Bridging Ecosystems: The Next Frontier in Blockchain Development
New technological eras tend to follow similar patterns, and we are now seeing the next stage of crypto development enabling the widespread adoption of blockchain technology. Just as email became the “killer app” for the internet by enabling frictionless communication worldwide, the cryptoshpere is converging on protocols that enable siloed public and private blockchains to communicate and transact in a predictable and efficient way.
This comes at a time when banks are queuing up to form their own blockchain solutions and tech giants are getting involved in the market. History shows that when it comes to platforms the path of least resistance wins out, so there is a need for a standard protocol to enable all these new solutions to communicate and do business.
The need for interblockchain solutions has attracted a lot of interest from investors, not least because business-to-business startups tend to provide better ROI than consumer-facing solutions. This fact, along with the massive investment from financial institutions and corporations into their own blockchains has shown how lucrative this space can be. One project that is aiming to be the answer to interchain transactions is Aion, a blockchain for bridging blockchains from the Nuco team. Their solutions targets the unique challenges that the cryptosphere is facing on its path to mainstream adoption.
Addressing the limitations of blockchains as stores of data
Blockchain ledgers are novel in terms of their immutability and trustless decentralization, the very features that make them ideal for cryptocurrencies. These features also make smart contracts possible. While blockchains are very good at this, the level of security they provide can be resource and data intensive. As a result, networks can get easily bogged down with data and transaction overload (which partly explains the need for the Bitcoin fork and the Raiden and Lightning networks).
So imagine if every corporation and bank worldwide was using blockchain technology to support complex business processes embedded with smart contracts. If simple transactions between users can be slowed down by a clogged network, imagine running entire industries on it.
This poses the need for a communication and transaction protocol that allows scalable communication between blockchains (both public and private).
Aside from the issue of resources, blockchain transactions face the obvious need for interoperability: transactions from one blockchain to the next simply won’t work if the correct “language” is not being used to enable the transaction.
Another concern for enterprise-level use of blockchains is privacy; despite the fact that the development of cryptocurrencies targetted built-in transparency, this is not so desirable for enterprise users who have a strong need for privacy in transactions. Any protocol would need to respect this need in order to see widespread uptake from enterprise users.
Taken together, these issues point to a lack of ecosystem maturity for corporate blockchain applications. The rewards for a B2B blockchain bridging platform are high, but the demands are also significant, and any company addressing the problem has high stakes to contend with.
The team behind Aion seem to be targeting this need for a reliable, agile inter-blockchain protocol. As one of Nuco’s advisors, Michael Tang, put it: “Blockchain technology will soon become integral to every industry’s infrastructure, and a framework for interoperability is critical to scaled adoption”. The Aion solution from Nuco revolves around some key capabilities it will deliver to users.
Using the soon-to-be-released Aion-1 blockchain which is based around a hub and spoke conceptual design, enterprises can federate to other blockchains that participate with the protocol. Also possible is easy creation of new blockchains that integrate well with the others on the platform while also retain governance for their owners (facilitating easy integration of both public and private of chains).
Finally, Aion allows straightforward scaling of blockchain resources for enterprise users. Together these capabilities make for a more modular and frictionless blockchain ecosystem for all participants. As Nuco CEO Matthew Spoke said of the technology: “AION 1 itself can be used to deploy decentralized applications on, as well as will maintain a public record of transaction between bridges. Essentially, facilitating a network that is to blockchains what the internet is to computers.”
Bridging silos of value
The Nuco team hopes that their solution will in turn allow for considerable value creation from the network effects that arise from intensive data-leveraged transactions. 25 years ago, the advent of Enterprise Resource Planning system revolutionized how businesses interfaced with each other. The full implications of this technology have only recently been realised with Big Data analytics. Something similar will happen with blockchains in the enterprise, and it is anyone’s guess what applications it will lead to.
Hoping to capitalize on this potential, Nuco are releasing a token that allows developers to make applications on the Aion -1 blockchain, enterprises to use the protocol to manage their blockchain transactions, and also to be used to make new links between different blockchains. The token sale begins on 3rd October.
Overall, it is a very business-focussed project. The 20-strong team have a wealth of experience in the area of corporate IT, with the founders having started the Deloitte blockchain practice (Rubix) before leaving to start Nuco.
This should lend them a strong competence in terms of communicating their message with the corporate and financial industry, which is still somewhat wary of the nature of blockchain technology. If they can deliver easy inter-chain data transfer with Aion -1 they will be in a prime position to capitalize on the significant potential of enterprise blockchain computing.