Hello Steemians! Today I will like to share a relatively new blockchain project, GoChain which I got to know through my buddy @mrshev. Coincidentally, @originalworks just posted this writing contest on GoChain and I thought I might as well take this chance to share what this project is about and try to win some STEEM 😎.
What is GoChain?
If you ask the developers what GoChain is, their official response should be what they have written in their whitepaper:
GoChain, a standalone blockchain, is a next generation smart contract platform. It’s built upon an improved Ethereum codebase that solves the scaling problem with immediacy.
To put it simply, GoChain is created from Ethereum's open sourced code, but several changes were made to make it better than Ethereum in certain ways (or so they claim). GoChain claims to be,
- 10x more decentralized
- 100x faster
- 1000x greener
I will explain a little more on how they can theoretically achieved this in the later sections.
Proof of Reputation
The key difference between GoChain and Ethereum is the consensus model. As we all know, Ethereum currently uses proof-of-work (might be shifting to proof-of-stake in the future, but there is no definite date yet). The main downside of proof-of-work has always been the amount of energy required to achieve consensus. There is also a scalability issue as increasing the block size will inevitably increase the difficulty of the hashing algorithm, therefore leading to higher energy consumption.
GoChain on the other hand is proposing to use the Proof of Reputation consensus model. Quoted from their whitepaper:
GoChain uses a Proof of Reputation (PoR) consensus model that depends on the reputation of its participants to keep the network secure. A participant must have a reputation that is important enough that they would face dire consequences if they were to cheat the system – in both financial terms and branding. Most businesses would face serious consequences if they were caught cheating a financial network. Larger companies with more to lose will be chosen over smaller companies with less to lose.
Basically, GoChain assign a list of companies to be the trusted nodes. Based on the whitepaper, there will be 50 companies selected for the initial PoR pool. Subsequently, the 50 companies will be able to vote for new nodes to be added to the PoR pool. The initially list of 50 companies will be handpicked by the GoChain Foundation. The objective is to ensure better decentralization by choosing reputable companies, from different geographical regions and industries, as trusted nodes. With just a shortlist of trusted nodes verifying the transactions, the block size and block time can be tweaked accordingly to achieve much higher transaction speed. Finally, without the need to perform the expensive PoW hashing algorithm, it will also be much greener.
Possible drawbacks of PoR
While PoR looks good on paper, I am still somewhat skeptical on how it can be implemented. First of all, there must be enough incentives for companies to join as a trusted node. In the whitepaper, the project team gave an example that a node can potentially earn 15.9 GOC (GoChain tokens) per signed transaction. Based on the current GOC price of US$0.026, that will translate to about US$0.41 per transaction signed.
Based on the current statistics, there are about 700,000 transactions per day on the Ethereum network. So in the most optimistic scenario where all Ethereum transactions are ported over to GoChain, we will only get US$287,000 worth of transaction fees to the initial 50 trusted nodes. On the average, each node will therefore receive about US$5740 worth of payout per day. In a year, it will be about US$2mil worth. It may seem a lot to common people like us, but to publicly listed large companies, this sum may not even move a needle. And we are talking about all Ethereum transactions being ported over to GoChain.
Essentially, there must be enough transactions in order to attract companies to participate as a node. But if there are no nodes, then there won't be dApps built on GoChain to generate the transactions. So GoChain might be stuck in a chicken-and-egg problem. Perhaps the GoChain foundation will have to sign all transactions during the initial stage, until the transactions volume hits a critical level, then source for the 50 participating companies. I am not sure.
How GoChain can potentially gain mass adoption
Despite the drawbacks on using PoR, I believe GoChain does have its use cases. And here, if I may propose, is what I think should be GoChain's go-to-market strategy.
Sell the GoChain idea to games on Ethereum first
There are many great selling points that GoChain has,
- Speed
- Scalability
- Ease of porting over from Ethereum
- Ability to modify smart contracts after deployment
In the very near-term, I think GoChain might find it difficult to attract dApps that require very strict and high level of consensus (e.g. decentralized crypto-exchanges). This is because, I anticipate GoChain to have difficulty attracting enough reputable companies to be nodes for PoR to be really trustworthy. So, GoChain should try to target dApps games that are built on Ethereum. In my opinion, most of these dApps games do not require the highly trusted consensus which Ethereum is offering. But these games really need the speed, scalability and ability to modify smart contracts after deployment.
Game developers will know that the games industry is highly competitive. There are many times where new features need to be rolled out and bugs need to be fixed. Time to market is often critical to games development. Hence, the ability to quickly modify smart contracts will be extremely welcomed by dApp games developers. This will also reduce the need for dApps developers to introduce 'backdoors' to their smart contracts to make adjustments to their dApps.
Get reputable companies to join as trusted nodes and also developers
If GoChain is able to get sufficient dApps games onboard, then there should be enough transactions to make it economically viable for some reputable companies to join as trusted nodes. It will also be great if GoChain can encourage these companies to develop dApps of their own. This will give them more incentives to join as a trusted node and at the same time increase GoChain's adoption.
Path to mass adoption
If all goes as planned, GoChain will eventually get the first 50 reputable companies to be trusted nodes. The ecosystem will then be complete. With the speed, scalability and agility to make changes to smart contracts, more and more developers will join the bandwagon. These developers will be able to produce more sophisticated dApps that can rival existing applications. That is probably when common users can no longer differentiate if an application is decentralized or not. Overall, this will lead to more dApps users and therefore mass adoption. This will be great for the entire crypto space!
When EOS was first conceptualized, there are some who coined it as Ethereum on Steroids. However, I think it is not a very apt name as EOS is fundamentally different from Ethereum. In my opinion, this name should belong to GoChain. GoChain is fundamentally a fork from Ethereum codebase, hence it is highly compatible with dApps that are built on top of Ethereum. DApps can easily migrate over from Ethereum to GoChain and enjoy the better speed and scalability. If GoChain is able to solve the issue on establishing the PoR ecosystem, I think GoChain has quite a bright future and potentially able to lead dApps to mass adoption.
Thanks for reading and please share your thoughts on the project!
gochain2018