The boundary between the public chain and the alliance chain will be further blurred, and it will be a common solution to build an alliance chain on the basis of the public chain.
Original title: “Research on Connecting Public Chain and Consortium Chain”
Written by: Hao Kai, working at HashKey Capital Research
Audit: Zou Chuanwei, Chief Economist of Wanxiang Blockchain and PlatON
This article studies the progress of the connection between the public chain and the alliance chain. As more and more companies begin to try to use alliance chains, there will be a great need for connectivity between alliance chains and public chains, and between different alliance chains in the future. From the perspective of implementation methods, it is a more common solution to build an alliance chain on the basis of a public chain. In the future, the boundaries between public chains and alliance chains will be further blurred.
In recent years, with the continuous development of blockchain technology, many countries including China have gradually realized the importance of this technology and have supported and promoted blockchain technology from the national strategic level. In October 2019, the Political Bureau of the Central Committee of the Communist Party of China conducted the 18th collective study on the development status and trends of blockchain technology; in April 2020, the National Development and Reform Commission clearly included the blockchain in the information infrastructure of the new infrastructure. In this context, the entire blockchain industry is booming and has made great progress.
This article studies the progress of the connection between the public chain and the alliance chain, which is mainly divided into five parts: one is the current status of the public chain and the alliance chain, the second is the need for the two to connect, the third is a feasible technical solution, and the fourth is the current The fifth obstacle to development is thinking about the future development of public chains and alliance chains.
The status quo of public chain and alliance chain
From the perspective of access rights, blockchain can be divided into public chains, alliance chains and private chains. Among them, the public chain is an unlicensed chain, and any user who is willing to participate can join in; the alliance chain and private chain belong to the permission chain and have corresponding access mechanisms, and only licensed users can participate. The research object of this article is public chain and alliance chain.
Public chains represented by blockchain projects such as Bitcoin and Ethereum adopt an open architecture, allowing any users who are willing to participate in the ecosystem to participate in the ecosystem, mainly featuring decentralization, distribution, and anti-censorship. The public chain needs to design a complete set of economic incentives and governance mechanisms, and use Token as a medium of value exchange to balance ecological internal supply and demand. Under the incentive of Token, participants will spontaneously maintain the safety and normal operation of the public chain, and actively promote the ecological development of the public chain.
The consortium chain represented by Hyperledger and Corda is a relatively closed ecosystem, and only authorized users can participate. The main features include weak centralization, strong identity permissions, and security and privacy. For the alliance chain, the trust between participants is achieved through contractual relationships or common interests, and does not require the Token economic model to provide incentives. The alliance chain is friendly to enterprise users and can integrate the internal resources of the alliance, reshape the value distribution, and optimize the use efficiency.
Compared with the public chain, the alliance chain is easy to supervise and does not involve Token, which is more in line with the development requirements of the current stage in China.
The need to connect public chains and alliance chains
At present, most domestic government departments and enterprises promote the implementation of blockchain platforms in the form of alliance chains, and the development of alliance chains in China has been smoother. However, this does not mean that the alliance chain does not have its own shortcomings and limitations. The alliance chain is not a perfect solution, and sometimes it is necessary to take advantage of the advantages and characteristics of the public chain. The public chain and the alliance chain are not directly competitive, but can learn from each other. In many application scenarios, there is a need for connectivity between public chains and alliance chains.
First, the alliance chain may not need Token to provide incentives, which is an advantage in terms of regulatory compliance, but it also causes the lack of incentives in the alliance chain ecology, which makes it difficult to attract more participants and cannot expand the influence of the alliance chain . Many alliance chain projects are led by one or several companies, ignoring the wishes of other participants, and eventually become open databases among alliance members, which makes it difficult to give full play to the advantages of blockchain technology. Therefore, the alliance chain project may encounter bottlenecks after it has developed to a certain extent. If you want to continue to expand the influence of the entire ecosystem, it is necessary to connect the alliance chain with the public chain, gain more users through the public link, attract more developers, and create more business models and application scenarios.
Second, the application scenarios involved in each alliance chain project are limited, and it is impossible for one alliance chain project to cover all application scenarios. Then, connecting the public chain and the alliance chain can enrich the usage scenarios of the alliance chain. For example, one alliance chain project is mainly engaged in supply chain finance, and the function of another public chain project is identity authentication. Then, connecting the public chain and the alliance chain can provide the necessary identity information for supply chain finance and solve the problem of data interconnection. In the end, both projects can benefit from it. In this case, the user and ecological scale of the alliance chain will also expand.
Thirdly, since the trust of the alliance chain does not come from cryptography and game theory, it is difficult to achieve mutual trust in the value interaction between the alliance chains. If a transaction needs to occur between the two consortium chains, they can be connected to the public chain separately, and communicate, verify, and settle through the bridge of the public chain. At the same time, the security of the public chain itself also provides a guarantee for transactions between alliance chains.
Fourth, connecting public chains and alliance chains can also help solve privacy and regulatory issues. The public chain is difficult to supervise, while the alliance chain is easy to supervise. After connecting the public chain and the alliance chain, information and data can be segmented and stored separately according to the business model to meet the security requirements of privacy protection, which can be balanced to a certain extent User privacy and supervision.
Implementation
There are two main methods for connecting public chains and alliance chains: one is to build alliance chains on the basis of public chains, and the other is to develop public chains on the basis of alliance chains.
Build a consortium chain based on the public chain
It is a common method to build alliance chains on the basis of public chains. On a common basic public chain, develop different alliance chains, and different alliance chains can have different designs. In this design, the connection between the public chain and the alliance chain can be realized, and the interaction between the alliance chain can also be realized.
First, the technical solution of Layer 2 can meet this design. As the basic public chain, Layer 1 guarantees the security of the entire system through its own consensus algorithm, which is mainly used for clearing and settlement and deposit certificates. The alliance chain is connected to the public chain in the form of Layer 2, and different Layer 2 alliance chains can be designed according to its own business characteristics. At the same time, the alliance chain can store private information and data to meet the requirements of privacy protection.
Second, cross-chain technical solutions such as the relay chain can also conform to this design. Take Polkadot as an example. The consortium chain can be directly connected to the Polkadot ecology through a parallel chain to realize the connection with other chains in the Polkadot ecology, and it can also realize the value interaction between the consortium chains. In addition, Polkadot will maintain the security of the alliance chain. Of course, this method needs to consider the issue of Polkadot slot fees.
Third, many public chain projects have both public chain and alliance chain solutions at the time of design. Under this circumstance, the public chain and the consortium chain have been standardized and designed to facilitate the integration of the consortium chain and the public chain, greatly reducing the difficulty of connecting the public chain and the consortium chain, and enabling the participants of the consortium chain in the ecology to cooperate safely .
Develop a public chain based on the alliance chain
It is also an idea to develop a public chain on the basis of a consortium chain. When the consortium chain continues to develop and grow, there is the possibility of transforming to a public chain, but this method is not common. In the Libra 1.0 white paper, the initial design of Libra was to shift from a consortium chain to a public chain after several years of development. Although this design was abandoned in the Libra 2.0 white paper due to compliance factors, it can be seen from this that the transition from the alliance chain to the public chain is a development direction.
Development hindrance
At present, there are not many successful cases of connection between public chains and alliance chains. The main reasons include the following points.
The first is the concept of enterprises in the alliance chain ecology. They are subjectively unwilling to connect with the public chain and do not want to share the data and information they hold. For this problem, it is necessary for pioneers to make a successful demonstration, so that more companies realize that connecting public chains and alliance chains can create higher profits for companies, and solve this problem through market forces.
Second, the actual demand for connectivity is not that great. As mentioned above, after the alliance chain has developed to a certain stage, connecting the public chain and the alliance chain can create greater value. However, the alliance chain in many business scenarios is still in its infancy, and the need to connect with the public chain is not urgent.
The third is the regulatory policy. In the current environment, the enterprise development alliance chain will not be subject to too much regulatory pressure. But after connecting with the public chain, companies may face additional compliance issues, which makes many companies reluctant to try. In addition, the technical threshold of the connection method is also an issue worth considering.
Thinking and summarizing
The current domestic environment is very suitable for the landing and development of alliance chain projects. More and more companies are beginning to change the way they view blockchain and try to deploy alliance chains. These consortium chains have similarities with local area networks in the 1990s. In the future, there will be a great demand for connectivity between alliance chains and public chains, and between different alliance chains.
From the perspective of development trends, public chains and alliance chains are approaching and merging, and their boundaries are further blurred. The source codes of many public chain and alliance chain projects are interlinked, and there is not much difference in technology, only in terms of access rights. Many blockchain projects support the ecology of public chains and alliance chains at the same time. In the future, public chains will be more convenient for supervision, and alliance chains will be more open. Public chains and alliance chains can be regarded as blockchain technologies suitable for different scenarios.
From the perspective of implementation methods, it is a more common solution to build alliance chains on the basis of public chains. The public chain and multiple alliance chains form a blockchain infrastructure, and the alliance chain can be flexibly designed according to its own business model. In this solution, on the one hand, it can inject real-world value into the public chain and endow the public chain with a new business model. On the other hand, it can make the ecology of the alliance chain continue to develop. The public chain provides the necessary security for the entire ecology and is responsible for the clearing and settlement of value interaction; the alliance chain can meet various needs of different application scenarios.
