What is a blockchain operating system and what are the benefits? Introducing Overledger from Quant Network.

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Overledger is the world’s first blockchain operating system (OS) that not only inter-connects blockchains but also existing enterprise platforms, applications and networks to blockchain and facilitates the creation of internet scale multi-chain applications otherwise known as mApps.

In less than 10 months since launching Overledger they have provided interoperability with the full range of DLT technologies from all the leading Enterprise Permissioned blockchains such as Hyperledger, R3’s Corda, JP Morgan’s Quorum, permissioned variants of Ethereum and Ripple (XRPL) as well as the leading Public Permissionless blockchains / DAGs such as Bitcoin, Stellar, Ethereum, IOTA and EOS as well as the most recent blockchain to get added Binance Chain. In addition, Overledger also connects to Existing Networks / Off Chain / Oracle functionality and it does all of this in a way that is hugely scalable, without imposing restrictions / requiring blockchains to fork their code and can easily integrate into existing applications / networks by just adding 3 lines of code.

What is a blockchain Operating system?

You will be familiar with Operating systems such as Microsoft Windows, Apple Mac OS, Google’s Android etc but these are all Hardware based Operating Systems. Hardware based Operating Systems provide a platform to build and use applications that abstracts all of the complexities involved with integrating with all the hardware resources such as CPU, Memory, Storage, Mouse, Keyboard, Video etc so software can easily integrate with it. It provides interoperability between the Hardware devices and Software.

Overledger is a Blockchain Operating System, it provides a platform to build and use applications that abstracts all of the complexities involved with integrating with all the different blockchains, different OP_Codes being used, messaging formats etc as well as connecting to existing non-blockchain networks. It provides interoperability between Blockchains, Existing Networks and Software / MAPPs

How is Overledger different to other interoperability projects?

Other projects are trying to achieve interoperability by adding another blockchain on top of existing blockchains. This adds a lot of overhead, complexity, and technical risk. There are a few variants but essentially they either need to create custom connectors for each connected blockchain and / or require connected chains to fork their code to enable interoperability. An example of the process can be seen below:

User sends transaction to a multi sig contract on Blockchain A, wait for consensus to be reached on Blockchain A

A custom connector consisting of Off Chain Relay Nodes are monitoring transactions sent to the smart contract on Blockchain A. Once they see the transaction, they then sign a transaction on the Interoperability blockchain as proof the event has happened on Blockchain A.

Wait for consensus to be reached on the Interoperability Blockchain.

The DAPP running on the Interoperability Blockchain is then updated with the info about the transaction occurring on Blockchain A and then signs a transaction on the Interoperability blockchain to a multi sig contract on the Interoperability Blockchain.

Wait for consensus to be reached on the interoperability Blockchain.

A different custom connector consisting of Off Chain Relay Nodes are monitoring transactions sent to the Smart Contract on the Interoperability Blockchain which are destined for Blockchain B. Once they see the transaction, they sign a transaction on Blockchain B. Wait for consensus to be reached on Blockchain B.

Other solutions require every connecting blockchain to fork their code and implement their Interoperability protocol. This means the same type of connector can be used instead of a custom one for every blockchain however every connected blockchain has to fork their code to implement the protocol. This enforces a lot of restrictions on what the connected blockchains can implement going forward.

Some problems with these methods:

  • They add a lot of Overhead / Latency. Rather than just having the consensus of Blockchain A and B, you add the consensus mechanism of the Interoperability Blockchain as well.
  • Decentralisation / transaction security is reduced. If Blockchain A and Blockchain B each have 1,000 nodes validating transactions, yet the Interoperability Blockchain only has 100 nodes then you have reduced the security of the transaction from being validated by 1000 to validated by 100.
  • Security of the Interoperability Blockchain must be greater than the sum of all transactions going through it. JP Morgan transfer $6 Trillion every day, if they move that onto blockchain and need interoperability between two Permissioned blockchains that have to connect via a public Interoperability blockchain, then it would always have to be more costly to attack the blockchain than the value from stealing the funds transacted through the blockchain.
  • Imposes a lot of limitations on connected blockchains to fork their code which may mean they have to drop some existing functionality as well as prevent them from adding certain features in the future.
  • Creates a single point of failure — If the Interoperability blockchain or connector has an issue then this affects each connected blockchain.
  • It doesn’t scale and acts as a bottleneck. Not only does building complex custom connectors not scale but the Interoperability blockchain that they are forcing all transactions to go through has to be faster than the combined throughput of connected blockchains. These Interoperability blockchains have limited tps, with the most being around 200 and is a trade off between performance and decentralisation.

But some Interoperability blockchains say they are infinitely scalable?

If the interoperability blockchain is limited to say 200 tps then the idea is to just have multiple instances of the blockchain and run them in parallel, so you benefit from the aggregated tps, but just how feasible is that? Lets say you want to connect Corda (capable of 2000+ tps) to Hyperledger (capable of up to 20,000 tps with recent upgrade). (Permissioned blockchains such as Hyperledger and Corda aren’t one big blockchain like say Bitcoin or Ethereum, they have separate instances for each consortium and each is capable of those speeds). So even when you have just 1 DAPP from one consortium that wants to connect Corda to Hyperledger and use 2000 tps for their DAPP, you would need 10 instances of the Interoperability blockchain, each with their own validators (which maybe 100–200 nodes each). So, 1 DAPP would need to cover the costs for 10 instances of the blockchain and running costs for 1,000–2000 nodes…This is just one DAPP connected to one instance of a two permissioned blockchains, which are still in the early stages. Other blockchains such as Red Belly Blockchain can achieve 440,000 tps, and this will surely increase as the technology matures. There is also the added complexity of then aggregating the results / co-coordinating between the different instances of the blockchain. Then there are the environmental concerns, the power required for all of these instances / nodes is not sustainable.

It’s not just transactions per second of the blockchain as well, its the latency of all these added consensuses along the path to reach to the destination and not knowing whether the security of each of the hops is sufficient and can be trusted. To see examples of how this potential issue as well as others effect Cosmos you can see my article here. I recommend also reading a blog done by the CEO of Quant, Gilbert Verdian, which explains how Overledger differs here as well as detailed in the whitepaper here.

Overledger’s approach

In 1973 Vint Cerf invented the protocol that rules them all: TCP/IP. Most people have never heard of it. But it describes the fundamental architecture of the internet, and it made possible Wi-Fi, Ethernet, LANs, the World Wide Web, e-mail, FTP, 3G/4G — as well as all of the inventions built upon those inventions.

Wired: So from the beginning, people, including yourself, had a vision of where the internet was going to go. Are you surprised, though, that at this point the IP protocol seems to beat almost anything it comes up against?

Cerf: I’m not surprised at all because we designed it to do that.

This was very conscious. Something we did right at the very beginning, when we were writing the specifications, we wanted to make this a future-proof protocol. And so the tactic that we used to achieve that was to say that the protocol did not know how — the packets of the internet protocol layer didn’t know how they were being carried. And they didn’t care whether it was a satellite link or mobile radio link or an optical fiber or something else.

We were very, very careful to isolate that protocol layer from any detailed knowledge of how it was being carried. Plainly, the software had to know how to inject it into a radio link, or inject it into an optical fiber, or inject it into a satellite connection. But the basic protocol didn’t know how that worked.

And the other thing that we did was to make sure that the network didn’t know what the packets had in them. We didn’t encrypt them to prevent it from knowing — we just didn’t make it have to know anything. It’s just a bag of bits as far as the net was concerned.

We were very successful in these two design features, because every time a new kind of communications technology came along, like frame relay or asynchronous transfer mode or passive optical networking or mobile radio‚ all of these different ways of communicating could carry internet packets.

We would hear people saying, ‘The internet will be replaced by X25,’ or ‘The internet will be replaced by frame relay,’ or ‘The internet will be replaced by APM,’ or ‘The internet will be replaced by add-and-drop multiplexers.’

Of course, the answer is, ‘No, it won’t.’ It just runs on top of everything. And that was by design. I’m actually very proud of the fact that we thought of that and carefully designed that capability into the system.

This is the approach Quant have taken with their Blockchain OS, Overledger to solve Blockchain interoperability. Compared to other Interoperability platforms that are trying to achieve interoperability at the transaction layer by connecting two blockchains via another blockchain, these will be ultimately be made redundant once faster methods are released. Overledger is designed to be future proof by isolating the layers so it doesn’t matter whether it’s a permissioned blockchain, permissionless, DAG, Legacy network, POW, POS etc because it abstracts the transaction layer from the messaging layer and runs on top of blockchains. Just as the Internet wasn’t replaced by X25, frame relay, APM etc, Overledger is designed to be future proof as it just runs on top of the Blockchains rather than being a blockchain itself. So, if a new blockchain technology comes out that is capable of 100,000 TPS then it can easily be integrated as Overledger just runs on top of it.

Likewise, with protocols such as HTTPS, SSH etc these will also emerge for blockchains such as ZK-Snarks and other privacy implementations as well as other features made available, all will be compatible with Overledger as its just sitting on top rather than forcing their own implementation for all.

It doesn’t require blockchains to fork their code to make it compatible, it doesn’t add the overhead of adding another blockchain with another consensus mechanism (most likely multiple as it has to go through many hops). All of this adds a lot of latency and restrictions which isn’t needed. The developer can just choose which blockchains they want to connect and use the consensus mechanisms of those blockchains rather than forced to use one.

Overledger can provide truly internet scale to meet whatever the demands may be, whether that be connecting multiple red belly blockchains together with 440,000 tps it doesn’t matter as it doesn’t add its consensus mechanism and uses proven internet scale technology such as that based on Kubernetes, which is where each task is split up into a self-contained container and each task is scaled out by deploying more to meet demand. Kubernetes is what runs Google Search engine where they scale up and down billions of containers every week.

Due to this being more of a summary, I strongly recommend you read this article which goes into detail about the different layers in Overledger.

But how does it provide the security of a blockchain if it doesn’t add its own blockchain?

This is often misunderstood by people. Overledger is not a blockchain however it still uses a blockchain for security, immutability, traceability etc, just rather than force people to use their own blockchain, it utilises the source and destination blockchains instead. The key thing to understand is the use of its patented technology TrustTag, which was made freely available to anyone with the Overledger SDK.

Please see this article which explains TrustTag in detail with examples showing how hashing / digital signatures work etc

A quick overview is if i want to send data from one blockchain to another the Overledger SDK using Trusttag will put the data through a hashing algorithm. The Hash is then included in digital signature as part of the transaction which is signed by the user’s private key and then validated through normal consensus and stored as metadata on the source blockchain. The message is then sent to the MAPP off chain. The MAPP periodically scans the blockchains and puts the received message through a hashing algorithm and compares the Hash to the one stored as metadata on the blockchain. This ensures that the message hasn’t been modified in transit, the message is encrypted and only the Hash is stored on chain so completely private, provides immutability as it was signed by the user’s private key which only they have and is stored on the blockchain for high availability and secure so that it can’t be modified, with the ability to refer back to it at any point in time.

Despite Overledger being a very secure platform, with the team having a very strong security background such as Gilbert who was chief security information officer for Vocalink (Bank of England) managing £6 trillion of payments every year and classified as national critical security (highest level you can get), ultimately you don’t need to trust Overledger. Transactions are signed and encrypted at client side, so Overledger has no way of being able to see the contents. It can’t modify any transaction as the digital signature which includes a hash of the transaction would be different so would get rejected. Transaction security isn’t reduced as it is signed at source using however many nodes the source blockchain has rather than a smaller amount of nodes with an interoperability blockchain in the middle.

Patents

The core code of Overledger is closed source and patented, one of the recent patents can be seen here, along with TrustTag and further ones are being filed. The Overledger SDK is open source and is available in Java and Javascript currently, with plans to support Pyhton and Ruby in the near future. Java and Javascript are the most popular programming languages used today.

The Blockchain connectors are also open source and this allows the community to create connectors to connect their favourite blockchain so that it can benefit from blockchain interoperability and making it available to all enterprises / developers currently utilising Overledger. Creating is currently taking around a week to implement and so far, have been added based upon client demand.

Multi Chain Applications (MAPPs)

Multi Chain Applications (MAPPs) enable an application to use multiple blockchains and interoperate between them. Treaty Contracts enable a developer to build a MAPP and then change the underlying blockchain it uses with just a quick change of couple of lines of code. This is vital for enterprises as it’s still early days in Blockchian and we don’t know which are going to be the best blockchain in the future. Overledger easily integrates into existing applications using the Overledger SDK by just adding 3 lines of code. They don’t need to completely rewrite the application like you do with the majority of other projects and all existing java / javascript apps on Windows / Mobile app stores / business applications etc can easily integrate with overledger with minimal changes in just 8 minutes.

Treaty Contracts

What Overledger will allow with Treaty contracts is to use popular programming languages such as Java and create a smart contract in Overledger that interacts with all of the connected blockchains. Even providing Smart contract functionality to blockchains that don’t support them such as Bitcoin. This means that developers don’t have to create all the smart contracts on each blockchain in all the different programming languages but instead just create them in Overledger using languages such as Java that are widely used today. If they need to use a different blockchain then it can be as easy as changing a line of code rather than having to completely rewrite the smart contracts.

Overledger isn’t a blockchain though, so how can it trusted with the smart contract? A Hash of the smart contract is published on any blockchain the MAPP developer requires and when called the smart contract is run its run through a hashing function to check that it matches the Hash value stored on the blockchain, ensuring that it has not been modified.

By running the Smart contract off chain this also increases Scalability enormously. With a blockchain all nodes have to run the smart contract one after another rather than in parallel. Not only do you get the performance benefit of not having to run the code against every single node but you can also run them in parallel to others executing smart contracts.

You can read more about Treaty Contracts here

The different versions of Overledger

Enterprise version

The current live version is the Enterprise version as that is where most of the adoption is taking place in blockchain due to permissioned blockchains being preferred until permissionless blockchains resolve the scalability, privacy and regulatory issues. Please see this article which goes into more details about Entereprise blockchain / adoption. The Enterprise version connects to permissioned blockchains as well as additional features / support suited for Enterprises.

Community version

The community version is due to be released later this year which will allow developers to benefit from creating MAPPs across permissionless blockchains. Developers can publish their MAPPs on the MAPP Store to create additional revenue streams for developers.

Where does Overledger run from? Is it Centralised?

Overledger can run from anywhere. The community version will have instances across multiple public clouds, Enterprises / developers may prefer to host the infrastructure themselves within a consortium which they can and are doing. For example SIA is the leading private Financial Network provider in Europe, it provides a dedicated high speed network which connects all the major banks, central banks, trading venues etc. SIA host Overledger within their private network so that all of those clients can access it in the confinement of their heavily regulated, secure, fast network. AUCloud / UKCLoud host Overledger in their environment to offer as a service to their clients which consist of Governments and critical national infrastructure.

For Blockchain nodes that interact with Overledger the choice is entirely up to the developer. Each member within a consortium may choose to host a node, some developers may prefer to use 3rd party hosting providers such as Infura, or Quant can also host them if they prefer, its entirely their choice.

Overledger allows for higher levels of decentralisation by storing the output across multiple blockchains so you not only benefit from the decentralisation of one blockchain but the combination of all of them. Ultimately though decentralisation is thrown around too much without many actually understanding what it means. It’s impossible to have complete decentralisation, when you sign a transaction to be added to a blockchain ultimately you still connect through a single ISP, connect through a single router, or the input into a transaction is done through a piece of software etc. What matters to be decentralised is where trust is involved. As i have mentioned before you don’t need to trust the OS, it’s just providing instructions on how to interact with the blockchains, the end user is signing the transactions / encrypting at client side. Nothing can be seen or modified with the OS. Even if somehow the transaction did get modified then it would get rejected when consensus is done as the hash / digital signature won’t match at the destination blockchain. Where the transaction actually gets put onto the blockchain is where decentralisation matters, because thats what needs to be trusted and conensus is reached and Overledger enables this to be written across multiple blockchains at the same time.

The Team

The team are very well connected with a wealth of experience at very senior roles at Global enterprises which I will include a few examples below. Gilbert Verdian the CEO was the Head of security for the payment infrastructure for the Bank of England through his CISO role with Vocalink (Mastercard)managing £6 trillion every year. This is treated by the government as critical national infrastructure which is the highest level of criticallity because its so fundamental to the security of the country. They have experience and know what it takes to run a secure financial infrastructure and meeting requirements of regulators. Gilbert was director for Cybersecurity at PWC, Security for HSBC and Ernst & Young as well as various government roles such as the CISO for the Australian NSW Health, Head of Security at the UK government for Ministry of Justice and HM Treasury in addition to being part of the committee for the European Commission, US Federal Reserve and the Bank of England.

Cecilia Harvey is the Chief Operating Officer, where she was previously a Director at HSBC in Global Banking and Markets and before that Director at Vocalink. Cecilia was also Chief Operating Officer at Citi for Markets and Securities Services Technology as well as working for Barclays, Accenture, IBM and Morgan Stanley.

Vijay Verma is the Overledger platform lead with over 15 years of developer experience in latest technologies like Java, Scala, Blockchain & enterprise technology solutions. Over the course of his career, he has worked for a number of prestigious organisations including J&J, Deutsche, HSBC, BNP Paribas, UBS Banks, HMRC and Network Rail.

Guy Dietrich, the managing director of Rockefeller Capital (manages $19 Billion in assets) has joined the board of Quant Network, and has recently personally attended meetings with the Financial Conduct Authority (FCA) with Gilbert

As well as advisors such as Paolo Tasca, the founder and Executive Director of the Centre for Blockchain Technologies (UCL CBT) at University College Londonfounder and executive director as well as Chris Adelsbach, Managing Director at Techstars, the worldwide network that helps entrepreneurs succeed. Techstars has partners such as Amazon, Barclays, Boeing, Ford, Google, Honda, IBM, Microsoft, PWC, Sony, Target, Total, Verizon, Western Union etc.

Due to client demand they are expanding to the US to setup a similar size office where board members such as Guy Dietrich will be extremely valuable in assisting with the expansion.

The most exciting part about the project though is just how much adoption there has been of the platform, from huge global enterprises, governments and cloud providers they are on track for a revenue of $10 million in their first year. I will go through these in the next article, followed by further article explaining how the Token and Treasury works.

You can also find out more info about Quant at the following:

Part One — Blockchain Fundamentals

Part Two — The Layers Of Overledger

Part Three — TrustTag and the Tokenisation of data

Part Four — Features Overledger provides to MAPPs

Part Five — Creating the Standards for Interoperability

Part Six — The Team behind Overledger and Partners

Part Seven — The QNT Token

Part Eight — Enabling Enterprise Mass Adoption

Quant Network Enabling Mass Adoption of Blockchain at a Rapid Pace

Quant Network Partner with SIA, A Game Changer for Mass Blockchain Adoption by Financial Institutions

Wall Street 2.0: How Blockchain will revolutionise Wall Street and a closer look at Quant Network’s Partnership with AX Trading

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