QITMEER , FINANCE AND ISLAMIC ECONOMY

The concept of blockchain as a standalone technology started gaining popularity in 2015. Prior to that, it was just known as a data structure underlying Bitcoin technology. In Satoshi Nakamoto’s white paper, the two words “block” and “chain” appeared together. It was only called “a chain of blocks.”

Bitcoin’s rise into popularity resulted in it being categorized as Blockchain 1.0. With Ethereum making waves as a decentralized platform for applications that run exactly as programmed, more and more people began to categorize Ethereum as Blockchain 2.0. Now the market is battling to see who will be named Blockchain 3.0. Direct Acyclic Graph or DAG may be it.

BlockDAG – In the context of distributed ledgers, a blockDAG is a DAG whose vertices represent blocks and whose edges represent references from blocks to their predecessors. Evidently, in a blockDAG, blocks may have several predecessors instead of just one; this will be described in more detail below.

DAG ( Directed Acyclic Graph) is a directed graph data structure that uses a topological ordering. The sequence can only go from earlier to later. DAG is often applied to problems related to data processing, scheduling, finding the best route in navigation, and data compression.

Bitcoin has always been inefficient due to the proof-of-work (POW) system. Blocks can’t be created simultaneously. The linked storage structure allows for only one chain on the whole network. All the transactions occurring around the same time are kept in the same block. Miners then compete for the block validation. One single block is created about every 10 minutes.

The first community to come up with the idea of changing the chain-like storage structure into a DAG of blocks was NXT. If the time of mining remains unchanged, the storage could be extended by X times with X blocks on the network at the same time.

Structure - Blockchain is a distributed ledger or database, replicated over all the nodes in the network. This distributed ledger is forms a linear chain of blocks of transactions in an unalterable, chronological order. Transactions are bundled into blocks of transactions to be validated. Validated blocks are added to a chain of previously validated blocks.

By comparison, a DAG is a network of individual transactions linked to multiple other transactions. There are no blocks of transactions in DAG networks. If blockchain is a linked list, a DAG is a tree, branching out from one transaction to another, to another and so on.

Consensus - In blockchain, consensus is achieved by validating transactions block by block. Various solutions exist for this, one is the ‘Proof of Work’ consensus mechanism that requires users (AKA miners) to race to solve a computationally strenuous problem. Successful validation may earn the miner a fee to be paid by other users.

In a DAG, individual transactions provide validation for one another. Network users are both miners and validators, although they cannot validate their own transactions. This typically means that in a DAG there is little or no need to pay fees.

The blockchain combination with DAG still comes from the idea of side-chains. Different types of transactions are running on different chains simultaneously. DAG of blocks still relies on the concept of blocks.

Orphan rate problem of blockchain - There are many barriers to blockchain scalability, including processing speeds, disk I/O, RAM, bandwidth, and syncing new nodes. While these limitations can be addressed with improved hardware and technology, a major barrier exists on the protocol level: the orphan rate. Orphans are blocks that are created outside the longest chain due to unavoidable network propagation delays.

Paradigm of blockDAG - The notion of a fork is organically absorbed in the DAG framework, so it seems worthwhile to consider if a DAG could do better than the chain/linked list structure of blockchains. Accordingly, with Satoshi’s proof-of-work system as the starting point, we need to make one change to the mining protocol in order to yield a blockDAG: blocks may reference multiple predecessors instead of a single parent. A canonical way to extend the ledger is to have blocks reference all tips of the graph (that their miners observe locally) instead of referencing the tip of the single longest chain, as in Satoshi’s original protocol.

Advantages of BlockDAG –

  • It allows for confirmation times on the order of seconds, at least when there are visible double-spends and conflicts
  • It allows for a large transaction throughput, limited only by the network backbone and endpoints’ capacity; as a derivative, it implies low fees
  • It contributes to mining decentralization by allowing for roughly 100,000 blocks per day, which reduces the incentive to join a mining pool
  • It avoids the risk of orphaning, which comes with many additional benefits (such as Layer Two compatibility)
  • It eliminates selfish mining by rewarding all blocks without discriminating between on-chain and off-chain blocks

Qitmeer is the first public chain that is dedicated to serving the ecosystem of ethics finance, socially responsible investment and Islamic Finance, which aims to act as the overall financial infrastructure to seamlessly converge all these areas, thereby enhancing financial inclusion.

Cutting Edge Public Chain Based on BlockDAG – Qitmeer stands for the state of the art of distributed ledger technology up to present, which adopts an open and technology that is rooted in the typical chain data structure of Bitcoin. Meanwhile, through the optimization of ledging, the fully decentralized, more efficient and truly fair collaborative model of mining is used to achieve a desirable balance of typical blockchain metrics among the security, openness, fairness and scalability. In order to serve tokenization of ethical finance, socially responsible investment and Islamic Finance, Qitmeer adopts the underlying structure equal to security of the Bitcoin network with the following main features:Qitmeer adheres to classic POW(Proof -of-Work) based on the BlockDAG(Directed-Acyclic-Graph) consensus protocol, which aims to achieve the desirable balance among security, openness, fairness and scalability. Qitmeer developed a unique OP_TOKEN asset issuance mechanism model based on the UTXO (Unspent Transaction Output), which is secure and efficient to support the tokenization of large volume transaction-level liquid it and its frequent secondary market trading activities. Thus, montage OP_TOKEN asset issuance mechanism organically converges the ecosystem of Islamic Finance, ethical finance and conventional finance, which is in line with Maqasid al-Shari’ah and other Social Development Goals (SDGs).

Qitmeer aims to act as the guardian for the core financial ethics values – Prophet Muhammad, prohibited speculations and Usury(Riba) immediately, and this philosophy eventually became the cornerstone of the Islamic economy.

MEER, the native currency of Qitmeer, acts as the guardian of the spirit “In Math We Trust”
KAHF is the literal translation of semitic language, which implies to use money in a wise and pure way.

Qitmeer ecosystem focuses on ethical finance and financial Inclusion – Since the initial inception of Qitmeer project, the business proposition is to satisfy the niche market of socially responsible banking, insurance and investment, and the Islamic Finance Industry, which aims to undertake the tokenization of trillions of dollar assets.

Unique mintage mechanism of reserving base currency for asset tokenization –The tokenization of assets on Qitmeer requires a reserve of base currency Meer which restricts the speculation and prevents malicious activities; thereby optimizing Shari ah-compliance of Islamic Finance, which gives rises to an equitable and sustainable ecosystem.

Qitmeer Technology Architecture -

Security - Nearly Real Time Instant Confirmation.

Highly scalable throughput

secures mainstream adoption.

Scalability - Fast confirmation to seconds order,

high throughput to thousands order.

Fairness - No opportunity cost to join mining pool.

Inclusion - Multiple cross-chain protocols

to integrate various use cases.

Intrinsic Value Guarantee - Tokens are reserved by native currency,

which is mined by Proof-of-work.

Assets Authentication Measure - Require an ecosystem endorsement

for anchors to issue asset.

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