Classroom #2: How does HUMAN Protocol work?

Through HUMAN Protocol, anyone can request and reward millions of people to complete work-related tasks online. It does all of this in a transparent and decentralized manner.

But what does that mean? And how does it work in practice? In this Classroom, we’ll look at how the network operates.

First of all, if you missed Classroom #1: What is HUMAN Protocol? You may want to read that introductory class before continuing.

At a glance

HUMAN Protocol is a network that is designed to optimize the execution of work in a fair, transparent, and decentralized manner.

There are many different participants required to make the network run well - there needs to be participants who want work completed, and people who want to earn rewards for completing work; there needs to be applications in the middle that can enable people to complete work, oracles to check the work is done properly, and blockchains to record transactions fairly.

The network is the composite of all of these; and It works by allowing them to collaborate with the shared goal of executing work, and earning rewards for their role in doing so. That's why the network is so flexible - its simplicity can accomodate and be adapted to an endless list o new use cases.

General overview: blockchain technology

Before we dive into specific HUMAN Protocol technology, let's have a quick look at three essential pieces of technology.

• Blockchain – a ledger of data maintained by a decentralized network of computers
• Smart contract – simply a blockchain program, a smart contract executes actions on a blockchain when certain conditions are met. Those conditions are predefined in the creation of the contract, and are immutable (cannot be changed).
• Oracle – a piece of software that connects a blockchain to external sources of information. It allows smart contracts to trigger actions on blockchains – such as payment – if criteria are confirmed by the oracle which can ‘see’ external sources of data.

HUMAN Protocol technology

At HUMAN Protocol, the technology itself is made up of a few components:

• Routing Layer – a system to coordinate the various Operators in the network (see below), and to ensure that Jobs are routed to the best network to optimize cost/speed/efficiency
• Execution Layer – where the transactions of information and value are actually actioned and written into the blockchain
• Escrow Contracts – an on-chain representation of the Job, these smart contracts hold the funds associated with a Job and distribute it to oracles and Workers according to their work. They can be thought of as connecting the two layers; an Escrow Contract is created in the Routing Layer, and then updated and completed in the Execution Layer.

A decentralized network

A network is simply a collection of interconnected things. If it is decentralized, it means simply that those things are not owned, controlled, or operated by a single entity.

HUMAN Protocol is a decentralized network. It is made up of many different network actors – collectively called Operators in HUMAN Protocol.

Below is an overview of the Operators.

• Requester – a company, project, or individual that requests work to be done
• Exchange Oracle – the applications where Workers complete tasks, and relay important work-related information to the network
• Recording Oracle – keeps a record of work, and provides initial assessment of its quality
• Reputation Oracle – checks the Recording Oracle’s work, and makes its own assessment of work quality, before assigning the Worker a reputation and updating the Escrow Contract to pay out the Worker
• Worker – a human that gets rewards for completing work

HMT – the network’s fuel

How does all of this run? A decentralized network operates effectively only with incentivization mechanisms. That means that the company or individual that runs an oracle must get a reward for providing a good service, and lose their rewards if they provide a bad one. That reward is HMT.

This incentivization mechanism is a very fine balance. It is all about creating a meritocratic, fair system.

To work as an Operator in HUMAN Protocol, you must stake HMT. To ‘stake’ in this context simply means to place a sum of the token in the network that can return to you once your role is complete. Think of it as collateral. 

It ensures that the Operator behaves appropriately. If they do not – for example, if an Exchange Oracle fails to distribute the Job to Workers as Tasks, their staked HMT can be slashed/cut, or frozen. 

This creates harmony in the network. Everyone can now operate on the same page, with the same incentives.

Trustless

The result of a decentralized network with aligned incentives is a trustless system. 

Trustlessness means that the system is hard-coded by rules, enforced by computers, so that you don’t need to worry about the other party fulfilling their side of the agreement. If they don’t, they will lose their stake. 

Because the Escrow Contract is updated in real-time, work cannot be stolen. If a Worker does the work to a good standard, they get the reward. There’s no possibility of quibbling, or disagreement, with the Requester. If the network is not sure if that the Worker did the work to standard, it is programmed to check again and again until there is a decentralized and fair convergence of opinion. It’s all taken care of by machines – which either recognise the work is done, or not.

Equally, a Requester’s HMT/FIAT used to fund the work only leaves the escrow as work is completed. If the Job were canceled for any reason, or the work wasn’t being done to standard, they get the HMT back.

That’s fair. That’s trustless.

Now, trustlessness doesn’t mean the system is 100% secure. No system in the world is 100% secure. What it does mean is that you don’t have to worry about the person on the other side of your deal – the computers take care of that for you.

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_{Legal Disclaimer}

_{The HUMAN Protocol Foundation makes no representation, warranty, or undertaking, express or implied, as to the accuracy, reliability, completeness, or reasonableness of the information contained here. Any assumptions, opinions, and estimations expressed constitute the HUMAN Protocol Foundation’s judgment as of the time of publishing and are subject to change without notice. Any projection contained within the information presented here is based on a number of assumptions, and there can be no guarantee that any projected outcomes will be achieved.}

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