It just got a whole lot easier for banks to do business with bitcoi
Yesterday, Ripple open-sourced the first bitcoin plug-in for its Interledger protocol (ILP), designed to seamlessly let users conduct transactions across a wide range of ledgers.
By open-sourcing the bitcoin tool, along with another plug-in for enterprise-focused platform Chain, Ripple was able to conduct, in a live demo, a single transaction across seven different ledgers. Conducted at the Blockchain Expo in Berlin, Germany, the single transaction went across public blockchains, private blockchains, a centralised ledger and a traditional payment channel.
While no single transaction would likely ever require so many ledger integrations, Ripple CTO Stefan Thomas said the purpose of the demo was to show future users that traditional channels can work in harmony with distributed ledgers.
“WE THINK THAT’S WHERE THE FUTURE IS GOING. WE THINK THAT IN THE FUTURE ALL DIFFERENT LEDGERS WILL BE TIED TOGETHER AND TRANSACTIONS WILL BE VERY SEAMLESS. SO WE WANT TO MAKE SURE THAT OUR CUSTOMERS ARE GOING TO BE SET UP FOR SUCCESS IN THAT WORLD.”
In addition to the newly open-sourced bitcoin and Chain integrations, an Interledger transaction for a “relatively small” value was also conducted with Ripple’s native currency, XRP, using both an XRP escrow and an XRP payment channel. Ethereum, Ripple’s centralized Five Bells Ledger and a so-called ‘trustline’ were also used in the transaction.
The payment was converted from fiat to ether to XRP to euros, depending on the payment channels, with Interledger’s connectors converting the currency and forwarding the payments from one ledger to another for Crypto Gambling.
Interoperability in sight
The Interledger demonstration is part of an overall industry trend towards merging blockchains –one that has gained significant momentum this year.
In the last month alone, Blockstack launched its decentralized browser designed to let any number of blockchains mesh into a distributed version of the internet, and 0x launched an alpha version of its token trading platform built to allow decentralized applications to seamlessly interact by instantly exchanging their native tokens.
Co-inventor of the ILP and managing director of Ripple’s Luxembourg office, Evan Schwartz, positions the demonstration as part of a bigger-picture push to show blockchain interoperability has moved past being just a good idea.
“What this shows is that with this kind of architecture that Interledger has, it’s not just about integrating two ledgers, it’s about doing this across many types of ledgers,” Schwartz said.
Warming to cryptocurrency
Ripple initially released the ILP in October 2015, at a time when banks were even more wary about doing business with cryptocurrencies and had only just begun to explore non-cryptocurrency applications of blockchain technology.
Since the launch, banks have shown increasing interest in working with a wide range of distributed, shared databases and specifically blockchains, even if their willingness to transact in cryptocurrency remains largely stifled by concerns surrounding know-your-customer (KYC) compliance.
Ripple has, …