High Performance Blockchain — Fundamentals
Last updated: March 2020
This article has been written to provide a basic fundamental overview about High Performance Blockchain.
To be completely transparent, I do hold HPB and I’m part of HPB node network as Nitro Node.
Blockchain technology is a phenomenon of the last decade. Many people at least heard about Bitcoin during its parabolic rise in 2017. However, blockchain technology is about much more than just Bitcoin.
High Performance Blockchain is a blockchain platform, in many ways similar to Ethereum, where any developer can build and launch a project. What makes HPB special is that it is secure and unusually fast, thanks to a unique hardware accelerator.
The problem and the solution
As you might know, the blockchain industry has been plagued with a low Transactions Per Second (TPS) bottleneck. Everyone who’s been around for a while remembers when CryptoKitties created congestion on the most popular smart contract platform Ethereum to the point where it became pretty much unusable and I think this made many people realize how far from readiness for mass adoption blockchain technology actually is.
Different projects take different paths to tackle this bottleneck. Some decided to increase their performance by significantly lowering the number of nodes, some are trying to solve this on a software level for example by implementation of sharding or second layers. One aspect these projects have in common is that all of them use conventional hardware that was not designed for running a blockchain, and this is where HPB differs.
With offices in Shanghai, Beijing and Singapore, the team is taking a very unique approach to tackle the TPS bottleneck to balance the blockchain trilemma — how to be fast and cheap enough to enable mass adoption but not at the expense of decentralization and (thus) security.
HPB is a permissionless blockchain architecture that combines customized open-source hardware (the BOE, or Blockchain Offload Engine) with High Performance Blockchain software. If you remember how ASIC miners changed BTC mining, or how GPUs changed the gaming industry, you might likely come to the conclusion that creating a blockhain dedicated hardware is a very logical step to take for the whole industry. Even internet speed was vastly increased thanks to hardware advancements such as ADSL or fiber optics. HPB is the first player in the market that has successfully designed and manufactured a hardware chipset dedicated to blockchain transaction speed. There is a very good article on hardware and scaling and another article on how such hardware is designed and manufactured from one of the community members who is an engineer in a hardware developing company.
Since November 2019 HPB is transitioning towards Community governance. The goal is to give more power to the community that can now propose ideas and then vote on them, on basis of 1 vote per 1 HPB held. Ideas can be proposed and viewed on the Gotoken platform. The website is currently in Chinese but should be soon translated into English.
To help accelerate adoption of HPB, the team is open-sourcing the HPB's code on Github.
In terms of researching new technology to implement, the team is currently looking into 3 key areas — Zero knowledge proof, Secure computing mechanism based on Root of Trust and New sidechain consensus algorithm for high speed computation of private data.
BLOCKCHAIN OFFLOAD ENGINE
As the name of the hardware indicates, its purpose is to offload CPU load from the node servers.
The BOE chipset consists of multiple FPGA chips that are configured to exercise a certain function through VHDL language. These chips are heterogeneous in functionality and thus work differently to chipsets that are only able to perform one function.
Part of the BOE is the ECDSA (Ecliptic Curve Digital Signature Algorithm) module that performs signature verification at a high rate and is essential for the network to be able to process thousands of signatures per second.
At the BOE Launch and Reveal event in July 2018 there was a live test of two identical servers — one with the BOE hardware unit and one without. The non-BOE server took 40 seconds using 76% of CPU to process 200,000 pieces of inspection data. The one with the BOE took 8 seconds to process the same amount of data, using only 5% of the CPU. That’s 5 times faster while using only a fraction of CPU!
Blockchain data is already well protected, but the BOE takes security to a completely different level! Any malicious actors would have to overcome not only the software, but also the hardware part of the network. HPB has an extra layer of security because the BOE has an in-built hardware random number generator. Random numbers are generated through FPGA chips and sensors that are configured to register tiny differences in voltage and temperature. For instance, even a variance of 0,00001 volt! To quote wikipedia on hardware random number generators “They are more secure alternative to Pseudo Random Number Generators (PSNGs) software programs. They produce sequences of numbers that are assumed not to be predictable, and therefore provide the greatest security when used to encrypt data.”
HPB's hardware random number generator also adds extra functionalities for developers building on HPB. You can simply send a smart contract with a call for a seed to get a true random number and usecases are endless (gambling, lotteries, chance-based events in games..)
Other parts of the BOE are the MAC module that handles processing of data packets transferred from Ethernet cables and the TCP/IP Offload engine (TOE), which optimizes throughput for high-speed Ethernet systems.
Using BOE hardware has another significant advantage. Other projects very often use VPS (Virtual Private Server) services to host their nodes, which adds another layer of centralization. Sometimes too many nodes use the same VPS service (EOS nodes most often use AWS for example). If a VPS provider experiences technical issues, then a high number of nodes might experience issues as well, making the network vulnerable. The VPS provider might also theoretically decide (or be forced by regulations) to stop providing services to nodes. Also, once the network reaches higher constant TPS, nodes will need to rent more processing power, resulting in much more energy consumption and much higher costs.
All HPB nodes are obliged to use the BOE hardware, meaning they can’t use VPS service, which makes the network much more decentralized. Furthermore, HPB nodes are more energy efficient and less costly because the vast majority of the CPU load is handled by the BOE unit itself.
HPB started the R&D of the BOE in 2016 and the first batch was ready in mid 2018. It is absolutely mind-blowing that the team spent two years and millions of dollars on R&D of this hardware and then they distribute it to successful node applicants FOR FREE!!
HPB TEAM
HPB has a team of over 30 full-time employees and developers who benefit from having having worked for huge companies such as IBM, Alibaba, Huawei, UnionPay and others. I won’t go much into detail since you can check yourself on the HPB website, but I do want to briefly introduce the CEO — Xiaoming Wang.
Xiaoming Wang has over 10 years of experience in finance and big data. He is one of the founders of UnionPay Smart — the Big data division of the largest payment processor in the world, UnionPay. I will get back to this later in the article. He is a blockchain pioneer, who is very well known among the Chinese blockchain community as Blue Lotus. He has been lecturing in Asia about the advantages and use cases of blockchain technology for years. He was the person who wrote the Chinese version of Ethereum’s official document and thus introduced this platform to many Chinese developers, he wrote a series of books including a “Blockchain developer guide” and many scientific articles about blockchain. He also made already two sets of courses for developers on the largest online IT educational platform in China China with over 600,000 active developers on the platform. See announcements here and here. In March 2018 he received the “Most innovative CEO” award at the 4th annual Blockchain Finance and Fintech China event.
NODE SYSTEM & CONSENSUS ALGORITHM
The number of nodes to run HPB network is set to 150, of which 31 are High Performance Nodes and the rest are Candidate Nodes. The number of nodes will increase to 300 in future, of which 61 will be High Performance Nodes and the rest Candidate nodes. HP-nodes are responsible for synchronization and block generation while Candidate-Nodes process transactions. The algorithm rotates the nodes every 200 blocks (around 10 minutes) and any Candidate-Node can become an HP-node at any time.
Node allocation
70% of nodes are decided by voting (elections are every 3 months), 6% of nodes are run by the HPB foundation and 24% of nodes are issued by invitation (enterprises that can easily deploy dapps and serve target users; Academic institutions; Developers; Non profit organizations.) All invitation nodes are contributing to the R&D of the network. You can have a look at the list of invitation nodes at the end of this article.
The block rewards are distributed as followed:
2/3 of the block rewards are allocated to the HP-Node that generated a new block and all Candidate-Nodes. For each block generated, the HP-Node responsible for the block generation receives 35% of the block reward, and all other Candidate-Nodes evenly divide the remaining 65% of the block rewards.
1/3 of the block rewards is allocated according to the proportion of community votes. Invitation nodes are excluded from this reward.
Another aspect that makes HPB unique is that it adopts its own consensus algorithm — Proof of Performance. This algorithm takes into account three key factors when choosing an HP-node: network bandwidth (50% weight), ranking of community voting (35% weight) and number of HPB coins held (15% weight). This way all nodes are incentivized to add as much performance as possible.
HPB adopts an inflationary system. Inflation in the first year of MainNet operation was capped at 3% of the initial token supply of 100,000,000 HPB. Inflation will now grow to a maximum of 6% of the initial token supply as another 150 nodes are gradually added. Fixing the maximum inflation rate to initial token supply means that the real inflation will actually decrease each year.
To drive adoption and economic incentives HPB team burned 3,000,000 HPB from their reserve fund to compensate for the first year of inflation. This means there was 0% inflation after the first year of MainNet.
Another coinburn was completed in February 2020. This 16,000,000HPB coinburn was proposed by the community. It was the first successful community voting since transition to Community Governance in late 2019. See this AMA with Xiaoming Wang to find out more about the burn.
HPB is a high performing and flexible platform
The HPB MainNet went live in late September 2018 and is currently run by 105 elected nodes (not all invitation node spots are full yet). Thanks to the BOE hardware, the network is capable of achieving more than 5,000 TPS globally (10,000 TPS peak in China), where most nodes are currently located. This makes HPB faster and more decentralized and secure than many competitors that are run by only a fraction of the nodes compared to HPB and waste much more energy.
The team has a plan to increase the performance soon: “In the coming months we will increase our TPS through a multi-step approach. First, we will further enhance parallel processing of transactions by optimizing the organization of data in the transaction pool. Secondly, we will perform network protocol optimizations to streamline network traffic. Thirdly, we will design a new virtual machine that runs on our BOE”. The next stop — 10,000 TPS globally
It might not come to you as a surprise after what you’ve read here about the CEO that HPB is in many ways similar to Ethereum. The source code is 80–90% based on ETH, it uses Go-ethereum and HPB also adopted a similar gas/fee system to ETH. Ethereum has one of the largest developer communities, and since Ethereum is open-source and software parts of the two projects are very similar, any software solution adopted by ETH should not be hard to implement on HPB with slight modifications if needed or desired. It is also fairly easy for ETH dapps to migrate to HPB should they need higher performance than ETH can offer.
HPB is an open-source permissionless blockchain, so anyone is free to take part in the network and deploy smart contracts, from small startups to large international companies, but unlike ETH, HPB doesn’t use its own dedicated language. It supports smart contract systems to facilitate smooth integration of the existing developer ecosystem. The base layer of the blockchain provides a series of blockchain data access and interaction interfaces by using JSON-RPC & RESTful API to support various data applications and development languages. Developers will be able to use any type of mainstream programming languages such as JAVA, Python, .NET, JavaScript, C+ etc, so the barrier to entry is low as there is no need for developers to learn a new dedicated programming language.. Currently, HPB developers can use Java and other languages are being worked on. Nicemans, one of the other nodes, have recently published SDKs (Software Developer Kits) for Python, Ruby and NodeJS. Ethereum’s programming language Solidity is of course supported as well.
HPB has also released a Unity (.NET) SDK. Unity is the world’s most popular 2D and 3D game engine, and is used for game development on 30 platforms including Windows, iOS, Android, Nintendo Switch, Playstation 4, Oculus Rift, Samsung TV, etc. More than half of all mobile, console, virtual reality and PC games in the world are created with Unity. Game developers utilizing the HPB SDK are able to take advantage of things such as quick transaction verifications, high amounts of transactions without slowdowns, and cheap transaction costs. High Performance Blockchain is derived from Ethereum, making it very quick and easy to migrate from Ethereum to High Performance Blockchain.
HPB supports the General Virtual Machine (GVM) mechanism. This GVM also supports code from other blockhains, allowing for greater flexibility. Currently Ethereum VM and NEO VM are supported and HPB is capable of adding new VMs as needed through its modular design. This basically means that dapps on ETH or NEO can interact with HPB where the use case demands higher performance
Another interesting feature is that HPB supports sidechains. This means for example that core technological and/or software updates can be tested on a sidechain prior to public release.
HPB is one of very few blockchain projects that generates revenue. The team offers BaaS (Blockchain as a Service), providing end-to-end solutions and consulting for enterprises that want to take advantage of blockchain technology for their business.
What I personally find really important for future adoption is that HPB provides a blockchain middleware solution. The team basically creates plug-and-play blockchain templates that are suitable for different industries. Thanks to this, companies and enterprises can easily deploy their decentralized applications with almost zero knowledge of blockchain or making dapps. HPB can provide middleware solutions for the food industry, healthcare, finance, manufacturing, education and auctions.
HPB generally takes a very wide and holistic approach. The team recognizes that different entities have different needs and motivations. A game developer has very different priorities than a financial institution for example. While a game developer might enjoy developing his game on a public blockchain, a financial institution might not be happy with all their data being stored on a public ledger.
That’s why HPB takes a hybrid approach — it works as a public blockchain platform where anyone can come and build their dapps but at the same time they can reach partners or developers that want more freedom in terms of their consensus algorithm, privacy etc through their BaaS offering or sidechains. “A lot of data is open and open source, but the data also needs privacy protection, so we provide a trusted secure computing hardware intelligent virtual machine, and a secure privacy smart contract” — HPB CEO at China Big Data Expo 2019
Use cases of HPB are endless since performance and high transaction costs are not an issue, but the whitepaper mentions mainly big data, gaming and anti-counterfeiting traceability.
HPB Coin
HPB coin is the fuel of the whole HPB ecosystem. Some of the use cases are:
- it is used as a gas for transactions
- developers need it to issue smart contracts
- new projects can hold HPB and launch ICOs to raise funds
- coin holders can vote for nodes and influence the way the network is governed with 1 HPB = 1 vote ratio
- nodes also need to hold HPB coins and the more they hold, the higher their chance of becoming an HP-Node and earning higher block rewards.
- staking — nodes can decide to share part of their voting rewards with their voters. We at NitroNode are currently sharing rewards. These translate into daily returns for our voters
- clients who decide to pay for BaaS in HPB coin (that has to be bought from an open market) are eligible for a discount for the service
- third parties can be offered a discount on smart contract fees based on number of HPB coins they hold/stake for their dapp
- Initial coin supply is 100,000,000 HPB.
PARTNERSHIPS
UnionPay Smart
UnionPay is a payment processor like Visa or MasterCard but with total transaction value of $14.95 trillion USD in 2017 made by over 7.5 billions credit cards they issued it is bigger than both of them combined. It is China’s only interbank network that links all ATMs of all banks throughout the country, it processes about 80% of all transactions in China.
UnionPay Smart is the big data division of UnionPay and together with HPB they are building a dapp called UnionPay Smart Authorized Traceability System. This dapp is designed to work on HPB MainNet. Just like any other dapp on HPB, it will need HPB coins to make transactions and issue smart contracts.
One of the speakers at the BOE launch and reveal event in July 2018 was the COO of UnionPay Smart, who described the issues and challenges big data faces nowadays. These are primarily: privacy leaks, revenue generated without user consent, identity fraud, and adapting to the new GDPR standard. He describes all these points in more detail during his speech. He also called HPB “the most pragmatic blockchain”.
“We are currently testing the dapp in a secured network, to see whether all parties can reap the benefits that this system provides. Once we deem the system sufficiently stable, we will publicly launch the DApp on our public chain. At the first stage it will only be accessible to big institutions, however we do have plans to potentially expand this, and also involve regular consumers into the system through a mobile app.” — Danny Rowshandel (from BitMax AMA)
SME Finance forum
This is another partnership with a major financial institution. HPB has become a member in the SME finance forum in the International Finance Corporation (IFC) of the World Bank group. IFC, a sister organization of the World Bank, is the largest global development institution focused exclusively on the private sector in developing countries. The SME Finance Forum works to expand access to finance for small and medium businesses. It operates a global membership network that brings together financial institutions, technology companies and development financial institutions to share knowledge and promote growth of SMEs (Small to Medium Enterprises). Globally, SMEs account for 9 of 10 businesses, 50% of world GDP and two thirds of world jobs. HPB Foundation will take place in member working groups and build its knowledge of SME financing through member engagement and Forum events. Through this partnership, HPB is linked to global policy-making networks such as the World Economic Forum, G20, OECD, APEC and AFI.
“200 million businesses worldwide need financing to invest, grow and create new jobs. We are proud to have HPB Foundation join our network of 140 members who work to expand access to finance for small and medium businesses,” — Matthew Gamser, CEO of the Forum.
“Partnering with the SME Finance Forum allows us to effectively position ourselves to develop blockchain infrastructure for SMEs. We are excited to learn from other members and explore opportunities throughout SME financing together,” said Xiaoming Wang, Founder and CEO of HPB Foundation
HPB is the only blockchain project on the members list of the SME Finance Forum. Membership of such an institution gives HPB a lot of credibility and will possibly open many doors to potential business partnerships with other members.
ITCEC MOU
HPB came to an agreement with ITCEC to explore the potential to build a new industrial city development and operation services platform based on HPB MainNet!
ITCEC was founded in 1988, affiliated to China Electronics Corporation (CEC), which is a People’s Republic of China’s state-owned company, a Top 500 global enterprise for seven consecutive years and one of the largest producers of telecom equipment in China. Together with HPB they will work on resource integration in areas such as smart city, ecological park, comprehensive park, and industrial projects.
KNOWNSEC
Knownsec, founded 2007 in China, is a security services provider. The company’s CEO was on Forbes ’30 Under 30' list in 2012. In 2015 Knownsec received a large-scale strategic investment from Tencent, which is one of their clients. Some other clients include for example: China Merchants Bank (major Chinese bank, ranked 213th in the Fortune Global 500 list), CITIC Securities (China’s largest full-service investment bank), Jingdong (massive B2C online retailer and the largest competitor to Alibaba) and the list goes on. Providing security services to such companies made them very highly recognised in the industry.
HPB, keeping security in mind as a priority, announced a partnership with Knownsec in August 2018. In late Q1 2019 Knownsec finished their security audit which was focused on HPB’s smart contract, consensus algorithm, BOE hardware, network protocol, iOS and Android mobile wallets. The result is very pleasing for everyone involved with HPB. According to the report “HPB has proved itself to be a high-performing blockchain with high security.”
Chainlink
HPB and Chainlink will leverage each other’s products to improve their respective service offerings. The Chainlink network provides valuable middleware solutions, making in-demand off-chain resources available to on-chain smart contracts. HPB’s hardware chipset, the Blockchain Offload Engine (BOE), supplies true random number services to Chainlink clients.
China Cloud System Pioneer Strategic Alliance
HPB became a member of The China Cloud System Pioneer Strategic Alliance (http://www.ccopsa.cn/) — a non-profit organization with international impact, dedicated to building a community of cloud platform and service providers and end users, related academia and researchers, related policy and regulation decision-makers and influencers. The Alliance is highly recognized and supported by all the relevant sectors of society, including industry, academia and government.The Alliance is co-founded by influential entities including industry giants, academic and research institutes, investment agencies, and government agencies in the applicable fields. Among them include international organizations such as Microsoft, Intel, Toshiba, Seagate, Netapp, and Cloud Security Alliance (CSA); Chinese IT companies such as Alibaba, Tencent, Baidu, China Telecom, China Mobile, China Unicom, China UnionPay, and JD.COM
Tale of Toast
High Performance Blockchain is now integrated with Tale of Toast, a massive multiplayer online role-playing game or MMORPG. This is one of the very first 3D games of its kind to enjoy blockchain integration. In this case the full integration includes the HPB Wallet, an option to pay in HPB for game purchases, rewards in HPB coin and the use of smart contracts on High Performance Blockchain.
Toasty Leaf, the creators of Tale of Toast, will trial storing encrypted gameplay statistics on the blockchain using High Performance Blockchain’s fast and secure platform. Players will gain numerous benefits from the integration including the future assurance of 100% fair in-game loot.
It is the first application of HPB's Unity SDK.
HPB has already set up their first international dev incubator in Crypto Valley in Switzerland. Switzerland is one of most pro-crypto nations in Europe, a great place to be for any blockchain project that aims to succeed on a global scale and Crypto Valley is the fastest growing tech-hub in Europe.
You can have a look at the list of all HPB partnerships at their website or here.
Other facts and information about HPB
HPB is ahead of its initial roadmap since the MainNet was meant to be released in 2019 but was released in September 2018.
There are over 150 BOEs shipped worldwide. The FPGA used in each BOE alone costs around $2200. That's about $340,000 in hardware that HPB shipped FOR FREE to all successful node applicants. This doesn't include: other hardware parts, millions and millions spent on R&D, or postage.
HPB was featured on Dutch national TV (https://hpb.io/post/195)
In May 2019, HPB attended China Big Data Expo. The HPB CEO Xiaoming Wang delivered a speech titled “HPB: Revolutionise the Blockchain Infrastructure” where he pointed out some key advantages of using dedicated BOE hardware. He also participated in a panel discussion with directors of Alibaba, Huaweii, VeChain CSO, Huobi CEO and others where they explored the topic of “How can Blockchain Influence the Digital Economy”. HPB was the only blockchain company that had its own booth where they exhibited their BOE hardware. HPB grabbed the attention and discussion of the political and business leaders present at the Expo.
HPB was awarded “Hurun blockchain innovators TOP 50 projects” award. They also received the “Blockchain infrastracture with most potential 2017” award at the Financial Technology Introduction awards.
HPB takes energy savingseriously. They made a minor adjustment and replaced the fan of BOE unit with an energy efficient sustainable heat sink to make nodes more eco-friendly.
The approximate energy consumption of our HPB node is less than 250kWh/month.
HPB shared a sneak peak of the CEO Xiaoming Wang working on what appears to be a quad-BOE. In one of the early bi-weekly reports the team announced that TPS linearly increases with the number of BOE units on the board. Releasing “quad-BOE” would therefore significantly increase TPS performance, but there’s no need for that now. It will take a while to test the current 5000 TPS average potential on a regular basis. The BOE hardware is already giving HPB huge advantage over “software-only” projects and this advantage will be even more significant in future.
Thank you for reading
For more information about HPB:
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If you hold any HPB and you'd like to support our activities, you can do so by voting for NitroNode any day of the year. Thank you for your support!
Sources and interesting links:
https://www.youtube.com/watch?v=674FSw__JuQ&t=1 — very informative interview with Danny Rowshandel from HPB, hosted by Brad Laurie. Highly recommended.
https://www.youtube.com/watch?v=pZw8TheeE7k&t= — top 5 reasons to buy HPB
https://en.m.wikipedia.org/wiki/Hardware_random_number_generator — about the hardware random number generator
https://medium.com/@pattympat/scaling-the-undeniable-role-of-hardware-d3c304af73f1 — an article explaining the importance of hardware for scaling different industries
https://hpb.io/post/185- Two year anniversary open letter from CEO Xiaoming Wang
https://www.hpb.io/post/201 — Mars Finance interview with Xiaoming Wang
