The blockchain has emerged naturally from internet protocols. It is attracting the attention of numerous technical, financial, and industrial parties as a promising infrastructure for achieving secure peer-to-peer (P2P) transactional systems. It is inherent in a wide variety of application domains that participating peers are usually not equally trustworthy. A trust graph is encoded in the Point of Trust (PoT) blockchain protocol. When run, it produces a randomly selected node in each round proportional to its total trust in the underlying trust graph. This node is selected as the leader to propose the next block in the managed blockchain.
The PoT implies a trust graph on which peers can be ranked based on their trust ratings. The trust graph in PoT ensures that:
- The system is not dominated by a few highest trusted peers
- The network is self-adaptive to avoid monopolized trust power
- Each peer declares (in a decentralized uncontrolled fashion) the trust towards any member of the system establishing a trust graph unambiguously encoded by the blockchain itself.
- It is extracted from the peers’ social networks and inferred from the interactions between peers in the underlying system.
- The identity management is enforced (i.e. public with permissionless participation or private with permission membership),
- The decentralized property of the environment in any case is not broken.
Conventional finance relies on credit bureaus for credit assessment and government-provided ids for identity. It limits access to credit for small businesses and individuals. Bitcoin proved that trustless peers can create and exchange value over the internet without the intermediation of a central trusted authority.
The current market needs to be focused are:
- Funding of small businesses and individuals left out by traditional finance
- Using social capital to prove identity and creditworthiness to lenders from both conventional and DeFi side
- Authenticating collateral and/or cash flow (against which finance is raised)
- Reducing friction in repayment and collateral enforcement
The trustworthiness of a person is based on their trust rank. In PoT blockchain, peer trust is evaluated in the network based on a dynamic trust graph that emerges in a decentralized fashion. It is encoded and managed by the blockchain itself. The trust is declared based on explicit factors in the system (e.g., transactions between the peers, behavior observed in the network), or on implicit elements such as business relationships between peers or criteria relating to the underlying application supported by Blockchain.
Newrl’s Social Graph
Consensus: To agree on the validity of cryptocurrency transactions in a blockchain network, there is a framework that allows network participants to agree or disagree on the validity of data entering a ledger. A consensus is a set of rules enabling a blockchain network to agree on data values and network states that ultimately determine the legitimacy of every transaction. Consensus facilitates trust, agreement, and security throughout a blockchain network.
Newrl provides a solution to bring the trust back and enhance it further. Newrl is a decentralized trust network; a social graph of identifiable real individuals and small businesses. It is like a WhatsApp meeting Ethereum meeting Credit bureau. It is a decentralized social network that enables users to transact value and collaborate in a decentralized manner. Hence alters the trust score based on the honesty of users’ behavior.
Newrl focuses on:
- Social graphs and PoT protocol
- Trustworthiness of a person based on trust rank similar to Google’s page rank
- Hard to fake/game a trust rank overnight, unlike government-issued ids and centralized credit assessment
- Generalizing trust score use beyond the credit network itself
- Decentralized collaborations, jobs, tenant contracts, etc
PoT makes it easy to create dynamic peer-to-peer payment channels that can scale to meet enterprise needs. It has reduced the amount of energy required to maintain blockchain-based systems. Using PoT has inhibited low-trusted peers from participating in the mining process as their chances would be relatively low compared to the privileged more trusted nodes. It defines the critical modules to achieve blockchains and formalizes the required properties to ensure their robustness and security.