blockchain

Wanchain – One Chain to Rule Them All

Since the invention of Bitcoin almost ten years ago, literal thousands of new blockchains have been released. Some of them are essentially Bitcoin clones, and others are worlds apart and completely incompatible with each other.

While blockchain adoption stands to massively benefit the human population in many different industries and areas of life, lack of public awareness isn’t the only thing holding it back. While everyone was busy putting together the newest, coolest, most unique blockchain they could think of to solve any or all of the world’s problems (or just to make a quick buck), one project out there was watching from the sidelines thinking: “Wait a minute – how the hell are we ever going to connect these damn things together?”

Wanchain’s task is to enable interoperability between blockchains, allowing them to combine their functions to form web 3.0. This is also something on the Ethereum agenda, and while Ethereum has been doing an incredible job of covering more use cases and projects than any other network by a wide margin, there are some projects out there that have shunned the Ethereum network and are doing their own thing.

Private enterprise blockchains, for example, do not and should not function on a public blockchain like Ethereum. Hyperledger Fabric is used by IBM to create permissioned blockchains for wholesalers and industry retailers, and even within the public blockchain space there are non-Ethereum platforms developing decentralized apps. Instead of creating a Highlander type situation where “there can only be one”, it’s best to welcome all worthy projects with open arms – the more the merrier, particularly if they can all link up to create the blockchain internet of the future.

What Does Wanchain Do Exactly?

The project aims to allow transfers of value and information to take place between and across multiple blockchains.

As CEO and Founder Jack Lu put it:

“Let’s say you were to open a bank on the Bitcoin blockchain. You would be able to trade, lend, borrow BTC in a fully decentralized and peer to peer manner. Now let’s say you wanted to trade other assets using the same bank on the Bitcoin blockchain, you would have no way to execute these trades.”

“The Bitcoin blockchain, working as a silo, has no knowledge of other outside blockchains.”

On the other hand traditional banks don’t just deal in one currency but in many, and a person with a US bank account can also buy or receive Euros, Pounds, Yen, etc.

Wanchain aims to create a network for stablecoins, real estate, commodities, and new protocol tokens from other blockchains to interact.

Wanchain 2.0

Wanchain 2.0 was launched in September and is connected to Ethereum. The project states that it is now the world’s first and only interoperable blockchain with secure Multi-Party Computing.

Ether tokens from the Ethereum blockchain can be sent to the Wanchain platform and seamleslly converted into WETH token – this stands for WAN-ETH and is a proxy token with a 1:1 value peg used to connect both chains.

Ether can be transferred cross-chain from Ethereum’s blockchain and accurately represented 1:1 on Wanchain’s blockchain with WETH which can be sent to another user’s Wanchain address, redeemed, and unlocked to allow the recipient to receive ETH in their Ether account within the WanWalletGui.

Much like ether in the Ethereum gas price system which covers operational costs and allows for Turing complete loop capabilities (allowing code to repeat itself automatically), WAN is a utility token that goes beyond the function of a security-esque token and actually fuels the platform, covering transaction costs and providing bond deposits for Wanchain nodes.

Ethereum DApps can run on Wanchain without any code changes but Wanchain APIs can modify apps to leverage privacy protection and cross-chain capabilities if users wish.

Privacy

Like Monero, Wanchain uses ring signatures to provide complete anonymity to the signer of a transaction while also allowing the receiver to correctly verify that the sender did, in fact, sign the transaction. The optional One Time Addresses (OTA) provides complete anonymity for the receiver of every transaction. Private Send function breaks down every transaction input to a standard denomination, thereby providing further obfuscation to the transaction amount.

CEO Jack Lu states:

“We figured that privacy is important. When you have an open network, your transaction can be traced and that is not a good idea. We not only want to link to existing public blockchains but also to the traditional financial area as well. If their assets or fiat currencies move to a private or consortium blockchain, we want to connect to them too.”

This is a useful tool for any financial services network, particularly one that will be running Ethereum apps dealing in peer-to-peer lending like ETHlend as well as other marketplaces, gaming, and utility DApps allowing for secure micro/macrotransasctions between users.

Leadership

Jack Lu is the founder and CEO, and a prominent figure in the crypto space. He has a masters degree in business and another in computer science – he also cofounded Factom which was worth hundreds of millions before the crash and is now valued at a more modest $35 million.

He graduated from the prestigious Peking University and assembled a crack team of other graduates to be the software engineers and cryptographers for Wanchain itself is now valued at over $100 million and is ranked 54 on Coinmarketcap.

Wanchain 3.0

“For Wanchain 3.0, we plan to connect and be completely interoperable with Bitcoin. At the same time, we are working with other infrastructure tools to ensure the Wanchain ecosystem is optimal for future tools, dApps, and platforms.

Our main goal is to connect with Bitcoin and to prove to the community that our approach does work with the Bitcoin family, the Ethereum family, and most of the other chains in today’s blockchain world,” says Lu.

“Once we have these two established, we can help other communities, developers and projects to scale up and to connect with the most chains. After 3.0, we will be connected and compatible with the two biggest digital crypto economies and we can host a lot of dApps.”

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Drain the Swap: Lessons on Loving the Atomic Swap

CoinMarketCap currently lists over 1,600 different cryptocurrencies, and the number of new coins is expected to increase, and probably increase dramatically.

If an individual owns only one cryptocurrency and will only ever trade in that one cryptocurrency throughout his entire life, then all trades are simple transactions on that one blockchain. (After all, many people over the world may well go their whole lives only using the fiat currency of their given nation.)

However, in the borderless and dynamic world of cryptocurrency, people often own more than one type of coin. A person might have a portfolio of many coins. A person might have a varied portfolio that includes Bitcoin, Ether, Litecoin, Monero, and maybe some more obscure coins as speculative investments. Each of these coins exist on their own blockchain, and none of these blockchains talk to each other.

At some point, you might want to trade your ether for bitcoin, your Monero for Litecoin, your Litecoin for Ether, your Bitcoin for something, or your something for something else altogether. In a centralized context, you could do this on an exchange and trust the exchange to handle the details of the transaction.

This approach is no different than processing a transaction through a bank or making a payment with a credit card. The buyer and the seller both trust the centralized bank to lock the funds in the process and to ensure that all parties end up with the correct assets, or that a refund is processed if the transaction cannot complete to everyone’s satisfaction.

Centralized exchanges function in exactly the same way as centralized banks.

But a number of good reasons exist why you might not want to do your trades through a centralized authority. You might not trust the centralized authority. The fees the centralized authority charges might be too high.

The website of the centralized authority might go down or have other accessibility issues. You might sacrifice a certain amount of privacy by using a centralized authority.

In a trustless, decentralized environment, a cross-chain atomic swap would do everything a centralized authority would do. The “cross-chain” nature provides a bridge between separate blockchains. The “atomic” nature ensures that the trade (the “swap”) would complete successfully or that all assets would be returned to their original owners.

Cross-Chain Atomic Swaps 101

Live action shot of an atomic swap.

Cross-chain atomic swaps can be implemented on any blockchain that supports hashlocks and timelocks. Suppose Alice has a-coins, and Bob has b-coins, and they want to trade. They do not have any reason to trust each other, and they do not want to use a centralized exchange. A high-level overview of how this would work in a cross-chain atomic swap is as follows.

1) Alice chooses a random value X and hashes it to create the private hashlock to lock the transaction. She keeps this value to herself for now and posts Transaction 1 to send her a-coins to Bob. These funds are currently unspendable because they are locked with the hashlock.

2) Bob waits for Transaction 1 to be confirmed, then posts Transaction 2 sending his b-coin to Alice. He does not yet know the value of X to unlock the hashlock, so all funds are unspendable at this point.

3) Alice waits for Transaction 2 to be confirmed, after which she posts Transaction 3, in which shares the value of X with Bob.

4) Bob posts Transaction 4 which unlocks the funds. Bob now has coins from Alice he can spend, and Alice has coins from Bob she can spend.

All four transactions must complete for the overall transaction to complete; this is what is meant by the word “atomic” to describe this process.

Proper time management is required for the above protocol to work.

For instance, if for any reason Alice never posts Transaction 3, all funds could be frozen and lost forever. This is where a timelock is useful. If Transaction 3 does not occur within a specified time frame, the timelock cancels the transaction, and all funds are reverted to their original owners.

And since Alice has the value of X to begin with, the implementation must be very careful to prevent any shenanigans Alice might attempt. The time between Transaction 3 and Transaction 4 is also important in this regard. If the algorithm is not implemented correctly, exploits exist where Alice could share the value of X but not give Bob time to retrieve his coins from the transaction.

The above approach describes the TierNolan algorithm (for a discussion of the topic, see this thread: https://bitcointalk.org/index.php?topic=193281.msg2224949). This protocol has different variations. For example, if Alice and Bob both trust each other, the number of transactions can be reduced and simplified.

One convenient place to locate this protocol would be to take a lot of the processing off the primary blockchains and implement the logic in a side chain like the Lightning Network.This would reduce the burden of miners having to process all the transactions on the primary blockchains, and it would speed up the overall process.  You can find an explanation of the Lightning Network here: https://coincentral.com/lightning-network-beginners-guide/

Final Thoughts

Other algorithms exist, and for good reasons. One entirely different way of doing cross-chain atomic swaps separate from the TierNolan protocol would be to create a whole new blockchain outside both the a-coin blockchain and the b-coin blockchain.

Olaus Magnus Historia om de nordiska folken. Bok 4 – Kapitel 5 – Om varubyte utan penningar. – Utgivningsår 1555.

This new blockchain would be an intermediary between the two separate cryptocurrencies. This new blockchain would understand both a-coins and b-coins and be able to process transactions between them. This approach would require network nodes for this new blockchain and miners willing to invest the resources to process the transactions.

The new network would require a governance model to ensure that transactions were processed fairly and securely and that none of the parties would have any advantage over the other.

Regardless of the method used, in a decentralized, trustless world with a multitude of cryptocurrencies in use, cross-chain atomic swaps will inevitably become an important component of cryptocurrency trading.

Originally posted here

written by Wilton Thornburg