For some time now Thomson Reuters has been working on integrating data feeds into smart contracts, the name given to automated capsules of business logic which can be verified and enforced by parties on a blockchain.
TR started looking at data "oracles", adapter-like mechanisms that bridge the gap between web-based APIs and the blockchain, within the context of the public Ethereum blockchain.
Ethereum touts a high degree of flexibility and is therefore thought to be suited to things like complex financial instruments, weather insurance products and the like (it's worth noting the Bitcoin blockchain also allows smart contracts of the payment variety by time locking coins or doing atomic swaps, but that adding oracles into the mix is particular to Ethereum).
In addition, TR has done extensive work with the R3 banking DLT consortium around things like Smart Contract Templates and the creation of interest rate swaps, and innovators like Axoni for equity swaps.
This work has culminated in the release of TR's beta smart oracle design for permissioned blockchains: BlockOne IQ. The aim is for firms experimenting with smart contracts to represent real market conditions accurately in their proof of concepts – which comes with cryptographic proof that Thomson Reuters is the source.
Sam Chadwick, director of Strategy in Innovation and Blockchain, Thomson Reuters, explained that early on they realised developers had no idea who was using their applications because people arrive and use their pseudonymous Ethereum addresses. This meant things like saving preferences and permissioning people to do various things were practically impossible. The first step was the creation of BlockOne ID, a secure mapping mechanism that enabled a user with an Ethereum account to associate that with someone in same way logging in with Google, LinkedIn or Twitter does.
This led to BlockOne IQ which provides data and intelligence as a service in the form of permissioned content. It's available to developers doing proof of concept work on R3's Corda and the Enterprise Ethereum Alliance, while Hyperledger and other technologies are in the pipeline. It will also be available to developers via the Thomson Reuters Developer Network.
Chadwick said: "It will enable developers to get a subset of our content so starting with share prices, corporate actions, foreign exchange, Libor, and access to our knowledge graph, which is a big data structure for how our data is linked together. There are lots of uses; things like weather derivatives or weather insurance products."
Chadwick said the trusted part is the most important for any oracle to be adopted and TR has been providing trusted data for 150 years. But what happens if – heaven forbid – some erroneous or inaccurate data makes its way into the system; if everything's automated and blockchainified, then you're kind of screwed, right?
He said: "That's going to be part of the learning process as we get educated with blockchain applications. I think it's a good way to move the industry forward and think about data quality; not every data point is perfect, sometimes exchanges themselves make mistakes. We have validation rules to try and remove as many of these as we can."
John Dwyer, Senior Analyst Celent, said: "Thomson Reuters move to bring secure external data to the blockchain through BlockOne IQ will be hugely beneficial, as data is currently a big area that the ecosystem needs a trusted firm to be delivering on. As the first major industry player to do this, it coincides with both the rapid expansion of new alternative data sets in capital markets and the extraordinary level of innovation across both public and private blockchains."