the concurrence of the other party or parties. The strongest version of this requirement is ‘immutability’, where it is technically impossible to make any changes to data that is agreed to and committed to the chain.

Fault-Tolerance and Consensus

Distributed systems, therefore, require fault-tolerance, consensus, and immutability in varying degrees, depending on the needs of the business. Mechanisms for fault-tolerance and consensus evolved since the early days. Notable developments are:

  • Byzantine Fault Tolerance (BFT) by Lamport, Shostak, and Pease in 1982, to deal with situations where one or more of the nodes in the distributed system become faulty or malicious.
  • Proof-of-Work (POW), first described in 1993 and the term coined in 1999, which is a technique for providing economic disincentives for malicious attacks. A precursor idea of POW was proposed in 1992 by Cynthia Dwork and Moni Naor, as a means to combatting junk mail—a problem that was already a significant nuisance way back in 1992!* Their solution was to require a sender to solve a computational problem that was easy enough for sending emails normally but becomes computationally expensive for sending massive amounts of junk emails.
  • Hashcash, a POW algorithm, was proposed by Adam Back in 1997. This was used as the basis of POW in bitcoin by Satoshi Nakamoto in 2008, which brought awareness of POW to a much wider audience.
  • A high-performance version of BFT, called Practical Byzantine Fault Tolerance (PBFT), by Miguel Castro and Barbara Liskov, in 1999; and so on.
  • Paxos**, a family of consensus algorithms, has its roots in a 1988 work by Dwork, Lynch, and Stockmeyer, and first published in 1998 (even though conceived several years earlier) by Leslie Lamport.
  • Raft consensus algorithm was developed by Diego Ongaro and John Ousterhout. Published in 2014, it was designed to be a more understandable alternative to Paxos.

State machine replication (SMR) is a framework for fault-tolerance and consensus is a way to resolve conflicts or achieve agreement on the state values. SMR’s beginnings are in the early 1980s, with an influential paper by Leslie Lamport, “Using Time Instead of Timeout for Fault-Tolerant Distributed Systems” in 1984.

In Part 3, we will do a high-level review of mechanisms designed to keep distributed systems secure, consistent, and able to handle large volumes of transactions.

Read Part 1: The Foundations and Part 3: Cryptography, Scaling, and Consensus.


*Their paper, “Pricing via Processing or Combatting Junk Mail”, begins with a charming expression of exasperation: “Some time ago one of us returned from a brief vacation, only to find 241 messages in our reader.”

**No known relation to the blockchain company, Paxos.com

Source: https://www.koreconx.com/2018/11/20/technologies-blockchain-part-2-distributed-systems/