Kadena launches a hybrid platform to connect public, private blockchains

Credit to Author: Lucas Mearian| Date: Thu, 16 Jan 2020 12:10:00 -0800

Brooklyn-based spinoff Kadena has launched a hybrid blockchain that can scale horizontally, enabling multiple electronic ledgers to talk to each other via smart contracts – and letting users transfer cryptocurrency between the chains.

Hybrid blockchains combine permissioned chains for businesses to transact in the background while connecting to a public blockchain (via an API) for consumers and others to make money transfers or access information about products moving across supply chains.

“Their hybrid blockchain model looks interesting, mainly because it enables interoperability via smart contracts that run on public chains and talk to/with private chains,” said Avivah Litan, a vice president of research at Gartner. “That way, enterprises can keep their private data and transactions limited to the private chain but benefit from the liquidity and cross-chain access available by leveraging smart contracts running on the public chain.”

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Kadina’s Chainweb architecture depicted in a graphic.

Kadena is being piloted for interoperability, scalability and increased security across industries, including financehealthcare and insurance, according to Kadena co-founder and CEO Will Martino. For example, Rymedi, a North Carolina medical technology firm, plans to test the platform this year as part of an FDA-backed pilot of prescription drug tracking via a blockchain supply chain.

Kadena is the first startup to come out of JP Morgan’s Blockchain Center for Excellence, a development project started in 2018. Last year, JP Morgan announced it had created its own cash-backed cryptocurrency called JPM Coin, which it plans to pilot with institutional clients for international funds transfers.

Kadena’s Chainweb platform also relies on sharding to increase transactional throughput by creating multiple proof-of-work consensus-based partitions on its blockchain ledger through which multiple parallel chains can operate.

Because a single platform can be parsed, there’s theoretically no limit to the number parallel chains that can be created on the company’s platform, according to Martino.

“We’ve figured out how to horizontally scale this core concept of the ledger found at Layer 1 without needing to centralize any part of the platform,” Martino said. “It’s a major moment for decentralized distributed systems, as horizontal scaling this far down the stack has been a dream of many for at least a decade.”

In Kadena’s blockchain, Layer 1 is the layer over which currency and a state ledger operates. There is infrastructure beneath Layer 1 related to propagation, peer-to-peer communications, storage, cryptocurrency mining and more, but Layer 1 is where cryptocurrency and smart contracts first show up. 

A metaphor for Layer 1 would be one bank account and three credit cards; the  bank account would be the fundamental Layer 1 ledger, and the three credit cards would represent Layer 2 scaling.

“The cards settle through your bank account, but your bank account doesn’t settle through anything else. Your bank account has a single sequential ledger of transactions, as it has to decide the order of transactions,” Martino said “But, you can do transactions simultaneously on Layer 2 by using more than one card at the same time. Most other blockchain projects are trying to scale via adding cards. Kadena scaled by figuring out how to let you have a bank account at more than one bank.”

So far, the company has gone live with 10 chains on a single platform, but it plans to pilot ones with as many as 50 this year. Kadena’s “braided” blockchain network has so far demonstrated it can process up to 750 transactions per second or 40 terahashes per second (40 trillion hashing operations per second). The higher the number of terahashes, the more difficult it is for someone to attempt to game the system.

“Instead of hashing and mining pointing at a single block, miners can mine blocks for any of 10 chains in a network,” Martino said. “Instead of one chain and one conduit for throughput for transactions, we have 10.”

Gartner’s Litan, however, said Kadena’s technology does have challenges, not the least of which is its permissioned-public hybrid environment. That could complicate challenges that already exist with enterprise blockchain smart contracts.

Those challenges include:

“Kadena would likely disagree with these challenges, but that’s how we see them,” Litan said.

Kadena’s proprietary smart-contract language called Pact, can also instruct a node (computer) on what the code means, or its purpose. For example, a smart contract coded with Pact can instruct a blockchain ledger to forbid users of cryptocurrency from going into debt, meaning the ledger balance can never go below zero.

“It’s the idea that I can run my code and then write what I intended it to do with it, and the computer can understand both my intent and what code means,” Martino said.

Essentially, the single blockchain platform can host multiple ledgers, each new ledger connected via an API to previous ones. In connecting the ledger, the processing power or hashing capability of nodes is divided among them and cryptocurrency and other data can be shared between the ledgers.

“If one [ledger] gets saturated, it doesn’t affect the throughput of another. You can horizontally scale this,” Martino said.

Kadena is also integrating its digital wallet, Chainweaver, with the Cosmos Network, an inter-blockchain communications protocol that enables multiple blockchains to communicate between one another, enabling cryptocurrency transfers across disparate blockchains.

“Kadena is one of the start-ups that stands out from the crowd,” said Martha Bennett, a Forrester vice president of research. “A key differentiator is the firm’s focus on, and understanding of, the requirements of enterprise-grade systems. Clearly, it’s too soon to tell how much traction Kadena will gain – it’s early days yet. But from a technology perspective, it’s one of the few that I regard as worth watching; the hybrid model is also a differentiator.”

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