Making Private Blockchains Possible

The Genesis Project is adapting the best of Bitcoin's proof-of-work innovation to the commercial blockchain ecosystem.

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The Genesis Project is a blockchain research and technology company that is ending the need to rely on Bitcoin for embedded consensus and the wasted time and money on worthless, unsecure workarounds to proof-of-work security.

We unleash the huge economic potential of blockchain technology for genuine enterprise-level commercialization by extending the efficiency and bulletproof security of the proof-of-work protocol to private blockchain applications.

We make commercialization of private blockchains possible!

Can Bitcoin and the blockchain be separated effectively? Can private blockchains operate without losing the benefit of the public blockchain?

Greenwich Associates Research Report, 7/22/15

The Genesis Project is the logical next step of the Bitcoin ecosystem. We evolve the unitary purpose "crypto-currency" autonomous blockchain into the multi-purpose semi-autonomous blockchain industry.

The semi-autonomous blockchain protocol is an innovation step for the entire industry, including Bitcoin, which will unleash the huge economic potential of blockchain technology for private and public commercialization and create an efficient-running blockchain technology sector.

This next evolutionary step for blockchain technology will ensure miner profitability and the proof-of-work security regime beyond reduced Bitcoin payouts and the end of Bitcoin currency generation, securing the utility of the Bitcoin crypto-currency in perpetuity.

Can private blockchains operate without losing the benefit of the public blockchain?

Here at Genesis Project, the answer is YES! We are powering the evolution of a mature blockchain ecosystem.

Do you need network effect to implement a secure proof-of-work security protocol?

Yes, but not anymore. Genesis Project has developed a new mechanism for applying the "gold standard" proof-of-work security protocol to any blockchain project.

Isn't proof-of-stake cheaper to implement than proof-of-work?

No, it's not. Paul Sztorc, has written extensively on this matter. See 3042430006.

I've been reading all these whitepapers and articles about proof-of-stake. What should I do?

Ignore them. Proof-of-stake is an untested, theoretical workaround to the resource requirements necessary to secure a blockchain. Building a blockchain application on proof-of-stake may be very risky. Advocates of proof-of-stake may have peddled this stuff on the less technically inclined in a possible attempt to raise capital investment.

Why bother with a purely theoretical security approach that opens your blockchain to new attack vectors when you can have the mathematical certainty of the proof-of-work security protocol? With Genesis Project, you can now focus on commercializing your blockchain application rather than wasting time and money with unproven workarounds.

Doesn't proof-of-stake provide blockchain record protection equal to that of proof-of-work?

No, there is no known alternative for blockchain technology that provides as much or more protection as the proof-of-work security protocol.

Can't I use an application layer above the Bitcoin protocol or a colored coin to implement my blockchain business application?

Until the Genesis Project, the only mechanism available to implement a private blockchain with Bitcoin-level security was the embedded consensus workaround implemented either through an application layer above the Bitcoin protocol or a colored coin. However, this is not a serious solution for enterprise-level platform development as it requires reliance, in perpetuity, solely on a third party blockchain (i.e., Bitcoin) for proof-of-work record security.

I want to build a decentralized control, distributed ledger financial product. Can I rely on a trusted node (permissioned) consensus protocol?

Due to the fact that non-currency-based distributed ledgers cannot incentivize miners to supply proofs-of-work, there is a plethora of people and institutions proposing various workarounds to proof-of-work. Be careful; workarounds are only theoretical. At this time, there is no proven alternative for blockchain technology that provides as much or more protection as the proof-of-work security protocol.

A lot of techies are telling me that a permissioned private blockchain design doesn't require Bitcoin-level proof-of-work security because you know the participants. And, they say you can't get proof-of-work security for a non-crypto-currency blockchain anyway, so either use a workaround or rely on traditional, contractual means to enforce honesty.

Due to the inability of attaining proof-of-work security, various workaround solutions are being peddled for closed, permissioned systems under the false assumption that trusted parties (nodes) are immune from collusion and third party attacks. Practitioners in these arts prey upon the unsophisticated selling a rubric that proof-of-work is (economically and environmentally) wasteful and record immutability can be generated with tokens or for FREE (with "their" version of an alternative system). Clearly, this is only a theoretical argument and it's a complete fantasy. Nothing could be further from the truth, but it sells because it's available today and sounds cheap to implement.

All alternatives to proof-of-work are theoretical and cannot deliver Bitcoin-level record immutability; ultimately forcing you to rely on contracts and third party enforcement mechanisms which seems to defy the logic of building a blockchain in the first place. Genesis Project eliminates these concerns so that you can focus on developing the most efficient and secure private distributed ledger application.

How do I report to the CEO or Board of Directors that our blockchain application dumps our valuable programs onto a public blockchain that may, in the future, become unpopular, unlawful, or replaced by another digital currency product - all options that my company has no control over.

Don't tell them if you value your job. They'll think you're crazy!

Many developers say that the costs of "using a proof-of-work system" make it unattractive to implement blockchain technology.

For the corporate professional, the costs and professional risk of implementing an unsecure blockchain with security workarounds make any alternative to proof-of-work even less attractive. Genesis Project eliminates these concerns because we make proof-of-work economical.

Many proponents talk about traditional permissioning and federated models as an alternative means to historical record security.

This line of reasoning is faulty because permissioning only resolves who can access the blockchain, it doesn't answer the question of how to ensure the immutability of the blockchain record. In other words, once we know who can access the blockchain, how do we know that the "true" blockchain record wasn't altered "invalidly" by colluding participants or someone appearing to be a permissioned participant? There's no scientific or economic basis to believe that permissioning or proof-of-stake workarounds, directly or in concert with other means, can (in perpetuity) ensure the integrity of the blockchain record.

What makes proof-of-work the enterprise-class solution for blockchain record immutability?

Many talk about the 51% attack vector assuming that it represents a hashing power point whereby overturning the record may become theoretically possible. The assumption is that such an attack will cost 51% of the money being spent on security, which today is about $300 - 400 million per year. However, this assumption is false. The actual cost of rewriting the proof-of-work based Bitcoin record has been pegged at closer to $1 trillion; the cost of rewriting each block increases exponentially the further back in the record the change is contemplated. Essentially, the cost of overturning the record is quantifiable. Without proof-of-work there is no practicable approach to either assess or quantify the actual security of the historical record. It is this particular accountable (quantifiable) security that makes the proof-of-work protocol very appealing and enterprise-class.

Many proponents talk about using blockchain technology to drive efficiency into audit and transaction authentication processes.

The core concept driving this proposition is the potential audit and tracking cost reductions and possible consolidation of multiple party interactions associated with Bitcoin's blockchain technology and its immutable transaction record. However, without an unassailable historical record in a private blockchain orchestration, these proposed efficiencies will remain largely an academic discussion.

Q: If the system includes only fully trusted nodes (permissioned parties), then what's the rationale for a blockchain implementation?
A: There are far easier and more efficient means to share information amongst fully trusted parties than a blockchain.
Q: If the system includes only partially trusted nodes (permissioned parties), then what's the mechanism for calculating the risk of (party) collusion that could alter (very cheaply) the historical record?
A: Can your blockchain developer/supplier define the exact (not theoretical) cost of overturning the historical record? No, because only a proof-of-work historical record security regime delivers quantifiable immutability.
Q: What do your company's auditors say about not being able to guarantee the immutability of the historical record with a permissioned system?
A: ?

Without such an assessment, there's a significant likelihood (given the Kool-Aid™ being peddled) that a practicable development strategy may never conclude with a product that your company and its auditors could/would sanction. It would be more efficacious to address the above questions before any moneys are spent on development.

Jonathan Wolinsky

Managing Director & Chief Scientist

352-267-9692

Marshall Long

CTO

Tassos Recachinas

Director Financial Operations

2536573938 (951) 654-7320

Konstantinos A. Nedas

Director Software & Network Systems

4184296138

Matthew Fried

Director Cryptographic Mathematics & Quantitative Analytics

We're working on our beta now, we'll notify you when Genesis Project is available to the public.