SEGMENT, a blockchain solution for the future

Blockchain – literally a “chain of blocks” – often also referred to as DLT (“Distributed Ledger Technology”) – is a relatively recent technology, but one with almost limitless potential.

Put simply, a blockchain is a kind of fully distributed / decentralized database where data is written into blocks using complex cryptographic algorithms, guaranteeing the reliability and security of the information it contains.

There are already many blockchains in existence around the world: Bitcoin, Ethereum, Hyperledger, Stellar, Corda, Hashgraph, Horizen, Cardano, AlephZero, Avalanche… So what are SEGMENT’s advantages compared with other blockchains on the market?

SEGMENT in a nutshell

WHAT DOES SEGMENT PROMISE ?

No limits. No borders. No brakes. 

SEGMENT fits fully into the global blockchain dynamic. Since this technology appeared more than 10 years ago (Bitcoin was launched in January 2010), new ways of doing things have emerged (Ethereum and its smart contracts), new ways of thinking (Polkadot and its side-chains), and new uses (Uniswap and DeFi protocols).

This presentation is structured in two main parts:

• its methodological and technological specificities: a third-generation blockchain

• the future market it is already targeting: an economic model for tomorrow

1. SEGMENT, a third generation blockchain

The application layer in SEGMENT

Unlike traditional blockchains that are optimized for specific tasks (Bitcoin = cryptocurrency transactions, Ethereum = native applications (Solidity) on smart contracts, etc.), SEGMENT is a “root” blockchain platform that enables the development of all kinds of applications as overlay layers: DeFi, DAX/DEX, GOA/DAO, IoT dials, protection of sensitive data, online voting, document certification, financial transactions, point-to-point encrypted exchanges, etc., using common languages (ES6, React) through a public API.

Securing SEGMENT data

Unlike classic blockchains where only transactions are written in the blocks (the data is generally stored in a cloud and the wallets on exchanges or hard ledger type) with SEGMENT, contracts, data, wallets, etc. are encrypted in the chain of blocks specific to each cube.

SEGMENT does not use any external entity (external API, code repositories, atomic swap, cloud, etc.), it creates its complete technological ecosystem, avoiding any substitution attack (dependency confusion).

In August 2013, a bug in the Java class SecureRandom could generate collisions in the k nonce values used for ECDSA in implementations of Bitcoin on Android. When this occurred the private key could be recovered, in turn allowing stealing Bitcoins from the containing wallet.

SEGMENT and its cryptography

Unlike classic blockchains where cryptography is used to protect/secure User accounts (private/public keys) and to check the validity of a block of transactions (checking the SHA hash of parentage), in SEGMENT, cryptography is used for everything: storage, exchanges, transactions, languages, etc.

Moreover, SEGMENT is Q-resistant (resistant to quantum attack): see page Technologies “6. Cryptography”.

Sharding in SEGMENT

Unlike classic blockchains (Ethereum2 for example) where sharding is in fact a call to sub-chains, in SEGMENT the sharding is a distribution in the same cube/client/project of data between all the connected machines. Reconstructing a piece of data that we need (to make it consensual, for example) is therefore not problematic because the operation is only carried out internally.

SEGMENT cuts off the complete blockchain (which, suddenly, does not exist anywhere in a fully searchable version) and distributes it by segments (hence the name …) on all the machines according to their power, their memory capacities and their speed in receiving, processing and returning data.

This Sharding also makes it possible to avoid having to expose all the data to an attack on one or more machines, because the blocks contained by each of them, even once decrypted, are not sufficient to reconstitute the data entirely.

“The fact that in a sharded system block production (and not just block verification) is highly accessible and can be done even on consumer laptops is also very important.“

Vitalik Buterin, founder of Ethereum, 08/17/2020

… with SEGMENT we add: and can be done on phones, on connected objects, on everything able of communicating.

SEGMENT doesn’t need miners

Unlike classic blockchains where a miner/validator produces a block (by POW, POS, DPOS, it doesn’t matter) which will then be validated by consensus or rejected, in SEGMENT the consensus is pre-block: it is only once this consensus has been achieved (the machines in charge of the transaction recognize it as valid) that the block is written. This is possible by a POI (Proof of Identity) protocol specific to SEGMENT.

The security of SEGMENT protocols

Unlike classic blockchains where it suffices to own 51% of the “miners” (depending on the blockchains, a few hundred or thousands of nodes) and to validate a fake transaction yourself on all these machines to attack/falsify the blockchain, attack/falsify a SEGMENT transaction would require taking control of more than 80% of all the connected machines (see page Technologies “8. Datas and Transactions”).

The SEGMENT actors

Unlike traditional blockchains where nodes are extremely powerful mining pools, the actors in SEGMENT are simple machines: computers, tablets, smartphones, as well as all IoT (Internet of Things) devices: sensors, vehicles, watches, household appliances, drones, etc.

These are the devices that communicate with each other, compare their data, query one another, and ultimately decide whether a transaction is accepted or rejected. This enables tens — and eventually hundreds — of thousands of transactions per second. Since there is no mining, every transaction is consensually validated by groups of machines, guaranteeing absolute systemic scalability.

“Secondly, client-side validation is extremely important for all of this to work. A network where only a few people run nodes and everyone else blindly trusts them is a network that can easily be taken over by special interests.”

Vitalik Buterin, founder of Ethereum, 17/08/2020

Nearly unlimited SEGMENT transactions

Unlike traditional blockchains, where the number of simultaneous transactions and their processing time (2 to 10 minutes) are constrained by the number of active nodes/miners, SEGMENT can virtually handle millions of transactions: only 5 nodes are required per transaction. Thus, with 1 million machines connected at the same time, up to 200 000 concurrent transactions become possible — equivalent to roughly 50 000 TPS (transactions per second), assuming an average processing time of 3 to 4 seconds per transaction.

No-fork SEGMENT

Unlike traditional blockchains, where a batch of transactions is broadcast to the network and the first node to solve the cryptographic puzzle (PoW) or the one with sufficient stake (PoS) creates the new block and appends it to the chain — while other nodes may still be computing previous blocks, leading to disagreement, failed consensus, and a chain split that isolates the fraudulent part (“Hard Fork”) — in SEGMENT, consensus precedes block writing: when a transaction is initiated, the nodes responsible for collectively approving it first reach agreement among themselves, and only then proceed to write the block. Hard forks are therefore impossible in SEGMENT.

Whereas classic blockchains bundle multiple transactions into a single block and achieve consensus on the state of the entire chain, SEGMENT achieves consensus on the transaction itself before it is written — processing each transaction individually makes subsequent updates possible.

Updates in SEGMENT

Unlike traditional blockchains where the exponential inflation of data to store and compute (several gigabytes for Bitcoin) restricts processing to ever more powerful machines, SEGMENT deliberately breaks away from this model and chooses to update its blocks.

Some purists will argue that, by definition, one of blockchain’s core characteristics is the guaranteed immutability of its transaction blocks. At SEGMENT we took a different approach: since transactions are processed one by one, there is no point in keeping the block “Mr Smith spent 1 accounting unit on transport ticket n°123456 to take line 27 bus on 15 April 2014 at 8:30 a.m.” for decades… If Mr Smith wants to keep that information, that’s entirely up to him. Optional individual transaction history is available in SEGMENT, whereas it forms the very foundation of security protocols in other blockchains that process transactions in batches.

SEGMENT is not a blockchain like the others — it is a 3rd-generation DDLT: a “Dynamic Distributed Ledger Technology”.

SEGMENT and its wallets-inside

Unlike classic blockchains where users hold their wallets on external exchanges or on Ledger type keys, SEGMENT contains its user wallets internally, encrypted in its blocks… No more theft of millions of dollars poorly secured by badly secured external exchanges parameterized in terms of security, and therefore subject to incessant attacks.

Each user has as many wallets as there are types of digitally storable objects (tokens) : values in currencies, kWh, geolocalized positions, votes, hours of time, etc., both protected cryptographically and by protocols of Security: KYC optional, Multi-Factors Authentication, Q/A.

DAOs on SEGMENT

A DAO, or “Decentralized Autonomous Organization”, is a concept of organization governed by forced digital rules (smart-contracts) and directly controlled by shareholders without hierarchical management. DAOs involve a set of people cooperating according to a self-executing open source protocol.

In SEGMENT, the DAOs can be of two types :

• by GAO (Group of Associated Objects) : several machines can share a common identifier and a common wallet, and process transactions as a group, with internal rules determining how the income is distributed between each machine in the group.

• as an organization: several entities (companies, individuals) pool their machines to perform a task, for example producing a limited series of 3D printed objects. The owner of the 3D printers, the plastics engineer who delivers the raw material, the energy specialist who supplies the electricity and the transporter who will deliver the finished products to the customer create a “temporary virtual company” with no premises, no stock, no payroll and no status. The DAO is dissolved as soon as the task is completed.

DeFi on SEGMENT (Flash Loans)

The DeFi (Decentralized Finance) protocols on SEGMENT are in the form of escrow made by GAOs/DAOs :

• Alice wants to buy an NFT (non-fungible token) identified by its KYT (Know Your Token: unique identifier) put on sale by Bob on the exchange platform for a certain amount, for example 1000 units (CHF, Euros, ETH, whatever). She does not have this amount in her wallet.

• She launches a GAO on the platform, asking to be loaned these 1000 units at a rate of return that she sets herself (1%, 5%, 10%…) for a specific term: the higher her rate of return and the shorter the term (one week, one month…), the better her chances of raising these funds quickly.

• Subscribers/investors then pay between 1 and 1000 units into the GAO’s wallet; once the 1000 units are raised, the GAO buys the NFT from Bob on behalf of Alice. The NFT is added to the wallet of the GAO as its “collective property”: the NFT is held in escrow.

• If at the repayment+interest date to the GAO fixed in the smart-contract, Alice has not managed to find the funds, the NFT belongs de facto to the GAO who can now resell it, the amount of the sale being redistributed to each contributor in proportion to his initial stake.

• If Alice has started to pay back but does not reach the end of the amount (1000+x%) this amount is also redistributed to the contributors according to the same rule.

• If Alice has managed to pay back the scheduled amounts on time, the full ownership of the NFT is contractually attributed to her: the block of the chain describing the contents of her wallets (assets/tokens held) is credited with the KYT of her NFT.

SEGMENT and the environnement

Resolving a transaction on SEGMENT does not consume much more electricity than what a post on Twitter or a short exchange consumes on Whatsapp… a few bytes of encrypted data exchanged, a few seconds of calculations and the transaction is complete. 

Because there is neither a riddle to solve nor gigas of data to compute, a simple exchange of a few signs of codes between machines is enough. For this reason, it makes it possible to make an IoT a node like any other. 

SEGMENT is a “society of machines” organized around rules and technical protocols where human intervention is excluded. A machine has neither the awareness of its immediate interest, nor the intention to cheat or lie: it only does what it is made for.

2. SEGMENT, an economic model for tomorrow

SEGMENT and the “Post-App Era”

Through its “platform protocol”, SEGMENT promises that what will capture, what will create value tomorrow, is not (or very marginally) that we can contract exchanges between economic actors, but that a secure universal peer-to-peer platform allows any user to create the applications he needs on demand – and as many as he will need -, whether for individual or collective uses (companies, communities, associations) via secure, intangible and tamper-proof protocols.

It’s the next frontier to cross, the one Gartner already calls the “Post-App Era”. We are therefore entering areas where the Internet of Things (IoT), 5G, artificial intelligence (AI) and distributed technologies (blockchain) converge to produce decentralized exchanges (without interposed trusted third parties), guaranteed by robust, reliable, and resistant protocols to censorship or attacks.

The arrival of 5G networks confirms SEGMENT’s initial strategic interest: bringing blockchain into our “phones-as-nodes”.

So, where is the value ?

Unlike the current “application” business model where value is generated by the application layer*, in SEGMENT, value is generated by the protocol: it is in its ability to make machines dialogue, interact and work in a reliable, secure and inviolable manner that the added value lies (neither database always hackable, nor possible intervention in the encrypted information flows, nor possible external takeover of the contract encoded in the blocks, nor possible modification of the conditions without peer-to-peer consensus). SEGMENT, in itself, does nothing: it makes doing possible.

* In the digital industry, the value (capitalization) is entirely contained in the “application service” to the customer (GAFAs). The “Post-Appli” era is betting that in the years to come it will be entirely contained in the technological offer allowing the production of applications on demand.

We are talking about…
“Some speak of a technology that can ‘uberize Uber’, implying that the peer-to-peer model of Blockchain could eliminate centralizing platforms. Some are even preparing Blockchains for the Internet of Things (Segment). Blockchain promise is therefore colossal.“
Cyril Garnier, SNCF Development Director-General, Oct 2016.