Ultrain CEO Guo Rui

Blockchain has been described as a revolutionary technology — that the technology born from Bitcoin will change our lives and guide us towards a future way of living. This hype is somewhat dampened, however, by the disappointing performance of existing blockchain infrastructure. Ever since Ethereum was introduced to the world, Blockchain 3.0 has been the ultimate vision that will fully realize the true value of the Internet. It is widely believed that a virtual business network, perfectly compatible with the concepts of decentralization, security, and ideal performance, will eventually be realized.

We face the blockchain Trilemma, which describes the tradeoff between simultaneously achieving high performance, decentralization and security in a blockchain system. Optimizing this triangle has become the main focus of every public chain project on the market, though limited breakthroughs have been made in recent years.

In a recent interview, Rui Guo, co-founder and CEO of Ultrain, expressed his opinion:
“A lot of us are often too optimistic about the development of technology in the short-run, while remaining pessimistic towards our long term goal.”

Guo stated this with great confidence in the future of blockchain technology, while also pointing out that Ultrain’s founding team “only focuses on the long-term value of blockchain technology… with dedication and commitment, blockchain can establish an innovative trust relationships, and execute transactions that generate great growth to existing enterprises… Such technological value, created to benefit our society, will scale up within three to five years…”

Despite the global crypto bear market, Ultrain received funding from top venture capital investors, concluding a 20 million dollar private round in July, valuing Ultrain at 200 million USD. With laser focus, Ultrain is relentlessly continuing development of its ultimate goal, and achieving new milestones every week.

Ultrain recently announced the official opening of its test network, allowing enthusiastic community members to contribute to the network from early December. DApp developers can already deploy their own Ultrain smart contracts to the testnet, verifying their functionality in a real blockchain environment. Ultrain is proud to be one of the first Blockchain 3.0 project with open test network worldwide.

In light of the latest new progress, Rui Guo would occasionally recall the early days of Ultrain when the company was first formed. In a volatile market, the key to success is to build a company focused on technological evolution, rather than financial speculation. Guo first encountered blockchain in 2012 while working as Technical Director of the Alibaba Security Group, and was immediately curious about the technology. This spark of curiosity quickly ignited into a long term and firey passion, leading Guo to much personal experimentation with blockchain. When the popularity of the burgeoning blockchain industry entered new heights in May 2017, Guo made the decision to deepen his involvement. Using his accumulated expertise in the field, he quickly established a vision for the future development of blockchain that addresses the technical issues currently faced.

Ning Li, working as the Chief Architect of the blockchain team at Ant Financial, hit it off with Rui Guo from the moment they met. Guo and Li decided to form a team and devote themselves to the revolution that is blockchain technology. Guo described the feeling at the time: “… we felt the excitement of an engineer who is eager to resolve technical challenge.”

Such excitement did not blind the duo. After experiencing the exponential growth of Alibaba, Guo and Li recognized the importance of user engagement to a project’s success. Emma Liao, who was head of IoT investment at Qihoo 360 at the time, had the expertise and experience to drive a thriving ecosystem around the project.

Soon after the three met for the first time, Ultrain was formed.

The three entrepreneurs formed a solid and complementary triangular structure, covering each other’s weaknesses and complimenting each other’s strengths. A shared devotion to resolving blockchain’s technical issues, created a simple goal: to building a programmable business society.

From that day, Ultrain was born.

At this point, are public chains too dull to mention?

As an innovator working on the cutting edge, Guo has a nuanced answer to this question. He explains that the approaches existing blockchain projects have to the “blockchain trilemma”, such as DFINITY, Oasis Labs, Algorand, Thunderella, and Zilliqa, can be classified into two groups: generate block prior to confirmation and generate block after confirmation.

An example project of the former solution is DFINITY, and an example of latter project is Algorand. Both projects are well received with great attention.

The solution chosen by Ultrain is logically consistent with Algorand, using a Verifiable Random Function (VRF) and Byzantine Fault Tolerance (BFT) as the core technology. The difference is that Ultrain has achieved further optimization with a self-designed Random Proof of Stake (R-PoS) consensus mechanism, as well as implementing an incentive and punishment mechanism based on token staking. The penalty mechanism increases the cost of a malicious attacks, improving the overall security of the Ultrain network.

Traditionally, the basic VRF+BFT consensus process is as follows:

The first stage is known as the Role Confirmation phase: at the beginning of each round of consensus, each node uses VRF to generate a credential. Nodes with a matching credential are then randomly selected to participate in the current round of consensus. Participants are split in to two groups: Voters and Proposers.

The second stage is the Hierarchical Consensus phase: Proposers are responsible for generating candidate blocks. Blocks are then verified by Voters. Consensus is reached upon by the Voters of this round, and the candidate block is noted as being confirmed.

The third stage is the Binary Byzantine phase: Voters vote on the candidate block, with the option of accepting or rejecting the candidate block if it is considered to have an error, such as double spending. If a block is rejected it is replaced by an empty block.

The fourth and final step is to broadcast the blocks identified in this round to the entire network.

Ultrain's R-PoS algorithm adds an ingenious mechanism to the VRF+BFT system: the Token Deposit Staking Mechanism.

In the first phase, three inputs are made to the Ultrain’s VRF: the number of UGAS stake by a single node, the previous performance rating of the node, credibility of specific machines.

In Ultrain’s R-PoS algorithm, the output of the VRF is used to confirm the roles of:

Proposer node: the node responsible for assembling and generating the candidate block in this round. There will be multiple nodes selected as the Proposer node.

Voter node: responsible for the next stage of voting and to confirm the identity of the Proposer node of each round.

Notary node: Does not participate in the block formation stage, but records block data once a block is generated.

The probability of a single node being selected as a Proposer or Voter node depends mainly on the input parameters of the VRF, as outlined above. The higher the parameter, the higher the probability of being selected. The machine credibility score (determined by a node demonstrating good behavior), as well as the token-based locking mechanism, greatly improves and guarantees the overall security of the Ultrain network. Algorand, which runs on an idealized model that assumes that 2/3 of participating nodes are credible, overlooks the "human nature" components of blockchain, which may limit the projects development.

The Token Deposit Staking Mechanism allows Ultrain to determine the number of nodes participating in a particular round of consensus during the Role Confirmation stage by using the Fisher–Yates shuffle algorithm, where Algorand loses efficiency by electing a consensus committee based on probability.

Ultrain implements another change to VRF+BFT in the second stage, transforming Hierarchical Consensus into a parallel consensus phase. The selected Proposer nodes assemble candidate blocks in parallel, and Voter nodes reach consensus on the Proposer nodes during the current round to determine if the candidate block is accepted by most of the nodes in the network.

Having multiple Proposer nodes generating blocks in parallel improves the overall TPS of the system. In addition, parallelism improves the flexibility of the system. If a Proposer node is under attack, as long as a single node is capable of reaching consensus, the system will not produce an empty block. A parallel BA algorithm is used to overcome the technical challenge of voting on a proposed block, but this may result in network storms.

To solve this problem, Ultrain introduces redundant coding technology to divide the message into multiple transmissions, ensuring that the most messages can be broadcast with limited network bandwidth, optimizing network throughput.

In addition, Ultrain also introduces an aggregate signature algorithm that allows candidate blocks to be delivered in small chunks, meaning each node won’t receive the full block before voting is completed. Hiding the content of the message avoids collusion, improving the overall fairness of the system.

Guo uses a simple comparison: “… picture EOS with their DPoS consensus mechanism as a large group of people voting for a fixed number of people to make decisions for them. The voting decision is based on the number of tokens held by individuals in a large group. In comparison, the R-PoS mechanism randomly selects a few nodes to make the initial block proposals, and then randomly selects 10 times more people to judge and review whether the previous proposal is correct or not.”

The core idea of ​​R-PoS is to change the selection method of participating nodes from a trusted election method, such as DPoS, to a random selection method. This allows any node in the Ultrain network to participate in the consensus process, which not only protects the decentralization of the network, but also greatly improve performance.

Ultrain released the conceptual network of R-PoS in July 2018, deploying 1000 nodes to the AWS cloud. The network was able to reach an average of 3000 TPS with a confirmation time of 10 seconds. This performance far exceeds other existing blockchain 3.0 projects.

Ultrain’s Plan for 2019

When discussing Ultrain’s plan for 2019, Rui Guo said that in addition to the launch of Ultrain's main network at the end of April, Ultrain will deploy wallets, DApps and mining machines within the year. The recent announcement of opening the testnet for public application indicates Ultrain is moving from the theoretical phase to a quasi-realistic scenario. Unlike Ultrain's cloud-based test network, the biggest challenge to a public testnet is the quality of each node, and achieving global distribution. These factors are critical for Ultrain to grow into “the world computer”.

In the face of the deteriorating bear market, Guo believes that the emergence of a killer DApp is of the utmost importance to stabilize the market.

Why hasn't there been a real large-scale commercial blockchain application?

"The blockchain has a huge impact on business scenarios through establishing trust relationships and transactions," Guo said. "We believe that projects in sectors such as fan economies, healthcare, energy, and logistics will benefit from blockchain technology and grow manifold.”

Guo anticipates the successful deployment of Ultrain’s mining rigs will see blockchain technology will be enter people's daily lives within five years.

A technology is called revolutionary when it creates a fundamental change to our society. In Ultrain's perspective, finance, an industry that relies on a well-established trust system, is not the main battlefield for blockchain technology. To Guo, blockchain will greatly contribute to the logistics giants known in China as “Si Tong Ba Da”, and would mark a new chapter in the blockchain industry if adopted.

According to Guo, Baidu, Alibaba and Tencent (aka, BAT) will not be the main players in blockchain. He adds his two cents: “BAT will not be the main character in the blockchain world, they will only be the followers to a leader”

Recently, Ethereum founder Vitalik Buterin has expressed similar views publicly. Buterin believes that the so-called application of blockchain technology in many industries is actually a marketing gimmick.

Guo recalls that during his tenure at Alibaba, the original platform management department played the role of controller, which reflected that BAT's is built on the centralization of control. The underlying premise of blockchain technology is precisely the opposite – decentralization.

This notion of control limits BAT's approach to blockchain technology to micro-innovations, such as the "consortium blockchain". Such micro-innovation may lead to some system optimization, but could not be considered revolutionary.