Is Credits a cryptocurrency?¶
No. Credits is not a cryptocurrency and has nothing to do with cryptocurrencies. Credits is a software framework for the creation of applications based on Distributed Ledger Technology (DLT).
Is Credits a distributed ledger or blockchain?¶
The distributed ledger vs blockchain comparison is a politically charged question so is not easy to answer in the conventional sense. However, within the scope of this documentation we are using these terms in the strictly technical sense, and technical definitions of both are given in terms page.
In the strict technical sense Credits Core is a DLT framework.
Is there a public Credits token?¶
No. Since Credits is not a cryptocurrency there is no underpinning token or anything of a kind.
Is there a public Credits’ blockchain?¶
No. Credits is not a public permissionless blockchain in the sense of e.g. Bitcoin being called a public blockchain and is not supposed to be. Credits Core is a DLT framework designed to help developers of conventional end-user applications do their work, i.e. build applications, without having to worry much about implications of a distributed ledger.
A public but permissioned distributed ledger can be built with Credits, and this distinction is discussed later in this FAQ.
Is there a Credits blockchain at all?¶
Yes, and more than one. But those blockchains are mostly private, so it is not possible to access them without explicit permission from their respective owners.
So what is Credits Core?¶
Credits Core is a software framework for building DLT based applications. It is a developer tool designed to help developers build applications using Distributed Ledger Technology. It has an underlying blockchain data structure in strict technical definition but is not meant to be a public ledger like Bitcoin or Ethereum. It is designed primarily for building applications with private permissioned blockchains.
What is a private blockchain?¶
Private blockchain is quite simply - a blockchain that is kept privately and not exposed to the world. Very much like a traditional database - the private blockchain is a blockchain-as-database, backend system accessed by the backend application developers, DevOps and other engineers, but not accessible to the public.
Private blockchain is by definition permissioned since once needs an explicit permission to access such blockchain. However not being private doesn’t make a blockchain immediately permissionless.
What is permissioned blockchain or distributed ledger?¶
Permissioned blockchain is a blockchain where one needs to obtain a permission to join a specific distributed ledger network and participate in its consensus.
This may be a private ledger, where one needs explicit permission to even see the contents of the specific blockchain or a public permissioned ledger where the blockchain content is available for reading without prior permission, but joining the network is still possible only after explicit permission from the distributed ledger owners/operators.
A permissioned ledger may be public, where the content of the blockchain is available for reading and verification, or private.
Is Credits a Proof of Work or Proof of Stake?¶
Credits is a Proof of Stake system. For more details please refer to refer to Credits Core consensus algorithm description.
Is Proof of Stake actually useful?¶
In a permissioned distributed ledger there is no need to impose an arbitrary artificially complicated task (proof of work) to ensure the alignment of participants’ economic incentives with the goals of the network’s existence. A permissioned system by definition is created by certain participants with a specific goal and is not meant to be used by the uninterested public. Thus the participants of the network are supposed to have an interest in network’s existence and functioning through interests external to the network itself.
Stakes in a permissioned system are a mere reflection of stakeholders input into the creation and maintenance of the said system. Stakes can and should reflect the relationships between the stakeholders outside of the network and correspond to mutual duties and obligations.
In this sense Proof of Stake consensus algorithm is a much better reflection of the permissioned distributed ledger system then a Proof of Work.
What about “nothing at stake” problem?¶
Nothing-at-stake is a conceptual problem and a possible attack vector in a Proof of Stake distributed ledgers that implies that uninterested operators that may hold “stake” in the Proof of Stake consensus not necessarily have the actual stake in the said system, i.e. have nothing to lose if the system is malfunctioning or subverted.
This is a problem in a permissionless Proof of Stake systems since the wide public is allowed to join the consensus without an obligation to have an explicit stake in the system. This is not so much of a problem in the permissioned Proof of Stake ledgers because all participants of the network are expected to have an external interest in network’s existence and good standing. So in the permissioned system, the participants are expected to have stake prior to joining the network, otherwise, they should have no reasons and should be not allowed to participate, and so the nothing-at-stake problem does not apply.