Blog manager: Giovanni Capaccioli

Translated by: Lawlinguists

The birth of Affidaty: a story to tell

Affidaty was born in April 2016 thanks to the idea of Dane Marciano, C.E.O. and Founder of the society that, together with the four co-founders partners Niccolò Quattrini, Riccardo Setti, Marco Balduini, Jacopo Perillo and their determination. Nowadays it can be said to be the author of innovative and revolutionary solutions aimed at identifying and deepening the most modern technologies in the field of data handling and sharing.In 2017, Affidaty, transformed itself into a public limited company consolidating its position on the market and developing its own technology, to the point that in November of the same year it became co-founder, together with multinational giants and the Luxembourg state, of Infrachain, an organization that aims at promoting every possible usage and application of the blockchain technology in the Data Protection (G.D.P.R.) field

How an idea was born…

Everything started in 2007 when I decided that I would become the most celebrated building contractor that Europe had ever seen… At that time, I promoted the initiative of Gruppo Leonardo Toscano that saw its foundation in 2008 in the legal form of consortium and I begun to work in the construction field as General Contractor. Those were beautiful years for my career, and at that time, nothing seemed to go against my dream. It wasn’t too long that we were entrusted to carry out prestigious, and of great gratification, works and everything seemed to go in the right way.

However, the disastrous years and the crisis increasingly took their toll, we started to receive delated payments and, over time, this led to growing problems in the associated companies. The lack of finances began to undermine the relations inside the company, damaging the its soul until the dismemberment in 2012. I saw shattering a long-held dream due to the lack of technology means that could have helped to survive several companies in the construction. 

This event hit me like a train: I couldn’t believe that in the smartphone era, where digital recognition is in place, commercial entities still could hide their scarce financial responsibility. 

The bitterness of this failure led me to Tallin, Estonia, where, while being there on business, I met some Italians that migrated to this land full of opportunities. I spent some days with professional people that showed me the several construction sites in progress. 

One morning, shortly before going back to Italy, one of the partners of this initiative and I had breakfast together and, while exiting the shop to reach the airport, I started walking to the car outside the crosswalk to reach it faster. At that point, I felt something grabbing my arm, withdrew, stopped there, surprised and, curious about this act, asked why he stopped me from crossing the street. So, while we were walking on the road, he told me that in Tallin, as for Estonia as a whole, there is a profound respect for the rules and that, there could have been a good chance that somebody ran over me if I didn’t comply with the semaphore signal. 

We headed to the semaphore and, at that point, he brought to my attention a local free flyer which was available in all collection points, as autobus stops and crosswalks. Pointing to the newspaper,  he told me that in Estonia there is even a “pillory” where who commits offences to the rules of the road, not paying and several other misbehaviours to society; he told me about customs of the territory and, listening, I was enlighted by the local customs…

I thought that if this kind of attitude were present in Italy maybe, what happened, wouldn’t have. 

Purposes

The trip to Tallin profoundly changed the way I saw things, and I decided that I had to do something to contribute to a problem that persisted at several levels of society. The dematerialization of borders, money and social relations was leading to a complete loss of value in markets. Since my previous disgraced experiences, I realized that currently, social interactions were focused on appearance rather than on essence, to the point that both honour and individual dignity didn’t matter anymore. 

That was the moment in which, remembering what was happening in Tallin, I had an illumination and thought that if there was a way to track commercial payments digitally, many misadventures could be avoided. So I stood up and started studying possible solutions to bring back in social relations an instrument aimed at fostering Loyalty, Fairness, Transparency and Good faith. It wasn’t long until I came across the Banking Central Risk, where I learned about the techniques used by banks to protect with each other from bad payers. So, I involved an accountant, a lawyer and an economist to discuss what I thought of creating. 

We had several meetings to discuss the possible adverse outcomes of this adventure. However, those didn’t matter, the intentions were too loud compared to risks. 

We started working hard to build on paper a framework that allowed to send a contract and follow its payment in an objective way: the planning and several I.T. architecture inquiries taught us how difficult was to realize such software…

However, after months of work, at the end of 2015, we had an architecture that, at least on paper, could have solved the payment problem by tracking the obligations deriving from contracts and consequent expiring payments, in a way that allowed the creation of a commercial risk central. 

In fact, everything derived from a single finding: if banks protect themselves by identifying payers in a collective information circuit, why this couldn’t be done even for who rents a property, lends a commercial service or offers professional services?

So we founded Affidaty with the purpose of contributing to commercial relations.                                  

Possible commercial C.R. solutions 

We were already in the Big Data era, but no data was available about financial responsibility at the commercial level, and consequently, we thought of an architecture that, through an innovative digital form of trading, contributed to the generation of pieces of information through a “Rating” protocol, or a system that could allow digital operations through a tracking process of contractual obligations. A contractor sent the contract to the committent and when payments were made, the system kept track of the successful transaction following the contractual rules objectively. 

“The debtor’s payment Track Record History, which belongs only to him, would have been registered in a specific container inside his I.D., where it would have been protected with the safest cryptography until he decided to share his buying history with another subject”. The system should have been a ternary programmable and standardized ecosystem, defined as “Pay-Contract-Rating” that should have eased the “on-demand” commercial relationship between traders in a safe and global way that should have enabled to negotiate financial conditions by tracking outcomes and add value. 

How did it work:

Pay:

It was the protocol that enabled value transfers (payments) from one subject to the other through asset exchange, after defining the exchange rules inside the digital contract                         

Contract:

It was the part of the system that allowed anyone to write
the rules of engagement and allowing a seller to digitally register the substantial obligations, allowing to write supplying and payments terms and conditions.

Rating:

The payment obligations and the payment itself matching would generate organized information in a standard format, understandable and reusable. 

Through this system, it could be possible to ensure the persistence of the data regarding the buying behaviour opening new market scenarios on all levels. From international commercial relations, the study of the trends and consumption to economic situations statistical forecast.

Looking back this recalls Libra quite a lot…

Analysis

At the end of the first work round we had a real solution that we could develop and make freely accessible for everybody, however something was wrong, the system wasn’t taking off, received several objections even though it was effectively necessary: people didn’t trust to use it, and consequently we decided to avail of a Deloitte partner that, as a courtesy, would give us a challenger table with several informatics systems and management control experts. 

I remember it as the one hundred question table, where I gave 99 correct answers except one, the hundredth:

“Why should I put my contacts in your data bank? Who grants the confidentiality, Affidaty?”

To this question, as an entrepreneur, I couldn’t refrain from the objective reality that it could be the same as asking to tell to our company every commercial secret: the clients should have given us enormous confidence to accept this condition, and that was an unacceptable request for anybody…

How could we do?

We came back to the working table, conscious that something had to change for this project to see the light. The problem was trust, we couldn’t ask firms to put such expectations in us since they would have never entrusted us with such a high responsibility. 

It was at this point that Professor Andrea della Croce suggested us for the first time the blockchain technology as a possible solution for the trust issue. 

Discovering the blockchain

We started to investigate, studying the few pieces of information available at that time: empty pages…

We arrived limping to the White Paper of Bitcoin, written by Satoshi Nakamoto that, even if discursive, was really hard to understand… After days spent analyzing this document, we interpreted the core technological potential and decided to use this technology that promised to solve the trust issue…

What had changed for real

Nothing compared to what firms like Mastercard, Visa, Union-Pay and others did and do for decades…

Until the advent of blockchain promoted by Satoshi Nakamoto, in fact, there was a conception of security based on centralized systems that, to be kept active, had and have enormous costs to sustain, aimed at granting communication efficiency, systems security and grant that it isn’t possible to hack or steal. 

To these characteristics, we need to add the credibility factor, or “Trust”, that we give to such infrastructure built to determine precisely the parts’ “give and take”. 

For example, let’s imagine how credible we must be to be entrusted to keep the ledger of all expenses made with a debit or credit card at the international level… for this reason, behind these big firms there is always a state component; for Mastercard and Visa there are the F.E.D. and M.F.I., or in other words, the only authorities recognized by credit institutes and banks as trusted. 

In simple terms when someone spends money in whatever shop in whatever part of the world with a debit or credit card on the Mastercard or Visa circuit, this transaction is logged in the centralized and inaccessible ledger to allow access to the banks whose the deal is referred to, allowing them to evaluate precisely how much to withdraw from the money emitter and transfer it to the recipient from which the purchase was made with electronic money. 

Obviously, this kind of management implies enormous maintenance costs for infrastructure, communication lines and organized management and, for this reason, the ledger technology was applied only to the world of money, since only it could have justified such high costs to manage digital assets securely. 

With blockchain technology, this cost went for 100 to 10 and, thanks to this cost reduction, the same process can be applied in fields where it wasn’t possible with previous technologies. 

In fact, the critical change that blockchain brings with itself hits the paradigm of “Authority”, redefining the models of “Trust” in scenarios that would allow infinite “Concepts” able to help new sustainable architectures.

The Smart-Contracts in fact, being secure and inviolable protocols, allow to write in Blockchain trough predefined rules and apply it autonomously by its algorithms and, whatever standard is given to contracts, these always do their job impeccably and inviolably. Consequently, this scenario claimed the crest of most discussed technologies in the last five years. 

How could we had used such technology                        

We then started to explore the possibility to use such technology, at first on bitcoin, but unfortunately it didn’t manage Smart-Contracts that were essential to our Pay-Contract-Rating protocol, so we shifted to Ethereum, and we worked to define the basic principles systematically until we reached the Pay part, where we realized through a simple computation, that it wasn’t fast enough to sustain the numbers that we could have achieved with few tenths of firms…

We then reached the conclusion that with the few public chains available (Ethereum, Bitcoin and others) are significantly limited and don’t allow the expansion of such technology in the industrial field as the whole blockchain system once promised. 

Such public technologies aren’t fast enough and consequently inapplicable to the industry field, where instead would be needed more; these don’t allow paying with FIAT currency, so firms are obliged to open accounts in states where the legal value is recognized; they don’t guarantee who are the managers of the structures where there are the nodes, and consequently the ledger, that, even if anonymous, may be managed everywhere and in an uncontrolled way to the point that it could become centralized again in big mining pools that would have control, as for Genesis Mining and Bitmain, that already have a significant share of consensus percentage. 

This happens for a simple economic reasoning: if everybody can become a miner, the richest miners will become even more significant and encourage small miners to join in their mining farm as cloud miners, since they will have less managing, less individual costs in terms of energy and less administrative problems, so, in all likelihood, everything will centralize in the hands of few deleting the benefit that such technology promised to the world. 

This isn’t the only problem: we need to add the sustainability factor that, as you can read here, represents a real waste of resources: transactions are too costly and don’t allow to carry on systematic action on single hashes, but on the block as a whole limiting the application to aggregated processes.  

At this point, it becomes clearer why even with the high hopes about this technology, there weren’t any widespread phenomenons except for cryptocurrencies…

We realized that public blockchains weren’t suitable to sustain real-life complex scenarios due to the significant, and hidden, limits at the technology level that these carried in themselves.                 

All the previous things forced our firm to evaluate alternative technologies, as private blockchains, so we shifted from one to another in the hope to find solutions that could successfully enable our technology purpose, and consequently we deepened our knowledge before these were described as “D.L.T.”; so experimenting with the complex interfaces of big firms, we encountered unintelligible and foggy scenarios, understanding that something was wrong. 

So, deepening even further, we realized that these private concepts were only a good reason to sell overpriced Cloud services. 

It was clear from the beginning, evaluating the contractual information, that these made developer portals available, after accepting the documentation, which allowed accessing the infrastructure.     

From these documents emerge the corporate intentions and the managing of responsibility at different levels, as the node distribution and the governance centralization.

At this point, we realized that it made no sense to use such technology that, by centralizing the infrastructure control, gave the trust component to a single individual at the enormous price of tenths of hundredths euros per year even for a Start-Up like ours. 

Apples and pears 

We were facing a choice: waste everything and work on something else or keep trying ad find an alternative solution.                         

We rolled our sleeves and worked hard to understand what to do…at the end of a long series of analysis, we found a possible theoretical way, we discussed how we should program the chain and several interfaces. Then, one day, the crucial assembly: we gathered with all technical resources available at that time and, in an extemporaneous way, discussed what to do…

Hours and hours spent discussing the complexity of operating on such code, the economic risks deriving from it if we made bad choices.

One of our historical programmers took the floor with a puzzled look and told me: 

“Dane you want to mix apples and pears in technology that few know, it’s a risky choice”.

Caught up in the excitement I decided that I shouldn’t be influenced from the perspective of becoming the supplier of the underlying technology and, (…), took some days to think before the final decision… The day after I asked for sing to the unknown, the question was simple, should I mix apples and pears knowing that I don’t have enough financial resources to take on this adventure, or should I change course and adapt our structure to existing technologies carrying around their limits? Days went by, and the weekend arrived, during which my mother visited me. We spoke about the intentions in my heart for a long time, then I asked for advice, and she told me that I had to do what I felt like doing…It got late, so I decided to follow her to her car, a few meters away from my garage. Nearby her car I saw an abandoned picture, there was glass all around, and the frame was drafty. My curiosity took over the prejudice, and I turned it around to see what was painted on it…

Incredibly it was a bidimensional black and white picture of apples and pears…

I didn’t hesitate, took a picture of the painting and sent it to our product manager telling in astonishment what happened… we had a call, and I said to him that this was the sign that I was looking for and what to do was clear: we would have to go through the Valley of Death.

We started right away to organize ideas to start this adventure at the end of 2016, lost in enthusiasm and astonishment… We suffered and worked hard since then, not looking the hour, going through days full of meetings and phone calls at any time of the day and night to assist this project. 

The keyword was resilience: we worked for years with passion trying to make this technology, which promised to offer an alternative to cloud services and the “centralized trust” paradigm, scalable and able to handle information through processes organized by autonomous contracts, the so-called Smart-Contracts.

The painting is hung in our meeting room, as a reminder that will is power…              

The birth of T.R.I.N.C.I. & Independentchain

 Our ideal blockchain model, “Trust Rating International Network Central Intelligence”, operates multidimensionally abstracting functions while maintaining a unique code and scalability by default in the context of a fundamental synoptic philosophy.  

It is capable of connecting Smart-Contracts following deterministic criteria, demanding fiduciary functions to the blockchain.                         

Substantially it allows creating interactive Smart-Contract that may contain different functions. 

It is a smart system that offers an alternative to conventional programming:                      

Ratio, -ōnis

• • • • •

Element definition

Functional order

Cross-functional schemas 

Modules

Loop (->∞ combinatorial)

The knowledge that we could achieve even more with this engine.

Suddenly we realize that we could achieve even more with this engine, that there weren’t limits to imagination, that everything was conceivable with this technological model… So, we started to think big, even bigger…                          

We imagined a model to interconnect people on multiple social levels, intervening on existing protocols with the aim of achieving tangible benefits in processes:

  1. Cost reduction/ Waste reduction/ Lost or missing resources recovery
  2. Consolidation of the turnover/ Consolidation of margins/ Consolidation of the market
  3. Rise in turnover/ Rise in margins/ Rise in the number of clients                              

At this moment, we reached full awareness that it wasn’t enough to have the engine, we needed to realize a node structure fully compliant with the present legislation to be attractive to firms, and consequently we started working to achieve the hardware capable of performing on electrical consumption and of working at several temperatures and so on…

So we rolled up our sleeves another time and went back to the table, and at the end, after several attempts, we reached the goal…

I recall as if it was today, the day I was in Buenos Aires for 2018 G20 when they called me from the Concilium debuting with these words:

“We did it, Boss, the test outcomes signal stability and efficiency at more than double our expectations

It was a perfect moment of joy, the dream was becoming more and more real, we had the node prototype compliant with E.U. regulation, allowing the distribution and the decentralization of infrastructures without compromising stability. 

We could finally realize a decentralized and certified structure made of nodes optimized for high performances while keeping energy consumption low, allowing to mine T.R.I.N.C.I. while making a revenue… 

From here, the inspiration…