Today, many companies use blockchain to drive greater veracity and transparency across their digital information ecosystems. And, they are boosting awareness of the blockchain industry and its accompanying infrastructure in a variety of sectors—ranging from consumer-packaged goods (CPG) to cloud computing and storage, and from infrastructure to public policy.
Building upon these developments, blockchain has surpassed initial forecasts based on its promise within the banking and cryptocurrency arenas. Worth noting: Funding to blockchain-based companies, despite dipping from 2018’s highs, more than doubled in 2020 as compared to 2017.
Moreover, forecasts predict that annual spending on blockchain solutions will exceed $16B in 2023—thanks to the increased adoption of blockchain-based ecosystems.
To add, 2021 has branded its mark in history as a year of crypto institutionalization, with large multinationals (e.g., JPMorgan, PayPal, DBS) starting to offer crypto-based services.
While blockchain was invented in 2008 by Satoshi Nakomoto, developments in blockchain ecosystems, today, have a striking semblance to the early years of the internet. During the inception years pioneers, dreamers, and early adopters came together to build the internet space we experience today.
In the blockchain space, many pioneers, dreamers, and early adopters have introduced ground-breaking projects. Samzuga foundation is among these novel organizations. The Zugacoin Network is a pioneer in today’s establishment of blockchain ecosystem architecture. Leveraging the power of cryptographic tokens, Zugacoin interconnects an ecosystem of applications via a unique blockchain infrastructure that allows fast, frictionless and secure payment,and ensures reliable storage of value.
Powered by SAMZUGAWAL Protocol, ZugacoinXDPoS Hybrid Network is a highly interoperable blockchain network supporting global trade and finance. Thanks to the SZCXDPoS’ interoperability, the network permits digitization, tokenization, and swift settlement of trade transactions, increasing efficiency and reducing reliance on complex foreign exchange infrastructures. Operating as a blockchain agnostic middleware, the ZUGACOIN Network ensures flexibility in liquidity management by connecting MSME originators and decentralized liquidity pools.
Recently, Zugacoin received recognition from the World peace Organization an arm of United Nations (UN) for its hybrid protocol that supports permissionless ledgers for public verification and permissioned ledgers for restricted data sharing.
2B. Zugacoin’s Efficient and Secured Protocol
Satoshi Nakamoto’s blockchain protocol attempted to achieve consensus within a permissionless setting—that is, anyone can join or leave the protocol execution without seeking permission from a centralized or distributed authority. Additionally, the protocol’s instructions weren’t dependent on the players’ identities, presenting a game-changing protocol architecture. Later, Ethereum and the Ethereum Virtual Machine (EVM), which were released in July 2015, proposed notable enhancements compared to the Bitcoin protocol.
The Ethereum protocol introduced the smart contract functionality. Whilst Bitcoin and Ethereum are game-changing technologies, they present a myriad of issues, especially with transaction processing performance. That said, to create an efficient and secured consensus protocol for the Zugacoin Network, the novel network tackles the following bottlenecks of classic blockchains.
● Transaction In-Efficiency
Consortium blockchains, employed by leading cryptocurrencies like Bitcoin and Ethereum, experience a blockchain scaling problem. More specifically, they don’t scale well to handle large transaction volumes. Put into context: the fixed block size in the Bitcoin blockchain and gas prices in Ethereum cap their transactions per second (TPS) to 7 and 15, respectively. This small throughput severely hinders the wide-spread adoption of such cryptocurrencies.
● Confirmation Times
Network latency—the time required to generate an additional block of transaction in a chain or the time it takes for a transaction to appear on a blockchain—is a major issue of concern. For instance, Bitcoin’s 10-minute block-time is significantly longer than the average network latency. To add, Bitcoin blocks require 5 subsequent blocks to ensure confirmation. Thus, it takes close to an hour for transactions to receive confirmation. On the other hand, Ethereum, which has lower latency, has a relatively high block-time, around 13 minutes. These long confirmation times hinder the wide scale adoption of these classic blockchains in many smart contract applications.
● Fork Generation
Fork generation—whether hard or a soft fork—is time-consuming, creates potential vulnerabilities, and consumes significant computational energy. In regards to vulnerabilities, fork generation exposes blockchain networks to costly attacks like Peer-to-Peer Network-based, Smart Contract-based, Consensus & Ledger-based, and Wallet-based attacks. In the past, Ethereum Classic, Bitcoin gold, Feathercoin, Vertcoin, Grin, and Verge blockchain networks suffered 51% attacks. (A 51% attack refers to an attack on Proof-of-Work (PoW) blockchain where attackers gain control of 51% or more of a networks’ hash rate). Given the vulnerabilities therein, private/permissioned blockchains are usually very resistant to possible forks of their blockchain.
● High Energy Consumption
With classic blockchain networks, the Proof-of-Work (POW) consensus mechanism requires mining (computational power) to do proof-of-work computations. These transactions consume alarmingly large amounts of energy. To clarify, the current annual estimated energy consumption of Bitcoin mining activities is 87.17 terawatt-hours (TWh)
3 while the energy consumption of Ethereum is 29.41 TWh.
4 Put into further perspective, as of 2017, Bitcoin mining activities consumed energy levels equivalent to Denmark’s energy consumption. With projections indicating that energy consumption in Bitcoin mining will soar by the year 2022, the POW consensus remains unsustainable.
● Anonymous Network Node
A transaction hash is a unique string of code that’s given to transactions that have been verified and added to a blockchain. With blockchain nodes playing an important part in transaction hashing, the anonymity of nodes—which store copies of the distributed ledger and maintain the reliability of the stored data—poses a problem.
With governments seeking control of sensitive transactions, lack of government control, lack of regulatory authority, and maintaining pseudo-anonymity is a challenge. Notably, anonymous transactions may lead to misuse of blockchain technology, undermining government and regulatory activities.
Motivated by the above-mentioned challenges, the Szc Network proposes a consensus protocol that focuses on the following key strategies:
● Double Validation to strengthen security and reduce likelihood of forks.
● Randomization to guarantee fairness and prevent handshaking attacks.
● Fast confirmation time and efficient checkpoints for finality or rebase.
● Self-KYC layer while setting up Network Node.
To start dealing with these problems, this whitepaper presents an overview of the architectural design of Zugacoin Network’s masternodes. In particular, the paper proposes Szc Delegated Proof of Stake (XDPoS) consensus, a Proof-of-Stake (PoS)-based blockchain protocol with rigorous security guarantees and fast finality.Zugacoin Network’s consensus algorithm offers a more secure protocol.
Since 100masternodes are the maximum number in the masternode committee, masternode holders must deposit 1000 SZC to be considered for positions in the masternode committee. The amount (10,000 SZC is locked in a smart contract for the minimum of thirty days. In the event that a masternode is demoted or intentionally resigns from the masternode, the candidate’s deposits are locked for 30 days and can be accessed thereafter.
For each iteration of 900 blocks (called an epoch), a checkpoint block is created, which implements only reward works. The checkpoint block is referred to as the block signer. Tasked with storing all block signatures, block signers count the number of signatures sent to the block signer smart contract during the epoch. Rewards are based on the number of signatures linked to a masternode in an epoch.
In addition, block creators are selected in a circular and sequential order, allowing each masternode holder an equal opportunity to create and sign a block. In XDPoS's current implementation, failure of a masternode to create a block causes a 10-second delay before the next masternode in the sequence takes its turn to create the next block.
Further, there is a reward-sharing ratio among coin-holders and masternodes that have been elected via the support of coin-holders. Specifically, each epoch consists of 900 blocks, which receive a 250 SZC reward in the first 3 (Three) month. The 250 SZC reward is divided among masternodes based on the number of signatures associated with the node in each epoch. Thereafter, masternode rewards are divided into three portions, namely:
● Infrastructure Reward:
This reward comprises the first portion of 40%. The reward goes to the masternode.
● Staking Reward:
This reward accounts for 50% of the reward. The reward is shared proportionately amongst the pool of voters for a specific masternode. Token stake is the criteria used to share the reward amongst voters.
● Foundation Reward:
The foundation reward accounts for the last 10%. This reward is channelled into a special account that’s controlled by the masternode foundation.
The foundation is initially run by the SZC Network founding company.
PROOF OF PARSE SZCXDPOS MASTER NODE TECHNOLOGY
For coin-holders to operate a masternode, 8 (eight) key requirements must be satisfied. These include
● More than 1,000 SZC held by the new masternode holder, helping them perform random delegated proof of stake consensus, seamlessly.
● A suitable wallet to store SZC tokens. Preferably in hardware form or hot storage.
● A dedicated and stable hardware environment.
● A dedicated Static Public IP address.
● 100% network uptime by IDC network.
● A minimum of tier 3+ IDC environment.
● Virtual Private Server (VPS). Though optional, this option is highly recommended.
● When using cloud-based services like Amazon EC2 M3, large virtual machine (VM) sizes are appropriate. Similar configurations are applicable for the Microsoft Azure Cloud network users.
Given that the SZC masternode is a full node, it stores a copy of the blockchain, produces blocks and keeps the chain consistent. These nodes are controlled by consortium members and come with a number of caveats. As previously noted, full nodes must purchase (and hold) a fixed equity of SZC (more than 1,000) to be able to host the full SZC protocol.
This design introduces the advantage that no Full Node or groups of Full Nodes have control over the network. For node holders to possess more than 51% hashing power, a full node must acquire more and more SZC. With increased demand, SZC prices rise, making it financially impossible for a Full Node cartel to control the ZUGACOIN Network.
The Zugacoin Network also employs Double Validation complemented with a Randomization mechanism to prevent unscrupulous characters from gaining control of the network. With these techniques, the network reduces the probability of having invalid blocks in the blockchain, ultimately reducing its effectiveness. These enhancements and the components of the ZUGACOIN Network are explained in subsequent sections.
Coin Holders, Masternodes
Coin-holders are as simple as the name suggests: users who join the network and who own and transfer the required amount of SZC. It's worth noting that the Zugacoin Network doesn’t have miners as is with Proof-of-Work-based blockchain systems like Bitcoin and Ethereum.
The Zugacoin Network employs a Proof-of-Stake (PoS)-based protocol. On the XDPoS using parse tree technology only masternodes can produce and validate blocks. Once coin holders deposit 1000 SZC to the Smart Contract, they are listed as masternode candidates in the DApp. Masternodes that work consistently within the system creating and verifying blocks are incentivized with SZC. Zugacoin Network engineers take responsibility for designing this fair, explicit, automated, and accountable reward mechanism.
Using the samzuga vault mechanics as deposits is made into the staking vault in Etherum or Bitcoin cryptocurrencies, Zugacoin engineers converts these traditional cryptocurrencies into SZC which is forwarded to contract address