An interview with ICON’s founder on how the project is enabling cross-blockchain transfers, and what this means for the industry.
As more enterprises and large-scale corporations continue to realize that they cannot exist in complete exclusivity, interoperability (in terms of seamless information transfer and data exchange) via the use of blockchain tech has become an increasingly attractive option for not only streamlining internal processes but also reducing day-to-day operational costs.
Today we talk to Min Kim, Founder of the ICON blockchain, about their recent release of a new transmission protocol that can connect different blockchains together.
Rochelle: You recently released a new “Blockchain Transmission Protocol” which is meant to enable interoperability between blockchains. Can you explain at a high level how that works?
Min: Our Blockchain Transmission Protocol, or BTP, enables data exchange between different blockchains. Any blockchain that supports smart contracts and guarantees finality can be easily connected to the ICON blockchain through BTP. It is also possible for two blockchains that do not talk to each other to indirectly transmit data through the ICON network.
How BTP works is quite simple. We first deploy BTP core component smart contracts (namely message verifier, message center and service handler) to the two blockchains that want to connect. Then we install external relayers (in grey below) to monitor BTP events, gather proofs for these events and relay the messages from one chain to the other. The relayed information will be bundled as a transaction.
Rochelle: What does this mean for ICON? Will it drive traffic to your blockchain? Will blockchains who want to connect using your technology pay a fee using ICX?
Min: This means that the ICON blockchain will be the central hub that connects all blockchains via BTP. Yes, our goal is to drive traffic not only to the ICON blockchain, but also to many other blockchains. Collectively, we are creating the ICON network.
We know BTP brings scalability to private enterprise blockchains.Companies prefer to operate a private blockchain because they have privacy-sensitive data. So with BTP, private blockchains can pick and choose the data they want to send to the public blockchain.
We also plan to connect public blockchains together. With BTP, ICON’s decentralized applications (Dapps) can deliver transactions to dApps from other networks. This also means DApp developers get more reach.
For end users, our goal is to make the experience as seamless as possible, so they don’t know that they are even using blockchain technology. It should be the same as using a credit card today.
And yes there are fees using ICX. Users can either lock up a deposit that will pay for BTP over time, or the middleman (the relayer) can cover for the fees themselves. The relayer can also decide to pass on the fees to the users.
Rochelle: How do you think this new bridge between blockchains will impact the industry?
Min: The new bridge will completely change how we collect and manage data. For example, we can expect a bank to share a blockchain with other banks, but probably not with a hospital’s blockchain. Now, if a bank and a hospital need to transfer private data, they can use BTP.
Of course, the current limitation of any interoperability solution is that very few companies are using blockchain technology today. And worse, the legacy systems that they are using cannot be integrated with blockchain.
The utility of BTP will increase when many companies begin using blockchain technology together, instead of each having separate and different blockchains. Every new company that joins the network will make the ICON network and BTP exponentially more valuable.
Rochelle: How can public and private blockchains be linked with one another without any security or privacy lapses occurring?
Min: There are two ways to keep confidentiality for the network operator. First, the network operator of a private blockchain can select specific data to be viewed by the relayer. This ensures confidentiality. Another option is for the private blockchain’s operator to act as the relayer themselves.
Rochelle: How does governance work when you have different chains connected?
Min: Think of BTP as a contract that lets two independent governance models transact. As long as each chain can guarantee block finality, the transaction will be verified and processed. Transactions on the public ICON blockchain will respect ICON’s own governance model.
Rochelle: How do you connect two chains that have different levels of trust? i.e. bringing data from a blockchain with only a few miners to a blockchain with 10,000 miners.
Min: For BTP to work, the number of miners is not important. What is important is for a blockchain to ensure the finality of the blocks. As long as there is finality, BTP works. BTP itself is just the technology to standardize the message format, enabling the transport.
It’s true that blockchains with too few miners are inherently more risky, because miners can easily collude to falsify a transaction and have it reach finality. But with BTP, the trust is in the hands of the relayer. If the relayer trusts the other chain, it can decide to make the connection.
We are designing economics to ensure proper bonding/relayer incentives to ensure proper security and trust minimization for the ICON network.
Rochelle: Do you have any use cases already underway?
Min: We don’t have a use case yet. We’ll probably be the first to use our BTP, so users can understand how it works and build off of our example. Our goal is to showcase what using the BTP looks like by the end of 2020.
While we’re not sure what the first use case will be, we are currently aiming for a private to public connection. For instance, the Seoul Metropolitan Government uses a private blockchain, and could benefit from connecting parts of it to the ICON public network.
We are also trying to find a way to connect the Korea Gold Exchange to a public blockchain. Right now the largest gold exchange in South Korea uses a private blockchain to sell gold-backed gift certificates. The private blockchain is a way for them to abide by all the local tax laws and regulations. Finding a way to connect this private blockchain to a public network would enable them to access people outside of Korea who could purchase gold tokens.
Rochelle: Several other projects are also working to connect siloed blockchain networks together. What is unique about ICON’s interoperability protocol?
Many blockchains create a dummy token in order to transfer value between two blockchains. But those are very simple value transfers. Many more use cases could exist if different types of data could be exchanged- which is why we have a full smart contract platform instead.
We’re architecturally similar to a Cosmos’ Inter-Blockchain Communication protocol, but with some differences. For instance, instead of having the application specific blockchain like the Cosmos ecosystem, we use a shared security model similar to Polkadot, where eventually we’re going to have application specific validators within our own ecosystem.
Rochelle: How are you tracking the success of the rollout?
We do our fair share of analytics in-house. We track active wallets, wallets with a balance, growth metrics, smart contracts deployed, on-chain transactions, governance based transactions, etc. But we’ve noticed blockchain analytics is growing as an industry, and it could make sense for us to outsource the workload in the future.