Blockchain Interoperability

Research Overview

Author: Marek Laskowski, Henry Kim
Release Date: August 21, 2020

Abstract:

This project explains the key interoperability challenges that the blockchain pioneers need to solve. It covers the business and technical foundations of interoperability, namely decisions about user identity (keys and signatures), security of assets (cryptography), notaries of off-chain events (oracles and Byzantine committees), block relays (sidechains and pegs) between a local chain and a foreign one, gateways of communication, and network architecture. It surveys the five major interoperability projects, and it explores the use case of cross-border trade, defining the problem it solves as well as the advantages of the solution it provides. Finally, this project includes an appendix that covers concepts behind interoperability such as atomic swap, practical Byzantine fault tolerance, dogfooding, and Shamir secret sharing.

Copyright 2020 Blockchain Research Institute – not for distribution

Blockchain Interoperability

Related Content

Coopetition in Global Commerce

This research project explores coopetition as a strategy for realizing the potential of Web3 technologies in global commerce. The author starts by recounting FedEx’s own blockchain use case and lessons learned, then describes how coopetition has advanced standards and best practices in the rail, airline, and automotive industries through such groups as the Associate of American Railroad, the International Air Transport Association, and the Global Express Association. He discusses coopetition through industry- and platform-oriented consortia, including the Global Blockchain Business Council and the Enterprise Ethereum Alliance. Finally, he walks through the challenges of permissioned enterprise blockchains (e.g., B3i, TradeLens, and we.trade) and entrenched corporate cultures as well as the benefits of open innovation such as interoperability, transparency, and risk mitigation. Throughout, the author keeps the enterprise executive’s questions and concerns front and center. It is great read for the C-suite.

Read More

Decentralized Finance Analysis

In this project, our research leaders develop a method of formal analysis of the value of decentralized finance (DeFi) initiatives. Inspired by Vitalik Buterin’s writings on the intrinsic worth of projects in the crypto economy—that they must solve legitimate human problems on a macro scale—our researchers mirror the approach of Benjamin Graham and David Dodd in Security Analysis. For several different applications within the DeFi space, they identify the business metrics as well as the financial and social key performance indicators (e.g., staking yield, fees generated) that will help investors distill signals from the noise—that is, the inherently valuable projects from what Graham and Dodd protégé Warren Buffett called “rat poison.” Although this research is by no means as detailed as Security Analysis, we think it will “shake readers from the memetic psychosis that has propagated crypto booms and busts over the past decade,” to quote the authors.

Read More
Subscribe