What is a Golden Copy?
A golden copy – or golden record – typically serves as the official, master version of a record of data. It is an authoritative single source, sometimes referred to as the “single version of the truth”, where “truth” is understood as that which users can ensure is the single correct piece of information which can then be actioned upon.
What constitutes a golden copy varies based on the particular use of that data. For example, a passport or social security number may constitute a golden copy in the case of customer KYC information, while a driver’s license can be thought of as golden copy of a form of identity at the DMV.
For financial institutions, there is a reliance on a single source of data that is untainted, “true” and represents something that is actionable. In trading, for example, this means that the initial booking of a trade and agreement of the attributes of that trade between counter parties forms a representation that can be used for some action. In other words, the initial construct of a golden copy consists of the data attributes (of a trade contract information that is both common like reference data and counter party specific, like a trader ID) that define the data and confirmation / validation that makes this golden copy reliable and, ultimately, actionable.
While existing processes – like reconciliation – currently carry out this validation process in a bank, distributed ledger technology (DLT) may ultimately be able to carry out these actions far more efficiently. DLT enhances the notion of a golden copy in that it enables a group of participants to confirm that data is true, lowering the cost of reconciliation and relieving the burden of having a single institution validate or act as a golden copy. DLT allows for multiple, distributed confirmations, strengthening the claim of factuality.
A golden copy is considered the original, incepting transaction – any amendments or changes to the data must be confirmed and validated by participants in the distributed ledger network that have the authority to make and validate those changes. In this sense, a golden copy is a living piece of data that is continuously validated.