In our second Tech Talks article, we have discussed the main reason why people use private blockchains and the hybrid solution. In this last article, we will introduce the chain anchoring technology.

First, we need to shed light on the wording ‘hybrid’. Hybrid can imply a mix of two or several structures or processes. In our previous article, we have talked about a ‘hybrid solution’ from a structural perspective, i.e. the mix of a private database and a blockchain.

On the contrary, in this article, we will look into another hybrid solution that is called ‘chain anchoring’, which is the use of a private blockchain and a public blockchain. Even though those two hybrid solutions are different structure-wise, they both have the same goal of ensuring data integrity.

As discussed previously, private blockchains are susceptible to manipulation, most often manipulation resulting from collusion. This can happen when the parties managing the data on-chain have aligned interest that might be detrimental to other internal or external parties of the network. Since private blockchains usually involve a few selected and known parties only, the chances of collusion are typically higher.

How to deter collusion and data manipulation on private blockchains?

The process of chain anchoring is similar to the prior hybrid solution. To a certain extent, the transactions are still kept private, but by having a verified block header hash on the public blockchain, it provides verifiable proof that no data tampering has ever happened.

The main difference between the hybrid solution and the chain anchoring solution is that while the former is mainly used for privacy law compliance, the latter aims at ensuring private data stored on the private blockchain stays private but secured from tampering and manipulation.

Recognizing the need to provide greater trust for the blockchain platform run in a private environment, LuxTag® has developed a chain anchoring service. We have made this technology open-sourced to the NEM Community, usable for users of NEM Catapult in a private environment, and other private blockchains in the future.

The source code for the implementation can be found here.

If you are interested to know more, feel free to contact us via [email protected] 

®“LuxTag”, Trademark registered.