Platform growth drives innovation
Innovation around distributed ledger (and specifically blockchain) technology has undoubtedly benefited from competing platforms. Development and engagement on platforms from Bitcoin, Digital Asset, Ethereum, Hyperledger, R3 Corda and more, have resulted in decentralized, vibrant innovation ecosystems delivering rapid development and implementation.
While some forms of interaction and communication are possible today, no best practice has yet emerged that achieves "interoperability" such that we can maintain the efficiencies and simplicity that drives blockchain value.
Solving for integration between platforms may seem simple. One platform need only communicate with another the status of a particular data object and/or pass control.
But that apparently simple suggestion reintroduces the need for messaging and data reconciliation—the very thing that blockchain so valuably eliminates. It is possible for leading platforms to work together to develop a common standard against which each platform’s engineers could design and code compatible components. However, early interest in resolving this problem collaboratively between platform providers have been stymied by two primary challenges:
- First, the competitive dynamic of the respective DLT platform providers and their focus on getting to or moving beyond the first versions of their platforms makes their imminent productive collaboration unlikely.
- Second, even if that collaboration were to happen, the resulting harmonization could limit further innovation.
The basis of Accenture’s integration solution is to establish a trusted "interoperability node" that sits between the target DLT systems. This interoperability node is given the appropriate identity and access control capabilities to all in-scope DLT systems.
Industry analysts acknowledge there will likely be more than one successful DLT platform, that different platforms will succeed in different business ecosystems and that over time those ecosystems will see value in connecting with each other. Concern about picking the "wrong system" has been a hinderance in moving the technology forward. Having the ability to "interoperate" DLT systems mitigates some of these concerns.
What is required?
An integration protocol requires that the leaders of two or more DLT based ecosystems establish the business rules, policies, standards and governance by which they agree to work together. The business logic resulting from these governance agreements is then used to configure the interoperability node and technical implementation.
- Asset Locking Mechanism in value transfer. At a high-level, assets are transferred from one DLT to another by “locking” the asset on the first chain and then creating a representation of the asset on the second DLT platform.
- Double-Spend Prevention in “active state.” When building a blockchain integration solution, the solution must maintain as many blockchain-like guarantees as is possible.
What is next?
Our near-term goals are to continue to test effectiveness with each of the leading DLT platforms and work with clients and partners to expand the possibilities for cross-industry cross-process collaboration. Learn more by downloading the full report.