While the decentralized dream may seem to imagine a world that exists on a single, universal blockchain, the reality is that different people and organizations will always choose to use different blockchains.
So, it has become necessary to transfer data and assets reliably from one blockchain to another. The latest enterprise to approach a solution that enables this is Accenture, the international management consulting company, which has announced what it calls an "interoperability node."
The Problem: Blockchain Diversity
A decade ago, the world knew just one blockchain: Bitcoin.
Fast forward to the present, however, and the blockchain ecosystem is diverse, dynamic and burgeoning. Not only are there something like 1,600 different cryptocurrencies in existence, there is also a multitude of major public blockchains, from Bitcoin and Ethereum to Corda to Litecoin. Plus, tools like Hyperledger Sawtooth make it relatively easy for anyone to create a new blockchain from scratch.
In most respects, blockchain diversity is a good thing. Different blockchains excel at different things, and being able to choose the blockchain that best fits your particular needs - or to build an entirely new blockchain - is one of the factors that is helping to drive the popularity of blockchain technology.
Yet technological diversity also has a downside, which is that it makes interoperability difficult. Most blockchains were designed to optimize data storage and security within their own networks. Their designers gave little thought to the need to share data or other resources with external blockchains.
Accenture's Blockchain Interoperability Vision
This is the challenge that Accenture announced it has solved by creating "an interoperability node that resides, and provides the lines of communication," between multiple blockchains.
In a separate blog post , Accenture added a bit more technical information about how the solution actually works. Essentially, the interoperability node is a special node that runs on two or more blockchains at once and transfers data between those blockchains.
Accenture has tested the solution using the Digital Asset, R3 Corda, Hyperledger Fabric and Quorum blockchains.
How Is This Different From Atomic Swaps?
Accenture is hardly the first organization to take note of the blockchain interoperability problem. As crypto enthusiasts know, other solutions for achieving interoperability or data exchange between distinct blockchains exist.
Atomic swapping is one example, although it was designed primarily for exchanging cryptocurrencies between different blockchains, not for sharing data of all types.
Other projects, like Cosmos , have attempted to build cross-blockchain interoperability into their architecture. Unfortunately, this solution works only with blockchains that are designed to support their communication protocol.
In its blog post , Accenture seemed to give some vague acknowledgement to this and other blockchain interoperability efforts, without calling them out by name. The company suggests, however, that existing interoperability solutions fall short. One problem, it noted, is that collaboration between different blockchain projects in the interest of interoperability "could limit further innovation." It's unclear what exactly that means, but Accenture may be alluding to the fact that having to conform to a universal data-sharing standard could stifle the fast evolution of a blockchain project - just like having to follow traffic laws stops you from getting where you want really fast.
You could, of course, debate whether the benefits of a universal blockchain data-sharing protocol would outweigh the drawbacks.
Accenture also makes the point (and this one seems more compelling) that a true interoperability solution for exchanging data across blockchains should not require ongoing messaging between the two blockchains. That was one major design goal for Accenture's interoperability nodes.
"Trusted" Nodes
Critics of Accenture's solution might note two potential drawbacks. The first is that the interoperability nodes must be "trusted," according to Accenture. Without full technical details on how the solution works, it's hard to know what exactly "trusted" means in this context. But the language suggests that each blockchain that hosts an interoperability node must place special faith in that node.
That requirement would undercut the decentralized, trustless architecture that makes blockchains so powerful. Normally, you don't have to trust any particular node on a blockchain network; as long as you trust the network as a whole, your blockchain will function reliably. If Accenture's interoperability nodes require special trust, they may pose some challenges to blockchain's core value.
Second, Accenture mentions that interoperability nodes support only "in-scope" blockchains and distributed ledgers. Here, again, it's hard to say precisely what this means, but it may be a way of saying that the interoperability nodes work only with supported blockchains. That may be an unavoidable limitation, but it nonetheless means that Accenture's solution is less exciting than one that would manage to work with any blockchain anywhere.
Accenture's New Enterprise Blockchain Strategy
None of the above is to say that Accenture's interoperability nodes aren't useful. They hold promise, especially in the context of enterprise blockchain platforms, where businesses that are using different public or private blockchains will need interoperability.
Importantly, they also signal Accenture's interest in producing actual blockchain technology. That's a change for the company, which previously seemed to be focusing only on providing blockchain-related consulting and planning services. Now, it seems to want to join the likes of IBM and Hyperledger by rolling out enterprise-focused blockchain technology of its own making.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
