A Middleware for Hybrid Blockchain Applications: Towards Fast, Affordable, and Accountable Integration

Hybrid blockchain architectures combine centralized applications, like enterprise systems, with (public) blockchain to implement additional functionality, such as tamper-proof record keeping. To reduce the latency and cost of using a public blockchain, these systems may rely on batching of transactions or general-state channel networks. While reducing costs, the former increase the latency. With the latter, only major state updates are recorded on-chain, while most transactions history remains only on the channels. This paper describes a novel solution that combines the benefits of both approaches to decrease the latency and cost of hybrid blockchain applications. We propose to combine a local blockchain that runs on a centralized server to provide near-immediate state update confirmation, with a batching mechanism sending transactions to a public blockchain for record-keeping at a most convenient time. We also introduce a dispute mechanism promoting the prompt delivery of correct batches to the public blockchain by the application provider, thereby deterring malicious behaviours. The solution is motivated by a fintech use case, for which we also show the implementation of a prototype and an experimental evaluation of the latency and cost savings.