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Aleph Zero’s Commitment to Solving DLT Base Layer Challenges


Introduction


Distributed Ledger Technology (DLT) is a common but often intertwined term. People interchange blockchain for DLT and DLT for blockchain. However, they are not to be taken as the same. While blockchain can be regarded as a DLT, DLT is not a blockchain. Confusing? Let’s take a look.



What is Distributed Ledger Technology?


Distributed Ledger Technology, preferably referred to as DLT, is a technological framework that allows individuals across various places and networks (nodes) to access, validate, and update transaction records. It operates on a computer network that spans several nodes, entities, or locations.


Every node in a distributed ledger processes and validates every transaction, producing a record of every interaction and reaching an agreement on the accuracy of the data. Whether the data contains information that is regularly being updated, like financial transactions, or data that doesn’t change after being recorded, they can be processed and accessed via a distributed ledger. Blockchain is a well-known distributed ledger technology but it isn’t the only one out there.


Other DLTs include Directed Acyclic Graph (DAG), Hashgraph, Hyperledger Fabric, R3 Corda, etc. So while blockchain is a DLT; the term “DLT” isn’t exclusive to blockchains alone.



Applications of DLTs


Distributed Ledger Technologies can be applied in almost every industry:


In healthcare: To provide further clinical assistance and expedite diagnosis while safeguarding patients’ data.


In government: To provide an open and transparent electoral process. 


In cybersecurity: It raises the bar for internet security and provides better firewalls.


In global payments: To offer a better system for faster transactions worldwide.


In supply chain: To track and monitor goods from their time at the hands of the manufacturers to the point where they reach the consumers.


In entertainment: To improve artist value and optimize entertainment channels.


DLTs can be applied in these industries because of the many benefits that they offer.



General Benefits of DLTs


Transparency: Distributed ledger technologies are designed in such a way that every participating node can see what happens on it. You can say it’s an “open book” literally. Over the years, a lot of closed-door activities, e.g., from financial institutions that affect users have been brought to light and people have had fewer reasons to trust giant companies to be looking out for them.


Before the real use cases of DLTs came into play, people had no option but to trust these companies more or less because there was no real choice. However, with DLTs in full swing, more and more people are beginning to see other options. Everyone can see what happens in the system, changes being made, inputs and outputs, so it makes it hard to cheat or try anything cunning without every participant being aware. So DLTs allow for full transparency and with that, breed trust.


Process information in real-time: Various computers can exchange data in real-time with the use of DLTs. Instead of centralizing all the information on one server, distributed ledgers employ separate nodes to record, share, and synchronize transactions in their electronic ledgers.


Traceability: Like the open ledger it is, DLTs allow every interaction to be available for monitoring, which inevitably gives room for traceability.


Security: Data stored on DLTs can hardly get lost because it isn’t recorded in one place, there are other copies of every data with every participating node which means a particular set of data getting lost on one node doesn’t even make a dent. So this encourages data security.


Immutability: Every information inputted is permanently stored and is not subject to changes either by the users or the nodes involved.


Almost every distributed ledger technological system provides these benefits and more but while we praise the benefits of DLTs, we can’t overlook the downsides. Distributed ledger technologies, in an attempt to solve many dilemmas facing the world today, have traded off some important factors. Some of these very same benefits have turned out to be double-edged swords and we’ll delve into what I mean by this.



Shortcomings of a Typical DLT (with Blockchain as a Major Player)


Privacy challenge: The first item on the list of benefits of DLTs is transparency and it might interest you to know that this is one of the double-edged swords referred to earlier. As much as transparency is needed to breed trust and eliminate reliance on centralized bodies, it also gives no latitude for privacy. Privacy shouldn’t be mistaken for pseudonymity or anonymity as they all differ in certain degrees (you can better understand what I mean in this article).



When you send crypto, for instance, to a wallet address, it doesn’t mean you or the recipient are kept private. Why? Because there’s still a record showing that a transaction happened between two people and the two addresses involved in the transaction are visible for the public to see. So while your real identities are kept unknown (like with a mask), your transactions can be traced (assuming you've been a clown at various circuits).

These methods of pseudonymity and anonymity are what most blockchains and web3 projects use.


Lack of true security: Following up on the privacy challenge, the lack of true privacy in most blockchains opens tiny cracks for insecurity to creep in. With mere wallet addresses, the real identities behind the millions of transactions happening on the blockchain can be uncovered. Sure, it’ll involve investing a lot of time and probably money but guess who has the most time for this kind of pursuit? A dedicated hacker!

Suffice it to say that many blockchains out there are at risk of being hacked and even more, every user is at risk of getting his/her data exposed for misuse.


Scalability concerns: For an industry looking to onboard the “next billion” users, there seems to be a lack of a memo on how this will play out. A distributed ledger that can perform more transactions is considered scalable and this is an important factor in ensuring mass adoption. The most popular blockchain, Bitcoin, can handle 7 transactions per second (TPS), the second most popular, Ethereum can process just about 20 on average. 


The image below (source: Invest in Blockchain) shows a list of the maximum transactions per second for the top 50 blockchains.



It is quite understandable for blockchains who chose to opt for better security, thereby trading off scalability, but in an industry that has gained/is still gaining the interest of many every day, you’ve got to give the users more. 


Lack of enforced regulatory compliance: Many blockchains allow projects built on them to “run wild” all under the cover of “blockchain for freedom.” As a result of this, many blockchain projects have been sued, brought down, or are in constant battle with government authorities over non-compliance with the guidelines set. With this, it is not unexpected for the government to come after the web3 industry as a whole, using the issue of projects not complying with Know-Your-Business (KYB) and Anti-Money Laundering (AML) requirements as a perfect excuse.


Pretty sure you’re not oblivious to the fact that the government is really after the blockchain industry, I mean it goes against everything they wish to keep happening, but why give them the chance to when these can be prevented?


Long verification time: This is an important criterion to be factored into determining the speed of a blockchain because it denotes how fast a blockchain can process transactions. As seen in the image shown above, some blockchains take as long as 30 minutes or 60 minutes to confirm a transaction with the least time in the list being 1 second for Nano.


Environmental problems: Some DLTs, certain blockchains to be specific, utilize methods of validating transactions that are not eco-friendly. This, as a result, has brought lots of backlash to the industry with people emphasizing the cons of technologies within this category. Proof of Work (PoW) is a consensus mechanism that some blockchains, like Bitcoin and previously, Ethereum use in arriving at consensus and confirming transactions.


PoW involves miners solving highly complex computational tasks to confirm crypto transactions and add them to the block. This process requires high electrical power to be consumed because of the type of computers that can only be used for this mining.


Centralization: Some DLTs are permissioned and are hence, exclusive for private users. 



Aleph Zero Saving the Day


Here’s how Aleph Zero has approached solving each of the highlighted problems.


True privacy: If there was ever a list of stern believers in the need for users’ data privacy, Aleph Zero won’t be found missing on that list. It is a blockchain infrastructure that allows developers to deploy projects that are scalable, secure, and even more, privacy-focused using technologies best known for ensuring privacy.

“Acknowledging the need for efficiency and ensuring strict privacy of users’ data on all fronts, Aleph Zero combines the best features of ZKPs and sMPC.” Here’s how Aleph Zero is hacking the key to true privacy.


Security: Security is vital to blockchain technology and that is why various methods of ensuring blockchain security (consensus mechanisms) have sprung up over the past few years. Aleph Zero utilizes the Byzantine Fault Tolerance (BFT) consensus mechanism, AlephBFT. In theory, consensus indicates that all participants agree before a transaction is signed.



In practice, however, not all nodes/validators are honest but BFT ensures that blockchains can still operate even if some of the participating nodes are malicious or dishonest. AlephBFT allows every transaction to be confirmed as long as 67% of the committee members come to a consensus. This means the network can still function even when some of its participants are not to be trusted.


Scalability: Aleph Zero boasts of being able to handle up to 100,000 transactions per second (TPS), making it one of the fastest blockchain networks to deploy projects on. It measures this capability in terms of the number of user transactions it can withstand (Do note here, and not to confuse any readers, that in a tested environment, the team at Aleph Zero was able to achieve 89,600 TPS for AlephBFT between 120 nodes and with a validation/finality time of 0.416 ms).


Ensures compliance with regulatory requirements through KYB check: Aleph Zero ensures that all projects coming into its ecosystem through the Ecosystem Fund Program (EFP) undergo strict KYC/KYB background checks to make sure that they follow through with Anti-Money Laundering (AML) rules to keep users’ data private.


Latency or verification time: Aleph Zero has a verification/finality time of 0.9 seconds. This means that transactions are confirmed in 900 milliseconds. This is indeed an improvement when compared to other blockchains and, combined with Aleph Zero’s TPS, you can add Aleph Zero to your list of fastest blockchains.


Eco-friendly: Aleph Zero leverages Proof of Stake in its effort to see a drastic reduction in energy waste. Aside from this, Aleph Zero joined the Crypto Climate Accord, an initiative to use renewable energy in powering blockchain technology to help decarbonize cryptocurrency, in a bid to make crypto green. The blockchain also works with carbon offsetting programs on a mission to decrease carbon footprint. You can learn more about Aleph Zero’s carbon-negative journey here.


Decentralization: Aleph Zero is a fully permissionless blockchain that employs a DAG architecture that anyone can use without needing to ask for permission.



Conclusion


Solving the blockchain trilemma might have been something that no blockchain could achieve, but not until Aleph Zero emerged. With a scalability feat like no other, a security measure that many are still looking to implement, an architecture built to resist centralization, and an in-built privacy enabler, Aleph Zero is well on its path to becoming the DLT many didn't see coming.

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