GRAFT Development Status Update September 2018

It’s time for another dev update! It’s no secret that RTAs (real time authorizations) remain the main focus for the GRAFT development team, so let’s start from the alpha review.

RTA Alpha

We are excited to announce that RTA transaction now works end to end for the entire sale workflow – it is stable, and takes just a couple of seconds to get approval on both wallet and point of sale as expected. There is still some work to be done before we move to beta release, and there are many ways to do even more improvements. But here is the most important thing: the first instant payment on a private CryptoNote blockchain is now a reality!

The RTA alpha release contains a full set of components necessary to conduct an end-to-end point of sale transaction in real time:

  • completely redesigned full supernode, i.e. the supernode that can participate in authorization sample and approve a GRAFT transaction in real time;
  • completely redesigned wallet and point-of-sale proxy supernodes, i.e. the supernodes that provides an “entry point” to the RTA network and participate in RTA transactions;
  • mobile and desktop wallet and point of sale apps for iOS and Mac OS X redesigned for RTA.

In addition, there is a special testing environment created for RTA alpha testing – alphanet – a dedicated testnet which contains several seed nodes, a miner, proxy supernode cluster with load balancer, and blockchain explorer.

We managed to assemble a very efficient and quite large team of alpha testers – 50+ active members who are able to run both RTA supernode and iOS/Mac clients (wallet, POS). In addition, we have selected an extra “reserve” group of volunteers (also 50+) that will be able to join the testing once it’s extended to the next phases – additional clients for Android/Windows and then beta release.

People familiar with development release cycle know that alpha releases are usually unstable and may lack some features. RTA alpha was not an exception. Once the RTA functionality was released to the alphanet, we discovered issues that we could not see during regular testing. We are able to simulate the real network very well because the alphanet consists of real participants running on different networks and different hardware or hardware abstractions, rather than artificially cloned nodes and supernodes. We really appreciate the patience and positive attitude of alpha testers team!

So it’s time to learn more about the RTA transaction flow, which you will be able to experience in retail stores soon! It is very simple – a couple of clicks (literally) in the wallet app and a couple of clicks at the point of sale app: Figure 1: GRAFT RTA Workflow Between Mobile Wallet and Point-of-sale Apps

Payment Gateway for Merchants and Service Providers

As recently described in the Fees and economics update post, one of the important profiles in the ecosystem is a Merchant Service Provider (MSP). An MSP’s role is to provide and support payment network services to the merchant, ensure the uptime of the network (usually referred to as Service Level agreement or SLA), provide and manage equimpent (e.g. payment temrinals), provide reporting, etc.

To enable an MSP to do this, another type of server is needed – one that would:

  • Manage the terminal’s configuration (including wallet address)
  • Handle the MSP specific fee economics for the MSP (an MSP could choose to handle tiers of service differently or charge different fees for different transaction amounts)
  • Transaction reporting and analysis for merchants

In theory, such payment gateway can be designed and implemented by a third party such as traditional payment processor that wants to add cryptocurrency payments to their portfolio of services. However, we decided to create a “reference implementation” to enable faster adoption rate as a part of out go-to-market strategy.
Since GRAFT is a decentralized payment network, the payment gateway is multi-tenant, multi-instance, open source app, and everyone can host their own payment gateway and become a service provider on the network.

Payment Gateway is this “fifth element” that is supposed to manage the GRAFT payment apps on hardware payment terminals and GRAFT ecommerce interfaces, and link them with the GRAFT supernodes. Since it has transaction visibility, it is considered part of merchant’s ‘back office’ applications. Figure 2: GRAFT Payment Gateway, Service Provider Dashboard Figure 3: GRAFT Payment Gateway, Merchant Dashboard

* Note: With GRAFT network, the merchant can be their own MSP, but would still require the functions of a Gateway in order to manage the terminals setup, reporting, etc.

Upcoming Dev Updates

We’re moving forward with every track on the development roadmap and even pulling some of them forward. An interesting upcoming project, which is currently in design and not even announced yet, is GRAFT ColdPay Supercard. This is a smart card that combines functionality of cold wallet, which can be used with mobile or desktop host app, and payment card, which can be used for making a payment at hardware payment terminals and mobile points of sale. More details about this exciting development will be unleashed very soon. Stay tuned, happy grafting!

RTA now working in a sales workflow!

Please remember this day – September 6, 2018. After several issues were fixed, GRAFT RTA transaction now works in a point-of-sale workflow, end to end, on alphanet, and it’s stable! It takes just a couple of seconds to process the payment! There is still some work left to be done before we move to beta, but… it works!

We will be publishing a full development update soon shortly. Payment Successful

Changes in Transaction Fee Structure: Even More Ways to Earn with GRAFT Network

As the ideas initially set forth in original GRAFT white paper gradually come to fruition, we have to adjust some “game rules” as we get one reality check after another. One of the most important rules in payment processing is the transaction fee structure. Transaction fees are equally important for all players including merchants, buyers, full (RTA) supernode owners, proxy (gateway) supernode owners, exchange brokers, miners, and service providers. After several white paper editions and other adjustments, we propose the following fee structure to be implemented in the GRAFT ecosystem:
  • Full Supernodes RTA Fee (any RTA Tx): 0.5%

    1/8 of this fee, or 0.0625% of the total RTA Tx amount, goes to each supernode participating in the RTA authorization sample.

  • Proxy Supernodes Fee (any RTA Tx): 0.1%

    1/2 of this fee, or 0.05% of the total RTA Tx amount, goes to each supernode in the proxy pair that provides connectivity into the network (wallet and POS proxy supernodes).

  • Wallet Proxy Supernode Fee (non-RTA transfer): 0.1 GRFT

    This small fee is going to be charged by the wallet proxy supernode to the mobile or desktop sender’s wallet in addition to the existing network fee (miner’s reward).

  • Exchange Broker Fee (RTA with altcoins): 0.25%

    Exchange brokers include pay-in, payout, top-up, and interchange brokers.

  • Miner Transaction Fee (RTA): variable

    Determined by the merchant service provider through the payment gateway, but not lower than 0.1 GRFT.

Figure 1: GRAFT Ecosystem Fees

If a particular RTA transaction is processed via the payment gateway, which will be the case for most hardware payment terminals, the fees are set and calculated by the MSP (merchant service provider). This occurs through the payment gateway plugin to the POS proxy supernode using the information about the pay-in and payout currencies as input, and setting a miner fee commensurate with the service level they are obligated to provide to the merchant.

Here’s a table-form summary of various fees in combination with various workflows:

1 2 3
Regular P2P Transfer RTA Tx (GRFT) RTA Tx with altcoin exchange broker (i.e. bitcoin acceptance)
a Sender’s wallet proxy Supernode Reward 0.1 GRFT * 0.05% * 0.05% *
b Full Supernode (auth sample member) Reward N/A 0.0625% ** 0.0625% **
c Exchange Broker Reward N/A N/A 0.25% **
d Miner (settlement) Reward Variable, based on Tx size in KB Configurable *** Min: 0.1 GRFT Configurable *** Min: 0.1 GRFT
e Merchant POS/Recipient Gateway Proxy Supernode Reward **** N/A 0.05% **** 0.05% ****
Total Fee Amount paid by the Tx sender (buyer in RTA) a1 + d1 0 0 *****
Total fee amount paid by the Tx recipient (merchant in RTA) 0 a2 + b2*8 + d2 + e2 a3 + b3*8 + c3 + d3 + e3
Total amount charged to the Tx sender Tx amt + a1 + d1 Tx amt Tx amt
Total funds available to the Tx recipient Tx amt Tx amt – (a2 + b2*8 + d2 + e2) Tx amt – (a3 + b3*8 + c3 + d3 + e3)
Table 1: GRAFT Transaction Fees/Rewards Structure

* wallet proxy supernode can be a proprietary server or a public cluster hosted by a service provider. You can run and use your own proprietary proxy supernode to avoid the proxy fee altogether. The supernode must have a stake in order to be able to charge the fee.

** stake is required for full supernode or exchange broker in order to participate in RTA Tx processing and receive this reward

*** set by the merchant service provider or the owner of the POS proxy supernode

**** POS proxy supernode can be a proprietary standalone server, a part of the merchant infrastructure, or a part of a payment terminal or/and ecommerce gateway maintained by the merchant service provider. POS supernode must have a stake in order to be able to receive this reward

***** does not include the altcoin network fee

You can see that the new fees have been introduced on proxy supernodes—both wallet proxy and point-of-sale/payment gateway (a1, a2, a3, e2, and e3 in Table 1). Those changes will achieve increased decentralization of the infrastructure, which means no more complaints about GRAFT wallet downtime or delays! If you don’t like the proxy supernode cluster hosted by GRAFT, there will be alternative providers ready to serve your wallet or POS. In order to receive the reward, the proxy supernode must demonstrate the unique stake wallet linked to the supernode’s public IP address. The amount of proxy stake is 250,000 GRFT.

Unlike an authorization sample supernode, the proxy supernode will still be operational even without the stake, however an unstaked proxy supernode won’t be able to charge the fee. This option is reserved for proprietary proxy supernodes, so the users with elevated privacy needs can host their own entry points to the network. Without the stake, the proxy reward will be sent to the GRAFT community donation wallet address. This way the total transaction fee, which is assembled from several components, always remains consistent regardless of the status of the proxy supernodes.

Another major change, which was partially proposed earlier, is the flat fee paid to the miner for RTA transaction settlements (d2, d3). The miner’s fee is traditionally calculated based on transaction record size in KB (d1). With RTAs, however, we cannot make the miner fee variable as it would make the total fee paid by the merchant inconsistent and unpredictable, which is unacceptable in most situations. Additionally, we cannot make this fee proportional to the value of the transaction (similar to the supernode fees) because miner fees are visible on the blockchain, meaning the transaction amount could be calculated from a proportional fee (although we may fix this in the future). Therefore, we made it a simple configurable flat fee, with a minimum amount of 0.1 GRFT.

The fees associated with RTA transaction with exchange brokers are the same as RTA fees (column 2) with an extra 0.25% taken by the broker (and paid also by the merchant).

Merchant Fees and Service Providers

The MSP sets a fee schedule that’s consistent with their business model and fees could be structured in tiers with options, for example:

  • Transactions below $10: 2%
  • Transactions above $10: 1%
  • Min transaction amount: $1
  • Miner: 0.1 GRFT
  • Transactions in altcoins: + 0.25%
  • Instant payouts in altcoin or fiat: + 0.25%

Below is an example of a sample $20 altcoin transaction and the associated fees given a reference Merchant Service Provider fee schedule. Figure 2: Example of GRAFT RTA Altcoin Tx Fees and Rewards with Service Provider

GRAFT Emission Correction

When you take a look at whattomine, mining GRAFT is as profitable as mining Monero. At first glance, this seems like a good situation for everyone who cares about GRAFT, especially for the miners. But let’s compare Monero and GRAFT market capitalization (the dollar price of one GRFT multiplied by the number of tokens in current circulation): $1.68 billion (Monero) vs. $3.76 million (GRAFT). There is a huge difference between these two market caps, but they have the same mining profitability (actually GRAFT is even higher).

The current GRAFT block reward (the proof-of-work fee that the miners receive when they “solve” the block and successfully add it to the blockchain) today is approximately 1,420 GRFT, so every day the GRAFT circulation grows by more than 1 million (!) GRFT. Unfortunately, many miners use the high profitability of GRAFT to immediately sell their mining rewards on exchanges, which keeps bringing the price down as the demand cannot keep up with such a rapidly growing supply. Even growing demand cannot catch up to the emission rate because the project is too young.

Although the block reward is designed to decrease with every block, the current rate by which emissions are decreasing is not significant enough to counteract the overall supply increase rate from miners dumping. It will be significantly lower in, let’s say, one or two years, but the GRAFT team and supporters (including miners) cannot wait that long. We all need the economics to stabilize in the near term in order for the project to regain its footing and bring things into balance.

It is hard to anticipate these imbalances ahead of time as we’re trail blazing in a lot of respects. The only thing we can do is react quickly and adjust things whenever we see the “go off the rails” potential.

Note that ERC20 token-based projects do not have the problem described above because they don’t have a real blockchain. Their token supply remains the same (actually, it is even reduced with every exchange transaction), so they just need to make sure their demand at least remains the same in order to constantly pump the price and the market cap.

With that said, in order to rebalance the network economics, we have decided to correct the emission by reducing the block reward by 50%, so the new block reward formula will be as following:

reward = (M – A) * 2^-19 * 10^-10 / 2

Where M is max total supply and A is current supply.

As you can see, the correction will not change the total maximum amount of GRAFT that will be ever created, it will just stretch the emission curve such that it will take longer to mine the total supply (see the existing and the new emission curves on the diagrams below).

All GRAFT supporters should benefit from the corrected emission formula because it is supposed to limit the daily increase in circulating supply, which will reduce the overall supply growth rate and stabilize the price. Long-term miners will benefit from the reduced emission for two reasons: 1) the price will go up so they will receive the same, or even better, revenue, and 2) the emission curve will be stretch, so they will get a more steady income over the extra years without the need to rely on transaction fees.

The emission reduction change requires a major network update (aka “hard fork”), which will be scheduled for block 176,000 (September 17, 2018). The major network update means that each GRAFT network node must be updated to the new software version before that block/date. Otherwise, the node that wasn’t updated is going to be on the wrong version of the blockchain. The new release will be available for download on September 10, 2018.

As another reminder, a major network update means that if you are running the GRAFT network node (graftnoded daemon), you must upgrade it to the current software release as soon as possible. If you do not install the updated node before the block 176,000, it will be disconnected from the mainnet after block 176,000.

Note that the users of mobile and desktop wallets will not be affected by the upcoming major network update and don’t need to do anything—as long as they are still connected to the default proxy supernodes (if you are connected to your own supernode, however, do not forget to upgrade the underlying network node to stay on the right network).

How GRAFT is Going to Conquer the Crypto Payments World. Part 1: Blockchain and CryptoNote

Slava Gomzin, GRAFT Co-Founder

Although we have created a lot of materials explaining GRAFT (both existing features and future developments), including countless technical or semi-technical pages, marketing brochures, blog posts, and educational videos, it’s often difficult to see the whole picture while going through all of the specifics. A focus on the multiple features and their design details can obscure the view of the entire system, creating a so-called “you can’t see the forest through the trees” effect. We are getting many questions from supporting community members as well as potential customers and partners about “the big plan”: what is the ultimate goal, and how exactly are we going to achieve it? Whereas the answer to the first part of this question is quite simple and short, the answer to the second part requires some time and efforts. In this series of blog posts we will iterate through the various GRAFT features and try to explain why they are there, and how they help achieve our ultimate goal: Conquest of the crypto payments world.

Part 1: Blockchain and CryptoNote

Let’s start from the very beginning with the blockchain, or layer one of GRAFT. The blockchain is maintained by a peer-to-peer network of computers, or network nodes. We refer to these network nodes as “cryptonodes” to distinguish them from our “supernodes” (a.k.a. “masternodes” in other networks), which constitute the second layer of the GRAFT network (to be explained in a future blog post). The GRAFT blockchain is based on the CryptoNote protocol, which is the most private blockchain protocol in use as of today. In order to save time and resources, we used the luxury of the open source principle and forked the initial code of the GRAFT cryptonode from Monero — the best implementation of the CryptoNote protocol. In addition to acquiring fundamental privacy features “out of the box”, forking Monero provided a high degree of confidence in our blockchain from day one of the mainnet existence. It’s important to note that the code of GRAFT supernodes, which we create from scratch, is also open source, so essentially everything that we add on top of the previously existing features is also available for others to reuse.

Now let’s go back to the initial question and apply it to the blockchain layer: Why a brand new blockchain and why CryptoNote?

We’ll start with the new, dedicated blockchain: Yes, it would have been easy-peasy to run the GRAFT ICO on ERC20 or a similar token, as most people do these days to avoid blockchain maintenance, mainnet, mining, emission, seed nodes, etc. However, creation of the GRAFT payment network requires our own blockchain because we have to modify the cryptonodes as we develop the supernodes so they will support each other and work together. Without the ability to modify the code, we wouldn’t be able to create the network of supernodes and implement features like real time authorization or exchange brokers on top of any existing blockchain or token platform. In addition, there are features such as payout tokens, loyalty points, store credits, gift certificates, and discount coupons that are required for merchants — all of these are based on the merchant tokens platform, which cannot be built without a dedicated blockchain.

Now for CryptoNote: it’s not just “nice to have”, it is absolutely required in order to be competitive with traditional payment systems such as Visa network or PayPal. Ironically, Visa and PayPal provide much better privacy to their customers than most existing cryptocurrencies such as Bitcoin and Ethereum. Let me explain. When you swipe/insert your payment card at the point of sale terminal, or click the PayPal’s pay button online, there are two entities in the world that are aware of your transaction: the payment network (Visa or PayPal in our case) and the merchant. In reality, of course, there are more organisations that “know” about your transaction because the payment network is more complex. This network includes, at the very least, the issuing bank (the one that gave you the payment card), the acquiring bank (the one that approves the payment), the payment gateway (the one that routes your transaction to the right payment processor/acquiring bank) and the payment processor (which processes the payment and merchant’s payout). However, in any case, this list of organizations is limited because they are under security and privacy regulations, and they have typically implemented some decent security controls that protect your transaction records from prying eyes. Of course, everyone in this list can be hacked or give away your info to a law enforcement agency, but this is a different story (which is, by the way, another good reason to switch to cryptocurrency payments and throw away your plastic cards!). For the sake of simplicity though, let’s assume that random people cannot gain access to your data in most situations.

Finally, let’s see what happens with blockchains. The key innovation of Bitcoin (the first blockchain and cryptocurrency) was the open ledger that is accessible to every node participating in the network because your transaction must be verified to make sure you are not trying to spend your money twice. But this also means that anyone in the world can see your transactions and how much money you have in your wallet! Now, unlike plastic cards, Bitcoin wallets are, in principle, anonymous because transaction records are not directly linked to your identity. At first glance, this feature appears to compensate for the fact that your transaction records are laying there in plain sight on the blockchain for anyone to see. Well, the problem is that there are ways to link addresses to identities. Once this happens, all of your transactions magically become visible forever because the blockchain is always there and it cannot be erased!

Fortunately, there is a solution: the CryptoNote protocol, which hides the sender’s address, the recipient’s address, and the transaction amount , while still preserving the ability to validate each transaction and prevent double spending — and it’s all thanks to advanced cryptography! One day I am going to explain how it works in layman’s terms to unveil the beauty of CryptoNote and its cryptography (the same as I have done to explain RSA and Elliptic Curves cryptography in my book about Bitcoin payments). But for now, let’s just take it on faith that CryptoNote ensures a high degree of privacy for all participants. Moreover, on top of existing CryptoNote features, GRAFT adds even more privacy and hides transaction fees!

Summary of Part 1:

Why a brand new blockchain and why CryptoNote?

The dedicated blockchain allows GRAFT to create a merchant token platform. This is required for features like payout tokens and loyalty programs, and the second layer supernode network, which enables special retail features such as real time authorizations and exchange brokers.

The Cryptonote blockchain protocol provides an absolute privacy to all participants of the transaction, which is required in order to compete with existing payment platforms such as Visa or PayPal that are more private than most exciting (non-Cryptonote) cryptocurrencies.

To Be Continued — Part 2: Supernodes and RTA

GRAFT Wallets are Safe and NOT Affected by Double Counting Bug

As you probably know, most exchanges recently took offline all CryptoNote wallets (including Monero) due to Double Counting Bug. We tried to reproduce an exploit of the double counting bug with GRAFT master (current GRAFT version) to prove that GRAFT is not affected. In order to do that, we have prepared a special testing branch with the exploit: https://github.com/graft-project/GraftNetwork/tree/double-accounting-exploit, where we duplicated the “add_tx_pub_key_to_extra” call inside “construct_tx_and_get_tx_key(…)” method in cryptonote_core/cryptonote_tx_utils.cpp. The destination wallet with the bug was supposed to show the wrong (doubled) balance after the transfer from the exploited source wallet.

The destination wallet (GRAFT master, private testnet) before the test transfer shows 20 GRFT balance:

Now, we are transferring 10 GRFT from the exploited source wallet (private testnet), trying to “trick” the destination wallet:

The destination wallet after the transfer shows the correct amount (30 GRFT):

Here is the destination wallet log:

So this case is already handled in current Graft version (1.2.1), which is based on Monero v11, and the bug seems to be introduced in Monero v12, where subaddress functionality was implemented.

Therefore, current GRAFT wallets are safe for all users including exchanges.

GRAFT Development Status Update June 2018

Supernodes and Real Time Authorizations

Let’s start from implementation of full supernode, which is essentially an implementation of real-time authorizations (RTA). Although we are close to the finish line, we do not release it yet to public alpha. We need more time for optimization, fine-tuning, and QA testing. One of the main reasons for the delay is an issue with communication. Unlike other two-layer cryptocurrency networks which use a separate mechanism for communication between their second-layer nodes, we reuse the existing peer-to-peer network as a basic transport. Our original algorithm finds the shortest and fastest routes between the supernonodes by maintaining a set of P2P tunnels through the network of cryptonodes. The main difference and greatest benefit of using the same communication base for two layers (both cryptonode and supernode networks) is not exposing the authorization sample’s supernodes – because in our design they are not required to have a public IP. Such design is the major difference and significant improvement comparing to other layer two implementations such as Dash masternodes.

Remember that one of GRAFT’s key differentiators and goals is absolute privacy initially provided by underlying CryptoNote blockchain protocol, which is the first layer of GRAFT platform. The fact that the auth sample supernode does not require a public IP attached to it makes GRAFT even more private and decentralized, because the supernodes are less dependant on regulated hosting providers. Without public IP the supernodes are “hidden” behind the large, distributed, and complex P2P network, which makes them less vulnerable to DDOS attacks. At the same time, the hosting and maintenance are less complicated and less expensive for supernode owners. (Note that wallet/POS proxy supernodes, which typically belong to service providers and large merchants, still require public IP address in order to be able to serve wallets and POS/payment apps).

However, such great benefits do not come for free. Along the way we found several issues in existing CryptoNote/Monero P2P communication implementation, which we are fixing in order to make it more efficient, stable, and suitable transport for our purposes. With that said, we anticipate the public alpha of supernode with RTA to be released by the end of July. Meanwhile, we will start a private alpha release for testing in a coupe of weeks, so if you are interested in helping us with preliminary testing please contact us at [email protected]

While working hard on RTA implementation and getting ready to its production launch, we realized that hosting a supernode, either full (authorization) or proxy/gateway, requires a special DevOps skill set, so we are working through making arrangements and building relationships to provide turnkey solutions to supernode owners and merchant service providers.

Payment Apps

We are continuously working on improving the Verifone terminal app so it will be fully polished for production by the time RTA is released. As Verifone have written on their merchant marketplace website, where GRAFT app is listed as the Featured Apps Partner, “Our app partners are working around the clock to help empower our merchants with applications that enrich the customer experience and provide business productivity.” This is absolutely true statement, there is not much to add. Since the Verifone certification was achieved last month, we have done several improvements such as UI redesign (in both terminal app and our wallet), enhanced configuration utility for merchants, integration with CoinMarketCap for real-time exchange rates, and some bug fixes. Also, we are working on Ingenico terminal app integration into their marketplace.

One of important and promising features we are planning to develop is using NFC (Near Field Communication) for initial engagement between the mobile wallet and terminal app, so instead of scanning QR code displayed on payment terminal the buyer will just wave the phone (the same technology is used by contactless payment cards and Apple Pay). Implementation of such a feature will help improve both buyer and merchant user experiences and reduce the overall transaction time. We will keep you posted about our progress in this area.

We just finished design and now are ready to start implementation of the payment gateway which will facilitate GRAFT payments on online shopping platforms. Once implemented, integration with GRAFT payment gateway, among other features, will bring to online merchants and buyers a unique combination of absolute privacy and instant transaction confirmations (using RTA) – something they have never seen before. Plus, after we finish RTA and move to accept broker implementation, they will be able to accept various cryptocurrencies, while keeping the same benefits of privacy and transaction speed.

Wallet Apps

We finally redesigned the app downloads page on our website, so now it’s easier to find all our apps, including wallets, and their releases for various mobile and desktop operating systems: iOS, Android, Windows, Mac OS X, and Linux. In recent wallet releases, we fixed some bugs and added new configuration options. The upcoming wallet release will support purchases with real time authorizations using full supernodes (currently it supports a limited version of RTA on testnet only).

CryptoFind App

As our app for discovering and listing crypto-friendly merchants is gaining more popularity among crypto enthusiasts, we periodically release new features and bug fixes. In recent CryptoFind version, in addition to bug fixes, we added a possibility to take a picture of the GRAFT sticker on the merchant’s window so the users can earn better bonuses.

Happy Grafting!

New Element of GRAFT Ecosystem – Stable Value Payout Token

Designing Payout Tokens and Real Time Decentralized Exchange

As we’re working on the design and development of the features defined in the original GRAFT white paper, we are monitoring industry trends, listening to the community, and constantly looking for new ways to enhance and extend functionality of GRAFT network and its applications. Currently, we are in a process of refining several sections of the white paper, adding new features that will help GRAFT become an even more comfortable place for both merchants and buyers. In order to do that, we are designing two very important ingredients: a payout tokens and a real-time decentralized exchange. These two new features will enable optimal flow of funds, either crypto or fiat between GRAFT users on both sides of retail payment transaction. We will publish information about those new elements of GRAFT ecosystem in this blog, in two different posts, before it goes to the next version of the white paper. The first article below describes payout tokens, and the second one, which will be published soon, will describe real-time DEX using atomic swaps on network of GRAFT supernodes. The product roadmap will be also updated along with the publication of the updated white paper.

GRAFT Merchant Token Platform:

Introducing Payout Token

Although recent version of the GRAFT white paper provides pretty detailed definition of merchant token concept, it does not contain (yet) some important details which are described in this article. In addition, we introduce a concept of payout token – a special type of a merchant token that will be used to facilitate merchant payouts in local fiat currency. Before we move to payout token definition, let’s refresh our memories to recollect the concept of a GRAFT merchant token, which is a foundation of GRAFT payout token. Here is the definition from the GRAFT white paper:
In addition to fast and inexpensive transactions, merchants place high value on customer loyalty and branding. This functionality will be enabled by the token layer of the GRAFT currency. The token represents domain (merchant) specific GRAFT use, and offers smart contract-backed functionality like loyalty point accumulation and use, reward points, sale discounts, spending discounts, competitor discounts, coupons and store credit. Merchant token is a predefined smart contract that allows creating a private token that belongs to its owner. Unlike some other smart contracts and token platforms, creation of GRAFT merchant token does not require any programming and can be done by anyone.
Note that merchant tokens are not equivalent to “open” smart contracts: we do not try to build another Ethereum platform. Unlike Ethereum-like smart contracts that can be unpredictably customized through programming, flexibility of merchant tokens is limited to their necessary features, which makes them simple and inexpensive but powerful tool accessible to a merchant of any size – from individuals and small businesses to large retail chains. In addition, the main features of each particular merchant token type will be supported by supernode DAPI and GRAFT wallet and point of sale apps. Thus, those features are going to be available for merchants and buyers “out of the box”.

Stable Value

Since Graft tokens (GRFT) are tradable, when they are used for merchant payouts directly, volatility may become a problem. We cannot ignore the fact that many merchants would like to be able to accept cryptocurrencies but prefer to get paid in their local fiat currency. This is their reality: merchants still need to pay for restocking, utility bills, and employee salaries in fiat. At the same time, they don’t want to be involved in cryptocurrency exchange business, and they need to be isolated from the financial details of the crypto business. In order to finally fill the gap and connect the two worlds – cryptocurrency transactions and fiat currency merchant operations – we have created a concept of a payout token, which represents a local currency and can be transacted on GRAFT blockchain in real time using the supernode tier of the blockchain. Payout token is based on GRAFT merchant token technology, similar to gift, rewards, and other merchant token types.

Underwriting

The main goal for creating payout token is providing an easy and reliable way for merchants to get paid in stable local fiat currencies while avoiding usage of centralized payment processors. Payout tokens are issued and maintained by responsible token underwriters (such as banks). When someone (payout broker, for example) is buying payout tokens from the token underwriter, the company generates a necessary amount of tokens and transfers them to the buyer in exchange to an equivalent amount of fiat currency. When someone (merchant or payout broker on behalf of merchant) is selling payout tokens back to the token underwriter, the company destroys the tokens and pays an equivalent amount of local fiat currency to the seller. Thus, payout token is always backed by sufficient amount of fiat currency, and its price always remains the same and equals to the corresponding fiat currency float. For example, 100 USDG can be always bought or sold for US$100. Payout tokens will be issued by licensed token underwriters only in exchange to equal amounts of fiat currency. Furthermore, the rights to handle particular payout tokens can be delegated (licensed) to local commercial banks or even national governments. At this point, we’re open to partnership inquiries from financial institutions interested in underwriting payout tokens tied to the local currency. Please email info @ graft.network or contact us through other means if you represent an organization that wants to get involved.

Details

VChain name for all payout tokens is always “GRAFT”. Each payout token subtype matches a particular local fiat currency. For example, GRAFT.USDG token (ticker: USDG) matches US dollar. Payout Token Naming Format GRAFT.[Currency Ticker]G Examples:
GRAFT.USDG GRAFT.EURG
 

Vlog Version

Special shout-out to Jose D for making this wonderful video version of this important blog post, making our ramblings little easier to digest. Thanks Jose!!!

GRAFT Development Status Update May 2018

It’s time for another status update! Y’all are busy people, so let’s not waste any time and get right to the point.

Payment Apps

Let’s start from really good news – our Merchant Marketplace app just received certification from Verifone – big step towards GRAFT acceptance by brick-and-mortar merchants and a product of 6 months long development cycle in close communication with Verifone. We are working on improving this application as well as building apps for other major players in the area of hardware payment terminals such as Ingenico.

Also, we just started designing the online shopping cart integrations – the first implementation is going to be an integration with Shopify, one of the most popular online store platforms. While it’s not within GRAFT’s charter to produce all the integrations, we take it upon ourselves to provide reference integrations with few leading platforms, paving the way for the independent software developers to take GRAFT to all other platforms.

Blockchain

It’s not a big secret that GRAFT has been forked from Monero – in order to be able to reuse the best (as of today) implementation of Cryptonote protocol, which is the most secure blockchain protocol so far, at least for people who care about their privacy. The idea was (and still is!) to take the open source Cryptonote technology and use it as a tier-1 foundation of the future 2-tier application platform, when the 2nd tier consists of the network of full supernodes (please read the white paper for more details). So the GRAFT dev team was supposed to be mostly focused on design and implementation of the tier 2 from the beginning. Unfortunately, sometimes our plans diverge reality in unpredictable ways, and we admit that it was naive assumption. Instead of working on core development tasks, significant part of the team had to address several problems caused by network difficulty and timestamp manipulation attacks. As a result, we switched to more efficient difficulty adjustment algorithm, which is already used by a few other blockchains, and even managed to improve it. We also followed the majority of Cryptonote community and implemented ASIC-resistant code.

We appreciate a concrete help we receive from the community, including individual contributors zawy12 and jagerman – thank you guys! It’s also worth mentioning that our full time core dev team has been growing as well – we have added two senior core developers and project/product manager.

We are working on another potential modification – Cryptonote Heavy hash algorithm. Although the code change is ready, we are still testing, and haven’t made a final decision when (if at all) to switch to Heavy. We continue monitoring the situation in order to find the best time for changes that require major network update.

Real Time Authorizations (RTA)

Our top-most development priority right now is RTA and we’ve been hard at work doing the R&D and laying the foundation to meet our delivery timeframes. For those of you who are interested in details, here is the “10,000 foot view” of RTA – simplistic, optimistic sequence diagram of the RTA flow: Note that every line of text in this diagram correspondents to hundreds or even thousands of lines of the source code, so this diagram just demonstrates interactions between the main players, without going deeply into the details such as auth sample selection, fee distribution, message broadcasting, etc. We are working on various modules of the RTA so we could compile the full picture: supernode-ng server framework, porting DAPI/business logic into a new framework, and authorization sample communication, which includes both super-fast UDP-based direct communication protocol (for “urgent” messages) and “unhurried” protocol (for regular message transmissions) based on existing P2P implementation.

CryptoFind

Although CryptoFind was not designed to be the core product, its popularity recently skyrocketed, and so now we cannot imagine GRAFT without CryptoFind, which becomes the most comprehensive worldwide database of businesses that accept crypto. We have implemented some new features and improvements in CryptoFind since the last update: added a text search function, which allows you to find nearby points by name or type (cafe, store, refueling, etc.), enhanced the user interface, and created statistics page.

Network Monitoring

Also we are internally monitoring multiple parameters of GRAFT servers using special tools such as CloudWatch and Nagios, we thought that the community should be able to know about the basic status (“up/down”) in real time as well, without the need to ask and repeat the same questions on forums. So we have created a simple public network status monitoring page – don’t forget to check it out!

Happy Grafting!

Consolidating “US” and “EU” GRAFT Mining Pools Into a Single Community Pool

GRAFT team is going to consolidate the “US” and “EU” mining pools into a single community pool, which is supposed to increase the efficiency and reduce the costs of maintenance and support. Initially, at the moment of GRAFT blockchain launch on January 16th, 2018, two pools were supposed to ensure better decentralization and stability of the new blockchain; however, rapid growth of GRAFT popularity and mining community made this issue irrelevant shortly after the launch. Now Graft team is seeking a better distribution of the hashrate load, and as the network grows bigger, we are decommissioning one pool to allow operators of independant pools to gain a bigger market share.

The URL of the consolidated pool is going to be grftpool.com. Users of both current pools will be automatically redirected from the old urls. Miners connected to the “EU pool” will not be affected. Miners connected to the “US pool”, which is going to be shut down, will be receiving their payouts in full after the mining on the US pool is turned off. The switch will take place on April 1st. We recommend all miners currently connected to us.pool.graft.network to switch to eu.pool.graft.network as soon as possible in order to avoid any unexpected issues. Happy mining!