101 Blockchains Think Tank Webinar Series LIVE WEBINAR A Framework for Blockchain Interoperability Presented by: Nadia Hewett Blockchain and Data for Common Purpose Project Lead World Economic Forum Jonas Sveistrup Søgaard NextGen Lead (Industrial PhD) Deloitte Denmark Sigrid Sømod NextGen Senior Consultant Deloitte Denmark
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101 Blockchains Think Tank Webinar Series
LIVE WEBINAR
A Framework for Blockchain Interoperability
Presented by:
Nadia HewettBlockchain and Data for Common Purpose Project LeadWorld Economic Forum
Jonas Sveistrup SøgaardNextGen Lead (Industrial PhD)Deloitte Denmark
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Blockchain Deployment Toolkit 01Interoperability 10102Blockchain interoperability model03Two types of data for interoperability04Four conceptual scenarios for interoperability05Three approaches to blockchain interoperability06Q&A07
Redesigning Trust: Blockchain Deployment Toolkit
What is it?
World Economic Forum ®
Redesigning Trust: Blockchain
Deployment Toolkit
This toolkit is designed to guide you and your
organisation through the development and deployment of
a new blockchain solution.
This toolkit provides tools, resources, and know-how to
What requirements and prerequisites are necessary for interoperability across different permissioned distributed ledgers – or between a permissioned and public ledger?
What solution scenarios can be imagined with and without a trusted central party orchestrating transactions – and what are the pros and cons of the various setups?
How can interoperability efficiently be supported and can there be made any general recommendations for creating interoperability?
A distinction between business requirements and technical requirements is crucial to highlight non-technical issues such as governance, data ownership and commercial
business models that incentivize ecosystem stakeholders to collaborate with each other.
The blockchain interoperability model
Source: World Economic Forum Interoperability module, Redesigning Trust: Blockchain Deployment toolkit
Two types of data for interoperability: digital asset exchange and arbitrary data exchangeDigital asset exchange cover exchange of an asset like a cryptocurrency, while arbitrary data doesn’t necessarily represent an item of value, but could instead be an
event tracked on the blockchain. Arbitrary data exchange will be required to support even the most basic cross-platform use cases.
D I G I T A L A S S E T E X C H A N G E
Example:
Making bitcoin spendable in Ethereum dApp.
A R B I T R A R Y D A T A E X C H A N G E
Example:
Changing ownership of Bill of Lading from shipper on Ethereum to consignee on Hyperledger.
Shipper ConsigneeBitcoin in Ethereum dApp Verification to Ethereum that BoL is verified
Four conceptual scenarios for interoperabilityThe most suitable solution and consequently standard for interoperability depends on the scenario. It is therefore important to outline which scenarios for
The nature of DLT projects indicate the need for a wide interoperability scopeThe most interesting projects from shipping and adjacent industries are mapped in the below model for visualizing potential scope of the interoperability
complexity. The shipping industry solutions are still at a rather simple level of complexity while other industries build around more advanced cases.
Complexity of use cases
Involved industries
No
tary
Sh
are
d
led
ger
IoT
To
ken
ized
eco
syst
em
Shipping Insurance Trade FinanceLogistics
Insurwave
Interoperability can be solved relatively simply if the scenario is limited to multiple dAppson a single DLT platform as with the two applications in the blue area.
Ecosystems develop around DLT platforms, but these are expanding beyond the initial industry in the pursuit to unlock business value. Moreover, DLT is maturing and platforms may fall out of fashion as concerns around security, performance and scalability are addressed.
Three approaches to blockchain interoperabilityThere are three overall approaches to interoperability; cross-authentication is the most complex solution
ORACLES
Oracles can be used to fetch data for smart-contract execution, and can likewise be used to push data
API GATEWAY
API gateways can be used for communication between blockchains, but still require cross-authentication between nodes
CROSS-AUTHENTICATION
Cross-authentication covers three different methods; hashed time-locks, notary functions and relays / multichains
Three different technical approaches to cross-authenticationRelays offer similar capabilities in a more trust minimized setting, but have drawbacks in terms of compatibility with existing networks and present an alternative
direction for the evolution of blockchains. Hashed time locks represents the most trust-less and practical approach at the cost of scope limitation to digital asset
exchange and can not be used for arbitrary data exchange.
Source: A primer on blockchain interoperability – Medium, Vitalik Buterin – Blockchain interoperability
HASHED TIME LOCKS
KEY CHARACTERISTICS:
ONLY DIGITAL ASSET EXCHANGE
HIGH LEVEL OF DECENTRALIZATION
PROVEN TECHNICALLY IN SEVERAL SOLUTIONS
NOTARY SCHEMES
KEY CHARACTERISTICS:
BOTH DIGITAL ASSET AND ARBITRARY DATA EXCHANGE
LOW LEVEL OF DECENTRALIZATION
PROVEN TO A LIMITED EXTEND IN FEW SOLUTIONS
RELAYS / MULTICHAIN
KEY CHARACTERISTICS:
BOTH DIGITAL ASSET AND ARBITRARY DATA EXCHANGE
HIGH LEVEL OF DECENTRALIZATION
LIMITED PROVEN TECHNICAL SOLUTIONS, DESPITE MANY SOLUTIONS PENDING TO EXPAND FUNCTIONALITY
Existing POCs are limited in scope but have created valuable insightsDeloitte and Accenture have both announced successful interoperability proof of concepts. Accenture has conducted generic proof of concepts testing out
interoperability between platforms while Deloitte also has conducted shipping and financial specific interoperability prototypes.
The POCs have helped drive understanding of what is required to support interoperability for specific use cases. It should be considered that none of the POCs
has used an advanced decentralized method for solving the interoperability challenge, instead two solutions use an API based solution and one has used smart
Summary of interoperability There are several technical solutions for interoperability which solves different needs. The requirements for practical implementation are still unclear, and it is
required to analyze potential use cases further to uncover the requirements
There are several methods and
solutions for interoperability
But all remain too immature to
constitute a fit-for-purpose
solution especially within the
space of permissioned ledgers
Both Start-ups, established
technology companies and
standard initiatives are working on
standards
Progress in the field is expected
within the next couple of years, but
the results this far has been limited
POCs exploring interoperability
for specific use cases is so far the
best way to create reliable
knowledge on the subject due to
the speed of technology
development and nascent nature
of existing solutions
There is no ‘one solution fits all’ for blockchain interoperability.
The complexity of the challenge is highly dependent on the number of platforms involved and especially the complexity of the use case which the interoperability solution is supporting.
NO MATURED FIT-
FOR-PURPOSE
SOLUTIONS
POCS ARE THE WAY
FORWARDINTEROPERABILITY
COMPLEXITY IS HIGHLY
CONTEXTUAL
LIMITED PROGRESS
ON STANDARDS
Toolkit Value Modules
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Interoperability
Enable End-to-End Value Chain Integration across 100+ Blockchain Platforms in Production Today
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