As Oliver E. Williamson comments, “ … there is less agreement on how the self-interestedness of economic actors should be described. Transaction cost economics has proposed that economic agents be described as opportunistic where this contemplates self-interest seeking with guile.” From the perspective of economics, the most significant contribution blockchain technology brings is reduce transaction cost by removing opportunism.
However, for current blockchain system, scalability is a huge problem which causes low efficiency. As a result, blockchain system today can be hardly used under the scenario of IoT. Sharding is one of the most worth expecting technologies to improve the system's throughput by processing transactions in parallel. However, the state-of-the-art sharding-based system has two main disadvantages: (1) Lack of the proper incentive mechanism. (2) Low security level.
We have proposed a reputation based blockchain system to overcome the above two limitations. The key idea is the parallelchain architecture that leverages a reputation chain with moderate generation speed to support the high throughput transaction chain. The reputation chain records the validators’ reputation based on their behaviors. Also, a reputation based sharding and leader selection scheme maintains a balanced sharding to enhance the security and incent the validators. The transaction chain is generated via a Raft-based synchronous consensus which achieves high throughput and high resiliency by effectively utilizing the capability of competent shard leaders. All these designs combining together realize a secure, high incentive and fast blockchain system.
In the incoming IoT era that brought by 5G communication technology, a blockchain-based decentralized machine-tomachine payment system is the most fundamental infrastructure for IoT devices to communicate and functions well. Together with our previous academic achievements on IoT identity authentication, we are working hard to put all these technologies together in the form of a USB device/ blockchain chip to build an IoT-affordable blockchain payment system.