The blockchain/DLT consortium will ‘open source’ its main platform with hopes of creating an industry standard.
As promised months ago, a distributed ledger technology (DLT) consortium of key players, R3, is going to “open source” its DLT platform Corda by the end of November with the hope of making the platform an industry standard that will encourage others to build products on top of it, confirms Todd McDonald, R3 co-founder and chief operating officer (COO), in a recent blog posting.
R3 officials acknowledge that they will contribute the code for Corda on Nov. 30 to the Hyperledger project, which is being led by the non-profit Linux Foundation to advance blockchain/DLT.
In McDonald’s blog posting, dated Oct. 23, the COO cites James Carlyle, chief engineer for R3, who the Reuters news agency quotes as saying “ … We don’t want everyone to create their own platform … because we’ll end up with lots of islands that can’t talk to each other … If we have one platform with lots of products on top, then we get something that’s more like the internet, where we still get innovation but we can still communicate with each other.”
R3 introduced the R3 Corda distributed ledger for financial services via another blog posting, dated April 5, from Richard G. Brown, chief technology officer (CTO) for R3.
“As reported in Bloomberg this morning, I’m delighted to confirm that R3 and our member banks are working on a distributed ledger platform for financial services: Corda,” Brown said at the time. “For the last six months, my team and contributors from our membership have been building a distributed ledger platform prototype from the ground up, specifically designed to manage financial agreements between regulated financial institutions. I am massively excited by the progress our team, led by James Carlyle, our chief engineer, and Mike Hearn, our lead platform engineer, are making and I think the time is right to share some details.”
The Corda records, manages and synchronizes financial agreements “and is heavily inspired by and captures the benefits of blockchain systems, without the design choices that make blockchains inappropriate for many banking scenarios,” Brown said.
Brown said some of the key aspects of Corda are:
- No “unnecessary global sharing of data: only those parties with a legitimate need to know can see the data within an agreement;”
- A choreographed workflow between firms without a central controller;
- A consensus achieved between firms at the level of individual deals, not the level of the system;
- A design that directly enables regulatory and supervisory observer nodes;
- Transaction validation by parties to the transaction rather than a broader pool of unrelated validators;
- A variety of consensus mechanisms;
- Recording of explicit links between human-language legal prose documents and smart contract code;
- A usage of industry-standard tools;
- No native cryptocurrency
- And a design based on detailed analysis and prototyping with R3 members
In the McDonald post, he adds that R3’s “technology team has been hard at work on Corda for many months and we are excited to see the reaction and feedback of the wider community, both for financial and non-financial applications. You can also expect to hear more publicly from Richard Gendal Brown, James Carlyle, Mike Hearn and the whole R3 tech team.”
Also in his blog posting, McDonald quotes R3 CEO David Rutter who shared his this vision for Corda’s via the Tabb Forum. Rutter argues that “blockchain-inspired technology will facilitate mutualized and consistent middle- and back-office systems that assure that one firm’s view is identical to its counterparts’ view. … The application of this technology to finance holds the key to releasing banks and other financial institutions from the technological binds in which they find themselves after years of unstructured investment in multiple generations of expensive legacy middle- and back-office technology.”
As blockchain/DLT technologies advance, there may have to be more interaction among them.
In March, FTF News reported on a successful trial of “five distinct blockchain technologies in parallel in the first test of its kind.” The trial “represented the trading of fixed income assets between 40 of the world’s largest banks across the blockchains, using multiple cloud technology providers within R3’s Global Collaborative Lab,” according to R3.
The participating banks “connected to R3-managed private distributed ledger technologies built by Chain, Eris Industries, Ethereum, IBM and Intel,” say R3 officials. “They evaluated the strengths and weaknesses of each technology by running smart contracts that were programmed to facilitate issuance, secondary trading and redemption of commercial paper, a short-term fixed income security typically issued by corporations to raise funding.”
Cloud computing resources to host the distributed ledgers tests were provided by Microsoft Azure, IBM Cloud and Amazon AWS.
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