Next-Generation Blockchain
miyabibitFlyer, Inc.

Company Profile
bitFlyer, Inc.
Established

January 2014

Capital4.1238 billion yen (including capital reserve)

Head offices address

Akasaka, Minato Ward, Tokyo

Overseas branches

The United States, Singapore, Luxembourg

Partnering Bank

Sumitomo Mitsui Banking Corporation

Account auditor

Ernst & Young, ShinNihon LLC

Law officeMori Hamada & Matsumoto, Nishimura & Asahi, AZX Professionals Group, So
Law OfficeTax corporation

Ernst & Young, Tax Co.

Employees

72

Over 900,000 users
Over 1.5 trillion yen in monthly transactions
About 4.1 billion yen in capital
Japan's largest bitcoin and blockchain company
2

What is blockchain?
The Japan Blockchain Association’s
Definition of Blockchain
Blockchain Put Simply —A shared network database that
— Only allows correct records to be saved— Does not allow the alteration, deletion, or falsification ofrecords— Automatically repairs itself when damaged— Does not crash— Only recognizes information that everyone agrees on as valid(REF: Ichiban Yasashii Blockchain no Kyohon (The Kindest
Blockchain Textbook)

A blockchain is defined as a protocol, or implementation of aprotocol, used by an unspecified number of nodes containing
Byzantine faults, and converges the probability of consensus
reversion with the passage of time to zero.
In a broader sense, a blockchain is a technology with a data
structure which can easily detect manipulation using digital
signatures and hash pointers, and where the data has highavailability and integrity due to distribution across multiple nodes
on a network.
(REF: Japan Blockchain Association — http://jba-web.jp/)

Blockchains are a new kind of database
They’re unique in that data recorded on a blockchain cannot be modified ordeleted, repairs itself when broken, and does not degrade.
This network sharing model makes only the information that all users agree onvalid.
3Unique Features of blockchain
Immutability• Transactions (data) are stored across consecutive blocks. Because consecutive blocks are codependent, altered transaction data is highly easy to detect, and data corruption is virtually
impossible.

Byzantine Fault Tolerance (BFT)• When a system has BFT, the whole system continues to function normally as long as the total numberof Byzantine nodes (nodes that do not behave properly due to hardware failure or server hacking)remain below a certain level.

No Single Point of Failure (SPOF)• A part of a system that, if it fails, will stop the entire system from working. In non-blockchain systems,
master, controller and certificate authorities can become SPOFs. Blockchain has no SPOF.
4

Introducing...

miyabiA next-generation blockchain database

World's Fastest Performance
miyabi realizes transaction processing speed that was thought of as nearly
impossible using pre-existing technology.

1,500 - 2,000 TPS

miyabi software

Max 4,000 TPS (on advanced hardware)This performance power was realized through thoroughoptimization of the consensus algorithm, execution engine,and other common components.

ExecutionEngine
Kotowari

Consensus
Algorithm
BFK2

Common components

Finality + Unmatched Performance6

Merits of implementing miyabi (1)Immutability• miyabi offers an extremely high level of security not available in normal database systems.
• The data for each transaction is stored in a block, and a hash of the data in each block is stored in the next block, creating a chain of dependency
between the blocks.
• Chaining together the blocks in this way allows the consistency of the transaction data to be guaranteed. It is easy to detect when transaction
data is overwritten, making data tampering effectively impossible.

Finality• miyabi allows for the securing of transactional finality in which the data for each transaction can be fully confirmed.
• One major problem with blockchains such as those used in Bitcoin and Ethereum is that the data stored therein is not permanently fixed. In a
Bitcoin-style blockchain, the probability of existing data being overwritten decreases as time passes.
• However, miyabi's algorithm is written in such a way that data cannot be altered or lost as soon as it is written.

Byzantine fault tolerance (BFT)• miyabi is a pure blockchain with Byzantine fault tolerance (BFT).
• Nodes (servers) that do not behave properly, whether due to hardware issues, hacking or other causes, are known as Byzantine nodes.
• A blockchain with Byzantine fault tolerance remains able to function properly as long as the number of Byzantine nodes does not exceed a certain
amount. Older systems did not feature Byzantine fault tolerance, and the entire system would go down if even one server stopped working.
Measures such as triple modular redundancy are used to help prevent such occurrences, but this does not completely protect the system fromhacking.

7

Merits of implementing miyabi (2)No Single Point of Failure• miyabi does not require a certificate authority. A certificate authority is a single point of failure, and a technical issue or an incident such as a DDoS
attack at the certificate authority poses the risk of taking the entire blockchain down. Even if redundancy measures are implemented at thecertificate authority, this does not change that fact that it is a single point of trust (SPOT). With miyabi, privilege setting is done with a secret key,eliminating the weaknesses present with a single point of failure and a single point of trust.

Disaster countermeasures (High Availability)• miyabi offers high availability even in the face of disasters. Even in the event that a subset of the servers (nodes) are lost due to a disaster, all of
the data is stored in each node, and it remains possible to access the latest correct data. For example, an approach of maintaining servers in avariety of locations such as Japan, the United States and Europe allows for a flexible system that is highly disaster-resistant.

Performance (Throughput)• miyabi is able to process 2,000 transactions per second (4,000 transactions per second on advanced hardware) and boasts the world's highest
performance (according to an internal study) among finality-ensured blockchains.
• Existing blockchain technologies have struggled with the issue of extremely slow processing speeds.
• It is its support for finality and BFT, its elimination of the single point of failure (SPOF) and its high performance (throughput) that gives miyabi its
technological superiority.

Latency• At one to four seconds, miyabi features shorter delays than other blockchains (Ethereum has a 15-second delay and does not ensure finality).
• A blockchain is a type of distributed database. What we consider a blockchain is a system that includes a new database with features such as nontamperability, finality and Byzantine fault tolerance as well as a smart contract execution environment. Since the nodes and data are distributedover the network, the processing speed, including the throughput and delay, depends greatly on the speed of the network.

8The Pursuit of Finality
Public chain

Immutability
BFT
Finality
Consensus
Algorithm

Bitcoin

Ethereum

miyabi

Product A

Product B

RDBMS

○〇
×○
○
×○
○
○

○
○
○

○
×
○

××
○

PoW

PoW⇒PoS

BFK2

PBFT？

（N.A.）Yes-Single Pointof Failure

None

None

None

Yes
Certificate
Authority

Throughput

215

1,5002,000(4,000)

1,000

10min

12sec

1-4 sec

Latency

Relational
database

Private chain

Over 100,000

1 msecBlockchains without finality bear the risk of data turnover, making
them unsuitable as enterprise solutions.

9Difference between miyabi and other databases
Database.

Centralized DBRDBMSKey Value

ObjectOriented

Network Distribution

Distributed Database
DLT

Apache Cassandra＋Immutability(Broad Sense)Blockchain

Product B＋Byzantine fault tolerance (BFT)

Private Chain
Product A

Blockchain- SPOF

Public Chain
Bitcoinmiyabi

Ethereum
No Finality

Finality10

Upcoming for miyabi

11Equipping Industry Leader Sekisui House withmiyabi
Resident
B Company
Real Estate Agent
Sekiwa Real Estate, Ltd.
Unified system

Blockchain

Core system

Resident
A Company

Using blockchain technology to construct areal estate information management system

Distributor
Resident

Real Estate AgentCore system

Japan’s first application of blockchain
to enterprise operations
Providing rental services using
blockchain.
Cross-industry consortium also
currently under consideration.

Resident
Sekiwa Real Estate, Ltd.

Core system
Unified system
Resident

Aims to create standardized platformarchitecture for Japan's real estateindustry (launch planned within
FY2017)B Company

Real Estate Agent

Rental contract
management withBlockchaintechnology

My Number managementWith Blockchain technology.

Distributor
A Company
Insurance, finance,advertising, etc.
Blockchain technology for otherindustries

Registry management
With Blockchain technology

Core system

12

Provision of Testing Platform for the Japanese
Bankers Association

Source: fhttps://www.zenginkyo.or.jp/fileadmin/res/news/news290413.pdf

13
Source: https://www.zenginkyo.or.jp/news/detail/nid/8407/

Blockchain Research & Development at bitFlyer

Acquired first patent using blockchaintechnology

Patent covers private nodes, as well as
related processing methods andprogram
Ongoing dedication to the R&D ofblockchain technology

Japan’s First Integral
Blockchain Technology Patent14