engine of the next generation economy › 5th_whitepaper_0.6_en.pdfeconomic system that 5th chain...

Engine of theNext Generation Economy

5th Chain provides core infrastructure to build next-generation economy.

Everyone profits from consumption.

White Paper V0.6

Fifth Foundation Ltd.

Contact Us

Fifth Foundation Ltd. was registered in Singapore and jointly launched “5th

Chain” project with an investment institution, ALA.

Goal of the Foundation: to guarantee research and development and

maintenance of 5th Chain, manage the operation of the 5TH token, and coordinate

with 5Mall and other DApps.

Foundation: [email protected]

Token Info: [email protected]

Public Relations and Others: [email protected]

Fifth Foundation Ltd.

Joint Investors

Following list is in no particular order.

Joint Investors

Table of Contents

Table of Contents

1 Background …………………………………………………………………………

2 5th Chain: Engine of the Next-Generation Economy…………………………

3 5Mall: Forerunner of the Next-Generation Economy ………………………

4 5TH: Token of the Next-Generation Economy ………………………………

5 Roadmap ……………………………………………………………………………

6 Risk Disclosure ……………………………………………………………………

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2.1 Parent Blockchain of 5th Chain ………………………………………………

2.2 5VDN: Value-Delivery Network of 5th Chain ………………………………

2.3 5ESS: Enhanced Storage Structure of 5th Chain …………………………

2.4 Consumption-Profiting Transaction Explorer ……………………………

2.5 Quantitative Node ……………………………………………………………

2.6 Ecosystem ……………………………………………………………………

4.1 Issuance Plan …………………………………………………………………

4.2 Consumption-Profiting Mining ……………………………………………

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Background

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1 Background

There are four economic forms in human society: agriculture economy, industry

economy, service economy and experience economy.

Agricultural products address people’s basic needs of food, clothing, and

housing etc. Industrial products address people’s needs in using products, and

significantly reduce product costs through standardization.

Service economy is more about reducing people's fatigue, or reducing energy

and time that people spend, making people feel convenient and satisfied.

The experience economy is an extension of service economy, which regards

goods as props, service as stage, experience as main economic provision,

emphasizing customers’ sensibility satisfaction, and emphasizing the customers’

psychological experience when their consumption behavior occurs. Customers are no

longer just buying real goods or services, but also emotional, physical, intellectual and

even spiritual experiences, which has changed industries from industry to agriculture,

computer industry, Internet, tourism, commerce, services, catering, entertainment etc.

However, long evolution between agriculture economy, industry economy and

service economy to experience economy, does not deviate from the basic model of

“producer-product-consumer”, and economic system of the whole society still has

great limitations, the speed of economic development has gradually reduced or even

stagnated. Humans need new economic model to bring revolution to society.

Under this background, base on blockchain technology, 5th Chain provides core

infrastructure to build next-generation economy system, promoting humans into the

fifth-generation economic form: consumption-profiting economy.

5th Chain: Engine of the Next-Generation Economy

2 5th Chain: Engine of the Next-Generation Economy

As the engine of the next-generation economy, 5th Chain’s system framework

closely integrates Merchant-on-Blockchain(“MoB”) ecology and economic model, and

breaks through the boundaries of production, consumption and investment, converting

all participants’ “consumption” to “equity” in the ecosystem. Through whole process

of value transfer, profit transfer and transaction traceability of economic ecology that

5th Chain carries, It achieves the transformation of economic form, establishing a

decentralized, positive-circulating next-generation economy system.

Each consumption-profiting transaction will be passed on the chain. Each

trading behavior will trigger the resonance of merchant nodes, consumption nodes

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2.1 Parent Blockchain of 5th Chain

The 5th Chain uses the extensible architecture combined with parent blockchain

and side chain, providing reliable, stable and fast basic support for blockchain overall

performance, data privacy, multi-ecosphere, fast payment etc.

Parent blockchain is the basis of 5th Chain, mainly for address management,

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DApps

Open SDK/API

5TH Core

Wallet Transaction Explorer

5Hash 5ESS 5VDN 5Proof 5Pool ...

Developer Tools

Index Optimizer

and quantitative nodes, and will promote the next consumption-profiting transaction.

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Abstract Blockchain Interface

5th Chain

Sidechain

Sidechain

Sidechain

Exchange Channel

Exchange Engine

Side chainInterface

Side chainInterface

Side chainInterface

side chain management, encryption management; side chain can build its own

ecosphere, achieving its respective business sub-cycle, and each side chain can also

deliver and exchange their own consensus and value with each other.

The 5th Chain uses SHA256 digest algorithm and ECC encryption algorithm

to encrypt on-chain data, realizes communication through main network protocol,

Stratum network protocol and sharding network protocol, and its P2P network

is realized through Kademlia(“Kad”) algorithm, and stores data by referencing

Hyperledger Fabric blockchain distributed storage technology.


2.2 5VDN: Value-Delivery Network of 5th Chain

In the 5th Chain network, distance between nodes of P2P’s Kademlia(“Kad”)

algorithm is logical distance, which is calculated through XOR’ing node ID.

If distance between a target node and local node is in the range of [2(i-1)，

2i ], that node will be classified as “K-bucket I”. For example, the distance between

the node with node ID of 000111, the node with node ID of 000110 and the node with

node ID of 000011 is calculated as: 000111 Å 000110 = 000001(Decimalism 1), 000111

Å 000011 = 000100(Decimalism 4). According to the above algorithm, in K-bucket

whose node ID is 000111, the node with node ID of 000110 is assigned to “K-bucket 1”,

while the node with node ID of 000011 is assigned to “K-bucket 3”.

This way of using XOR to calculate distance, is equivalent to organizing the

entire network topology into a binary prefix tree. All the nodes mentioned here are

distributed on the leaf nodes of the binary prefix tree, and this organizational form is

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2.3 5ESS: Enhanced Storage Structure of 5th Chain

The storage structure of 5th Chain references the storage system of Hyperledger

Fabric, just like Bitcoin, also composed of common file and K/V database(LevelDB/

CouchDB).

Final LevelKey value stored in K/V database of the block index information

format of 5th Chain is composed of a prefix flag and a block hash. LevelValue value

consists of block height, block hash, local file information (file name, file offset,

etc.), offset list for each transaction in the file, and block MetaData. The 5th Chain

splices the above information into values in the database according to a specific

coding method. Final LevelKey value stored in K/V database of the transaction index

information format of 5th Chain is composed of the key values in channel_name,

chaincode_name and chaincode:

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equivalent to classifying the distance of the nodes by each of their node IDs.


2.4 Consumption-Profiting Transaction Explorer

The 5th Chain will offer consumption-profiting transaction explorer that

adapted to parent blockchain, open query and verification of consumption-profiting

transaction information, including:

record verification of consumption-profiting transaction;

transaction amount, data of mining computing power, consumption-profiting

profit etc.

verifications of merchant nodes, consumption nodes, quantitative nodes.

Consumption-profiting transaction explorer has now completed the first phase

of research and development, running on the test network, and supporting the query

of the transaction summary.

LevelKey = channel_name + []byte + chaincode_name + []byte + key

The value of LevelValue is composed of the BlockNum block number and the

number of the TxNum transaction in block. The 5th Chain encodes the block number

and the transaction number in a specific way, and then splices with the value in the

chaincode to finally generate the value in the database.

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2.5 Quantitative Node

Quantitative nodes participate in every transaction on 5th Chain, making that

everyone's rights and interests can be realized from consuming mining power. MoB

economy will become a new round of growth in consumer finance and supply chain

finance.

The 5th Chain continues to evolve its algorithms to automate the search

procedure of fittest selection and global portfolio optimization. This framework

is designed with the purpose of sifting through multiple liquidity sources and

combinations to find goodness of fit. Individual solutions are selected through

quantitative-based processes, where fitter solutions (as measured by fitness

functions) are more likely to be selected. Fitness functions are defined and ranked

as classifications of desired characteristics based on margin, volatility(real-time),

risk, return, exposure and execution costs. Fitness functions are criteria for superior

selection.

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Maximum Retracement Rate Formula： Drawdown=max(Di-Dj)/Di


Variance Formula： S =(Xi- )∑ X

2

2

n

R

i

Strategy Formula： Max(Weight*Avg（Y）/Weigh*Variance (Y))

=1

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2.6 Ecosystem

The 5th Chain ecology is a distributed value transfer system that covers

e-commerce, social activity and finance, and achieves artificial intelligence,

consuming transactions, interconnection and value sharing. The autonomous

economic system that 5th Chain built operates around consumer behavior, business

behavior, social behavior, will replace indiscriminate traditional business path, to

become a new value standard for the future MoB world.

The open-source community of 5th Chain creates a future-oriented

decentralized open-source public blockchain and a widely-used DApp system,

chaining ontology data of all 5th Chain open-source community participants,

confirming the rights, having the value of continuous growth, and finally empowering

humans through consumption-profiting economy.


The 5th Chain ecosystem takes node as support, community as link, value as

venation, mining power as core, builds a value deep network ecology to achieve

"Consensus", "Collegiality", “Co-Sharing", “Coalition" and “Co-Right” of business

value in MoB era.

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5Mall: Forerunner of the Next-Generation Economy

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3 5Mall: Forerunner of the Next-Generation Economy

The 5Mall is an important partner of 5th Chain. As the first DApp in 5th Chain

ecosystem, 5Mall is a model for practicing consumption-profiting economy. Merchant

nodes, consumption nodes, quantitative nodes form a cycle of consumption-profiting

transactions through 5Mall. Every consumption behavior will trigger the resonance of

the system ecology.

The 5Mall is more than just a “Blockchain Amazon” which uses the shared

consumption mining power mechanism as the engine, which is also a DApp MoB

platform that integrates the whole ecological scenes such as mining pool, wallet,

transaction and investment. Consumption-profiting consumption will change

traditional consumption concept, making everyone, including Merchant-on-Blockchain

and Customer-on-Blockchain, benefit from development of the next-generation

economy.

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4 5TH: Token of the Next-Generation Economy

Base on system carrier of smart contract, 5TH token has decentralized value

measurement, payment ecology, transaction storage, contribution motivation and

other attributes.

The 5TH tokenizes points, integrates the asset island of traditional business,

realizes consumption-profiting transaction with 5Mall and other 5th Chain DApps, and

will become basic element of the next-generation economy system.

5TH: Token of the Next-Generation Economy


4.1 Issuance Plan

The total amount of 5TH issuance is constant at 2.2 billion, and will never be

issued more.

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4.2 Consumption-Profiting Mining

Every transaction that runs on 5th Chain will process consumption-profiting

mining through quantitative nodes, and continue until the transaction completed.

Every tiny business behavior can drive long-term fission of the entire system.

Customer nodes participate in consumption-profiting transaction by using 5TH

Token, deliver value to merchant nodes through 5th Chain DApps, and transmit a

certain percentage of the “MoB Fund” to quantitative nodes, and quantitative nodes

will carry out consumption-profiting mining. The speed of mining varies with the

efficiency of quantitative nodes.


The proportion of MoB Fund varies with capacity of the 5TH consumption-

profiting pool. For every 10% reduction in consumption-profiting pool, the proportion

of MoB Fund will increase by 1%.

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5 Roadmap

Roadmap

2018-01Foundation Established

2019-095Mall DApp Release

2021-065th Chain Main Network

Trial Running

2019–08Consumption-Profiting Transaction Explorer Internal Testing

2020-125th Chain Parent Blockchain Testing

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Risk Disclosure

6 Risk Disclosure

This white paper is only a project information introduction, and does not

constitute any form of sales. The dissemination of this white paper by any party will

not constitute a public promotion.

This white paper has not been reviewed by any supervisory institution or

administrative organs. In light of the instability and changes in related policies, laws,

regulations, technologies and other factors, the information provided in this white

paper may not be accurate or final. The matters set out in this white paper are for

reference only and do not have any legal effect.

At the same time, in order to ensure the stability, consistency and flexibility

of the relevant system, Fifth Foundation Ltd. has the right to update the relevant

contents of this white paper. Please be sure to obtain the latest version of the white

paper in time.

In view of the attributes of the business model of the project and the project in

the early stage of development, 5th Chain and related applications in this project will

be regarded as high-risk projects. Participants should understand the potential risks

of the project, and make rational decisions after assessing their financial situation

and risk tolerance.

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Engine of the Next Generation Economy

Visit the official website for more informationhttps://5th.world

engine of the next generation economy › 5th_whitepaper_0.6_en.pdfeconomic system that 5th chain...

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