Centralization is becoming an increasingly contentious point in the blockchain space as the decentralization of several crypto projects has come into question lately.

Blockchains that run on both proof-of-work (PoW) and proof-of-stake (PoS) protocols face a variety of issues that threaten their decentralized nature. As the centralized mining pools that support traditional PoW networks like Bitcoin continue to grow exponentially, decentralization of the networks decrease. Similarly, many PoS networks suffer from inequality in token distribution, giving wealthy investors an unfair degree of control over the network.

To combat this threat, a new startup based in Switzerland plans to utilize artificial intelligence and neural networks to create an enhanced consensus algorithm unlike anything seen before.

VELAS (Virtual Expanding Learning Autonomous System)

The company, Velas AG, is developing a comprehensive blockchain ecosystem built upon its VELAS technology, an AI-enhanced delegated proof-of-stake (AI-DPoS) network.

VELAS (Virtual Expanding Learning Autonomous System) is a highly scalable, interoperable blockchain that uses AI technology to circumnavigate scalability and capacity limitations that are presented by human involvement. The improvements equate to a massive increase in transactional speeds when compared with existing blockchain networks.

“Most people are already aware that the Ethereum blockchain currently supports roughly 15 transactions per second. Well, Velas enables up to 30,000 transactions per second, thanks to AI optimization and Schnorr Signatures,” says Shirly Valge, Velas Project Lead.

Alex Alexandrov, the founder of Velas and CEO of one of the industry's longest-running payment platforms, Coinpayments, started the project to address a growing list of blockchain-related issues.

“Here at Velas, our purpose is to address and fix existing issues and challenges faced by most existing blockchains, such as centralization, 51% attacks, the nothing at stake problem, scalability, security, high upfront expenses and so on," says Alexandrov. "This is done by using neural networks optimized by artificial intelligence to enhance its consensus algorithm.”

A roadmap to true decentralization

Velas has already made the project available to developers to build on and begun working with companies like Mind.AI to develop systems on its VELAS mainnet. Asset tokenization, smart contract creation, and AI-integration are just a few of the benefits that the VELAS blockchain currently offers. Future developments, some of which will be launched this month, include a multi-signature wallet, custody solution and a fully licensed cryptocurrency exchange.

The Velas token (VLX) is also scheduled for launch this month and will initially be issued to four masternodes which will begin to process transactions on the network. The initial public listing of the VLX token will be through an IEO (Initial Exchange Offering) before being made available on several major crypto exchanges. An expansion to 10 masternodes and AI-testing across four servers will follow in Autumn this year.

"A fully functional system will be launched by Q4 2020” - Alex Alexandrov, CEO

Looking Ahead

Blockchain remains a fledgeling industry in the world of finance and technology, with many more advancements to come before it enjoys widescale adoption. As large financial institutions begin to show interest, the problem of scalability will become an increasingly important aspect to improve upon.

Many projects are currently attempting to address this issue, but few have managed to do so without sacrificing decentralization - a vital component of any blockchain network. Velas see this key issue as the biggest stumbling block that the industry will face in the future.

“This industry is ever-evolving, and we see Velas as being the next evolutionary step towards a completely decentralized AI-driven ecosystem.” Farkhad Shagulyamov, Director of Business Development.