Connecting Public and Private Blockchains
The blockchain space requires standardization when it comes to intra and extra-communication (flow of data & value within and outside of the ecosystem). As Adam Ludwin, CEO of Chain, puts it: “Over time there will be more of a convergence of what’s happening in the enterprise and what’s happening on the open Internet to create this future of value over IP.”
Various interoperability standards are being proposed, but the only tested and secure, scalable solution is a combination of atomic swap technology and secure multiparty computation (sMPC). You need wider-community acceptance before distributing such technology to the masses. There needs to trust in the technology before there is a trustless bridge.
Connecting private blockchains with public blockchains is typically more challenging for a number of reasons:
1. Public blockchains are permissionless while private blockchains are permissioned: The consensus mechanisms of public blockchains are typically different from those used for private blockchains
2. Private blockchains have strict requirements for privacy and security: The bridges that connect a private blockchain with a public blockchain will need to have different security zones.
3. Private blockchains are normally built and maintained by enterprises and consortiums: They are highly customizable, with each major private blockchain having multiple different flavors and configurations. While there are a generally recognized handful of major public blockchains, the number of private blockchains and their technical configurations are effectively unlimited
There will be tons of complex business scenarios where connecting private blockchains to other private or public blockchain will offer huge transformational opportunities, few examples below:
- Scenario 1 (Private to private): The issuance of frequent flyer miles on Airline Company A’s private chain which is then connected through a router chain (Wanchain for example) to an e-commerce platform’s private loyalty points chain. Through this connection, frequent flyer miles can be exchanged for customer loyalty points which can be used for purchase on the e-commerce platform
- Scenario 2 (Private to public): A private chain used by an insurance company to register the validity of insurance claims. The insurance company may connect its own permissioned chain to a public router chain (i.e. Wanchain). Once a claim has been verified as valid and the corresponding transaction has been published on the insurance company’s private chain, automatic payment can be triggered on the public chain through the cross-chain connection
- Scenario 3 (Private to private): A local government uses a private blockchain to record property ownership records. A local lending business uses a private blockchain to issue loans to individuals based on the property they are able to offer as collateral. Through a router chain that implements the T-Bridge framework (Wanchain), these two private blockchains can seamlessly connect, which allows for the construction of a loan product to offer users instant credit based on their property ownership
Connecting private chains allows for the establishment of global asset exchange
The ability to connect with private chains is particularly important as private / permissioned chains are where the majority of legitimate tokenized assets will live in the future. Permissioned chains are necessary for assets that must comply with the laws and regulations of multiple jurisdictions and are subject to the control of a variety of regulatory bodies. By connecting together different private chains, interoperability players like Wanchain 4.0 paves the way for the establishment of global, compliant, blockchain-based asset exchange for traditional assets such as stocks, bonds, securities, and many more.
Reference: Wanchain 4.0
Disclaimer: The views shared are in my individual capacity.
