Blockchain becomes a new social infrastructure - Beyond Blockchain

Blockchain is one of the most promising technology to support traceability which grasps cryptographic assets such as Bitcoin and the manufacturing distribution and sales process of products. This article will introduce “interoperability technology” which is the key for Blockchain to support social infrastructure.


Interoperability that connects scattered Blockchain systems

The global Blockchain market is expanding rapidly year by year, and Blockchain is no longer just a novel technology. As a result of the correct understanding of the characteristics and the arrangement of applicable and inapplicable services, we are entering the stage of providing new services that take attitude of aptitude*1.

NTT DATA began technical verification of Blockchain in 2015. In 2017, it launched the Blockchain CoE (Center of Excellence), collaborating with Blockchain engineers around the world to gather knowledge and worked together to achieve practical use of Blockchain. Blockchain technology is also expected to be used in DX (digital transformation). One example is that “securities digitized on the Blockchain can be purchased with crypto assets such as Bitcoin.” In reality, the Blockchain that manages electronic securities and the Blockchain that manages crypto assets are implemented separately, so data existing on different Blockchain platforms cannot be easily linked. Interoperability can solve this problem.

In the IT context, interoperability refers to interoperability of the systems that can operate together.

When systems can be linked with each other, seamless transactions and processes that do not depend on system characteristics will be executed from the user side, and the user no longer needs to face inconvenience or to make any unnecessary efforts. Until now, systems that utilize Blockchain have been individually optimized according to the purpose. By linking these individual systems, Blockchain has the potential to become a new social infrastructure technology as well as being used in DX. Therefore, the importance of interoperability technology that connects Blockchain is increasing.

Obstacles for interoperability and demonstration experiments

In order to seamlessly realize data linkage of different Blockchain platforms in actual services, it is necessary to have the following three conditions at the same time.

  1. Multiple blockchains can be linked
  2. Not necessary to leave the private key required for the transfer of rights and values to the operator of each blockchain
  3. Processing on both blockchains can be automatically executed at the same time

However, when linking data on different blockchain platforms, if the client (service user) has a private key, the client must take an execution action at the processing timing of each service. On the other hand, if it is the same blockchain platform, it can be executed automatically, but it could not be achieved with different blockchain platforms. As mentioned above, there are various blockchain platforms in reality. Executing three conditions at the same time is an extremely difficult task and is called the trilemma.

Therefore, NTT DATA’s focus on IBC*2, which is a communication protocol for blockchain linkage, and use the Relay method*3, which does not depend on third parties that mediate transactions, it has conducted a demonstration experiment with the cooperation of Datachain in order to solve this problem. In this demonstration experiment, we were able to connect two different platforms, a trade platform and a payment platform, using the Relay method, and automatically transfer (payment) trade documents and funds at the same time. This experiment proved successful and found the way to eliminate the trilemma.

Datachain possesses high technology to link blockchains simultaneously and in the future, NTT DATA aims to establish technology that can connect to any blockchain platform via a hub. In this experiment, with the cooperation of Datachain, NTT DATA succeeded in connecting two major blockchains, Hyperledger Fabric used on the trading platform, and Cosmos used on the payment platform. Utilizing the results of this experiment, interoperability is expected to be realized in the fields such as trade, security token and insurance and electricity, where transfer of rights(goods and services) and transfer of value (cryptographic assets, etc.) are expected to be linked.

Toward the creation of new social infrastructure

NTT DATA has built many social infrastructures over the years. In addition, as a world-leading company in the blockchain field, Avasant*4 and Everest*5 are highly evaluated. NTT DATA is also working on open innovation and is actively taking on the challenge of creating new service models in technical cooperation with various venture companies. Blockchain interoperability technology, which expands further possibilities by connecting newly provided services, is one of the most important technologies for creating “the new social infrastructure” that NTT DATA aims to realize. By combining NTT DATA’s experience of building social infrastructure with new technologies possessed by venture companies, NTT DATA will contribute to build social infrastructure that provides new value to consumers.