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Quant - Interchain Development And Cross-Chain Protocols. BlockchainLive 2018


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The Internet of Trust: Network of inter-connected blockchain networks to transact Value.
I covered the history of the Internet, the mistakes we made with OSI and why we’re making the same mistakes again on blockchain.
The problem with Blockchain today is lack of Openness, Adoption and Proprietary Technology

#Overledger solves this.

Published in: Internet
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Quant - Interchain Development And Cross-Chain Protocols. BlockchainLive 2018

  1. 1. Interchain Development And Cross-Chain Protocols Gilbert Verdian
  2. 2. The Internet Network of inter-connected networks to transact Information
  3. 3. The Internet Tribes OSI TCP/IP Open Systems Interconnection (OSI) 1977-1983 1983 to today
  4. 4. OSI 1977: International Organization for Standardization (ISO) committee on Open Systems Interconnection (OSI) is formed May 1983: ISO publishes “ISO 7498: The Basic Reference Model for Open Systems Interconnection” as an international standard 1984: Individual OSI standards for transport protocols, electronic mail, electronic directories, network management, and many others. Digital Equipment Corp., Honeywell, and IBM were by then heavily invested in OSI, as was the European Economic Community and national governments throughout Europe, North America, and Asia. 1985 - National Research Council recommendation to transition away from TCP/IP and toward OSI. The Department of Commerce issued a mandate in 1988 that the OSI standard be used in all computers purchased by U.S. government agencies after August 1990. By the late 1980s, frustration with OSI’s slow development had reached a boiling point. Fatal flaw, ironically, grew from its commitment to openness. 4
  5. 5. TCP/IP Internet was a Research Network - Commercial traffic or for-profit service providers were banned until 1992. 1980: U.S. Department of Defense publishes “Standards for the Internet Protocol and Transmission Control Protocol.” January 1983: U.S. Department of Defense’s mandated use of TCP/IP on the ARPANET signals the “birth of the Internet.” 1991: Tim Berners-Lee announces public release of the World Wide Web application. 1992: U.S. National Science Foundation revises policies to allow commercial traffic over the Internet. 1992: In a “palace revolt,” Internet engineers reject the ISO ConnectionLess Network Protocol as a replacement for IP version 4 5
  6. 6. The problem with OSI was lack of Openness, Adoption and Proprietary Technology • OSI protocols were overwhelmingly unappealing for actual use. • They were developed by committee, so they were more complicated. • More complicated meant more cost to implement. • More development cost meant more incentive to keep implementations proprietary. • Proprietary implementations meant fewer opportunities for reuse and cross- fertilization, and also fewer implementations. • Fewer implementations meant less opportunity for proving interoperability. • And on top of it all, just to play in the OSI game, you had to pay through the nose for copies of the standards With all that against it, it was ONLY massive government interference (in the form of mandates and government support of telecom industries) that caused OSI implementations to exist at all, and they were generally closed, proprietary, incomplete, expensive, and late 6
  7. 7. How we got the Internet of today • TCP/IP was open and accessible, whereas OSI was "open" only in name • TCP/IP, the definitions were free, and in most cases multiple implementations were available for study, if not actual reuse. • TCP/IP's success was driven bottom-up, by widespread adoption in LOCAL networks and an industry of hardware and computer companies that used those protocol definitions. • The Internet was supposed to be Decentralised, by its original design. 7 “Birth of the Internet” - 1 January 1983, ARPA stopped supporting the ARPANET host protocol, forcing contractors to adopt TCP/IP if they wanted to stay connected
  8. 8. TCP/IP was Simpler 8
  9. 9. Sarah Jeong The Internet of today?
  10. 10. Blockchain
  11. 11. For the first time, we can honour the original vision of the Internet to create an open, interoperable and trusted network for people, machines and data to operate on, but without the original flaw of having to know and trust everyone within the network. We can trust the network without the need to know and trust each other. 11
  12. 12. Blockchain: We’re doing it wrong 12
  13. 13. The problem with Blockchain today is lack of Openness, Adoption and Proprietary Technology 13
  14. 14. 2009 20181950s 1989-94 The Internet of Trust Satoshi Paper Networks are evolving 14
  15. 15. • Creating more Value • Trust the Network • Human-to-human Trust • Machine-to-Machine Trust Centralised Web is becoming obsolete 15
  16. 16. Why are we building closed proprietary networks in isolation?
  17. 17. 1990’s: Online Service Providers - Proprietary Networks are limited Compuserve Prodigy America Online ? We’ve been here before 17
  18. 18. 18 Why are we building closed proprietary blockchain networks in isolation? Ripple Stellar Bitcoin Ethereum Hyperledger AION Polkadot Cosmos ICON ARC 1st Generation of Blockchains Nth Generation of Blockchains Interoperability Blockchains NEO IOTA Cardano CORDA Existing Networks JPMQUORUM
  19. 19. 19 Problem: Blockchains are Closed Proprietary Networks • Users & Apps of one network can not interact and talk to other networks • Users & Apps are restricted and limited to their network and its technology • No options to benefit from the other blockchain technologies • No option to manage cost and fees • Enterprises don’t like the above
  20. 20. Blockchain needs Openness, Mass- Adoption and Non-Proprietary Technology
  21. 21. The Current Blockchain approaches won’t work • Another blockchain on top of another blockchain • Another consensus protocol on top of an existing consensus protocol • Proprietary or Single Network technology – All participants won’t connect to the one blockchain • Single use-case networks and protocols • Restricted connectivity approaches • Restricted scaling approaches and speed - Side-chains, Virtual chains, Sharding • Limitations and forcing mass User & Enterprise changes We need Standards 21
  22. 22. Why Standardise Blockchain?
  23. 23. 23 25/09/2018 Voluntarily developed ü Developed by experts ü Consensus-based ü Documented good practice ü Tested against ü Voluntarily applied ü What makes a Standard…? Terminology Guidance Code of Practice Specification Test method
  24. 24. 24 Int’l Standards (ISO, IEC) Regional Standards (EN) National Standards, e.g. British Standards (BS) Sponsored standards – BSI PAS Private and Consortia Standards Corporate Technical Specifications Professional Codes, Guidance, Best Practice National, European and international standards BSI as NSB manages BS, EN & ISO, IEC standards. All EN and most international standards are “adopted” as British Standards Private & professional standards, codes and guidance PAS route to national and international standards Copyright © 2016 BSI. All rights reserved.
  25. 25. 25 Trade associations Certification bodies Government departments Enforcement bodies Consumer bodies Professional institutions Standards users Research organisations Public sector Education bodies Standards Committee National Standards Bodies do not write standards, the stakeholder committees do
  26. 26. 26 26 Developing Standards Proposal Drafting Public Enquiry Approval Publication Draft Standard Approved Standard
  27. 27. 27 The value of standards
  28. 28. 28 • Convening communities • Building consensus of what good looks like • Diffusing knowledge into the market • Enabling scale-up and creation of supply chains • Levelling the playing field and avoiding technology lock-in • Building public and investor confidence in new technologies and products. Copyright © 2016 BSI. All rights reserved. The role of standards in innovation
  29. 29. China creates blockchain coalition ChinaLedger Union The country’s blockchain industry organises distributed ledger- based coalition in Beijing supported by Chinese National Assembly and aiming to standardise the application of blockchain. - 20 April 2016 2015: Need for Blockchain ISO Standards Russian Finance Firms Form Blockchain Consortium A group of Russian banks and financial services companies has formed a private-sector consortium focused on blockchain applications. - Coindesk 1 July 2016 Blockchain: Standards Wanted Long reliant on collaborative standard-setting, the financial industry looks for more of the same to realize the operational and risk-mitigation potential of blockchain - GARP – Global Association of Risk Professionals 8 April 2016 29
  30. 30. The proposed work is to: • define this standard • create the mechanism to be a gateway to multiple blockchains • create the governance framework • have interoperability and compatibility with existing financial standards • provide legal and regulatory compliance to each transaction across blockchains • work towards a regulatory framework that provides a mix of legal and technical rules Proposed ISO Standard 2015: Proposed Blockchain ISO Standard
  31. 31. To address key areas such as: • Terminology – Having a common language and terminology to define the interoperability of blockchain • Process and Methods – the mechanism and messaging standards around inter-blockchain communication including routing. • Trust and Interoperability – Develop the standards that incorporate messaging protocols and methods to route, trust and connect to different blockchains. Establishing a standard API (Application Programming Interface) and set of routines and tools for building blockchain software and applications • Privacy and Security – Ensure the confidentiality, integrity and availability of users and entities are maintained. Embed compliance to money laundering and KYC (know your customer) requirements. • Authentication – ability to map blockchain transactions to individual users and entities in a secure manner. Store credentials on the blockchain or align/federate to a sidechain (off blockchain) 2015: Proposed Blockchain ISO Standard 31
  32. 32. 51 Countries working together to Standardise Blockchain • WG1 Foundations - Terminology, Reference Architecture, taxonomy and ontology • WG2 Security, Privacy and Identity • WG3 Smart Contracts and their Applications • JWG4 Blockchain and distributed ledger technologies and IT Security techniques • SG2 Use Cases • SG6 Governance of blockchain and distributed ledger technology systems • SG7 Interoperability of blockchain and distributed ledger technology systems 2018: TC307 Blockchain ISO Standard 32
  33. 33. ISO Development TC307 – 24-36 months April 17 April 18 April 19 April 20 Terminology WG1 Tax/Reference Arch Identity SG7 Interoperability Governance Security & Privacy Nov 17 Terminology WG1 Foundations WG2 Security, Privacy and Identity SG6 Governance Tokyo London Use Cases Smart Contracts WG3 Smart Contracts & their applications Moscow TC307 Roadmap Sydney Dublin Visakhapatnam JWG4 Blockchain and distributed ledger technologies and IT Security techniques 33
  34. 34. TC307 Standards under development ISO/CD 22739 -- Terminology ISO/NP TR 23244 -- Overview of privacy and personally identifiable information (PII) protection ISO/NP TR 23245 -- Security risks and vulnerabilities ISO/NP TR 23246 -- Overview of identity management using blockchain and distributed ledger technologies ISO/AWI 23257 -- Reference architecture ISO/AWI TS 23258 -- Taxonomy and Ontology ISO/AWI TS 23259 -- Legally binding smart contracts ISO/NP TR 23455 -- Overview of and interactions between smart contracts in blockchain and distributed ledger technology systems ISO/NP TR 23576 -- Security of digital asset custodians ISO/NP TR 23578 -- Discovery issues related to interoperability 34
  35. 35. The Internet of Trust Network of inter-connected blockchain networks to transact Value
  36. 36. 36 We will be transacting with Value not Information
  37. 37. 37 We’ve built Overledger an OS overlay to inter-connect blockchains & networks Overledger Ripple Stellar Bitcoin Ethereum Hyperledger AION Polkadot Cosmos ICON ARC 1st Generation of Blockchains Nth Generation of Blockchains Interoperability Blockchains NEO IOTA Cardano CORDA Existing Networks JPMQUORUM 37 • Openness – Open-source adoptable approach like TCP/IP, respecting the rules of the underlying blockchains • Interoperable – Connecting Any network to Any other network without overhead or limitations • Create an ecosystem to foster innovation
  38. 38. • Enable applications to function across multiple blockchains and multiple protocols (MApps - Multi-chain Applications) • Choice - Not be limited to any single vendor or technology • Better Resilience and Security. Choice to migrate across blockchains • Cost Management - Provide enterprises and developers the ability to manage blockchain fees • Treaty Contracts – evolution of Smart Contracts recognised across blockchains • Easy to Integrate Overledger & upgrade existing dApps to MApps Benefits of Overledger 38
  39. 39. 39 Inviting Enterprises & Developers 39 Start benefiting from Overledger SDK released 30th September 2018
  40. 40. Thank you Quant Network