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Moving on to blockchain

We’ll be there very soon.

And yes, you’re right. In part it is the capacity and possibility of ‘smart-contracts’ to make otherwise quite complex tasks, automating and inter-active.

Interesting times ahead.

Hello All, I am a little one here but sounds exciting and huge to me, nevertheless my understanding is very limited, please, is there someone who could explain in simple language. ? As well, how should I prepare myself technically for the next level ?
Thank you,
David

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Hi turexD,

I think the simplest is that as a coop member this affects you in two ways:

  • first, at some point, when the system is ready and tested, you will be asked to on onboard the new system, where you will find your shares and the tools to buy more shares, info on their development; the stuff that you are used to

  • second, the new system will have some new featuress; to begin with, a members’ market where you can also sell your shares

As time goes on, more new features will be introduced. The plan is to prepare proper how-tos on these before they are introduced.

All this stuff will be usable via a regular browser, no new tech or tech skillls needed.

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Thank you.

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In regards to the blockchain size and Ethereum, there is a lot of active development for ‘sharding’ and ‘Proof of Stake(PoS)’ techniques that will address the scalability/size issue of the blockchain as the platform matures. Sharding will allow the chain to be split into smaller chunks while maintaining its integrity with the same cryptographic assurances as before.

The feature set of the network and the explosive growth happening right now in the Ethereum ecosystem make it an ideal fit for the Robin Hood project!

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This is a big step for the coop and there is a lot to digest, so we thought that we could organise a couple of live Q&A-sessions, where members of the board & development team can discuss with members and answer any questions. How does that sound? We will soon announce the times for these sessions.

Any suggestions?

Moving the assets to the new system.

The new system means more streamlined system of keeping track and accounting.

As you know, the old system allocated voluntary shares in chunks of 30
Euros. Furthermore, the shares were assigned into series. A new series
was created in the beginning of each month out of the new shares booked
during the previous month. These two aspects were designed to make the
operations possible in the face of some arbitrary limitations. (1) The
30 Euro chunks were necessitated by the Finnish coop law that forced us
to name the nominal price of a share. (2) The series, in turn, were
necessary in order to take into account the fact that money had to be
moved first from the member to a Finnish bank account, then manually
from there to our broker account in New York, and from there to the
portfolio. It would have been unfeasible to take each share payment
manually through the whole route individually. Now, both of these
hurdles are obsolete! The voluntary shares do not have to be in chunks
of 30 euros any more, because of the changes in the Finnish law. Also,
the new payment system and database is automated so that we can quote a
daily price for the shares.

The 30-Euro-shares-in-monthly-series model was basically a way to
organize the different entrance points of member shares to the Robin
Hood portfolio, even if the nominal price remained always 30 Euros. This
was made possible by an accounting mechanism (not visible to the
members) where the shares in each series were assigned a value in so
called “u-units”, corresponding to the actual per-series share price.

The calculation for the u-unit price in each series has been the
following: (net asset value - monthly series deposit)/(the sum of all
previous u-units). Then the amount of u-units in each series is
calculated by dividing the monthly deposit by the u-unit price. And
voilà! We know what kind of a piece of the portfolio one gets with 30
Euros at the specific point in time. In other words: the amount of
u-units (and not the number of shares) defines really the value of
member’s assets in the portfolio.

Now, when moving to the new system, as there is no reason for the
artificial complication of the monthly series, the series will be
retired. This will not affect the value of the shares of old members.
The artificial extra accounting transformations are just removed,
because they are no longer necessary.

What will be moved over from the old database is the amount of u-units
each member holds in each series (determined by how many shares she/he
has in each series) and not the number of voluntary shares - as the
number of shares neither has an effect on decision making in the coop
(one member, one vote is the rule) nor affects the value of the member’s
assets, which is really defined by the amount of u-units.

This way the performance of each member’s assets will continue as before
(the month when the shares were booked will still have an effect on the
development of the value), but we get rid of the cumbersome and
labour-intensive series system. In the new system the shares will be
booked in a manner similar to ”ordinary” funds: with a daily price
depending on the performance of the portfolio and the day of purchase.

Consequently, what you will see in the new member pages is different,
because the series will be gone. However, the value of your assets will
not change in any way in the transition. Neither will your rights as a
member. We simply move to a more streamlined system of keeping track and
accounting.

In sum, in the new system:

  • Members will see the value of their investment as before, and it
    will behave as before, but the series and number of voluntary shares are
    gone.
  • The one-time membership is still 30 euros and the obligatory
    membership share 30 euros. These two give the member full membership
    rights.
  • Voluntary shares are given a daily price and you can purchase them
    with any sum you like (and depending on the sum, you will get a
    corresponding amount of shares).
  • The shares are now, in essence, crypto-tokens, as explained in the April Newsletter.
  • As the first new feature, members can also access a “members’ market, where shares can be sold and bought among the members.
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Read something recently about vulnerabilities with Ethereum. Something about time stamps and validation being manipulated to allow transactions to be made before it shows up. Given the complexity of the code seemed as if not as issue that can simply be patched. I’m not very well versed in this stuff - as you can no doubt tell. Is someone able to explain how this does or doesn’t matter re robin hood.

Important stuff – the vulnerability of “smart contracts” has also been highlighted by the DAO case recently. Of course, we won’t be, at least initially, using anything so complex, but rather relatively straightforward transactions (registering shares, buys and sells, etc.)

Do you have a link, @surgeb, to the stuff you read so we could check if it is relevant for our use case?

Hey mate, thanks for your response. I was binge reading at the time so I think what I referenced was an amalgamation of a lot of stuff I had read on the fly. Had a dig round in my browser history.

A couple of things here:

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and here:

https://medium.com/@chjj/ethereum-is-the-op-eval-of-cryptocurrency-d6beaa17eb50#.jknqgkvt1

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Hello Tere, the picture of new website looks cool nevertheless it would be really good (to me) to have access to it and do something like invest and buy and sell, etc, I don’t want to be annoying but must to ask, how long we have to wait for New Website, forever :slight_smile: ?
David🐙

Not forever, I trust. But still a little while. I certainly feel the urgency of finalising the move.

We - myself and Ana, with support from Akseli and Dan from the board - are working daily on this with the contractor, HitFin.

One thing that would help a lot would be developer/coder contributions. Our sister ECSA would be willing to pay for that. So if you know anyone with this skillset https://unicornhunt.io/jobs/full-stack-developer-at-economic-space-agency-inc?utm_content=buffer1c03c&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer
please let us know and spread the word!

Hello Tere, thank you for your answer, is good to know something positive is on its way towards us, nevertheless is uneasy to spread the word without actual website running, if one advices to invest people simply don’t want to believe, they want to see things instantly. When they would see something instantly then very likely they would be thinking about the investment, people will invest straight, we are emotional beings driven by the emotions so are the money to us, and with todays advanced technology just a few touches on smart phone would make :money_with_wings::money_with_wings: ! Thank you for reply,
David

Situation update:

Since the last newsletter, the core tem, board and our contractor HitFin have been daily working with the new Ethereum-based system. The main bottleneck is developer resources. Our contractor can allocate only one developer to the task – and the task has proven more complicated than expected. From our side, we would be ready to allocate more resources to the development, but finding available Ethereum developers is really hard at this time. So if you know any, let us know. :slight_smile: Actually, also people willing to do web development and admin would be very helpful, too.

In the meantime, the Ethereum network has also been under a malicious DDOS attack. The problem was solved by a hard fork, but caused days of additional delay as all Ethereum nodes had to be updated (and another hard fork is planned for the near future).

Currently we have a live price feed from the RHC stock portfolio connected to the Ethereum back-end, and are debugging and finalising the onboarding of new members on a test/staging server. We will update on developments here.

Thank you for info.

Wanted to share my experience with blockchains with you. Perhaps it could lead to a simpler solution for the cooperative.

From the mid-may to start of october I partcipated in a blockchain startup project as a lead developer. The aim was to move significant parts of a non-bank loan market trade to blockchain. It could dramatically lower compliance and due diligence costs and increase velocity.

Before that, my knowlwdge of blockchains was very sketchy, but the project was very interesting. We made a theoretical data model based on our knowledge of databases, and started to seek the blockchain platform that could be used as a tool for our model.

To keep a long story short, after a month of generally wasted efforts our first conclusion was:

1. There is too much hype and not much substance in all these blockchain platforms. Even in the most famous ones.

Marketing rules the world. What we really needed was to define our own data field in records, or at least toss more or less lengthy texts into some field that can be used to store json. But all the blockchain tools we tried out were very similar to bitcoin in one regard - they all were obsessed with storage and creation of coin type assets. If fact it really is a single field that stores a floating point value and thats it, if we do not take hashes and other infrastructure fields into account.

Somehow it seemed natural to us that developers should be able to define their own data structures, when setting up a blockchain database. We were wrong, and this mistake cost us a lot.

The only tool that promised to solve our problem was BigchainDB, but that was not usable yet in the mid-2016.

So, the next conclusion was:

2. Current blockchain platforms do not allow to define project-specific data fields.

Perhaps some will soon enable us to do it. Why so much care for data fields? Because correctly designed data structures allow to write less code.

We were on tight budget and had very little time. So we decided not to do anything with smart contracts - because:

  • smart contracts are a hype and it is hard to separate truths from marketing, especially in short timespan;
  • smart contracts can potentially hang up entire chain (we did not test though);
  • smart contracts are somewhat similar to multi-threaded programming - hard to master and use properly.

We started to seek some platform that can be used to define our own assets with own data fields, even if it comes in some clumsy, convoluted way. And we found it: Stellar

The rest is another story of Electron application, Javascript and so on, but at the end we did it. We had to use Stellar in non-standart way, that is true, and we made it without smart contracts.

Stellar seems to be very suited to quickly program RH shares. It has the following developer usability points:

1) Stellar if free to try and test, and it already has an online-sandbox for playing and testing. We used it extensively.

2) Stellar has interfaces to several widely used languages, including Javascript, Go, C#, Python, Java, Ruby (https://www.stellar.org/developers/reference/). APIs are substantially documented, it is open-source.

3) One can make accounts, test out operations and create assets without coding, using only online tools at the website. This allows to quickly test models and assumptions.

4) Testnet is basically free while operations in the real net cost negligible amounts of lumens (XLM).

5) It is almost tailor-made for cooperative shares, as one can create an asset that can be moved only between predefined accounts; to set up the system correctly, one does not need to use smart contracts, but to configure it properly. In light of smart contract rawness and complexity, it is a big plus.

6) One can make his own system in the stallar chain, that is visible for others (including market regulators) but not usable by them.

7) Accounts have a very flexible permission system. Partially signed transactions can be moved offline, signed offline and after signing, imported back to the system. It allows to use the system via postmen, travelling notaries and whatever else. Multi signatures can be used for multi-side deals.

8) The developers are very helpful and forthcoming, this is from our experiance. One of them was a leading Ripple developer (Jed McCaleb).

9) Operations are fast, block time is 2 seconds. Almost instantly.

My humble advice is to use Stellar instead of Ethereum and smart contracts. In it, shares can be simply defined as a set of rules,without smart contracts. And you will spend 1 week for backend, most of it learning Stellar. Frontend probably is already ready.

Blockchains are developing very fast, and there is much chance that already a year from now there will be much better tools, so you will have to rewrite it anyway.

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Thanks @pmartinsons! This is very helpful.
Also corroborates some of our experience in the development, especially the fact that smart contracts (in this case on Ethereum) are much more limited in their capacities compared to what they are hyped up to be. For instance, like noted on our twitter feed, the temporary drop of Ethereum gas limit to 2 million (due to the DDOS) a while ago created problems for the kinds of transactions we need. Basically, the confirmation of the transactions was delayed considerably. Not fatal, but very annoying. Now the gas limit is back to 4 million and that delay has vanished.
Stellar definetely seems worth checking out. However, we are at the very edge of deploying the Ethereum system and confident that it can deliver what we need. More on that next week!

Will be very interesting to see the result. I will test it out for sure.