Gruut Network Review image

Gruut Network ICO Review: A Fully Decentralized P2P Public Ledger


Imagine a project that’s innovative enough to build something that won’t try to reuse what existed before in these financial institutions and businesses. Instead, Gruut is developing something that those businesses will want to use and implement as the “new standard”.

PROS

  • Solid team academically and technically
  • Green consensus model
  • Economically fair ‘One node, One vote’ solution

CONS

  • Token utility not clear
  • Business plan not established
  • Regional adoption of chain could be slow

When we talk about blockchain technology and its potential impact on the world, the words that are touted by many are “revolutionary”, “world changing”, “new financial era” and several others.

Surely you’ve come across people passionate talking about dismantling government authority or “distrusting” the current trust model provided by banks and similar entities acting as third parties.

It’s also true that whenever transacting/trading with money (FIAT) a third party has been an integral part in recording the transactions in a secure and trusted manner.

It seems there’s a constant battle between these new and old guards, old practices by financial institutions who limit our financial freedoms and the new blockchain philosophies that believe in financial future that creates access for all.

But today, we bring to our community something different. A project that’s not trying to dismantle current institutions authority, but create a new business environment.

This is Gruut Network, and they are aiming to develop a new alternative to the business model which is currently relied upon by third parties to make sure that the records of transactions are intact and not manipulated.

They will implement a Peer to Peer network to support real businesses, which will reduce fees and encourage trust in the technology, and consensus mechanism.

Imagine a project that’s innovative enough to build something that won’t try to reuse what existed before in these financial institutions and businesses. Instead, Gruut is developing something that those businesses will want to use and implement as the “new standard”.

So let’s dive right in!!

Do forget to join us on telegram and subscribe to our newsletter.


Problem

The Gruut team has an interesting micropayment solution that can run on devices as lightweight as a smartphones which could theoretically scale adoption of the blockchain and the coin. What problems do the team see in the blockchain space and how do they plan on tackling them?

  • No decentralization
  • No economic transparency
  • High transaction fees
  • Lengthy transaction confirmations
  • High cost for mining
No decentralization

As we have learned from some of the other projects we have reviewed and even by scanning across-sections of the top 100 on LiveCoinWatch.com we can see that many of the top coins are still not living up to Satoshi’s dream of creating a currency that will be able to escape the entrapments of the fiat system.

Unfortunately in the implementation of both ‘Proof of Work’ and ‘Proof of Stake’ consensus mechanisms the trend towards centralization started almost immediately upon mainnet launch.

As we can see from this Bloomberg article in December of 2017 they were less than 1,000 people that controlled 40% of the available Bitcoin.  This kind of centralization cannot be good for the long term adoption of the cryptocurrency.

And this scenario is similar across multiple cryptocurrencies as those high networth individuals are able to purchase lots of crypto in preseed rounds.

No economic transparency

Economic transparency is another attribute that the team is working to bring to the forefront in there project.  Although it is possible, with a bit of luck, to track down the owner of the BTC, ETH and other cryptocurrency transactions, it takes a lot of time and it’s likely to be a hit or miss situation.

In the Fiat-based economy its fairly easy to know who you are conducting business with and even know about the entity from publicly available records if it’s a registered company.

While some people claim they want this anonymity there can be more downside to anonymity than upside so a highly regulated and transparent currency is going to be needed for mass use.

High transaction fees

As many of us know, once the blockchain network is busy, within PoW, the miners need to be paid more to keep the transactions moving on the blockchain. This leads to high transaction fees – ‘gas wars’ on ETH network or slow and expensive transactions within BTC.

This limits the usefulness of the currency as well as the application.

For example, if you were to use BTC to purchase a house, something that typically costs thousands in transaction fees, the fees for executing that transaction on the bitcoin chain may not seem as bad in context – however – applying that situation to purchasing a cup of coffee the transaction fees potentially could cost more than the cup of coffee.

As we can see from the chart below, transaction costs in December of 2017 rocketed from a low of $6 up to about $26 at its peak.  This type of fee volatility really underscores the point around mass usage.

Lengthy transaction confirmations

Here’s the “double-whammy”, when they are high transaction fees confirmations on the network can take a while, so not only do you pay more for the transaction but you have to wait longer too!

The variable nature of the transaction confirmations can be a determining factor in the type of transactions that someone would attempt with a particular currency.

Below is a comparison with some of the leading blockchains and Gruut.

As we can see from the table Gruut compares well to the existing blockchains when they are a similar number of miners.

Going back to our earlier example with buying real estate, if we were going to purchase a house with BTC, the transaction time of 10+ mins, and longer if the network is saturated, would be ok because the transaction takes much longer – up to several days – to purchase a home.

Likewise if one were going to buy a cup of coffee with BTC, the 10 minute wait time would be silly.  So they are use cases for when crypto makes sense.

High cost for mining

The last hurdle the team is looking at is the high cost of mining.  As we know from our previous reviews, the high cost of mining BTC and ETH (and many others) can’t be maintained if we plan on mass adoption.

Right now the specialized computers needed to mine BTC and ETH keep most people out of the mining space which can lead to the centralization that was discussed earlier.

Now that you’ve seen and understand the problems the Gruut Network team is trying to tackle.  What are the high-level solutions that they are developing and how does that tech work.  Continue to read the Solution and Main Features sections.


Solution

OK, it’s clear what problems the team is trying to solve and their intentions with respect to improving blockchain technology and its adoption between real businesses and institutions already in the market.

Now we’ll summarize their plans to solve the problems laid out in the previous section.

To help guide you through this we have arranged this section as a Q&A:

– How are the Gruut team going to build a solution that is cost efficient and has low fees but keeps decentralization as its core?

Their answer comes in the from of identified nodes, that do not need to stake coins, to run a P2P ledger.

Gruut Networks does real name (ID)-based voting (Nodes won’t be identified to protect privacy, Gruut will see only pseudonyms).

The node identification can make every vote distinguishable, while allowing anyone to join the network once they are identified, therefore privacy stays in tack and each node is limited to one vote per block.

While solving Node voting Gruut encountered another problem…

-How will they maintain a fair incentive model for their decentralized low cost ecosystem?… how will their reward system work?

The teams approach will be to limit a users greed, when producing blocks.

It means: they will try to provide rewards equally distributed to peers indepently of how much resources, computing power or equity staking they have.

Random algorithms will determine which nodes are to produce the blocks. Therefore every node has the same chance to be rewarded.

This could lead to lack of effort because of the lack of competitiveness, but Gruut solves this by designating a group of nodes as candidate block-producers instead just one node.

-Proof of Population Collaboration in Gruut’s consensus mechanism called PoP – which we will explain in depth later, is their way of stopping attackers from trying to secretly fork and double spending on the network.

Because of that, a secret fork in PoP is impossible. You get the risk of being reported by random signers determined by Gruut.

-In order to encourage mainstream adoption along the already existing business model, where transparency is a must, they will relay in the added value of fair identification.

Within Gruut Networks, the level of identification required to make a transaction varies, allowing both secure and fluent work.

With this flexibility they avoid the negative effects such as money laundering and tax evasion.

They want this new ledger to work as a universal peer-to-peer financial platform capable of dealing with assets, real currency and cryptocurrency

Ok, so how will they solve volatility when dealing with payments through their network?… well, that’s an interesting question.

They will use real FIAT in the payments. Which discourages volatility, after all.

To absorb price fluctuation, transaction fees are evaluated in terms of fiat money. After that, GRU coins are used for the transaction fee.

We can say that GRU tokens will have a clear utility and cannot be classified as a security.

What are they planning to do to acquire the needed scalability to keep up with all the P2P transactions? How will they manage that volume?

They will use a well known method found in the battlefield

“ divide-and conquer”

With this approach, they will use multiple local blockchains in parallel and adopt an inter-chain protocol. They plan to use and take advantage of what has already been built.

The team is planning to run a blockchain for each dApp, being able to adapt to what the application needs.

In summary and before we get deep into their main tech features, we could say that Gruut;

“Can work as a universal financial/business platform replacing current models used by “third parties” owing to a new consensus architecture adopting fiat based transactions.”


Main Feature

Gruut Networks – A decentralized P2P public ledger

Gruut identifies its nodes through a real-name (I.D voting) but for privacy sake it only sees pseudonyms, so partial anonymonity is implemented by way of an alias. Staking is not required on the network and Gruut says their public blockchain will ran by identified nodes, which we know; to eliminate double voting and forge decentralization.

The Voting mechanism in Gruut’s ecosystem is signature based and doesn’t require extensive mining, therefore keeping cost low. All nodes are required to compute a standard digital signature for blocks, making the entry point to become a node very affordable and as easy as being a legal subscribed smartphone owner.

Gruut also employs a different consensus algorithm called Proof of Population (PoP).

PoP: is based on P2P voting on the Gruut Platform, emphasis is placed more on how many voters sign blocks and not specifically who they are. PoP uses a gamified form of mining were block rewards go to the miner that collects the largest number of signatures for a block.

The number of signatures is proof that as many of the population have supported the block.

What are some of the benefits of PoP as a consensus mechanism?

    1. Double Voting Prevention: Nodes are identifiable and can be kept to one vote.
    2. Decentralization: No need for large hashing power or huge equity stakes.
    3. Green/Environmentally Conscious: No need for specialized energy-hungry equipment; mining can occur on subscribed smartphones.
    4. Micropayments can be processed: Low mining cost keeps the rewards to miners smaller, allowing small transactions to take place.

Team and Advisors

DaeHun Nyang – Founder

  • DaeHun has 17 years work experience in Research as a Professor.
    • He is a member of the IEEE.
    • Member of the board of directors and editorial board of the Korean Institute of information Security and Cryptology.
  • His research interest include cryptography, network security, privacy, blockchain, cryptocurrency, traffic measurement, network monitoring, deep learning-based software and PKI infra.
  • Holds a MS & PhD, Computer Science at Yonsei University
  • Holds a Bachelor’s Degree, EECS at Korea Advanced Institute of Science and Technology.
  • Created 3 Publication, 200 Papers and  80 Patents

Choi SungWone – Board Member, Platform, Blockchain Expert

  • Choi has amassed 20+ years work experience as serve programmer.
    • Currently he is also the CEO of Supertree. Supertree is a contents platform for decentralized blockchain globally. It meta-blockchain include ETH, QTUM and EOS.
  • Longest tenure at one position was 7+ years as PM at NHN. A gaming company. Here he used all his skillset.
  • Skills: C++, SQL, Java all stages of game Development
  • No details any formal studies for Choi.

Kiyong Choi – COO

  • Kiyong has been working in the gaming industry as COO 11+ years.
    • Currently also the COO of Supertree
    • More experience in 3 more korean companies Npic Co. Ltd, DSC investment and Logtu Korea Inc.
  • Holds Bachelor’s degree, Business Administration and Management at Yonsei University.

Sources

Leave a Comment