A blockchain without the blocks?
Not exactly, but a company launching Wednesday called O(1) is seeking to take the unorthodox approach of throwing out the blocks its new Coda protocol produces as soon as they elapse. While that might seem illogical since blockchain’s immutable history is to many its principal benefit, an impressive line-up of investors believes the idea could be just what cryptocurrency needs.
Led by Metastable, AngelList co-founder Naval Ravikant, and Twitter and Google alum Elad Gil, O(1) has secured a $3.5 million seed equity round, with investment from Coinbase alums Fred Ehrsam and Linda Xie and Polychain Capital joining to complete the fundraise.
“What attracted me was a small, scalable blockchain that’s still independently verifiable on small nodes,” Ravikant told ExposedCrypto.
And that’s no small feat given the growing costs of storing major blockchains, which are designed largely to keep a record of every transaction ever made over the network. Still, that transaction history is also a strength since that’s what allows miners and users to check the accuracy of transactions.
But if there’s no requirement to hold the ledger, why would anyone trust the Coda Protocol to be accurate?
Because it uses something called “snarks” in a clever way. If you’ve been around crypto, you’ve likely heard the term zk-snarks, most widely known as a privacy technology advanced by zcash, but which has recently gained momentum with other blockchain projects including ethereum and even JPMorgan’s private blockchain Quorom.
Yet, O(1) isn’t so much concerned about the privacy aspects of the technology (it’s not a privacy coin, because a validator could hold onto the ledger if they really wanted to) but believes it can be adapted to build a blockchain that doesn’t have the scalability hurdles of blockchain’s today.
“It’s a cryptocurrency that’s decentralized at scale,” O(1)’s co-founder and CTO Izaak Meckler explained.
He told ExposedCrypto:
“I think what we’re building is really decentralized peer-to-peer cash. So, basically people who are enthusiastic about that idea would be enthusiastic about our protocol.”
O(1)’s protocol will support a native cryptocurrency called Coda coins using an uncapped networked of proof-of-stake validators, but distribution plans and the size of the cryptocurrency pool have yet to be determined.
All O(1) would commit to was launching the testnet in the third quarter of this year.
Snarks for scale
There should be lots of people excited about the concept, but probably many wondering how exactly it works.
Simply, a snarks cryptographic proof – one that can demonstrate that every wallet on the blockchain has the crypto that it should – stands in for the full ledger. The ledger then does not need to be stored forever; the proof stands in for the transaction history and explains the blockchain’s state.
Each new block will generate a new proof, which reflects the validity of past proofs that will be transmitted to every wallet. Because the proof will be only a few hundred bytes, vastly smaller than the gigabytes a bitcoin node needs to download to participate in that protocol’s verification, O(1) contends even smartphones will be able to run verification on the snarks proof.
“There’s this tension between scaling and decentralization because the burden of decentralization increases as the network grows,” Meckler said.
But the Coda Protocol has been designed so that every new proof stays the same size.
“In our, case it’s really succinctness that’s important. These things are a few hundred bytes, like a few tweets, and they can be checked quickly,” Meckler said. “So the chain itself never grows.”
According to Meckler:
“It’s like a picture of a picture of a picture.”
Making it understandable
This is what makes the Coda Protocol so technically compelling but also psychologically daunting.
Knowing that the bitcoin blockchain has a line item for every transaction ever made is something many can grasp intuitively. O(1)’s use of snarks proofs blurs that process a bit and could be challenging for many to really wrap their head around, or more importantly trust.
Meckler acknowledges this, saying, “Something is not truly a proof unless it’s legible to you. A core design constraint for us is: Let’s make this something that’s something easy to read.”
To that end, O(1) wrote a programming language called Snarky for writing verifiable computations.
And while that may still be over the average user’s head, the O(1) detailed a hypothetical application on their blog.
The example outlines how votes would be hashed and counted when a group was trying to decide what pizza toppings to order. While silly, the example displays how each vote is hashed separately and then hashed together so that all users can tell their vote was counted, but can’t view any other user’s vote.
Speaking to the trustworthiness of snarks, Ravikant said, “So far so good although the only real solution here is more time and more scrutiny.”
Yet, the O(1) team itself seems is optimistic its design will drastically change the blockchain space, saying in a statement:
“By compressing the blockchain down to the size of a couple tweets, Coda makes entirely new things possible.”
Colorful blocks image via Shutterstock