This research aimed to answer the core question: “What elements of a trusted third party are displaced by blockchain technology?” by providing a basic demonstrator of distributed ledgers, including blockchains, and comparing how they might work within selected financial services use cases. The research revolves around an online demonstrator of InterChainZ, Z/Yen’s prototype distributed ledger system developed in-house.
Started in June 2015, the research process was divided in six stages, using Z/Yen’s Z/EALOUS methodology.
In this first stage of research, the consortium members led by Z/Yen Group agreed the scope, objectives and approach of the research. In particular, it was agreed that the research team would explore several architectures, including Z/Yen’s InterChainZ. The research team started approaching other organisations operating distributed ledger software. The consortium also agreed to contrast and compare selected distributed ledger software on performance, resilience and security by exploring how they worked in the set of four agreed ‘use cases’:
The team and consortium members agreed the use cases to be tested and what anonymised data could be supplied for the testing. In parallel, the team sought to approach other organisations known to operate distributed ledger systems in order to invite them to participate by providing their distributed ledger systems for comparative testing. In the event Bitcoin data was easily available for analytical comparison and Ethereum had just launched a new system (Frontier) for which data was readily available. However three other parties who claimed to have 'open source' software proved, despite discussion, not to have software yet ready for comparative testing.
The third stage of research centred on uploading data for each use case’s content MDL and consortium members were invited to explore their use case on InterChainZ. R&D focused on validation with three separate validation architectures developed including:
An independent ICT expert subjected InterChainZ to a security review during the course of the research, concluding, "the system stacks up cryptographically, by which I mean you can use the system to create the kind of non-repudiatable proof you want". However, the more important the system the more attractive it becomes to attack.
In this fourth stage of the research, the team explored storage options and network architectures for InterchainZ. Each use case was expanded to contain not only a Content MDL (with all the documents) but also a related Identification MDL, with the team exploring different levels of interactions between the two chains. The team also sought to test the scalability of InterChainZ by increasing the number of servers across which the prototype runs.
The team collated preliminary findings stemming from previous stages, including issues and possible recommendations for future R&D efforts. A user guide was created and circulated to all consortium members. A sense-making session was organised with the research consortium members to discuss the findings and recommendations and how these should be presented.
During this final stage, the team worked to finalise web-based materials including: