Qubic is a quite revolutionary project in the realm of crypto and AI, and you’re about to see why. It’s a layer 1 that combines elements of Kaspa (@KaspaCurrency $KAS) and Bittensor (@opentensor $TAO). The name “Qubic” stems from the acronym “QBC,” standing for “Quorum-Based Computing.”
Qubic was founded by a team of developers led by CFB, the founder of NXT and Co-Founder of IOTA. The aim was to create a more efficient and versatile blockchain network to meet the growing needs of the industry.
In a blockchain-centric environment, Qubic stands out by offering solutions to address the challenges of traditional networks. Its unique approach to consensus, AI, and smart contracts makes it a promising project for the upcoming Bull Run.
Understanding the Qubic Project
Qubic is a layer 1 utilizing Proof of Useful Work (PoUW), which harnesses computational power to train AI models.
ℹ️ Information What is Proof of Useful Work?
Proof of Useful Work (PoUW) is an evolution of the Proof of Work (PoW) concept. In traditional PoW, miners must solve complex mathematical problems to secure the blockchain, but these calculations serve no real-world purpose outside of network security. This method is criticized for its high energy consumption.
PoUW seeks to address this issue by incentivizing miners to perform calculations that have real-world utility beyond the blockchain. Instead of solving random mathematical problems, miners are encouraged to solve real-world problems. These problems can vary, ranging from video encoding to weather forecasting to supporting scientific research with machine learning models.
For example, a blockchain using PoUW could dedicate its computational power to mathematics. Miners could use their power to calculate the next digits of π, advancing mathematical research.
As you may know, AI requires a significant amount of computational power to develop. That’s precisely why Qubic adopts Proof of Useful Work. It leverages its computational power to train AIs. Qubic engages in Machine Learning.
➮ This isn’t the project’s sole objective; others include:
- Scalability Enhancement: Qubic also aims to create a scalable blockchain network capable of handling increasing transaction volumes without compromising speed and decentralization (Qubic ensures fair distribution of power and resources across its network, promoting decentralization). Fairly standard for an L1.
- Innovation in Consensus: Qubic has its own consensus mechanism: the Quorum protocol. It ensures rapid and secure finality on the network while minimizing the risks of manipulation or centralization (we’ll delve into this further shortly).
Architecture of Qubic
🔹Proof of Useful Work and Ranking
Firstly, as we’ve seen, the Qubic network revolves around Proof of Useful Work. Within the Qubic ecosystem, Proof of Useful Work transforms the computational energy expended in the mining process into beneficial outcomes. The PoUW protocol directs this computational power towards the training of Artificial Neural Networks (ANN), essentially AI.
➮ At Qubic, there’s a ranking system for Computors based on the efficiency of their AI miners in solving these complex problems. Essentially, it pits miners against each other to continually provide the best possible work.
At the end of each epoch (= a one-week period), the Computor ranking is conducted. The better a miner performs, the higher their ranking, and the higher their ranking, the more $QUBIC they earn. So essentially, all miners compete to be at the top of the ranking and earn maximum rewards.
ℹ️ Information:
Computors refer to machines or nodes participating in the network’s consensus protocol and performing computational tasks. They are a critical component of the Qubic network, responsible for executing transactions and operating smart contracts. Computors = Miners = Validators
This Computor ranking is based on a Quorum system.
🔹The Quorum System
ℹ️ Information What is the Quorum?
In everyday life, a quorum is the minimum number of members required to be present at a meeting or assembly for official business to be conducted. The number of members needed to form a quorum is typically defined by the rules or statutes of the organization holding the meeting.
To illustrate: think of a quorum as a participation rule. Imagine you’re hosting a party and decide that for the party to happen, at least 10 of your friends must be present. If fewer than 10 friends show up, the party is canceled. The quorum works in the same way. It’s just a minimum threshold of participation required for something to be valid, whether it’s a meeting, a vote, or any other collective decision.
➮ The Quorum in Qubic
In Qubic, the Quorum consists of a group of 451 Computors out of 676, which is the number of validators needed to validate a smart contract on Qubic. So any decision made by the Quorum requires at least 451 votes from Computors. Each Computor has an equal vote. The goal is to decentralize power and promote healthy competition for the system’s interests. This unique form of governance separates the roles of Computors and the Arbiter, ensuring that no single entity can control both.
ℹ️ Information: We will provide the definition of what an Arbiter is in the context of Qubic: 👇
An Arbiter is an entity within the Qubic ecosystem responsible for resolving disputes and safeguarding user interests. The arbitrator defines the parameters of the mining algorithm, publishes lists of computors at each epoch, develops the ability to replace faulty computors, and accumulates unearned QUs (= $QUBIC) from underperforming computors. Each node operator individually selects their arbiter by setting the corresponding ID in Qubic.cpp. The entity controlling the current arbiter remains unknown, although rumors suggest it is operated by the development team.
➮ Functions of the Quorum
The Quorum in the Qubic system serves key functions:
• Block Formation and Creation: The Quorum handles the creation and validation of blocks in the Qubic blockchain.
• Quorum Voting on Proposals: The Quorum manages governance. Regarding voting, a decision is considered valid when it has received approval from at least 451 Computors. The proposal with the most votes wins, thus favoring a majority rule system. This requires broad consensus and encourages active participation of Computors in making impactful decisions. In scenarios with 2 decision proposals, the winning option must obtain at least 50% of the votes (or at least ⅓ of all Computors if only ⅔ participate). In scenarios with multiple options, the winning proposal is chosen by the highest number of votes (always provided that 451 Computors have voted).
➮ And here’s where the ranking system comes into play. The top 451 Computors will be rewarded in $QUBIC each week, while others will see their rewards significantly reduced.
🔹Smart Contracts on Qubic
➮ Simplified Explanation:
Smart contracts on Qubic differ significantly from others. Each contract must undergo a quorum proposal vote, ensuring that only useful and legitimate contracts are added. When a smart contract is accepted, it is launched via an IPO with 676 shares. The $QUBIC spent on these shares is locked in the smart contract, reducing the circulating supply of $QUBIC and paying for the contract’s execution.
Shareholders earn passive income from contract fees. The contract is self-sustaining until the locked $QUBIC is depleted, after which some of the shareholders’ fees fund a new execution. For reference: the first 3 smart contracts alone burned over 10.5 trillion $QUBIC.
ℹ️ Information: What is an IPO? 👇
In a general context, an IPO, or Initial Public Offering, is a process by which a company issues shares for the first time on the public financial market. This allows the company to raise funds by selling a portion of its ownership to investors. Investors purchase these shares in the hope of making a profit as their value increases over time.
In the context of Qubic, an IPO refers to the initial launch of a new smart contract on the platform. When Qubic introduces a new smart contract, it is put up for sale to participants through an auction process called the Dutch auction model (discussed later in the thread). During the IPO, participants submit bids to purchase shares of the smart contract using Qubic Units (QUs = $QUBIC). The QUs spent during the IPO are then permanently burned, meaning they are taken out of circulation and cannot be reclaimed. This process helps reduce the supply of QUs over time, potentially increasing the value of the remaining QUs in circulation.
➮ Complex Explanation
ℹ️ Information: Before diving into the explanations, let’s review this information section explaining what C++ is: 👇
C++ is a computer programming language. It’s used to create software, applications, and video games. C++ is considered a versatile and powerful programming language because it offers advanced features such as object-oriented programming, memory management, and the ability to create highly efficient programs. Many operating systems, software, and video games are written in C++.
Smart Contracts on Qubic are self-executing protocols based on the blockchain, which trigger when specified code criteria are met. They operate using public functions encapsulated within the contract’s source code. These functions take a C++ structure as input and emit another C++ structure as output. To trigger a function, a transaction is made with the destinationPublicKey associated with the contract’s index.
Specifically, when a smart contract function is called, the inputType of the transaction is set to the index of the called function, and inputSize is set to sizeof(inputStruct). The amount can be non-zero to simultaneously transfer QUs when a smart contract function is called, and the amount is deducted from sourcePublicKey only if the function is called.
Before integration into a Smart Contract, it must undergo a proposal vote by the quorum (as seen previously). The shares associated with the Smart Contract then undergo an IPO using a Dutch auction model.
ℹ️ Information: If you’re wondering, “What is the Dutch auction model?” Read this: 👇
The Dutch auction model is a specific auction process. In this model, the price of the item being auctioned starts high and gradually decreases until a buyer accepts the proposed price. In the context of Smart Contracts IPO on Qubic, the Dutch auction model is used to sell shares associated with the contract. This means that the price of shares starts high and decreases gradually until buyers accept the price and purchase shares. It’s a transparent and efficient method for determining the initial price of shares and fairly distributing investment opportunities.
Distinctive features of Smart Contracts on Qubic include the use of Qubic Units or QUs (= $QUBIC) as “energy,” making contracts frictionless and expansive, as well as their deflationary nature by design, with the $QUBIC used during execution being “burned.” Additionally, Smart Contracts can integrate with real-world data using Qubic oracles.
🔹 Oracle Machines
Oracle Machines on Qubic are essential components of the network that act as bridges between the digital world of the blockchain and the real world. Their primary role is to provide real-world data to smart contracts and the Qubic protocol. This data can include a variety of information such as stock prices, sports results, weather data, real-time event information, etc…
So, Oracle Machines are designed to collect, validate, and securely transmit external data to the blockchain reliably. They act as trusted sources, enabling smart contracts to access accurate and up-to-date information to make autonomous decisions.
By utilizing the data provided by Oracle Machines, smart contracts on Qubic become more powerful and versatile. They can be programmed to react to real-world events automatically and autonomously, or to make decisions based on this external data. Essentially, the Qubic network will have its own Oracles.
Aigarth AI
Aigarth is a project that will be developed within the Qubic network (it is currently in development). It is a fusion of artificial intelligence and distributed computing, aiming to create a collective system to solve complex AI problems. The name “Aigarth” is a combination of the terms “AI” for artificial intelligence and “garth,” which evokes a garden or courtyard.
This project is still in the development phase, but its objectives and operation give an insight into its potential. Aigarth is based on the principle that participants in the Qubic network contribute their unused computational power to find solutions to various AI problems (as we have seen with PoUW).
In practice, participants in Aigarth work on specific AI tasks. For example, a problem could involve developing an AI model capable of distinguishing between cats and dogs. Problem setters provide fitness functions to evaluate proposed solutions, while participants run special evolutionary algorithms to find the best solutions.
The fundamental block of the Aigarth algorithm is the Helix logic gate. This functionally complete and reversible gate offers simple logic: it takes three input values, A, B, and C, and returns them in the same order after rotating A+B+C positions. This simple mechanism significantly enhances convergence towards an efficient solution compared to randomly chosen logic gates.
Aigarth is closely tied to the Qubic network, and its development is closely linked to the progress of the latter. Once fully operational, Aigarth could play a crucial role in the development of advanced AI solutions and in solving complex problems.
Project Overview
🔹 Qubic Blockchain Statistics
Qubic achieves an average block time of 7 seconds, thanks to its efficient “bare metal” code execution. Previously, Qubic had a block time of 0.2 seconds and plans to return to sub-one-second block times after node updates in Q2, Q3, and Q4 of 2024.
🔹 Metrics
- A tightly-knit community with 50,000+ members.
- A developed mining network with 90,000+ Miners.
- Over 40 million smart contract transfers per second. • Fair Launch: $QUBIC was not pre-mined, and there was no fundraising by private investors / VCs.
- The mainnet was launched in April 2022 (a recent project that has not yet experienced a Bull Run).
Tokenomics Analysis
Welcome to the part you’ve been waiting for the most: the tokenomics analysis.
➮ The tokenomics of $QUBIC is based on the use of Qubic Units (QUs) as the unit of measurement for computational energy (as seen previously). Unlike traditional currencies, QUs (= $QUBIC) are not simply exchanged but are burned upon use, which helps maintain the balance between inflation and deflation in the Qubic economy.
➮ Each epoch, lasting for 7 days, generates 1 trillion QUs, mainly allocated to Computors. Computors can potentially receive income equivalent to 1 trillion QUs divided by 676 (approximately 1.479 billion QUs) under conditions of maximum Computor efficiency (as seen in the part discussing Quorum and ranking). The remaining QUs are allocated to the Arbitrator, who has no role in smart contract governance or QUs distribution.
➮ For the total supply, it is limited to 1000 trillion $QUBIC. There will come a point where the burn rate of $QUBIC equals or exceeds the token emission rate, at which point $QUBIC will become deflationary (and yes, currently it is inflationary).
➮ A big deal: on Qubic, there are no transaction fees. As we have seen in the smart contract part, fees are paid by $QUBIC tokens locked in the smart contract. Moreover, the “fees” associated with smart contract execution are not traditional fees but burned QUs, thus reinforcing the concept of QUs as “energy” rather than currency.
➮ Computors play a crucial role in maintaining the economic balance of Qubic by performing tasks assigned by the Arbitrator, and voting to determine the size of the commission is also burned, thereby adjusting the inflation or deflation of QUs in the ecosystem.
In summary, Qubic is a Layer 1 in PoUW powering AI systems. With its fresh approach to smart contracts, AI training, and efficient use of computational power, Qubic offers a comprehensive solution to meet the needs of various sectors. Its decentralization, economic model, and robust consensus system make it a promising Layer 1 with potential.
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