Important Changes in GRAFT Design

Combined PoW/PoS (proof-of-work/proof-of-stake) algorithm was one of the most important proposals in the original GRAFT white paper. After getting some real-life experience with running the mainnet since January 16th, and based on feedback received from multiple miners and potential supernode owners, the GRAFT team realized that there is big difference between “combined” and “coupled”. The proposal of the “combined” PoW/PoS was in fact “loosely coupled” PoW/PoS. The problem with coupled PoW/PoS is that the PoW power is mostly consolidated in a few large pools, which limits the ability to create a large number of independent full supernodes. This process of consolidation happened very fast because 1) we use CryptoNote/CryptoNight protocol which is very well known in miners’ community and 2) our project received good attention and massive support of miners community, with many miners spending significant resources to contribute to the network hashrate (which is great!).

With that said, we decided to make the following changes in RTA (“real time authorization”) design:

1. “Decouple” PoW and PoS, so the full supernode will require only the stake (PoS), effectively eliminating the requirement to mine a block in order to run the full supernode. The full supernode will only require a stake (50,000 GRFT) in order to be eligible for processing RTA. We modify the authorization sample selection algorithm so instead of looking at recent mined blocks it will compare the hash of the supernode’s PoS wallet with the hash of the last mined block (height – 30). The main idea here is that the selection is random while the result is deterministic for anyone who calculates the formula. The Tx fee is still equally distributed between the members of the authorization sample; the miner also receives the share of the fee.

2. Introduce 4-tier stake model where a higher tier has a greater chance to be selected into authorization sample, while the selection process is still random.

50,000 GRFT – tier 1

90,000 GRFT – tier 2

150,000 GRFT – tier 3

250,000 GRFT – tier 4

Each tier participates in a random selection of 2 sample supernodes (a total of 8 full supernodes). Thus, naturally, tier 4 supernode has more chances to be selected due to the limited number of tier 4 supernodes. “Empty” spots are filled by the higher level tiers (or lower in absence of higher). This algorithm is also adaptive as it will “regulate” the average number of full supernodes on each level.

3. Allow delegated stake. Balances from multiple wallets can be “delegated” to a single full supernode in order to form a stake significant enough to run a full supernode. The earnings are distributed between the wallets according to their stake share. Minimum balance for delegated stake is 5,000 GRFT.

4. Introduce 2-tier transaction fee. The RTA (“instant confirmation”) Tx fee will be set to 0.5% of Tx amount or 0.01 GRAFT, whichever is greater. RTA transaction is used for real time point-of-sale purchases, in store or online, similar to credit/debit card payments. The regular (“slow”) transfer fee will remain the same: 0.1% or 0.01 GRAFT, whichever is greater, for micropayments (Tx amount less than 1,000 GRFT), and Log(1000) of Tx amount – for Tx amounts greater than 1,000 GRFT. This transaction type is used for transfers between accounts, similar to ACH bank transfers.

Although these changes may resemble some existing implementations of PoS and masternodes, GRAFT solution is still a unique combination of most private blockchain protocol (CryptoNote), advanced principles of PoS and multi-tier networks, and new approach to crypto payment processing with features like low Tx fee, the fee charged to the recipient, functional separation between the Wallet and Point-of-sale apps, various retail transaction types, service brokers, and more. GRAFT development team has already started design and implementation of all the features and changes above.

Sample Earnings / ROI Calculations

As can be seen from this calculator, the full supernode income depends on 1) number of transactions in the network, 2) number of full supernodes in the network, 3) average transaction amount, and 4) the stake tier of the full supernode.

The following were the assumptions for these calculations:

Additional Income Sources for Supernodes

In addition to transaction fees, the full supernode owners can also charge Service Broker fees. Service Broker fees are the fees that customers pay to the full supernode owner in return for Service Level Agreements (SLA) and DAPI access. These fees can be metered or flat, depending on the business arrangement the supernode owner wants to offer. More on this later…

ICO Launch Recount, Support for USD, XEM, and Early Bird discount Extension

We’re off to a good start with the ICO, had a strong first day, albeit with few hiccups in the beginning. While we concentrated on getting the MainNet up and running, throwing most of the engineering resources on that, the ICO onboarding platform ended up being a sophisticated project in itself. We had to account for things like:
  1. KYC/AML check – to make lawyers and government happy, and keep the bad guys out
  2. Unique payment wallet addresses to prevent fraud
  3. automated updating of the transaction status
  4. giving users ability to track their transactions

All these things amounted to quite a hefty engineering undertaking with lots of integrations with third party services.  We were diligent and careful selecting partners for these services (KYC/AML and Payment processing), making sure their systems were up to par in terms of maturity, sophistication, reliability, and most importantly security.

However, when you have so many parts that need to come together, and not enough time to test things properly, things do happen, and we had a few last minute hiccups bringing things into production. (Something as simple as number of decimal places can mean a diference between a transaction being accepted by a crypto payment processor and not being accepted)

As the result, we had to pare down on the initial currencies supported to only BTC and ETH.

The good news is that earlier today we were able to add Paypal for fiat payments, and XEM, which brings our currency support to where it needed to be. Because we were late with support for fiat and XEM, we’ve decided to extend the early bird 10% discount by 2 more days.

Finally, we had lots of questions about KYC checks – and we hear you – people just don’t want to give out their personal info! We totally wish we didn’t have to collect it either! Unfortunately in order for us to operate under US jurisdiction, we have to comply with AML (anti money laundering) rules and regulations. Having said that, we’re using the best KYC provider we could find. We looked at their processes and came away very impressed by the systems they’ve designed and their treatment of people’s personal data – they really do try to do the right thing and go a long way to keeping your personal identifying information (PII) private.

With that, we will try to get a little bit of rest now and get back to work to make both the ICO, and this project a huge success!

Sincerely, GRAFT Team

The MainNet is Up! Long live and prosper GRAFT Blockchain!!!

Graft is a rare ICO project with its own blockchain. The team is so dedicated to mainstreaming cryptocurrency and making a merchant-friendly solution that we have developed a blockchain that is built around the merchants’ systems and processes, bringing together the most advanced techniques in the space and resolving the issues with the other cryptocurrencies. Soon, merchants with Graft will be able to accept crypto at the point of sale as easily as they do with cash or credit cards.

Running on its own blockchain sets the GRAFT project apart from its competitors that are based on the ERC20 tokens. As such, the Graft blockchain-based network will not be subject to the underlying Ethereum blockchain conditions such as latency and fees, putting the company in a strong position to be able to offer optimum payment services.

This brings us to the MainNet – the first major milestone and the cornerstone of GRAFT blockchain and eco-system!

We promised, and we delivered! The team has worked tirelessly around the clock for 5 days straight, launching, optimizing, relaunching, until we got to the chain that we could open up to the world.

As of 10pm America Central Time on Jan 16 it finally happened! The baby has been born!! The baby is healthy and all the parents and family are recovering from the huge adrenaline rush and weeks of hard work.

Congratulations to the AWESOME TEAM and Long live and prosper GRAFT Blockchain!!!!!!!

GRAFT MVP Development Status Update January 2018

Happy New Year 2018! It’s time for another update! As we are getting close to the ICO, the development team is focused on ICO related tasks at the moment. Early GRAFT supporters, who participated in token pre-sale, know that we used temporary NEM Mosaic grf:tokens during pre-sale. However, we promised to run main ICO on real network – GRAFT’s own blockchain – and we are going to keep our promise. The mainnet will be launched right before the ICO, tentatively on January 16th, so ICO participants will be able to use GRAFT wallets and receive freshly baked shiny GRF coins.

GRAFT Blockchains

We are creating three networks (blockchains), all of them open for public access:

mainnet – actual GRAFT blockchain, production network. This is the blockchain that carry real GRF transactions.

public testnet – an exact functional copy of mainnet for public testing of mining, supernodes, wallet apps, etc. The public testnet was recently hard forked to the mainnet release candidate version.

RTA testnet – a branch that contains real time authorization and other “next” features that are not yet available on mainnet.

The mobile wallet app can switch between the three networks.

Network Node and Blockchain Protocol

We have made several changes required for supporting the supernode activities as well as important protocol changes. One of the main changes is “X100” – increased emission of GRF. The total supply has been increased from 18 *10^6 to 1.8 * 10^9. Read more about the reasons for this increase in this blog post. Note that the majority of GRF will be still gradually emitted via mining within several years. We haven’t modified the emission curve or the number of atomic units; it’s basically just a decimal point that has been shifted by two positions.

Supernodes and Mobile Apps

We are in the middle of implementation of the most important core feature of GRAFT blockchain: RTA (real time authorization), aka “instant approval”. The initial workflow and DAPI have been developed and will be available for public alpha testing on special separate RTA testnet. The mainnet will support a limited supernode and mobile wallet functions at the moment, until the RTA functionality is fully developed and thoroughly tested and debugged. The payment terminal application will be also available through the RTA testnet. CLI (command line interface) wallet currently supports full funds transfer functionality, and can “backup” the mobile wallet by using import / export functions when necessary.

Solo Mining and Mining Pools

Mining is a key function of successful decentralized blockchain. Both “solo” and “pool” mining will be available at the time of mainnet launch. For people who do not want to create their solo mining rigs but still want to participate in GRAFT mining we are creating two mainnet mining pools. Along with the existing test pool, those mining pools will be maintained by GRAFT team and open for anyone to participate. We also provide assistance for anyone who wants to run their own GRAFT mining pool or become a solo miner and eventually a supernode operator. Please check the testnet page on GRAFT website and Getting Started page on the test pool site for mining instructions. Those pages will be constantly updated with more information and various mining instructions and tutorials. Also, please check GRAFT Youtube channel for mining instructions and GRAFT explanatory videos. Happy GRAFT mining!

1:100 Split

Price Cup of Coffee Bitcoin vs GRAFT

What’s the difference between 0.01 and 1? When it comes to a price of cup of coffee, the difference is pretty substantial.

Over the course of the last month or so, we’ve been talking to users, customers, and potential investors, it became clear that one of the things that bothers people about Bitcoin and other major “investment” cryptocurrencies is that they always require a calculator when trying to pay for anything, as the numbers have a lot of .00 in front of them, with the situation likely to get even worse.

Since we’re targeting the retail segment with GRAFT, we thought it’s important to pay attention to the usability at the point of sale. Even though GRAFT is initially intended to be a “hidden” currency, facilitating a payment using one type of currency into another, longer term it’s possible that it will become more visible, and if it does, dealing with whole number is a whole lot easier than dealing with a lot of decimals.

As an added bonus, this makes the purchase price psychologically more palatable to the investors.

After weighing all pro’s and con’s and doing testing to the algorithms to confirm feasibility, we have decided to go forward with the change.

We’re keeping everything else (emission formula, coin distribution percentages, and valuation) the same, just multiplying the size of emission by 100.

If you have received grf:token so far as part of the Presale, service, or bounty programs, we will apply the split at the time of conversion to the GRF coin.

GRAFT blockchain MVP Development Status Update

We are moving forward with our MVP development, and it’s time for another update! Last time we talked about several areas of current activities: network node, supernode, blockchain explorer, testnet, mining, mobile wallet and POS apps, and payment terminal apps. So let’s review the progress in all those areas.

Network node

We have done several changes required for supporting the supernode activities as well as protocol changes such as new wallet addresses. GRAFT wallet addresses now start from “G” for mainnet and “T” for testnet, so they could be easily distinguishable from other wallet addresses. Also, we have introduced a new transaction type flag in order to be able to distinguish between different transaction types. For example, a new transaction that is approved instantly by the authorization sample is different from a “standard” slow transaction (which is eventually going to be deprecated).


We have successfully finished the transition of the supernode codebase from Python to C++ – good job, our development team! Essentially, it has been rewritten in C++ from scratch. It took time and efforts, but there are huge benefits of this refactoring: a unified technology stack and generic code reusability. Now both network and supernode are located under the same project in github, so don’t be confused by lack of activities in “supernode” project: it’s been deprecated.

We have started the full implementation of the most important core feature of Graft Network: real time authorization (instant approval). During the PoC phase, real time authorization was not fully implemented, and many core functions were just mocked up. Now we are implementing the real mechanism according to the original design described in the white paper. The optimistic flow is scheduled to be ready for testing by mid December, while the full implementation should be done by the end of the year. It is very heavy lifting from development point of view, but once fully implemented and tested, this feature alone is going to revolutionize crypto payments!

Mobile Wallet, Mobile Point of Sale, and Payment Terminal apps

We are actively working on further development and redesign of client applications, which include wallet and point of sale mobile apps as well as payment terminals’ apps for Verifone, Ingenico, Equinox, and AnywhereCommerce. The most recent versions of MVP apps are going to be open for public testing very soon. Stay tuned!


Mining is a key function which is required for a successful network setup. As such it is our goal to provide with a simple and streamlined process on how to mine GRF. Our vision is to provide holistic procedure (turnkey) which can be understood and executed by everyone, including non-technical users.

In order to achieve our goal we are currently testing and documenting the best and easiest processes for miner setup and configuration. Our effort is not limited to written instructions, and we are also planning on providing video guides on how to perform the setup and configuration. To minimize the entry barrier for mining we are also creating a template for cloud mining (AMI/terraform) allowing new users to mine with zero CAPEX investment.

Public testnet

The main testnet is open to public. Now you can run your own network node and supernode and even mine some test GRF coins with CPU minder and run basic transfers. Note that currently we do not accept any support requests for the testnet for two reasons: first, it is not stable, and the versions are changing literally every day, and second, we do not have a designated support team yet, and developers are focused on their primary development tasks so we could meet our very tight deadlines. Thus, please connect to the testnet at your own risk. Nevertheless, we are always open for healthy criticism and happy to receive any feedback and bug reports. You can find information about the testnet connectivity, network node, and CLI wallet setup below. The full supernode setup and configuration instructions will be also published soon.

Public testnet seed nodes:,,,

Public testnet block explorer:

Installing VM

1. Install VirtualBox (another virtualization software can be used, but only VirtualBox has been tested):

Guest OS is Ubuntu 16.04, x64. Download ISO image using following URL:

2. Open VirtualBox, create new Virtual Machine

Select menu “Machine -> New”, Enter name, Select “Linux” (Type), Select “Ubuntu (64-bit)” (Version):

3. Select at least 2Gb RAM for the Virtual Machine.

It is recommended to arrange 2Gb RAM per CPU core for faster build.

4. Create new Virtual Hard Disk:

Select “VDI (VirtualBox Disk Image), Dynamically Allocated, Adjust file location (if needed) and select size appropriately. If you set it as e.g. 100Gb it doesn’t mean 100Gb will be allocated immediately – this is just upper limit.

5. Mount installation ISO:

Select your VM in the list, click “Settings”, select “Storage” and mount downloaded ISO as a new optical drive to IDE controller

6. Start VM and install the OS:

Follow the steps:

Installing the network node and CLI wallet

1. Install git (if not installed already):

sudo apt-get install -y git

2. Clone Graft Network from GitHub repository:

git clone

3. Go to GraftNetwork directory:

cd GraftNetwork

4. Install dependencies from the list

Use the following command line:

sudo apt-get -y install build-essential cmake \

pkg-config libboost-all-dev \

libssl-dev libunwind8-dev \

liblzma-dev libldns-dev \

libexpat1-dev doxygen graphviz

5. Start the build:

Option A (Use all CPUs):


Option B (Defined CPU affinity):

make -j4

for “-j” param select appropriate number of CPU cores available on your system.

In order to build standalone binaries (i.e. to upload it to the server where no dev packages installed), invoke:

make -j4 release-static

Wait until compilation is finished (Approximately 21 minutes using AWS T2 Medium)

6. Copy binaries to the appropriate directory:

Option A (system scope) –

sudo cp build/release/bin/* /usr/local/bin/

Option B (user scope) –

mkdir $HOME/bin

cp build/release/bin/* $HOME/bin

7. Run Graft blockchain node

Under folder /GraftNetwork/build/release/bin, the following components may be found:

graftnoded – Graft Blockchain daemon;

graft-wallet-cli – Graft Blockchain CLI Wallet.

Running Graft Blockchain node daemon:

graftnoded --testnet

8. Creating CLI wallet and connecting to the local testnet node

To create new wallet for the public testnet, invoke:

./graft-wallet-cli --generate-new-wallet --testnet

File location : ~/GraftNetwork/build/release/bin

It will try to connect to the local network node daemon, running in testnet mode, ask password for a new wallet, electrum seed language, generate new wallet, and finally open wallet with CLI interface. Invoke help to see available commands. E.g. CPU mining (solo mining) can be started with start_mining command.

Paying with Bitcoin at a Restaurant – First Hand Experience

I was in Ukraine last week working on setting up some of the operation back there. The country is famous for its fabulous food and tech talent. It’s also very fast at adopting new trends. An associate mentioned a restaurant that was accepting cryptocurrency, so I decided to check it out.

Not only was the restaurant and food fantastic and fairly inexpensive, paying with Bitcoin actually worked and worked quickly! What’s the catch? Well, the fee I ended up paying on the $25 transaction was a whopping $7 (around 25%).

Now, that was the price of prioritizing the transaction in order to make it into the next block and illustrates the problem of paying with Bitcoin or other cryptocurrencies that are not designed for point of sale – there’s no real-time authorization protocol that is required in order for the point of sale payments to work. GRAFT solves this problem by implementing real-time authorizations.

The other issue is who pays the fee – it shouldn’t be the customer (me) – it should have been the restaurant. GRAFT addresses that problem as well.

Later I found and talked to the the integrator about deploying this and other restaurant locations.. They said even though the interest is there from merchants to take crypto in order to attract customers and provide progressive image, they face resistance from the owners who are unsure about the legal status of accepting crypto, and the way they are able to address those concerns is to do payouts in fiat so the merchant never has to touch crypto. This is a pretty good way to address this issue with merchants and is consistent with GRAFT’s approach of giving merchants payout preferences.

Introducing SUPERSTAKE: Important Enhancement of Graft Blockchain Protocol


If you have read Graft white paper, you should remember that in Graft Blockchain only full supernode is allowed to perform real time authorizations (instant approvals) which are issued by an authorization sample – a group of full supernodes that are selected by special algorithm. The main eligibility criteria for becoming a full supernode are combined PoW (Proof of Work) and PoS (Proof of Stake): the full supernode must have both a recently mined block and a stake wallet with a minimum balance of 500 GRF.

With that said, only full supernodes – authorization sample members receive transaction fees, while mining nodes receive block rewards only. But every mined block opens the door for the mining node to become a full supernode and earn even more on real time authorization and service broker hosting.

At the very beginning, right after the mainnet launch, the mining can be done using regular CPU. However, once miners start connecting their GPU cards and rigs, the hashrate will go up. We realize that at some point, sooner or letter, the miners will start consolidating into mining pools due to the raising hashrate. Such consolidation will reduce the overall number of “unique” mining supernodes, which may affect the number of supernode candidates that are eligible to become a full supernode.

In order to maintain the combined PoW/PoS scheme relevant while keeping up with constantly rising hashrate, we introduce superstake – a mechanism which allows a single mining supernode associated with mining pool to be linked to more than one stake wallet. Thus, a single mining wallet can be linked to multiple stake wallets, which allows a single miner to maintain multiple full supernodes, which will increase an income from transaction fees. However, only up to 3 full supernodes linked to the same mining wallet can participate in the same authorization sample. Also, the stake for extra full supernodes added to the same miner is doubled in order to compensate for the fact that a single miner controls a larger piece of the network (and receives extra portions of transaction fees).

The superstake approach does not change the existing requirement to have at least 500 GRF stake plus recently mined block in order to become a full supernode. However, the second full supernode connected to the same miner will increase the required stake amount to 1000 GRF each. The three supernodes will require a 2,000 GRF stake per each “sister” supernode, etc. Although there is no limit for a number of superstake supernodes, only up to three “sister” supernodes can participate in a single authorization sample. The superstake supernodes can be also used for hosting service brokers that cannot be hosted together with real time authorization for any reason (for example, elevated security or privacy requirements).

How we priced GRAFT ICO

  We get a lot of questions about the ICO pricing, including “Why GRAFT ICO is so expensive”. What follows is an attempt to explain how we arrived at the ICO pricing and what all contributed to it.  

Not All Altcoins Are the Same

There are two types of altcoins (aka tokens) out on the market today – one that sit on top of another blockchain (like Ethereum), and others that implement their own blockchain. The ratio of derivative tokens to custom blockchain ones are roughly 100:1.   It is a lot easier to do a derivative token based ICO – you just write a small amount of code in  Solidity (if Ethereum) – and you have a token you can sell. Doing or modifying a blockchain on the other hand involves a very substantial amount of engineering efforts – the team has to figure out the math and economics behind the blockchain, implement additional capabilities, secure that new functionality, create API’s, in many cases create applications like a wallet, etc. They also have to create a whole new network complete with node installation procedures, upgrade processes, and many other considerations. GRAFT is the latter of the two – while leveraging CryptoNote protocol which addresses privacy, decentralization and fungibility as well as  great work that Monero team has done to improve scalability among other things, GRAFT is having to implement a new communication protocol that allows instant authorizations, a distributed API (DAPI) that allows connections from the POS and other applications, and a set of reference applications for the point of sale  and the wallet – just to name a few high-profile tasks.    

Derivative Tokens Cost More

Tokens run on top of another blockchain (say Ethereum), so purchasing a token is not sufficient to run the application that the token represents – you also need to purchase “fuel” (which is the underlying coin/token). The amount of fuel depends on the amount of transactions that the token application represents. Compare this to the blockchain like GRAFT which encompasses the value of entire transaction. As you can see, the cost of a token is more than meets the eye, in some cases much more.  

Pay Attention to Valuation, not Token Cost

Valuation (or capitalization) follows a simple formula: (Number of tokens or coins) x (Price of the token / coin). It’s natural for people to think that smaller price of the token represents a bargain, but the critical piece in this equation is the number of coins or tokens that are being issued. For example, which is less expensive (has higher valuation) – 1 billion tokens at $1, or 10 million tokens at $10? It is as you could calculate the latter, with corresponding valuations of $1B vs $100MM.  So when you buy a $10 token from a 10 million token pool, you actually end up with a significantly (10x) larger piece of the pie than if you buy the same amount of the $1 token in a 1 billion token pool. Most token ICO’s are not burdened by emission math (the formula that guides how the coins are mined, making the later mined coins harder to mine than earlier mined coins), so they issue a very large number of tokens (often in 100’s of millions or even billions) and then pricing the tokens low for the perception of the low entry cost. Top 10 Derivative tokens (illustrating circulating supplies differences)  

GRAFT Valuation is 1/40 of Dash

GRAFT’s total final emission (the number of coins to ever be minted) is roughly 18 million (18,446,744 to be precise). We’re pre-mining certain number of coins (45%) to cover the ICO, marketing, reserves, and incentives. This is it. We will never be able to add or pre-mine any more coins!  We have also decided not to siphon off any fees from the transactions to fund the development like some of the other blockchains are doing.    As such we have to make sure that whatever we raise now will be sufficient to sustain GRAFT project until no further development or support from the core team are required (we estimate that to be roughly 7 years with the overall team growing to 30-40 people). This is roughly $25MM.   Now, we also have to account for additional unexpected expenses, crypto-currency fluctuations at the time of the raise, and potential taxable events. This means that we need to need to double the $25MM getting us to $50MM. Since the ICO represents 25% of the total coin supply, the $50MM has to be equal to 25%, which brings the valuation to $200MM, and subsequently the price of the coin to roughly equivalent of $11 USD.  


When evaluating GRF pricing, it’s really important to compare apples to apples in terms of:
  1. size of emission (or the number of tokens available)
  2. type of a token/coin – a blockchain or a token on top of another blockchain
  3. valuation which is a product of number of tokens multiplied by price
If you do such comparison, you will see that GRF token ICO compares very favorably against other blockchains on the market:
Current circulation Price Market Cap / Valuation
Bitcoin 16,678,650 $6,100.00 $100,000,000,000
Ethereum 95,715,037 $310.00 $29,500,000,000
Ripple 38,622,870,411 $0.20 $30,000,000,000
Litecoin 53,819,707 $60.00 $3,250,000,000
Dash 7,687,407 $340.00 $3,200,000,000
Monero 15,345,839 $118.00 $1,800,000,000
Graft (after ICO) 100,000,000 $.32 $32,000,000 (numbers are approximate)


We have made couple of changes to the ICO and token structure since the article was first written:
  1. decided to lower our ICO hard cap to 5% of the total emission (or around $11,000,000 in USD), down from 25%,  and keep the rest of the coins slated for ICO in reserve for subsequent raises as needed.
  2. Do a 1:100 split, multiplying the total emission by 100
These changes doesn’t really change any of the math, just help us improve usability of the coin at pont of sale, and address some of the perceived value concerns.