GameofBitcoins covers various topics relating to cryptocurrency news, tutorials, analysis and ICO reviews. He has a large following of fans which we felt would benefit from discovering Geeq’s new Proof of Honesty (PoH) protocol and how it will be a game changer for the Internet of Things (IoT) as well as businesses in various fields that require a low cost, secure scalable solutions to grow.
We had loads of brilliant questions but unfortunately we only had time to answer the 11 questions below.
John picked his best 10 questions and is awarding them with 80 $Geeq each!
Not a bad reward for educating yourself !
Below is a list of questions picked from the community and answered by our Founder & Chief Economist John P Conley, Enjoy!
Q1. Can you provide a simple explanation of Coalition proof equilibrium?
Good question. There are many different equilibrium notions in game theory. The most common is Nash equilibrium. Simply put, at a Nash equilibrium no single agent would benefit from changing his strategy provided that no other agent changes his strategy. In other words, a Nash equilibrium proof against unilateral deviations.
The problem is that in many situations, blockchain especially, people/agents/nodes can coordinate their behavior and act as coalitions for their mutual benefit. The mining pools in bitcoin are a good example of this. Nash equilibria are not proof against coalitional deviations.
What this means is that if honest behavior by nodes is only a Nash equilibrium, the blockchain can be corrupted by coalitions of nodes. If you think that collusion, pooling, and Sybiling are possible, you must have a consensus protocol that is proof against deviations of coalitions. In other words, honest behavior should be a coalition-proof equilibrium in the sense to group of nodes, even all the nodes acting together, would not be able to profit by choosing anything else but honesty.
In Geeq’s PoH protocol, honest behavior by all nodes is the only coalition-proof equilibrium. In PoW, PoS, PoA, and even DAG based protocols, this is not the case. Honest is usually one of many Nash equilibria, and is not coalition-proof.
Q2. Why does Geeq use a Proof of Honesty Protocol? What are the competitive advantages of POH?
That is a big question! Let me try to give as an short answer as I can.
PoW uses the longest chain rule and so the majority of the hashing power gets to decide which transactions are valid and the state of the current ledger. If 51% of the hashing power in the mining pools is dishonest, they can take over the ledger and make it say whatever they like.
In PoS, the majority of the stake gets to decide the correct state of the ledger. They can also roll back or rewrite the ledger. If 34% of the stake belongs to dishonest agents, they can halt block writing. If 67% are dishonest, they can take over the ledger completely.
A similar story holds for PoA and DAGs.
The common element in all of these approaches is that the majority gets to decide what the truth is. If the majority says an apple is an orange, users either have to accept it, or walk away from their accounts.
PoH is a completely different approach to validating a blockchain. Users, who hold tokens an the chain, individually decide if the ledger is correct. Nodes must prove to the users that they are keeping a correct ledger (prove their honesty).
If a node can’t or won’t prove its honesty, users can ignore it. For example, if you send me 100 $Geeqs and the only place that transaction appears is on chains kept by nodes that can’t or won’t prove their honesty, then I know that the transaction is not valid. This is just like trying to pass crudely forged check. No rational person would accept a check that he knew could not be cashed.
Summing up, in PoH: Users are empowered to protect themselves. It does not matter if a majority of the nodes are dishonest. Users can detect and ignore them. This means we only need one honest node in the system. If users can find an honest ledger, they will always use it no matter how many dishonest versions are kept by dishonest nodes. Buying ASICs or staking tokens, or even Sybiling does not threaten the security of Geeq since users pay attention to honest nodes, not a majority opinion of dishonest ones.
Sorry to go on, but this is really the center of what we are doing at Geeq.
Q3. Your platform is able to generate a huge amount of data speaking about users preferences, strategies and behaviors. Are you already using those data? Do you plan to use them in the future as an additional source of profit?
I understand your concern. Actually, we have designed Geeq not to collect this data. In fact, this data is never seen by any of the validators or by anyone else on the platform.
Like most blockchains, account numbers are based on public keys. There is no information there that directly ties accounts to real world users. The blockchain and ledger are publicly visible, so transactions and balances can be seen by anyone. Geeq has no special access.
This approach is called “pseudo-anonymous” because inferences can be sometimes be made from this anonymous data.
For example, most transactions take place in daytime, so a transaction that was logged at 12PM New York time, is not likely to have come from a user in Mumbai. If Walmart started accepting Bitcoin or Geeq, it might be possible to identify their account from the number and nature of the incoming transactions. Users can undertake additional measures to make it harder or even impossible to make such inferences, but generally, this is not a major concern.
The real weak point in crypto are the exchanges and the real banking sector. To move fiat money on to and off of a blockchain platform, both of these intermediaries are typically involved. (they can be avoided in some cases, but it creates difficulties).
Banks and exchanges are regulated and must perform KYC/AML checks. This connects an individual to crypto holdings, at the entry and exit points. This has nothing to do with Geeq, Bitcoin, or any other platform. Once you have tokens on the chain, you are anonymous as you want to be.
Q4. Can you please highlight more on the decentralization aspect using your technology. Also in the future, is it possible to quantify the level of decentralization and economic incentivization?
This is something we are very concerned about at Geeq. We are decentralized at several levels.
First, validating nodes in the network are anonymous and can join or leave the network as they choose. This means they can’t be pressured by governments, courts, or criminals to do anything they don’t want to do. Geeq could be pressured, but we don’t control the ledgers. If we were part of a validation network and we were forced to be dishonest, users would simply ignore us.
Second, we have a multi-chain architecture. I like to think of Geeq as local public blockchain. GeeqChains can be created to serve specific purposes (process subway fares in London, or create a chain of custody record for opioids, for example). These chains are interoperable and $Geeqs can be moves to any chain a user wishes, but there is no central or mother chain. Even if someone somehow succeed in destroying one or more of these GeeqChains, the rest of the system would not be harmed.
Third, honesty and correctness of any GeeqChain is judged by its users. In other words, we don’t have to rely on the majority of a decentralized network of nodes. We don’t even rely of a majority opinion of users/account holders. Instead we allow each user as an individual to determine for himself if a transaction is valid, which is about as decentralized as you can get.
Without true decentralization, you may as well just use a database.
Q5. There is a common bottleneck in PoW and PoS chains. Big stakeholders can manipulate voting / governance as they wish. How does Geeq’s PoH solve this problem?
Thanks for the question. In one of the answers above I described how buying hashing power, staking tokens or making Sybil’s does not threaten the honestly of a GeeqChain ledger. Wealth cannot purchase influence in Geeq by design. Governance is something completely different. I find it puzzling that anyone would think it is a good idea have governance on blockchain.
Blockchain is supposed give users certainty that rules will be followed, smart contract correctly executed, and transactions honestly and irreversibly recorded. Blockchains should allow us to cooperate, trade, and create value with people we don’t know and have no reason to trust because the rules of the game are known and fixed.
If committees of wise men or women, coalitions of nodes, majority stakeholders, or anyone else can change the rules, then what is the point of consensus?
Whoever controls the rules, controls the ledger and all of the accounts. In other words, what matters is what the voters decide since they can over-rule and roll-back decisions made by the validating nodes.
At a more pragmatic level, what is likely to happen is that most users will ignore their governance powers, will not become informed about proposed rule changes, may be tricked into voting against their interests, or simply will not vote.
Consider how people vote (or don’t vote) in the real world. The result is that a narrow group of not necessarily benevolent agents will gain effective control and then change the rules to benefit themselves at the expense of the rest of the users.
At Geeq, code is law. We stick by the rules we promised.
Q6. I am a crypto investor and I only care about prospect of a crypto that I chose, tell me the reason why I should choose your token over the existing one? What is your token advantage that can convince me to change from my favorite token?
That’s a very rational attitude! There are two things that drive the value of any currency, including crypto: expectations and the quantity theory of money (QTM). One thing that differentiates Geeq for any other project I can think of is that we have built these into the foundation of our token economics.
I won’t go too deeply into the QTM, but the basic idea is that given a fixed number of tokens in the monetary base, token price is driven by the amount of value that people want to exchange using the token (transaction demand) and how frequently the token changes hand (velocity).
Expectations come into in it through something called efficient market theory (EMT). Basically, this says that the today’s token price must approximately equal the average expected price tomorrow.
If people believed that a token price will go up tomorrow, then arbitrage would cause them to buy it today until the current price matched tomorrow’s price (and the inverse if people thought the price would be lower tomorrow).
At Geeq, the fundamental use of the token is to pay nodes for their services and for nodes to stake good behavior bonds (GBB). This means the more use the platform sees, the greater the transactions demand and the higher the token value. Even though GBBs are relatively small, our multi-chain ecosystem means that many nodes will post this stake. The more tokens that are staked, the lower the velocity and the higher token value.
Our business model is focused on what we call high volume, low transaction value use cases.
For example, recording IoT telemetry, creating audit trails for financial transactions, and micropayments. Our low transactions costs make whole new categories of applications possible. For example a medical or industrial device could do a telemetry write to a GeeqChain once a minute for $50, and once an hour for less than $1 per year.
I have gone on too long, but our unique algorithmic momentary policy (AMP) is designed to manage expectations and stabilize token value. The AMP manages the circulating supply of tokens to meet the actual needs of the nodes and the platform. The AMP is not designed to make Geeq a stable coin, but it reduces the impact of low information, low trading volume driven volatility and make token value more dependent on it use on the platform. In turn, reduced volatility will make the token more useful in both exchange and as a store of value which should increase token demand and value. A virtuous circle.
Q7. Most of investors just focus on the price of token in short term instead of real value of project. Can you tell us the motivation and benefits for investors to the Geeq token long term?
As a company, Geeq takes a part of each transaction fee paid by users. This means that we only make money if we succeed at driving wide-spread adoption and large volumes of transactions.
As I say above, our comparative advantage is high volume, low transaction value applications. Our plan is produce ready-to-go applications that enterprises can use without having to change their information systems.
Geeq will allow enterprises to do things they were never able to before, machine to machine markets, compliance and liability protection, for example. Geeq’s applications will start at the edge rather than at the core of enterprises’ operations as a value added service that is easy to adopt.
We also think that fostering an active developer community and developing partnerships is crucial. We have set aside a portion of revenues from token sales and transactions fees for just this purpose.
The upshot is that our business model is structured that that the only way we gain is if we succeed in getting wide spread use of the platform and token. This aligns our incentives with token holders and platform users.
Q8. Well I know the transaction cost of Geeq is $ 0.001, how does Geeq serve such high TPS at such low cost? What types of DAPPS are supported by Geeq?
I really like this question!
The hard fact is that the cost of processing transactions must be borne by the system’s users somehow. It might be through inflation and transactions fees, as in Bitcoin and Ethereum, transactions fees alone, providing services to the network, buying and staking tokens, or anything else. Regardless, the costs have to be paid or nodes will not support the system.
First, each of the validating networks that support individual instances of GeeqChain (recall Geeq is a ecosystem of separate, interoperable chains), is relatively small. Networks of between 10 and 100 nodes are used. It is much cheaper to have transactions distributed to, validated, and replicated on 25 computers than on 10,000.
Delegated PoS and PoA based chains exploit this as well.
Second, Geeq uses a hub and spoke network instead of a gossip network. The hub rotates with each block, but hub and spoke reduces the bandwidth needed for transaction, block, and other message traffic to the minimum possible. In gossip networks, messages are repeated and transmitted, which wastes bandwidth.
Third, Geeq’s transaction, block and ledger structure are designed to be a lean as efficient as possible. This both reduces the amount of message traffic and the hard drive space required to store the chain. Transactions are less than .5kB.
Fourth, Geeq does not use PoW and so does not need to pay for the associated electricity used. We also don’t require nodes to lock up large amounts of costly staking tokens.
Put this together, and the resources needed for one transaction are the following:
(1) transmit the transactions three times (user to node, node to hub, and hub back to node) plus some headers, approximately 2kBs of bandwidth is needed.
(2) Do two or three signature verification’s, depending on block size.
(3) Do a ledger update with the valid transactions, a few other small computations, and a few reads and writes to disk.
(4) store approximately 1kB for some number of years.
Multiply this by the number of nodes in the network.
The majority of the cost is bandwidth, it turns out, but overall, this is very small resource cost. For a ten node network, we estimate this is the thousandths of a cent. The hundredth of a cent transaction fee you mention allows us to pay nodes twice the cost of the resources they use and leave one third left over for the platform.
Q9. Where do you and the Geeq’s team see the world of blockchain being in years to come, and how will Geeq change the landscape of the cryptocurrency space in years to come?
Bitcoin is awesome. It does what it was designed to do and does it well. It is also expensive to use, does not scale, and is not very versatile, Ethereum addressed the versatility issue with smart contracts, but it is also expensive, not very scalable, and is difficult to use securely.
More recent PoS based projects are a mixed bunch. Some can scale, some are relatively cheap to use, and some offer better DApp and smart contract approaches than Ethereum.
I think adoption has been slow in part because PoS just does not offer a good security guarantee, and in practice, most platforms are quite centralized. Would you recommend tokenizing the New York Stock exchange and putting trillions of dollars of value on the EOS chain, for example?
What Geeq brings first and foremost is a security model that is strong enough for the real world: 99% Byzantine Fault Tolerance and Strategically Provable Security. We also bring limitless scalablity because of our multi-chain approach, as well as very low costs and versatility.
Q10. To what extent have the recent bear market have on the project development and how have you been able to survive this longest bear market and continue building and developing?
We started Geeq in late 2017. The first year was largely Ric, Stephanie, myself working on the foundations. We developed the protocol, the monetary policy, the white paper and other documents, and got the legal and compliance issues organized. Basically, we bootstrapped. Ric donated time, resources and support from Terapac (the IoT company he founded), and Stephanie and I worked on the rest.
We thought we were ready to launch a funding effort in 2018, but we missed the window and the bear market put us into crypto-winter.
Strangely, this turned out to be a good thing. As projects failed to deliver what they promised, the crypto market, especially at the customer end, started to become clearer and more rational about what they wanted from blockchain. It turns out that the market moved in the direction that Geeq was designed for.
This pause also gave us time to think more carefully about use cases, customers, and marketing. We have built a really excellent, international team that now has seven people who are working purely for tokens to handle community building, outreach to partners and customers, and marketing. (Thanks Guys!)
We raised seed capital to pay the legal costs of making sure that Geeq is compliant with Canadian law and regulation, secure intellectual property, and other cash expenses. We hired a developer team that is writing code to implement Geeq. Geeq is now a real company with 14 people working on everything from coding to accounting.
The bear market was actually a blessing. It made the project much stronger, more professional, and focused on what the market really needs.
Q11. The biggest application of the Geeq project in the future is financial or IOT?
We don’t discriminate. Geeq has a unique security model that makes it a good fit for fintech and other high value use cases. We can also process very large volumes of transactions extremely cheaply. This makes use a good fit for IoT.
One thing I have not mentioned so far is that GeeqChains actually have two separate layers with separate ledgers and blockchains.
At the foundation is the validation layer where $Geeq tokens live. This layer simple and provides minimal attack surfaces.
On top of this is the application layer that can be customised to meet the needs of any use case.
This means that developers can build things like chain of custody, peer to peer markets for content and services, or micropayment applications on specialized and optimized GeeqChains within the broader Geeq ecosystem.
Our initial focus is on high volume, low value use cases, which create many possibilities in both the fintech and IoT spaces.
Thanks for the patience with my long answers!
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As you can see John went in depth in some of his answers giving a real deep dive into Geeq & its unique approach to blockchain , but this was only possible due to the great technical questions which were asked. We were very impressed by the quality of them !
Once again we would like to thank everyone who submitted a Question!
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