Distributed Ledger Technology
With the explosion of Bitcoin and the Blockchain, there has been a massive increase of interest in Distributed Ledger Technology. Distributed Ledgers powered by a Byzantine Consensus method are a totally ordered list of transactions, where each transaction represents a change of state of the system. Machines can scan the distributed ledger to determine the current state of the system. In addition, through cryptographic signatures, transaction integrity is ensured. Once a transaction is submitted to the ledger, it cannot be modified or changed by malicious actors.
Decentralized Distributed Ledger Technology is especially interesting because the ledger is not stored in any single location, meaning the records kept are public and easily verifiable. Transactions can change the state of the system through Smart Contracts which are publicly visible. Because of the totally ordered list of transactions, smart contracts will always operate correctly as programmed.
There is no greater use for this technology than in Real Estate, as the eventual shift of deed-verification (title) to a decentralized system will allow a more accurate and less costly transfer of ownership of real property. This technology will allow professional escrow services to be replaced with smart contracts. It will also allow rentals and sales across national borders and for Buyers and Sellers to utilize our public and open database to communicate more easily.
We chose to launch Quarteria on the Neo platform. This decision is due to the nature of the Neo platform. Traditional Distributed Ledger platforms, such as Ethereum, rely on Proof of Work to order their transactions. Proof of Work relies on miners calculating solutions to difficult cryptographic problems to achieve consensus. This allows for maximal decentralization, however, Proof of Work based solutions have a very low transaction throughput. Ethereum, for instance, only has a throughput of around 16 transactions per second. This is not enough to handle any production application. CryptoKitties itself, a simple asset trading game on the Ethereum network, brought the Ethereum network to its knees and actual performance of the application was abysmal. A global Real Estate listing and transaction service will require much more than 16 transactions per second in order to perform at a reasonable rate.
Neo solves this problem by utilizing Delegated Byzantine Fault Tolerance. Delegated Byzantine Fault Tolerance is a message passing algorithm to solve the Byzantine Generals Problem. This is unlike Proof of Work which relies on solving hard problems. Thus, transaction ordering is not limited by how fast a cryptographic problem can be solved – it will occur after a few rounds of message passing. Theoretical distributed systems research shows that Byzantine Fault Tolerant systems still guarantee the integrity of transaction order as long as there are 2f + 1 good nodes out of 3f + 1.
The only limiting factor is the speed of the network. This allows Neo to scale to a speed of greater magnitude than Ethereum. Neo has the ability to process thousands of transactions per second.
The Neo community is also fairly mature, unlike other Ethereum alternatives. There are many interesting projects and libraries that are undergoing development on the Neo platform. NEX, or Neon Exchange, is a platform for transferring cryptographic assets on Neo that plans to support cross chain asset transfers. This would allow one to send Ethereum with a Neo smart contract. We plan on utilizing the NEX platform to allow properties to be transacted in multiple cryptocurrencies.
Neo presents a very promising solution to the performance problem in distributed ledger technology. We plan to utilize Neo to allow Quarteria to facilitate real time auctions, transactions, and overall wide spread use.
InterPlanetary File System
InterPlanetary File System (IPFS) is a decentralized peer to peer file system. Files uploaded to IPFS are accessible by the world through its hash and are censorship resistant. No entity can remove files from the IPFS system.
One challenge with public distributed ledgers is that storing data on the Blockchain does not come free. To run a true listing service that people will use, we need to allow Sellers to upload photos and video of their listing. Furthermore, when transactions are settled, documents must be uploaded as well. Storing all of this on Neo will be prohibitively expensive.
To get around this issue, we chose to utilize IPFS. Instead of storing content directly on Neo, we plan on having clients upload their listing media and legal documents to IPFS and only the hash of the files will be stored on the distributed ledger. Thus, we can still provide a rich listing database service with property transactions without prohibitive fees.