Tari, a new open source blockchain protocol, aims to redefine the digital asset experience. Backed by institutional investors including Redpoint, Trinity Ventures, Canaan Partners, Pantera and Multicoin Capital, its founders Riccardo "fluffypony" Spagni, leader of the cryptocurrency Monero; Naveen Jain, an entrepreneur of the serial entertainment industry; and Dan Teree, co-founder of Ticketfly, hopes to simplify the management, trade, programmability and use of all digital resources.
Current status of digital assets
"Today, most digital resources such as event tickets, in-game items, loyalty points and virtual currencies are silenced due to restrictions that limit their use and the secondary market," he said Jain in an interview Bitcoin Magazine.
Companies mainly adopt these restrictions to control activities after their distribution, verify the identity of an asset holder and prevent fraudulent counterfeiting.
Silenced digital resources are not ideal for consumers or businesses. Consumers do not enjoy the "real" ownership of digital assets they buy or earn because they have to comply with secondary market restrictions and regulations and businesses lose billions of dollars generated by secondary digital asset resales that occur on external channels.
For example, consider a Delta frequent flyer who takes a Lufthansa flight in the year and is unable to exchange his Lufthansa miles (which are unlikely to be redeemed) for Delta miles. Or, the millions of dollars in ticket resale revenue that artists like Beyoncé lose after issuing tickets for their world tours. Once Beyoncé sells a $ 100 ticket to the original buyer, it does not participate in the secondary market resale economy when the original purchaser resells his ticket for $ 500, and the secondary market scalper he turns and sells the ticket a third time for $ 1000 the night before the show.
Digital resources renewed
By exploiting blockchain technology, the Tari protocol allows consumers and businesses to break down fenced gardens between businesses, sell and trade poor digital assets with programmed rules and record the immutable transfer and verification of ownership.
The Tari protocol hopes to unlock further usefulness for users of digital resources and to enable the control and ownership of "real" digital resources. Using the Tari protocol, the aforementioned Delta flyer can perhaps exchange its Lufthansa miles with Delta miles. And artists like Beyoncé can issue their tickets for the world tour with programmed rules that allow them to capture and control the value of the secondary market. Beyoncé has hard-code rules such as: tickets can only be resold three times, Beyoncé is entitled to 10 percent of any ticket resale and tickets can not be resold 24 hours before the show.
John Pleasants, former CEO of Ticketmaster and COO of Electronic Arts, thinks that the Tari protocol will open free trade between a variety of industries ".[Tari] It can help the entire live entertainment industry to recover billions of lost revenue by better controlling how tickets are sold and resold. From the point of view of the game, the ability to buy and sell virtual goods on a system distributed on different platforms can greatly improve both the monetization for publishers and the overall consumer experience. "
Tari Protocol: Under the Hood
According to Spagni, the Tari protocol will be built over Monero. In particular, Tari will be a sidechain undermined by the merger of Monero. The combined extraction allows to extract two cryptocurrencies based on the same algorithm at the same time. In this case, it is the test algorithm of Monero's work that the miners have to solve.
The Tari token feeds the Tari protocol, serves as an incentive for miners to extract Monero and for valiators to accurately validate network rules.
"To give miners an incentive to merge your chain, there must be a reward – we can not pay them in Monero, so we need a native token that the miners come together." Tari tokens will also be used as an incentive to validate rules: Users have the opportunity to put Tari tokens into a escrow account and passively execute a validating program [protocol] rules on your computer. If they behave correctly and validate the rules, they earn tokens and maintain their commitment ", Spagni explained.
Merging-Mining with Monero
Because Tari is a united mining sector, the team does not have to recruit new miners. Instead, Monero mining pools can "flip a switch" (change their settings) and extract Monero and Tari at the same time. Spagni also stressed that mines combined with the Monero test system do not involve additional electricity costs or risks of environmental damage traditionally associated with the job test, as miners do not burn more cycles.
Spagni also noted that "all work chain tests consume less Visa electricity." We are coming to a point where a solid proof of the chain of work can provide the same, if not greater, capabilities of Visa. "
The Tari team noted that there is no "central core" for Monero. Jain noted, "We do not want any single points of error, we are co-founders and contributors, but not the only contributors, there are many intelligent people inside and outside the organization. external contributors of internal contributors In fact, we want hundreds if not thousands of contributors over time. "
For reference, the Monero protocol has had about 150 contributors in the last 12 months.
Although Tari aims to renew the way consumers and businesses interact with digital resources, the team has several obstacles to overcome.
Is it favorable for companies to allow their businesses to be traded on a secondary market? And will companies change the terms and agreements with users to allow secondary market liquidity for their digital assets? For example, airline loyalty points are currently an illiquid market. The Wall Street analysts have pointed out that the sale of these loyalty points can amount to half of the airline's annual earnings before interest and taxes, but airlines may want loyalty points to expire unused. In this way, airlines can increase revenue without having to give up travel for customers who do not take advantage of their loyalty points.
Since the Tari protocol aims to become the underlying protocol for the transfer of digital resources, it will be necessary to manage "many tens of thousands of transactions per second", according to Jain. The team plans to use lightning as the main throughput mechanics for Tari.
Spagni explained: "We are constructing a standard-compliant lighting router that will be compatible with Bitcoin, Monero and Tari, and we will also get additional throughput by creating a MimbleWimble chain, which means that the transactions will not be stored in the blockchain in their entirety, only the kernels. "
The Tari protocol has not yet implemented a test network that boasts transaction capabilities, not to mention performance at the Visa level.
Disclosure: the author has an investment in Tari.