Symbiont CTO talks about smart contract systems

Adam Krellenstein , co-founder and CTO of Symbiont, said Ethereum is the only smart contract system other than Symbiont, but in general, Ethereum is not very suitable for financial applications.

Commenting on Ethereum, Krellenstein said:

“It’s an interesting project and they’ve accomplished a lot. But overall, it’s not very suitable for authorized accounts and financial applications.”

“Writing smart contracts in Solidity and running them on the Ethereum blockchain is not ideal and has a slim chance of success in our target market. You need a smart contract system more like ours, with anonymous accounts and a more stable and secure code base.”

Krellenstein also contributed to Counterparty, a non-profit, open-source community-driven project software suite and protocol for the Bitcoin blockchain. Together with Counterparty's other founders Robby Dermody and Even Wagner, Krellenstein founded Symbiont, an institutional software provider that delivers a full suite of smart contract solutions. CEO Mark Smith later joined them.

In some ways, Symbiont extends Counterparty’s implicit consensus approach. In August, Symbiont published its own secure authentication on the Bitcoin blockchain, defining terms, conditions, and financial business logic in the form of a smart contract.

“Symbiont is independent of Ethereum and has its own innovative smart contract system. I think there are only two smart contract systems at the moment – ​​Ethereum and ours. Ours is written in an existing high-level general-purpose language, and that’s all I can reveal. Symbiont has the same functionality as Ethereum, it’s also Turing-complete and can run across account systems.”

“We are working with some of the largest financial institutions who are very interested in this technology and see the potential to disrupt and rebuild the financial network architecture.”

R3CEV

The R3CEV blockchain project is growing rapidly. More major banks are joining the R3 consortium every week. Separately, as a separate experiment, Ethereum offers an Ethereum smart contract toolkit on Microsoft Azure cloud service. Krellenstein said he couldn’t comment on these projects at this time, but did point to a recent report by Tim Swanson, head of market research at R3, that examined colored coins and watermarked tokens.

Krellenstein said one of the pitfalls of the watermark token system is that when tied to metadata, the liquidity of bitcoin is broken.

“With Symbiont and Counterparty, that’s not the case because you don’t associate metadata with the output, you just store it on-chain. Colored coins need to be associated with bitcoin, but Counterparty tokens or Symbiont smart contracts don’t.”

“The combination of smart contracts and distributed cryptographic ledgers has great potential to change the way financial instruments are issued, traded, created and managed. We firmly believe that smart contracts are the way to go because you can build the entire financial instrument on a cryptographic ledger, not just part of it. Our system is more powerful than a token system. You can write a token system in a smart contract system, but not the other way around.”

“There are companies that are applying token systems (even more primitive than what Counterparty used a year ago) to finance. There are also open source projects that use smart contracts for the general purpose of public accounts. But Symbiont is focused on the application of smart contracts in the financial sector.”

Rootstock

Rootstock, which aims to use hybrid sidechains and merged mining on the bitcoin network to achieve smart contract goals, will be officially launched in Mexico City on December 4 and 5. People compared Rootstock to Counterparty/Symbiont. Krellenstein reminded people of the security issues of merged mining. In merged mining, miners on the bitcoin blockchain use their hashing power to secure another blockchain. He said the economic incentive mechanism of merged mining is that miners on the parent chain can attack the side chain at will.

“Looking at systems like Rootstock, I think there are a lot of architectural tradeoffs that we don’t want, so there are different approaches. Merged mining is pretty much the only complete solution for securing decentralized sidechains. You always require the miners of the parent chain to mine your sidechain in good faith. There is no economic incentive for honest and trustworthy behavior, but your own chain remains honest.”

“The biggest alternative is Counterparty, and what Symbiont actually uses — implicit consensus. No need to create a second blockchain, no need to have a second currency, no need to combine the two, no need to mine on a second chain, just store all your data on the main chain. You need to separate the consensus logic from the transaction logic.”

“For example, that’s what Counterparty does. Counterparty is parasitic on Bitcoin, where all the data and transaction history is stored inside Bitcoin; embedded in the normal Bitcoin transaction. Bitcoin miners and users don’t know it’s there. It’s hidden inside, and then the Counterparty network sits on top of it using the data and the peer-to-peer network.”

“It’s a really cool idea, and the security model is really cool. It doesn’t change the economic incentives, you inherit all the security of the underlying chain, and you don’t need goodwill or anything like that with miners. Bitcoin miners have been mining Counterparty transactions for almost two years without knowing it, but it’s there. We thought that was the best way to add new functionality on-chain using implicit consensus, rather than using sidechains. There are some use cases for using sidechains, especially when you’re trying to deal with the bitcoin cryptocurrency.”

Securities Settlement

In recent speeches and discussions, system architects from institutions such as Barclays Investment Bank have highlighted the complexity of industrial-scale trading and settlement environments, where smart contracts can be useful. Fusion of these systems involves securities settlement, when algorithms seek the best way to settle a combination of long and short positions, for example, allowing hundreds or thousands of trades to be settled at lightning speed.

“The executable logic is actually very simple,” Krellenstein said. “Our smart contract system is designed to manage that financial logic, and it works very simply and clearly. Business logic like foreign exchange trading and the display of these financial instruments are very simple for smart contracts compared to tokens.”

As for when to deploy the integration and how to work with existing systems, it is most likely to be replaced bit by bit where conditions allow, and gradually switched over, so that the existing system can be smoothly migrated to the new system.

“We are also very concerned about such markets, where there is no effective and complete technology to manage these tools. So, for blockchain and smart contracts, there are many blue oceans in the capital market, where we can demonstrate the power of technology without removing many obstacles.”

“Our smart contract system is part of a complete solution that can be exposed to traditional financial technology APIs, so it can be plug-and-play when replacing existing systems. While changing the architecture, there is no need to change its usage method. For example, traders can still use the original method to trade these products on the screen.”

Original article: http://www.ibtimes.co.uk/symbionts-adam-krellenstein-theres-really-only-two-smart-contract-systems-ethereums-ours-1530490
By Ian Allison
Translator: gsj
Reward address: 1DHs7hZMdx6tgUHdqXiub3XrovrF6Pte7y
Editor: printemps
Source (translation): Babbitt Information