In our constant lookout for the most interesting blockchain projects, we have come across many. Their ability to spot the drawbacks of traditional methods and provide efficient and cheaper solutions makes them unique. XinFin is one such project that caught our eye in the middle of a regular day. After going through their elaborately written whitepaper, we decided to reach out to their Chief Technical Officer, Karan Bhardwaj, for an interview. He was humble enough to make a window for us that would eventually provide us a detailed overview of their blockchain-based global trade and finance platform. Here are some excerpts from the conversation we had.
Yashu: Thank you for speaking to us on such a short notice Karan.
Karan: The pleasure is all mine Yashu. Thank you for having me.
First of all, I would like to tell you that I’ve read your whitepaper. But for our readers, I would urge you to provide us an overview of XinFin’s blockchain.
We call it the XDC blockchain. It is a hybrid blockchain that maintains both a public state as well as a private state. This distinction is very useful for enterprise use cases because various institutions may prefer to keep their financial transactions private but still be verifiable by an immutable record on the public state of the blockchain. This need is fulfilled by the XDC blockchain where the details of the transaction are available only to the involved participants but the same transaction can easily be verified because of its digital record on the public state of the blockchain.
How do you ensure such privacy? Have you created any unique standard? What is XinFin’s XDC01 Protocol?
Yes, we have. Thanks for mentioning it Yashu. We have developed a protocol here at XinFin. It is called “the” XDC01 protocol. There are many blockchain implementations out there but no real standardization across or even within an industry. The XDC01 protocol seeks to change that by offering a robust and customizable enterprise blockchain solution that has applicability many different industries.
But how is XDC01 protocol more secure than any other public blockchain?
While public blockchains are secure platforms for carrying out trustless transactions, there is public visibility that can be exploited to compromise sensitive financial information. The Bitcoin blockchain, for instance, has been exhaustively mapped out such that transactions can be traced in ways that subvert the protocol.
The XDC blockchain, thanks to its hybrid functionality, allows for fully private sub-networks to carry out transactions that are recorded as a single hash on the public state of the blockchain. This hash can be used to verify the transaction by the involved parties but cannot be used to derive any meaningful financial details that can compromise the data security of those involved.
The XDC blockchain is a permissioned blockchain. That means the distributed infrastructure that makes up the XDC blockchain will be hosted on the infrastructure of leading financial institutions, corporates, and other kinds of reputed players. There will be stake requirements that will ensure all participants behave in a truthful and reliable manner. There will be punitive measures against the wrongdoers.
Interesting! Could you also tell us the real world applications of XDC01 protocol?
Well, there are many! I’ll try to give an overview. The first one is Trade and Finance. The XDC blockchain can act as a marketplace platform for peer to peer trade and financing. The advantage of using the blockchain, specifically the XDC01 protocol, is to minimize the global infrastructure deficit by enabling peer to peer financing between governments, corporations, buyers, and suppliers to make efficient use of capital and deploy projects without burdening government treasuries. The platform can help buyers secure capital at globally competitive rates, give suppliers visibility on global tenders, give access to a large customer base, and give financiers real time visibility on their investments through real time monitoring via IoT devices.
The second real-world applications of XDC01 protocol is Digital Wallet and Remittance. The XDC blockchain allows for real-time settlement where individuals, corporates, and financial institutions can carry out cross-border payments for trade, financing, and remittances. The XDC blockchain offers robust security and high transaction throughput making it an ideal solution for financial transactions.
And how can I forget Industrial Applications! The XDC blockchain is use case agnostic and XinFin is currently working with several partners and institutions in energy, travel, aviation, and fintech sectors. Blockchain and IoT based customized solutions can be deployed for business process re-engineering, supply chain, financing, procurement, and settlement.
More questions on XDC01 protocol. Does it run on electricity, or make any similar power demands to function properly?
The XDC blockchain does not achieve consensus based on Proof of Work that is employed by Ethereum or Bitcoin. PoW is a very energy intensive mechanism for achieving consensus. And frankly not appropriate for enterprise blockchain use cases. So the XDC blockchain does not make any additional electricity/energy demands over the necessary IT infrastructure.
So what is the consensus mechanism of XDC, exactly?
The consensus mechanism used in public blockchains(Proof of Work) is entirely unsuitable for the permissioned blockchain use case. The consensus mechanism used in the XDC blockchain is derived from algorithms that ensure BFT.
At XinFin we have an in-house RD team that is actively developing advanced consensus mechanisms. We collaborate with premier educational institutions in our RD endeavors and are planning on involving skilled developer talent for this project as well. If you’re a software engineer with expertise in computer networking and looking to get involved in cutting edge financial technologies, we’d love to hear from you.
How big is the XDC developer community?
The blockchain space values its community very highly and XinFin is no exception. We’re closely connected to the larger blockchain community and host various channels for developers to contribute to our project. We’re setting up a new RocketChat server and invite the developer community to come talk and code with us on this very exciting project.
How does XDC plan to be compliant with regulators?
The XDC blockchain has been designed with enterprise use cases in mind. Solutions built on the protocol have to conform to numerous regulatory frameworks that govern these institutions. We have initiated contact with regulators around the globe and shared our technical documents and other business literature. The XDC blockchain has provisions to set up auditing nodes which will be extended to regulatory bodies, with customizable permissions, for the purposes of regulatory compliance. Xinfin will make necessary disclosures and adhere to regulatory guidelines.
Moving to the adoption. How can large institutions work with XDC01 protocol?
Public blockchains, like Bitcoin or Ethereum, run on public nodes. Some of the nodes take part in the activity of mining. Through mining new blocks(of transactions) are added to the blockchain. These mining nodes are set up as clusters and consume a large amount of electricity. The cost of running this infrastructure, including all hardware and ISP fees, is offset by incentives paid to the miners to continue running their nodes. There are two kinds of incentives. One is paid when a miner or mining pool adds a new block. The other is paid as transaction fees charged against individual transactions. Hybrid and Private blockchains do not employ mining to make blocks of transactions. So the incentives and costs are fundamentally different.
The XDC blockchain is a Hybrid blockchain that does not allow public hosting of its nodes. Corporates and financial institutions must obtain a membership by owning stake in the XDC token pool. There are three tiers of membership. Tier 1 is open and available to all participants in the XDC ecosystem. Tier 2 and 3 memberships are obtained by organizations that purchase a certain number of XDC tokens. These members have the ability to host nodes validator nodes that correspond to ‘mining’ nodes in the public blockchain paradigm. They can additionally create and run private blockchain networks that are connected to the pubic XDC blockchain. The private and permissioned sub-networks are highly powerful and secure while simultaneously leveraging the power of the public XDC blockchain.
And how does XDC trade and remittances address the Volatility issue of the crypto markets?
The extreme volatility of cryptocurrencies makes them unsuitable for real-world trade use cases. Any fall in prices may lead to significant losses for involved participants. The XDC blockchain has easily deployable smart contracts written with a unique hedging feature. This feature allows the recipient to receive exact fiat value of the trade (net of commissions) at the time of smart contract closure. 10% of XDC tokens will be reserved for the hedge pool and will be used to guarantee the trade.
How does the XDC protocol architecture address the global Assets and Equipment Financing market?
The XDC protocol adds the efficiency of blockchain tech to the real world asset financing processes. Assets financed on the XDC blockchain are monitored real time to ascertain value depreciation according to standard processes. If the asset needs to be refinanced or sold, the valuation is available in a standardized and appropriately public form.
Before wrapping up, do you wish to say anything to our readers?
Hello readers! We here at XinFin are strong believers in the open-source paradigm. We like to support open source projects and plan to contribute parts of our own development to the open source community. We invite developers and blockchain enthusiasts to join in our project. We also have bounty like programs where we set up problem statements and developers can solve them for rewards, tokens, or prize money. I’ll request Yashu to list our community page links where you can access more information about our project.
Sure, I will.
Thank you, Yashu.
XinFin Community Page:
https://www.xinfin.org/community
Other links:
Slack Channel for Developers :
https://xinfin-public.slack.com/
Gitterchat Channel for Developers :
https://gitter.im/xinfin-public
Github :
Our Social Networks: Facebook Instagram Pinterest Reddit Telegram Twitter Youtube
