Fandom Sports Media (FDM.C) gets burned on Blaze blockchain deal

Fandom Sports Media (FDM.C) purchased a perpetual license for the BLAZE Protocol blockchain solution for an all-share deal of 12 million shares.

I can just imagine the uncomprehending nods and grins from the guys from Fandom Sports when they were being explained how this thing works, because there’s no way they looked over the white-paper and still decided to buy this garbage.

Here’s what the press-release offers:

BLAZE is a patented blockchain technology that can spawn in a 9-dimensional space. Its unique structure offers unbeatable speed and high industry adaptability. Because of its unparalleled speed and industry-defining structure, BLAZE is poised to take over the microtransactions industry. Using BLAZE as a payment structure for ESPORTS FANDOM Platform 2.0 will open up new microtransaction-based revenue opportunities for FANDOM SPORTS.

The first point that jumps out at you is “nine-dimensional space.”

The proposition of this nine-dimensions in space-time super-blockchain is that it builds scales, adding dimensions (or layers—why not just call them layers?) as the load on the blockchain expands. Then through a peculiar consensus protocol mix of distributed proof of stake and proof of authority, closes the block, and moves the chain along with the information imprinted.

My pet peeve with all of these different companies is the different words used to describe basic blockchain functionality. For example, Blaze calls their blocks “action blocks” and their peculiar consensus protocol Weighted Deputed Proof of Stake (WPOS).

Here’s the quote on it:

WPOS consensus mechanism, optimizations and in-memory processing helps achieve an industry-scale throughput in a single Dimension itself and also makes the system robust against unwarranted forks. Accounts in Blaze-System can communicate with other accounts on the same Dimension, which is termed as Horizontal-Transaction, or across Dimensions, termed as Crosswise-Transaction.

In standard English, it’s a consensus protocol that eliminates needless data to speed the data processing along, while requiring a certain percentage of nodes to agree on the contents of the block to close. This involves communication between the blocks and we have both direct and indirect communication methods to accomplish it.

Anyone holding Blaze coins can vote in the Blaze-system for executives, or node-operators, through a continuous approval voting system. Anyone can participate if they satisfy the minimum criteria and can persuade Blaze coin holders to vote for them.

There is one large problem here:

The problem with this entire arrangement lies with the consensus protocol. In order to close the block, 67% of the nodes must agree on its contents. Nothing wrong with that. But the problem is the same as Distributed Proof of Stake consensus in that there’s nothing to stop individual nodes from communicating, forming a bloc, and agreeing to take over the functionality of the blockchain—effectively choosing and re-choosing the same closers every time—regardless of which version is correct.

Let’s extrapolate out, shall we?

The blockchain and its contents have now been hijacked by a small group of, let’s say, disgruntled former employees as long as they hold Blaze, who can then grind block closure to a halt and therefore stall the company, or directly alter the information in the block. If the company is otherwise dumb enough to store financial information on the block (and many are) then these anonymous Blaze holders could easily disappear with credit card information from Fandom Sports Media customers.

But that’s really not all.

BLAZE is carefully crafted to handle thousands of transactions per second – the most crucial requirement for microtransactions. BLAZE is the easily scalable blockchain and has insurmountable speed – it is faster than the usual data systems. With its unique structure, patented governance, consensus, and crosswise transaction mechanism – BLAZE offers one-of-its-kind nonlinear structural growth – making it the fastest and the most suitable to handle a large number of transactions.

If it works, Blaze has the potential to handle thousands of transactions per second, including microtransactions. The problems aren’t with its structure—which is clearly the neatest part about this blockchain—but the governance model and consensus protocol.

The governance model has top down pyramid structure:

Those with power reside at the top of the pyramid. They make the decisions, including dispute resolution, after which a 67% agreement is required to make it binding. This centralizes an awful lot of power in the hands of a few people on the network—people who can be persuaded, manipulated, bought-off, or coerced—into doing whatever it is you wanted them to do. Those folks needn’t even be executives in the company—that’s the kicker.

All that’s needed to be a node operator, and an executive, is the technical specifics and the votes.

A prospective candidate will need a minimum computational power to be able to handle the responsibilities of being an Executive and it will increase with the increasing load on the system. Recommended minimum computational power required for the candidate nodes as of now is: · CPU with 16+ cores. · 64+ GB RAM. · 1+ TB Storage. The systems must be vertically scalable to support the ever growing needs of the ecosystem.

Too many moving parts. If a blockchain is going to scale-up sufficiently to beat Visa, it’s going to have to do more than clear out useless data from the blockchain. The idea of adding more layers to the blockchain to widen the available space is smart, but the apparatus requires to provide support is what ultimately will drag this problem out and sink this protocol down with the rest.

This is not the next bitcoin. Keep looking.

—Joseph Morton

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