Nervos is Building the Common Knowledge Base (CKB)

In the last couple of years, we’ve seen new blockchain protocols emerge attempting to solve the blockchain trilemma, which is the believed impossibility of maximizing scale, security, and decentralization. While most recent blockchain launches have focused on Proof of Stake (PoS) consensus to solve the trilemma, the recent launch of the Nervos Network reasserts the strengths of Proof of Work(PoW). To enable greater flexibility for application developers, Nervos created a Common Knowledge Base (CKB) to focus on the security of assets, enabling a complementary layer of Virtual Machines (VM) to scale and facilitate computation.

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It has become apparent since the days of buying a coffee with bitcoin that on-chain transactions can quickly overwhelm a blockchain protocol as network traction takes hold. Many projects are scaling transaction throughput in “Layer 2” solutions, which aim to reduce the burden of transaction volume directly on the blockchain by leveraging a complementary layer. 

Projects like Nervos Network take an interesting approach to solve the trilemma by abstracting some functions of the protocol into a separate layer to conserve the security and decentralization of the Nervos Common Knowledge Base (CKB). The CKB is the base layer of the Nervos Network, which boasts a modified version of the Nakamoto Consensus, called NC-Max. NC-Max differs from Satoshi’s consensus mechanism with three significant changes:

1. Two-step transaction confirmations to reduce ophan rate;
2. Dynamic block intervals and block rewards to best utilize bandwidth;
3. A difficulty adjustment mechanism to count all blocks, including uncles, to defend against selfish mining.

NC-Max utilizes the orphaned blogs to understand bandwidth utilization better and adjust the throughput, to ultimately make selfish mining unprofitable. 

The potential of VMs on Layer 2 offers a unique opportunity for flexibility while reserving the stability and shared pool of resources on the CKB. Differing from Ethereum, Nervos has opted not to include computation on the base layer, but instead layer the VMs to optimize for such functionality. Each VM operating on the CKB can have properties necessary to the intended use-case, such as regulatory consideration, privacy, or high transaction throughput. This flexibility may prove valuable to various projects looking to build customized solutions on a VM while retaining the pooled security of the CKB. 

Building a protocol so the core can be focused on the security of assets, while a complementary layer is specialized in facilitating transactions, introduces new possibilities in a space attracting a diverse set of use-cases from private industry, and even public institutions. As distributed protocols gain traction with additional use cases outside of simple value transfer, projects like Nervos will offer more choices for developers to build on. While most of the builders of the cryptofinance ecosystem are developing on Ethereum, Nervos is investing big on ecosystem development with an on-going grants program designed to encourage the evolution of the protocol.