CPChain (CPC) Review / Analysis – The Blockchain For IoT Solutions?
Cyber Physical Chain (CPC), is a blockchain network tailored for the Internet of Things (IoT), aimed at improving current IoT infrastructure. The team behind the project pinpointed the problems that current blockchain solutions face in regards to IoT integration, and decided to offer a blockchain specifically designed to tackle those problems. The project has been underway since 2015, with the team conducting academic research on the integration of blockchain technology and IoT – constructing the theoretical framework and structure for CPChain.
Among other things, the network should: reduce integration costs for IoT devices, enable the storage and sharing of large-scale IoT data, ensure user privacy, and increase the value of the data produced by IoT devices. In essence, the platform will create infrastructure enabling data acquisition, data storage, sharing, and provide an ecosystem for IoT applications to run frictionlessly. From the IoT side, CPChain aims to develop wearable device prototypes (hardware pieces) which will enable these to run the CPChain blockchain. However, the team intends to collaborate with hardware suppliers to produce them – allowing the team to fully concentrate on the infrastructure building.
We explained in our Blockchain In: Internet of Things article that current IoT infrastructure suffers from security, privacy, and ultimately scaling issues. The problem is that current blockchain infrastructure is not to able to handle the amount of data that IoT devices produce and to compute it quickly enough. However, we see blockchain technology being a good complement to IoT due to the fact that it not only allows for privacy and security, but also for autonomous transactions between machines with the help of smart contracts.
Ref: CPChain official website
The Protocol (click here to skip to the Team and Partnerships section)
One problem with many blockchains, such as in the case of Bitcoin or Ethereum, is that all nodes have to agree on a transaction before the transaction can be written into the blockchain – creating a lot of redundancy. This leads to a problem for DApps and Big Data computation as they need to produce real-time information flows for applications such as real-time dashboards, or fast agreement between data providers that a specific transaction was made, which is crucial in Big Data analysis and business intelligence.
The response from CPChain is to create a parallel architecture system, with the controlling layer (the blockchain) being linked to the data layer but not dependent on it. In essence, the control layer is the blockchain which will “supervise” data interaction. In contrast, the data layer is the IoT component. The rationale behind this architecture is that the blockchain only computes the data and hashes, reducing block size but also reducing the amount of data to be computed, while in the meantime, maintaining data integrity and accuracy.
Ref: CPChain’s whitepaper
The Data Layer
The physical layer engulfs everything that captures data and is the base for data acquisition. Interestingly, the team mentions that the devices joining the network will need to have the capacity to communicate with the blockchain network. These physical objects would also have a virtual machine, enabling them to encrypt and form consensus.
The data layer regroups all the data specific computations, from the cleansing, processing, structuring and compressing. This is where the data receive their hash value (ID) and, the IDs are sent to blockchain while the data are sent to the cloud. The hashes which will go into the blockchain will match the data in the cloud when a computation or transaction is performed in order to verify that the two reconcile. On top of the data layer, we have the contact layer which contains the smart contracts – enabling IoT seamless payments and other things. Finally, the application layer is the layer where DApps will be.
The Control Layer
As we mentioned, in order to reduce confirmation redundancy, and improve confirmation times, CPChain decided to separate its blockchain layer from the data layer. Additionally, the separate architecture enables the data not to be stored on the blockchain, reducing block sizes. If you are more technically inclined, this research paper written by the CPChain team gives detailed insight into their plans.
Another approach which CPChain takes, in the same vein as WTC with their child chains, is that CPChain, enables the creation of industry chains along their main chain, with the sidechains having their own lightweight consensus mechanism. As we mentioned earlier, CPChain aims at being scalable, which is why they decided to employ this system. Sidechains enable each blockchain to be optimised for their industry needs, as well as to decrease the burden on the main chain. With this system in place, CPChain will allow for different industries to create their own application layers.
Ref: CPChain’s whitepaper
Dr. Long, founder and CEO of CPChain, has been working on CPChain’s concept since 2015. With his team he has conducted academic research concerning the integration of blockchain technology and IoT, creating the theoretical framework behind CPChain. He is a professor at Jiao Tong University, and has published more than 50 academic articles on IoT and AI related topics. His role in the team is to lead the R&D component of the project.
Co-founder Dr. Zhao Bin has a similar academic background, but worked as a Chief Engineer at Shanghai Bell, the R&D arm of Nokia, and four years in the IoT department of Alcatel Lucent. In contrast with Dr. Long whose focus is primarily on R&D, Dr. Zhao is in charge of development and operations from a business perspective. The rest of the team hasn’t been revealed, but is claimed to be composed of 20 people.
We do see Ph.D. being in charge of the project as very beneficial as the technology is still in its infancy, and as blockchain technology relies heavily on mathematics and cryptography – a single mathematical error could lead to the network failing. Additionally, having researched IoT for many years, the team is aware of the problems that the industry faces and can easily conceptualise ideas. However, the lack of business know-how could be problematic as other platforms may be better at securing partnerships, trials, and therefore gaining the first-mover advantage in terms of real-world implementation.
Concerning the partnerships, and what brought our attention to the project in the first place, is the fact that the team listed its angel investors on its website. However, the list disappeared and has been replaced with mentions within the news section, with HPB, QTUM, and ETP Metaverse appearing, but VeChain no longer being mentioned. In a recent Reddit AMA, it was claimed that the cooperation seems more, as of now, on increasing awareness of blockchain technology rather than true technological partnerships; this makes sense as all the mentioned companies are based in Shanghai. Concerning VeChain, the team hinted towards future collaboration by saying in their AMA that “[..] we are expecting more tech collaboration with projects, such as VeChain”.
In regards to non-crypto “partnerships”, CPChain currently runs a pilot program with SAIC Motor Corporation Limited, a Chinese state-owned automotive manufacturing company. As part of the partnership, SAIC deployed 200 electric vehicles on the campus of Jiao Tong University, with 3 being given to the CPChain team as a direct testing platform for the development of an electric car data center. It is worth mentioning that CPChain is not the only project to be connected to SAIC, as Elastos (ELA) is also developing a platform for applications for SAIC automotive control systems, and VeChain is partnered with one of SAIC’s client.
The team also recently partnered with Zhichao Medical, a company part of Hunan provincial health industry park who are working on using AI to diagnose illnesses and diseases. The team created a medical robot which takes 4.8 seconds to scan and diagnose 100 medical records – with the company claiming that the diagnostic accuracy of the algorithm is 20% higher than humans. The aim of this partnership is to enable the general public to receive instant diagnoses and treatments, without having to go through the company or any medical center. Zhichao, in turn, would benefit by not only receiving payment for the use of its algorithm on the CPChain network, but also by increasing the reach of the company and providing them with more data to train its algorithm. To picture how the system would work, a doctor in France could send a patient’s encrypted data to the CPChain network, and receive an instant diagnosis.
The role of CPC, the native token of CPChain, is similar to the role of tokens within other platforms – to power the network, as a voting right, and for transactional purposes. Moreover, the network will have a masternode system, and therefore tokens will be needed in order to be able to confirm transactions, and DApp developers will need to lock a certain amount of CPC (calculated in regards to the resources that the application uses on the network).
Concerning masternodes, the information will be released after the CPC mainnet goes live in October. The rewards system will be based on the CPC amount the nodes hold as well as the computing power they provide to the network. No further information concerning the economic model has been released yet.
The IoT industry is certainly one of the industries which will benefit the most from blockchain technology due to the reasons we encompassed in our Blockchain In: Internet of Things article. Among other things, blockchain will enable higher network security, heightened user privacy, lower fees, and payment automation, with the help of smart contracts. However, it is important to understand that we are still far from adoption and implementation of blockchain technology within IoT, at least at any appreciable scale.
The main risk we see concerning CPChain is that the competition within the blockchain for IoT space is fierce. Not only do we have many companies within the public blockchain space such as IOTA, VeChain, WTC, and INT, among others, but also from centralised legacy companies such as IBM, Huawei, Alibaba, or Tencent, which are already developing in-house private blockchain networks to run their IoT devices. These companies not only have the money and talent availability, but also have the influence over other companies to join their networks if they desire to use their services. For instance, Tencent has over one billion people connected through WeChat (“the Chinese WhatsApp”, with more options and services). The company could oblige blockchain-based projects to run on its proprietary blockchain in order to have their services integrated within the application.
One “red flag” is that we have little information concerning the project advancement in regards to both R&D as well as business development. VC’s possess insider information which enables them to direct the company in the right direction and to raise concerns if there is a lack of advancement. However, as a sole investor, one does not possess this information, and given the fact that CPChain has been crowdfunded by the public and is open-source, we believe that more transparency is needed. To “fight” the problem, the team decided to boost its marketing efforts, such as releasing weekly updates to the community, expanding their marketing staff, and trying to involve the community to a greater extent.
Ref: CPChain’s Twitter account.
In terms of partnerships, the one with Zhichao is promising, as it will enable CPChain to deploy globally, and potentially lead to mass adoption for the detection of diseases, due to the added value to patients the service provides. In medical use, the fact that blockchain technology enables encryption, transparency, and security, thus, not leading to issues when sensitive medical data is being dealt with, is really a way for companies to scale as they would be able to reach many customers which might have issues concerning sending sentivie information to Chinese companies. If the trial is successful, it would be an encouraging sign to other companies in the medical industry, as well as many others.
Last but not least, at the time of writing, the market cap of the coin is sitting at $35 million, and the coin is only available on BiBox, Etherdelta, and IDEX. Any positive catalyst, such as an exchange listing, partnership reveal, masternode explanation, mainnet release, among other things, could potentially move the market upward. Concerning the downside risk, the fact that Quantum, Metaverse ETP, HPB, and VeChain have backed the company, is highly positive, as first it means that from an architectural standpoint the project has a high potential, and second because these projects likely wouldn’t associate their names with a project deemed not good enough.
Given the lack of information provided by the CPChain team in relation to the project’s business development, and the long-term view of the project, as seen with their roadmap, the power of centralised corporations, and the high level of competition between blockchain projects, we see CPChain as a highly speculative investment. Moreover, despite the trial phase with SAIC, nothing tangible has been provided by the team so far, giving us little idea if the project is still at whitepaper stage or more advanced; we’d love for the team to disclose more information related to its business development plan and to make its go-to-market strategy clearer.
To summarise, we are fond of projects working on building blockchain infrastructure as they are not only some of the biggest winners in the space – with most top 20 coins being blockchain infrastructure – but also fundamental to the industry, as DApps need platforms to run on. While we are still in the very early days of the project, nothing tangible has yet been demonstrated. However, given the fact that the team seems highly skilled when it comes to the technical side of the incorporation of these two technologies – supported by the fact that VeChain and Qtum are invested in the projects – we do believe that the team possesses the tools to achieve their mission to create tomorrow’s IoT infrastructure, and that any positive catalyst can skyrocket the project.
As always, this is not financial advice. This article is based on personal opinion, and we advise everyone to read CPChain’s white paper, and check through their official webpage, before investing. Do your own research, and consult a financial advisor if needed.
Disclaimer: We do not hold CPC.
Jacek graduated with an M.A. in Finance from the Shanghai University of Finance and Economics. He lived in Europe and Asia, and always loved to dig into papers and research projects to really understand the key drivers and trends. He’s passionate about blockchain’s business application, the sharing economy, and FinTech.