Æternity Blockchain – A Functional Oracle Machine
Æternity is an exceptionally scalable blockchain protocol that is based on Ethereum’s network. Æternity offers a unique consensus mechanism that can be utilized to check oracles (we will touch on oracles later on in this article), which maximizes their efficiency, as Æternity prevents layering of consensus mechanisms on top of one another. State channels are implemented to maximize scalability and privacy. Channels’ tokens can be transferred via means of functional smart contracts that have access to the answers of an oracle. Æternity renders smart contracts faster and easier to execute, because it doesn’t act through recording contract code, or state, on the blockchain, i.e. on-chain, but without affecting the functionality of the smart contracts.
A week ago a white paper was published to introduce the architecture of Æternity and its potential use cases. Æternity can be used on a global scale in prediction markets and synthetic assets’ markets.
How Can Æternity Blockchain Serve Smart Contract Platforms?
1. The presently prevalent stateful design renders smart contracts, coded for smart contract platforms, rather hard to analyze. Moreover, combining statfefulness with sequential ordering of transactions reduces scalability.
2. Introducing real-world data to smart contract platforms, in a trustless, decentralized and reliable manner significantly hurdles the realization of a large number of advantageous applications.
3. Most smart contract platforms have limited abilities to update themselves to cope with newly emerging economical and technological knowledge.
Recent studies of the state channel technology have proven that in many instances, storing state on-chain is unnecessary. In most cases, all data can be stored in state channels, and the blockchain would be only used to settle the economic results of exchange of information and/or to act as a fallout whenever a dispute occurs. This represents an alternative blockchain architecture approach, which is marked by Turing-complete smart contracts that exist in state channels but not on the blockchain. This would boost scalability as all transactions are independent and can be processed in parallel. Furthermore, this approach means that smart contracts will not write to shared state, which will greatly simplify contracts’ testing and verification.
Augur is a decentralized prediction market that attempted to integrate real-world data with the blockchain in a decentralized manner via a process that implements a consensus mechanism on smart contracts, rather than implementing the consensus mechanism provided by the underlying blockchain. This will result in inefficiencies, yet it won’t boost security. So, it is logically better to generalize the consensus mechanism of the blockchain so that it can provide information on the next internal state as well as on the external world’s state. So, we can assume that the blockchain’s consensus mechanism dictates the outcome of executing what complexity theory describes as an “oracle machine”. An oracle machine is a theoretical machine that is far more powerful than a Turing machine due to the fact that it can bear answers to questions whose answers cannot be computed such as “Who won the Super Bowl in 2016?”
Overview and Applications of Æternity:
Æternity is a blockchain protocol that is designed to solve all the aforementioned problems that are challenging smart contract platforms. Æternity provides a highly efficient system for transferring value. Practically speaking, Æternity represents a global oracle machine that can be utilized to provide decision making services on an enormous scale.
The stateless nature of Æternity’s smart contracts makes it ideal for building a myriad of applications including:
1.Identities: Each account will be associated with a unique ID number. Users will be allowed to register distinctive names and link them to a data structure’s Merkle root.
2. Wallet: the wallet manages the cryptocurrency, Aeon, private keys, sends and signs transactions. It can also be used to create channel transactions and use apps within the channel network.
3. Toll API: Payment channels open the door to a novel type of APIs where a user can pay for every API request. Toll APIs mitigates DDoS problems and simplifies the creation of high quality APIs.
4. Insured Crowdfunding: Insured crowdfunding can be implemented via means of dominant assurance contracts, which are smart contracts that are created to raise money for a good cause.
5. Others: other possible applications include cross-chain atomic swaps, event contracts (e.g. insurance, whistleblowing) and prediction markets.