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hi everyone steven from lawyers of
tomorrow here with a further in the
series of videos looking at blockchain
explained where we get beneath the hood
of blockchain technology learn about how
it's being developed and used and how
our clients are starting to use it and
therefore we can understand our clients
businesses better so I've been doing a
number of videos on the EOS system which
is the great challenge in my view to
etherium and I'm going to show you a
really interesting development that has
occurred today concerning activity on
the system but what is this video about
today it is to explain the RAM system
now there's a ram system that has been
everybody's operating with iOS has been
controversial and it's led to
dysfunction so this video is going to
give you a simple explanation of what
the Ram system is and then if you wish
to bail at that point fair enough you
can do that but if you hang around I'm
going to give a fuller explanation by
referencing an article by Dan Larimer
who's the CTO the chief technology
officer of Eos which I think really
helps to understand the way EOS is
developing we have to remember that it's
only the second month of this startup
and the whole Ram system problem that
we've got is very instructive on how EOS
is developing and the solutions they're
being put forward are very instructive
and I think positive about the way give
a positive reflection on the way Neos is
developing so let's get into it right
very quick recap for those of you who
don't know much about EOS what's the big
the big sell on s well compared to say
etherion when you've got 30 transactions
per second what else is going to be
giving you is 1,000 trans persons
actions per second compared to say
aetherium where you are looking at one
block every fourteen point five seconds
you're talking about a block every 500
milliseconds so if we go here to eros
Network Monitor
here and you can see this is
irreversible clocks blocking clocking up
on the system and hammering through at
an incredible rate so this thing is fast
now the latest news to come out today
when we're looking at this one here
block tivity what do we notice look at
this this is truly a historic moment
this is aetherium here this shows you
the activity blockchain activity so if
you go here block tibideaux info we can
see we have got a theory in here this is
the activity on that blockchain and
notice what does this say here this is
at 100% capacity which is indicative of
the problem that we have with the
theorem that it's it's it cannot scale
at the moment 38,000 it says there
38,000 962 unconfirmed transactions so
you've got a significant latency now EOS
is only just starting off it's only
really getting going and what we can see
already the activity on this chain is
more than the activity on assyrians
and we can also see that the other two
blocked chains which are up here are
operating on systems which were
forerunners these are localized
blockchain systems which eos is now a
generalized system because the people
who built yose designer also designed
these to steam and bitshares now the
most important thing is when we get over
here look at this naught point naught
seven percent of capacity we have barely
even got started so that's the good news
that is the good news about EOS more
activity now on our theorem but this is
the problem area that we have to look at
today setting the scene this is the
problem area there are teething problems
with the RAM market that are slowing
development and depressing the token
price and making everyone feel a little
bit scared about things although
personally not me
so let's get into it what are the
problems that we've got with the RAM
market at the moment there are concerns
about RAM speculation which I'm going to
explain in a minute the RAM system high
ram prices have depressed the token
price because the view is there people
who wanted to smaller developers who
wanted to get on a feeling squeezed out
and the volatile it volatility hasn't
led to uncertainty in there for a lack
of development and as one person
correctly pointed out the other day it's
kind of like some of the developers
instead of building houses are now
selling bricks so the article I think
that really does explain what the
problems are is this one here now I've
included this into my Evernote folder
you know just so it's easy for me to
mark it up here so what do we got arrows
block producers traded six thousand six
hundred thousand profit so what we've
got is this article talking about how he
asked the decentralized community where
the governance is is somewhere between
Philadelphia Convention and free-market
Lord of the Flies I quite like that
anything is anywhere near net dramatic
but speculation is definitely stifling
sorry for my spelling they're stifling
stifling development because RAM is a
scarce resource it is allocated within
eos byron an algorithm setting helping
to set price and then people then
obviously can it can buy and sell this
I'll talk to you in a minute about
exactly what this is this is giving rise
to problems as people speculate on RAM
for example one of the big air drops
which was supposed to go ahead we had
ever peed yeah they had a whole lot of
RAM set aside in order to do their
airdrop and then what they did my
understanding is they kept the necessary
bit back they would enable them to do
their airdrop but then they sold the
because they could see that the RAM
prices were overinflated so they decided
to make a quick profit by essentially
shorting at the high price and then
knowing that they think that the price
is going to come down and they're going
to buy back in later on which he said
there's nothing wrong with the them
doing that as far as the creator's down
Larimer and block one as far as the
creators of this system are concerned
because it's built in that we have a
free market in you're able to speculate
another block producer er a OS nation
cause article talks about them as as
doing a similar thing and there's been
criticism from the community but I would
point out from the legal point of view
the Constitution does point out that
none of the operators in it have a
fiduciary duty to maintain token price
or to maintain Ram prices the idea is
you can within the system acting in in a
way that is in line with your own
interest if you're operating in the RAM
market which I'll explain in a minute so
the Constitution makes clear that you
are under no obligation to maintain
system resources is the way it puts it
and the EOS has in has a built in free
market system however the operation of
that system has been dysfunctional so
why is it been dysfunctional that's get
in and have a look at the whole business
of RAM first thing I need to be able to
explain here is the difference between a
OS tokens and a OS Ram one of the big
advantages for anybody who wants to be
an end-user on EOS for example you want
to say if there's a decentralized social
network which I know Dan Larimer is
working on building if there's a
decentralized social network you could
go on and use that social network you
wouldn't even know you're on a
blockchain it will be fast you won't
have to have any tokens you wouldn't
have to pay a single penny big advantage
compared to say doing something on
aetherium now if you're any else token
holder and I've always made it very
clear that I am one of these Heroes
token holders because down the line I've
got plans that may well be their main
be a decentralized application that
lawyers are tomorrow technology could
work on so I have invested in the ears
token in it has any token holder now
what does this give you as an EOS token
holder well it's kind of like you have
some EOS real estate or you've really
got some access to the resources well
what access to do you get is an EOS
token holder where you get access to
computational power or processing power
this is measured in milliseconds so for
example if I'm doing something on the
platform which necessitates a transfer
that transfer or some sort of activity
then they measure that in terms of how
long it lasts milliseconds that's your
bandwidth
so they're all computational bandwidth
now what is referred to as general
bandwidth what we're talking about here
is the amount of data that's being
pushed through this is this is referred
to as byte so I think it's easier to
just talk about CPU and ignore cpu
bandwidth even though people do talk of
it like that CPU that's just processing
power and then bandwidth is how much
data you're putting down there measured
in bytes so if you want to develop on
EOS if you want to build something as a
purse opposed to the person who just
wants to use applications if you want to
develop obviously you've got to have
some EOS tokens and you've also the EOC
tokens giving you the CPU and bandwidth
you've also got to trade some of your
Yost tokens to buy RAM which it's random
access memory now what this Ram is going
to allow you to do is allow you to get
access to resources very very quickly
which you'll need if you're going to
open up accounts and use smart contracts
now a good website to go to is this one
here this here tells you current Ram
Prize it talks about the current network
bandwidth network bandwidth and CPU
bandwidth measured in bytes here for
bandwidth and then CPU measured in
milliseconds so this here gives you an
indication of Graham pricing and so
forth and network pricing so that's a
good place to go for that having dealt
with that let's go simple explanation of
RAM now Ram is a consumable meaning it's
a network resource which developers
needed to buy and then use now where do
you buy it from well what you're gonna
do you're gonna buy it from the system
now people seem to be thinking some
people seem to be confused and think
that you're buying is a secondary market
you are not you're only buying it from
the system now why do you need it well
you need it every time for as I say you
could create a user contract a user
account or to store a smart contract so
you're gonna have your smart contracts
sitting there where you're going to need
to get access to that as you're
operating your DAP so that's what you
use RAM for so Ram you kind of the
system's got a set amount of it and
there's reasons why the longer
explanation later on will explain their
Rams Colossus there's a set amount and
it's locked away so you kind of buy into
it or rent it and then once you've used
it you can sell it back to the system so
you buy RAM and you can sell it back to
the system later on the price is fixed
by a system contract in this simple
explanation ain't gonna get into the
details of how that's done the system
for fixing that price is what has led to
speculation what's led to the
dysfunction as developers have not been
developing is because of the uncertainty
and said that instead there's been some
speculation and RAM which is just
clogging up and holding up the whole
thing and which is led to the price for
eos it's been floating around this area
for a while it's dropped down so this
uncertainty is not helping things at all
okay so that is the way RAM works on a
simple explanation anybody who is happy
with that you can happily bail but I'm
inviting you to hang around a little bit
longer
and have a look at the more detailed
explanation because this is really
instructive on telling us the way
EOS is organized on a functional level
and the way that the people who designed
it are trying to solve this problem on
ramp so let's get into it and have a
look at the more complex explanation so
detailed explanation now for this we're
going to go to this medium article here
which is written by Dan Larimer at the
CTO now a summary of this before we get
into it what does this article say it
says well there was an error in the RAM
configuration or setup that led to
certain volatility the suggestion is
they reset the parameters on this and
then that the block produces then create
more RAM they think were a monad and
Larimer things that this will then
stabilize the RAM market there is also I
should add this is not something that
comes from the article but there's the
possibility of side chains or separate
or linked chains which can come about
where there would be cheaper RAM so I
think long term the RAM situations could
likely to resolve itself let's go in and
have a look at this article here by Dan
Larimer what I've done is I've plugged
it into my Evernote so that it's easy
for me to mark it up so now this article
is complex it's rather technical it took
me a while to get my head around it but
I'm very glad that I did so because it
really is instructive so what Daniel
aramid starts out by doing this thing
okay fine what is Bram required for it's
a system resource
he says fine you need it in order to run
applications now Ram is fundamentally
scarce and there's a reason for this
heõs adopts a free-market approach to
allocating the RAM and the idea is well
the less ram there is available the
price is likely to go higher the more
around there is in the system available
the price is likely to go lower so there
is a market to buy and sell from the
system there is no secondary market you
cannot
sell to other development developers now
an important thing is that setup into
the system there is an algorithm known
as the bank or relay algorithm and this
thing works as a market maker I it is
one half of the means via which prices
are determined so the algorithm here as
I've said acts as a market maker
interacting with demand in order to
determine the price how does it do it
well as it says here the bank or relay
does not Bank or relay does not set the
price it only offers to buy and sell on
behalf of the system and previously
established market rates anytime the
current real market rate that the market
is feeling out there is different than
the current price offered by bank or or
then relay traders will buy or sell Ram
pushing pushing too close closer to the
market determine price now I'm not an
expert on market economics I did in
economics a level but I don't think we
need to go into into much details they
give you an example here if you're
interested in that I think that's enough
depth to know that there is an algorithm
which interacts with the way the market
is working as they've said here RAM is a
commodity and they say it's expensive
and at the moment it's too expensive
which makes it non viable for many
business models this is the key issue
the high prices are squeezing smaller
developers out of the market and I've
seen some videos where developers are
talking about well you know maybe we
should be looking at a fork maybe we
should have a different type of Eos it
because it's open source software where
maybe we should have a different type of
yours where we can set up RAM on a
different way where it's not going to be
so expensive expensive but the idea is
set up under the whole eoz democratic
solution or organization voters can vote
for more RAM or for the system to be
reconfigured to ease the problems
however built
into the system as it is at the moment
under the system contract is as a ram
holder you only get the right to store
data in the contracts you are not
guaranteed any specific price and the
market prices will be set by people
interacting with the system now let's
get into the volatility it looks like
this was because they messed up the
settings so the bank or relay has some
parameters is what they're talking about
here there are some parameters which
impact on how fast the price moves in
response to incoming requests to buy and
sell so if you got incoming requests to
buy and sell then the bank or relay
algorithm is going to respond to that
how quickly it does it is the issue so
due to an unintentional configuration
the bank or relay waits on the EOS
blockchain the parameter was set to
nought point 5 percent rather than 50
percent this introduced some heavy
slippage for buying and selling
quantities which led to volatility so
they've owned up and said well part of
the reason for the volatility is we
cocked up basically so they read a
recommend re setting this parameter well
if it's just a question of tweaking an
internal setting that will be nice to
stabilize the prices so reducing
slippage and volatility provides a more
predictable and stable market so that
and parameter has got to be reset so
there's a proposal that that's going to
go ahead okay now next up bringing down
costs by scaling so as we've seen the
problem with aetherium is that it's
stuck right there at 100% it's having
great problems scaling I'm going to do
future videos looking at EOS versus a
theory I'm on ER on a comparative level
about all the problems there a theorems
got and scaling in the solutions the
ears has come to but as we can see
already EOS has got huge amounts of
headroom it's already got more activity
than Nerium and it's got huge amounts of
headroom
but this has been the big problem block
chains have been struggling to scale
okay the recent price is in a Osram
market have indicated that there is
strong market signal that providing more
ram would be very variable okay now why
did they limit RAM in the first place
well it all comes down to this and this
is why hanging around in this video to
listen to all this detail here is going
to help you because when they set up the
system they realize that dab developers
would have to costs in their whole setup
there will be the cost of buying a full
node setting up and then there will be
the continuing cost of interacting with
the blockchain so we got set up costs
and the cost of interacting with the
blockchain now this is the reason for
keeping things scarce they said keeping
Ram scarce at 64 gigabytes low is the
cost of hosting a full node that's you
setup cost so they thought they'd keep
it low in order to get some all adapt
developers in there but it increases the
cost of interacting with block chains as
you go along which is the RAM price so
they worked out how much it is and they
can say here look if you are deploying a
typical smart contract which is what a
decentralized application would do the
cost is 40,000 at today's RAM prices a
developer attempting to building social
media platform which is what down
Larimer is doing is likely to want to
host that on a full note of their own
okay so they say 39,000 on high-end
hardware and 10k for RAM and that's your
breakeven so call it 40 grand 40000 okay
now then they what they've done having
looked at the way the RAM market has
been operating they said hang on let's
take a step back here and work out what
would be like in the real world
well they said Ram is about $11 per
gigabyte per server and the eos ram
market is pricing ram at four million
dollar bytes per dollars per gigabyte
right this is indicative indicates then
the network as a whole could
real ran out in the real world they
could buy over 300 thousand service for
the same price that speculators are
bidding on the limited 64 gigabytes of
RAM which has been allocated to the eos
chain as it says here so they say the
network could clearly maintain
significant decentralization whilst
raising the cost of a full node based
upon this analysis server versus server
cost setup versus chain costs on running
costs looking at this balance it is
clear that a dramatic increase in
unchain ram with more expensive full
nodes is a cheaper way to go so they are
saying hey look the way we set it up the
first time from the way things are
working now it's clear it wasn't a good
idea so the proposal is we reconsider
the system to give much more ram built
into the system this will have the
effect that costs of full nodes your
setup costs goes up but your interaction
costs EUR am cost goes down and the idea
is that the overall cost should go down
so they're tweaking it so let's just
remember we are in the second month of a
startup this has never been done before
it's already seen to be way way way
faster than aetherium but they are
tweaking it to make sure this thing
works so they're trying to optimize it
we're in that optimization phase so yeah
as a as a as a technologist here I'm
confident that they're spotting what the
problems are and tweaking the engine or
what does this mean so far we haven't
got people developing on it to the
extent we want but I'm confident that
they're gonna do this over time so
what's happened is we've got block 1 has
created a proposed update to the system
contract which will fix we'll add in a
fixed amount of blocks per by sorry
black bytes per block to the RAM supply
so we can go and have a look at the
system contract I've got it here where
is it that's under block ones github so
you can see there
that's I'll put a link to that down in
the description you can go and have a
look at that and say what they've got
this so so this allows for electric
producers to set the RAM rate this will
all also resync bank or parameters so
that's what we were talking about there
the parameters which were not correctly
set set up obviously they don't want
this to suddenly flood out onto the
market so the suggestion is elected
Brock Brock producers can set a
sustainable rate of growth rather than
an instantaneous release so don't
release it all at once as RAM supply
increases are the purview of producers
it is my opinion that no referendum is
needed to automate what they will do so
it's up to the block producers to decide
how to tweak it so that it then gets
released so okay so the conclusions is
meant to be used for developers who want
to build real things and make everyone's
life better absolutely that is why we
are here that is why I'm interested in
what else is doing so I've got my
academic geeky interest in the whole
development of blockchain but then of
course at the end of the day we're not
just sitting here geeking out of
Technology for its own sake we are
looking at what's it going to do to
change the way things are going so free
market and blockchain communities will
adopt and combine approaches to reduce
the total cost of deploying and using
large-scale decentralized applications
RAM is not designed to be artificially
scarce so they said it scarce because
they thought it was gonna lead to a
lower cost that didn't work Plan B we
need to sort this Ram out issue out
quickly but I think they will do so that
was a very interesting article it took
me a while to get my head around it but
I'm really glad I did if you stuck
around to the end I hope that was very
useful for you other issues we've got
when it comes down to Ram is this this
article here
talked about I'll put a link for this
down in the description it talked about
some problems with block produces
experience within problems with rams so
I've got this in Evernote as well so
this article it mentions the bug hunting
program that he also got going this
shelling out serious amounts of money to
make get enough eyes on the bug
situation is a saying in software
development with enough eyes all bugs
are shallow they're shelling out serious
amounts of money to get people to spot
any bugs in the system but that's not
the point of this article I'm not
looking at for that reason I'm looking
at it for this there was also a problem
with sun block producers where ram in
their own settings on their nodes it was
incorrectly configured such that there
was a round crash which two non techie
people means to hit they didn't produce
blocks because sun block produces
crashed when ram usage on the eos
network exceeded one gigabytes now i
don't know exactly why exceeding wanna
kick about it's not the point
either they only had one gigabyte or
they did not configure their node
properly and said it at 64 gigabytes so
it was a configuration issue well this
is in violation of the read producer
agreement well if you're a block
producer you sign an agreement that you
will have a certain number of
specifications to your system you will
configure write X Y Zed way is as per
the agreement well if you haven't done
that if you've messed up and this is the
issue that we have with the block
produces there are some who are not
configuring their system correctly there
are some out there who are not acting as
you would hope not being respected
responsible block producers and all I
would say on this is as per the other
video I will stick a link to it all
about block 1 and their voting power
blog 1 I've got 10% of the votes here
and they have yet to cast their vote
they will be watching the block
producers of working out which ones are
doing a good job or which ones won't so
I think once they decide to act then
they're going to start voting for block
producers
who are doing the job properly looking
at our 21 block producers there are a
lot up here that are only there because
serious whales out there are voting them
in so within the 21 some of these crash
because they weren't set up there are
some very good ones EOS New York US
Canada u.s. Authority us Argentina
Brazil Sweden us debt but there are some
up here this one for example this one
for example this one which are only
there because they are held up by whales
well once block one come in and start to
do their voting as I've said in previous
videos once block one come in they've
got essentially another third on there
they will have a huge effect okay I hope
you found that useful what I try and do
with these videos on this channel is I
know a lot of people are doing 10 minute
videos but I try and go in in in depth I
mean I'm a cadet I'm an academic I'm
gonna be running block chaining courses
will be covering covering the same type
of stuff on this so I'm gonna be doing
blockchain courses for lawyers and so I
really do want to get beneath the hood
and provide a little bit more value if
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podcast is being filmed next week at
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care bye bye
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you
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