TenX Community Forum

Comparing COMIT to Lightning


Andreas A. talking about the inter-operability between cryptocurrencies - about how Lightning can work in that. I am wondering what pro’ and con’s COMIT protocol has compared to this. Obviously Lightning will be known and only very few know of COMIT…so Lightning has a head start there. But would COMIT (utilizing atomic swaps) have benefits/stengths here? - I guess COMIT will also be decentralized? And trustless?

Hi @Endurance,

thanks for sharing the video. Andreas is a great person in crypto space and I love his way of explaining things :slight_smile:

… about how Lightning can work in that. I am wondering what pro’ and con’s COMIT protocol has compared to this. Obviously Lightning will be known and only very few know of COMIT…so Lightning has a head start there. But would COMIT (utilizing atomic swaps) have benefits/stengths here?

Tough question :slight_smile:
COMIT and the Lightning Network aim at solving different kind of problems: while Lightning focuses on payments and is a scaling solution (on Bitcoin or Bitcoin-like blockchains), COMIT focuses on cross-chain transactions aka atomic swaps. In that sense, it is hard to compare benefits or strengths of each of the solutions.

He is completly right, the Lightning Network is a it as a general purpose layer-2 network which can work on every blockchain. This is indeed true and he states correctly that in theory Lighnting can work on any blockchains which supports timelocks and hashing, however the challenge is the implementation and connecting different Lightning implementations with each other.
He later on talks about a standardized protocol to connect COSMOS, Lightning, Raiden, etc. the internet protocol of money.

This is the level COMIT is working on, i.e. we aim at connecting all the blockchains with each other. This can either be achieved on-chain or off-chain.

Some time ago we actually did an atomic swap from Ethereum on-chain to the Lightning Network on Bitcoin: https://blog.coblox.tech/2018/12/12/erc20-lightning-and-COMIT.html

In that sense, COMIT and Lightning are not competing but are compatible with each other :slight_smile:

Cheers,
Philipp

Thanks for at great high quality reply. Following up on this, can you also answer these questions:

  1. Compliance restrictions in using COMIT protocol. Can you elaborate on the compliance restrictions in relation to TenX or CoBlox using COMIT in actual services for end users? As an example through COMIT you could easily anonymise your transactions goes against the KYC requirements.

  2. It would be interessting to get an update about the hackathon that took place over the weekend 6-8 dec 2019. Like how many teams and what services did they develop? Any insights into, if any of the teams attenting will continue their development towards launching an actual user service based on COMIT?

  3. This one is just copying in a question asked in the community chat, together with your answer.
    QUESTION about Price discovery: How can we find exchange rates in cross chain systems? How would a node know the exchange rate? What fees should be charged? How knows the node the perfect route?

This is a major question that, once solved, will make a lot of money. It is not a fee that will be charged that wil make money, it is the payment provider (TenX) being confident in knowing how to go from one place to another place. If TenX can provide that knowledge, their fees will beat other routers fees. TenX’ vision is to provide all users to use as many cryptocurrencies all over the world, with COMIT and their price discovery they see a huge advantage in this area (special prices, low fees, etc.). That is the actual gain TenX will profit from, not the fees they will charge for transactions.
How does price discovery work?

On a reactive system you have route discovery (the better the model of this route dicovery, the cheaper and faster the transaction). Selling point: Julian claims that TenX knows COMIT the best. Therefor, they will be able to provide people with the best price. Through arbitrage more expensive nodes will become cheaper and the system will get balanced out. Because the system is decentralized, changes are slower and therefor the fluctuation of the prices won’t be as big as it is in todays models.

ANSWER:
Hi Endurance! CoBloX Dev here. I assume your question is based on the original COMIT white paper. At this stage we are focusing in making a useful platform for simple (2 assets/2blockchains) atomic swaps. Routing and other multi-hop problematics using 3+ blockchains is something we look into but we prefer to focus on adoption first.

Regarding price discovery, this is an extremely interesting subject. There are so many way to do it, whether it’s using a centralised server (like a website order book) or putting an orderbook on a specific blockchain or using a gossip protocol over libp2p to broadcast offers.
Again, we prefer to focus on meaningful usable features first to help adoption, e.g., it may make more sens to have Liquidity providers publishing their rates via a REST API first and then move to a more peer-to-peer model.

  1. Following up on 3)
    Can you comment on how CoBlox and/or TenX (any innovative and clever setup) could end up where openly profiting from COMIT would be legally and compliantly OK…assuming that authorities will probably never embrace the decentralized and non-KYC approach that CoBlox envisions. How could that work? COMIT is open source but does that also mean that the governing and further developement of COMIT could be made de-centralized at some point? To make it censorship resistant… I guess my question is: How can reaching your vision with COMIT be compatible with TenX and/or Coblox’ wish to somehow profit from COMIT?..how can it open source while at the same time keeping valuable knowledge about the protocol private with CoBlox (to profit from)?

  2. Do you make advertisements to industry leaders (devs, exchanges etc.) in order to make the existence of the COMIT protocol known in the world? Functionality and getting simple form of it to work is not all it takes to get the world to use it - what is your strategy on that?

  3. If CoBlox team and other external teams (like the ones from the Hackathon, should they end up with an actual service) takes the COMIT protocol to the next level of use in the world…assuming that there will be a profit from it…would that profit benefit be part of the Quarterly evaluations by TenX Managment on the general profitability of the TenX GROUP?..I don’t really care where the profit officially lies…just that TenX reward token holders will benefit from it also…

Thanks in advance for great answers to the community ;o)

/Endurance

1 Like

@Tenebrae
Exactly why I keep asking why hasn’t TenX implemented lightning? The TenX team working on COMIT uses Lightning to do a cross chain atomic swap and TenX doesn’t even have lightning implications on their own wallets yet!

I would love to hear the answers

Hi @Endurance and @Pwent,

thanks for these detailed and very interesting questions, I’ll do my best to answer them:

  1. Compliance restrictions in using COMIT protocol. Can you elaborate on the compliance restrictions in relation to TenX or CoBlox using COMIT in actual services for end users? As an example through COMIT you could easily anonymise your transactions goes against the KYC requirements.

Regulatory questions are really hard to answer and out of my expertise, so I’ll try to answer it with some technical details:

As an example through COMIT you could easily anonymise your transactions goes against the KYC requirements.

Yes and no :smiley: There are always two parties involved in an atomic swap using the COMIT protocol. This is by design so that we don’t have a third party involved at all.
This means, there are multiple ways of how TenX could make use of COMIT. For the sake of simplicity, let’s say the two people in the swap are called @Endurance & @Pwent.
Using the latest COMIT protocol you would be using an HTLC based swap as described in basic htlc atomic swap.
As there are no other 3rd parties are involved theoretically the only two people who know about the swap are the two of you. However, given the nature of HTLCs it is possible (it’s hard but doable) to link the two swaps with each other. However, given the pseudonomous nature of the blockchain, one would need to link the addresses on the blockchain to your real world identity.
In regards of KYC/AML: It is my understanding that it is up to you two to do KYC with each other, the protocol it self does neither enforce it nor prevent you from doing so.

  1. It would be interesting to get an update about the hackathon that took place over the weekend 6-8 dec 2019. Like how many teams and what services did they develop? Any insights into, if any of the teams attending will continue their development towards launching an actual user service based on COMIT?

The hackathon was an interesting experience and I think we learned a lot from it. The biggest outcome was around how we can improve our tooling and protocols.
I don’t know for sure if some of the participants will continue their development towards launching a product. We definitely encourage them to do so and we are still in contact with some. So let’s keep the fingers crossed :slight_smile:
If we see a product being launched powered by COMIT we will definitely report about it in our dev-update: https://blog.coblox.tech/

  1. This one is just copying in a question asked in the community chat, together with your answer.
    QUESTION about Price discovery: How can we find exchange rates in cross chain systems? How would a node know the exchange rate? What fees should be charged? How knows the node the perfect route?

Super interesting topic. For me coming from a distributed system background I love thinking about decentralized topics :smiley:

As mentioned on the chat: to date, we only have 1-1 trades, so there are no hops involved for now.

However, finding a good rate is still quite challenging.
There are two sides of the coin: the maker and the taker:
Let’s assume @Endurance is the maker and @Pwent is the taker. @Endurance wants to sell some BTC for a stable coin AUD and @Pwent is in the market to buy BTC.

  1. @Endurance: has to come up with a rate which is suitable for him/her. As it is in the interest of the maker to have his/her BTC sold eventually a rate with is highly over the market value won’t find any buyers. The closer the rate gets to the market value the more likely it is that a taker can be found. If the rate is below the market rate (meaning it’s cheaper), then someone will take it for sure. Do you see where I am going? It depends on your use case and why you want to sell.
  2. @Pwent is the taker and he/she is interested in buying BTC. Obviously, he/she wants to get the best price, so as going to a bazar, amazon or ebay, he/she will compare your offer to multiple makers and then trade against the most suitable one. This could be either the best price, someone with a high reputation, a mate, or just cuz.

The logic above described is just how markets work right? Now, the challenge is to form this into a protocol so that every participant can get the most suitable price in an efficient manner with a high execution guarantee and low-no Spam.
This is a tough problem but we understand a solution is rather crucial for a decentralized exchange to take off. COMIT is (so far) not aware of the underlying use case, e.g. it only takes care of the execution of the protocol. The price negotiation is one layer above and can be solved independently by an application. For now we do not concentrate on this, but we might do so in the future :slight_smile:

Following up on 3)
Can you comment on how CoBlox and/or TenX (any innovative and clever setup) could end up where openly profiting from COMIT would be legally and compliantly OK…assuming that authorities will probably never embrace the decentralized and non-KYC approach that CoBlox envisions. How could that work? COMIT is open source but does that also mean that the governing and further development of COMIT could be made de-centralized at some point? To make it censorship resistant… I guess my question is: How can reaching your vision with COMIT be compatible with TenX and/or Coblox’ wish to somehow profit from COMIT?..how can it open source while at the same time keeping valuable knowledge about the protocol private with CoBlox (to profit from)?

Wow, I assume your question is around how the COMIT protocol can be profitable given regulatory restrictions and how TenX/CoBloX can make profit with it.

This is a super hard question and very detailed into our strategies and goals.
First in regards TenX/CoBloX profitability: many companies these days invest in research because they want to grow by developing new products. It’s hard for a company to remain competitive if it does not stay ahead of the technology curve. Research in that sense might not make revenue itself on the very beginning but at a later stage when products/service are built. IBM/Intel are one of the only companies I know were able to make money purely on research. Nevertheless, I would claim that every company out there does its own research in-house or through sponsoring PhD students/researchers. They do so to have a competitive advantage in the future or come up with new innovative product ideas, these might even seem to compete against their own business.
One recent example is Twitter, the CEO Jack Dorsey just announced the funding the development of a decentralized standard for social media… so directly competing with the centralized Twitter.
I’m confident that we will learn in the future how Twitter can profit from this but for now this is a company secret. There are more examples out there starting from Google over Amazon to Tesla.

Anyway, let’s go back to TenX: I can’t say much besides that there are some obvious and some not so obvious use-cases you can build on top of a decentralized protocol such as the COMIT protocol. Let’s compare it with the Internet protocol TCP/IP: the protocol it self does not make money and neither does every product powered by it, however, there are millions of businesses making money powered by the Internet.
How TenX intends to make money with this in the future is up to TenX :slight_smile:
CoBloX itself intends to focus on the development of the COMIT protocol.

Do you make advertisements to industry leaders (devs, exchanges etc.) in order to make the existence of the COMIT protocol known in the world? Functionality and getting simple form of it to work is not all it takes to get the world to use it - what is your strategy on that?

We indeed neglected that a bit but we are present at various blockchain conferences and events to spread the word. We partner with universities and small startups who are either interested in just the tech or are actively considering in integrating COMIT. We are sure that a running product powered by COMIT will speak by itself once it is open and publicly available :slight_smile:

If CoBlox team and other external teams (like the ones from the Hackathon, should they end up with an actual service) takes the COMIT protocol to the next level of use in the world…assuming that there will be a profit from it…would that profit benefit be part of the Quarterly evaluations by TenX Managment on the general profitability of the TenX GROUP?..I don’t really care where the profit officially lies…just that TenX reward token holders will benefit from it also…

Interesting idea. COMIT is publicly available, open source and free to use for anyone. We don’t want to force anyone to pay a fee for using the protocol.
There are way too many other solutions out there which are powered by tokens etc to drive revenue back into the protocol.
Our approach is similar to the Internet protocol, if this would have had a fee, we would not be where we are right now.
Nevertheless, we assume that big companies will support further development of COMIT if their main product(s) are powered by it as they have interested to maintain and keep the protocol alive. You can compare it to the linux kernel, several companies support the development in any way these days, may it be with money or full-time employed developers.
I’m speaking here from a researcher perspective: Imho how TenX tokens can benefit from a product heavily depends on the product itself and I don’t speculate about this as this is not my expertise :smiley:

Boom… that took a while, sorry the the giant wall of text but I hope I answered the questions to your satisfaction, if not, please let me know.

Have a great day ahead @Endurance & @Pwent
Cheers Philipp

1 Like