Introducing Graphite: the reputation-based blockchain redefining digital finance

Since its inception over a decade ago, blockchain technology has evolved from a niche interest to one of the most significant sectors in global finance. This process has, however, been marked by numerous growing pains caused by issues that have not yet been completely alleviated, despite the greatly expanded usage of the technology. While the potential that this technology has as a means of providing the financial tools and capabilities sorely needed by those who have been left on the sideline by traditional finance has long been acknowledged, making good on that potential on a global scale has not been easy.

It is with this in mind that the Graphite blockchain was launched. One of the key features of Graphite is its entry-point nodes. An entry-point node is a role that provides developers and users with the opportunity of getting rewarded for maintaining the network. This is a first in blockchain, where users can legitimately earn directly from a network without the need of any kind of L2 solution.

Graphite is the first reputation-based blockchain, the logical next step in the evolutionary path of an industry that has been hamstrung by trust issues. What that means is that each account, or wallet, on Graphite has a reputational score. These reputational scores are determined by user behavioral patterns and visible to everyone on the network. What this does is allow Graphite users to only interact with accounts that they trust.

Passive income from entry-point nodes

Nodes play a key role in the operations of any blockchain. In order for transactions to be processed in an efficient manner, nodes are tasked with maintaining network health and approving transactions alongside validators. As a consequence of their importance, master nodes that carry out these functions are sometimes rewarded for the services that they provide via the currency in play on the given blockchain.

However, most blockchains have high entry thresholds for individuals looking to become nodes. On Graphite, the opposite is true. The network’s architecture allows for both entry-point (transport) nodes and authorized, larger nodes to earn an income on processed transactions. Most networks do not have the capability to allow entry-point nodes to earn off of their work. Becoming an entry-point node is possible for virtually anyone on Graphite as they do not require a high level of computational resources to operate.

This opens the door for enterprises of any size, startups and developers to start making passive income off of network operations. Whereas on other blockchains, earning is often dependent on tokens and other monetization means, here that income is generated on transaction fees. Nodes, including entry-point nodes, are entitled to 50% of the fees on the transactions that they facilitate, with the remaining 50% going to block sealers.

The importance of trust

The most significant barrier to massive crypto adoption is trust. Given all of the negative attention that bad actors have garnered in the crypto industry over the years, there is still widespread apprehension among businesses, governments and everyday people when it comes to using blockchain technology.

To resolve this, Graphite has been built as a blockchain that reduces the risk of dealing with non-savory parties. This has been achieved by introducing a one-user, one-account policy, wherein each account is given a reputation score based on behavioral factors and activity.

Reputation is essential in any well-functioning market. Companies and individuals rely on reputations in order to inform their business decisions. Previously, using blockchain technology meant that entities and individuals would have to expose themselves to the risk of interacting with shady actors. Now, that risk is greatly diminished, opening the door for unprecedented growth and allowing for the easy and safe migration of large-scale entities on-chain.

While Graphite has been built to be a reputation-based economy, the focus on reputation does not come at the cost of user privacy or even anonymity. Graphite has been designed to maintain privacy as a fundamental right that belongs to all users. Instead, transparency is encouraged in the interests of economic health and, the more users participate in that transparency, the more options they will have on Graphite.

To use Graphite, each individual has to create a wallet and then activate their account. Once this is done, they will be able to make transactions and receive funds. However, that is only the basic level of a Graphite account. The network will feature a tiered KYC structure, the first stage of which is social media authentication. Later on, new levels will be introduced that will give individuals more control over who they transact with and who can transact with them. The more active an account is, and the more funds they have on their balance, is reflected in their reputational score and verified accounts will have the ability to only interact with other verified accounts.

Fast, scalable and cost-effecient

Graphite’s reputational system is built on top of a blockchain network that is among the fastest and most cost-efficient in the industry. Instead of the Proof-of-Work model, which requires a great deal of electricity and can become bogged down under high transaction loads, Graphite employs a Proof-of-Authority Polymer 2.0 consensus mechanism, which boasts a 1,400 tps network capacity without requiring a ton of computational resources.

Graphite’s sizeable network capacity gives it the scalability necessary to host projects of any size. This, coupled with the network’s reputational model, makes it an ideal hosting network for large-scale projects looking to take advantage of blockchain technology without exposing themselves to unnecessary risks.

Additionally, transaction fees on Graphite are completely transparent. For many networks, like Ethereum for example, transaction fees can be volatile, causing users to pay exorbitant sums depending on when they are using the network. This is simply unsustainable in the long run, especially for businesses and applications that are providing financial services. Graphite’s consensus protocol has prevented the possibility of “gas betting” from taking place, greatly reducing the volatility that has made using blockchain technology untenable for most.

Taken all together, Graphite is building a digital economy that is egalitarian and merit-based. Opportunity, both to earn alongside the network and to build on the network, is open to all. The more participants in this economy, the healthier it becomes. With guardrails in place to insulate the network from unnecessary risk and the assurance that comes with being able to interact with trustworthy parties, Graphite has laid the groundwork for the next stage of digital finance, one in which network participants can directly and legitimately earn from the blockchain.