A new form of technology is being worked on by the giant blockchain Consortium R3CEV. On April 5th the startup’s blog post introduced Corda, “a distributed ledger designed for financial services” and the company explains the concept is a unique protocol very different than the blockchain technology we know of today.
R3CEV: Building ‘Different Solutions for Different Problems’
R3’s chief technology officer Richard Gendal Brown explains the organization has been working on a prototype for the past six months. Brown details the team has built this platform “from the ground up” and is constructed primarily for “financial agreements between regulated financial institutions.”
However, the project has key differences that set it apart from typical blockchain technology. For instance, Corda doesn’t share its data globally, and only participating members can view the information. Still the startup claims Corda “choreographs workflow between firms without a central controller” and supports an array of “consensus mechanisms.” Transaction privacy and trade data are kept between member banks to protect financial dealings. Charley Cooper, a managing director at R3, told Bloomberg a few hours before the blog announcement stating:
The banks touch everything. The vast majority of all financial deals have a bank on one side of the trade. Because of that, the privacy piece becomes much more important.
Another difference between R3’s Corda and blockchains like Ethereum or Bitcoin is the new protocol does not have a native cryptocurrency. The prototype is designed with current industry standards, and “records an explicit link between human-language legal prose documents and smart contract code.”
Brown says when the code matures in the future, it will be open sourced to the public. Over the course of much contemplation Brown and the team researched these cryptographic technologies and dissected what he calls the “blockchain bundle.” Brown explains:
We concluded that a blockchain such as the ones underlying Bitcoin or Ethereum or any of the private variations actually provide at least five interlocking, but distinct, services. And the right approach is to treat them as a menu from which to select and customise […] different combinations, in different flavours, for different business problems.
The five blockchain attributes include consensus, validity, uniqueness, immutability, and authentication. Corda addresses these key points in distinct ways offering “different solutions for different problems.” Despite its focus on some of the same goals the team is “not building a blockchain” and they reject the idea that all data should be available to everyone. Brown explains that financial agreements between institutions need more than just a basic consensus mechanism.
“We need to make it easy to write business logic and integrate with existing code; we need to focus on interoperability,” the CTO explained. “And we need to support the choreography between firms as they build up their agreements.”
The R3 team doesn’t believe Corda is the solution to all problems and the organization still has lots of work to do. Brown says the distributed ledger technology isn’t meant to compete with others because they believe Corda is entirely different than other platforms. The company says that over the next few months more information will be released about the new system with preparations for the launch of the core platform and open sourced code.
It will be interesting to see what R3 has up its sleeves with the Corda project, and Bitcoin.com will be watching this as it transpires.
What do you think about R3 creating a new consensus prototype? Let us know in the comments below.
Images courtesy of R3CEV’s blog, Pixbay, and Shutterstock