When is blockchain not a blockchain?
We’ve been flattered by all the attention Corda has received this past week. It’s just too bad the story isn’t a story.
The issue of semantics is always a challenge as new ideas, technologies and cultural phenomena work their way into mainstream consciousness and the media. Rewind a few years and who would have thought the Oxford English Dictionary’s definition of ‘meme’ would be updated to refer to a picture of a grumpy cat or a sad Michael Jordan on Instagram?
When we launched R3 in 2015, we were among a handful of companies inspired by the technology underpinning bitcoin, known as blockchain, and its potential application to wholesale financial markets. Conversations in boardrooms and the media revolved around blockchain, which at that point was the most pertinent example of distributed ledger technology in the mainstream consciousness.
Humans are creatures of habit. As time went on, the term blockchain came to be associated with any type of distributed ledger, even as the technology matured and evolved to meet the needs of different groups of users. This isn’t an issue unique to our space. The marketing team at Canon must have spent countless hours working out how to stop people referring to all copy machines as Xeroxs.
While we were almost certainly guilty of slipping into this semantics trap now and again, we’ve said from the beginning that Corda is a distributed ledger platform, not a traditional blockchain platform. It was never designed to be one.
At the outset our architecture team identified its first priority to be to decide whether to adopt, adapt or build. Put simply, if we found another platform currently in the market that was fit for purpose for regulated financial institutions, such as a traditional blockchain, we would have had no need to build our own and we would have gladly adopted it wholesale or adapted it as necessary.
Blockchains are specific pieces of software originally built to handle transactions of virtual currencies such as bitcoin and ether. Together with our bank members, we realised early on that this technology could not be applied blindly to wholesale financial markets without careful consideration: changes must be made to satisfy regulatory, privacy and scalability concerns. And that is what we have done with Corda.
Corda’s open source distributed ledger technology was designed from the ground up to address the specific needs of the financial services industry. It is heavily inspired by and captures the benefits of blockchain systems, but with design choices that make it able to meet the needs of regulated financial institutions.
Crucially, Corda restricts access to data within an agreement to only those explicitly entitled to it, rather than the entire network. And financial agreements on Corda are intended to be enforceable, linking business logic and data to associated legal prose in order to ensure that the financial agreements on the platform are rooted firmly in law.
Corda was designed from the ground up to address the specific needs of the financial services industry. There are currently very few tangible examples of distributed ledger platforms in the market – and none that were developed with over 70 global institutions from all corners of the financial services industry. It is unique and its launch was a landmark moment for the market.
When is a blockchain not a blockchain? When it’s Corda.