White Paper - ltecoin.info · White Paper LTE. LITECOIN ... Release Circulation market foundation for the future of a new generation of the underlying technolo- ... nism of consensus,

White Paper

LTE

LITECOIN

Content

Ⅰ、Blockchain Overview

1、Bitcoin and blockchain overview

2、The basic model and key technologies of blockchain

3、Application scenarios of blockchain

4、Existing problems of blockchain

5、Smart contracts based on blockchain

6、Blockchain driven parallel society

1、LTE development motivation

2、Development direction

2.1、The data layer

2.2、The network layer

2.3、Consensus layer

2.4、Layer

2.5、Contract layer

4.1 、Security problem

4.2 、The efficiency problem

4.3 、Resource issues

4.4 、Game problem

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Ⅱ 、Design philosophy

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Ⅲ、 Summary of LTE

1、What is the LTE

2、How to get LTE

Ⅳ 、The technical details

1、Litecoin branching

2、UTXO

3、EquiHash

4、POW+POS

5、Replay attack protection

6、Zero knowledge proof

7、Technical route

Ⅴ、Team member

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1、member introduction

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Ⅰ、Blockchain Overview

1、Bitcoin and blockchain overview

Bitcoin is so far the most successful block chain scenarios. According to

the real-time monitoring site Blockchain. The information statistics show

that on average about $7, 5 million, 120 000 transactions are written to

the currency block chain per day, has generated more than 400000

blocks.

Encryption, according to the monetary value of statistics website, coin-

marketcap.com until February 2016, a total of 675 global encryption cur-

rency, total market capitalization of more than $6.7 billion, in which the

currency market capitalization of about 86%, Rayleigh wave currency

and etheric currency respectively in two, three. Now the currency supply

(i.e., has dug out the number of COINS) is more than 1 5 million, accord-

ing to the current price of $389.50 per commemorative COINS to esti-

mate the total market capitalization of more than $5.9 billion. In 2015, the

countries all over the world GDP ranking occupied 144th (moldova) is

slightly lower than Europe. In other words, in the absence of government

and central bank credit endorsement, decentralized algorithm of COINS

have to rely on credit to create with small volume quite global economies

in Europe. By 2027, 10% of global GDP will be stored by chain block

technology.

he first Bitcoin the block (called creation blocks) was born on January 4,

2009 by the founder of this hearing. A week later, in the hearing sent 10

COINS to cryptography experts Hal finney, formed for the first time in the

history of currency trading; In May 2010, Florida programmers use

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10000 COINS and buy pizza coupon worth $25, so the currency was

born the first fair exchange rate. Since then, the currency price rise

quickly, and in November 2013 in each currency exchange 1 high histori-

cal value of $242, $1, 241.98 a Troy ounce of gold prices over the same

period. According to CoinDesk estimate, there are about 60000 busi-

nesses worldwide accepted currency transactions, which China is the

country's fastest-growing currency trading.

The currency is essentially a system generated by the distributed net-

work of digital currency, its process does not rely on particular central-

ized organization, but depends on the workload in a distributed network

nodes is called.

(Proof of the work, PoW) consensus process to complete the verification

for the currency transactions and records. PoW consensus process

(commonly known as mining, each node called the miners) contribution

of all nodes is usually their own computing resources competition to

solve a difficult mathematical problems can be adjusted dynamically,

successfully solve the problem of the mathematical miners will get the

block of charge to an account, and the current time period all the curren-

cy transactions recorded in the packaging of a new block, according to

the time sequence to link to the main chain of the currency. The currency

system will be issued at the same time a certain number of COINS to

reward the miners, and inspire other miners continue to contribute force.

The currency circulation process depends on security cryptography

method. Every currency transactions through special algorithm process-

ing and the miners to block chain after verificat ion, as well as the

attached with certain flexibility script code (smart contracts) in order to

realize the programmable automation currencies. Thus, the currency

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and chain block system generally has the following five key elements,

namely public block chain books, distributed peer-to-peer network

system, decentralized consensus algorithm, moderate economic incen-

tive mechanism, and programmable script code.

Block chain technology to solve the currency system of digital encryption

monetary field for a long time required to face two important questions,

namely double pay and Byzantine general problems. Double payment

issues is also known as \ double flower ", it is using digital characteristics

of monetary twice or more times the use of \ the same amount of money

"to complete the payment. Traditional financial and monetary system, the

cash (fiat) as a physical entity, can avoid double pay naturally; Other

forms of digital money need trusted third party institutions (such as bank)

to ensure that the center. The contribution of block chain technology is in

the absence of third parties, through validation and consensus of distrib-

uted node mechanism can solve the problem of decentralized system of

double pay, accomplished the value in the process of information trans-

mission and transfer. The Byzantine general problem is a distributed

system interaction problems generally, which in the case of lack of trust-

ed central node of the distributed node how to reach a consensus and

build trust. Blockchain through digital encryption technology and distrib-

uted consensus algorithm, realized in the case of without trust a single

node of the trusted system. Build a decentralized and traditional institu-

tions such as the central bank at the center of the credit mechanism of

endorsement, the currency blockchain formation is a software defined

credit, this marks a centralized national credit to the decentralized algo-

rithm of radical change.

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Bitcoin with its first born advantage, at present has formed complete

system covers the issue, circulation and ecosystem of financial deriva-

tives market and industry chain (as shown in figure 1), which is its

long-term occupy the vast majority of market share of the main causes

of digital encryption currency. The currency of the open source nature

attracted a large number of developers continuous contribution to its

innovative technology, method and mechanism; Currency count each

network node (men) to provide power to ensure the stability of the cur-

rency consensus and security, most of its work force from the vendors

selling consensus algorithm for PoW professional equipment (mill.) the

currency network for each new discovery of the block to issue a certain

number of COINS to reward the miners, some miners may cooperate to

establish mineral pools of revenue sharing, collection in order to calcu-

late the force to improve the probability of the currency. The currency

after released into the circulation, the holder can through specific soft-

ware platform (such as COINS) wallet to pay COINS to the businessman

to buy goods or services, which embodies the currency monetary prop-

erties; At the same time because of the currency price rise and fall of the

mechanism to make it fully has all the attributes of the financial

derivatives, therefore appeared the currency trading platform to facilitate

the holder investment or speculative currency. In the circulation and

financial market, each a currency deal by the currency network all the

miners validation and credited to block chain.

Currency is the first block chain technology can assign \ killer ", the core

technology and block chain so far most talent resources is still in the field

of research and development of the currency. However, block chain as a

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Fig. 1.1 The Bitcoin ecosystem

Trading

information

BTC Development

BTC network

Mining Pool

Miner Miner Miner

Miner Miner ⋯⋯

Merchant

The holder

BTC trading platform

Investor

BTC software platform

BTC

Trading information

BTC

BTC

BTC

BTC

update

BTC

Equipment

computations

Equipment supplier

Release Circulation market

foundation for the future of a new generation of the underlying technolo-

gy, its application scope will surpass digital encryption monetary and ex-

tends to the financial, economic, technological and political and other

fields.

The existing technology, the mode and mechanism of Bitcoin,

provide some useful reference to blockchain in the development

of new application fields, and the new blockchain in the field of in-

novation also certainly will, in turn, promote the currency system

of the existing problems. Therefore, there is a synergy evolution,

harmonious coexistence between the currency and blockchain

technology rather than competing positive feedback relations.

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In this section, we will together with the present situation of the technolo-

gy and application of the currency system, the basis of block chain tech-

nology model, basic principle and key technology, and block chain in

several innovation mode of the currency system. The existing other block

chain applications mostly like COINS, only in some specific link more or

less adopts the model of the currency of the variation.

Block chain technology infrastructure model is shown in figure 2. Gener-

ally speaking, block chain system consists of data layer, network layer,

consensus, incentive, contract of layer and application layer. Among

them, the data layer encapsulates the underlying data block and related

technologies such as data encryption and timestamp; The network layer

includes distributed network mechanism, data transmission mechanism

and data verification mechanism. The consensus layer mainly encapsu-

lates the various consensus algorithms of network nodes. The incentive

layer integrates economic factors into the blockchain technology system,

mainly including the distribution mechanism and distribution mechanism

of economic incentives. The contract layer mainly encapsulates various

kinds of scripts, algorithms and smart contracts, which is the basis of the

programmable characteristics of block chain. Application layer encapsu-

lates the block chain various application scenarios and case study. This

model, based on the timestamp of the chain block structure, the mecha-

nism of consensus, a distributed node based on consensus to calculate

force of economic incentives and flexible programmable intelligent con-

tracts is the most representative block chain technology innovations.

2、The basic model and key technologies of blockchain

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Narrow chain block is a decentralized system, each node Shared data

books. Each distributed node can through specific Merkle hash algorithm

and tree data structure, will be a period of time to receive the transaction

data and code wrapped in a data block with a timestamp, and link to the

longest main blocks in the current chain, form a new block. This process

involves block, chain structure, hash algorithm, Merkle technology ele-

ments such as trees and timestamp.

Data block, as shown in figure 3, each data block is usually the head

(Header) and the block Body (Body) two parts. Block head encapsulates

the current Version (Version), the former block address (Prev - block),

the goal of the current block hash value (Bits), the current consensus

process solution of random number block PoW (Nonce), Merkle root

(Merkle - root) and the information such as Timestamp (Timestamp).

[21] currency network consensus can dynamically adjust PoW difficulty

value of the process, the first to find the right solutions for the random

number Nonce and tested all the miners will get the current block billing.

Block Body, including the current number of deals and proven, the block

generated in the process of creating all transaction records. These re-

cords through the process of Merkle hash of the tree generated only

Merkle root and recorded in the block.

2.1 The data layer

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Fig. 1.2 A basic framework of blockchain

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Programmablecurrency

Programmablefinance

Programmablesociety

Script code

Release rule

PoW PoS DPoS ⋯⋯

Allocation rule

Algorithm mechanism

Transmissionrule

Authenticationrule

Intelligentcontract

The application layer

Contract layer

P2P network

Transmissionrule

Authenticationrule

P2P network

The datablock

The chainstructure

The timestamp

Asymmetricencryption

MerkleTree

The hashfunction

The network laye

The data layer

Consensus laye

The network layer

Layer

Consensus layer

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Chain structure: acquired the right to charge to an account of the miners

will be the current link to the previous the block, the formation of the latest

main chain blocks. Each block into the inside, in order to form the foun-

dation of the block to the current block is one of the longest main chain,

which recorded the complete history of chain block data, can provide

block chain traceability of data and positioning function, ultimately, any

data can be through the chain structure of tracing. To be sure, if short

time there were two men at the same time, dig out "to link two new blocks,

the main chain of the block may be temporarily \ bifurcate" phenomenon,

its solution is agreed upon in the miners always choose to extend the cu-

mulative effort to prove that the largest block chain. Therefore, after the

main chain bifurcate, subsequent through calculating and comparing, the

Fig. 1.3 The structure of blocks

Version number

Thepreviousblock

Thenextblock

The previous block The time stamp The random number

Merkle tree

The number of deals Hash1～8

Hash1234

Hash12

Hash1 Hash2 Hash3 Hash4 Hash5 Hash6 Hash7 Hash8 ⋯⋯

⋯⋯

Hash34 Hash56 Hash78

Hash5678

Objective the hash

Trading1 Trading2 Trading3 Trading4 Trading5 Trading6 Trading7 Trading8

The block body

The block head

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miners of the block links to the current total workload, prove that maxi-

mize alternative chain to form a longer new main chain, so as to solve the

problem of bifurcation [19].

Timestamp: technical requirements to obtain the right of charge to an ac-

count block chain node must be stamped with the timestamp in the cur-

rent data block header, data show that block write time. Therefore, each

block is on the main chain according to the order of time sequence. The

time stamp technology itself is not complicated, but its application in block

chain technology is a significant innovation. The existence of the time

stamp can be used as a block of data to prove (Proof of existence), helps

to form not tamper with the database and unforgeable block chain, to

block chain is applied to the notarization, registration of intellectual prop-

erty rights and other time sensitive areas laid a solid foundation. More

importantly, the timestamp for the future based on the Internet and large

data block chain increases the time dimension, through the block data

and time stamp to reconstruct history possible.

Hash function: block chain to keep the original data or transaction re-

cords usually does not directly, but rather the hash function value, the

original data encoding for a particular length of string composed of Num-

bers and letters written block chain. Hash function (also called a hash

function) has many excellent characteristics, and is especially suitable

for used to store data block chain. For example, by working backward

hash output can hardly input values (one-way), different length of input

hash process consumes about the same amount of time (time) and pro-

duces the output of the fixed length (staying power), even if the input (just

a byte will also have a significant different output values (random), etc.

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The currency block chain usually adopts double SHA256 hash function,

the original data of arbitrary length after two SHA256 hash operation is

converted into a length of 256 bits (32 bytes) of a binary number to a uni-

fied storage and identification. In addition to the above characteristics,

SHA256 algorithm also has the huge hash space (2256) and impact re-

sistance (to avoid different input values produce the same hash value)

features, can satisfy the currency of any relevant tags need without con-

flict.

Merkle tree: Merkle tree is an important data structure of block chain, its

effect is the existence of rapid induction and calibration block data and

integrity. As shown in figure 3, Merkle tree usually contains blocks in the

bottom of the body (trading) database, block head to the root of the hash

value (that is, Merkle root) and all along the bottom block of data to the

root hash branch. Merkle tree operation process is generally will block

body data grouping hash, and will generate new inserted into the Merkle

hash value is in the tree, so the recursive until the last of the root and

notes for block head Merkle hash value. The most common Merkle tree

is to use the binary tree of Merkle COINS, its each hash node always

contains two adjacent blocks of data or the hash value [22], and other

varieties, including the etheric fang Merkle Patricia tree etc. [4] Merkle

tree has many advantages: the first is greatly improves the efficiency and

scalability of the block chain, makes the block head only contains root

hash value without having to encapsulate all the underlying data, which

makes the hash algorithms can run efficiently on smart phones and even

the Internet of things device; Followed by Merkle tree can support \ sim-

plified payment verification agreement, i.e. without running under the

condition of complete block chain network nodes, also can carry on the

inspection to the data (trading) [3].

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For example, to verify in figure 3 deal 6, without a chain data, the client

can download the complete blocks from trading by including other nodes

for 6 along the Merkle hash tree root that block head hash hash se-

quence (namely the hash node 6, 5, 56, 78, 5, 678, 1 234) to quickly es-

tablish the existence and correctness. Generally speaking, in N trading

block in the confirmation of any transaction algorithm complexity only

log2N. This will greatly reduce block and validate the bandwidth required

of the chain operation time, and only save some related data block chain

lightweight client is possible. Asymmetric encryption: asymmetric en-

cryption is to meet the demand of security requirements and ownership

verification and integrated into the blocks in the chain of encryption tech-

nology, the common algorithms including RSA, Elgamal, Rabin, d-h,

ECC (elliptic curve encryption algorithm), etc. Asymmetric encryption is

used in the process of encryption and decryption two asymmetric pass-

word, respectively referred to as the public and private keys. Asymmetric

keys which has characteristics of the two, first is to use one of the key

(public or private key encrypted information, only the corresponding key

to unlock another; Followed by the public key can be open to others, the

private key is secret, others can't through the corresponding private key.

The public key calculated asymmetric encryption technology in the appli-

cation scenario of block chain mainly includes the login information en-

cryption, digital signature and authentication, etc., including information

encryption scenario is dominated by the sender (to A) the use of the re-

cipient (for B) public key to encrypt information and then send to B, B

used his private key to decrypt the message. The currency trading en-

cryption which belongs to the scene; The digital signature scenario is

sent to B by sender A using its own private key encryption information,

and B USES the public key of A to decrypt the information to ensure that

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the information is sent by A; The login authentication scenario is sent to

the server by the client using the private key encrypted login information.

After receiving, the user USES the public key of the client to decrypt and

authenticate the login information.

Currency system, for example, the asymmetric encryption mechanism

as shown in figure 4: the currency system in general by calling the oper-

ating system at the bottom of the random number generator to generate

256 random Numbers as the private key. The total amount of up to 2256

COINS a private key, by iterating through all the private key space ex-

tremely hard to get the private key entities COINS, thus security of cryp-

tography. To facilitate identification, a 256 - bit binary form of currency

private key will be sent to you by SHA256 hash algorithm and Base58

conversion, the formation of 50 characters easy to identify the length of

the written and presented to the user's private key; COINS of the public

key is generated by the private key by Secp256k1 elliptic curve algorithm

first 65 bytes of random Numbers. The public key can be used to gener-

ate address used in currency trading, the generation process for the first

public key SHA256 and RIPEMD160 digest double hash operation and

generate 20 bytes of the result (namely hash160 results), then after

transformation SHA256 hash algorithm and Base58 forming 33 charac-

ters length COINS address. Public key generation process is irrevers-

ible, which cannot be deduced through public key private key. The cur-

rency of the public and private keys are usually stored in COINS wallet

file, which is the most important private key. The loss of the private key

means lost corresponds to address all of the currency assets. Current

COINS and chain block system, according to the actual application

demand has spawned many private key encryption technology, to satisfy

the multiple signature is more flexible and complex scenes.

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Fig. 4 he asymmetric cryptography of the Bitcoin system

The private key（ 256bits）

SHA256

Base58

SHA256Base58

SHA256RIPEMD160

Secp256k1

Elliptic curve algorithm

The private key（50character）

The public key

（65 bytes）The public key

（20 bytes）

address（33character）

Network layer encapsulates the network mode of block chain system,

elements such as message transmission protocol and the data validation

mechanism. Combined with the actual application requirements, with the

specific design of communication protocol and the data validation mech-

anism, chain blocks, each node in the system may be can participate in

the process of block data validation and billing, only when the block of

data by most tech-oriented nodes after verification, can be credited to

block chain.

Network mode: block chain system of nodes usually with a distributed,

autonomous, free to access features such as open, thus generally USES

peer-to-peer network (Peer - to - Peer network, P2P network) spread

around the world to organize the participation of the data validation and

billing nodes. Each node in the P2P network are opposite and with flat

topology interconnection and interaction, there is no centralized special

2.2 The network layer

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How to effectively reach a consensus in a distributed system is an im-

portant research problem in the field of distributed computing. As in the

2.3 Consensus layer

nodes and hierarchy, each node will undertake the network routing, vali-

dation data, spread the block data, found a new node, etc., depending on

the node storing data quantity can be divided into the node and light-

weight. The former holds so far to the current newest the block from the

creation of the complete data block chain, and to participate in the block

of data through real-time calibration and billing to dynamically update the

main chain.

The node's advantage is not dependent on any other nodes that can be

independently realize arbitrary block of data validation, query and

update, disadvantage is the maintenance of all nodes space high cost;

Currency, for example, as of February 2016, creation to present the

block the amount of data has more than 60 GB. In contrast, lightweight

node is given only part of the chain block data, and through the simple

mentioned in section 2.1 payment authentication way to the adjacent

nodes data needed for the request to complete the data validation.

Data transmission protocol: after any block data generation, broadcast to

the entire network, the data generated by the node to verify all the other

nodes. The existing block chain system general design according to the

requirements of practical application of the currency variations of trans-

mission protocols, such as the etheric fang block chain integration the

so-called \ "ghost agreement in order to solve because of the fast block

data confirm.

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social system of democracy \ "and \" relationship, decision-making, the

dispersion of the lower the efficiency of the system to reach a consensus,

but the system stability and satisfaction is higher; And the more concen-

trated the decision-making system is easier to reach a consensus, but

also appear more repressive and authoritarian. Block chain technology is

one of the core advantages to high dispersion in the decision-making in

the decentralized system makes the effectiveness of the data to each

node efficiently blocks on the same page.

Early currency block chain is proved by means of count is highly depen-

dent on the node force workload (Proof of the work, PoW) mechanism to

ensure the consistency of distributed bookkeeping currency network.

With the development of the block chain technology and a variety of

competitive currency rising, the researchers have proposed many do not

rely on work force and can reach a consensus mechanism, such as the

rights and interests of little money first prove (Proof of gaining, PoS) con-

sensus and bit the first authorized shares prove mechanism (Delegated

Proof of gaining, DPOS) consensus mechanism. Block chain consensus

mechanism layer that encapsulates the consensus.

PoW consensus: the hearing in its currency, founding the thesis designs

the PoW consensus mechanism, its core idea is distributed nodes to cal-

culate power competition is introduced to guarantee the safety of data

consistency and consensus. The currency system, each node (i.e., the

miners) based on their own computer to calculate force competing to

solving complex but a verification easy SHA256 mathematical problems

(i.e., dig), the fastest to solve the problem of node to get the block to an

account and the system automatically generate the currency reward.

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The mathematical problems can be formulated as follows: based on the

current difficulty value, by a proper random number search solution

(Nonce) made of figure 3 central each metadata double SHA256 hash

value hash value less than or equal to the target. The currency system by

the difficulty of the flexible adjustment of random search value to control

block generated time to an average of 10 minutes. Generally speaking,

PoW consensus of random search process (see figure 3) block structure

as follows:

Step 1. Collect the entire network of the current time period unconfirmed

transactions and add a Coinbase transaction for issuing new bitcoins.

Forming the transaction set of the current block;

Step 2. Calculate the Merkle root of the block transaction collection and

fill in the other metadata of the block header, in which the random number

Nonce set zero;

Step 3. Random number Nonce add 1; The double SHA256 hash value

of the current block head is calculated, if the value is less than or equal to

the target hash value, then the appropriate random number is success-

fully searched and the bookkeeping power of the block is obtained. Oth-

erwise, continue step 3 until the appropriate random number is searched

by any node;

Step 4. If a certain period of time is not successful, then update the time-

stamp and unrecognized transaction collection, recalculate Merkle con-

tinue to search after the root. Conform to the requirements of the block

head hash value is usually composed of several leading zeros, target

hash value is smaller, the more leading zeros block head hash value,

managed to find suitable random number and dig \ "the difficulty of the

new block. According to the real-time monitoring site Blockchain block

chain. The info display, as of February 2016, conform to the

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requirements of the block head with an average of 17 leading zeros hash

value, such as the 398th block hash value is 346

\0000000000000000077f754f22f21629a7975cf ￠￠￠ ".

According to the probability calculation of random number 16 per search

will have to find a block containing a leading zeros hash value, and thus

the currency now 17 leading zeros hash value asked 1617 random

search to find a proper random number and generate a new block. Thus,

the currency block chain system security, and tamper-resistant sex is

strong consensus by PoW mechanism is guaranteed, any attack or tam-

pered with to block data must recalculate the SHA256 problem and later

all the block, and computing speed must make forge the main chain of the

chain length of more than, this kind of attack difficulty caused by the costs

will be far more than its benefits. It is estimated that as of January 2016,

the currency block chain work force has reached 800, 000, 000 h/s,

namely 8 ￡1018 calculations per second, greater than the sum of the

global Top500 supercomputers to calculate force.

PoW consensus mechanism is important significance to innovation, its

almost perfectly integrates the currency system of issuing and trading

currency payment and verification, and other functions, and the safety of

the system through calculating power competition guaranteed and de-

center; PoW consensus mechanism at the same time there is a signifi-

cant defect, calculate its powerful force caused by the waste of resourc-

es (such as electricity) has always been criticized by the researchers,

trade confirmations and 10 minutes time to make it relatively is not suit-

able for small business applications.

PoS consensus mechanism: PoS consensus is the common mechanism

for resolving PoW resources waste and security flaws, and alternative.

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Limited to space, this paper mainly focuses on the innovation of the PoS,

relative to the PoW. PoS consensus is essentially determined by the use

of interest instead of PoW work proved that based on hash work force is

the system has the highest equity rather than force node get the block to

an account. The ownership of the rights and interests embodied in the

node to a specific number money, days age or currency is called curren-

cy (Coin days). The age of money is the last time a certain number of

currency and trade the product of the length of time that each transaction

will consume a certain number of currency age. For example, someone

in a deal and hold for 10 days, after receipt of the 10 dollar 100 dollar of

age; Then its after spending five COINS, consume 50 COINS age.

Clearly, using PoS consensus mechanism of system total number of

COINS of age in a particular point in time is limited, long-term cash more

tend to have more money, so money age can be considered as its inter-

ests in the PoS system. In addition, each node in the process of PoW

consensus dig the same difficulty, and the difficulty in the process of PoS

consensus is inversely proportional to the input to a currency of age, the

dig, the more difficult the more low consumption currency age. Main

chain nodes judging standards are the highest cumulative consensus by

PoW difficulty into the highest consumption c age, every block trades will

be submitted to the consumption of its currency age the blocks, the high-

est cumulative consumption currency age blocks will be linked to the

main chain. Thus, PoS only rely on internal currency consensus process

of age and interests without external force and resources consumption,

fundamentally solved the problem of the PoW consensus to calculate

power waste, and can shorten the time of the agreement in a certain

extent, so many competitive currency after the currency mechanism

adopts PoS consensus.

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DPoS consensus mechanism: DPoS consensus mechanism is the basic

idea is similar to \ decisions of the board of directors ", namely the system

of each node can be holding shareholders' rights, as a representative of

the vote to grant a gets the most votes and willing to be on behalf of the

former 101 nodes will enter \ "of the board of directors, in turn according

to the established schedule package settlement for the deal and sign a

new block (i.e., production). Each block is signed before, you must first

verify the previous block has been signed by the representative of the

trusted nodes. The board of directors of the \" authorized representatives

of the nodes can be obtained from each transaction fee income, at the

same time to be authorized on behalf of the node must pay a certain

amount of deposit, the amount is equal to the production of a block of

income 100 times. Authorized representatives node must be responsible

for the other shareholder nodes and if its miss sign corresponding

blocks, the shareholders will recover votes to the node \ out "the board of

directors. Therefore, authorized representative nodes usually must

ensure that more than 99% of the time online to achieve profit targets.

Obviously, and PoW consensus mechanism must trust mechanism of

nodes and PoS consensus is the highest power must trust rights node,

highest DPoS consensus mechanism in each node can decide its trust

authorized node and generate new blocks of charge to an account in turn

by the nodes, thus greatly reducing the participate in verification and the

number of nodes of charge to an account, you can achieve rapid con-

sensus.

Apart from the above three mainstream consensus mechanism, the

actual application of block chain also spawned PoW + PoS and action to

prove (Proof of ac - tivity), and other variant mechanism.

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Block chain consensus process by gathering massive consensus node

work force resources to realize the sharing chain block books data vali-

dation and accounting work, and its essence is a kind of consensus be-

tween nodes task crowdsourcing process. The consensus in decentral-

ized system node itself is self-interest, participation in the data validation

and maximize their profit is the fundamental goal of charge to an account.

Therefore, must design the reasonable crowdsourcing incentive com-

patibility mechanism, the individual rationality behavior of consensus

node to maximize its own benefits and guarantee decentralized block

chain system of the safety and effectiveness of the overall goal is con-

sistent. Block chain system by designing moderate economic incentive

mechanism and integrate with the process of consensus, thus gathered

massive nodes to participate in and form the history of block chain stabil-

ity of consensus.

, in the case of the currency, the currency PoW consensus of economic

incentives and issued by the new currency reward of transactions in the

process of handling fee of two parts, awarded to a successful search to

the blocks in the process of PoW consensus random number and record

the block of the node. Therefore, only when each node through coopera-

tion jointly build sharing and credible history block chain, and maintain the

effectiveness of the currency system, its currency reward and transac-

tion fees will have value. The currency has formed mature mining eco-

system, miners actively involved in the equipped with professional mining

machine equipments based on mining of PoW consensus process, its

fundamental purpose is by getting the currency reward and converted to

the corresponding legal tender to profit.

2.4 Layer

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Release mechanism: each block issuance of the currency in the curren-

cy system is JieTiXing decreasing over time. The number of blocks in the

creation of each block will issue 50 COINS awarded to charge to an ac-

count of the block, after every 4 years (210000 blocks) of each block

issue currency quantity reduced by half, and so on, until the number of

currency stability in the cap of 2, 1 million. The currency trading process

will produce poundage, currently the default fee is one over ten thousand

of the currency, the fees will be credited to block and reward to charge to

an account. The two parts cost will be encapsulated in each block of the

first transaction (called Coinbase trading). Although now each block rel-

ative to the total costs for new COINS is small (usually not more than 1

COINS), but with the future currency number gradually reduce and even

stop issuing, poundage will gradually become the main power of driver

nodes consensus and billing. At the same time, the handling charge can

also prevent a large number of micro amount of trading on the currency

network launched \ dust "attack, have the effect of safety.

Allocation mechanism: the currency system, a large number of nodes is

small force will usually choose to join the mineral pools, through mutual

cooperation together to calculate force to improve dig \ "to the new block

probability, COINS and share this block, and fees. According to Bitcoin-

mining.com, 13 different allocation mechanism. The existing mainstream

mine pool usually adopt PPLNS (Pay per last N shares), PPS (Pay per

share) and PROP (PROPortionately) mechanism.

Mineral pool will calculate the contribution of each node force divided into

shares in proportion (Share), including PPLNS mechanism refers to find

blocks, each cooperative nodes according to their contribution in the last

N shares actual stake to allocate blocks of COINS;

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PPS directly according to stake for each node earnings estimates and

pay a fixed theory, adopt the way of mine pool will be modest fees to

make up for each node of income uncertainty risk; PROP mechanism is

based on node shares in proportion to the contribution of distribution of

the currency. The emergence of mine pool is for COINS and chain blocks

of the potential threat of decentralization trend, how to design reasonable

allocation mechanism to guide reasonable cooperation, avoid all nodes

due to calculate force caused by excessive concentration of security re-

search problem to be solved is the problem.

Contract layer encapsulation blocks all types of script code, algorithm of

chain system and the resulting more complex intelligent contract. If the

data, network and consensus three levels as the underlying block chain \

virtual machine "for data representation, data transmission and data val-

idation function, contract layer is based on virtual machine block chain

business logic and algorithm, is to realize the flexible block chain system

programming and operation data. The basis of digital encryption, includ-

ing COINS, currency mostly adopts the Turing complete simple script

code to program control exchange process, this is the prototype of intel-

ligent contracts; With the development of technology, is now in the ethe-

ric lane and other turning-complete can realize more complex and flexi-

ble intelligent contract scripting language, enables the block chain to

support the macro financial and social system of many applications. This

section will COINS script, for example, from a technical point briefly de-

scribes the basic techniques and methods of contract layer; The exten-

sion of the smart contract will be discussed in section 5.

2.5 Contract layer

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COINS with a simple, based on the stack, from left to right to deal with the

scripting language, and a script attached to the currency trading is es-

sentially a set of instructions of the list. The currency trading is depen-

dent on two kinds of script to verified, namely the lock and unlock script,

the different combination of both can be derived in the currency trade un-

limited number of control conditions. Among them, the locking scripts are

attached on the transaction output values \ obstacle ", output regulation

cost after the deal condition; Unlock script is satisfy is locked in an output

set on the condition of the script, it will allow the output to be consumption

at the same time. For example, most of the currency trading is using the

recipient's public key encryption and private key to decrypt, and their

corresponding P2PKH (Pay to public key hash).

The locking script in the standard trading script is to use the recipient's

public key to block the output function, while the digital signature corre-

sponding to the private key is unlocked.

The bitcoin scripting system can achieve flexible transaction control. For

example, delay payment can be achieved by specifying a time period

(such as a week) as an unlocked condition. By stipulating that the recipi-

ent and the guarantor must sign a private key to control a bitcoin, the

guarantee transaction can be realized. By designing a kind of can ac-

cording to the external information source rules and check whether a

certain probability event happened as unlock script attached on a certain

number of currency trading, gambling can be realized and predict the

market and other types of applications; By setting N private key collection

provide at least M private key to unlock, can realize M � N multigeniture,

namely at least M a N a potential recipient agree to payment by signature

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can be realized. Multiple signature can be widely used in decision-mak-

ing, financial supervision, the mediation guarantees even bequest allo-

cation, etc.

COINS script is the prototype of intelligent contract, has given rise to

human history the first programmable global currency. However, the

currency scripting system is turning-complete, in which there is no com-

plex circulation and flow control, the loss of flexibility at the same time can

greatly reduce the complexity and uncertainty, and can avoid the denial

of service caused by an infinite loop and other logic bombs and other

types of security attacks. In order to improve the flexibility and scalability

of the scripting system, researchers are trying on COINS protocol stack

of the New Deal, to meet in the building of a more complex block chain

intelligence contract requirements. The etheric fang has developed a

spirit complete scripting language code, users can be based on Ethernet

fang build arbitrarily complex and precise definition of intelligent decen-

tralized contracts and application, which is based on building block chain

programmable financial and social system laid a solid foundation.

The technical design, block by block chain unique chain system with dis-

tributed redundant storage, time-series data and tampering and forgery,

decentralized credit, automatic intelligent, security and privacy and other

significant characteristics of contract, which makes the block chain tech-

nology not only can be successfully applied in the digital encryption cur-

rency areas, at the same time in economic, financial and social system is

3 Application scenarios of blockchain

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widely used in the scene. According to the present situation of block

chain technology application in this article, we will block chain is mainly

used in general as digital currency, data storage, data verification, finan-

cial transactions, asset management and voting, a total of six scenarios,

and Outlines the five scenarios of besides digital currency and block

chain three application modes.

High redundant storage of data storage: block chain, each node storing

a data), decentralized, high security and privacy protection features

make it particularly suitable for storage of privacy and protection of im-

portant data, in order to avoid the centralized organization attack or au-

thority due to its improper management of large-scale data lost or

leaked. Similarly, with the currency trading data any data can be through

the hash algorithm to generate the corresponding Merkle tree and pack-

aged to block chain, through the common node of the system to calculate

force and asymmetric encryption technology to ensure the safety. Chain

of multiple signature technology can flexible configuration data access

permissions, for example must obtain specified 5 people in 3 individuals

authorized to gain access to the private key. At present, the use of chain

blocks to store personal health data (such as electronic medical records

and genetic data, etc.) is a promising application area, in addition to store

all kinds of important electronic files (video, images, text, etc.) and even

the human mind and consciousness and so on also has a certain appli-

cation space.

Data verification: data block chain with a timestamp, verify and record

together by consensus node, tampering and forgery, these characteris-

tics make block chain notarization and audit scenario can be widely used

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in all kinds of data. For example, chain blocks can be safely stored per-

manently from all kinds of license, registration, license issued by the

government agencies, certificate, certification and records, etc., and can

at any time convenient to prove the existence of certain data and the au-

thenticity of a certain extent. Many professional audit companies, includ-

ing deloitte has deployed block chain technology to help the auditor to

implement low cost and efficient real-time audit; Factor has designed an

accurate, verifiable and unalterable audit notarization process and

method based on the blockchain.

Financial transactions: block chain technology and the application of

financial markets can be very high fit. Block chain can spontaneously

produce credit in the decentralized system, to establish credit endorse-

ment without central organization of financial markets, which to a large

extent achieved \ financial disintermediation ", the third party payment,

escrow, all intermediaries is disruptive business model change. In the

field of Internet finance, blockchain is particularly suitable for business

models such as equity crowdfunding, P2P network lending and Internet

insurance. Securities and banking is an important application field of

block chain, traditional need through a central clearing institutions, secu-

rities trading center institutions, such as Banks, securities companies

and exchange of multiple coordinate, and the use of block chain con-

tracts and the characteristics of programmable automation intelligence,

can greatly reduce the cost and improve efficiency, avoid cumbersome

centralized clearing delivery process, realize convenient financial prod-

ucts transactions; At the same time, the instant access account of the

blockchain and bitcoins allows Banks to make cross-border transfers

that are faster, more economical and safer than the SWIFT code system;

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This is also an important reason why the R3CEV and Nasdaq have

invested in the research and development of blockchain technology.

Asset management: block chain in the field of asset management has a

broad prospect of application of can achieve tangible and intangible

assets of approval and authorization, and real-time monitoring. For

intangible assets, based on the time stamp technology and do not tamper

with the characteristics of block chain technology can be applied to the

protection of intellectual property rights, domain management, integral

management and etc.; For tangible assets, and by combining the Inter-

net of things technology design a unique identifier for assets and de-

ployed to block chain, can form \ digital intelligence assets ", realize dis-

tributed asset authorization and control based on block chain. For exam-

ple, through to the physical assets such as houses, cars block chain key

authorization, can be based on specific permission to distribute and the

right to use the recycling assets, to help someone whose house lease or

vehicle leasing business model to realize the automation of assets

transfer; By combining the asset marking and identification technology of

the Internet of things, we can also use the blockchain to realize flexible

supply chain management and product traceability.

Vote: voting is typical applications of block chain technology in political

affairs. Distributed consensus based on block chain validation and tam-

per-resistant, can efficiently achieve political elections, low cost applica-

tions such as enterprise shareholder vote; At the same time, block chain

support individual users to vote on certain issues. For example, by re-

cording users to vote on whether a particular event happens, chain block

can be used in scenarios such as gambling and forecast market;

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By recording users' voting scores and Suggestions on specific products,

we can achieve the "mode of social manufacturing" of large-scale user

crowdsourcing design products.

Scenarios and requirements according to the actual application, block

chain technology has evolved three application modes, namely Public

chain (Public blockchain), union (Consortium blockchain) and Private

chain (Private blockchain). Public chain is completely decentralized block

chain, distributed systems are involved in any node chain data reading

and writing, validation, and consensus on the process, and according to

the pew or PoS contribution to obtain corresponding economic incen-

tives. The currency is the typical representative of Public chain. Chain is

of decentralized (or more centralized) block chain, applies to organiza-

tions consisting of multiple entities or alliance, the consensus process is

a set of nodes by predefined control, for example, the generated block

need to gain 10 primary five nodes in a consensus on node to confirm;

Private chain is totally centralized block chain, apply to specific institu-

tions internal data management and audit, etc., the write access is con-

trolled by a central organization, and read permissions visual demand

selectively opening to the outside world. To be sure, because of the dif-

ferent degree of decentralization, league chain and private chain may not

be completely in accordance with section 2 proposes block chain model,

such as high degree of centralized block chain may not need the design

layer of economic incentives and so on.

As the rise and rapid development of new technology in recent years,

4 Existing problems of blockchain

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4.1 Security problem

block chain is bound to be faced with all kinds of problems and obstacles

that limit the development of the. This section will from four perspectives:

safety, efficiency, resources and game overview block chain technology

to solve the problem.

Security threat is block chain so far the most important problem facing.

Among them, the process of consensus based on PoW block chain main

problem is 51%, namely by master cut in more than 51% of the node

force have the ability to successfully tampering and forgery block chain

data. In the case of the currency, according to statistics, China's large

pool of mineralization is already accounts for over 60% of the entire net-

work finally force, in theory, the mineral pools may perform 51% attack

through cooperation, so as to realize the double pay [1] of the currency.

Even though the actual system to master the 51% cut in the cost of inputs

to calculate force than earnings after a successful attack, but 51%

against security threats always exists. Based on PoS consensus pro-

cess to a certain extent, solve the problem of 51%, but also the introduc-

tion of block bifurcate when N @ S (Nothing at gaining) attack problem.

Researchers have proposed by constructing at the same time rely on

high force and high memory PoW consensus algorithm to partially solve

the problem of 51% [4], the consensus is more safe and effective mech-

anisms to be more in-depth research and design.

Block chain of asymmetric encryption mechanism will also with the de-

velopment of mathematics, cryptography and computing technology and

become more and more fragile. It is estimated that at present the Tianhe

ii work force, to produce COINS SHA256 hash algorithm is a hash colli-

In recent years the rapid development of Internet and the depth of the

physical world coupled with powerful feedback that already have radically

altered the production of modern society, life and management decision

model, and formed the real physical world {virtual network space is tight

coupling, interaction and co-evolution of parallel social space, Internet

sion is about 248, but with the development of quantum computers and

other new computing technology, the future asymmetric encryption algo-

rithm has certain possibility of cracking, it is also a potential security

threats of block chain technology.

Block chain privacy protection there is also a security risk. Each node in

the system is not completely anonymous block chain, but by a similar

email address identifier (such as COINS public address) to implement

the data transmission. Although the address label was not directly asso-

ciated with the real world of characters, but the data block chain is com-

pletely transparent, with the development of all kinds of an anonymous

identity screening technology, implementation key purpose. Rather than

meaningless SHA256 hash value. The potential development trend of

the future is to design effective interaction mechanism to gather and use

distributed consensus node of swarm intelligence, to help solve practical

problems on a large scale.

The importance of the consumption of resources. Therefore, how to

effectively collect distributed nodes of the network is to solve practical

problems, is an important problem of block chain technology needs to

solve. Researchers have been trying to solve this problem at present.

has given rise to \ + "4.0 and a series of national strategy and industry.

The development trend of the future society will from CPS real world of

physical + network (Cyber - physical systems, CPS) to the spirit of

human world, forming a physical + + network of artificial {{machine the

ternary coupling system of content integration, known as social physical

information systems (Cyber - physical - social systems, CPSS). At

present, based on the parallel CPSS society has emerged, the core and

essential feature is the actual interaction and parallel evolution.

Block chain is to realize the CPSS parallel social infrastructure, one of its

main contribution is to distributed social systems and distributed artificial

intelligence research provides an effective decentralized data structure,

the interaction mechanism and calculation model, and to achieve the

data of the parallel society have laid a solid basis and credit basis. In

terms of data base, management experts Dai Mingceng Edward said, in

addition to god, all people must speak with data. However, in a central-

ized social system, the data are usually in the government and big com-

panies such as the minority of \ "hand, speaking for a few people \", its

impartiality, authority, and even may be unable to guarantee safety. Data

block chain, through highly redundant storage distributed node, in all \ ",

can do real democracy \ data ". In terms of the credit foundation, because

of its highly centralized society system engineering complexity and social

complexity and will inevitably exist \ "Merton system features, namely,

uncertainty, diversity and complexity, the central organization in the

social system and rules may be broken by individual behavior; Block

chain technology contributes to the realization of social system, the soft-

ware to define its basic idea is to eliminate centralized organization, the

unpredictable behavior in the form of intelligent contract procedural code

deployment and curing in the chain of blocks in the data in advance, and

cannot be forged and tampered with automation, thus to some extent can

\ Merton "social system into a comprehensive observation, active control,

can accurately predict \ Newton" social system.

Parallel Computational experiments and parallel execution method is by

far the only into the areas of social management of systematic and com-

plete research framework, the complexity science is the logic of social

environment in the new era of parallel extension and innovation. ACP

can be naturally combined with block chain technology, realize block

parallel social management of chain drive. First of all, collaboration and

block chain of P2P network, distributed consensus based on the contri-

bution of economic incentive mechanism itself is the distributed nature of

social system modeling, in which each node in a distributed system, and

serve as a independent and autonomous Agent (Agent). With the im-

provement of the ecological system block chain, chain blocks all common

nodes and the increasingly complex and autonomous intelligent contract

will by participating in various forms of Dapp, form a specific organization

form of DAC and the DAO, eventually forming the DAS, the ACP of artifi-

cial society. Secondly, intelligent programmable characteristics of con-

tract makes the block chain can be carried out various \ what-if "type of

virtual experiment design, scene deduction and result evaluation, such

calculation experiment process and automatic or semi-automatic to im-

plement the optimal decisions. Finally, blockchains, such as the Internet

of things intelligent asset formed by the combination of make Unicom real

physical world and virtual network space, and can be real and artificial

social system between virtual interaction and parallel tuned to achieve

social management and decision-making of the collaborative optimiza-

tion. It is not difficult to foresee, the physical world in the future real assets

are registered as chain intelligence assets, is the parallel block chain

drive society arrives.

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4.2 The efficiency problem

Block chain is also an important factor of restricting its application effi-

ciency. The first is block expansion problem: block chain for each node in

the system to save a backup of the data, it is for the growing mass data

storage is very difficult. In the case of the currency, fully synchronous

since the creation of the block data needs to be about 60 GB storage

space, while the lightweight node can partly solve this problem, but is

Security threat is block chain so far the most important problem facing.

Among them, the process of consensus based on PoW block chain main

problem is 51%, namely by master cut in more than 51% of the node

force have the ability to successfully tampering and forgery block chain

data. In the case of the currency, according to statistics, China's large

pool of mineralization is already accounts for over 60% of the entire net-

work finally force, in theory, the mineral pools may perform 51% attack

through cooperation, so as to realize the double pay [1] of the currency.

Even though the actual system to master the 51% cut in the cost of inputs

to calculate force than earnings after a successful attack, but 51%

against security threats always exists. Based on PoS consensus pro-

cess to a certain extent, solve the problem of 51%, but also the introduc-

tion of block bifurcate when N @ S (Nothing at gaining) attack problem.

Researchers have proposed by constructing at the same time rely on

high force and high memory PoW consensus algorithm to partially solve

the problem of 51% [4], the consensus is more safe and effective mech-

anisms to be more in-depth research and design.

Block chain of asymmetric encryption mechanism will also with the de-

velopment of mathematics, cryptography and computing technology and

become more and more fragile. It is estimated that at present the Tianhe

ii work force, to produce COINS SHA256 hash algorithm is a hash colli-






sion is about 248, but with the development of quantum computers and

other new computing technology, the future asymmetric encryption algo-

rithm has certain possibility of cracking, it is also a potential security

threats of block chain technology.

Block chain privacy protection there is also a security risk. Each node in

the system is not completely anonymous block chain, but by a similar

email address identifier (such as COINS public address) to implement

the data transmission. Although the address label was not directly asso-

ciated with the real world of characters, but the data block chain is com-

pletely transparent, with the development of all kinds of an anonymous

identity screening technology, implementation key purpose. Rather than

meaningless SHA256 hash value. The potential development trend of

the future is to design effective interaction mechanism to gather and use

distributed consensus node of swarm intelligence, to help solve practical

problems on a large scale.

The importance of the consumption of resources. Therefore, how to

effectively collect distributed nodes of the network is to solve practical

problems, is an important problem of block chain technology needs to

solve. Researchers have been trying to solve this problem at present.

suitable for the larger industrial solutions remains to be developed. The

second is the market efficiency: the currency block chain per second can

handle only 7 deals at present, this greatly limits the block chain in most

of the financial system, the application of high-frequency trading scene

(such as VISA can handle up to 10 000 transactions per second). Finally,

the transaction confirmation time problem: the currency block generated

for 10 minutes, thus transaction confirmation time is 10 minutes com-

monly, this to a certain extent, limits the COINS in the application of the

trading of microfinance and time sensitive.


























































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4.3 Resource issues

Block chain technology has redefined the smart contract. Smart PoW

consensus process is highly dependent on the chain of chain network

node contribution agreement is the block core elements (layers), is

driven by events, with state, running in the chain of reproducible Shared

block of work force, the work force is mainly used to solve the SHA256

hash and random number search, in addition to the social value, does not

produce any computer program for data on the books, can achieve a

process the data in the active or passive, accept, store and send the

value, as well as the control and management. And in general, think

these work force resources waste is \ "intelligence asset off, all kinds of

chain, and other functions. Smart contracts as a kind of embedded at the

same time wasted a lot of power and resources. As the currency type

procedural contract, can be built in any block the rising popularity of chain

data, trading and the emergence of professional mining equipment,

COINS ecosystem on tangible or intangible assets, the formation of pro-

grammable control software has been in the capital and equipment of the

Block chain is also an important factor of restricting its application effi-

ciency. The first is block expansion problem: block chain for each node in

the system to save a backup of the data, it is for the growing mass data

storage is very difficult. In the case of the currency, fully synchronous

since the creation of the block data needs to be about 60 GB storage

space, while the lightweight node can partly solve this problem, but is






suitable for the larger industrial solutions remains to be developed. The

second is the market efficiency: the currency block chain per second can

handle only 7 deals at present, this greatly limits the block chain in most

of the financial system, the application of high-frequency trading scene

(such as VISA can handle up to 10 000 transactions per second). Finally,

the transaction confirmation time problem: the currency block generated

for 10 minutes, thus transaction confirmation time is 10 minutes com-

monly, this to a certain extent, limits the COINS in the application of the

trading of microfinance and time sensitive.

definition of arms race, obviously system, markets and assets. The issu-

ance and trading, creation and management provides innovative solu-

tions.


























































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4.4 Game problem

Block chain technology has redefined the smart contract. Smart PoW

consensus process is highly dependent on the chain of chain network

node contribution agreement is the block core elements (layers), is

driven by events, with state, running in the chain of reproducible Shared

block of work force, the work force is mainly used to solve the SHA256

hash and random number search, in addition to the social value, does not

produce any computer program for data on the books, can achieve a

process the data in the active or passive, accept, store and send the

value, as well as the control and management. And in general, think

these work force resources waste is \ "intelligence asset off, all kinds of

chain, and other functions. Smart contracts as a kind of embedded at the

same time wasted a lot of power and resources. As the currency type

procedural contract, can be built in any block the rising popularity of chain

data, trading and the emergence of professional mining equipment,

COINS ecosystem on tangible or intangible assets, the formation of pro-

grammable control software has been in the capital and equipment of the






definition of arms race, obviously system, markets and assets. The issu-

ance and trading, creation and management provides innovative solu-

tions.

Block chain network as the decentralization of the distributed system,

each node would inevitably exist in the process of interaction of competi-

tion and cooperation game relation, which is especially obvious in the

process of currency dig. Generally speaking, the currency can through

the mutual cooperation between mineral pool preserving stability of

earnings. However, the mineral pools can be called a Block intercept

attack (Block, withholding attacks) way, through the disguised as ore

mining pool the miners, enjoy opponents pool income but not the actual

contribution of complete work certificate to attack other mineral pools,

reducing the opponent mineral pool. If the ore tank attack each other, the

party’s gains are less than don't attack each other. When mine pool

earnings function satisfies certain conditions, this attack and competition

will cause \ the prisoner's dilemma".

Specifically, intelligent contracts are a set of scenarios | deal with proce-

dural rules and logic, is deployed in the chain of blocks on the decentral-

ized, credible sharing program code. Intelligence contracts with the same

data block chain general characteristics, such as distributed recording,

storage, and validation, tampering and forgery, etc. The parties to sign

the contract on contract contents, conditions of breach and external veri-

fication data sources agree, if necessary after check and test the con-

tract code to be sure, in the form of intelligent contract deployment on

block chain, cannot rely on any center institutions signed on behalf of

each party enforce contracts to automation. Intelligent programmable

characteristics of the contract that the parties can increase the terms of

any complex.

Smart contract operation mechanism as shown in figure 5: normally,

intelligent after the contract signed by the parties, in the form of program

code attached in block chain data (such as a currency deal), after verified

by P2P networks and node credited with specific blocks of block chain.

Smart contract encapsulates the predefined number of state and trans-

formation rules, trigger contract execution situation (e.g., arrived at a

specific time or specific incidents, etc.) and response under the particular

situation, etc. Block chain can be real-time monitoring of intelligent the

status of the contract, and through the verification external data sources,

confirmed that meet specific trigger condition after activation and exe-

cute the contract.


























































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ntelligent contract

Preset departureconditions

External verificationdata source

Condition1：Response1



ConditionN：ResponseN

……

…………

(time, event, etc.)

status

block

value

block block block block

Preset response rules （specific transactions, actions, etc.）

Fig. 5 The rationale of smart contracts






Block chain network as the decentralization of the distributed system,

each node would inevitably exist in the process of interaction of competi-

tion and cooperation game relation, which is especially obvious in the

process of currency dig. Generally speaking, the currency can through

the mutual cooperation between mineral pool preserving stability of

earnings. However, the mineral pools can be called a Block intercept

attack (Block, withholding attacks) way, through the disguised as ore

mining pool the miners, enjoy opponents pool income but not the actual

contribution of complete work certificate to attack other mineral pools,

reducing the opponent mineral pool. If the ore tank attack each other, the

party’s gains are less than don't attack each other. When mine pool

earnings function satisfies certain conditions, this attack and competition

will cause \ the prisoner's dilemma".

Specifically, intelligent contracts are a set of scenarios | deal with proce-

dural rules and logic, is deployed in the chain of blocks on the decentral-

ized, credible sharing program code. Intelligence contracts with the same

data block chain general characteristics, such as distributed recording,

storage, and validation, tampering and forgery, etc. The parties to sign

the contract on contract contents, conditions of breach and external veri-

fication data sources agree, if necessary after check and test the con-

tract code to be sure, in the form of intelligent contract deployment on

block chain, cannot rely on any center institutions signed on behalf of

each party enforce contracts to automation. Intelligent programmable

characteristics of the contract that the parties can increase the terms of

any complex.

Smart contract operation mechanism as shown in figure 5: normally,

intelligent after the contract signed by the parties, in the form of program

code attached in block chain data (such as a currency deal), after verified

by P2P networks and node credited with specific blocks of block chain.

Smart contract encapsulates the predefined number of state and trans-

formation rules, trigger contract execution situation (e.g., arrived at a

specific time or specific incidents, etc.) and response under the particular

situation, etc. Block chain can be real-time monitoring of intelligent the

status of the contract, and through the verification external data sources,

confirmed that meet specific trigger condition after activation and exe-

cute the contract.


























































36

LITECOIN






Block chain and intelligent contract has extremely broad application sce-

narios. For example, in the field of Internet financial stake in the raise or

P2P lending business model can achieve by chain block and intelligent

contract. The traditional way is through equity raise or peer-to-peer

lending exchange or the complete network platform as the central orga-

nization fund-raising, management and investment, easy to appear be-

cause of the central organization in the process of actual operation

caused by lack of credit and financing risk. Using intelligent contracts,

these functions can be encapsulated in the decentralized credible auto-

matically block chain. Chain block can record every financing, when suc-

cessfully achieve specific financing amount calculated each investor

equity share, or for a period did not meet credit line automatic return

money to the investors. Such as, through the physical assets such as

houses and cars to asymmetric encryption, and embed intelligent de-

ployment after contract with specific access control rules on the block

chain, users meet certain access permissions or perform a operation

(e.g., payment) after just can use these assets, which can effectively

solve the house or car rental business model in asset transfer and

licensing of pain points.

Smart contracts are characterized by autonomy, self-sufficiency and

decentralization. Autonomous means that once the contract is started, it

will run automatically without any interference from other signatories.

Self-sufficiency means that the contract can obtain funds by providing

services or issuing assets, and using them when needed; Decentraliza-

tion means intelligent contract for verification by the decentralized stor-

age and program code rather than centralized entity to guarantee exe-

cution of contracts, can to a great extent, guarantee the fairness and im-

partiality of the contract.

Intelligent contract for block chain technology has important significance.

On the one hand, smart contracts is the activator block chain, for static

data given the underlying block chain flexible programmable mechanism

and algorithm, and chain of 2.0 and 3.0 times for building blocks pro-

grammable financial system and social system laid a foundation; Intelli-

gent contract, on the other hand, automated and programmable features

make it can encapsulate complex behavior of each node in the distribut-

ed block chain system, become the block chain software agents in the

virtual world of robot, which helps to promote block chain technology in

the application of all kinds of distributed artificial intelligence system,

makes the application based on block chain technology to build all kinds

of Decentralized (Decentralized applicantion, Dapp), Decentralized au-

tonomous organization (Decentralized au tumorous - organization,

DAO), Decentralized autonomous company (Decentralized autonomous

corporation, DAC) even Decentralized autonomous social (Decentral-

ized autonomous society, DAS) possible.

In terms of the status quo, chain block and intelligent contract technology

is the main development trend of the evolution from the automation to the

intelligent direction. The essence of all kinds of intelligent contracts and

the applications of the existing logic is mostly based on predefined sce-

narios \ the IF - THEN "type of conditional response rules, can satisfy the

requirements of automatic transaction and data processing. The future

of smart contracts should have according to the unknown scene \

what-if" deduction, computational experiments, and a degree of autono-

mous decision-making function, so as to realize the current \ automation

"to true \ intelligence" agreement of fly

Jump.


























































37

LITECOIN






Block chain and intelligent contract has extremely broad application sce-

narios. For example, in the field of Internet financial stake in the raise or

P2P lending business model can achieve by chain block and intelligent

contract. The traditional way is through equity raise or peer-to-peer

lending exchange or the complete network platform as the central orga-

nization fund-raising, management and investment, easy to appear be-

cause of the central organization in the process of actual operation

caused by lack of credit and financing risk. Using intelligent contracts,

these functions can be encapsulated in the decentralized credible auto-

matically block chain. Chain block can record every financing, when suc-

cessfully achieve specific financing amount calculated each investor

equity share, or for a period did not meet credit line automatic return

money to the investors. Such as, through the physical assets such as

houses and cars to asymmetric encryption, and embed intelligent de-

ployment after contract with specific access control rules on the block

chain, users meet certain access permissions or perform a operation

(e.g., payment) after just can use these assets, which can effectively

solve the house or car rental business model in asset transfer and

licensing of pain points.

Smart contracts are characterized by autonomy, self-sufficiency and

decentralization. Autonomous means that once the contract is started, it

will run automatically without any interference from other signatories.

Self-sufficiency means that the contract can obtain funds by providing

services or issuing assets, and using them when needed; Decentraliza-

tion means intelligent contract for verification by the decentralized stor-

age and program code rather than centralized entity to guarantee exe-

cution of contracts, can to a great extent, guarantee the fairness and im-

partiality of the contract.

Intelligent contract for block chain technology has important significance.

On the one hand, smart contracts is the activator block chain, for static

data given the underlying block chain flexible programmable mechanism

and algorithm, and chain of 2.0 and 3.0 times for building blocks pro-

grammable financial system and social system laid a foundation; Intelli-

gent contract, on the other hand, automated and programmable features

make it can encapsulate complex behavior of each node in the distribut-

ed block chain system, become the block chain software agents in the

virtual world of robot, which helps to promote block chain technology in

the application of all kinds of distributed artificial intelligence system,

makes the application based on block chain technology to build all kinds

of Decentralized (Decentralized applicantion, Dapp), Decentralized au-

tonomous organization (Decentralized au tumorous - organization,

DAO), Decentralized autonomous company (Decentralized autonomous

corporation, DAC) even Decentralized autonomous social (Decentral-

ized autonomous society, DAS) possible.

In terms of the status quo, chain block and intelligent contract technology

is the main development trend of the evolution from the automation to the

intelligent direction. The essence of all kinds of intelligent contracts and

the applications of the existing logic is mostly based on predefined sce-

narios \ the IF - THEN "type of conditional response rules, can satisfy the

requirements of automatic transaction and data processing. The future

of smart contracts should have according to the unknown scene \

what-if" deduction, computational experiments, and a degree of autono-

mous decision-making function, so as to realize the current \ automation

"to true \ intelligence" agreement of fly

Jump.


























































38

LITECOIN

Intelligent contract concept originally in 1994 put forward by scholars,

Nick Sz - abo, was originally defined as a set of defined commitment in

digital form, including contract participants can perform these promises

agreement on it and hope that through the smart is the designed contract

built into the physical entity to create a variety of flexible and controllable

intelligence assets. Because of the poor means computing and the lack

of application scenarios, intelligent contract has not received extensive

attention of the researchers.

Block chain technology has redefined the smart contract. Intelligent con-

tract is the core of the chain block elements (layers), is driven by events,

with state, running in the chain of reproducible Shared block data books

on computer programs, can achieve a process the data in the active or

passive, accept, store and send the value, and intelligent control and

manage all kinds of chain assets, and other functions. Intelligent con-

tracts as a kind of embedded programming, data can be built in any block

chain, trading, tangible or intangible assets, the formation of program-

mable control system of the definition of software, markets and assets.

Intelligent contract not only for traditional financial assets.






5 Smart contracts based on blockchain

6 Blockchain driven parallel society


























































39

LITECOIN































































OINS with a script in trading system, and the FORTH (a compiled lan-

guage), the script is a simple, based on the stack, and from left to right, it

is specially designed to be a turing-complete, no cycle (LOOP) state-

ment of a system. In the currency In the network, a scripting system to

the operation of the data, which was completed through the stack (the

main stack and the stack), the stack is a commonly used abstract data

types, the most main characteristic is the Last In, First Out (LIFO: Last In

First Out).

In the currency of the client, the developers put COINS support client

Script type through Standard () function is made a summary, in the Stan-

dard () function contains five types of Script: P2PKH (Pay to publickey

hash), P2PK (Pay to publickey), MultiSignature 15 private key signature

(limited), P2SH (Pay to Script hash) and OP_Return. The five standard

script types are implemented, with public key hash payments, public key

payments, multiple signatures, the ability to pay through the script hash,

and data output. With these five standard script types, bitcoin clients can

implement complex payment logic. In addition, a non-standardized script

type may be created, but a miner who is willing to package the non-stan-

dardized transaction must be found, and the non-standardized script will

be executed.

We take P2PKH (Pay to publickey hash) as an example to illustrate the

production and execution of scripts. Suppose we need to pay 0.01BTC to

a bakery to buy Bread, the bakery's Address is: Bread Address.

The output of the transaction is:

OP_DUP OP_HASH160 <Bread Public Key Hash> OP_EQUAL OP_-

CHECKSIG

The unlock script corresponding to the locking script is:

<Bread Signature> <Bread Public Key>

Combining the two scripts can form the following combination script:

<Bread Signature> <Bread Public Key> OP_DUP OP_HASH160

<Bread Public Key Hash> OP_EQUAL OP_CHECKSIG

Only when the unlocking script is in line with the setting conditions for the

lock script, when the composite script is executed, the result is true

(Ture). To implement the combination of the script the results is true, also

means that the Bread Signature Signature is Bread that Address the

corresponding private key Signature, is a Bread Address valid signa-

tures, only in this way can trade execution results through (the result is

true).

Although bitcoin's scripting language contains many operators, it is im-

portant to note that the bitcoin scripting language is unsophisticated. In

this scripting language, there is no loop function, which means that the

transaction is limited in complexity and the number of transactions can be

limited. Script is not a general purpose programming language, these re-

strictions also avoids the potential to create an infinite loop or other com-

plex logical loopholes terms of payment, to leave the currency network

security hidden danger.

In UTXO model, we can through an open book clear trace the history of

every transaction, and can be totally transparent, UTXO model also

brought some parallel processing ability, can launch multiple addresses

to the address of the trading, bring certain reference for can expand sex.

In addition, the UTXO model also brings some privacy, and users can

use the Change address as the output address of UTXO. But UTXO itself

is stateless, and we will implement a UTXO type of smart contract

through a series of innovative designs.

40

LITECOIN






































































First Out).












be executed.






CHECKSIG












true).

















41

LITECOIN

2.1 LTE development motivation

2.2 Development direction































































On October 7, 2011, a network organization announced the release of a

new P2P virtual currency, called the Litecoin (LTC). The name is LTC,

and the English name is LiteCoin, meaning that lite means lightweight,

and the meaning behind it is lightweight. In fact, the idea of the release of

the LTC was designed to address some of the shortcomings of bitcoin,

and to make some optimizations and improvements on the basis of bit-

coin. However, at present, the efficiency of the use of the currency has

been unable to meet the needs of the customers, and it is difficult for

merchants to use blockchain technology in their business, so the LTE

operation is born. LTE not only inherits all the benefits of the Wright coin,

but also has faster networks, more sophisticated algorithms (EquiHash),

more stable performance, and more mature models.

In the early development of LTE, first of all, complete infrastructure, free

of charge transfer, user authentication, encryption, digital asset distribu-

tion, management and the basic function such as alliance, service to

businesses and ordinary users. Next, the improved encryption digital

asset payment function and asset transfer function will be completed. In

the future, automatic dividend sharing and other more advanced cryp-

Ⅱ 、 Design concept

tographic asset management capabilities will be issued to enable it to be

applied to more industries and scenarios.








First Out).












be executed.






CHECKSIG












true).

















42

LITECOIN

3.1 What is the LTE

3.2 How to get LTE































































In the early development of LTE, first of all, complete infrastructure, free

of charge transfer, user authentication, encryption, digital asset distribu-

tion, management and the basic function such as alliance, service to

businesses and ordinary users. Next, the improved encryption digital

asset payment function and asset transfer function will be completed. In

the future, automatic dividend sharing and other more advanced cryp-

Ⅲ、 Summary of LTE

tographic asset management capabilities will be issued to enable it to be

applied to more industries and scenarios.

The currency was a digital currency based on bitcoin code, and many of

the new features were first tested on the currency and then merged into

bitcoin branches. Our primary goal is to fork out a digital currency. It is a

digital currency based on blockchain technology and one of the most

successful digital currencies to date. There are many advantages, from

the split of the coin to the advantage of the Wright coin.








First Out).












（1）POW is a very good work - proof mechanism, but it's all for miners.

We decided to join the POS mechanism and take care of the interests of

the holders in the interest of the miners. This forms a collaborative model.

（2）POW and POS have a 1:1 ratio, and have their own way of difficulty

adjustment.

be executed.






CHECKSIG












true).

















43

LITECOIN

4.1 Litecoin branching

4.2 UTXO































































Ⅳ、 The technical details








First Out).












It is well known that the currency is a digital currency based on bitcoin

code, and many of the new features are first tested on the currency and

then merged into bitcoin branches. Our primary goal is to fork out a digital

currency. It is a digital currency based on blockchain technology and one

of the most successful digital currencies to date. There are many advan-

tages, from the split of the coin to the advantage of the Litecoin.

The UTXO model used by Wright was proved to be a reliable model for a

reliable digital currency over the course of nine years. And the inherited

UTXO model is also the first condition of the coin split. The most import-

ant function of the digital currency is the transfer of digital money, which

inherits the UTXO model and the basic model of the whole trading

system of digital money.

In the network of the currency, UTXO (Unspent Transaction Output with-

out spending deal Output) is the basic unit of currency trading, through

the deal of input and Output, the currency network money changes into a

data structure that is distinguished from the credit card payment must be

in the encryption security network transmission, the data can be in any

currency may not secure network transmission of (WiFi, bluetooth, NFC,

tables, etc.). UTXO can be a "hearing" (1 � 10 to 9 BTC) of arbitrary inte-

ger times. Although UTXO can be any number less than 21 million, once

UTXO is created, it can only be spent. If a transaction requires a BTC

less than one UTXO, then the UTXO will still be spent and form a null

UTXO.

UTXO can be considered a bitcoin currency unit identified by the owner

of the private key and recognized by the entire bitcoin network.

In the UTXO model, UTXO consumed by a transaction is called a trans-

action input, and the UTXO created by the transaction is called the trans-

action output. In this way, a certain amount of bitcoin is transferred be-

tween different private key owners and is constantly consumed and cre-

ated in the trading chain. A bitcoin transaction is used to unlock UTXO

through the owner's private key signature, and it locks and creates UTXO

using the new owner's bitcoin address. In the initial stages of the curren-

cy network, miner through a special type of transaction type, Coin base

trading to create the output (the deal no input), the currency, can be used

to create other UTXO.

UTXO is each Node (Full Node) currency the client in a stored in the

memory of the tracking database, the database is also called "UTXO set"

or "UTXO pool", a New Deal to build from UTXO pool consume one or

more output, and currency network monitoring with all available UTXO, in

millions of dollars in currency network does not exist in the world the con-

cept of "balance of COINS", because the currency on the Internet will

only record all not cost UTXO, the concept of the balance of the currency

more is through the currency wallet client derived products, COINS wallet

through the scan chain blocks and aggregate all belong to the user's

UTXO to calculate the balance of the user.

In addition to the transaction cost, we can calculate the transaction cost

of a transaction by calculating the difference between the input and the

output.

Bitcoin network transaction costs = trading input sum - total transaction

output

Because every COIN all client according to a series of rules for each

deal, an independent checking, a currency exchange some business

information are included in the script, if any one node according to the

script, and to check the validity of the results, and all the other nodes will

get consistency check result, this also means that a valid transaction is

valid for everyone.

The execution of each transaction in the bitcoin network relies on the

unlock script and the lock script. The unlock script can solve the lock

script's blocking of an output value, and lock the script to set the cost on

a certain output value. The unlock script typically contains a signature of

the private key, also known as ScriptSig, and the lock script typically

locks a transaction output to a bitcoin address (the Hash Hash value of

the public key).

The entire node client of bitcoin performs the locking script and the lock-

ing script to verify the validity of a transaction. Client will first retrieve the

input points to UTXO, this UTXO contains a lock script defines the cost

condition, the client then reads tried to spend this UTXO by the client

structure contained in the input that unlock script, and perform the two

scripts. If the result of the locking script is true after the stack data is

copied from the unlock script, then the unlock script has the power to use

the UTXO and initiate a new transaction.

A simple unlock script and a lock script are shown below:

be executed.






CHECKSIG












true).

















44

LITECOIN






































































First Out).




























UTXO.

























output.


output






valid for everyone.







the public key).










be executed.






CHECKSIG












true).

















45

LITECOIN






































































First Out).




























UTXO.

























output.


output






valid for everyone.







the public key).










be executed.






CHECKSIG












true).

















46

LITECOIN

Unlock script Lock the script

Unlock script: provided by the user to meet the requirements of the call transaction

Locking script: exists in a transaction output, setting up the blocking conditions for the transaction output

(scriptSig)

<sig> <Pubk> DUP HASH160 <PubKHash> EQUALVERIFY CHECKSIG

(scritPubKey)

Fig. 5 The rationale of smart contracts






































































First Out).












be executed.






CHECKSIG












true).

















47

LITECOIN








First Out).












be executed.






CHECKSIG












true).

















48

LITECOIN

4.3 EquiHash

4.4 POW+POS

The current POW algorithm used in leiter has been supported by mature

mining machines, resulting in a huge computing power monopoly. We will

use Equihash algorithm, which has stable operation in the digital curren-

cy of ZCash, and the docking of the ore pool is stable. At the same time,

this algorithm is mainly used for mining, which has high degree of partici-

pation. It is not easy to be monopolized by a single mine. And this algo-

rithm is an in-memory algorithm, which is not easy to be accelerated by

a proprietary chip in the short term.

POW is a very good work - proof mechanism, but it's all for miners. We

decided to join the POS mechanism and take care of the interests of the

holders in the interest of the miners. This forms a collaborative model.

POW and POS have a 1:1 ratio, and have their own way of difficulty ad-

justment.








First Out).












be executed.






CHECKSIG












true).

















49

LITECOIN

4.6 Zero knowledge proof

4.5 Replay attack protection

Zero knowledge proves that the transaction information can be com-

pletely hidden on the blockchain network. We think that in many cases,

privacy protection is very important, so we're going to have this feature in

the future. We hope that private transactions and ordinary transactions

can coexist.

This is not a feature, it is the protection of the assets on the two chains of

the fork. We must prevent transactions on the leiter chain and LTE chain

from being replayed on another chain.

Before the fork, we were compatible with the trading data of the currency.

After the fork block, we will use a different way of signature and Wright

coin and so on the New Deal in the chain of Wright coin LTE cannot verify

through, Wright coin new deals on the chain cannot verify through on

UBChain. In the meantime, the new signature is adopted to ensure that

no one can replicate/fake the same transaction except for the initiator.








First Out).












be executed.






CHECKSIG












true).

















Transaction1 TransactionN

Signature1 SignatureN

LTE

LTE/LTC


Signature1 SignatureN LTC


Signature1 SignatureN

50

LITECOIN

4.7 Technical route

2017Q4 Modify the EquiHash algorithm to add POS and release new

wallets

2018-01-06 At approximately 1345678 block height, perform bifurca-

tion.

2018Q2 Zero knowledge proof








First Out).












be executed.






CHECKSIG












true).

















51

LITECOIN








First Out).












be executed.






CHECKSIG












true).

















Ⅳ 、 Team member

Jose Nunes is a Spanish native and co-founder of Mychino. He is a senior

researcher at the Spanish institute of financial studies,

university of California, Berkeley,and Stanford

university.

Wang Fei Yue, management and control of complex systems, institute of

automation, Chinese academy of sciences researcher at the state key

laboratory, national university of defense technology military computa-tional experiments and parallel system

technology center, professor. Main research interests include intelligent

system and complex system modeling, analysis and control.

Yuan Yong, The research of complex system management and control state key laboratory of Chinese academy of sciences In 2008, he received his PhD in computer software and theory from shandong university of science and

technology. The main research direc-tions are business intelligence and

computational advertising.

Maria Grazia Erika giufrifi-da，Graduated from Stan-

ford university, computer master, senior c/c++ engi-neer, data analysis engi-

neer.

Hoffmann，Overseas section overall technical

framework, technical direc-tor, study cryptography and

block chain related field work, rich software devel-

opment experience and team management experi-

ence.

Wang Fei Yue Yuan Yong

52

Documents

White Paper - ltecoin.info · White Paper LTE. LITECOIN ... Release Circulation market foundation for the future of a new generation of the underlying technolo- ... nism of consensus,