ConsenSys Proposes Interoperable Private Sidechains, Connected to Larger Public Blockchain

ConsenSys, a Brooklyn, New York-based Ethereum-focused development studio, has released a research paper which outlines a method for establishing connections between public and private blockchain networks.

Referred to as “Atomic Cross-chain Transaction” technology, the research document’s authors noted the new technique will allow transactions to be executed “atomically across sidechains.”

Additionally, the Atomic Cross-chain Transaction technique will “introduce a new mechanism for proving values across sidechains, describe a transaction locking mechanism which works in the context of blockchain to enable atomic transactions, and a methodology for providing a global time-out across sidechains.”

Cross-chain Transaction Consists Of Originating And Subordinate Transactions

According to the research paper shared with Trustnodes

A Cross-chain Transaction consists of an Originating Transaction and one or more Subordinate Transactions and Subordinate Views, where the Originating Transaction is the Ethereum Transaction which executes on the sidechain on which the Cross-chain Transaction was submitted, and the Subordinate Transactions and Subordinate Views are Ethereum Transactions and Ethereum Views which execute on other sidechains as a result of the Originating Transaction

As mentioned in the research paper, Ethereum Transactions (TXs) issue updates to the state of the Ethereum blockchain, however they “cannot return a value.” Meanwhile, the “Ethereum Views” are able to return values, but they “cannot update the state” of the Ethereum blockchain.

Cross-chain Transactions Contain Information About TXs On Multiple Blockchains

Cross-chain transactions contain information about TXs processed on multiple blockchains (for example, blockchain A and B) and they also conduct transactions on two different chains. This is possible because both the transactions and views have signed parameters that match the TX values which are processed through the Ethereum Virtual Machine (EVM).

As explained in the paper: 

The Coordinating Node on the Originating Sidechain works with other Originating Sidechain validators to threshold sign a Cross-chain Transaction Start message. This message contains the Cross-chain Transaction Identifier, the Originating Sidechain Identifier, and the Cross-chain Transaction Timeout.

“Coordinating nodes,” or the nodes associated with each sidechain, use threshold signatures in which “any M of the N sidechain validator nodes must collaborate to sign a message.” This process is somewhat similar to how multi-sig works.

“Cross-chain Coordination Contracts”

ConsenSys’ latest paper further noted that "Cross-chain Coordination Contracts exist on Coordination Blockchains" and "allow sidechain nodes to determine whether the state updates related to the Originating Transaction and Subordinate Transactions should be committed or not." The contract, the company's paper notes, is used to "determine a common time-out for all sidechains.”

Going on to describe how atomic swaps can be executed, the paper states: “Imagine contracts which facilitate atomic swaps of Ether between Sidechains A and B. On each sidechain, there is an Atomic Swap Registration Contract. These contracts are Non-lockable Contracts.” In order to exchange Ether (ETH) between Sidechain A and Sidechain B, a new Atomic Swap Execution Contract is issued on both sidechains. These contracts are also “Lockable Contracts.”

Moreover, the execution contracts contain the current Ether balance of users looking to conduct atomic swaps and they also include the exchange rate the user is offering. The users are also able to register their execution contracts along with the other registration contracts on both sidechains.

One of the main use cases for the techniques described in ConsenSys’ paper is allowing for permissioned chains to connect to the public Ethereum network in order to take advantage of its high level of security. The new features proposed by the researchers at ConsenSys may also be used by other blockchains because they may want certain components of their platform to be placed on a public chain like Ethereum.