Blockchain Gateways: Use-Cases
draft-sardon-blockchain-gateways-usecases-00

Internet Engineering Task Force                                A. Sardon
Internet-Draft                                                  Swisscom
Intended status: Informational                               T. Hardjono
Expires: May 3, 2021                                                 MIT
                                                        October 30, 2020

                     Blockchain Gateways: Use-Cases
              draft-sardon-blockchain-gateways-usecases-00

Abstract

   In the past five years there has been a growing interest in using
   blockchains and DLT systems as a means to create a new mechanism to
   issue, distribute and manage virtual assets.  However, as DLT systems
   consisting of peer-to-peer (P2P) network of nodes increase in number,
   there is an increasing need to interconnect these networks to permit
   virtual assets to flow into and out of them.  This document captures
   a number of use-cases driving the need for interoperability between
   DLT systems.

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Table of Contents

   1.  Introduction  . . . . . . . . . . . . . . . . . . . . . . . .   2
   2.  Use-Case: CBDC interoperability . . . . . . . . . . . . . . .   2
   3.  Use-Case: Application and Data Portability  . . . . . . . . .   3
   4.  Use-Case: Interconnection of Supply-Chains  . . . . . . . . .   3
   5.  References  . . . . . . . . . . . . . . . . . . . . . . . . .   3
     5.1.  Normative References  . . . . . . . . . . . . . . . . . .   4
     5.2.  Informative References  . . . . . . . . . . . . . . . . .   4
   Authors' Addresses  . . . . . . . . . . . . . . . . . . . . . . .   4

1.  Introduction

   In the past five years there has been a growing interest in using
   blockchains and DLT systems as a means to create a new mechanism to
   issue, distribute and manage virtual assets.

   However, as DLT systems consisting of peer-to-peer (P2P) network of
   nodes increase in number, there is an increasing need to interconnect
   these networks to permit virtual assets to flow into and out of them.

   This document captures a number of use-cases driving the need for
   interoperability between DLT systems.

2.  Use-Case: CBDC interoperability

   A Central Bank Digital Currency (CBDC) is a digital version of the
   sovereign currency within a nation.  The CBDC is distinct from other
   types of digital currencies because (a) its sole issuer is a central
   bank, and (b) like paper sovereign currencies the issuance of a CBDC
   represents a claim that the holder has upon the central bank.

   Many central banks are considering the use of DLT systems for CBDCs.
   For example, the Monetary Authority of Singapore (MAS) and the Bank
   of Canada (BOC) have been experimenting with private blockchains and
   have been exploring methods used to settle CBDCs (see project Ubin
   and Jasper) [MAS19].  Since different central banks might be using
   different private DLT systems, interoperability of these systems will
   be crucial for facilitating cross-border payments.

   The MAS and BOC have carried out a joint pilot project in 2019 to
   evaluate how transactions between a Quorum-based and Corda-based
   systems can be performed [MAS19].  While their HTLC based proof-of-

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   concept with direct node-to-node connectivity was conducted
   successfully, they point out that such a network model may have poor
   resiliency and suggest testing alternative models, in particular
   using gateway nodes that would act as service nodes for the network
   participants.

3.  Use-Case: Application and Data Portability

   Portability has been described as a desirable property for
   applications on private blockchains and DLT systems [SKS18].  For
   example, applications with poor portability may suffer from vendor
   lock-in effects, potentially preventing users to benefit from better
   middleware platforms.

   Moreover, regulations like the GDPR even explicitly require data
   portability.  For private blockchains, where the network members may
   be subject to such regulations, interoperability shall be encouraged
   [STOA19].  The use case would be to migrate either the application
   (e.g. a token smart contract) and/or the associated state (e.g. token
   balances) from one private blockchain to another.

4.  Use-Case: Interconnection of Supply-Chains

   Blockchains and DLT systems are currently being deployed for
   augmenting the supply-chains of good and services [Scot19].  The
   notion of a shared ledger has significant appeal among the
   participants of a supply-chain network (e.g. suppliers, vendors,
   buyers, etc.) because: (i) it permits all participants with equal
   visibility into the state of the supply/demand of goods; (ii)
   permitting suppliers (e.g. manufacturers) to increase their
   efficiency in maintaining the supply of goods in warehouses, leading
   to the freeing-up of capital, and (iii) allowing participants to
   improve the tracking of deliveries and payments settlements.

   A key challenge for of a supply-chain network based on DLT systems is
   its ability to interoperate with another supply-chain network.
   Interoperability across blockchains and DLT systems allows a
   participant (e.g. manufacturer, buyer) to participate at a single
   end-point in the network, while giving them access to all other
   blockchains that are connected.  Without interoperability, the
   participant would need to join each and every supply-chain DLT,
   something that is cumbersome, costly and does not scale.

5.  References

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5.1.  Normative References

   [RFC2119]  Bradner, S., "Key words for use in RFCs to Indicate
              Requirement Levels", BCP 14, RFC 2119,
              DOI 10.17487/RFC2119, March 1997,
              <https://www.rfc-editor.org/info/rfc2119>.

5.2.  Informative References

   [MAS19]    MAS, "Jasper-Ubin Design Paper, Enabling Cross-Border High
              Value Transfer Using Distributed Ledger Technologies,
              Monetary Authority of Singapore.", May 2019,
              <https://www.mas.gov.sg/-/media/MAS/ProjectUbin/Jasper-
              Ubin-Design-Paper.pdf>.

   [Scot19]   Scott, T., "TradeLens: How IBM and Maersk Are Sharing
              Blockchain to Build a Global Trade Platform. IBM Report",
              November 2018, <https://www.ibm.com/blogs/think/2018/11/
              tradelens-how-ibm-and-maersk-are-sharing-blockchain-to-
              build-a-global-trade-platform/>.

   [SKS18]    Shudo, K., Kanda, R., and R. Saito, "Towards Application
              Portability on Blockchains, Proc. IEEE HotICN 2018",
              August 2018, <https://arxiv.org/pdf/1801.01421.pdf>.

   [STOA19]   STOA, "EU STOA, Blockchain and the GDPR: Can distributed
              ledgers be squared with European data protection law?, EU
              European Parliamentary Research Service, STOA, PE
              634.445.", July 2019,
              <https://www.europarl.europa.eu/RegData/etudes/
              STUD/2019/634445/EPRS_STU(2019)634445_EN.pdf>.

Authors' Addresses

   Aetienne Sardon
   Swisscom

   Email: Aetienne.Sardon@swisscom.com

   Thomas Hardjono
   MIT

   Email: hardjono@mit.edu

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