Cypherium

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What is Cypherium?

The first thing you probably want to know is: What is Cypherium? Well let’s try and answer that question in this article.

Let’s summarize it all in a single paragraph;

Cypherium is a layer 1 enterprise ready highly scalable and permissionless blockchain platform, with a hybrid consensus mechanism that utilizes both proof-of-work and HotStuff Byzantine fault tolerance.

That’s allot of terminology, lets step through each term and explore what It means.

1. Layer 1

Cypherium is a Layer 1 blockchain, this means (in this context) that Cypherium is not built on top of an existing blockchain (like for example the Bitcoin Lightning network on top of the Bitcoin blockchain), but built from the ground up.

2. hybrid consensus mechanism that utilizes both proof-of-work and HotStuff Byzantine fault tolerance

Cypherium uses a proprietary consensus algorithm called CypherBFT, a complex and ingenuously designed algorithm that in all fairness is a bit hard to summarize and explain without selling it short, so if you are really interested, I would suggest reading the whitepaper however, let’s try and summarize it.

A very complex problem in the decentralized blockchain space is achieving consensus or agreeing upon the state of the blockchain. The reason this is so terribly complex is that the blockchain itself is formed by a large number of decentralized nodes (miners) and each of these nodes can fail, act maliciously, turned off etc. So, the consensus algorithm needs to be able to deal with a high amount of uncertainty, thus it needs to be highly fault tolerant, yet still provide a high number of TPS (transactions per second)

In traditional PoW (Proof-of-Work) blockchains like Bitcoin the mining process takes on two related yet distinct functions.
– The first function of the PoW mining process involves electing a leader (the winner of the PoW challenge) who is responsible for generating a new block.
– The second function consists of verifying the transaction data that exists within the block.
For example bitcoin issues new blocks with a rate of approximately one block every 10 minutes, where each block has an approximate size of one megabyte (MB) resulting in approximately 3-7 transactions per second (tps).
however the most significant problem of bitcoin is it’s lack of transaction finality, referring to impossibility to “reverse” a transaction, a bitcoin transaction is considered to be final after 6 block confirmations (approximately one hour)

However, there is nothing inherently beneficial about using a single process for both of these tasks. Here is where Cypherium’s proprietary CypherBFT consensus algorithm comes in, it separates these two functions into two distinct blockchains in order to improve the efficiency of both.

The CypherBFT consensus algorithm uses PoW (Proof-of-Work) in order to select validator nodes that make up the “election chain”, only nodes (miners) who complete the PoW challenge successfully are considered to join the validator committee, note that PoW is exclusively used in order to form the validator committee (thus efficiently securing the blockchain) this “election chain” or “key chain” contains new key blocks.

Note - The Committee includes one validator node that serves as a "Leader" validator node also called "Crown" node (the Leader node is changed periodically), regular validator nodes are referred to as "Associate" validator nodes.

- The validator nodes (or committee members) are only known to each other as being validator nodes but are indistinguishable from normal nodes to the rest of the network, adding an extra layer of security.

Transactions on the other hand are recorded on the “transaction chain” and verified by the HotStuff algorithm, while “pointing” to the appropriate key block. This results in a transaction runtime of only 20-30 milliseconds (ms) where only Two-to-three confirmations are required to accept a proposed block into the blockchain, thus the transaction finality is around 90ms to put it differently, Cypherium offers instant finality.
Besides the tremendous transaction speed CypherBFT also boosts security, where traditional PoW blockchains are vulnerable to the 51% attack this is no longer the case with Cypherium, since CypherBFT is Byzantine fault tolerant taking over the blockchain would require not 51% but 66% of all nodes to be compromised, a sheer impossible task.

The steps involved in the block generation process are:

The leader node (crown or leader node) proposes a block and waits to be verified by validating nodes (committee members).
If 2/3 of the quorum is reached, the block is accepted and added to the blockchain.
Following its acceptance, the new block is broadcasted to all nodes.
Honest, verified nodes will then reject any messages from nodes that do not meet the PoW challenge.

Note Cypherium has a fixed size validator pool of 21 nodes (committee members), each node (miner) running the Cypherium miner is eligible to become part of the committee after successfully completing a PoW challenge.

- A committee member will rewarded for transactions and mined blocks.
- Committee membership rotates so each miner gets a chance to become a committe member.
- There is no fixed blocktime or fixed blocksize, new blocks are introduced if there are transactions

3. permissionless

Cypherium is a 100% permissionless blockchain, everyone can participate and run a node (driving decentralization), thus everyone can participate in the consensus process that blockchains uses to validate transactions and data. You can imagine that this makes the fault tolerant part of the CypherBFT consensus algorithm so immensely important.

4. Scalable

Cypheriums scalability is achieved by its dual chain structure where the election chain selects Proof-of-Work leaders in order to mine new blocks and the transaction chain is responsible to verify the transaction data within those blocks. The only limitation is network latency and bandwidth capacity of individual nodes.

5. Smart contract platform

Cypherium supports the Ethereum Virtual Machine offering effortless portability for the majority of smart contracts in existence today and Java (natively) the most used coding language in the world. This allows a vast number of existing devices access to blockchain technology and enables the enormous Java developer community to start using blockchain technology without having to switch to a new language.

So, what does this all mean for us?

Reduced security threats; The high degree of decentralization and open character combined with sophisticated CypherBFT consensus algorithm, greatly reduces the likelihood of Sybil and 51% attacks become impossible (require 66%).
Extremely Fast transactions; Users no longer need to wait on transaction confirmation, Cypherium offers instant finality.
No minimum charges for smart contracts; Having eliminated price minimums, businesses of all sizes can benefit from using the platform.
No fixed block size; Faster, more adaptable processing allows the technology to scale.
An instant ledger to process real-time transactions for billions of users.
A smart contract platform to enable enterprise use cases for all industries.
A trusted database to connect CBDCs, digital assets, and dApps around the world.
An open network to enfranchise any participant or contributor.
A secure vault to combat the increasing threats to data privacy.