Digital Asset Holdings has revealed new blockchain technology it believes could one day connect the world’s most important financial institutions.
Instead of a single “full stack” of its own applications, languages and execution capabilities, the company (headed by former JP Morgan executive Blythe Masters) is going for a more modular approach with its new Global Synchronization Log (GSL), revealed for the first time late last week.
Intended to serve as a foundation for independent distributed ledger implementations, GSL also aims to help other blockchain products focus on improving their smart contract servicese.
Digital Asset Holdings CTO Shaul Kfir went so far as to say the startup’s goal is industry-wide standardization.
Kfir told CoinDesk:
“Rather than a series of competing full-stack implementations, which each have to re-implement their own solutions to common problems, the GSL focuses on a very specific subsection of a platform so that it can be reused and combined with other components.”
Presented for the first time at a meeting of the Hyperledger open-source blockchain consortium, the white paper details how popular enterprise blockchain frameworks including Hyperledger’s Fabric, R3CEV’s Corda and CoinScience’s MultiChain could each interface with the distributed log.
The benefits from such a “wider collaboration,” the paper argues, include more robust metrics about transactions and allowing other blockchains to focus on improving the quality of their own throughput and version management.
From the paper:
“We believe this solution is suitable for systemically important financial institutions. We further believe that these components are reusable across many use cases, platforms and industries, which would all benefit from wider collaboration.”
Choosing a method
Presented in detail by Digital Asset’s chief ledger architect, Tamas Blummer, the paper positions the GSL as aligned with Hyperledger’s stated objective of becoming an “umbrella” organization that connects corporations.
To help ensure that happens, GSL was developed in response to demands Digital Asset encountered in its work with highly regulated global financial infrastructure providers, according to the paper. (That includes the Australian Securities Exchange (ASX), which has invested at least $17m of Digital Asset’s $60m raised to date).
The New York-based company identified five existing methods it said are currently being used elsewhere to protect user privacy. The first two of which — obfuscation and encryption, the paper argues, don’t provide enough privacy for customers.
During the presentation, Blummer compared these two methods to those provided by the bitcoin blockchain, Hyperledger’s Fabric and the new blockchain project, Zcash, the best-known blockchain to implement zero knowledge proofs.
While touted as a step forward in blockchain privacy, the Digital Asset team concluded Zcash’s technology had not been tested enough in real-world applications. (The blockchain project officially went live last week).
With the remaining options left, the GSL combines segregated ledgers and data execution commitments.
The former, the paper defines as an interconnected network using “common protocols or trusted intermediaries” to move data from one place to another. The latter, being a “network wide blockchain” that “carries fingerprints of sensitive data” while the actual data is broken off and transmitted over private channels.
How it all comes together
The first function of the GSL is to ensure that “mutually exclusive events” are in fact unique. Or to put it another way, to ensure that smart contracts only exist in one place and that if an older contract is referenced by a newer contract, only the new one survives.
Notably, the paper does away with the term “smart contract” altogether, opting instead for the more traditional term “contract.”
But in addition to ensuring duplicate contracts don’t exist, the service works as a messaging system to inform all parties affected by a contract — perhaps thousands of them — that something has happened on the blockchain that they should know about.
To do this, the contract is processed off-chain. This could include processing ranging from flows of transactional data to common models of workflow behavior. While these contracts are designed to be code-enforced agreements which participants must follow they are not, for that matter, intended to be legally binding, according to the paper.
In fact, these contracts, taken together as a single collective state are how the paper defines the blockchain itself.
So long as these contracts remain capable of executing a command they will remain a part of the blockchain. But as soon as a new contract references the old one, it “replaces or consumes” the predecessor.
This process of replacing is similar to the contract version of ensuring there isn’t a double-spend. Importantly, in light of the problems that led to the downfall of The…