Interoperability will change what a blockchain means and upend the order of the blockchain industry

James Barry
Mar 11, 2019 · 7 min read

Blockchains built as vertical software in walled gardens are about to go away in favor of composable stacks of independent software, and the change will upend the cybercurrency and blockchain industry as it sits today. Vertically designed public cybercurrency and blockchain applications are about to change in a way that makes them less behind a “walled garden” and more of a piece of an overall application that changes markets. The blockchain space is quickly abstracting into different layers, just like building a web application is today. How will this change the blockchain organizations as they are structured today? I believe these new layers will not be “walled in” by a single organization like Ethereumor EOSas they are today, but will be made into new composable entity made up of various pieces that built together will deliver an application that will be a cybercurrency, an asset trading app, etc. These new entities will not be bound by what is “Ethereum” or “EOS” or any other similar chain, but rather by a set of tools that together are the essential layers of a blockchain that together make up a total blockchain solution.

Today, vertically focused proprietary blockchain networks (Like Ethereum or EOS) rule the mindset of the Blockchain and cryptocurrency worlds. Each chain is focused around a tight integration of their consensus algorithm, their vision of a coin, and their idea of distributing the load. The difference between this and prior computing revolutions is the fact that these vertically focused programs are focused on providing monetary value (cybercurrency) and are less likely to accept programs not lending themselves to promoting or using that currency. This has led to walled gardens of development, that promote only those ideas that are there to promote their own cybercurrency and its corresponding platform.

The future of blockchains is abstracted layers that are developed independently and combined into composable blockchains that are far more powerful than the current single vertical chain application that exists today. Today’s blockchain chains are approaching this first phase as “Layer 2” technologies. Layer 2 are technologies that build on top of and attach to the vertically integrated chains that exist today. The build new interoperable code to “exchange” values, contracts and other items between blockchains. This means that each Lay2 app must keep up with any changes each vertical stack makes and apply them in time to ensure that their exchanging system continues to work with all versions of the software supported. I believe that thinking is way too narrow. I see the direction is tightly focused components that inter operate through internationally accepted standards.

Today’s vertical walled gardens defined by the myriad of blockchains available today have created either extensible component’s that work so long as you follow their walled garden specifications or they consist of a single stack of code that defines the walled garden of the vertical application. Defining application definition within a single system stack, restrains creativity and will eventually lose out to worldwide standards. The single stack created by many walled gardens, has created a situation where the application layer and the protocol code are hopelessly intermingled for the purpose of that single blockchain solution. Upgrades make for a mess as all the components are built as one and not separated by function though application layering. As each component needs to gain more functions to stay current with the newest blockchain functions, either the code is abstracted into layers for easy upgrading, or the code additions become harder and harder to accomplish, while introducing more errors because of the huge complexity of a single codebase. No matter how the vertical stack is coded, when you introduce the governance of these vertically oriented chains where you have everyone across the system needing to agree to the biggest changes and you have created slow overburdened software. Layer 2 applications waiting on the vertical stack to adopt new functionality will eventually make their interoperability impossible to maintain and slow down the system by the slowest adopter of new technology. Thus abstraction layers with fined grained components defined by internationally accepted standards will emerge.

What are these abstracted layers? Blockchains today could be broken into components that interact with each other as Web application do today. Components may be the logical pieces like the coin, the consensus, the chained database (the ledger), the smart contract, identity, the wallet, the peer to peer network (for node discovery and validation), cryptography, gateway services (API’s), etc. The question may arise that even if I can, why would I want to separate these layers out to discrete organizations? And are these the right components or do we need to further define the functionality to be broken out into layers? I believe we are still in the process of figuring out the right components and how they interact. Standards need to be built, adopted and adhered to when building out tools for the blockchain. Once these standards for each layer are designed and built, the blockchain revolution will really begin.

For my professional purposes, I selected the “Sawtooth” chain for my company Taekion, which is under the Hyperledger consortium run by the Linux Foundation. Already this chain has separated out consensus so one can change out consensus on the fly, all determined by the workload you are trying to achieve. That’s right just have the consensus approve the new consensus and you are off and running. How secure the proof will be may vary by application, and less provable consensus to gain more transactional speed may be a perfectly acceptable tradeoff. Already there are over 50 consensus mechanisms from Proof of Work, Proof of State, Proof of Time etc. that offer various tradeoffs between security and scalability. The future will be a consensus mechanism that can work on any chain that follows internationally accepted standards and is slotted in to meet the needs of a chain that is composed to meet a need of a blockchain.

The core “chain of blocks”(ledger) that these systems use can be custom as they are today, or use a variety of databases, with an “append only” mode and encrypt to the last write databases. Already Bigchaindb(Mongo) and Credereum(Postgres) are looking at extending traditional databases with Blockchain capabilities. I expect to see the use of traditional databases to continue to progress while consensus, coins, smart contracts etc. will be layered onto this data structure to create new and exciting use cases.

Smart contracts should be able to run on any system that the builder designates, not just the walled garden that they are designed for today. While many companies are building interoperable smart contracts (like Chainlink), eventually smart contracts will be a defined entity and contract builders will build them once for deployment on any base blockchain. Via international standards, the contracts will be usable with any compliant chain. They will have a standardized API to access information to execute the contracts. (Called “oracles” in Blockchain vernacular) And these contracts should be able to contract in multiple currencies or cybercurrencies. The contract and governance of the contract is what is important, not the currency or vertical stack that is used to create and deploy the contract.

Encryption will be one of these layers in the future. Hyperledger already has built out an abstraction layer, Ursa, to allow for encryption to be separated from the core code. Any blockchain app can use this encryption abstraction as their layer in the blockchain space. As encryption changes over time (stronger encryption in reaction to more powerful machines used to decrypt the algorithms) you do not have to rebuild the core code, just ensure the new encryption understands the abstraction layer. Using abstractions like Ursa will free the programmer up from referencing a common method over and over, but only refer to the API to access the latest algorithm for that composable application.

The coin today is abstracted by many blockchains using an ERC20 framework. But ERC20 coins today run only on the Ethereum network. Meaning they need to be validated on the Ethereum network, within their walled garden. FIAT currency (Government issued Legal Tender) and stocks are not restricted like these cybercurrencies are to a single stack to be validated. I expect to see coins built on entirely new stacks that mix and match other components to create new cybercurrencies built on entirely open standards. Why shouldn’t the coins, their various rules be nothing but a virtual instance on top of an agnostic network?

The end result of these abstracted components will be the breakdowns of these vertical walled gardens that exist today with cybercurrencies. Composable Blockchains will emerge, each build upon a foundation of applications and together they will make up the new widely used Blockchains, both private and public. The European Unions “Scalability, interoperability and sustainability of Blockchains” reportsummarizes the situation nicely:

‘There is, however, a flaw in the walled-garden approach: the walls. Networks are powerful in proportion to their size. As we know, large private versions of the Internet like AOL eventually disappeared as the maturation and adoption of the world wide web provided average people with user-friendly access to the open, decentralised, global version. This model won the day mostly because it proved the most inclusive and most useful. Something similar is likely to happen in blockchain.”

Vertical stacks are dead, just like they died during the conversion from Web 1.0 to Web 2.0, they will absolutely die here. Look for a robust interoperable set of components meeting internationally approved standards that create fast, scalable networks with robust components that are combined to create new industry disrupting blockchains and cybercurrencies.

Blockchain Standards

Blockchain Platforms need tech standards to grow the…

James Barry

Written by

technology geek, blockchain, crypto, tokens, cybersecurity, open source, standards, new product design, on the edge of new..father-husband-skier-traveler-photos

Blockchain Standards

Blockchain Platforms need tech standards to grow the industry

James Barry

Written by

technology geek, blockchain, crypto, tokens, cybersecurity, open source, standards, new product design, on the edge of new..father-husband-skier-traveler-photos

Blockchain Standards

Blockchain Platforms need tech standards to grow the industry

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