Blocknet prepares to launch production blockchain

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Blocknet prepares to launch production blockchain

In a major step toward the release of its decentralized exchange app, the Blocknet is poised to retire its interim wallet and launch the service that generates its tokens’ intrinsic value.

Boston, 24 July 2017 – Since the Blocknet’s ICO in October 2014, its interim wallet has served to secure Blocknet tokens in readiness for the launch of the first inter-blockchain application platform. At centre stage is the Blocknet’s decentralized exchange: the launch of the production blockchain is the next step to providing an exchange app with a user experience to match online centralized exchanges, but with the privacy, freedom and security benefits achieved by enabling users to retain control over their coins.

As the integration testing of coins successfully traded on the decentralized exchange grows – and now includes Bitcoin, Litecoin, Dash, Syscoin, Digibyte, Vertcoin, Duality Solutions, Viacoin, and BitBay – the Blocknet is now in final preparations to retire the interim wallet, and to lay the foundation for the emerging “token ecosystem” through its core services, namely decentralized exchange, blockchain routing, and inter-chain data transport.

What does the business model of a protocol token look like? Any inter-chain service requires a sound cryptoeconomic design in order to capture value and secure its network; but to be decentralized, it is necessary to capture value without functioning as an intermediary. This could not be clearer in the case of the Blocknet’s decentralized exchange service, which is explicitly intended to remove intermediaries from the trading of blockchain tokens. The Blocknet’s solution to the value capture problem preserves the decentralization of not only its coin exchange protocol, but of order broadcast and order matching too, all the while enabling traders to store their coins on their own devices throughout. The secret: its service nodes.

Service nodes to launch on mainnet

Service nodes earn trade fees on the decentralized exchange without controlling traders’ coins in any way, and without mediating between buyer and seller. They function to provide QoS (“Quality of Service”) on the decentralized exchange, chiefly in the form of preventing order spam – the design of which shall be published in the Blocknet’s upcoming white paper. In return, service nodes receive trade fees, which, in turn, provides Blocknet tokens (BLOCK) with their intrinsic value, in virtue of the fact that every trade on the decentralized exchange places buy pressure on the token, resulting in a continual stream of trade-fee micropayments.

The launch of the Blocknet’s production blockchain will move its service node technology from testnet to mainnet, enabling those who wish to operate a service node to begin to earn trade fees for the first time.

Service node development will not be finalised with the release of the production blockchain. While the production chain brings service nodes to mainnet, like any well-supported software, their development will be ongoing.

Strategic advantages

The launch of the production blockchain presents several strategic advantages. Firstly, it allows for a change of codebase to one that is correctly forked from Bitcoin Core, significantly simplifying the task of implementing BIPs (“Bitcoin Improvement Proposals”), and thus speeding up development.

Secondly, it will allow the removal of the ICO’s burn address, which has historically not been correctly parsed by blockchain explorers, causing perennial confusion as to the Blocknet’s coin supply. Increased consistency of information will boost confidence, and will enable investors to better gauge BLOCK’s fundamentals.

Thirdly, the rollout of service nodes includes a voting system, which will provide for decentralized governance of network and protocol-related changes. Pending community support, this will provide a solid financial basis for the Blocknet’s future, by creating new funds to pay developers and to cover marketing costs.

Finally, with the ability to trade directly from one’s wallet comes freedom from having to be at the mercy of centralized exchanges at critical points in a coin’s history – such as Bitcoin’s at the end of this month, when it reaches a crucial juncture and may hard fork. Most exchanges will freeze users’ Bitcoin wallets, but with the Blocknet’s exchange, traders are only limited by protocols themselves.

Production blockchain features

With the release of the production blockchain, the following features will be supported:

  • Enforcement of the 5000 BLOCK requirement to run a service node (which shall not be alterable without implementing a formal improvement proposal)
  • Support for OP_CHECKLOCKTIMEVERIFY (BIP65) on mainnet
  • Support for the service node voting system, which will enable governance of development funding, and network and protocol-related changes
  • Feature parity with Bitcoin Core
  • Block time: 2.5 minutes
  • Consensus algorithm: proof-of-stake
  • Annual stake reward: ~9% (10% of stake reward to fund development)
  • Codebase: Bitcoin Core + PivX masternode implementation

Migration steps

The move to the production chain follows Syscoin’s method of migration, and for users, is effectively a matter of downloading the production wallet upon release, and copying one’s wallet.dat file into its directory:

  • The Blocknet developers shall create a snapshot of the current chain at a date to be announced in advance
  • Every address in the snapshot shall be funded from a premine at the production chain’s inception
  • Users’ current private keys will work on the production chain; users do not have to take any action except open their wallet.dat using the new wallet.

A user guide shall be made public in due course for users to migrate from the interim wallet to the production wallet.

Upcoming developments

The production release marks the beginning of a significant period in the Blocknet’s timeline, with its whitepaper, SPV multiwallet implementation, and consumer-friendly trading app in the pipeline.
Of particular significance is that, in one week’s time, a major announcement will be made regarding the decentralized exchange’s UI.

blocknet.co