Review: Is Blockcloud The Next IoT Protocol?

June 19, 2018

by Editorial Team

Project Research: Blockcloud

By: Erick Pinos, Lead Researcher & Remi Gai, Research Analyst


Current IoT networks are facing great challenges by uneven connectivity, poor scalability, absent trust, cracked security and broken business due to limitations of current TCP/IP architecture. Current TCP/IP architecture is run based on Domain-centric Networking approach, designed 40 years ago. With Domain-centric Networking, IoT platforms provide a centralized server to aggregate IoT devices, data and services and manage them, which leads to poor scalability and high bandwidth consumption. The number of IoT devices is predicted to be increased to 20 billion devices by 2022, and the current infrastructure limits the growth potentials and profitability of IoT.


Self-driving car: Network transmits navigation information to smart gadgets. Error in the transmission (whether it’s caused by DNS, IP, or internet network) could cause serious accidents.


Blockcloud aims to solve the current problems with IoT by developing an advanced TCP/IP architecture based on a new consensus mechanism (Proof of Service) for verification of services and efficient ledger structure (CoDAG) for fast transaction writing. Blockcloud combines (1) a Service-centric Networking (SCN) approach to provide reliable connectivity and global scalability and (2) the blockchain technology to achieve a trust, secure and incentivized IoT infrastructure. Additionally, smart contract operated double auction will be used to fairly price and match services providers and users.


Network Layer - Service-centric Networking: an internet technology that provides a service-aware network stack, where applications communicate on service names instead of IP addresses. Traditional TCP/IP infrastructure is designed for fixed entities in stable environment, and with the growing number of mobile/IoT devices it has created great challenges in mobility and scalability.

1. Mobility solution

Service-centric paradigm enables name-based routing that connects clients to services, seamlessly changes network addresses, migrates flows across interfaces, or establishes additional flows for efficient and uninterrupted service access required by mobile/IoT devices.

2. Scalability

On Blockcloud services and data are decentralized with peer-to-peer technology, achieved from the adoption of a Distributed Hash Table (DHT) network.

Note: Compatible with today’s internet and can evolve over time. Can run over IP. Services are published/subscribed to/from the network.

Application Layer - Blockchain operates on top of SCN to provide trust, security, fairness, economic incentive.

Service Access Layer (SAL) - The SAL maps service names in packets to network addresses, based on rules in its service table managed by a blockchain. Unlike traditional “service layers” which sit above the transport layer, the SAL’s position below transport provides a programmable service-level data plane that can adopt diverse service discovery techniques

Note: This is to enable communications on service names, not exact endpoints who provide the services. Thus endpoints can change network addresses with uninterrupted service assess. Think DNS

Proof of Service consensus provides trust and security to Blockcloud infrastructure, by having distributed miners, economically incentivized to be honest, to check services provided to the network and guarantee the trust. Blockcloud believes that successful decentralization of IoT lies in being trustless so that there is no need for participants to be trusted or centralized.

Compacted Directed Acyclic Graph (CoDAG) - transaction recording structure

The CoDAG structure is different from chain-like structure, as it adopts a flexible structure that is more suitable for asynchronous operations. It is also different with previous DAG-based structure, it adopts a more compacted structure, where nodes are more well connected. Intuitively, CoDAG is more like a well-connected channel, and the width of the channel can be adjusted according to user demands.

Truthful Continuous Double Auction (TCDA) - fair service distribution

The Blockcloud team develops a truthful continuous double auction (TCDA) mechanism that allows users to bid for service. TCDA has the following properties:

· Defending against price cheating

· Cheating traders can not increase the profit so that they do not have incentives to cheat.

· Guaranteeing fairness

· TCDA treats sellers and buyers equally, where sellers and buyers have the same opportunity to earn profits.

· Minimizing trading maintenance cost.

· TCDA optimizes the trading maintenance cost to scale the system to support a large number of trading simultaneously.

Market Size

The global Internet of Things (IoT) market is projected to grow from $2.99T in 2014 to $8.9T in 2020, attaining a 19.92% Compound Annual Growth Rate (CAGR). Industrial manufacturing is predicted to increase from $472B in 2014 to $890B in global IoT spending. Healthcare and life sciences are projected to increase from $520B in 2014 to $1.335T in 2020, attaining a 17% CAGR. Source: Statista, Size of the Internet of Things market worldwide in 2014 and 2020, by industry (in billion U.S. dollars).

The global IoT market will grow from $157B in 2016 to $457B by 2020, attaining a Compound Annual Growth Rate (CAGR) of 28.5%. According to GrowthEnabler & MarketsandMarkets analysis, the global IoT market share will be dominated by three sub-sectors; Smart Cities (26%), Industrial IoT (24%) and Connected Health (20%). Followed by Smart Homes (14%), Connected Cars (7%), Smart Utilities (4%) and Wearables (3%). GrowthEnabler, Market Pulse Report, Internet of Things (IoT), 19 pp., PDF, free, no opt-in.


· Current TCP/IP

· NKN (New internet protocol, competes with BlockCloud on creating universal relay for internet but not IoT focused)

· Atonomi (focuses on IoT security)

· IoTeX (focuses on token economy and crypto incentives)

· IoTa (transaction settlement and data transfer. Doesn’t seem to be creating a new IoT infrastructure, nor have a Service-centric Networking approach)

Token Utility/Economics

BLOC Token will be used as a mean of transaction and a reward to:

· Service providers for contributing to the marketplace

· Miners to keep the network secure

· Verifiers to ensure the quality of the service providers

Token Symbol: BLOC

Crowdsale Hardcap: $15M

Token Distribution: 20% to crowdsale, 10% to team, 30% to foundation, 30% to mining awards, 10% to early contributor incentives

Initial Market Cap (at crowdsale price): $75,000,000 USD


2018 Q1

· Complete the infrastructure design

· Complete the conceptual verification of CoDAG algorithm

· Complete the conceptual verification of PoS mechanism

· Complete the conceptual verification of online bilateral auction algorithm

2018 Q2

· Complete the design of CoDAG algorithm

· Complete the design of PoS algorithm

· Complete the design of online bilateral auction algorithm

· The choice of cornerstone investors

2018 Q3

· Complete the independent node based on PoS

· Building a developer community

· Partner selection

· Global road performance

· International first-class academic conference / journal contribution

· Token sale

2018 Q4

· Complete the CoDAG minimum test network

· Complete the PoS minimum test network

· Complete the minimum test network of bilateral auction mechanism

· International / domestic standards writing

· The landing exchange

· Continuous optimization of the algorithm and code quality

2019 Q1

· Integrated development

· The first commercial application scene fell to the ground

· The development of network API and mobile terminal SDK

· The first batch of application and development partners to join

· Submission of international / domestic standards

· Continuous optimization of the algorithm and code quality

2019 Q2

· The release main test network

· The joining of the well-known Internet of things chip enterprises

· Open network API and mobile terminal SDK

· Continuous optimization of the algorithm and code quality

The IoT devices have:

· Users 8,000,000+

· Devices 7,000,000+

· Daily Active Users 1,000,000+

· Monthly Active Users 3,000,000+


20k on Telegram

1k on Twitter

Blockcloud Team

Zhongxing Ming(CEO)

- CTO of Oudmon

- 2009 – 2014: Tsinghua University, Ph.D. (Doctor of Philosophy), Computer Science

- 2012 – 2013: Visiting scholar of Princeton University

(Worked on Serval architecture)

- Member of Blockchain Special Committee of China Computer Federation

- 40 Million Accumulative Project Financing

- 13 Publications On Top Conferences and Journals on network

Shu Yang (Chairman/SCN Lab Principal)

- CEO of Oudmon

- Tsinghua University, Ph.D. (Doctor of Philosophy), Computer Science

- Hong Kong Polytechnic University, Postdoctoral

- Visiting scholar at Case Western Reserve University

- Blockchain Special Committee of China Computer Federation

- Shenzhen High-Level expert

- 40 million accumulative project financing

- 10 Publications on Top Conferences and Journals

Dai Pan (COO)

- COO of Oudmon

- Peking University, Master's, information security

- Urban intelligence expert

- Shenzhen High-Level expert

- 40 million accumulative project financing

For the rest of the team:


· Genesis Capital

· Innoangel Fund

· Ok Capital

· Neo Global Capital

· BKFund



· BlockVC


· Brink Asset Consensus Capital

· MW Partners

· Passport Capital

· Arrington


SWOT Analysis


· Can plug and play into IP and current Internet, easier for adoption

· More holistic solution - solves issue of underlying network which will lead to a stronger overall solution.

· Team experienced in IoT and Network.

· Backed by large amount of VCs who can introduce Block Cloud to more clients and partnerships.


· Doing two things at once - underlying networking layer & application layer

· Team members and advisors have little experience in blockchain technology

· No MVP - Hard to verify technological feasibility at this point.


· BlockCloud trying to become the TCP/IP for IoT devices can capture large market

· IoT industry is one of the first priority in China and highly supported by the government.

· Fast growing IoT market.


· Corporates’ migration from traditional infrastructure to BlockCloud solution can be risky and costly, hence making them unwilling to switch.




Code Review: