Ian Bessarabia, FX & FI Market Development Lead - Africa, Thomson Reuters.
Speaking with various customers who were exploring the Blockchain ecosystem, especially in the financial services sector in Africa (and globally), the need for a trusted source of external data on Blockchain has given rise to what we refer to as Blockchain oracles. A Blockchain oracle sounds like something from a story on ancient mythology, and in fact, in this instance, it functions similarly. Blockchains, like those of Corda and Ethereum, do not have access to information off the chain, and there is no direct way to validate the conditions that smart contracts are agreed. An oracle; therefore, acts as a trusted source of information provided by an outside platform.
In 2017, Thomson Reuters became the first major industry player to innovate a smart oracle framework in Africa (and globally). This oracle framework, BlockOne IQ, which operates on private distributed ledgers, allows application developers to use signed content from Thomson Reuters within smart contracts – providing ledger counter-parties with a high level of trust that the content has not been tampered with. It is an adapter-like mechanism that bridges the gap between web-based Application Programme Interface (APIs) and the Blockchain.
With over $1.5bn invested in Blockchain-based start-ups over the last two years and with a further $1.2bn raised via "Initial Coin Offerings" in H1 2017 alone, it was a natural transition for Thomson Reuters to start exploring the potential for this new technology. It resulted in the provision of market data and identity services – two elements at the core of the Thomson Reuters BlockOne platform.
Thomson Reuters Trust Principles, history as an ethical and neutral company and its open platform model further provided the perfect position to create a smart oracle: a device wholly reliant on trust and the key to putting important data on the Blockchain.
BlockOne IQ is available in the Blockchain ecosystem for lean experimentation purposes. All over the world, big banks, investors and other financial institutions have invested millions of dollars in Blockchain, hoping that the technology will make transactions faster, more accessible and more secure. However, it has not yet scaled, partly because of a disconnect with technologies that underpin other applications. Most financial, real-life use-cases for Blockchain rely quite heavily on knowing and including real-world data, but there was no way to do it before Thomson Reuters launched BlockOne IQ.
Currently, BlockOne IQ is compatible with Corda and Ethereum. However, Hyperledger and other platforms are now in the pipeline. The service has been released to R3 and Enterprise Ethereum Alliance members and is also available to developers via the Thomson Reuters Developer Community. BlockOne IQ is also possible to any organisation experimenting with Blockchain technology.
Tools like BlockOne IQ are becoming known as "oracles" in financial-technology circles because they allow the two different technologies to communicate with one another. This not only fundamentally changes the way Blockchain applications and proof of concepts develop, but it also opens up countless possibilities for Blockchain innovation across various industries – not just finance. BlockOne IQ also provides cryptographic evidence that Thomson Reuters is the actual source of content, which is a unique and essential characteristic of this oracle and hard to do on the Blockchain.
It is incredible how both of these technologies – trusted data and Blockchain – can together significantly improve the usability of each other. The techniques can help create a complementary infrastructure on the foundation of big data and Blockchain. The foundation will be flexible for different application types.
The Blockchain is one of the building blocks for future innovations. A culture of change and adapting to this new technology is imperative. We are no longer talking conceptually; we are now executing tangibly, as we go beyond the proof of concept.
By Ian Bessarabia, FX & FI Market Development Lead - Africa, Thomson Reuters