APOLLO Blockchain White Paper

APOLLO
White Paper Version 1.0
– December 5, 2017
Contents

Abstract............................................................................................................................................ 2
Realizing the Potential of Blockchain ............................................................................................ 2
What is Blockchain? ....................................................................................................................... 2
1. APOLLO Overview .................................................................................................................. 4
2. Core technologies ................................................................................................................... 5
2.1 Proof of Stake .................................................................................................................. 5
2.1.1 APOLLO’s Proof of Stake Model ................................................................................ 6
2.2 Tokens .............................................................................................................................. 7
2.3 Network Nodes ................................................................................................................ 7
2.4 Blocks ............................................................................................................................... 8
2.4.1 Block Creation (Forging) ............................................................................................. 8
2.4.2 Accounts..................................................................................................................... 11
2.4.3 Transactions............................................................................................................... 12
2.5 Cryptographic Foundations .......................................................................................... 15
3. Core Features........................................................................................................................ 17
3.1 Basic Payments ............................................................................................................. 17
3.2 Crypto Messaging.......................................................................................................... 17
3.3 Asset Exchange ............................................................................................................. 17
3.4 P2P Marketplace ........................................................................................................... 17
3.5 Device Portability ........................................................................................................... 17
4. Proof of Work vs Proof of Stake .......................................................................................... 18
4.1 Reward Model ................................................................................................................ 18
4.1.1 What is the APOLLO Forging Block Reward? ........................................................ 19
4.1.2 How is the Block Reward Determined? ................................................................... 19
4.1.3 Importance of the Block Reward .............................................................................. 19
Conclusion ..................................................................................................................................... 20

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References .................................................................................................................................... 21

Abstract

Realizing the Potential of Blockchain

The internet is entering a second era that’s based on blockchain. The last few
decades brought us the internet of information. We are now witnessing the rise of the
internet of value. Where the first era was sparked by a convergence of computing
and communications technologies, this second era will be powered by a clever
combination of cryptography, mathematics, software engineering and behavioural
economics.

It is blockchain technology, also called distributed ledger technology. Like the

internet before it, the blockchain promises to upend business models and disrupt
industries. It is pushing us to challenge how we have structured society, defined
value and rewarded participation.

What is Blockchain?

Each blockchain, like the one that uses bitcoin, is distributed: it runs on computers
provided by volunteers around the world; there is no central database to hack or shut
down. We can send money and soon any form of digitized value – from stocks and
bonds to intellectual property, art, music and even votes – directly and safely
between us without going through a bank, a credit-card company, PayPal or Western
Union, social network, government or other middleman.

Blockchain is encrypted: it uses heavy-duty encryption involving public and private

keys (rather like the two-key system to access a safety deposit box) to maintain
virtual security.

In many cases, blockchain is public: anyone can view it at any time because it
resides on the network, not within a single institution charged with auditing
transactions and keeping records. No one can hide a transaction, and that makes
bitcoin more traceable than cash.

Blockchain is, for the most part, inclusive. The blockchain through what he called
“simplified payment verification” mode that can work on a mobile device. Now
anyone with a flip phone can participate in the global economy; no documentation is
required to be trusted.

Blockchain is immutable. Within minutes or even seconds, all the transactions

conducted are verified, cleared and stored in a block that is linked to the preceding
block, thereby creating a chain. Each block must refer to the preceding block to be
valid. This structure permanently timestamps and stores exchanges of value,
preventing anyone from altering the ledger.

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Blockchain is historical. The blockchain is a distributed ledger representing a network

consensus of every transaction that has ever occurred.

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1. APOLLO Overview

For an entire electronic economy to be based on a fully decentralized, peer-to-peer

solution, it must be able to do the following: process transactions securely, quickly
and efficiently, at the rate of thousands per hour or more; provide incentives for
people to participate in securing the network; scale globally with a minimal resource
footprint; offer a range of basic transaction types that launch cryptocurrencies past
the core feature of a payment system alone; provide an agile architecture that
facilitates the addition of new core features, and allows for the creation and
deployment of advanced applications; and be able to run on a broad range of
devices, including mobile ones. APOLLO (pronounced “APO”) satisfies all these
requirements.

APOLLO is a proof of stake (PoS) cryptocurrency, constructed from scratch in

opensource Java. A total quantity of 10 billion available tokens were distributed in
the genesis block. Curve25519 cryptography is used to provide a balance of security
and required processing power, along with more commonly-used SHA256 hashing
algorithms.

Blocks are generated every 60 seconds, on average, by accounts that are unlocked
on network nodes. Since the full token supply already exists, APOLLO is
redistributed through the inclusion of transaction fees which are awarded to an
account when it successfully creates a block. This process is known as forging, and
is akin to the “mining” concept employed by other cryptocurrencies. Transactions are
deemed safe after 10 block confirmations, and APOLLO’s current architecture and
block size cap allows for the processing of up to 367,200 transactions per day.

APOLLO transactions are based on a series of core transaction types that do not
require any script processing or transaction input/output processing on the part of
network nodes. These transaction primitives allow core support for:
• a fully-decentralized asset exchange
• alias creation, transfer and sale
• storage of small, optionally-encryptable strings of data on the blockchain
• a digital goods store
• account control features

By leveraging these primitive transaction types, APOLLO’s core can be seen as an

agile, base-layer protocol upon which a limitless range of services, applications, and
other currencies can be built.

Ongoing APOLLO development includes the implementation of a novel Transparent

Forging feature which will allow a transaction processing capacity increase of two
orders of magnitude using a deterministic block generation algorithm, coupled with
additional network security mechanisms. The latest development roadmap also
outlines the following short-term feature additions to the APOLLO core:

• a voting system
• asset exchange dividend payments
• a monetary system for facilitating the creation of new cryptocurrencies
and associated services that are secured by the APOLLO blockchain

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• atomic cross-chain trading, multi-signature transactions and escrow features

• additional mechanisms for securing the APOLLO blockchain, including penalties for
accounts that do not behave as expected on the network

This version of the whitepaper documents features and algorithms that are
implemented in APOLLO of version 1.0. Future revisions will be made to reflect
additional planned features and algorithm changes.

2. Core technologies

2.1 Proof of Stake

In the traditional Proof of Work model used by most cryptocurrencies, network

security is provided by peers doing “work”. They deploy their resources
(computation/processing time) to reconcile double-spending transactions, and to
impose an extraordinary cost on those who would attempt to reverse transactions.
Tokens are awarded to peers in exchange for work, with the frequency and amount
varying with each cryptocurrency’s operational parameters. This process is known as
"mining". The frequency of block generation, which determines each
cryptocurrency’s available mining reward, is generally intended to stay constant. As
a result, the difficulty of the required work for earning a reward must increase as the
work capacity of the network increases.

As a Proof of Work network becomes stronger, there is less incentive for an

individual peer to support the network, because their potential reward is split among
a greater number of peers. In search of profitability, miners keep adding resources in
the form of specialized, proprietary hardware that requires significant capital
investment and high ongoing energy demands. As time progresses, the network
becomes more and more centralized as smaller peers (those who can do less work)
drop out or combine their resources into "pools".

Bitcoin’s creator, Satoshi Nakamoto, intended for the bitcoin network to be fully
decentralized, but nobody could have predicted that the incentives provided by Proof
of Work systems would result in the centralization of the mining process. This leads
to possible vulnerabilities. The GHash.io bitcoin pool has reached 51% of the bitcoin
mining power in the past, and the top five bitcoin mining pools make up 70% of the
Bitcoin network’s hashing power. The concept of decentralization is at risk of being
completely lost.

In the Proof of Stake model used by APOLLO, network security is governed by peers
having a stake in the network. The incentives provided by this algorithm do not
promote centralization in the same way that Proof of Work algorithms do, and data
shows that the APOLLO network has remained highly decentralized since its
inception.

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2.1.1 APOLLO’s Proof of Stake Model

APOLLO uses a system where each "coin" in an account can be thought of as a tiny
mining rig. The more tokens that are held in the account, the greater the chance that
account will earn the right to generate a block. The total "reward" received as a result
of block generation is the sum of the transaction fees located within the block.
APOLLO does not generate any new tokens as a result of block creation.
Redistribution of APOLLO takes place as a result of block generators receiving
transaction fees, so the term "forging" (meaning in this context "to create a
relationship or new conditions") is used instead of “mining”.

Today, the block reward model also incorporates into APOLLO blockchain design
(for details refer to 4.1 Reward Model).

Subsequent blocks are generated based on verifiable, unique, and almost-

unpredictable information from the preceding block. Blocks are linked by virtue of
these connections, creating a chain of blocks (and transactions) that can be traced
all the way back to the genesis block.

Block generation time is targeted at 60 seconds, but variations in probabilities

have resulted in an average block generation time of 80 seconds, with occasionally
very long block intervals.

The security of the blockchain is always of concern in Proof of Stake systems. The
following basic principles apply to APOLLO’s Proof of Stake algorithm:

• A cumulative difficulty value is stored as a parameter in each block, and

each subsequent block derives its new “difficulty” from the previous block’s
value. In case of ambiguity, the network achieves consensus by selecting
the block or chain fragment with the highest cumulative difficulty. This
is covered in more detail in 2.4.1.

• To prevent account holders from moving their stake from one account to another as
a means of manipulating their probability of block generation, tokens must be
stationary within an account for 1,440 blocks before they can contribute to the block
generation process. Tokens that meet this criterion contribute to an account’s
effective balance, and this balance is
used to determine forging probability.

• To keep an attacker from generating a new chain all the way from the genesis
block, the network only allows chain re-organization 720 blocks behind the current
block height. Any block submitted at a height lower than this threshold is rejected.
This moving threshold may be viewed as APOLLO’s only fixed checkpoint.

• Due to the extremely low probability of any account taking control of the blockchain
by generating its own chain of blocks, transactions are deemed safe once they are
encoded into a block that is 10 blocks behind the current block height.

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2.2 Tokens

The total supply of APOLLO is 10 billion tokens, divisible to six decimal places.

The existence of anti-tokens in the genesis account has a couple of interesting side
effects:

• the genesis account cannot issue transactions of any kind, since its balance is
negative and it cannot pay transaction fees. As a result, the private passphrase for
the genesis account is free for anyone to use.

• any tokens sent to the genesis account are effectively destroyed, since that
account’s negative balance will cancel them out. Several thousand APOLLO tokens
have been burned in this manner.

• APOLLO assets may also be burned by transferring them to the genesis account.
The choice of the word tokens is intentional due to APOLLO’s intention to be used as
a base protocol that provides numerous other functions. APOLLO’s most basic
function is one of a traditional payment system, but it was designed to do far more.

2.3 Network Nodes

A node on the APOLLO network is any device that is contributing transaction or

block data to the network. Any device running the APOLLO software is seen as a
node.

Nodes can be subdivided into two types: hallmarked and normal. A hallmarked node
is simply a node that is tagged with an encrypted token derived from an account’s
private key; this token can be decoded to reveal a specific APOLLO account address
and balance that are associated with a node. The act of placing a hallmark on a
node adds a level of accountability and trust, so hallmarked nodes are more trusted
than non-hallmarked nodes on the network. The larger the balance of an account
tied to a hallmarked node, the more trust is given to that node. While an attacker
might wish to hallmark a node in order to gain trustworthiness within the network and
then use that trust for malicious purposes; the barrier to entry (cost of APOLLO
required to build adequate trust) discourages such abuse.

Each node on the APOLLO network has the ability to process and broadcast both
transactions and block information. Blocks are validated as they are received from
other nodes, and in cases where block validation fails, nodes may be “blacklisted”
temporarily to prevent the propagation of invalid block data.

Each node features built-in DDOS (Distributed Denial of Services) defence

mechanisms which restrict the number of network requests from any peer to 30 per
second.

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2.4 Blocks

As in other cryptocurrencies, the ledger of APOLLO transactions is built and stored

in a linked series of blocks, known as a blockchain. This ledger provides a
permanent record of transactions that have taken place, and also establishes the
order in which transactions have occurred. A copy of the blockchain is kept on every
node in the APOLLO network, and every account that is unlocked on a node (by
supplying that account’s private key) has the ability to generate blocks, as long as at
least one incoming transaction to the account has been confirmed 1,440 times. Any
account that meets these criteria is referred to as an active account.

In APOLLO, each block contains up to 255 transactions, all prefaced by a 192-byte

header that contains identifying parameters. Each transaction in a block is
represented by a maximum of 128 bytes, and the maximum block size is 256KB.

All blocks contain the following parameters:

 A block version
 A block timestamp, expressed in seconds since the genesis block
 The ID and hash of the previous block
 The number of transactions stored in the block
 The total amount of APO transaction volumes in the block
 The total amount of transaction fees in the block
 The payload length of the block
 The hash value of the block payload
 The account’s public key generated by the block
 The block’s generation signature
 A signature for the entire block

2.4.1 Block Creation (Forging)

Three values are key to determining which account is eligible to generate a block,
which account earns the right to generate a block, and which block is taken to be the
authoritative one in times of conflict: base target value, target value and cumulative
difficulty.

Base Target Value In order to win the right to forge (generate) a block, all active
APOLLO accounts “compete” by attempting to generate a hash value that is lower
than a given base target value. This base target value varies from block to block, and
is derived from the previous block’s base target value multiplied by the amount of
time that was required to generate that block.

Target Value Each account calculates its own target value, based on its current
effective stake. This value is:

T = Tb x S x Be

where:
T is the new target value

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Tb is the base target value

S is the time since the last block, in seconds
Be is the effective balance of the account

As can be seen from the formula, the target value grows with each second that
passes since the timestamp of the previous block. The maximum target value is
and the minimum target value is one half of the previous block’s
base target value.

This target value and the base target value are the same for all accounts attempting
to forge on top of a specific block. The only account-specific parameter is the
effective balance parameter.

Cumulative Difficulty The cumulative difficulty value is derived from the

base target value, using the formula:

where:
Dcb is the difficulty of the current block
Dpb is the difficulty of the previous block
Tb is the base target value for the current block

The Forging Algorithm

Each block on the chain has a generation signature parameter. To participate in the
block forging process, an active account cryptographically signs the generation
signature of the previous block with its own public key. This creates a 64-byte
signature, which is then hashed using SHA256. The first 8 bytes of the resulting
hash gives a number, referred to as the account’s “Hit.

The Hit is compared to the current target value. If the computed Hit is lower than the
target, then the next block can be generated. As noted in the target value formula,
the target value increases with each passing second. Even if there are only a few
active accounts on the network, one of them will eventually generate a block
because the target value will become very large. The corollary of this is that user can
estimate the time that will be required for any account to forge a block by comparing
that account’s Hit value to the target value.

The last point is significant. Since any node can query the effective balance for any
active account, it is possible to iterate through all active accounts in order t o
determine their individual Hit value. This means it is possible to predict, with
reasonable accuracy, which account will next win the right to forge a block.

A shuffling attack could be mounted by moving stake to an account that will generate
the next block, which is another reason why a APOLLO stake must be stationary for
1,440 blocks before it can contribute to forging (via the effective balance value).
Interestingly, the new base target value for the next block cannot be reasonably
predicted, so the nearly-deterministic process of determining who will forge the next
block becomes increasingly stochastic as attempts are made to predict future blocks.

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This feature of the APOLLO forging algorithm helps form the basis for the
development and implementation of the Transparent Forging algorithm.

When an active account wins the right to generate a block, it bundles up to 255
available, unconfirmed transactions into a new block, and populates the block with all
of its required parameters. This block is then broadcast to the network as a
candidate for the blockchain.

The payload value, generating account, and all of the signatures on each block can
be verified by all network nodes who receive it. In a situation where multiple blocks
are generated, nodes will select the block with the highest cumulative difficulty value
as the authoritative block. As block data is shared between peers, forks (non-
authoritative chain fragments) are detected and dismantled by examining the chains’
cumulative difficulty values stored in each fork.

There are two conditions that an account needs to satisfy before it can start forging:

The account needs to have an effective balance of at least 1,000,000 APO. That is, it
needs to have had a balance of 1,000,000 APO (or more) over the last 1440 blocks /
24 hours. This is needed because the forging algorithm depends on the stake of the
user. The account needs to have at least one outgoing transaction, also confirmed
1440 times.

The passphrase is the the account's private key, a public key is obtained only after at
least one outgoing transaction is executed and confirmed. This can be done in
several ways, notably by sending 1 APO to your own account (or someone else's),
by sending message using the crypto messaging feature or by registering an alias.

When these two conditions are met, a 1,000,000 APO effective balance and public
key published, the account is eligible to forge.

Note that forging will stop if the effective balance drops below 1,000,000 APO.

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Balance leasing
Since the ability for an account to forge is based on the effective balance parameter,
it is possible to “loan” forging power from one account to another without giving up
control of the tokens associated with the account. Using a transaction of the “account
control” type, an account owner may temporarily reduce an account’s effective
balance to zero, adding it to the effective balance of another account. The targeted
account’s forging power is increased until the end of a time period specified by the
original account owner, after which the effective balance is returned to the original
account.

Accounts with leased forging power generate blocks more often and earn more
transaction fees, but those fees are not automatically returned to lease accounts.
With a bit of coding, however, this system allows for the creation of nearlytrustless
forging pools that can make payouts to participants.

2.4.2 Accounts

APOLLO implements a brain wallet as part of its design: all accounts are stored on
the network, with private keys for each possible account address directly derived
from each account’s passphrase using a combination of SHA256 and Curve25519
operations.

Each account is represented by a 64-bit number, and this number is expressed as

an account address using a Reed-Solomon error-correcting notation that allows for
detection of up to four errors in an account address, or correction of up to two errors.
This format was implemented in response to concerns that a mistyped account
address could result in tokens, aliases, or assets being irreversibly transferred to
erroneous destination accounts. Account addresses are always prefaced by “APO-”,
making APOLLO account addresses easily recognizable and distinguishable from
address formats used by other cryptocurrencies.

The Reed-Solomon-encoded account address associated with a secret passphrase

is generated as follows:

1. The secret passphrase is hashed with SHA256 to derive the account’s

private key.
2. The private key is encrypted with Curve25519 to derive the account’s
public key.
3. The public key is hashed with SHA256 to derive the account ID.
4. The first 64 bits of the account ID are the visible account number.
5. Reed-Solomon encoding of the visible account number, prefixed with “APO-”,
generates the account address.

When an account is accessed by a secret passphrase for the very first time, it
is not secured by a public key. When the first outgoing transaction from an account is
made, the 256-bit public key derived from the passphrase is stored on the blockchain,
and this secures the account. The address space for public keys (2^256) is larger
than the address space for account numbers (2^64), so there is no one-to-one
mapping of passphrases to account numbers and collisions are possible. These

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collisions are detected and prevented in the following way: once a specific
passphrase is used to access an account, and that account is secured by a 256-bit
public key, no other public-private key pair is permitted to access that account
number.

Account Balance Properties. For each APOLLO account, several different types of
balances are available. Each type serves a different purpose, and many of these
values are checked as part of transaction validation and processing.

• The effective balance of an account is used as the basis for an account’s forging
calculations. An account’s effective balance consists of all tokens that have been
stationary in that account for 1,440 blocks. In addition, the Account Leasing feature
allows an account’s effective balance to be assigned to another account for a
temporary period.
• The guaranteed balance of an account consists of all tokens that have been
stationary in an account for 1,440 blocks. Unlike the effective balance, this balance
cannot be assigned to any other account.

• The basic balance of an account accounts for all transactions that have had at least
one confirmation.

• The forged balance of an account shows the total quantity of APOLLO that have
been earned as a result of successfully forging blocks.

• The unconfirmed balance of an account is the one that is displayed in APOLLO

clients. It represents the current balance of an account, minus the tokens involved in
unconfirmed, sent transactions.

• Guaranteed asset balances lists the guaranteed balances of all the assets
associated with a specific account.

• Unconfirmed asset balances lists the unconfirmed balances of all the assets
associated with a specific account.

2.4.3 Transactions

Transactions are the only means APOLLO accounts have of altering their state or
balance. Each transaction performs only one function, the record of which is
permanently stored on the network once that transaction has been included in a
block.

Transaction Fees. Transaction fees are the primary mechanism through which
APOLLO are recirculated back into the network. Every transaction requires a
minimum fee of 0.01 APOLLO; currently, the only exception is the fee for issuing an
asset on the APOLLO Asset Exchange, which is 5,000 APOLLO. When a APOLLO
account forges a block, all of the transaction fees included in that block are awarded
to the forging account as a reward.

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Until the size of all the transactions in a block exceeds the current 256 kilobyte
block size limit, the minimum fee will be sufficient for all transactions to be included
in blocks. In situations where the number of unconfirmed transactions exceeds the
number that can be placed in a block, forging accounts will likely select transactions
with the highest fees. This suggests that transaction processing may be prioritized by
including a fee that is higher than the minimum.

Transaction Confirmations. All APOLLO transactions are considered unconfirmed

until they are included in a valid network block. Newly-created blocks are distributed
to the network by the node (and associated account) that creates them, and a
transaction that is included in a block is considered as having received one
confirmation. As subsequent blocks are added to the existing blockchain, each
additional block adds one more confirmation to the number of confirmations for a
transaction.

If a transaction is not included in a block before its deadline, it expires and is

removed from the transaction pool.

Transaction Deadlines. Every transaction contains a deadline parameter, set to a

number of minutes from the time the transaction is submitted to the network. The
default deadline is 1,440 minutes (24 hours). A transaction that has been broadcast
to the network but has not been included in a block is referred to as an unconfirmed
transaction.

If a transaction has not been included in a block before the transaction deadline
expires, the transaction is removed from the network.

Transactions may be left unconfirmed because they are invalid or malformed, or

because blocks are being filled will transactions that have offered to pay higher
transaction fees. In the future, features such as multi-signature transactions may be
able to take advantage of deadlines as a means of enforcing an expiry date.

Transaction Types Categorizing APOLLO transactions into types and subtypes

allows for modular growth and development of the APOLLO protocol without creating
dependencies on other “base” functions. As features are added to the APOLLO core,
new transaction types and subtypes can be added to support them.

The following five transaction types and associated subtypes are supported by
APOLLO. Each type dictates a given transaction’s required and optional parameters,
as well as its processing method.

1. Payment: used for sending APOLLO tokens from one account to another
• Ordinary payment

2. Messaging: used by messaging, alias, voting, and account info features

• Arbitrary message
• Alias assignment
• Poll creation
• Vote casting
• Account info

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3. Colored coins: an implementation of the colored coins concept, which enables the
APOLLO Asset Exchange
• Asset issuance
• Asset transfer
• Ask order placement
• Bid order placement
• Ask order cancellation
• Bid order cancellation

4. Digital Goods: transactions that enable the APOLLO Digital Goods store
• Listing
• Delisting
• Price change
• Quantity change
• Purchase
• Delivery
• Feedback
• Refund

5. Account control: transactions that place limits on how accounts may or

may not be used.
• Effective balance leasing

Transaction Creation and Processing. The details of creating and processing

a APOLLO transaction are as follows:

1. The sender specifies parameters for the transaction. Types of transactions vary18,
and the desired type is specified at transaction creation, but several parameters
must be specified for all transactions:
• the private key for the sending account
• a specified fee for the transaction
• a deadline for the transaction
• an optional referenced transaction

2. All values for the transaction inputs are checked. For example, mandatory
parameters must be specified; fees cannot be less than or equal to zero; a
transaction deadline cannot be less than one minute into the future; if a referenced
transaction is specified, then the current transaction cannot be processed until the
referenced transaction has been processed.

3. If no exceptions are thrown as a result of parameter checking:

(a) The public key for the generating account is computed using the supplied secret
passphrase
(b) Account information for the generating account is retrieved, and transaction
parameters are further validated:
• The sending account’s balance cannot be zero
• The sending account’s unconfirmed balance must not be lower than the transaction
amount plus the transaction fee

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4. If the sending account has sufficient funds for the transaction:

(a) A new transaction is created, with a type and subtype value set to match the kind
of transaction being made. All specified parameters are included. A unique
transaction ID is generated with the creation of the object
(b) The transaction is signed using the sending account’s private key
(c) The encrypted transaction data is placed within a message instructing
network peers to process the transaction
(d) The transaction is broadcast to all peers on the network
(e) The server responds with a result code:
• the transaction ID, if the transaction creation was successful
• an error code and error message if any of the parameter checks fail.

2.5 Cryptographic Foundations

Key exchange in APOLLO is based on the Curve25519 algorithm, which generates a

shared secret key using a fast, efficient, high-security elliptic-curve Diffie-Hellman
function. The algorithm was first demonstrated by Daniel J. Bernstein in 2006.

Message signing in APOLLO is implemented using the Elliptic-Curve Korean

Certificate based Digital Signature Algorithm (EC-KCDSA), specified as part of IEEE
P1363a by the KCDSA Task Force team in 1998.

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Encryption Algorithm

When Alice sends an encrypted plaintext to Bob, she:

1. Calculates a shared secret:

• shared_secret = Curve25519(Alice_private_key, Bob_public_key)

2. Calculates N seeds:
• seedn = SHA256(seedn-1), where seed0 = SHA256(shared_secret)

3. Calculates N keys:
• keyn = SHA256(Inv(seedn)), where Inv(X) is the inversion of all bits of X

4. Encrypts the plaintext:

• ciphertext[n] = plaintext[n] XOR keyn

Upon receipt Bob decrypts the ciphertext:

1. Calculates a shared secret:

• shared_secret = Curve25519(Bob_private_key, Alice_public_key)

2. Calculates N seeds (this is identical to Alice’s step):

• seedn = SHA256(seedn-1), where seed0 = SHA256(shared_secret)

3. Calculates N keys (this is identical to Alice’s step):

• keyn = SHA256(Inv(seedn)), where Inv(X) is the inversion of all bits of X

4. Decrypts the ciphertext:

• plaintext[n] = ciphertext[n] XOR keyn

Note: If someone guesses part of the plaintext, he can decode some part of
subsequent messages between Alice and Bob if they use the same key pairs. As a
result, it’s advised to generate a new pair of private/public keys for each
communication.

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3. Core Features

3.1 Basic Payments

The most fundamental feature of any cryptocurrency is the ability to transmit tokens
from one account to another. This is APOLLO’s most fundamental transaction type,
and it allows for basic payment functionality.

3.2 Crypto Messaging

Crypto Messaging strings of data up to 1,000 bytes in length can be stored on the
APOLLO blockchain using the Crypto Messaging feature. These messages are
intended to be removable, in the future, when blockchain size needs to be reduced;
nonetheless, they form a critical building block for a number of next-generation
features. At the basic level, the system can be used to transmit human-readable
messages between accounts, creating a decentralized chat system.

3.3 Asset Exchange

An entire class of APOLLO transactions is used to implement a fully-decentralized

and automated asset exchange that operates on the APOLLO blockchain. Using the
colored coins concept, APOLLO assets may be issued and tracked on the APOLLO
ecosystem, supported by transactions and processing that allow for asset transfer,
bid and ask order placement, and automatic order matching.

By combining the features of the APOLLO Asset Exchange with other features such
as Crypto Messaging, value-added services can be created.

3.4 P2P Marketplace

The APOLLO P2P Marketplace gives account owners the ability to list assets for
sale in an open, decentralized market place. Goods can be purchased, discounted,
delivered, refunded, and transferred, using a dedicated class of transaction types
that manage and secure store listings on the decentralized blockchain.

3.5 Device Portability

Due to its cross-platform, Java-based roots, its Proof of Stake hashing and its future
ability to reduce the size of the block chain, APOLLO is extremely well suited for use
on small, low-power, low-resource devices. Android and iPhone applications are
currently in development.

The ability to implement APOLLO on low-powered, always-connected devices such

as smartphones allows us to envision a scenario where the majority of the APOLLO
network is supported on mobile devices. The low cost and resource consumption of

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these devices significantly reduce network costs in comparison with traditional Proof
of Work cryptocurrencies.

4. Proof of Work vs Proof of Stake

In comparison, in a Proof of Work (PoW) model, a reward is given for undertaking

complex computational work involving solving problems. This exercise is termed as
“mining” and people who undertake this work are called “miners”. Miners compete
with each other to find solutions to problems and are rewarded whenever they are
able to do so first. In theory, this is a wonderful principle but it requires complex
hardware and a lot of electricity to run this hardware.

Unlike the PoW however, with the Proof of Stake (PoS) model, the creator of each
block is determined by the wealth it holds, PoS is a different way to validate
transactions based and achieve the distributed consensus. PoS system is faster and
more economical than PoW, as it reduces energy costs and makes it possible to
forge using even an ordinary laptop.

4.1 Reward Model

Generally, there are no block rewards involved for PoS, so the forgers can only get
the transaction fees. Today, APOLLO has effectively combined the two factors into
considerations. A forger of APOLLO can now enjoy the chances to forge blocks that
contain transaction fees and also block rewards!

APOLLO blockchain, the first ever cryptocurrency based on a provably secure and
scalable blockchain design by incorporating the PoW concept into PoS mechanisms.
It is far more robust than that in a pure PoS based system where only transaction
fees be rewarded.

The APOLLO block reward incentive makes APOLLO a robust blockchain that attract
more nodes to become forgers as greater chances to be rewarded by securing the
network. Having more nodes in a blockchain indicates that more sec ure of APOLLO
network can be.

It makes APOLLO the best of both worlds!

A premine is where a developer allocates a certain amount of currency credit to a

particular address before releasing the source code to the open community. With
only 40% of premined coins, it means that at the time the APOLLO coin start to be
used, the majority of 60% of APOLLO are the block rewards have yet to be “forged”
by anyone. In a blockchain where no one could have already got an unreasonably
large amount of APOLLO, therefore how APOLLO be distributed to people becomes
a fairer deal. The design of APOLLO blockchain provides a greater room of
opportunities!

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Forging is needed to make things secure but without an incentive to perform forging,
no one will do it. Therefore, when an APOLLO account forges a block, all of the
transaction fees included in that block will be awarded to the forging account
together with the block reward. By accumulating more APOLLO, it also increases the
chances to forge a block based on PoS mechanism.

4.1.1 What is the APOLLO Forging Block Reward?

The APOLLO block reward refers to the APOLLO distributed by the network to
forgers for each successfully solved block.

4.1.2 How is the Block Reward Determined?

APOLLO Team, APO’s creator, set the block reward schedule when they created
APOLLO. It is one of APOLLO’s central rules and cannot be changed without
agreement between the entire APOLLO network.

The block reward started at 1,000 APO in block #1 and reduced by 10% for every
1,000,000 blocks. This means every block up until block #1,000,000 rewards 1,000
APO, while block 1,000,001 rewards 900, block 2,000,001 rewards 810, block
3,000,001 rewards 729 APO and so on. Since blocks are forged on average every
60 seconds, 1,440 blocks are forged per day on average. At 1,440 blocks per day,
1,000,000 blocks take on average 1.9 years to forge and approximately 16 years to
finish the overall “forging” process.

4.1.3 Importance of the Block Reward

The block reward creates an incentive for forgers to add hash power to the network.

It is worth mentioning that, the block reward can now be forged by forgers using their
computer without incurred high electricity costs, which make up the entirety of the
APOLLO network hash rate. Also, forgers who successfully forge APOLLO can also
sell them for a profit in APOLLO decentralized exchange.

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Conclusion

The Transformation of Blockchain Technology

Now many people will ask such a question, bitcoin can only deal with 7 transactions
per second, so how can the low transaction efficiency bring about technical changes?
In fact, there is a big misunderstanding here. Remember during the early days of
internet, the speed of dial-up internet is only few kb per second, download a MP3
requires more than 10 minutes. However, you cannot say this is useless.

Many disruptive technologies go through an immature to maturity stage. Like many

early disruptive technologies, the most typical one is the internet bubble around Year
2000 and after the bubble, people find out that the internet in the early days is not so
magical, nor to penetrate into various sectors. When a technological invention has
not reached the point where large-scale commercial applications can erupt,
especially where infrastructure and popularity are still immature, many different
points of view arise. But the seed of the really great internet company was also
planted during that time. History has proved how powerful the advance of science
and technology is.

Today, APOLLO is an open source project with a core development team who are
doing various R & D and upgrade programs. An investment with 10 times or even
100 times return on investment opportunities is achievable so long as the investor is
able to spot on the valuable digital assets with good growth potential. APOLLO, with
its smart contract features and blockchain technology as an evolutionary version, is a
wakeup digital asset market.

Bitcoin is already a success proven model, except that its technology is still unable to
do smart contracts and smart transactions. At the time of writing this white paper, the
market value of Bitcoin has been as high as $186 billion. APOLLO, which is known
for its blockchain-based innovation platform, has a 10 billion limit. With the birth of
many innovative blockchain agreements, Bitcoin is no longer the single-only digital
asset. Innovation agreements and blockchain applications will be the next
investment theme.

So APOLLO is to repeat its success in a shorter time to achieve greater

breakthroughs, or even better than the previous Bitcoin's amazing results.

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