Waves project purpose and description
What is Waves?
Waves is a decentralized blockchain platform designed to help custom tokens operations. The application of these tokens is run on the Waves blockchain via gateway operators.
The decentralized exchange (DEX) facilitates crowdfunding, fundraising, and even financial instruments trading on blockchain networks. Lightweight clients give users a direct and easy installation process resulting in a flat learning curve especially for end users.
Waves operates as a Proof of Stake (POS) blockchain and the digital cryptocurrency that fuels that blockchain. It enables users to craft custom tokens.
This implies that you can indeed launch your own cryptocurrency. It also makes it possible to launch ICOs that can help to raise funds for your project across the globe in no time.
What is the problem that Waves Solves?
When Bitcoin entered the market, it introduced and demonstrated how blockchain technology can be applied in sending value. Ethereum built on the Bitcoin successes. It became notable as the platform where blockchain startups could issue ICOs (Initial Coin Offerings) to raise funds for their startups. Though this made things easier, especially through the design and use of smart contracts, there are still some issues that needed fixing.
The main issue with most blockchain technologies is that nodes spread across the globe brought about synchronization related issues including the following;
- Slow transaction speed.
- High transaction costs.
- Poor scalability.
- Centralization of cryptocurrency trading.
How does Waves Solve the problem?
The outlined four problems are serious obstacles to the adoption, use, and advancement of blockchain technologies. Here are the main methods used by Waves to address the issues.
1) The leased Proof of Stake (LPOS)
The consensus protocol applied in the Waves system is Proof-of-Stake (POS). The main reason why Waves opted for POS is because of the effectiveness achieved at NXT. However, the consensus model was adjusted by improving it to Leased Proof-of-Stake (LPoS) to help reduce transaction time and raise throughput.
In a standard PoS consensus model, all nodes with balance in a blockchain network have a chance of producing a block. The probability of being selected is proportionate to the balance that a node holds. However, a general PoS model brings about the risk of tokens in a network being dominated by nodes with a lot of stake.
By introducing the notion of leasing in Waves, it implies that even nodes with a small stake can still participate in consensus building by leasing it to the full nodes. When the full node adds a block and gets rewarded, the benefits are divided to all contributing nodes based on their stake.
The shift to Waves-NG protocol that is based on Bitcoin-NG has helped to boost the Waves transactions to about 6000 per second. Though this is still far below the industry leaders such as Visa that can hit 30,000 t/s, it positions Waves well ahead of others including Ethereum, Bitcoin, Bitshares, and Ripple.
2) Lightweight clients
When you take a closer look at standard cryptocurrency approaches, the nodes are required to store complete copies of transaction history. It is the bottom-line of decentralization ideology. The issue with this model is its great limitation because not all nodes are able to store the entire copies of blockchain history. The impact is that scaling becomes a serious issue. Waves address the issue by using a simplified payment verification model referred to as lightweight nodes/ client.
When you become a lightweight node, there is no need to download the entire blockchain. However, these nodes rely on full nodes for network interaction and payment verification. This approach is based on the SuperNET Client that was successfully employed on another blockchain referred as NXT.
The wallet interface closely resembles the conventional internet banking user interfaces. It has integrated national currencies to allow users to transfer native value in fiats. Note that transfers of fiat currencies in the Waves system are only done through trusted providers.
At this point, it is important to appreciate that leasing does not mean transferring a node’s balance. The lightweight nodes are still allowed to conduct other operations such as sending value.
Besides, the lightweight nodes are allowed to pick the preferred full nodes. By reducing the number of full nodes, Waves is able to decrease transaction confirmation times, enhance the operational throughput, and lower the overall latency.
3) Decentralized exchange
Solving the problems of scalability, speed, and the cost was only the beginning. As more cryptocurrencies kept hitting the market, the idea of decentralization got rocked with a serious bottle-neck; centralized exchanges.
Most exchanges require users to add a lot of personal information during verification. It implies that in one way or another, the details collected from the exchanges can be used to unmask users. Besides, the exchanges charge users based on trade volumes which raise the overall transaction costs with a very huge margin. On some exchanges, users are charged for deposits, trading, and withdrawals. Waves solve the issue with DEX (decentralized exchanges).
A decentralized exchange is designed to advance the original idea of a fully decentralized blockchain. Waves’ DEX is designed to help users make transactions directly from their wallets.
This implies that there are no centralized exchanges or middle entities required when trading cryptocurrencies. Here are other benefits of DEX.
- Because you are not required to sign up for a trading account, no personal details are collected by third parties the way it happens with centralized exchanges. The only thing you require is a cryptocurrency wallet.
- There is no need to send crypto assets to a centralized pool. This lowers the risk of getting attacked and cryptocurrencies siphoned away.
- The transaction time is faster because transactions are completed on a peer2peer basis.
- The overall cost of transactions is lower because the third-party and profit-seeking exchanges have already been edged out.
What makes Waves better than its competitors?
When Waves was introduced, the developers knew that the competition would be stiff.
Therefore, they had to make most of the features more appealing, workable, and highly effective compared to the competitors. Here are some of the things that make Waves better than its competitors.
- Waves versus Ethereum
The closest competitor of Waves is Ethereum. The Waves development team indicates that Waves is the direct opposite of Ethereum. Ethereum focused on developing Bitcoin which in reality makes things very complicated. However, Waves preferred a simple and straightforward method of adding new functionalities through plug-ins.
The Waves platform is also projected at two main markets; crowdfunding and transfers on the blockchain. This implies that Waves provides a product for the general audience because the end user only needs to install a plug-in from the app stores.
- Waves versus Bitcoin
While Bitcoin set off the blockchain wheel, the founder probably never knew about the unique door he was opening. It ushered in a world of endless opportunities. As a pioneer, Bitcoin has been cited for most shortcomings that indeed delimit the growth of the blockchain technology it initiated.
The transaction speed is very low, and the transaction cost is very high. These were the main issues that Waves sought to address. The block time for Waves is only 1-30 seconds while that of Bitcoin is 10 minutes.
Waves is also better than Ardor that has a block time of one minute and transaction speed of 800 T/S. Waves further stands taller than most cryptocurrencies because of its decentralized exchange (DEX). The Waves DEX implies that most of these cryptocurrencies may still need to link with Waves for decentralized trading.
How can Waves be categorized?
Waves is a truly decentralized network structured to help advance the original dream of the blockchain founder. As more people develop interest in cryptocurrencies, the blockchain networks can overwhelmed. Waves has helped to point at such inherent issues and crafted workable solutions.
- Waves platform makes designing custom tokens easy, direct and fast. Now, every business or project has a good method of fundraising by issuing tokens on Waves.
- The decentralized exchange at Waves is a solution designed to address the issue of centralization. Centralized exchanges have become the primary target for hackers and third-party authorities. From Mt. Gox hack of 2011 to the Coincheck attack of 2018 where millions worth of cryptocurrencies was stolen, it was all in centralized exchanges.
- Waves make it easy and direct for all to get involved because users do not need to download the entire blockchain. Instead, they only have to install plugins from app stores that help them run as light clients but still get access to the full blockchain.
- As more cryptocurrencies opt out of dealing with fiat currencies, Waves is different. By providing direct fiat gateways, it is very easy for both experienced and new crypto enthusiasts to enjoy the best of both sides.
Waves and Security?
When developers set out working on a new crypto platform, success in the market can only be achieved if top-notch security is guaranteed.
Investors want to hear that the assets they buy are safe and not in the blink of getting lost through attacks. Waves has not disappointed on this front. Here are the primary methods used to keep Waves secure.
- The two-tier architecture through lightweight nodes and the full nodes help to provide an additional layer of security.
- By employing the Leased-Proof of Stake (LPoS) consensus model, Waves is able to distribute the native tokens evenly and lowering the danger of 51% attack.
- The Waves decentralized exchange (DEX) helps to trade cryptocurrencies without involving centralized exchanges. This implies that there is no moment that your tokens will be moved to the high-risk centralized exchange accounts.
- The Waves development team is always on alert to identify gaps and bugs that target the network. Such gaps are addressed immediately through progressive updates on the network.
- Advanced encryption at Waves network. Like other cryptocurrencies, Waves utilizes advanced encryption that helps users to operate anonymously. Whether you are sending value, developing smart contracts, or using APIs on the network, your details cannot be easily uncovered by third parties or attackers.
As Waves put the best foot forward to keep the network and users’ assets/ information secure, you also need to do your part. On your end, you have to make it extra difficult for attackers and intruders to break in.
For example, the Waves Brain Wallet does not have the .dat file that is used to store private keys in other wallets. This implies that even if someone hacks your wallet, he can’t get the private keys. However, you must also keep the private keys and the seed securely because their loss means permanent loss of your tokens. Therefore, how can you operate securely on the Waves network?
- Never share the private keys.
- Keep the private keys and the seed as securely as possible and away from the main computer.
- When using cryptocurrency exchanges, only select those that have a full commitment to user’s security.
- Avoid visiting risky sites from the computer used to access the Waves platform.
- Keep your computer and the Waves client up-to-date all the time.
- Employ the rule of the thumb common in most online systems; backup everything securely.
Examples of Waves’ use cases/applications.
With the superiority of Waves in the fast-evolving blockchain niche, you can apply it almost in every area of personal or business operations. Here are some of these use cases.
- Waves can be employed by businesses and institutions in Token based loyalty programs. These can be: awards to clients, coupons, or other motivation models.
- The Waves platform can be used by a business to launch new tokens and raise funds for development.
- As a cryptocurrency, stores can adopt Waves as one of the accepted means of payment. This could mean direct payment at the point of sale or adding Waves to the online payment portal.
- Waves is one of the top cryptocurrencies you can use to pay transaction charges in most exchanges. If you are trading in top markets such as Bittrex or Binance that are crypto-to-crypto only, transaction charges can be done in Waves.
- Many people use Waves as an investment through holding or trading them in the markets the same way that forex markets work. You can hold WAVES waiting for the price to grow or trade in the exchanges for regular and higher ROI.