White Paper

White Paper for Zioncoin Trusted Payment Protocol

Abstract.* The core of Zioncoin is the protocol for payment systems. This bitcoin-based decentralized network consists of mutually-independent, trusted gateways, where information is distributed in different server networks, to offer a safer, cheaper and more decentralized payment method. Our mission is to become an important part of global business by providing users all over the world a trusted, transparent and decentralized payment network protocol.Zioncoin currently operates on the Ethereum blockchain. The Zioncoin token is a digital asset totaling 100 billion. After Zioncoin's main network goes online line, it will be mapped 1:1 with the primary network's native assets.

Ethereum contract:0x5472E246529ba0C2917Eae93d27A7f955d4B1eb4

1.Introduction

Bitcoin: A Peer-to-Peer Electronic Cash System declares a new era where people's property can be truly protected and transferred freely.

However, when Facebook released Libra Coin, it threatens our world.We do not trust Libra Coin because Facebook has a reputation for intruding the privacy of the people.

We cannot trust Libra Coin because Facebook has too much information that it can know who has the crypto asset without the due processing of KYC.

We will not trust Libra Coin because Facebook is an America company which will ultimately turn Libra Association into a more powerful Federal Reserve.We believe people’s privacy should be protected.

We believe the private property is the foundation of our civilization.

We believe a better world can be built by giving people a safe way to store their property and use it freely.

So we the believers creat Zioncoin a safe global currency and financial infrastructure build on blockchain.

IN ZION WE BELIEVE

2.Economic Philosophy of Zioncoin

Zioncoin's design philosophy is to use profit incentive mechanism to construct a fast, low cost, efficient, safe and reliable public blockchain ecosystem which satisfies large-scale daily business needs. These requirements include, but are not limited to, trading and clearance of various types of assets, as well as redundant storage of information.

At the same time, in order to protect the autonomy right of the participants in the ecosystem, Zioncoin adopts the multi-chain architecture design principle of main chain plus parallel subchains, which provides the subchain ecosystem with an independent operating system of asset transactions, clearance and storage. This mechanism not only significantly reduce the systemic risk, but will further improve systemic efficiency.

2.1 ZNC: the NativeToken

ZNC is the abbreviation of the Zioncoin project's native Token. To some extent, ZNC can be regarded as the “gold” of the digital domain, serving as the pricing unit for everything within the ecosystem ; all economic activities will be settled using ZNC; the establishment and maintenance of all relationships will also depend on ZNC.

As the the foundation of Zioncoin’s economic ecosystem, ZNC will have all the functions of money for social and economic activities - a unit of account, a medium of exchange, a standard of deferred payment, and a store of value. The blockchain will have a huge impact on the existing economic society and is expected to reshape the human Internet activity.

Zioncoin follows the following four principles to build a self-financial blockchain system.

  • Cornerstone of trust: Trust is the cornerstone of the blockchain. The purpose of system design is to build a trusted system.
  • Community governance: The main feature of the blockchain. It is the substantial support for establishing credibility.

  • Practicality:All technologies must be considered for the actual application of the service. Experimental and unstable approaches should be abandoned.

  • Openness: Openness is a necessary condition for the success of blockchains. Openness means equality, open source code, and generalization of infrastructure.

3. The Opportunity

2 billion people worldwide do not have a bank account or access to a financial institution, and less than a quarter of adults have an account with a formal financial institution in Africa. Those people cannot participate to the economic growth of their regions and develop businesses. Blockchain technology and cryptocurrencies are one way for lesser-developed countries to jump intermediate stages and catch up on the unfair impact the globalization might have had on certain areas of the world. By encouraging and sponsoring initiatives moving towards a demonetized, accessible and inclusion friendly world, Zioncoin wants to maintain a strong focus on the development of financial and social empowerment implementations that can offer unbanked and underserved with highly secure and affordable ways of authenticating, identifying and transacting.

Traditional financial institutions have made outstanding contributions to the economy, however, they are faced with inherent risks and are falling short of the rapid social and economic transformation. The financial sector may be exposed to new risks and problems in this high-tech era, which may magnify those inherent risks of traditional financial institutions. The emergence of Internet + finance has made it possible for mixed operations and finance groups. However, under mixed operations, information asymmetry is more prominent, thus making financial risks more likely. Modern economic activities seek higher financial efficiency. However, transactions through traditional financial institutions require significant fees and prolonged process time, accompanied by increased risks of data breach of related parties due to human error.

Internet finance has unique advantages over traditional finance. However, due to limits of the credit information system and lack of a shared credit information platform, the Internet finance is prone to credit risks. The consensus mechanism in the blockchain can be introduced just to mitigate these risks. The cryptocurrency based on blockchain technology provides convenient alternatives to traditional financial payment and settlement. The technology promotes decentralized and peer-to-peer payment methods, breaking through the cumbersome bank transfers required by traditional financial institutions, and prompting great vitality in commercial activities.

  • We believe that many more people should have access to financial services and to cheap capital.
  • We believe that people have an inherent right to control the fruit of their legal labor.
  • We believe that global, open, instant, and low-cost movement of money will create immense economic opportunity and more - commerce across the world.
  • We believe that people will increasingly trust decentralized forms of governance.
  • We believe that a global currency and financial infrastructure should be designed and governed as a public good.
  • We believe that we all have a responsibility to help advance financial inclusion, support ethical actors, and continuously uphold the integrity of the ecosystem.

4. Objectives

The proposed solution improves accessibility to essential financial services:

  • Secured value storage.
  • Convenient cashless payments relying on blockchain and payment channels infrastructures.
  • Straightforward cross-border transfers.
  • Optimized cryptocurrency acceptance and payment processing solutions for merchants.
  • Fingerprint-based identification and protection.

Zioncoin targets several groups of users and solve different industry problems.

The number of cryptocurrency holders is increasing at a staggering path. Initially orientated towards the opportunity to cheaply and securely transact in a peer-to-peer manner, the cryptocurrency holders now have various types of objectives: means of payment, utility value, store value and speculation. The community keeps on growing but the ecosystem needs the right tools to trigger a wider acceptance into our societies and at different levels e.g. individuals, enterprises, financial institutions, central banks etc.

Individuals, merchants and other SMEs are currently bearing very high and opaque money transfer

costs. Building the most convenient and secure framework to welcome individuals and institutional

participants to adopt and transact with cryptocurrencies is entirely part of Zioncoin’ objectives.

Apart from a very few cashless and crypto-friendly countries where various daily transactions can be performed in cryptocurrencies, it is still very challenging to be able to spend cryptocurrencies on everyday purchases. Zioncoin, its ecosystem are specifically designed to encourage and strengthen the adoption of cryptocurrencies in mainstream payments.

Zioncoin network:The source code and data of the Zioncoin network are completely open source and can be accessed and accessed at will. The blockchain characteristics can be proved by anyone, allowing enterprises or individuals to independently carry out financial activities without relying on financial intermediaries.

Zioncoin's underlying protocol is designed and positioned to ensure that our self-finance agreements fully meet the needs of the ecosystem, that is, allowing any institution or individual to issue new assets based on the public chain native asset (ZNC as the Native Token).

Zioncoin network consists of many gateways,Gateways are entities that people trust (most gateways are financial institutions such as banks and payment companies).

The Zioncoin Mobile App:can be used to send, receive and exchange cryptocurrencies: ZNC,BTC, ETH, XRP, LTC and BCH. Zioncoin also wants to connect and facilitate accesses to Ethereum ERC20 tokens whether they are native Ethereum tokens, or tokenized assets. On the midterm, Zioncoin is committed to implement payment channels feature in order to provide a frictionless experience when interacting on-chain, and off-chain using channels. The Zioncoin team is testing different implementations and is currently developing the first smart hardware wallet based payment channels transaction.

4.1 The Zioncoin Merchant Ecosystem

The Zioncoin Merchant App is designed to be convenient to plug in for merchants who can accept ZNC powered transactions. The Merchant App can be used with a dedicated merchant API and proposes customizable features which include payment functions, fund transfer, bill payment, prepaid top up, and customizable loyalty management solutions for merchants. The cost of utilization is lower than the market fees standards, with 0.5%-0.75% transaction fees. Zioncoin will also maintain a midterm focus on testing and adding payment channels features into the Merchant App in order to allow individuals and merchants to efficiently interact using channels.

The Payment Processor - Merchant processing needs to be effortless. An essential development step that blockchain ecosystems and the payment applications built on top of it need to go through is improving user experience and offering the flexibility for merchants to accept and exchange cryptocurrencies into fiat currencies on demand.

Zioncoin allows merchants to easily and safely accept payments in cryptocurrencies and receive funds directly into their bank accounts, settled in US Dollars, Euros, Japanese Yen and HK Dollars.

Bank KYC compliance will be divided into three levels of KYC requirements based on the user's different usage requirements.

KYC Level 1: Only use cryptocurrency; KYC Level 2: Supports cryptocurrency and fiat currency, but has trading restrictions; KYC Level 3: Supports cryptocurrency and fiat currency and has no restrictions. The use of a three-factor authentication process also provides users with greater flexibility in security.

5. Zioncoin Consensus Protocol

Four key features of Zioncoin Consensus Protocol (ZCP) include:

Four key features of Zioncoin Consensus Protocol (ZCP) include:

  • Decentralized Control: Anyone is able to participate and no central authority dictates whose approval is required for consensus.
  • Low Latency: In practice, nodes can reach consensus at timescales humans expect.
  • Flexible Trust: Users have the freedom to trust any combination of parties they see fit, for instance, non-profit organizations or financial institutions.
  • Asymptotic Security: Safety rests on digital signatures to protect against adversaries with unimaginably vast computing power.Quorum Slices: When a node hears that a sufficient set of nodes assert a statement, it assumes no functioning node will ever contradict that statement. We call such a sufficient set a quorum slice.

Quorum: Quorum is a set of nodes sufficient to reach agreement.

A quorum slice is a subset of a quorum that can convince one particular node about agreement. Some typical examples are provided as follows to facilitate understanding of these two concepts.In ZCP, any 2f +1 nodes constitute a quorum (f is the maximum number of Byzantine failures). Namely, any 2f +1 nodes are sufficient to reach global decentralized agreement.

Consider the four-node system in the following figure, Node V1’s quorum slices include {V1, V2, V3}; Node V2’s, {V2, V3, V4}; Node V3’s, {V3, V2, V4}; and V4’s, {V2, V3, V4}.

In order to reach global agreement, the quorum must be {V1, V2, V3, V4}.

Top Tier: Slice is 3 out of {V1, V2, V3, V4}, including self. A top tier is structured like a PBFT system which typically has 3f +1 nodes.

Middle Tier: slice is self + any 2 top tier nodes.

Leaf Tier: Slice is self + any 2 middle tier nodes. Note that V9 and V10 may pick disjoint slices such as {v5, v6} and {v7, v8}; nonetheless, both will indirectly depend on the top tier, so the global agreement can be reached.

5.1 State Machine Replication (SMR)

In a distributed environment, the most common approach to enable fault tolerance is to run multiple copies on different servers. However, how can we ensure the synchronization of their status? Or, will we get the same results, irrespective of where the requests are processed? State Machine Replication, or SMR, provides a possible solution. Suppose each and every node in a cluster runs exactly the same Determinism state machine S, and all state machines are in the same initial state s0, then the same input series {il, i2, i3, i4, i5, i6,…in} will make all state machines reach the same final state sn through the same status transition path s0→s1→s2→s3→…→sn, and produce the same output series {ol (s1), o2 (s2), 03 (s3),...,on (sn)}.

In Zioncoin, ledger data are processed in line with SMR model, i.e. the state of State Machine is changed by the Input to produce the Output, where the Input is the transaction, State, the ledger, and Output, the archive (See the following diagram):

6. Network Tier

Blockchain provides a reliable solution to “trusted transaction under trustless network”; for example, information exchange or mutually dependent transactions between two or more untrusted entities.

As there are a number of public blockchains, why we need Zioncoin - a brand-new blockchain network - as an enterprise-level application?

(1)Network Capacity

Blockchain is an absolute P2P network, which means there is no master or secondary nodes. In order to reach decentralized agreement, consensus mechanism is required, which, unlike traditional approaches (for instance, Raft/Paxos), does not have master nodes. Meanwhile, time restriction on close for each ledger means additional bottlenecks on the network performance. Therefore, customized blockchain for a specific sector is a must.

(2)Network Performance and Reliability

The nodes of blockchain, especially public blockchain, may be distributed all over the world. Therefore, the network performance of blockchain might be bottlenecked by various factors like connectivity, transaction numbers of each ledger and computer software/hardware, etc.

(3)Limited Access to Some Businesses

The access to blockchain network, participation consensus and scope of application are subject to different application scenarios of business. That’s how diversified forms, including public blockchain, federated blockchain and private blockchain, came into being.

(4) Demands for Native Asset

Generally, there are two categories of assets in the blockchain network, namely Native Asset and Issue Asset. The former (for instance, ORC) is often used to ensure the robustness of the blockchain network (for instance, protecting against DDoS) or as the ecosystem incentive to some blocks. That’s why a brand-new blockchain network is needed.

(5) Autonomy and Physical Security

Some entities (for instance, countries and large-scale enterprise groups) may wish to build a globally manageable non-public blockchain network out of autonomy or control considerations.

6.1 Network Structure Design

ZCP and Network Access Control features of Zioncoin Blockchain; and access to Zioncoin Blockchain Network by applications through Equator components.

7. Protocol Tier

ZCP is a collection of rules, algorithms and business process logic used to describe the interactions between child systems. ZCP defines the interactions between network elements to allow secure communications and data transfer.

ZCP describes the following entities and processes:

  1. Data validation.
  2. Hash, data encryption.
  3. Data access algorithms.
  4. ncryption algorithms to protect the interactions between data and applications.。
  5. Structures of Open/Closed-Source Software Interfaces.
  6. Data ontology.
  7. Data storage structures, and local/cloud interaction structures.

8. Data Tier

In Zioncoin network, there are four categories of data: OTA data, ledger data, real-time query data and history archive data.

Normally, ledger data are stored in file systems, especially SSDs to improve performance; real-time query data, Structured Database, especially PostgreSql relational database; and history archive data, online storage solutions like OSS, S3 or FTP.

8.1 Ledger Data

The Ledger Data refers to the collection of ledgers, where individual ledger represents the global status of Zioncoin blockchain network at a specific time. Over time, ledgers are associated with the Hash value of the previous one according to the time line,resulting in a linked list data structure. Each ledger is associated with the previous one, and all the way back to the Genesis Ledger.

Ledger is a collection of Ledger Header and Transactions, where each transaction may include up to 100 operations and may designate a valid Time Bound for execution.

8.2 Entity Data

In Zioncoin, all data are organized by Account, which may consist of four important entities: Signer, TrustLine, Offer and Data.

An account allows for up to 20 Signers and any number of TrustLine, Offer and Data.

8.3 Historical Data

The flexible design of Zioncoin allows any location capable of accessing static files to be used for archiving, for instance, S3, FTP, local file system and AliYun OSS

8.4 Morphological Data

Ledger data and entity data necessitate transfer and persistence of data. In Zioncoin blockchain, two methods are used:

XDR (External Data Representation, RFC4506) and SQL (Structured Query Language, ISO/IEC 9075).

9. Account Tier

Account model is used in the base-level protocol of Zioncoin blockchain, where all information is linked to the account - just like bank accounts in the real world - to facilitate user understanding.

As Zioncoin blockchain is the federation of accounts and account relationship, the implementation of business scenarios will inevitably involve interactions with the physical world. In other words, the blockchain world must be capable of frictionless interaction with key service providers in the real world, such as real-name authentication, capital, asset and right-confirmation data.

Account Identity: Aka. Account Address or Account ID, the unique identifier of an account; once generated, Account Identity cannot be modified and is permanently unchangeable.

Account Key: Used to verify-sign transactions; account key is the crux of data right confirmation. User Key can be used to generate corresponding public and private keys. Once generated, the keys cannot be modified and are permanently unchangeable.

Account Flags: The following three flags are used for an issuing account of Issue Asset:

Authorization Required (0x1): When other accounts wish to hold the Issue Asset of an issuing account, they must submit an application for Trust Asset; this flag means “explicit authorization is required by the issuing account”.

Frozen (0x2): This flag is used by the issuing account to freeze the account which wishes to hold the Issue Asset. Once applied, Issue Asset can only be transferred from the frozen account to the issuing account.

Permanent (0x4): Once applied, the flag cannot be changed and the account cannot be deleted.

9.1 Assets

In Zioncoin there are two categories of assets: Native Asset and Issue Asset.

The former refers to the assets which already exist at the time of blockchain network launching, and the latter, those issued in a specific application scenario.

9.2 Inflation

An inflation model is built into Zioncoin for incremental offerings: 1% Native Asset will be added to the network every year, and the total Native Asset is captured in the “total_coins” attribute of each ledger.

  1. Forms of Architecture

Although blockchain is a virtual world of connected accounts - or the best example of “economy of accounts” - the implementation of application scenarios will inevitably involve the physical world, including providers of various key services, such as real-name authentication, data right confirmation, asset/capital mapping and data right confirmation mapping, etc.

These service providers, in turn, are inevitably linked to central authorities or trusted parties of various sizes in the real world, who provide trustworthy data and information to the blockchain. As we all know, “Blockchain eliminates the needs for unwanted intermediaries or central authorities”.

In traditional industries, cross-sector business coordination requires a strong authority and a trusted information system, for instance, CBRC, CIRC and Union Pay in the banking sector.

Nonetheless, blockchain enables a realistic technical alternative for cross-sector business coordination without a strong authority and a trusted information system, which significantly reduces frictions. This could be translated into lower costs of construction and operation.

10.1 Logic Architecture Design

Presently, there is no exact definition of Decentralized Application (DApp). In a broad sense, DApp is characterized by “Open Source” and “On-Chain Data Storage”.

In an absolute sense, the data storage and calculation of DApp must be implemented on the blockchain; however, most DApps are provided with their own application servers nowadays, which means that the data of DApps are stored both in the blockchain network and on the application servers.

Blockchain Network Tier: Where Zioncoin instances are deployed, which normally include Full Nodes, Synchronization Nodes and Validator Nodes. Blockchain Access Tier: Where Equator instances are deployed to access blockchain network. Adaptation Tier: Including adaptation of on-chain data, off-chain data and third-party service access. In engineering practices, middleware for blockchain network access is often built to provide reliability enhancements, such as synchronous-to-asynchronous and high availability.

Application Tier: User-facing applications, including DApps, standard applications and surveillance applications.

10.2 Account Architecture Design

Banks: There are more than 25 ways to use blockchain in the banking sector. The9 largest banks in the world, including Barclays, JP Morgan, Goldman Sachs and Credit Suisse, have entered into cooperation agreements with blockchain players.

Zioncoin Blockchain Protocol allows for fast and secure transaction and tracking of credit records with single synchronous access system, where changes of loan status are immediately shown.Besides, FATCA and AML / KYC processes are supported by Zioncoin Blockchain Protocol.

Any user can track their transactions on blockchain - which ensures the transparency of the system. Program codes are protected against manipulation, and copies of records are created on different computers to prevent forgery.

11 Conclusion

The proposed solutions articulated in this paper are the result of several years of implementation and experimentation in the blockchain industry. The team behind Zioncoin has been particularly close to several large-scale enterprise projects, where the challenges outlined previously are significantly pronounced. The Zioncoin network is designed to overcome these challenges, and to propose a solution that will enable blockchain applications to achieve their full intended potential. Join the Zioncoin network to get alerts about more-detailed white papers related to specific aspects of Zioncoin as they become available.