NKN wants to build a blockchain that will provide decentralized relay/transmission of data. There are protocols for decentralized compute (Bitcoin/Ethereum) and storage (Filecoin). NKN is looking to become the protocol for transmission.

Value Proposition

NKN is looking to tackle some of the following shortcomings of today’s Internet. Specifically, they cite the following issues:

· No net neutrality, which allows the largest ISPs to block and prioritize content

· Connectivity and bandwidth is not balanced between supply and demand

· Software defined networks (SDN) need a centralized controller. This is a single point of failure and potential performance bottleneck.

· Network fragmentation. There are more than 12K ISPs worldwide, but only top providers share traffic in certain peering agreements.

· Privacy of data from network providers.

NKN aims to address the problems above and provide the following benefits:

· Individuals will earn token rewards by sharing idle connectivity and transmission capability. You can think of this as something similar to allowing someone to connect to your phone’s hotspot in exchange for a fee.

· Developers can allow for messaging and connection without central server storage. The hope is that this decentralized storage would have a lower cost than existing servers.

· For ISPs, the value will be in lowering delivery cost and providing better transmission speed.

This coin’s utility and value is heavily dependent on the strength of its network. If there are not enough individuals on the platform giving their bandwidth for others to use, than the utility it provides to other users is nil. The benefits for a user are derived from other users existing on the system. NKN’s early adoption strategy and rollout plan will be vital to its success.

Overview + Rollout strategy

NKN plans to initially target ISPs to kickstart the network. One of the stated incentives for ISPs to jump on the network is that it aligns with net neutrality. Since the largest ISPs were the in the fight to repeal net neutrality, currently the assumption is that this would be mainly targeted smaller, local ISPs, but confirmation needs to be made with the team.

NKN is introducing novel ideas in many areas of the standard structure, including integration of Cellular Automata, new proof of relay consensus algorithm, and a dynamic network topology.

At the moment NKN has not provided a detailed rollout strategy for how they plan to attract users and ISPs to the network. Network effects are vital for NKN’s value proposition for its users. If no one is on the network, there is no spare bandwidth to share and NKN’s decentralized transmission offers little to anyone looking to join the network. Therefore, it is exceedingly important that NKN has a good rollout strategy for bootstrapping their network to the minimum viable number of users.

Networks Layer

The networks layer of NKN is based on the idea of cellular automata (CA). A cellular automata is a state machine with a collection of nodes. Each cell changes its state following a rule that only depends on its local neighbors. A CA can be represented as a 4-tuple CA = (S, N, K, f), where S = states of nodes, N = number of nodes in the network, K = neighbor set, f = the state transition function. The update rules for the cellular automata, despite being local, will eventually affect the global behavior of the whole network.

For a more concrete example of a system of cellular automata, read up on Conway’s Game of Life, perhaps one of the most famous cellular automaton in existence, and notice how the local update rules and initial state can create patterns across the board. NKN wishes to use these properties of CA, with careful selection of the update rules, to create a dynamical network without large centralized nodes.

Consensus Layer

The NKN team has created a novel consensus algorithm and framework for their unique network structure. They have decided not to use PBFT as the number of messages scales quadratically with the number of nodes in the network, which is not scalable when the number of nodes is large. Moreover, it requires each node to have a list of all other nodes in the network, which is difficult for the dynamical network structure that NKN is using.

Instead, the NKN team has developed a novel message-passing algorithm, based on sparse local neighbors and the Ising model commonly used in physics, guaranteed to reach consensus in linear time. The new consensus algorithm is robust against a network with 30% of malicious nodes, which is roughly the same as PBFT.

The update rule is a form of majority vote, and the it is driven by Proof of Relay. A node proves its relay workload by adding a digital signature when forwarding data, accepted by the system through the consensus algorithm.

With a significant amount of novel architecture, it is vital that the NKN team thoroughly root out and handle potential attacks against the system. Their whitepaper makes a reference to a yellow paper which will contain info on how they plan to defend against potential attacks, but as of yet no information on the timing of this yellow paper has been released. NKN has, however, open sourced their code on Github and has a demo video of their Preview Testnet on their website.

Current state

NKN currently has a preview testnet. There is still a long roadmap for development, with a mainnet launch not expected until into 2019.

The NKN main founders are as follows:

Yanbo Li, Founder and Core Developer. Co-founder of OnChain

Zheng Li, Founder. Technical Program manager for Project Fi at Google, experienced with the telecom industry.

Yilung Zhang, Founder. Physics PhD.

Justin Wang, Founder, expertise in Systems and architecture design.

The main NKN advisor is Whitfield Diffie, famous for the Diffie-Hellman key exchange, along with a partnership with his Cryptic Labs research team.

NKN’s has a standard one-year cliff for the team members. Outside of the token sale information on funding has been sparse.

Outlook

There are several competitors in the decentralized Internet space. Some other players in the blockchain space include BlockMesh, Substratum, and Ocean Protocol. Compared with these other players, NKN has a wider vision, seeking to handle general data transmission, whereas other projects appear to be hitting scalability issues or focusing only of specific types of transmission. Outside of the blockchain space, NKN has to contend with working with and around the conventional ISPs that currently provide the service.

The main concern with NKN is the execution risk. The founding team is solid, with members having expertise in the technical areas touched upon in their whitepaper, and they have Whitfield Diffie as an advisor. Even so, they are introducing a large amount of novel concepts in their architecture, and with those new protocols and structures comes fairly large uncertainty. Ideally their coming yellow paper and open-sourced code will shed some more light on the potential sticking points they may face. Outside of technical aspects, the second execution risk is actually growing the network to enough members to provide users with sufficient utility. Currently details on a potential rollout strategy are sparse. Advisors with expertise in network growth and user acquisition may prove invaluable here. Currently NKN’s website only publicizes Whitfield Diffie as an advisor, and no other figures of note.

Ultimately, NKN is a very ambitious project, with a strong founding team, and if they are able to acquire enough users on their network to reach minimum viability, it’s a project that has the potential to be revolutionary.