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Aergo hybrid blockchain Review - by Whitepapertrails, SEVER TL;DR - Analysis, Rating, and Review

AergoknightsJul 29, 2019, 6:38:41 PM

A hybrid blockchain environment focused on enterprise customers who can run independent interoperable private chains and anchor data & access additional resources on a dPoS public chain

Blockchain tech as seen by enterprises

The emergence of a new technology trend always sparks interest and discussions at CTO/CIO (main IT guy in a large organization) level. Most of these guys have been technicians perhaps at one point in their lifetime, but their role makes them focus on big corporate politics, strategy definition (and sometimes execution), change management and other activities which are unrelated to technology. So they hear the buzzwords and understand the trends but rarely have the time to delve into what they actually are and how they truly work.

That’s why, as any other buzzword technology trend before it, “blockchain” has caught their attention and right now a lot of organizations are looking into it one way or another. Some are looking at legit blockchain use-cases like inter-company data & value transfer, federation, disintermediating some of the third parties that “leech” from their business model, etc.

Some hear blockchain as an auto-magic cure-all for all of their problems. Either way, they approach this new topic in a very prudent manner, with security often being quoted as a main concern related to the public nature of blockchains, which often results in enterprises trialing private blockchains first.

And what’s important is that enterprises are mostly approaching supermajors like IBM, Microsoft, Accenture, Ernst & Young, Deloitte and others, who are tapped for guidance regarding how this new technology can help or threaten them.

These firms help their customers navigate the complexities on the space and choose the solution that best fits their needs, whether it’s private blockchains like Hyperledger, R3 Corda, modified Ethereum, or public blockchains such as Ethereum or EOS.

Image courtesy of https://101blockchains.com/permissioned-blockchain/

A similar albeit smaller firm is the Korean Blocko, who supports their customers to “design, deploy, and manage digital services on secure distributed networks”. They started out by building Coinstack, a private distributed system initially based off of Ethereum and Bitcoin that was adapted for enterprise customer needs, and eventually evolved this system into Aergo – a hybrid blockchain solution that allows multiple customers to run any number of independent private blockchains, with a public blockchain for anchoring and resource sharing.

How does Aergo work?

The private level of Aergo is made of Aergo nodes running inside the various organizations implementing it. They deploy the Aergo Hub component and run a leader-based consensus mechanism such as Proof of Authority, can have private repositories of data and run smart contracts written in Solidity or SQL-like scripting & Lua, which is convenient for enterprise devs already familiar with these programming languages.

The private implementations are great for running inter-company processes with various business partners and other related entities, or even within large organizations with interbranch trust, compatibility or even availability issues.

The public level of Aergo is running on a delegated Proof of Stake model, where 23 validators secure the network, ensure consensus and earn rewards for producing blocks. The Block Producers are intended to be selected from trusted enterprise partners that can provide highly available servers with top performance.

I am not a fan of dPoS as it does not guarantee trustlesness and immutability because the delegated actors can simply collude and do whatever with the chain records and assets. It does however make for a faster overall system when compared to existing PoS/PoW alternative, which is why this compromise has been made.

Anyone will be able to run a full node and offer up resources such as computation or storage in the Aergo Marketplace for developers looking to deploy their dApps or get access to pre-made smart contracts, machine learning algorithms and other similar resources.

Private instances of Aergo can link to the public chain for transparently anchoring data (i.e. for audit), interacting with public dApps & smart contracts or getting access to blockchain resources such as storage or computation from outside of the respective company.

These private chains can also directly communicate with one another via a Merkle Bridge or receive input from internal non-blockchain systems such as identity management, email, ERP, etc via Smart Oracles. Further interoperability with other public blockchains is a future goal for Aergo.

The AERGO token is used to pay for transactions and marketplace resources such as computing, storage, named entities, smart contracts etc from the marketplace. A significant portion of the circulating supply will be locked by validators to be able to produce blocks. Quite important, companies looking for support and services from Blocko’s experts will also have to pay using the token.

What is the current state of the project?

From a product point of view, the code for Aergo’s mainnet is finalized since April 2019, however the network itself is more of a public testnet at the moment, as the team is still figuring out issues like scalability, ironing out bugs and other similar activities that are necessary before migrating existing customers and deploying new ones to it. The 23 existing customers of Blocko have not grown in number since, with only the Hyundai Autoever anchoring their used car data on the Aergo public chain being a new customer.

Blocko has decided to make away with the legacy Coinstack product and migrate its existing and future customers to Aergo Enterprise, tying everything together into a new line of products based on the new Aergo blockchain. Furthermore, they are looking to cater to IoT use-cases and an Aergo Lite product is being developed as well.

From an investment point of view, Aergo successfully raised $30mn in 2018 but unfortunately for the token holders the terrible bear market didn’t help the price, with AERGO currently trading at $0.12, not great compared to the $0.2 initial price. The team is doing their best with listing on decent exchanges such as BitMax, Bittrex & Kucoin and obviously employing liquidity providers to have a $2.8mn daily volume. They recently applied for the Binance DEX and will likely try to win the community voting thingie to get onto Binance CEX.

From a timeline point of view, the team has been sticking to its initial roadmap, with the testnet live last year, mainnet ready mid April and efforts underway to migrate to the new product and deliver the hub & marketplace.

What I like:

Working product with real customers and a team that demonstrates a good understanding of the enterprise landscape

The available code and tools are highly appreciated by developers who can approach the product with ease; smart contract versatility by allowing Ethereum & Fabric (Hyperledger) alongside native AERGOSQL

The project is moving along as planned, the team is active and the community is engaged

The team, project and overall approach are consistently professional, which is rare in the crypto space of drama, dumps and dubious exits

What I dislike:

Extremely tough competition on the technology side from Hyperledger, R3 Corda, private Ethereum implementations and their local Korean nemesis ICONLOOP

Extremely tough competition on the implementation and services side from IBM, Accenture, Ernst & Young, etc and rising ones like Quant

dPoS public blockchain and trustlessness & immutability don’t sit well in the same sentence

No new notable customers except a minor used-cars tracking by Hyundai

Overall, I like it. The team is highly professional, they were very successful in raising enough cash to execute on their vision and have since been constantly delivering quality results. However, with no new real customers and extremely tough competition from bigger names globally and ICONLOOP locally in Korea, the Aergo team faces a steep uphill battle for a share of the enterprise blockchain market, which is not that big as of today. Companies such as Ernst & Young gifting $1mn worth of code (Nightfall) to allow for privacy on public blockchains and the overall efforts of most major blockchains to provide enterprise-ready easy to use tools out of the box aren’t helping either. The team’s best chance is to stay the path, keep delivering quality products on time and use their enterprise expertise to bring customers aboard, all of which is happening right now.


This Article was taken from https://whitepapertrail.com/aergo-project-review/ to help gain more exposure and repurposed for easy reading. Thank you SEVER from TL;DR for the thorough review!