Visionary Finance had the opportunity to meet with the founders of bloXroute, a fast growing Blockchain Distribution Network in the Chicagoland area. As Blockchain technology continues to expand, Visionary Finance enjoys setting up interviews with companies where we learn about a company’s business model and further understand what’s separating them from their peers. The team at bloXroute was very welcoming and gave us the ability to communicate with a few individuals from their leadership team. You can see some of the office pictures below, as the the team maintained a very strong work ethic despite Visionary Finance coming in mid-day!
We first sat down with Uri Klarman and Eyal Markovich. Uri is the CEO/Co-Founder of bloXroute and Eyal is the COO. They helped us understand the vision of bloXroute, which is to fix the “scalability bottleneck” in Blockchain Technology. Many people understand the benefits of Blockchain Technology, but do not fully understand some obstacles it faces. Uri and Eyal explained that in order for blockchains to scale, they need to fix scalability issues. They explained that both Bitcoin and Ethereum can process less than 10 transactions per second each. When comparing to larger entities, they explained that credit cards can process 5,000 TPS and Alibaba can process around 325,000 TPS.
Blockchains run by utilizing peer to peer nodes (computers) across the entire globe. When a node mines a new block of transactions, it sends the block to each peer node to be propagated. This process takes some time and results in Scalability issues. The current framework prevents Blockchains from handling larger blocks with more transactions. Uri summed this up as a “computer networking issue” that bloXroute is enhancing for miners across the globe.
bloXroute is able to help Blockchains scale thousands of transactions per second opposed to single digits. They do this by implementing their Blockchain Distribution Network of Servers. Uri explained that bloXroute works at “Layer 0” which is the network layer beneath the Blockchain. They use internal caching to reduce the data within a single block (100X less data that needs to be sent through the network. Other techniques they utilize include “cut-through routing” and optimized topology.” This Blog Post further explains these procedures. These solutions can be applied to all Blockchains, not just Bitcoin or Ethereum.
Eyal mentioned that during its “BCH Mining Test”, bloXroute has strong communication with mining pools in China who have provided strong feedback on this solution. Miners essentially receive a small piece of code from bloXroute, also known as a “Gateway.” The code is open source and results in relay nodes all over the world that shrink data and make everything much more efficient. Eyal mentioned the ultimate goal at bloXroute is to have every miner utilizing bloXroute, in order to fix “scalability issues” among all Blockchains. Please take a look at the figure below to fully understand how the Gateways operate!
Visionary Finance then sat down with Professor Aleksandar Kuzmanovic who is a CS Professor at Northwestern University & also Co-Founder/Chief Architect at bloXroute. We confirmed a lot of the information that was outlined above, but also talked about current solutions in the market. Professor Kuzmanovic mentioned that Layer 2 solutions such as Lightning Network are attempting to fix scalability issues. He thought Lightening was a great project, but also mentioned that it’s directed to the “smaller user” and not necessarily ready for large transactions. Professor Kuzmanovic stated that everything that goes “off-chain” through Lightning must come back “on-chain” at some point which could result in continuous congestion. When we asked if he sees more value in Bitcoin as a “Store of Value” vs “Payments” , Professor Kuzmanovic mentioned the network will ultimately decide that. He thought that both Store of Value and Payments can only exist if the overall Scalability issue is fixed. Professor Kuzmanovic shared that bloXroute can ultimately help any Blockchain regardless of the setup. When talking about the Blockchain differences between Ripple and Bitcoin for example, Professor Kuzmanovic said this will be a non-issue for bloXroute in the future. bloXroute will be able to help any Blockchain since all Blockchains need to exchange and route data!
bloXroute shared some goals they have in 2019. They plan on product launch this year which will start with the first “public test” in the next 2-3 months. Their first version will be compatible with the Bitcoin, Bitcoin Cash and Ethereum Blockchains. Towards the end of the year, bloXroute plans to release a second version which will give incentive to merchants + potentially compatible with additional Blockchains. Eyal shared with us that the company plans to issue a security token at the end of the year as well. This way they will be able to funnel company revenues to their token holders.