Filecoin has announced a new collaboration. Last week, the project revealed that its parent company, Protocol Labs, will work with the Ethereum Foundation to research Verifiable Delay Functions (VDFs). This will improve on existing cryptography, and the collaboration will produce applications for Filecoin, Ethereum, and beyond.
What Are VDFs?
VDFs provide cryptographic outputs that must be generated slowly, but which can be verified quickly. This could, generally speaking, prevent attackers from intercepting blockchain processes for profit. However, since VDFs are a new technology—just under a year old—research must be done to prove they are secure.
This new collaboration will largely investigate the viability of specialized ASIC devices, which could generate VDF outputs “more quickly than desired.” Since VDFs must be generated slowly, fast ASICs could compromise security. As such, Protocol Labs and the Ethereum Foundation are co-funding research to see if this is a real risk.
As for applications, Filecoin may use VDFs as part of its “proof of spacetime” consensus mechanism. This mechanism involves posing challenges to miners, and VDFs can ensure that there are delays between those challenges. Without VDFs, it would be necessary to use trusted hardware to prove time has elapsed, but VDFs will work on general hardware.
As Ethereum 2.0 researcher Justin Drake has noted, this is not the only time that the two projects have worked together or shared technology. He also mentions that Ethereum 2.0 will use Protocol Labs’ libp2p, which can be used to power peer-to-peer blockchain apps. Ethereum may also use secret single-leader elections, a process that selects block leaders fairly.
Drake additionally says that Ethereum and Filecoin are both working on BLS12-381, an elliptic curve construction that improves cryptographic security. This is actually being adopted by several projects: elsewhere, Drake has indicated that many other blockchains, including Zcash Sapling and Dfinity, are moving toward the new standard.
The State of Filecoin
When Filecoin launches in mid-2019, it will act as a decentralized online storage system. It will also face competition from similar projects like Sia and Storj. One thing that sets Filecoin apart from its competitors is its close association with IPFS, which is also created by Protocol Labs and is already live. However, Filecoin itself is still in its preliminary stages.
Right now, Filecoin is trading as futures, which are not the same as real Filecoin tokens. Exchanges will not begin trading Filecoin tokens until the project goes live later this year. Undoubtedly, Filecoin’s launch will raise the project’s profile more significantly than this week’s news. Still, the partnership shows that Protocol Labs is thriving.