Autonomy Network

Autonomy Network is a system that allows smart contracts to queue Requests in the Registry contract, with a trigger (e.g. price of ABC goes above 500$). The system then, when the condition is met, calls the contract to do whatever it needs to do.

It works by a sort of Proof-of-Stake system. “Validators” (bots) can lock their AUTO (in the StakeManager contract) to get the exclusive right to execute Requests for a certain period of blocks.

In exchange, the smart contract has to pay enough ETH or AUTO to cover gas fees and a little extra to make it worthwhile for that validator.

Autonomy's PoS structure vs. “Free-for-all” incentives

Current ways of trying to achieve autonomous transactions is to incentivize bots to do it, for example, the compounding of an autocompounder.

This is like putting a small pile of money that is just about worthwhile for somebody to grab, so 100 bots will try and lunge for it before the other ones, and one random lucky bot will win the grand prize of... 5 cents after gas, probably, while everyone else fails.

This works, but is inefficient, prone to frontrunning and this free-for-all battle can make it not worthwhile for the bot, as there is a high chance of loss and a tiny chance of earning (and tiny earnings).

Frontrunners

Bots aren't instant, they have to pay for gas and their transactions will sit quietly in the memory pool. Generalized frontrunners can scan the memory pool and copy profitable transactions with a slightly higher gas price, and so the bots trying to grab the pile of money end up being outpaced by those frontrunners.

Inefficiency

For every lucky bot that succeeds, there are at least 5 more who fail. The model of a free-for-all means there can be only one.

The combination of all these factors causes bots to slowly become disincentivized as more bots join in, with extremely tiny profit margins and high chances of loss. This causes bot makers to just “give up”, turning off their losing bots. This also leads to centralization, as certain people have an “edge” over others, such as well-connected nodes or an agreement with a miner.

To contrast, Autonomy Network is more structured, with each validator bot having the exclusive rights to grab these piles of money at different times. This stops these cycles of bots bumping into each other as they wrestle for this tiny pile of money, saving a lot of time, gas and having better economic guarantees that your request will be executed (if you pay enough).

What can Autonomy be used for?

Right now, Autonomy Network hasn't launched most of its stuff yet, like the AUTO token, or its documentation. It's in beta currently.

The current main usecase of Autonomy is trading. Autonomy's request architecture allows for limit orders and other stuff available on a CEX, on AutoSwap.Trade.

It could potentially be used in the future to create blockchain life, or NFTs that can run transactions on their own and be autonomous, these things could be used in the Metaverse too. Who knows?

I think Autonomy's really cool and I'll definitely be buying the token when it launches. Not financial advice by the way.

🚀

tags down here as to not interrupt your reading: #autonomy #defi #dapp #dev #nft #pos #dex

However, one mistake many people make is to associate the entire cryptocurrency space with Bitcoin, believing that all cryptocurrencies are inherently energy-wasters and horrible for the environment.

Let me explain why cryptocurrency isn't the coal-burning, oil-guzzling polluter that it is often portrayed as.

Proof of Work

Once upon a time, there was an incredibly smart person (or group) who went by the pseudonym Satoshi Nakamoto. Satoshi here found a way to solve the double-spend problem using computational work, and released the Bitcoin whitepaper, introducing both blockchain technology and the Bitcoin Core implementation.

It all relies on cryptographic hash functions. I'll break this down.

A hash function is a program that turns text into another “hashed” form, examples include MD5 and CRC32, usually used for checksumming.

Cryptographic hash functions are just hash functions, except they are extremely secure. They are one-way, meaning you cannot get back the input from its output, the best way is just to guess and check. Cryptographic hash functions make up the backbone of all of Internet security, examples including SHA256 and Blake2b.

Miners take transactions sent to them by users of the Bitcoin network, and arrange them into a block. (the block in blockchain!) Now comes the hard part: this miner needs to find a special nonce, that when hashed with the rest of the block, the resulting number starts with a certain amount of zeroes, determined by the difficulty.

There is no better way than guessing and checking, so this miner has to guess and check numbers billions of times, even trillions, just to find this specific special nonce. That is what wastes so much energy and that is what secures the Bitcoin network.

Proof of Stake

Many (and I mean many) blockchains use Proof of Stake or some derivative form of it, such as Avalanche, Cosmos, and Polygon. These chains require validators (not called miners anymore) to stake a certain amount that can be “slashed” for bad behavior.

I'm no expert on PoS, so you should check out the Ethereum Foundation article for more details.

And so...

Bitcoin will probably not fade away, but new, more secure, faster and more efficient chains will overtake it like Avalanche. Ethereum, one of the biggest blockchains, is switching from Proof of Work over to Proof of Stake. Bitcoin will probably never switch. Who knows?

The climate crisis is a big issue, but we shouldn't condemn a new revolutionary technology because a few implementations are bad.

tags are down here to not bother anyone #blockchain #consensus #pos #pow #environment