Slock.it: IoT + Blockchain

Founder Christoph Jentzsch takes the audience at Devcon One through a detailed tour of our technology.

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Overview

About Us

Slock.it UG is Blockchain + IoT solutions company registered in Germany (HRB 30026). We are lucky to already work with many exceptional clients with whom we are building the future infrastructure of the service economy. You can learn more about the services we offer on our Solutions page.

Who are Slock.it's partners?

We are have secured strategic partnerships with Ubuntu, Samsung, Microsoft, RWE, Shapeshift, SafeShare, IPFS and many more. We are currently reaching out to a number of further partners, in particular:

  • Sharing economy insurance providers
  • Manufacturers of smart locks for the home and offices
  • Manufacturers of electronic bike locks
  • Real estate companies investing in smart homes
  • Hotels and B&Bs
  • Network and operating systems developers
  • Other Ethereum and cryptocurrency businesses

The Ethereum Computer

The Ethereum Computer, is a piece of mainstream consumer electronics that brings blockchain technology to the entire home, making it possible to rent access to any compatible smart object and accept payments without intermediaries.

The DAO Framework

The DAO framework is side project of Slock.it UG and a gift to the Ethereum community. It consists of a definitive whitepaper, smart contract code audited by one of the best security companies in the world and soon, a complete frontend interface. All free and open source for anyone to re-use, it is our way to say 'thank you' to the community.

The Ethereum Computer

What exactly is the "Ethereum Computer"?

The Ethereum Computer is a small, preconfigured consumer electronic device running an optimized Ethereum blockchain node and a series of decentralized applications.

  • The Ethereum Computer is a source of revenue, making it possible to rent access to any space or compatible smart object and accept payments without intermediaries.
  • It's the simplest and most secure way to browse exciting new decentralised applications (or ‘Đapps’) from the convenience of a desktop or home theater.
  • And it’s also a brilliant development platform, packaging all the software needed to build Ethereum Đapps as part of a straightforward, optimized image.

We want to make the Ethereum Computer the easiest entry point to the world of Ethereum, without having to struggle with setting up a client, buying ether from an exchange or worrying about security updates.

The Ethereum Computer and the Sharing Economy

With the Ethereum Computer, our mission is to build the future infrastructure of the sharing economy by enabling anyone to rent, sell or share anything - without middlemen.

The Ethereum Computer strives to improve the experience of sharing items by:

  • Making trusting the other party as unnecessary as possible
  • Handling secure Peer-to-Peer payments
  • Providing a mechanism of deposits, and eventually, full blown insurance
  • Freeing the users from having to coordinate with each other to hand over keys
  • Enabling both owners and renters to connect each other
  • Supporting almost any object including cars, lockers, apartments, sheds, office space, etc.

For an in-depth introduction to the Ethereum Computer, please see Christoph Jentzsch's project reveal at Devcon One.

Who is the potential market?

Anywhere where there are underused assets such as temporarily vacant apartments, there is an opportunity to make a profit using the Ethereum Computer. The Ethereum Computer enables both consumers and businesses to turn their assets into income.

The sharing economy has created 17 different billion-dollar companies with 60,000 employees. The sector has received close to $15 billion in funding so far and its global yearly revenue is projected to reach $335 billion by 2025 (source: PWC).

We believe that very soon, Airbnbs will be fully automated, and small business owners will prefer to rent private work spaces on demand rather than commit to complex leases. Owners in a sharing economy become both consumers and producers, leveraging the Ethereum Computer to earn an income without losing revenue to a third party.

The millennials' philosophy is fast becoming "If you can rent it, why own it". 66% of the world is willing to share or rent their personal assets for financial gain, and that figure is as high as 94% in China. We believe the Ethereum Computer is uniquely placed to address those needs worldwide, today.

What are 'Slocks'?

Slocks are real-world physical objects that can be controlled by the blockchain. 'Slock' is a porte-manteau of 'Smart, Safe and Secure Lock'. Any object supporting ZigBee, Z-Wave, Bluetooth LE or Wi-Fi can already be used as a Slock thanks to the Ethereum Computer. When it comes to powering up a ‘dumb’ object, it will be a case of retrofitting it using smart plugs.

How do Slocks work?

The owner of a Slock sets a deposit amount (if needed) and a price for using the item. Users can find the Slock using the mobile app and then make a payment on the Ethereum blockchain, thereby gaining permission to open or close that Slock with their smart phone.

An (optional) deposit is held as collateral in a smart contract until the user returns the item. The smart contract is automatically enforced, with the deposit returned to the user minus the cost of the rental, which in turn will be automatically disbursed to the owner of the Slock.

We're working with our partner SafeShare, to provide ad-hoc insurance where a deposit wouldn't be appropriate.

All of this happens without any assistance from a third-party.

Will users have to pay every time they use a Slock?

They won't have to, as only renting access to the lock costs money. Any active user (which could also include the owner) only need to send Whisper-signed messages (which do not cost anything) to open or close the Slock.

Furthermore, the owner of the Slock can set the price to use the Slock to 0 while maintaining a deposit amount, and remotely share any item they want, enabling a trustless Sharing Economy.

Will users be able to use a debit or credit card to open a Slock?

We're currently approaching our partners and various financial institutions to try and make this a reality.

Aren't the Slocks going to get vandalized?

Of course some will, as Slocks aren't a panacea against theft or damage. What Slocks can do that traditional locks cannot, is provide an insurance option 'baked' into the usage contract.

If no insurance is required in the case of lower value or cumbersome items, a basic deposit implementation is provided by default and will suffice.

For higher value items, thanks to our partner SafeShare, we're working towards implementing a universal, on-the-spot insurance where users would pay only for the type of insurance they need, when they need it. The insurance provider will read from the Ethereum blockchain when the objects are rented out, and owners will only pay for the time the property was being rented.

What happens if there is no power or Internet?

The same thing that would happen if any other smart lock was employed: some will 'fail secure' while others will 'fail safe'. Which mode of operation is used is not determined by anyone but the use case and local regulations. For example, fire rated and hotel room doors will probably 'fail safe' while a locker will certainly 'fail secure'.

What could I do with the Ethereum Computer?

  • Enable the entire home to communicate with the blockchain: rent out a flat, an office space, access to Wi-Fi hotspots, or share any compatible smart object in range directly and securely.
  • Try out new, exciting applications: The Ethereum Computer is a full blown implementation of the Ethereum stack, and therefore can serve any Đapp out to a home theater.
  • Browse the decentralized web securely: it’s easy to point a browser, mobile phone or tablet to the Ethereum Computer, keeping precious cryptographic keys securely within the confines of the local network.
  • Earn a passive income: the Ethereum Computer can be used to run an IPFS node and perhaps receiving cryptocurrencies for renting unused computing resources. The Ethereum Computer could also facilitate the creation of decentralized oracles, earning tokens by providing physical data to blockchain smart contracts.
  • Develop applications with Ethereum: Developers will never have to worry about installation difficulties. We’ll resolve compatibility issues between the various components of the Ethereum 'stack' (Whisper, EVM, Web3.js, Swarm, etc) and will push updates for users to accept only after we have tested the framework top to bottom.
  • Get rewarded for helping secure the Ethereum network without having to dedicate larger, more expensive equipment to that task (will be available once Ethereum has switched to PoS).

Will it be hackable/open?

Absolutely. We'll not only make the devkit images publicly available, but also all of the detailed code that went into building the 'stack' so you can modify/improve on the installation. (we already started). A dedicated hobbyist should be able replicate the Ethereum Computer using off-the-shelf parts without having to buy it directly from a distributor. We want you to be able to experiment!

Furthermore, if any given lock manufacturer wanted to be able to embed the software as part of their own designs, in order to benefit from incremental revenue, then in our view, nothing should get in their way either, as this all ultimately benefits the ecosystem by opening the doors to a larger user base.

If it's open, won't people be able to bypass the contract system?

To remove the contract dependencies would would means losing all the advantages of decentralization and economies of scale, namely:

  • Efficiency, as the usage of blockchain removes the need to host a website and use payment providers
  • Trusted key management without third parties involved
  • Transparency: the blockchain contracts allows you to always prove that you have the permission to open any given lock
  • Stability, as blockchain-enabled locks work without any 3rd party involved, and have zero downtime
  • The open API for smart contracts
  • And of course the device would no longer be searchable in the Ethereum Computer directory of connected things

When will the Ethereum Computer become available to purchase?

This depends on the scope of the Proposal negotiated and chosen by the DAO. Slock.it UG will however make a small number of prototypes available to early adopters that can demonstrate a clear and active engagement in the development of related apps and have the intention and proven capability to deploy these apps on the Ethereum Computer. Applications to receive a prototype can be submitted by contacting us.

Will it be useful for mining?

The Ethereum Computer is a full Ethereum client and therefore perfectly capable to have its mining function enabled. That said, it would not be a good platform to mine on while Ethereum is still using Proof of Work, as its form factor prevents it from having the hashing power GPUs have. The Ethereum Computer will however be a perfectly appropriate platform to help secure the network once Ethereum switches to Proof of Stake, keeping your keys secure as part of a hardened stack.

How much will the Ethereum Computer cost?

We're still defining the Ethereum Computer cost of productions, as they will be dependent on many factors, including product design (we want the Ethereum Computer to become a worthy conversation piece for your desk). It is our intention to keep it very accessible and we are aiming for an MSRP of roughly USD $99 for the lower end model and USD $199 for the higher end model (pricing may vary by location).

The DAO Framework

DA.. what?

A DAO is a new type of organization that lives on the blockchain, best comparable to a digital company, but without an attached legal entity. A DAO is composed of DAO token holders that can review Proposals and cast their votes to elect and direct Contractors in the physical world. This process is very similar to selecting a vendor or supplier. A DAO is however superior in many respects to a traditional company in the sense that all the decisions it makes are transparent, its finances can be audited by anyone and corruption is impossible.

A primer to the mechanisms powering a DAO can be found on our blog. The whitepaper can be downloaded from our website.

The Framework

The DAO framework is side project of Slock.it UG and a gift to the Ethereum community. It consists of a definitive whitepaper, smart contract code audited by one of the best security companies in the world and soon, a complete frontend interface. All free and open source for anyone to re-use and is our way to say 'thank you' to the community.

What's in it for Slock.it UG then?

Slock.it UG is a Blockchain + IoT solutions company. However Slock.it UG (future GmbH) is not a DAO itself — we are a for-profit company registered in Germany. We are creating what we hope will be the future infrastructure of the Service Economy. We believe that Decentralized autonomous organizations (“DAOs”) will play an important role in that infrastructure.

Can I help with anything?

Yes, the DAO framework is an open source project and everyone is encouraged to participate in any way they can.

Things we could use help with include:

  • Reviewing and contributing code on github (it's an open source project after all!)
  • Translating the site, the whitepaper, the videos and the apps into your native language
  • Introduce Slock.it at meetups
  • Testing prototype hardware commissioned by a DAO

To join, simply request access to our chat room.

Is this just for geeks?

Definitely not. In order to make decisions, DAO token holders are be able to vote using a straightforward interface using Mist, the Ethereum browser. You need to be able to install software on your machine, and use what essentially looks and feel like a website. We are also providing video tutorials explaining most common interactions with the DAO framework.

Will it be a lot of work?

The Proposals to a DAO define how much or how little control over its operational responsibilities a DAO 'outsources' to a Contractor for any given project, task or product. It can range from an "every little details left to token holders" approach with weekly votes to a "100% hands off" approach equivalent to putting a DAO's trust into the Contractor's capability to execute on the concept. A DAO's underlying code is flexible enough to support both - or anything in between.

What can a DAO do exactly?

A DAO can commission a Contractor to implement a technology or develop a product by signing a smart contract. The smart contract specifies the terms of the relationship between a DAO and its Contractor.

Once a Contractor's Proposal has been approved, a DAO can call functions on this smart contract, setting the values of operating parameters. What parameters are available depend on the Contractor's smart contract and can range from a 'hands off' approach to having a DAO hold complete operational control.

Can a DAO acts on more than one Proposal?

Of course. No business can predict the future, not even a DAO - so it's expected for DAOs to review their engagement with their Contractors at regular intervals. New Proposals can be submitted by any Token Holder at anytime - each of these can be as simple or as complex as needed as the terms are written as part of Ethereum smart contracts.

Can the term of a Proposal be explained in plain English?

Yes, the Proposal smart contract itself can a hash of a plain English document - holding the Contractor responsible for its Proposal.

Can a DAO fire a Contractor?

Of course. Proposals will usually include a total amount (say, USD 5M to complete project A), an initial deposit (USD 1M to bootstrap project A) and a monthly payment (for example, USD 200K / month for 20 months). At anytime, a DAO can stop the regular payments if it is dissatisfied by the Contractor, effectively firing it.

We believe a relationship where a DAO stays in control of its ether is actually more beneficial to all parties.

How will DAO votes take place?

DAO votes can take place via the official Ethereum GUI wallet, through an automatically generated HTML interface. Once Mist, the official Ethereum Đapp browser, supports that functionality, we will make available a frontend interface to interact with a DAO under the same free, open source terms as its code and whitepaper.

How can a DAO protect itself from ether's volatility?

A DAO could enter into a hedging contract to protect itself from ether's volatility. This contract could be provided by a Contractor as part of a new Proposal.

Who owns the intellectual property created as part of Proposals?

This depends entirely on the terms of the Proposal from the Contractor - and then it's up to the DAO in question to approve these terms or not.

How many Contractors can a DAO have?

A DAO can hire as many Contractors as it sees fit.

Can a DAO fire a Contractor?

Of course, by simply terminating the smart contract engagement with the Contractor in question.

How is the DAO protected from malicious Contractors?

To guarantee the Contractors will not act against the interest of the DAO, a group of signatories validates Contractors’ Proposals then add them to the list of addresses authorized to receive ether (ETH) from the DAO. This group of signatories is collectively referred to as a Curator.

How many Curators does a DAO have?

A single one at any given time, although it's likely Curators will often be represented by a multisig of neutral and trusted parties.

Is the DAO dependent on the Curator?

No. To maintain decentralization, the Curator can be fired by the DAO at any time and for any reason.

What is the process for selecting a new Curator?

Changing the Curator takes the form of a Proposal with a special flag. Votes on changing the Curator take place in two steps. The first, a non-binding vote on whether the DAO would like to switch Curator or not. The second, a confirmation vote to give a chance to participants to confirm the result of the first vote, or a chance for the minority to ‘split’ the DAO into two and retain control over their ether.

Would DAO Token Holders still be entitled to rewards after a DAO split?

Yes. If a split occurs, a new DAO is created and both DAOs would continue to operate, each with their own tokens, and each with different Curator and Contractors. This would be the equivalent of a large company splitting into two. The rewards for Proposals previously voted on are also split and fairly distributed between the DAOs. Of course, Proposals voted on after the split will only pay out rewards to their respective DAO.

What's a 51% attack, and how do you prevent it?

In previous DAO models, if someone was to acquire 51% of a DAO's tokens, they could vote themselves as the Curator, and then send 100% of the ether to their own account. In order to prevent this, a DAO using our framework is able to split itself proportionally to the vote results, leaving the attacker with its ether and the rest of the participants in control of their own. Because of this mechanism renders the attack unprofitable, so there is no incentive to execute it. This originates a blog post by Vitalik Buterin on The Subjectivity / Exploitability Tradeoff.*

Why is there only a single Curator at any given time?

For safety reasons. In order to prevent a 51% attack, we needed to introduce the rule that a DAO may split in case there is no mutual agreement on a selecting a Curator, which in turn removes any incentive to even attempt to bring about such an attack. Having room for more than a single Curator would negate this fail-safe. On the other hand, a DAO can of course with an unlimited number of Contractors.

Why did you choose to abstract the operational parameters of a DAO?

You might wonder why the operational parameters of a DAO have been abstracted as part of a series of smart contracts between a DAO and its Contractors. This is because a DAO will hold 100% of its ether from day one and therefore stay secure using immutable code, while at the same time needing to retain enough flexibility to hire and fire both Curator and Contractors.

Using this model we are able to guarantee that the core of a DAO (the code that holds the ether) will rarely, if ever need to be updated. To keep adapting rapidly to market changes, a DAO will vote on Proposals and could even change Curator. This means a DAO will still be able to not only affect the operational parameters of its relationships with suppliers, but also entirely change business models if desired.

I still want to learn more.

Our Slack chat room has more than 3,500 participants discussing the Standard DAO Framework, we look forward to see you there!