Long hidden in the shadow of daddy bitcoin, its offsprings are now more and more aggressive and eager to dethrone it! Indeed the last generation of blockchain has undeniable advantages: No more mining, faster or instant transactions, user-friendly interface, and even no more blockchain! In this talk, we’ll have a look at the problems of the first blockchains and understand how the new generations are trying to solve them ... with varying degrees of success!

1. 402/55 Lime Street Sydney 2000 NSW > AUSTRALIA> WWW.OCTO.COM
Blockchain: The Next Generation
François-Xavier Bonnet + Yann Rouillard - April 2018
Harder, Better, Faster, Stronger

2. 2OCTO TECHNOLOGY > THERE IS A BETTER WAY
WHO ARE WE?
François-Xavier Bonnet
Senior consultant
Yann Rouillard
Senior consultant

3. OCTO TECHNOLOGY > THERE IS A BETTER WAY 3
AGENDA
LIMITS OF THE OLD GENERATION
INNOVATIONS OF THE NEW GENERATION
HEROES OF THE NEW GENERATION
01
02
03

4. >1 LIMITS OF THE OLD
GENERATION

5. OCTO TECHNOLOGY > THERE IS A BETTER WAY 5
THE 3 BLOCKCHAIN GENERATIONS
2ND
GENERATION
3RD
GENERATION
}
contrat {
Assets Management
Smart Contracts
}
con
tra
t {
1ST
GENERATION
Money
transactions
Scalability
Sustainability
Usability

6. OCTO TECHNOLOGY > THERE IS A BETTER WAY 6
THE BLOCKCHAIN CHALLENGES
SCALABILITY
INTER
OPERABILITY
USABILITY
? ? ? ?
SMART CONTRACT
SECURITY }
contrat {
GOVERNANCE
AND FUNDING
ANONYMITY
AND PRIVACY
??

7. OCTO TECHNOLOGY > THERE IS A BETTER WAY 7
THE BLOCKCHAIN CHALLENGES
SCALABILITY
INTER
OPERABILITY
USABILITY
? ? ? ?
SMART CONTRACT
SECURITY }
contrat {
GOVERNANCE
AND FUNDING
ANONYMITY
AND PRIVACY
??

8. OCTO TECHNOLOGY > THERE IS A BETTER WAY 8
SCALABILITY
THE BLOCKCHAIN CHALLENGES
INTER
OPERABILITY
USABILITY
? ? ? ?
SMART CONTRACT
SECURITY }
contrat {
GOVERNANCE
AND FUNDING
ANONYMITY
AND PRIVACY
??

9. OCTO TECHNOLOGY > THERE IS A BETTER WAY 9
THE BLOCKCHAIN CHALLENGES
SCALABILITY
INTER
OPERABILITY
USABILITY
? ? ? ?
SMART CONTRACT
SECURITY }
contrat {
GOVERNANCE
AND FUNDING
ANONYMITY
AND PRIVACY
??

10. >2 INNOVATIONS OF THE
NEW GENERATION

11. OCTO TECHNOLOGY > THERE IS A BETTER WAY 11
Increase your
TPS and storage
capabilities
Blockchain Sharding
Inexhaustible
source of money
for blockchain
development
Treasury System
When played
No one can see
your transactions!
Zksnark
? ? ?
Increase your TPS
and
Reduce your energy
consumption
Proof of StakeState Channel
When played
Increase your TPScapability
When played
No one can inflict
bugs on your smartcontracts
Formal Verification
}
contrat {
When played
You can send
your coins
to any blockchain
Cross Chain
W
hen played
Increase your TPS
capability
DAG

12. OCTO TECHNOLOGY > THERE IS A BETTER WAY 12
BLOCKCHAIN SHARDING
“When the blockchain make littles ones”
Increase your
TPS and storage
capabilities
Blockchain Sharding

13. OCTO TECHNOLOGY > THERE IS A BETTER WAY 13
● Transaction processing sharding
based on sender address
PRINCIPLES
● Blockchain State sharding
● Dynamic shard size
auto-adjustment
● One master blockchain
to rule them all
● Transaction processing sharding
based on account address
Tx
Tx
TxTx
Tx
Tx
Shard A
Shard C
Shard B
Tx

14. OCTO TECHNOLOGY > THERE IS A BETTER WAY 14
● Blockchain State sharding
● Transaction processing sharding
based on sender address
Blockchain state
PRINCIPLES
● Blockchain State sharding
● Dynamic shard size
auto-adjustment
● One master blockchain
to rule them all
● Transaction processing sharding
based on account address
Shard A state
Shard B state
Shard C state
Shard A
Shard C
Shard B

15. OCTO TECHNOLOGY > THERE IS A BETTER WAY 15
● Dynamic shard size
auto-adjustment
● Blockchain State sharding
● Transaction processing sharding
based on sender address
PRINCIPLES
● Blockchain State sharding
● Dynamic shard size
auto-adjustment
● One master blockchain
to rule them all
● Transaction processing sharding
based on account address
● Dynamic shard size
auto-adjustment
Shard A
Shard C
Shard B

16. OCTO TECHNOLOGY > THERE IS A BETTER WAY 16
● Blockchain State sharding
● Transaction processing sharding
based on sender address
PRINCIPLES
● Blockchain State sharding
● Dynamic shard size
auto-adjustment
● One master blockchain
to rule them all
● Transaction processing sharding
based on account address
● Dynamic shard size
auto-adjustment
● One master blockchain
to rule them all

17. OCTO TECHNOLOGY > THERE IS A BETTER WAY 17
BLOCKCHAIN SHARDING
Strengths
● High throughput: up to 10000 TPS and
higher
● Only scalable storage solution
● Transparent implementation for developers
Weaknesses
● Higher complexity (cross-shard operations,
shard load-balancing…)
● Weakened Security
unless Proof-of-Stake is invoked
Increase your
TPS and storage
capabilities
Blockchain Sharding

18. OCTO TECHNOLOGY > THERE IS A BETTER WAY 18
PROOF OF (not only) work
“Proof of work is not sustainable,
we need a better way”
Increase your TPS
and
Reduce your energy
consumption
Proof of (not only) work

19. 19OCTO TECHNOLOGY > THERE IS A BETTER WAY
Some people may want to create fake accounts
(Sybil attack):
☉ To earn all the transactions fees
☉ To take control of the network
Why do we need proof of work?

20. 20OCTO TECHNOLOGY > THERE IS A BETTER WAY
Different kinds of proof
☉ Proof of work (Bitcoin)
> Your chance of earning are
proportional to the CPU
> High resource consumption
> Mining pools use dedicated
hardware
☉ Proof of stake (EvergreenCoin)
> Your earning depends on what
you own
> The rich have the control
☉ Proof of space (Burstcoin)
> Algorithm that requires a lot of
disk space but not a lot of CPU
☉ Directed Acyclic Graph (IOTA,
Byteball)
> No more blocks
> For Byteball, restricted list of
witnesses
☉ Proof of Importance (NEM)
> EigenTrust reputation algorithm

21. 21OCTO TECHNOLOGY > THERE IS A BETTER WAY
Proofs of work vs proof of capacity
Mining Bitcoin Mining Burstcoin

22. OCTO TECHNOLOGY > THERE IS A BETTER WAY 22
Strengths
● Prevents hackers from taking control of the
network
● Does not waste power
PROOF OF (not only) work
Increase your TPS
and
Reduce your energy
consumption
Proof of (not only) work
Weaknesses
● Didn’t pass the test of time yet

23. OCTO TECHNOLOGY > THERE IS A BETTER WAY 23
STATE CHANNEL
“When it’s better not to be on the blockchain”
State Channel
When played
Increase your TPS
capability

24. OCTO TECHNOLOGY > THERE IS A BETTER WAY 24
John Not John
Blockchain
Multi-Sig
Wallet
5
5
Tx
5
5
Tx
5
5
5 5
Tx
5
5
Tx
5
5
PRINCIPLES: State Channel Opening

25. OCTO TECHNOLOGY > THERE IS A BETTER WAY 25
John Not John
Blockchain
Multi-Sig
Wallet
5
5
Tx
3
7
Tx
3
7
Tx
3
7
Tx
3
7
Tx
5
5
Tx
5
5
PRINCIPLES: 2 coins transfer John → Not John

26. OCTO TECHNOLOGY > THERE IS A BETTER WAY 26
John Not John
Blockchain
Multi-Sig
Wallet
5
5
Tx
3
7
Tx
6
4
Tx
3
7
3 7
PRINCIPLES: State channel closing

27. OCTO TECHNOLOGY > THERE IS A BETTER WAY 27
John
Not John
Not John
Nor “Not John”
PRINCIPLES: Transfer to another

28. OCTO TECHNOLOGY > THERE IS A BETTER WAY 28
PRINCIPLES: Scale with people

29. OCTO TECHNOLOGY > THERE IS A BETTER WAY 29
STATE CHANNEL
Strengths
● Scale with the number of participants
● Fast transactions
● low fees
Weaknesses
● Money locking
● Centralisation risk
State Channel
When played
Increase your TPS
capability

30. OCTO TECHNOLOGY > THERE IS A BETTER WAY 30
Directed Acyclic Graph (DAG)
“Simple, fast and efficient”
When played
Increase your TPS
capability
DAG

31. 31OCTO TECHNOLOGY > THERE IS A BETTER WAY
☉ No blocks
☉ Every transaction has 1 or several parents
Still need a way to prevent attacks
DAG = Direct Acyclic Graph

32. 32OCTO TECHNOLOGY > THERE IS A BETTER WAY
Problems:
☉ Transactions order
☉ Double spend
How to sort out the spaghetti plate?
☉ Witnesses
☉ Main chain
☉ Conflict resolution algorithm
Byteball: Consensus algorithm

33. 33OCTO TECHNOLOGY > THERE IS A BETTER WAY
1. Lowest MCI (Main Chain Index)
2. Lowest hash
All transactions (even invalid) are kept in the DAG
Byteball: Conflict resolution

34. 34OCTO TECHNOLOGY > THERE IS A BETTER WAY
☉ Small number or trusted witnesses (12)
> Reliable
> Order transactions
☉ Need to take control of a majority of them to hijack
the network
☉ A transaction witnesses list can differ from the parent from only 1
witness
Byteball: Witnesses

35. 35OCTO TECHNOLOGY > THERE IS A BETTER WAY
Starting from a transaction:
1. Go back until you find transactions from a majority of the witnesses
2. Then count the number of transactions until the genesis (= witnessed
level)
3. The transaction with the highest witnessed level wins
4. If 2 transactions have the same witness level, the lowest hash wins
Actually for a new transaction you can deduce the witnessed level
from the parents
Byteball: The main chain

36. OCTO TECHNOLOGY > THERE IS A BETTER WAY 36
Directed Acyclic Graph (DAG)
Strengths
● No blocks
● Fully deterministic process: once accepted by
witnesses the transaction is definitive
● No energy consumption, no mining
Weaknesses
● Depends on witnesses: not fully trustless
When played
Increase your TPS
capability
DAG

37. OCTO TECHNOLOGY > THERE IS A BETTER WAY 37
TREASURY SYSTEM
“If you need money... just create it!”
Inexhaustible
source of money
for blockchain
development
Treasury System

38. OCTO TECHNOLOGY > THERE IS A BETTER WAY 38
PRINCIPLES
● Evolution proposals can be
submitted by anyone
● Treasury fed at each new block
by newly minted coins
● Vote by crypto-currency holders
proportional to their wealth
● Voting system part of blockchain
protocol
● Treasury fed at each new block
by newly minted coins
● Evolution proposals can be
submitted by anyone
● Vote by crypto-currency holders
proportional to their wealth
● Voting system part of blockchain
protocol

39. OCTO TECHNOLOGY > THERE IS A BETTER WAY 39
TREASURY SYSTEM
Strengths
● Guaranteed sustained funding during
blockchain lifetime
● Avoid development paralysis per minority
blocking
● Transparency and decentralisation for
development itself
Weaknesses
● Give power to the wealthy
Inexhaustible
source of money
for blockchain
development
Treasury System

40. OCTO TECHNOLOGY > THERE IS A BETTER WAY 40
ZKSNARK
“I can’t show you, but I assure you
I have the money!”
When played
No one can see
your transactions!
Zksnark
? ? ?
Alternate solutions

41. OCTO TECHNOLOGY > THERE IS A BETTER WAY 41
ZKSNARK
=
Zero-Knowledge Succinct Non-interactive Argument of Knowledge
Prove Knowledge without revealing it
ZKSNARK
=
Zero-Knowledge Succinct Non-interactive Argument of Knowledge
ZKSNARK
=
Zero-Knowledge Succinct Non-interactive Argument of Knowledge
Proof doesn’t take 100 MB
PRINCIPLES
ZKSNARK
=
Zero-Knowledge Succinct Non-interactive Argument of Knowledge
Proof doesn’t require live communication
Can prove knowledge of solution for any arithmetic problem
? ? ?

42. OCTO TECHNOLOGY > THERE IS A BETTER WAY 42
Classic With zksnark
Miner knows all transaction info
To prove I can
spent the output
of a transaction
I sign the new transaction
with my private key
Classic With zksnark
Miner knows all transaction info
only the hash
of the transaction id and public
key owner
To prove I can
spent the output
of a transaction
I sign the new transaction
with my private key
Classic With zksnark
Miner knows all transaction info
only the hash
of the transaction id and public
key owner
To prove I can
spent the output
of a transaction
I sign the new transaction
with my private key
I prove I know transaction id,
secret and public keys that
gives the transaction hash
Classic
Miner knows
To prove I can
spent the output
of a transaction
Classic
Miner knows all transaction info
To prove I can
spent the output
of a transaction
Classic
Miner knows all transaction info
To prove I can
spent the output
of a transaction
I sign the new transaction
with my private key
PRINCIPLES
Miner never knows anything about the transaction
? ? ?

43. OCTO TECHNOLOGY > THERE IS A BETTER WAY 43
ZKSNARKS
Strengths
● Privacy covers all transaction information
(amount, sender, receiver…)
● Only real mathematically-proved anonymity!
under some assumption...
Weaknesses
● Resource-intensive transaction creation
(40s and 3 GB RAM required per transaction)
● Bigger transaction: x3 compared to bitcoin
● Relies on a secret generation ceremony
When played
No one can see
your transactions!
Zksnark
? ? ?

44. OCTO TECHNOLOGY > THERE IS A BETTER WAY 44
When played
No one can inflict
bugs on your smart
contracts
Formal Verification
}
contrat {
When played
You can send
your coins
to any blockchain
Cross Chain

45. >3 HEROES OF THE
NEW GENERATION

46. OCTO TECHNOLOGY > THERE IS A BETTER WAY 46
Featuring
BLOCKCHAIN
SHARDING
SMART CONTRACT
FORMAL VERIFICATION
TREASURY SYSTEM
CROSS CHAINS
PROOF OF STAKE
CATEGORY: I KNOW BETTER
Highlights
๏ Strong links with Research and
Peer-review approach
๏ Provably secure proof-of-stake
๏ Layer separation between
currency and smart contracts

47. OCTO TECHNOLOGY > THERE IS A BETTER WAY 47
CATEGORY: THE DAG FAMILY
Highlights
๏ Focus on IoT use cases
๏ No fee transactions!!!
๏ No miner!! Transaction
sender contributes to
transaction validation
๏ Focus on user-friendliness
๏ Bots as first-class citizens of
the eco-system
๏ Easy coin transfer with
textcoin

48. OCTO TECHNOLOGY > THERE IS A BETTER WAY 48
CATEGORY: MY SMART CONTRACTS ARE THE BEST
Highlights
๏ Focus on decentralized apps
development and environment
๏ Higher level services for smart
contract development
๏ Parallel processing capability
๏ Focus on smart economy
and asset management
๏ Support for classic language
(Java, C#...)
๏ Strong community
SHARDING
PROOF OF STAKE
TREASURY SYSTEM
Featuring
PROOF OF STAKE
CROSS CHAINSCROSS CHAINS

49. OCTO TECHNOLOGY > THERE IS A BETTER WAY 49
CATEGORY: OLD GENERATION STRIKES BACK
BLOCKCHAIN
SHARDING
SMART CONTRACT
FORMAL VERIFICATION
PROOF OF STAKECROSS CHAINS
STATE CHANNEL
ZKSNARK

50. CONCLUSION

51. OCTO TECHNOLOGY > THERE IS A BETTER WAY 51
THIS IS ONLY THE BEGINNING!
CONCLUSION

52. OCTO TECHNOLOGY > THERE IS A BETTER WAY 52
QUESTIONS?
CAREERS.OCTO.COM.AU