Biomimicry in Blockchain: How Constellation’s Design Is Based On Natural Systems

This piece is largely based off an interview I had with our CTO, Wyatt Meldman-Floch, where we took a deep dive into what inspired him to create Constellation, and more specifically, what fuels his underlying engineering ethos based around integrating natural law. Enjoy!

In our interview, we covered everything from thermoeconomics and dendrograms, the origins of Constellation and the universe, to DaVinci and Dutch string theorists and everything in between, so please forgive me while I attempt to properly formulate a jump off point for this quantum roller-coaster ride inside the mind of Wyatt.

The bulk of this piece is meant to illustrate how Constellation’s network can be compared to existing complex structures in nature. Wyatt breaks down how he approaches Constellation’s architecture by taking inspiration from and in some cases, mimicking, natural orders. Read on to find out how this approach is revolutionary and unlike any other approach in the blockchain space.

Constellation’s Inspiration

 

Constellation was spawned in part from many deep talks that Wyatt and Ryle would have after a days work during their time together at Radius, hanging out around the E-Trade building in downtown San Francisco. They were working in the midst of the big data boom, and they’d spend a lot of time discussing how they’d ideally envision things being done differently in the big data space.

Wyatt had also created a program called Big Fish, Little Fish, where nodes would host data and merge data like a little fish getting eaten by a big fish, whereby the big fish would represent increasingly trusted data points which had a greater idea of the network’s state. The creation of this program served as a sign of things to come:

“We spent a lot of time looking at patterns within primitives. If you’re looking at planet earth, it would be chemicals. If you’re looking on the internet, it would be points of data (the chemicals and data being the primitives) and looking at patterns in between them. That’s sort of how we started forming the ideas that would later become Constellation.”

Fields Medal winner Stephen Smale

Wyatt cited many mathematical geniuses as sources of inspiration for Constellation. From Fields Medal winners (which is essentially the Nobel Prize equivalent for Mathematicians) Stephan Smale, who did pioneering work in the 60’s tying Partial Differential Equations (PDEs) to economic markets and Alexander Grothendieck, to Dutch String Theorist and Nobel Prize winner Gerard’t Hooft. Maurice Herily, a Professor Emeritus at Brown, was also cited as a significant influence for Wyatt. “Herily analytically modeled distributed systems and proposed that we treat distributed systems in the same way we treat particle systems,” said Wyatt. All of these theorists, thinkers, and academics influenced Wyatt and the engineering team’s approach regarding the structure of Constellation.

If Herily could be seen as putting the “math on paper,” the creators of Twitter’s Algebird library for creating data models based on abstract algebra could be seen as turning that “math on paper” into “math on code.” Wyatt cited them as his modern-day engineering inspirations, saying “I’m really inspired by algebraic data types and projects like Cats and Algebird which extend the use of abstract algebra to create data structures that allow data processing to be reasoned about like a math problem.”

Taking all the influences into account, with Constellation, Wyatt and Ryle wanted to do things a bit differently than what was happening in the big data space.

Taking Cues From Nature – Entropy, Biomimicry & Thermoeconomics

 

Reverse engineering at it’s finest

Before we dive into the technicalities of how natural law is built intoConstellations tech, I asked Wyatt what inspired him to turn to nature for inspiration in the first place. “Often, it’s easier to try and reverse engineer a solution to a problemthan to start from scratch. We do this in programming every day. Fortunately, in many situations, we can see anomalies in nature, be it biochemistry or physics, which give us clues to the underlying structures that make solutions work.  The inspiration for most people who come up with new paradigms of understanding, like pure mathematicians, often comes from reasoning about natural phenomenon independent of existing frameworks.”

One aspect of natural law that is heavily featured in Constellation’s approach is thermoeconomics. For those who aren’t familiar (don’t worry, I wasn’t either) with this field, it’s a school of thought that maintains that human economic systems can be modeled as thermodynamic systems. Wyatt primarily integrated this in regards to thinking about the underlying utility of our utility token, $DAG. “I spent a lot of time thinking about what the ‘utility’ of a ‘utility token’ was, and it seemed to me that the utility of a token was actually the quantization of a good or service that the token represented. If that were the case then what is the underlying value of any cryptocurrency? It certainly has something to do with ensuring the validity of data.”

How can you communicate an exchange of value without an intermediary? In our society, that intermediary typically comes in the form of money, but in nature and physics, that unit is typically entropy. Wyatt thinks entropy (as it is a topologically invariant measure) is indicative of an underlying homotopy type hierarchy that the universe follows with regards to scaling. This notion is codified into Constellation as the underlying connective thread that ultimately normalizes the network’s data, allowing all processes to speak the same language. Speaking to this point, he described how this plays out in the network itself:

“Let’s model the actual dynamics of our distributed system based upon these physical and economic laws. It allows us to directly connect every operation that a network does directly to a unit of value. Every operation of a network, not just every unit of data, can be stored and maintained. People who care about the validity of their data, who care about encryption and privacy and using a blockchain, who want that provenance over their data… they care about whether it is true or not, and how we achieved that conclusion. If every bit of data that leads up to that conclusion is based on entropy, then you can build a model on that. You can normalize the data, and then you have all different processes speaking the same language. The same way an ecosystem or an economy communicates.”

Davinci’s flying machine sketch

In Wyatt’s presentation at De:Centralize 2018 (linked below), he said: “If you want to solve a problem, the smartest thing you can do is just copy what nature did.” The popularized term for this notion is biomimicry,  which is defined as the “imitation of the models, systems, and elements of nature for the purpose of solving complex human problems.” A famous example of biomimicry can be seen in Davinci’s early sketches of a flying machine (as seen above), based upon his observations of birds. I asked Wyatt to follow up with some other examples of how this is evident in the architecture of Constellation, and he shared several other fascinating parallels.

“Constellation’s network topology resembles a scale-free network. This structure pops up in the natural ecosystem or the cosmos (correlation does not imply causation, but the universe looks like a dendrogram, so does a neuron and a tree, etc.) because they are systems that are continuously applying some sort of optimization rule, typically based in the reduction of entropy. It’s an optimization problem that acts effectively like a balancing act. In the same way that plants and animals die, are reborn and transmuted into different forms of energy, our network needs to autonomously reorganize itself, like an ecosystem adapting to climate change.”

We see this same resilient autonomous pattern play out in modern day economics, as major corporations die out, get bought up or get swallowed whole by a different entity. “That’s why people model economics after thermodynamics, because it’s just like nature,” said Wyatt. In regards to Constellation’s Proof of Reputable Observation protocol, which assigns a reputation-based score to nodes based on prior accuracy, validity, and trust, Wyatt once again looked at nature for inspiration. “If you’re creating disorder within the greater system, the system will self- correct you and put you in your place to find its equilibrium.”

In Wyatt’s eyes, each blockchain protocol can be viewed as a different species, and with Constellation, he envisions the network serving as a baseline “pollinator” for any potential use case. “Bitcoin is like the crocodile, that has existed since the time of dinosaurs. We want to be like a pigeon—the most common, adaptable species that flourishes and finds utility in any ecosystem. Alternatively, we want to be the bees, something that helps to pollinate all potential use cases and be that underlying infrastructure.”

Fractal-ly Speaking…

 

In Wyatt’s presentation mentioned above, two notions popped up a fair amount — Homotopy Types and the dendrogram structure of a hierarchical DAG, which minimizes entropy in a system. I asked Wyatt for a layman’s breakdown of how these concepts appear in nature, and how they each factor into the design of Constellation.

John von Neumann, AZ Quotes

He started by sharing the work of the foremost mathematician of the early 20th century, von Neumann, who essentially came up with the basis for Constellation’s dynamic partitioning scheme a long time ago. Wyatt, take it away:

“What that question asks is ‘how can we model higher dimensional spaces that generates something abstract like a fractal?’ Without getting too into it, the methods used in fractal geometry (what pure mathematicians use to understand recursive, self-similar structures [like a hylo/metamorphism]) are primarily focused on something called measure theory, which is important, but they don’t translate explicitly to non-linear structures in programming like the f-algebra of a recursion scheme.”

What Wyatt and the engineering team did was extend that idea to something called Homotopy Type theory, which is how they think about the structure of data and processes in functional programming. In Wyatt’s words, “there’s this thing called the Curry-Howard Correspondence which ensures that a ‘Typed’ program is actually a proof. In this regard, by implementing these ideas with functional methods, we can assume that our code implements a model like something from continuous geometry.”

Illustration of the close-packing of equal spheres in both hcp (left) and fcc (right) lattices via Wikipedia

Why on earth would we want to have a fractal structure like this? According to Wyatt, “it’s because fractals have special space preserving properties which help us embed (store) information efficiently, and storing information efficiently is at the root of how we approach scalability.” A 2D fractal is a way to infinitely put information in a space and pack it in there, and this fractal structure is what allows Constellation to create an infinitely unbounded space to pack data into.

Constellation’s logo itself echoes this notion as the solution of closest packing of spheres (a hexagon) represents what we’re trying to do, which is “expand the closest packing of all information in all dimensions.”

I followed this up by asking Wyatt about the fractal nature of Constellation’s DAG, and if any other existing DAG based protocols, such as IOTA, are designed with a similarly fractal nature in mind. “Holochain is close, but Holochain is built for API level servers, nothing more, nothing less. Constellation is built for everything. We want to be the glue to connect the bottom line with something as slow and store-valuey as Bitcoin.” For a more thorough breakdown of how Constellation’s hylochain differs from the likes of a typical blockchain or other DAG protocols, check out the infographic below.

Constellation (via SpecRationality)

Conclusion

 

Hopefully, you’ve just gleaned a telescopic look inside the mind of Wyatt and the origins of Constellation, and how much of its underlying architecture is inspired by biomimicry. I hope this piece fully conveys how unique Constellation’s architecture truly is while giving you some further insight into Wyatt’s inspiration for creating Constellation.

Until next time,

Anthony

 

Become a Constellation Member

How Constellation is Different Than Blockchain

Over the past few years, Blockchain technology has taken the world by storm. It has been extended to a broader category of Distributed Ledger Technology (DLT). Constellation proposes an enterprise grade DLT that is scalable, secure, and inclusive. We recently published a detailed business whitepaper discussing our technology. In this post, we dive particularly into how the technology in Constellation is different than a traditional Blockchain.

Constellation Update – Testnet Stability and Tokenomics Update, Upcoming Events, Engineering Updates and Recent Press

Dear Constellation Community,

It’s been an exciting couple of weeks. Our Engineering team has hit a milestone with the stabilization of our Testnet and we published a new token model favoring community and validator rewards.  Moving into next week Wyatt and team are presenting at Scale by the Bay and our first Hyperledger meet-up. For details on all the above and more read on…

Network Stability Update

We’re excited to announce that our testnet has stabilized. Utilizing a DAG framework, we sent over 120 Million test transactions throughout the weekend across remote servers. This marks a major engineering milestone as we move closer to The Node Operator Program via Testnet 2.0. You can view a snapshot overview of confirmed tps, transactions sent, balances, etc. below.

 

This first test gives us the baseline for the lowest level ‘rank’ in our network.  It only goes up from here.” – Wyatt CTO

Despite not having fully optimized networking calls and data structures for memory or lightweight devices, we’re seeing consistent and predictable CPU loads across the network with no memory issues on the second cheapest cloud VM tier. Nodes are running at one quarter load (25% CPU) and using roughly 500 MB heap memory. We are easily seeing 500-1000 tps on a single partition with further optimizations to come.

Seen below is the the size of the snapshot folder on one of the nodes. It works out to 1500 TX per MB of storage. More specifically, 1.25e8/8e4 = 1562 TX per MB. This is a little larger than BTC’s average transactions size, but it includes extra metadata collected during testing and will be optimized further.

“There’s still a lot of work to come, but this is a major stability improvement. We’re trying to ensure node operators can run cheap instances and still participate in the network at high load, and we’ve made major strides in demonstrating that. This is still only on a single partition and resource offering type, which means as we expand tests to higher partition counts and more diverse node types, we should see even more dramatic speed improvements.”

Ryle – VP of Engineering

Interested in becoming part of the Constellation network? We are looking for  node operators who will host some of the early nodes on the network (in a testnet environment). You’d be providing valuable feedback, and earning $DAG tokens for doing so. You can register to run a node here.

 

Become a Constellation Member

Constellation Tokenomics Update

Dear Community,

I wanted to provide you all with an update on our newly revised tokenomic model. As you may know, our old model had the founders holding 20% of the tokens, with the Foundation having another 26.6%, resulting in a combined total of 46.6% of tokens being centrally held. We have always preached about being decentralized and putting our community first, and wanted our model to reflect that even further. This update establishes an improved model that is more community and validator rewards focused.

With this enhancement to our token model, we want to reaffirm community confidence in what we’re building and show, not just tell, that we believe strongly in the future of this business and our network.

So, what changes have we made? In relation to their previous percentages, both the founders and the Foundation are reducing their allocations and shifting to double the validator network. The founders are now holding 64% fewer tokens, and the Foundation is holding about 27% fewer tokens. See below tables. Most importantly, we are doubling the total validator reward pool to incentivize node validation.

We want developers who are excited about building on top of Constellation to have more access to rewards. This new model will not affect anyone who previously purchased tokens, nor will it increase the token supply. We’re not minting any new tokens, we’re merely opening up a larger piece of the network to those that build, adopt, and validate transactions on our network. We hope that this will foster developer growth and a stronger community sentiment for years to come.

OLD MODEL

Founders 20.00% 800,000,000
Partners & Advisors 13.43% 537,065,000
Foundation Tokens 26.32% 1,052,810,165
Community Tokens 2.00% 80,000,000
Validator Rewards 20.00% 800,000,000
Private Sale 18.25% 730,124,835
Total 100.00% 4,000,000,000

 

NEW MODEL

Founders 7.20% 288,000,000.00
Partners & Advisors 13.43% 537,065,000.00
Foundation Tokens 19.12% 764,810,165.00
Community Tokens 2.00% 80,000,000
Validator Rewards 40%  1,600,000,000.00
Private Sale 18.25% 730,124,835
Total 100.00% 4,000,000,000

 

If you have any questions on the new token model or the decisions behind it, please reach out to us on Orion or Discord.

Sincerely,

Ben Jorgensen CEO

Disclaimer

This paper is for informational purposes only and is not a statement of future intent. Constellation Labs makes no warranties or representations as to the success of the DAG tokens (the “Tokens”), Constellation Labs or related entities (“Constellation”), or the achievement of any activities noted herein, and disclaims any warranties implied by law or otherwise, to the extent permitted by law. No person is entitled to rely on the contents of this statement or any inferences drawn from it, including in relation to any interactions with Constellation, the Tokens or the technologies mentioned in this paper. Constellation disclaims all liability for any loss or damage of any kind (whether foreseeable or not) which may arise from any person acting on any information and opinions relating to Constellation, Constellation’s products and services, the Tokens contained in this statement, or any information which is made available in connection with any further enquiries, notwithstanding any negligence, default or lack of care. Whilst every effort is made to ensure that statements of facts made in this paper are accurate, all estimates, projections, forecasts, prospects, expressions of opinion and other subjective judgments contained herein are based on assumptions considered to be reasonable as of the date of the document in which they are contained and must not be construed as a representation that the matters referred to therein will occur. Any plans, projections or forecasts mentioned in this paper may not be achieved due to multiple risk factors including without limitation defects in technology developments, legal or regulatory exposure, market volatility, sector volatility, corporate actions, or the unavailability of complete and accurate information. All information contained in this document is intended to be indicative only and is not a statement of Constellation’s intentions or a promise of any kind. Constellation expressly reserves the right to to modify its plans at any time. In that event, any new documentation will supersede this document and be made available at https://constellationlabs.io.

Definitions:

 

Foundation Tokens:

These tokens are available for issuance to the employees, consultants, and advisors of the Constellation Foundation, in each case with a vesting schedule commensurate with the token allocation. For example, token grants to employees will be subject to a four-year vesting schedule with a 12-month cliff. Additionally, tokens held in treasury are available to further the mission of The Constellation Foundation.

Community Tokens:

These tokens are used to incentivize community participation in the Constellation ecosystem through airdrops, developer initiatives, and academic grants that will be available through our community portal.

Validator Rewards:

These tokens are issued to validators on the Constellation mainnet when it is launched in 2019. They are intended to be released over a period of 10 years to validators on the Constellation mainnet.

Constellation Announcement: Company restructure and strategic update

Dear Constellation Community,

First off, I would like to take the time to apologize for being silent and not having a consistent cadence of communication. Constellation has been growing and going through some organizational shifts which has caused us to go heads down. Even while we were restructuring the organization, we made headlines by being one of the first scalable protocols to be a part of the Linux Foundation’s HyperLedger (the genesis of modern computing) and joining the largest mobility consortium, MOBI.

Brendan is stepping down as the CEO of Constellation Labs and as a member of the Constellation Foundation board to focus his attention on his passion for the consumer adoption of blockchain technology in developing economies and nations. Constellation has been restructuring the organization where the founders empower cross-departmental alliances and decision-making. The company has named Ben Jorgensen CEO and Brendan’s tokens remain with the foundation.

As a result, Brendan sees an opportunity to leverage his strengths to other blockchain and community-based initiatives. Given his strengths that include product development, growth, and design, as well as engaging with a broad community, he sees the opportunity to support Constellation and the blockchain space as a whole while not being a part of the day to day operations. Stepping back from Constellation will allow the organization to focus on building and deploying the Constellation mainnet. Constellation wishes Brendan the best in his future endeavors.

I’m very excited to accept the position of CEO and thankful for the team’s input and validation. A lot of my prior experience to Constellation has been growing and advising early to mid-market organizations. All of the partnerships and engineering developments have been made by empowering the organization with a streamlined vision and implementing  OKR’s (a method of measuring milestones and successes in the organization).

Going forward, I will be doing the following in order to facilitate ongoing communication with our amazing investors:

  • Monthly Token Holder Update: which you will receive on the last Monday of every month
  • Quarterly Token Holders Calls: to review strategy and state of the organization
  • Weekly Company Highlights/Newsletter

Below is a breakdown of our new strategic direction. In the meantime, if you have any questions please feel free to reach out directly in email or suggest a call time.  

Focus on Technology

Ultimately, our promise to you and the wider community is to build groundbreaking Distributed Ledger technology for consumers and businesses alike. We’re re-allocating considerable funds to the core engineering team, and away from marketing and community initiatives. The industry is moving at an incredible speed, and in order to maintain the interest of enterprise groups, we need to accelerate the roadmap towards adoption. We’ve established direct relationships with a number of clients (direct and through consortiums), and they need to see open APIs and a functioning network to test potential integrations.  In order to deploy and retain our current conversations, the engineering team will continue to expand as we invest in new tools, infrastructure, and personnel.

Building on Recent Partnerships

We are now members of some of the most influential blockchain consortiums, which include the likes of IBM, Cisco, and FedEx among their partners. We’re at the table with these companies, and we need to pull additional resources to maintain our active presence in groups like HyperLedger and MOBI. These partnerships are not passive and require continued management from a marketing and business perspective. We’ve seen a huge return in value from investing in these groups, and we need to continue to do so.   

Why is this so exciting?

Essentially, these organizations are how enterprise organizations vet out the opportunities in the blockchain industry. Additionally, Linux is a foundation that basically invented modern-day computing. Our participation enables us to create a loud voice in the industry. We are already seeing PoC (proof of concept) requests come in from large organizations. This is a one-to-many approach and gives us more access, more feedback, and more clout across partnerships.

Delay International Community Building

Over the past few months, we’ve seen a direct correlation of code updates, whitepaper releases and engineering updates having positive effects on $DAG and the overall community sentiment. On the flip side, we’ve seen poor returns from paid global community building. This is mainly due to the current bear market cycle we are experiencing and a general shift in the ecosystem. Developers and investors alike favor actual tech buildout and use cases over a purely speculative basis. Therefore, we will continue to grow organically by leading with technology versus paid outreach. We have an incredible team of community managers who we will continue to work closely with and engage the wider crypto community — these initiatives are not going away, and we will restart our efforts in line with our tech rollout and an expected market turn.

PR Announcement

We’re excited to announce a new partnership with Sutherland Gold, Silicon Valley’s premier PR agency who counts Bill.com, Cloudflare and SurveyMonkey amongst other clients. They have successfully helped launch a number of blockchain businesses, such as Circle. Our partnership marks a renewed approach to press relations, with an emphasis on enterprise. They are helping us shape our messaging and build momentum around our new and existing industry partnerships.

 

Sincerely,

 

Ben Jorgensen (CEO)

Constellation Sponsors MOBI Grand Challenge

MOBI and the Trusted IoT Alliance (TIoTA) have recently launched a three-year series called the MOBI Grand Challenge (MGC). The MOBI Grand Challenge is a four-month long competition which will demonstrate the potential use-cases of Blockchain in coordinating vehicle movement and improving transportation in urban environments. The ultimate goal is the creation of a viable, decentralized, network of blockchain/DLT connected vehicles which will be able to reliably share data, coordinate behavior and ultimately, improve urban mobility.

Constellation Labs is proud to announce its sponsorship of the MOBI Grand Challenge. Constellation has contributed $DAG to the overall prize pool, which will include over one million dollars of token prizes to be awarded over the three-year Challenge series. Constellation’s Engineering Team is also offering a mentorship, which gives participating teams the ability to message them for specific questions regarding their expertise.

With Constellation’s focus on the Mobility and Autonomous Vehicles markets, we see the MOBI Grand Challenge as a bold and meaningful showcase of the promise of Distributed Ledger Technology,” said Constellation’s VP of Business Development, Benjamin Diggles. “We view our sponsorship and promotion of this event as a way to accelerate developer and enterprise participation to yield the best results possible for a foundation we believe in.”

The launch of MGC took place on October 12 in New Mexico and will end with a public demonstration of selected  technologies at an event hosted by the BMW Group, MOBI community member, in Munich, Germany on February 15, 2019.  

Check out the official video from MOBI:

https://m.youtube.com/watch?v=0tL9_E_dtqk

About the MOBI Grand Challenge:

The MGC is loosely modeled on the 2004 DARPA Grand Challenge, where robotic vehicles competed to autonomously navigate through the Mojave Desert. While the most successful vehicle traveled only 5% of the course, the 2004 event ignited worldwide interest in autonomous cars and launched billions of dollars capital investment. Just eighteen months later, when the event was repeated, five vehicles completed the full course and 22 of the 23 teams surpassed the best result of the previous year.

The challenge includes, but is not limited to exchanging data and payments with other vehicles and infrastructure; operating in a tokenized environment by registering assets and payments on a public or permissioned ledger; negotiating rights of way, access, and use of infrastructure in a cooperative and distributed ecosystem; adjusting behavior to maximize efficiency from providing services, buying fuel, managing pollution, congestion and carbon footprint, etc. Winning teams will be expected to demonstrate how blockchains and related technologies – distributed ledgers, cryptography, tokens, and consensus mechanisms can leverage the high-speed connections and computing power of future vehicles to make mobility safer, cleaner, faster, more efficient and accessible.

MOBI has selected The Blockchain Society (TBS) to assist with organizing the Grand Challenge. TBS works behind the scenes with innovative startups and projects to advance blockchain technology integration in the mainstream.  For more information on TBS, visit theblockchainsociety.ca/.

Follow the links below for additional resources and how to get involved:

More Information on the MOBI Grand Challenge.

Register For The MOBI Grand Challenge

MOBI Grand Challenge Official Press Release

 

 

Constellation Update – Engineering Updates, Panel and MeetUp Recaps, Airdrop 4 Update, Upcoming Events & Recent Articles

Dear Constellation Community,

 

Coming off of a busy couple of weeks of events, we’ve got lots to share with you all — including recaps of Wyatt’s panel at SFBW, our LA MeetUp with Element Group, as well as a video from the recent FinTech panel in Portland. We also have Engineering and Airdrop 4 Updates along with a new exchange listing, upcoming events, and recent articles.

Read on for all that and more, but first, a quick announcement about the frequency of our Weekly Updates. We’ll be switching over to a bi-monthly cadence of these emails, so you’ll receive the next one in two week’s time. Developer and Airdrop updates will be sent separately.

Community Survey

We’d like to get to know our community better in order to tailor our weekly content output.  Please take a few moments to fill out a quick questionnaire:

Constellation Community Survey

Engineering Updates

Snapshotting

Snapshots form the basis for finality in our protocol. It’s the last puzzle piece to our nodes.

Resolution

Resolution encapsulates the process of ‘stitching’ together data into a DAG. The data in this case are Bundles of Transactions.

Conflict Handling

In the case of a conflicting Bundle, we need to apply a logic to decide which to keep.

Node Stability

Memory issues causing nondeterministic crashing have been fixed

Auth and Join/Leave

Joining and leaving our cluster requires notarization with all nodes.

Data Store Cleanup

Our database interface has been updated and is much friendlier to use.

Wyatt at SFBW

Wyatt (CTO) wrapped up San Francisco Blockchain Week by speaking on the Next Generation Protocols panel at a Scalability event hosted by OK Capital, Luna Capital, Kosmos Capital, and Republic!

Other panel members included Shahaf Bar-Geffen (CEO, COTI), Lindsey Maule (Founding Director, Luna Capital), and Kyle Armour (Director of Technical Partnerships, Hashgraph).

Element Group

Last week we partnered with Element Group to host a Peer-to-Peer Blockchain Mixer in Santa Monica, CA. The evening started off with brief 20-minute presentations from Ben Jorgensen (COO, Constellation Labs) and Stan Miroshnik (CEO, Element Group). Ben and Stan outlined the key technologies their firms are currently building and how they fit into the future of the blockchain sector.

Thanks to everyone who came out, and to our friends at Element group for hosting us. This marks the first of regular LA MeetUps.

FinTech and Product Innovation Panel

Our VP of Business Development, Benjamin Diggles, recently spoke on a panel in Portland, Oregon titled “FinTech Product Innovation and the Intersection with Blockchain”. Check out what he, Shamir Karkal (Founder and CEO Sila; Co-Founder, Simple Bank) and Christian Maynard-Philipp (COO, Third Party) had to say about the topic in the video below:

Cryptochats presents FinTech Product Innovation & Blockchain tech meet up

Airswap Listing

We’re happy to announce our new Constellation Space on AirSwap! Users can now make any size OTC trades of DAG to KYC/AML-verified users with no counter-party risk. 

Airdrop 4 Update

Emails kickstart ing AirDrop 4 KYC process went out last week.  If your application is still pending, please don’t worry.  Our legal team is reviewing through to early next week. Expect a response soon! If you have any AirDrop related questions, visit our AirDrop FAQ  post.

Events

World Crypto Con, October 31-Nov 2, Las Vegas, Nevada

Hyperledger MeetUp SF, November 12, San Francisco, California – Details to come.

Scale by the Bay, November 15-17, San Francisco, California

Recent Articles

A Look at the Past Year in Blockchain

2018 has been an exciting year for blockchain and DLT. Give our latest blog post, Trends From The Trenches, a read for a deeper look at the major trends in the space, and how Constellation fits into some of them.

5 Reasons Why Blockchain Technology is Failing at Mass Consumer Adoption

COO Ben weighs in on the five obstacles we need to solve before blockchain technology can achieve true widespread adoption, as originally outlined by Deloitte. Give it a read on Medium.

We’re Hiring!

Constellation is looking for a Distributed Systems Engineer to join the Core engineering team building a third generation DAG protocol that uses reputation based consensus.

The perfect candidate has an in-depth understanding of distributed systems, distributed consensus, and hands-on experience building and testing data intensive applications at scale.

You will work directly with the Core engineering team and will be a key part of the protocol development.

Think you’d be a good fit? View the full job listing and apply here!

 

That’s it for this week. Until next time!

Sincerely,

The Constellation Team

 

Become a Constellation Member

 

Trends from the Trenches

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us…

That famous intro from the Tale of Two Cities feels like quite a fitting metaphor for the up and down nature of the blockchain space. While I’ve only been riding this roller coaster and working in the industry for just over a year (which automatically certifies me as a blockchain expert), I’ve witnessed many fluctuations and trends both rise and fall in the space.  For this piece, I thought it’d be interesting to sum up the major trends I’ve seen develop throughout 2018 while observing how Constellation fits into some of them. I’ll be drawing from both personal experiences and citing online resources along the way. Without further ado, let’s dive in.

The Emergence of Blockchain Consortiums

 

Over the past year, there has been a dramatic rise in the number of blockchain consortiums in existence. I think the space as a whole has realized that the only way we’re going to solve the lingering issues of scalability and widespread adoption is by working together (as cheesy as that may sound), and stepping outside of our individual blockchain boxes or silos. Per a recent article on this trend by Deloitte, A recent study counted some 61 blockchain consortia across a dozen industries globally—significant growth versus the prior year.” Blockchain consortia are groups of companies that come together with the joint purpose of advancing shared objectives, which might include “defining use cases, setting standards, developing infrastructure and applications, and operating a blockchain network.”

To take a moment to toot our own horn, Constellation has been extremely active on this front as of late, as we’ve become members of both the HyperLedger and MOBI consortiums. To further cite the relevance of consortiums, HyperLedger, and the Enterprise Ethereum Alliance, just announced their collaboration last week, with the goal of “accelerating the adoption of blockchain technologies for businesses.” With the rise of blockchain focused consortiums has also come an increased level of accountability and professionalism. Here’s what our CMO Zac Russell had to say on the subject: 

teamOver the past few months, the rise of consortiums and collaborative groups signals the realization that protocols and projects can’t work in isolation.  It’s early days, and weneed to share knowledge, resources and ultimately create integrations across platforms. This is the only way the industry will be able to scale and deliver on the promises and hype of 2017.

 

VC Investment Up, ICO Funding Down

 

2018 has seen a drastic rise in VC funding, while traditional ICO funding has plummeted 90% since the start of the year. Per a report from the blockchain research group Diar, VC investment in blockchain and crypto through the first three quarters of the year totals at $3.9 billion — up a staggering 280% from 2017. On the flip side, traditional ICO fundraising has been on a steady decline since raising $2.4 billion in the month of January, with only $300 million raised in all of September.

VC investment in blockchain/crypto (Source: Diar/Pitchbook)

What’s the reason for this sudden flip-flop in funding models?

Diar points to the overall market correction that plummeted token values, and left companies seeking an alternative model of fundraising, one that is also much more regulatorily compliant.

“Non-equity ICOs are not only scrutinized by the regulators but the founders also have very misaligned incentives as there is no contractual obligation to deliver a product – a reality that to date seems to be the case with few launches, and even less adoption. The amount that was raised through ICOs, as well as the number of projects successfully completing an ICO, is now approaching a one year low.”

Our COO Ben Jorgensen penned a recent article that echoed a similar sentiment, calling for a more mature and balanced fundraising approach that embraces both the VC and traditional cryptocurrency investor worlds:

A new era in cryptocurrency is upon us, and it will include participation and insight by both institutional and cryptocurrency investors, while ultimately requiring blockchain technology companies and the applications built on existing technologies to behave like mini-IPO’s being accountable to a myriad of personas from tech enthusiasts, crypto communities, users and enterprise organizations, and investors.”

Regulation Flirtation

 

Regulation has been another hot topic item throughout the past year. In comparison with more progressive countries such as Malta and Gibraltar, I think it’s fair to say that the U.S regulatory efforts have been quite lackluster up until this point. While we’ve seen a handful of states take some slightly progressive stances (hooray, you can pay your taxes in Bitcoin in a few years!), on the whole, it’s been a muddled and confusing effort from Uncle Sam. All the alphabet agencies seem to have differing opinions on how to classify cryptocurrencies, as the SEC, the CFTC, the FEDs, and the IRS can’t come to a consensus on crypto. Here’s what the billionaire venture capitalist Tim Draper had to say on the matter:

“I did not anticipate that the regulators would put a dark cloud over all this innovation. I had hoped that there would be some clear simple rules and we could then get on with it. But I guess there are a lot of old-school banking lobbyists trying to cling to the status quo. Years from now, governments will be judged by how well they manage this transition from fiat to crypto.”

To avoid picking on just the U.S here, they aren’t the only ones who can’t make up their minds. China, Korea, Russia, and the EU all have varying and dizzying takes on crypto regulation. I would love to see the U.S be a bit more proactive and become regulatory trailblazers, but time will tell.

In regards to governments who are managing this transition in a more pro-crypto way, let’s take a look at the tiny nations making big moves, Gibraltar and Malta. On July 5th, the Maltese Parliment passed 3 bills into law and became the first country in the world to provide clear and official regulations for those working in the blockchain and DLT space. Shortly before these laws were passed, Binance announced that they were moving their entire headquarters to Malta, prompting the birth of the nickname “The Blockchain Island” for Malta.

Why are these relatively tiny island nations paving the way for progressive crypto regulation? One Maltese official for Digital Economy Innovation, Silvio Schembri, made a great point to this regard. While the major nations are busy worrying about how to regulate the financial gains from cryptocurrencies, he outlined how Malta is more focused on the long-term development of the underlying technologies:

“We are not looking at short-term gains here, but rather at the long-term evolution of blockchain and DLT technology. For example, if we think about an issuance of an ICO, operators typically present a white paper with the ICO details. While other jurisdictions are looking at the white paper to see if it’s certified, it’s the technology behind that white paper that implements what is written. Currently, no one is looking at the technology. That is something that we are doing differently,” said Schembri.

This isn’t to say that there is no hope for the U.S to make haste and come to some sort of consensus on how to regulate the industry. Just as recently as September 25th, over 50 industry leaders convened in Congress for a roundtable discussion to address many of the unsolved regulatory issues. One of the chief complaints echoed by various participants was the notion that the 72-year-old Howey Test should not be the measuring stick to determine whether or not a cryptocurrency is a security. The SEC has already declared that they don’t intend on changing security laws to cater to crypto, so it remains to be seen what actually shakes out from all of this. To sum this all up, here’s what Coinbase’s Chief Policy Officer Mike Lempres had to say on the subject: We all want a fair and orderly market, we want all the same things regulators do. It doesn’t have to be done in the same way it was done in the past, and we need to be open to that.” Amen, brother.


Hungry Bears and the Year of (f)Utility

 

Let’s start off by killing two birds with one token (see what I did there?) and get the crypto markets price decline out of the way first, along with the hyped up notion of 2018 being the “Year of Utility”. As Coindesk and others optimistically declared towards the end of 2017, 2018 was to be the year when we’d “see tokens that provide true utility float to the top.The general hope was that all the upward momentum and hype that the industry generated would roll over into the following year, and businesses and consumers alike would actually be utilizing dApps and integrating these blockchain projects into reality, while we’d simultaneously shift out of the speculative money-hungry nature of the crypto craze. This hasn’t exactly played out.

doge-laden market cap guide to 2018

As illustrated by the handy Doge-laden graph I’ve made above, we’ve been ensnared in a nearly 10-month long bear market ever since the bulls went running wild last through last Fall and Winter. Ethereum and other big name tokens are all currently sitting around their lowest valuations of the year, and it’s anyone’s guess as to where things go from here. While this sharp drop-off probably lost a lot of new investors some hard-earned dinero and shook out a lot of shitcoins, I don’t think this decline in the total market cap is all that worrisome.

graph via Chris McCann

Many have correlated these early days of crypto-adoption to the early days of the internet, and I think that’s a fair assessment. As seen in the above graph, we’re right on track with the early days of the internet in terms of user growth and adoption, and I expect that trend to continue to follow suit. When I first stumbled down the crypto rabbit hole around a year ago, I was quite high on the notion that all of these new and disruptive (don’t you just love that word?), world-changing projects would be usable within the comings months of the year. I thought my life would be more decentralized by now, and that my brain would be uploaded on to the blockchain and I’d be eating bitcoin for breakfast. Fast forward to the present, and I’ve come to realize how nascent this tech still is, and how long it actually takes to frickin’ code the future.

This year hasn’t exactly seen the predicted rise of utility-driven companies and tokens either. It’s been more of a year of futility rather than utility. A year of failing ICO’s and floundering shitcoins,  and confusing regulatory guidelines. Personally, I see the bear market as a sign of maturity, not just in the sense of shaking out those who dreamed of riding ICO’s and random token investments to the moon and beyond — but in the sense that it’s forced those within the industry to focus more on the things that actually matter — which is driving adoption, building usable and scalable tech, while letting the market figure itself out. Despite the bear market, companies and enterprises alike have started to band together in order to hasten the development and adoption of DLT tech (namely in the form of the aforementioned rise of consortiums).

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Constellation Update – Engineering News, Event Round-Up: Past + Upcoming, & Recent Press

Dear Constellation Community,

This past week has been one for the books! We’ve been out on the ground attending and speaking at events in Santa Monica and San Francisco, California, Portland, Oregon, and even New Mexico! Meanwhile, our Engineering team has been hard at work building. Read on for an overview of what’s gone on, and what’s coming up!

Engineering Update

  • Updated and tested facilitator selections in new streaming flow
  • V2 skeleton cluster migration finished
  • Fixed memory issues in checkpoint combiner
  • Updated download functionality to V2
  • Prototype for conflict resolution functions
  • Improvements / refactoring for data resolver
  • Implemented simple snapshots for tip merge validation
  • Prototype for tip consistency validator
  • Refactored database methods to use typed actors
  • Added new tests for nodes joining cluster

Event Round-Up

Between SF Blockchain Week going on in San Francisco and Block-Con happening in Santa Monica, as well as a panel in Portland, OR, this past week has been an exciting one on the West Coast for the Constellation Team.

To start things off, COO Ben spoke at a Blockchain Brunch Panel in San Francisco last weekend featuring a spirited, audience-led panel chat.

On Tuesday, the Constellation team in LA attended the Block-Con Beach Crawl which kicked off a series of Block-Con events throughout the week.

Meanwhile in Portland, OR, Constellation VP of Business Development, Benjamin Diggles spoke on a panel titled “FinTech Product Innovation and the Intersection with Blockchain” hosted by Sila. Other panelists also included Shamir Karkal, founder and CEO of Sila, Christian Maynard-Phillip, COO of Third Party Technologies, and Isaiah Steinfeld, Entrepreneur in Residence at Nike.

On Friday, Zac (Head of Marketing) was back at Block-Con speaking on the future of Distributed Ledger Technologies. It was a great turn-out, and we’ll share a video of the presentation in the coming weeks.

Also on Friday, Benjamin Diggles was back at it in New Mexico where he attended MOBI’s Colloquium. The event aimed to promote and advance standards and accelerate adoption of blockchain, distributed ledger, and related technologies. If you’d like to watch the event, it’s available for viewing on MOBI’s Facebook page.

The team will be wrapping up the week at Blockchain Week SF Friday afternoon with a panel discussing DAG.

Upcoming Events

 

LA MeetUp w/ Element Group, October 18, Santa Monica, California

Constellation Labs and Element Group invite you for an evening of networking and drinks. We’ll start with brief 20-minute presentations from Ben Jorgensen (COO, Constellation Labs) and Stan Miroshnik (CEO, Element Group). In their respective presentations, Ben and Stan will outline key technologies their firms are currently building and how they fit into the future of the blockchain sector.

World Crypto Con, October 31-Nov 2, Las Vegas, Nevada

Scale by the Bay, November 15-17, San Francisco, California

 

Recent Press

Zac’s (Head of Marketing) commentary  on marketing and hiring for the blockchain startup space was featured in DMN this week – The Missing Link In Blockchain? Building The Right Team.

 

Until next week,

 

The Constellation Team

 

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