R3 has published a revealing blog post about Corda, a financial grade distributed ledger inspired by the benefits of blockchain systems, setting the record straight. After Corda had received increased attention last week, R3 understood that “the story isn’t a story”.
At the very launch of R3 in 2015, the team was pretty much inspired by the blockchain, a technology underpinning bitcoin. Just as many other companies, R3 hit on the idea to adopt it to financial markets. But the company failed to give special consideration to the issue of semantics.
“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”, R3 says in the post.
Thus, the company seems to have fallen into this semantics trap while it has been saying from the very beginning that Corda is a distributed ledger platform, not a traditional blockchain platform, and was never designed to be one.
R3 explains that if they had managed to find a perfect platform that fits regulated financial institutions, such as a traditional blockchain, at the very beginning of their way, they wouldn’t have needed to create their own one. Blockchain can’t be applied blindly to wholesale financial markets without careful consideration. It is necessary to change it to satisfy regulatory, privacy and scalability concerns. And that is how Corda was created.
Corda’s distributed ledger technology was developed to address the specific needs of the financial services industry. An important moment is that it restricts access to data within an agreement to only those explicitly entitled to it, rather than the entire network. And financial agreements on Corda link 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 is a unique distributed ledger that marked a milestone for the market. There is no similar project in the world that was developed with over 70 global institutions from all corners of the financial services industry.
At the end of 2016, R3 announced that Corda was to become open source meaning that developers got a universal access to the source code. R3 expected the initiative to encourage collaboration, review and contribution to the platform.