Catching up with P2P and Smart contracts

Alonzo protocol update
Boosting Network decentralisation

Following the last Cardano 360 edition back in Mar 21, we received further progress updates this week on two topics discussed. Click on the images above for the full blog post by IOHK.

1. Smart Contracts and Alonzo Protocol updates
2. P2P network and boosting network decentralisation

 Lets dive in.

1. Smart contracts

What is Smart contract? A smart contract is a self-executing contract with the terms of the agreement between buyer and seller being directly written into lines of code, which exist across a distributed, decentralized blockchain network. The code controls the execution, and render transactions traceable, transparent, and irreversible. They also  permit trusted transactions and agreements to be carried out among disparate, anonymous parties without the need for a central authority, legal system, or external enforcement mechanism.

Mary – a multi protocol upgrade that allows users to create their own unique tokens for transaction on the Cardano network, was introduced back in early Mar. The next Alonzo upgrade will seek to deepen and build on these capabilities in about 4 months, adding support for smart contracts and thereby allowing businesses to create smart contracts and decentralised apps on the Cardano network. 

In Cardano’s evolution to become a worldwide, distributed ledger, it is essential for the blockchain to guarantee that any payments can be transferred and used securely by businesses and individuals alike. Possible areas of business needs could include the deployment of escrow-based decentralised cryptocurrency exchanges

IOHK recognises that the important element for any smart contract platform is security and reliability, and thus applies a rigorous approach using the Plutus Core Language to significantly improve the scripting options. 

It definitely seems like a packed 4 months ahead!

2. Improvements to the P2P communication

Since d=0, 100% of all block production had been decentralised and  Stake Pool Operators (SPO) are fully responsible in running the blockchain. In our last blog post, we discussed that this is merely the first (but huge) step of achieving full decentralisation.  

With the transition from a handful of federated notes (ran by IOHK/ Emurgo/ Cardano Foundation etc) to a proof-of-stake system run by the community, Cardano is aware that the next step is to improve its P2P communication between each stakeholder. How then does Cardano continue to grow its network to make it more dynamic / efficient, and ensure that it is resilient to failure or worse, total collapse? 

First, we have to understand that Cardano’s networking layer is a physical infrastructure that combines nodes and their interaction into a unified system. The network relays information about transactions and block creation among all active nodes. In this way, the system validates and adds blocks to the chain and verifies transactions. Thus, a distributed network of nodes must keep communication delays to a minimum, and be resilient enough to cope with failures, capacity constraints, or hackers. 

Since the introduction of Shelley, nodes were able to communicate with each other via federated or other SPOs’ relays. While nodes can still produce blocks and relay information without depending on federated nodes, the connection is manually constructed and can thus be challenging to SPOs to setup. 

To cope with a growing ecosystem, IOHK’s engineers have been working to improve their “network stack” with advanced P2P capabilities to enhance the flow of information and reducing (ultimately removing) the usage of federated nodes. These includes

a) Mini protocols – enables automated communication between nodes, by implementing a basic information exchange requirement

b) Connection management – Using a multiplexer to improve bi-directional communication between peers and enhance node-node communication without affecting performance due to different operating systems.

c)P2P Governor functionality – Categorising peers (Cold, warm, hot) to provide visibility by building and maintaining a connectivity map to ensure that the best system performance

As of writing, the IOHK team is in the final stages of testing. 

Conclusion & Huat thoughts

The various teams are certainly working hard to bring alive the roadmap laid out in the last Cardano 360 edition. Both topics above have huge potential to improve / grow the Cardano ecosystem. When they are finally implemented, we would likely see an upwards adoption of the Cardano blockchain, for business or individual users, while the community who are running the blockchain will be able to communicate better and more efficiently, to further develop and improve the Cardano ecosystem. 

Its like helping one another to build a better world, and this is exactly why we at Huatpool decided we wanted to be a small part of the Cardano ecosystem. 

Let us know what are your thoughts in the comments below! 

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