Komodo enables tokenized systems to rely on the security and immutability of the Bitcoin blockchain without having to build directly on top of it. They have pioneered the “crypto conditions” aspect of smart contracts. In layman’s terms, smart contracts can run on Bitcoin-based blockchains with the same degree of usability as Ethereum smart contracts.
Komodo uses something called delayed proof-of-work (dPoW). Delayed proof-of-work provides developers with the ability to conduct fast transactions on their independent blockchains. Within 10 minutes, notary nodes notarize such transactions on the Bitcoin blockchain.
Komodo notaries function essentially as witnesses – they pass along the data to the Bitcoin blockchain in exchange for small amounts of the Komodo base token. Fairbank, who is based in the growing blockchain hub of Vietnam, says:
So basically what it means is that coins that have low hash can actually benefit and leverage from Bitcoin’s hash. It allows you to actually notarize back to Bitcoin’s blockchain, which is particularly useful for any coin that has a low hashrate.
Security for Smaller Blockchains Through Komodo and Bitcoin
One of the coins to do so is EMC2, which has a market cap of nearly $10 million but previously could have been 51%-attacked for a couple thousand dollars. It experiences frequent trading. The primary goal of EMC2 is as a fundraising utility for independent scientific research. Based in Quebec, they were one of the first altcoins (along with Litecoin) to implement the Lightning Network after Bitcoin.
The Einsteinium Foundation writes on the subject:
Firstly, we want to address a large concern expressed by our community. In August, the Einsteinium network experienced fluctuations in hash power which resulted in a number of orphaned blocks. […] Exchanges temporarily disabled withdrawals and deposits as precaution. We apologize for any distress or inconvenience caused by this, but we responded promptly and situation is under control. […]
We have chosen Komodo’s Delayed Proof Of Work (dPoW) as the solution. It increases security tremendously. Using it, every N-th Einsteinium block will be recorded in Bitcoin’s chain and remain there permanently. Those blocks will act as the guardians for the whole EMC2 network.
The Linux Analogy
Community-oriented, none of the dedicated members receive pay. Some development receives funding. ICO funds have been earmarked to pay for Bitcoin transactions for 8 years.
However, Fairbank says that much like Linux, Bitcoin, and other open-source projects, companies are growing up within the ecosystem. Linux was just a passion project of a Finnish college student until companies started to seriously develop code for it and on top of it. The Linux Kernel today has full-time employees from some of the largest tech companies in the world contributing to its development, with its creator Linus Torvalds largely still in charge of final changes.
The ecosystem is growing organically, says Fairbank, based on the demands of security and usability. Komodo offers an interesting crossroads between Bitcoin and Ethereum worldviews – on the one hand, you want a lot of hashpower backing your blockchain, and on the other, you want to be able to deploy smart contracts with similar ease to Ethereum. This is the thrust of Komodo’s aims.
Industries Picking up Komodo
Komodo has not been immune from the prolonged Crypto Winter.
In conclusion, we asked Ben Fairbank what industries he thinks will pick up Komodo the most in the coming years. As we’re often hearing these days, the word “gaming” came up a lot. The gaming industry is one of the few that has not experienced a slow-down in for almost a decade, if not longer.
I think that the industries that will make the most use of Komodo those that need more exceptions than a basic smart contract. Our platform is currently geared more toward gaming and rewards points programs. […] It will be able to automate a lot of these processes. The new crypto conditions contracts mean that any business could utilise the komodo technology to build on.
Fairbank believes that Komodo is nearing its Red Hat moment. While it is a partner with Amazon Web Services in building a 1-million-transaction-per-second product, he thinks one of the big hold-ups in blockchain is companies that help others implement and actually use blockchain technology. He personally believes that at least one or two companies will crop up within the Komodo ecosystem to facilitate more adoption.