In a bid to ease blockchain bottlenecks, Japanese credit card company JCB Co. Ltd. announced today the development of a technology that will connect separate distributed digital blockchain ledgers.

By sharing volume on multiple blockchains, JCB said, it expects to help ease problems caused by heavy traffic on any one blockchain. The company said it will jointly develop the project with Tokyo-based CurrencyPort Co. Ltd., a financial technology venture company.

A blockchain is a type of distributed digital ledger technology similar to the system that underpins the popular cryptocurrency bitcoin. The technology has been explored across numerous industries, including insurance, medical and finance, as a way to reduce paperwork, enhance security and decrease fraud.

Blockchains secure a history of transactions by distributing the same ledger across the network and protect them with encryption. Because all transactions must propagate across and entire network and must be agreed upon by all participants before being added to the ledger, when a single blockchain becomes congested or overloaded it can slow down.

The industry is also already filled with blockchains developed and deployed for a multitude of purposes and new blockchains arrive every day from startups and established companies across the world. In many of these cases, these blockchains are purpose-built but often act as solutions for extremely similar activities.

For example, easing interoperability between two or more credit tracking blockchains could allow them to share load. In the case that blockchain A suddenly receives double the volume it normally sees in a day, it could offload part of that capacity onto blockchain B in order to keep transactions flowing quickly.

Also, according to JCB, virtual currencies – such as bitcoin, litecoin, ethereum and other new ones that appear every day – are a primary use of current blockchains. According to a market report from CB Insights, last year the total market capitalization of blockchain currencies reached $150 billion. This research will make it possible to reduce the cost of exchanging between similar currencies.

A group of blockchains networked together with JCB’s technology could be used to reduce commissions for their currency exchange and make the realization of transactions faster. As a result, this research could also be used to reduce costs for securities exchanges or financial institutions using separate blockchains to interconnect. An exchange would be able to record transactions between the blockchains without the need for an intermediate agreement, so it could be automated by the underlying blockchain network.

Initially, JCB intends to connect seven to 10 domestic blockchains, according to an article from Japanese news source Nikkei. After that, the company hopes to expand the reach of its interconnectivity technology by opening it up to more companies.

Image: JCB