Bitcoin and Ethereum crashed noisily down to earth in 2018, losing 69% and 79% year to date, respectively. These staggering losses were matched or exceeded by many other formerly highflying cryptocurrencies over the past year, essentially crippling the ICO marketplace and spreading carnage that has spared very few cryptocurrency investors.
The collapse of the cryptocurrency marketplace underscores multiple risks and vulnerabilities inherent in the blockchain and highlight the reality that for all the hype, there has been limited adoption of the nascent technology.
Despite the doom and gloom hanging over the cryptocurrency market over the past year, there is a reason for optimism as we head into 2019. MATRIX AI Network, a Hong Kong-based blockchain and AI technology company, has set an ambitious corporate mission: to create an easier, faster, safer, and more flexible blockchain. Welcome to Blockchain 3.0.
An Easier Blockchain
Smart contracts are simply not smart enough, and you need a computer science degree to get the most out of them. The Ethereum blockchain uses Solidity, a contract-oriented language to write the necessary code. This certainly was a major improvement over preexisting programming options and helped spur the development of hundreds of cryptocurrencies, but it is not nearly enough. Smart contracts are probably the most important aspect of blockchain technology. Because the power of programming rests in the hands of so few people, and smart contracts are at the heart of blockchain technology, the blockchain revolution is stalling.
Evans Data Corporation estimates there are currently 23 million developers worldwide. The number is expected to reach 27.7 million by 2023. While the U.S. currently has the largest number of developers, India is expected to take the top spot over the next five years. China’s developer growth is also surging. Although there is significant growth, relative to the global population of 7.6 billion, the number of coders is very small.
MATRIX AI Network is designing Intelligent Contracts that leverage natural language programming and adaptive deep learning-based templates to auto-code. In other words, you won’t need to learn code to plan and execute a smart contract. If you simply enter the input, output, and transaction conditions, the program will do the rest. Currently, English and Chinese are supported. In the future, MATRIX AI Network is planning to support other languages. The MATRIX development team has recently finished a prototype that supports One-Click Token Launch, One-Click ICO, Voting, Insurance, and Auctions.
A Faster Blockchain
Bitcoin blockchain can process an average of 7 transactions per second, painfully slow by virtually any metric and another possible cause for its limited utility. Ethereum blockchain can perform up to 12–20 transactions per second. Ripple is currently the only crypto platform capable of processing up to 1500 transaction per second, leaving Bitcoin and Ethereum in the dust. Visa and PayPal can process 24000 (56000 max TPS) and 193 (450 Max TPS) transactions per second respectively. Visa is capable of processing the highest number of transactions per second and is the most advanced and fastest platform available.MATRIX AI Network recently launched a new public demonstration of its proprietary new technology, promising a new era in transactional speed and efficiency. “The AI-based MATRIX platform can process more than 50,000 transactions per second — more than Bitcoin, Ethereum, Ripple, more even than PayPal and Visa! This is because of the fusion of powerful artificial intelligence and the hybrid consensus (PoW + PoS) mechanism of the MATRIX blockchain,” explains Owen Tao, CEO of MATRIX AI Network.
“With the PoS-based random clustering, a small number of nodes will be chosen as delegates. The transactions are broadcast only among these delegates. In previous blockchains, transactions have to transfer to every node in a P2P network, and the latency increases as the number of nodes grow. With our algorithm, the small number of nodes enables a significantly lower latency because of the reduced overhead of broadcasting transaction.”
A Safer Blockchain
In 2010, a hacker was able to create 92 billion Bitcoins from scratch by exploiting a coding flaw. Although the community was able to roll back the transactions, this was the first and perhaps potentially the most serious cryptocurrency hack to date. In 2014, it was revealed that Mt. Gox, one of the largest cryptocurrency exchanges (handling nearly 70% of all transactions in Bitcoin) had been the victim of successful hacking attempts for a period of three years, 750,000 stolen Bitcoins belonged to Mt. Gox’s customers. When the full extent of the fraud was revealed, Bitcoin had lost over a third of its value. In 2016, Bitfinex, one of the most popular cryptocurrency exchanges in the world was hacked, and 120,000 Bitcoins were stolen, representing a market value (at the time) of nearly $72 million.
In 2018, there has been a steady flow of news reports revealing all manners of cryptocurrency fraud and token theft, Coinrail, BitGrail, Coincheck are just a few of the hacks exposed this year. For all of the blockchain’s purported advantages of building trust, anonymously, it remains a remarkably vulnerable technology.
MATRIX AI Network is using artificial intelligence (AI) to improve the safety and security of blockchain transactions. MATRIX AI Network’s security engine can identify bugs and vulnerabilities in smart contracts, leveraging the power of AI to maintain the safety of digital assets under malicious attacks. Because it is uniquely adaptable, the AI can self-optimize over time and improve at finding additional defects that could put transactions and funds at risk. MATRIX AI Network’s security framework consisting of four key elements: (1) a rule-based semantic and syntactic analysis engine for smart contracts; (2) a formal verification toolkit to prove the security properties of smart contracts; (3) an AI-based detection engine for transaction model identification and security checking; and (4) a deep learning-based platform for dynamic security verification and enhancement.
“The MATRIX Secure Virtual Machine can detect attacks on transactions by providing AI-backed vulnerability detection with fault-tolerant protocols,” explains Deng, “in other words, we have introduced formal verification technology during transactions to detect security vulnerabilities.”
A More Flexible Blockchain
A hard fork is a change to the bitcoin protocol that makes previously invalid blocks/transactions valid, and therefore requires all users to upgrade. A hard fork splits the coin or token community and devalues the digital asset. It is an inevitability for nearly all cryptocurrencies, which is probably what prompted MATRIX AI Network to try and develop an alternative.
MATRIX AI Network can dynamically adjust its parameters as necessary to adapt to market requirements. The AI-coordinated multi-chain construct can meet different, and sometimes conflicting market needs at the same time. An evolutionary proactive optimization engine is embedded in the bottom protocol layer of the MATRIX AI Network so that blockchain parameters are dynamically updated according to external conditions. In addition to maintaining the efficiency and applicability, the dynamic optimization scheme prevents the risk of a hard fork in each parameter update and software release, providing unparalleled flexibility.
A Look Ahead
According to a report published by consulting firm Greenwich Associates, 57% of executives working on blockchain initiatives at banks, technology vendors, dedicated blockchain companies, exchanges, and consultancy firms, and other firms said that implementing distributed ledger technology (DLT) at the enterprise level has been harder than expected, citing the technical challenges of adopting DLT solutions, including scalability issues, the question of hardware security, the need for transaction confidentiality, and how to handle the payments leg of transactions.
Even stalwart blockchain enthusiasts admit that (1) slow transaction speed; (2) programming barriers that limit access to highly skilled coders; (3) lack of security; and (4) inflexibility are systemic issues plaguing the wider adoption of the blockchain.
Heading into 2019, as investors and technologists survey the past years’ losses and lessons, companies like MATRIX AI Network are hard at work trying to solve these issues and lead us toward Blockchain 3.0.