Hyperledger Quilt is a project hosted by the Linux Foundation. It offers interoperability between ledger systems by implementing the Interledger Protocol (ILP). It is designed to be a secure payment tool for enterprises while isolating senders and receivers from the risks of intermediary failures.
Payment networks today operate in silos and hence are disconnected. Payments are relatively easy within one country or if the sender and recipient have accounts in the same network or ledger. However, sending from one ledger to another is often impossible. Where connections do exist, they are manual, slow, or expensive.
The Interledger Protocol
Also known as ILP, this is a protocol for making transactions across ledgers. The protocol’s standards and specifications are being defined by the open source community under the umbrella of the World Wide Web Consortium. ILP provides for routing payments across different digital asset ledgers while isolating senders and receivers from the risks of intermediary failures. Secure multi-hop payments and automatic routing enables a global network of networks for making payments of different values, connecting any sender with any receiver.
The Interledger Protocol is intentionally limited in scope to provide the functions necessary to deliver a payment from a source to a destination over an interconnected system of ledgers. It includes minimal requirements from the underlying ledgers, and it does not include public key infrastructure, identity and liquidity management or other services commonly found in payment protocols.
The central functions of the ILP are addressing hosts and securing payments across different ledgers. Each host that sends and receives interledger payments has an interledger module that uses the addresses in the interledger header to transmit interledger payments towards their destinations. Interledger modules share common rules for interpreting addresses. The modules also have procedures for making routing decisions and other functions.
The ILP uses transfer holds to ensure that the sender’s funds are either delivered to the destination account or returned to the sender’s account. This mechanism is described in greater detail in the Interledger whitepaper https://interledger.org/interledger.pdf.
The Interledger protocol is based on concepts dating back to the 1970s and 1980s, but it took the advent of Bitcoin and the global blockchain movement to make the world realise that money and value transfers could be reinvented with Internet based technologies. Internet protocols enable information to be packeted, routed and delivered over communication networks. With ILP, money and other forms of value can be packeted, routed and delivered over payment networks and ledgers.
Hyperledger Quilt started out around 18 months ago and is a Java implementation of the Interledger Protocol. Hyperledger Quilt offers interoperability between ledger systems by implementing ILP, which is primarily a payments protocol and is designed to transfer value across systems – both distributed ledgers and non-distributed ledgers. It is a simple protocol that establishes a global name space for accounts, as well as a protocol for synchronised atomic swaps between different systems.
Hyperledger Quilt is an enterprise grade implementation of the protocol, developed in Java and providing libraries and reference implementations of the core interledger components and timely ledger integrations for other Hyperledger projects.
Technical details of Quilt
The aim of those behind the project was that Quilt should become a ledger interoperability solution for Hyperledger projects. This will enable Hyperledger members’ distributed ledger solutions, financial institutions’ private ledgers, IoT companies’ wallets, and supply chain systems to connect with one another to perform distributed atomic transactions.
By implementing the Interledger protocol, Quilt provides the following:
- A set of rules for enabling ledger interoperability with basic escrow semantics.
- A standard for a ledger-independent address format and data packet format that will enable connectors to route payments.
- A framework for designing higher level use-case-specific protocols.
Getting started with Quilt
Quilt is an exciting addition for the Hyperledger community. As always, the community encourages developers to join its efforts on Quilt as well as other projects through GitHub https://github.com/hyperledger/quilt, Rocket.Chat, the wiki or the mailing lists. You can also follow Hyperledger on Twitter or address questions to [email protected].