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ABOUT RICHARD BROWN
About Richard Brown. I am Chief Technology Officer at R3. The opinions that I express are my own and do not necessarily reflect the view of R3. At times, I comment on assets or companies in which I directly or indirectly may hold a position. I also advise several firms in the cryptocurrency and decentralised consensus space both formally and A SIMPLE MODEL FOR SMART CONTRACTS A smart-contract is an event-driven program, with state, which runs on a replicated, shared ledger and which can take custody over assets on that ledger. But that’s just my working definition. And there are lots of conceptual issues. I summarise some of them here, merely as signposts for further study (and future posts) ON DISTRIBUTED DATABASES AND And so we call Corda a distributed ledger, to distinguish it from distributed databases. A distributed ledger that is designed painstakingly for the needs of commercial entities. Put more simply: you simply can’t build the applications we envisage for Corda with traditional database technology. And that’s what makes this newfield so exciting.
A CENTRAL BANK “CRYPTOCURRENCY”? AN INTERESTING IDEA, BUT The retail use-cases get all the press but the killer-app for digital central bank money might be smart contracts This post on a concept called “FedCoin” by David Andolfatto of the St Louis Fed raises the really interesting possibility of a world with central-bank-issued digital assets which can be held by a broad range of people. A SIMPLE EXPLANATION OF HOW SHARES MOVE AROUND THE I explained here how money moves around the banking system and how the Bitcoin system causes us to revisit our assumptions about what a payment system must look like. In this post, I turn my attention to securities settlement: if I sell some shares to you, how do A SIMPLE EXPLANATION OF FEES IN THE PAYMENT CARD INDUSTRY Merchant receives $97.76 – overall fee $2.24. Final picture showing how the merchant’s $2.24 fee is allocated. As I’ve stressed above, this is just a simple example but it shows two key points: 1) It is the issuer who receives the bulk of the fees (this is, in part, how they fund their loyalty schemes, etc) 2) The schemes actually earn A SIMPLE EXPLANATION OF BALANCE SHEETS (DON’T RUN AWAY… IT Shared ledgers could be revolutionary but do we need to share a mental model for banking to make sense of it all? What would be your first instinct if your friend were to tell you they had £1m in the bank? To congratulate them on their good fortune? To suppress a pang ofjealousy? Wrong,
HOW TO EXPLAIN THE VALUE OF REPLICATED, SHARED LEDGERS “Digital currencies” aren’t needed to explain why distributed ledgers are important. In this post, I develop an argument for replicated shared ledgers from first principles. It is intended to be an “education piece” aimed at those, particularly in the finance industry, who prefer explanations of new technologies to be rooted in a description of a real-world business A SIMPLE EXPLANATION OF HOW APPLE PAY WORKS (PROBABLY): IT Forget contactless point-of-payment that’s a solved problem. Apple’s use of tokenization is the interesting part I’ve been using a beta version of ApplePay on my iPhone 4 for some time now My very old, but very effective, Barclaycard contactless PayTag, stuckto my iPhone 4
RICHARD GENDAL BROWN As that article explains, it seems like the decision to use a non-replicating virus was a choice, presumably on safety and public acceptance grounds: it would have been possible to design a vaccine where the virus could replicate, and some vaccines for other diseases do work that way. The advantage of the latter, I guess, is that far fewer copies would have had to be injected to start with.ABOUT RICHARD BROWN
About Richard Brown. I am Chief Technology Officer at R3. The opinions that I express are my own and do not necessarily reflect the view of R3. At times, I comment on assets or companies in which I directly or indirectly may hold a position. I also advise several firms in the cryptocurrency and decentralised consensus space both formally and A SIMPLE MODEL FOR SMART CONTRACTS A smart-contract is an event-driven program, with state, which runs on a replicated, shared ledger and which can take custody over assets on that ledger. But that’s just my working definition. And there are lots of conceptual issues. I summarise some of them here, merely as signposts for further study (and future posts) ON DISTRIBUTED DATABASES AND And so we call Corda a distributed ledger, to distinguish it from distributed databases. A distributed ledger that is designed painstakingly for the needs of commercial entities. Put more simply: you simply can’t build the applications we envisage for Corda with traditional database technology. And that’s what makes this newfield so exciting.
A CENTRAL BANK “CRYPTOCURRENCY”? AN INTERESTING IDEA, BUT The retail use-cases get all the press but the killer-app for digital central bank money might be smart contracts This post on a concept called “FedCoin” by David Andolfatto of the St Louis Fed raises the really interesting possibility of a world with central-bank-issued digital assets which can be held by a broad range of people. A SIMPLE EXPLANATION OF HOW SHARES MOVE AROUND THE I explained here how money moves around the banking system and how the Bitcoin system causes us to revisit our assumptions about what a payment system must look like. In this post, I turn my attention to securities settlement: if I sell some shares to you, how do A SIMPLE EXPLANATION OF FEES IN THE PAYMENT CARD INDUSTRY Merchant receives $97.76 – overall fee $2.24. Final picture showing how the merchant’s $2.24 fee is allocated. As I’ve stressed above, this is just a simple example but it shows two key points: 1) It is the issuer who receives the bulk of the fees (this is, in part, how they fund their loyalty schemes, etc) 2) The schemes actually earn A SIMPLE EXPLANATION OF BALANCE SHEETS (DON’T RUN AWAY… IT Shared ledgers could be revolutionary but do we need to share a mental model for banking to make sense of it all? What would be your first instinct if your friend were to tell you they had £1m in the bank? To congratulate them on their good fortune? To suppress a pang ofjealousy? Wrong,
HOW TO EXPLAIN THE VALUE OF REPLICATED, SHARED LEDGERS “Digital currencies” aren’t needed to explain why distributed ledgers are important. In this post, I develop an argument for replicated shared ledgers from first principles. It is intended to be an “education piece” aimed at those, particularly in the finance industry, who prefer explanations of new technologies to be rooted in a description of a real-world business A SIMPLE EXPLANATION OF HOW APPLE PAY WORKS (PROBABLY): IT Forget contactless point-of-payment that’s a solved problem. Apple’s use of tokenization is the interesting part I’ve been using a beta version of ApplePay on my iPhone 4 for some time now My very old, but very effective, Barclaycard contactless PayTag, stuckto my iPhone 4
A SIMPLE EXPLANATION OF ENTERPRISE BLOCKCHAINS FOR just comment on the Go vs. Java part to be fair, Go’s crypto lib is about 8 times faster than that of Java. for a basic ECC point multiplication operation, Java’s BouncyCastle benchmarked at about 257ns, where as in Go that number is around 35ns (using base point, which BouncyCastle does not implement, the test was performed on a Intel i7 3.2Ghz processor). TOWARDS A UNIFIED MODEL FOR REPLICATED, SHARED LEDGERS Don’t Say The “B Word”! I’ve come to the conclusion that saying “blockchain” has become unhelpful. It just confuses people. It means too many different things to different people and so it’s almost impossible to have a conversation in this space without talking past each other. So, as I argued in this piece on permissionlessledgers and this
CORDA: AN INTRODUCTION Corda is the outcome of the analysis we did on how to achieve as many of the benefits of distributed ledger and blockchain technology as possible but in a way that is sympathetic to and addresses the needs of regulated financial institutions. Corda is intended to be a contribution to the plurality of technologies that will be adopted inthe
A SIMPLE EXPLANATION OF BALANCE SHEETS (DON’T RUN AWAY… IT Shared ledgers could be revolutionary but do we need to share a mental model for banking to make sense of it all? What would be your first instinct if your friend were to tell you they had £1m in the bank? To congratulate them on their good fortune? To suppress a pang ofjealousy? Wrong,
THE CORDA WAY OF THINKING The Corda Way of Thinking Corda is a revolutionary new Distributed Ledger Platform, the only DLT specifically designed for the needs of financial services. This article introduces the “Corda Way of Thinking”: understand this article and you’ll be well on your way to being a Corda Expert Solution Designer! What problem are we tryingto
INTRODUCING R3 CORDA™: A DISTRIBUTED LEDGER DESIGNED FOR Corda is a distributed ledger platform designed from the ground up to record, manage and synchronise financial agreements between regulated financial institutions. It is heavily inspired by and captures the benefits of blockchain systems, without the design choices that make blockchains inappropriate for many banking scenarios. LESSONS FROM BITCOIN: PUSH VERSUS PULL Lessons from Bitcoin: Push versus Pull. Bitcoin is going to change the world – but not for the reasons we commonly assume. One subtle way in which it will change the world is through its influence on other players in the payment ecosystem. At the heart of the Bitcoin system is the idea of a transaction: at its simplest, this is a transfer of A DECENTRALIZED SECURITIES TRADING AND SETTLEMENT SYSTEM Colored coins, chromawallet, coinprism, NXT Asset Exchange, Mastercoin, Counterparty tens of projects are working on asset tracking, transfer and exchange systems. What are they doing? Will it work? I wrote a piece last year explaining how today’s securities trading and settlement systems work. The full picture of participants is pretty complex: There are surprisingly many R3 CORDA: WHAT MAKES IT DIFFERENT Corda is a distributed ledger platform designed and built from the ground up for the recording and automation of legal agreements between identifiable parties. It is heavily influenced by the requirements of the financial industry but we believe the community will find the underlying architecture will lend itself to a broad range ofapplications.
A SIMPLE EXPLANATION OF HOW MONEY MOVES AROUND THE BANKING Hi Simon, I’m inclined to agree. I think there are two major forces driving us towards this sort of outcome. 1) the “average” user is likely to trust a reassuring brand more than themselves to manage their wallet, driving a move to a bank-like “safekeeping” business model and 2) the blockchain may not be the best vehicle formicro-payments.
RICHARD GENDAL BROWN As that article explains, it seems like the decision to use a non-replicating virus was a choice, presumably on safety and public acceptance grounds: it would have been possible to design a vaccine where the virus could replicate, and some vaccines for other diseases do work that way. The advantage of the latter, I guess, is that far fewer copies would have had to be injected to start with.ABOUT RICHARD BROWN
About Richard Brown. I am Chief Technology Officer at R3. The opinions that I express are my own and do not necessarily reflect the view of R3. At times, I comment on assets or companies in which I directly or indirectly may hold a position. I also advise several firms in the cryptocurrency and decentralised consensus space both formally and A SIMPLE MODEL FOR SMART CONTRACTS A smart-contract is an event-driven program, with state, which runs on a replicated, shared ledger and which can take custody over assets on that ledger. But that’s just my working definition. And there are lots of conceptual issues. I summarise some of them here, merely as signposts for further study (and future posts) A SIMPLE EXPLANATION OF FEES IN THE PAYMENT CARD INDUSTRY Merchant receives $97.76 – overall fee $2.24. Final picture showing how the merchant’s $2.24 fee is allocated. As I’ve stressed above, this is just a simple example but it shows two key points: 1) It is the issuer who receives the bulk of the fees (this is, in part, how they fund their loyalty schemes, etc) 2) The schemes actually earn A SIMPLE EXPLANATION OF HOW SHARES MOVE AROUND THE I explained here how money moves around the banking system and how the Bitcoin system causes us to revisit our assumptions about what a payment system must look like. In this post, I turn my attention to securities settlement: if I sell some shares to you, how do A CENTRAL BANK “CRYPTOCURRENCY”? AN INTERESTING IDEA, BUT The retail use-cases get all the press but the killer-app for digital central bank money might be smart contracts This post on a concept called “FedCoin” by David Andolfatto of the St Louis Fed raises the really interesting possibility of a world with central-bank-issued digital assets which can be held by a broad range of people. A SIMPLE EXPLANATION OF BALANCE SHEETS (DON’T RUN AWAY… IT Shared ledgers could be revolutionary but do we need to share a mental model for banking to make sense of it all? What would be your first instinct if your friend were to tell you they had £1m in the bank? To congratulate them on their good fortune? To suppress a pang ofjealousy? Wrong,
A SIMPLE EXPLANATION OF BITCOIN “SIDECHAINS” Could sidechains be the enabler of “semi-decentralised” Bitcoin products and services? An important paper was published this week: If you've followed Bitcoin for any time, you'll know this is a seriously eminent group of authors It describes a way to build “pegged sidechains”. Sidechains themselves are not new – the idea, and how to build them, has been A SIMPLE EXPLANATION OF HOW MONEY MOVES AROUND THE BANKINGSEE MORE ONGENDAL.ME
A SIMPLE EXPLANATION OF HOW APPLE PAY WORKS (PROBABLY): IT Forget contactless point-of-payment that’s a solved problem. Apple’s use of tokenization is the interesting part I’ve been using a beta version of ApplePay on my iPhone 4 for some time now My very old, but very effective, Barclaycard contactless PayTag, stuckto my iPhone 4
RICHARD GENDAL BROWN As that article explains, it seems like the decision to use a non-replicating virus was a choice, presumably on safety and public acceptance grounds: it would have been possible to design a vaccine where the virus could replicate, and some vaccines for other diseases do work that way. The advantage of the latter, I guess, is that far fewer copies would have had to be injected to start with.ABOUT RICHARD BROWN
About Richard Brown. I am Chief Technology Officer at R3. The opinions that I express are my own and do not necessarily reflect the view of R3. At times, I comment on assets or companies in which I directly or indirectly may hold a position. I also advise several firms in the cryptocurrency and decentralised consensus space both formally and A SIMPLE MODEL FOR SMART CONTRACTS A smart-contract is an event-driven program, with state, which runs on a replicated, shared ledger and which can take custody over assets on that ledger. But that’s just my working definition. And there are lots of conceptual issues. I summarise some of them here, merely as signposts for further study (and future posts) A SIMPLE EXPLANATION OF FEES IN THE PAYMENT CARD INDUSTRY Merchant receives $97.76 – overall fee $2.24. Final picture showing how the merchant’s $2.24 fee is allocated. As I’ve stressed above, this is just a simple example but it shows two key points: 1) It is the issuer who receives the bulk of the fees (this is, in part, how they fund their loyalty schemes, etc) 2) The schemes actually earn A SIMPLE EXPLANATION OF HOW SHARES MOVE AROUND THE I explained here how money moves around the banking system and how the Bitcoin system causes us to revisit our assumptions about what a payment system must look like. In this post, I turn my attention to securities settlement: if I sell some shares to you, how do A CENTRAL BANK “CRYPTOCURRENCY”? AN INTERESTING IDEA, BUT The retail use-cases get all the press but the killer-app for digital central bank money might be smart contracts This post on a concept called “FedCoin” by David Andolfatto of the St Louis Fed raises the really interesting possibility of a world with central-bank-issued digital assets which can be held by a broad range of people. A SIMPLE EXPLANATION OF BALANCE SHEETS (DON’T RUN AWAY… IT Shared ledgers could be revolutionary but do we need to share a mental model for banking to make sense of it all? What would be your first instinct if your friend were to tell you they had £1m in the bank? To congratulate them on their good fortune? To suppress a pang ofjealousy? Wrong,
A SIMPLE EXPLANATION OF BITCOIN “SIDECHAINS” Could sidechains be the enabler of “semi-decentralised” Bitcoin products and services? An important paper was published this week: If you've followed Bitcoin for any time, you'll know this is a seriously eminent group of authors It describes a way to build “pegged sidechains”. Sidechains themselves are not new – the idea, and how to build them, has been A SIMPLE EXPLANATION OF HOW MONEY MOVES AROUND THE BANKINGSEE MORE ONGENDAL.ME
A SIMPLE EXPLANATION OF HOW APPLE PAY WORKS (PROBABLY): IT Forget contactless point-of-payment that’s a solved problem. Apple’s use of tokenization is the interesting part I’ve been using a beta version of ApplePay on my iPhone 4 for some time now My very old, but very effective, Barclaycard contactless PayTag, stuckto my iPhone 4
A SIMPLE EXPLANATION OF BALANCE SHEETS (DON’T RUN AWAY… IT Shared ledgers could be revolutionary but do we need to share a mental model for banking to make sense of it all? What would be your first instinct if your friend were to tell you they had £1m in the bank? To congratulate them on their good fortune? To suppress a pang ofjealousy? Wrong,
ON DISTRIBUTED DATABASES AND And so we call Corda a distributed ledger, to distinguish it from distributed databases. A distributed ledger that is designed painstakingly for the needs of commercial entities. Put more simply: you simply can’t build the applications we envisage for Corda with traditional database technology. And that’s what makes this newfield so exciting.
CORDA: AN INTRODUCTION Corda is the outcome of the analysis we did on how to achieve as many of the benefits of distributed ledger and blockchain technology as possible but in a way that is sympathetic to and addresses the needs of regulated financial institutions. Corda is intended to be a contribution to the plurality of technologies that will be adopted inthe
A SIMPLE EXPLANATION OF BITCOIN “SIDECHAINS” Could sidechains be the enabler of “semi-decentralised” Bitcoin products and services? An important paper was published this week: If you've followed Bitcoin for any time, you'll know this is a seriously eminent group of authors It describes a way to build “pegged sidechains”. Sidechains themselves are not new – the idea, and how to build them, has been HOW TO EXPLAIN THE VALUE OF REPLICATED, SHARED LEDGERS “Digital currencies” aren’t needed to explain why distributed ledgers are important. In this post, I develop an argument for replicated shared ledgers from first principles. It is intended to be an “education piece” aimed at those, particularly in the finance industry, who prefer explanations of new technologies to be rooted in a description of a real-world business DECENTRALISED DIGITAL ASSET REGISTERS Decentralised Digital Asset Registers – Concepts. I am hugely optimistic about the role cryptocurrencies (such as bitcoin) will play in the future – and one of the reasons is that they enable us to build decentralised digital asset registers. I’ve written about thisconcept here.
BITCOIN MINING: THE FIRST TECHNOLOGY PLATFORM THAT WORKS They key to understanding mining is to realize we need blocks to be produced slowly! Whenever I present Bitcoin to new audiences, I avoid talking about mining. I find it confuse more than it enlightens. Instead, I simply give some intuition. I say: “Today’s value-transfer systems rely on central ledgers. Banks, telcos andother firms
BLOCKCHAIN IS WHERE BANKS HAVE THE MOST OBVIOUS Nasdaq’s recent announcement shows you need a strategy for both I have argued for some time that the world of “blockchains” is actually two worlds: the permissionless world of “bitcoin-like systems” and the permissioned world of “ripple-like systems”. The reason we so often talk about them together is because they share a common architecture: the COST? TRUST? SOMETHING ELSE? WHAT’S THE KILLER-APP FOR Could decentralized ledgers change the face of accounting? When I speak to people about decentralised ledgers, some of them are interested in the “distributed trust” aspects of the technology. But, more often, they bring up the question of cost. This confused me at first. Think back to where this all started: with Bitcoin. Bitcoin is deliberately less QUICK NOTES ON SIDECHAINS “ELEMENTS” Quick notes on Sidechains “Elements”. I’ve written a lot recently about the potential of replicated, shared ledgers that are private/semi-private. For example, I suggested that industries with duplicated systems across firms might get benefit from adopting this technology. But I also keep an eye on what’s happening in theBitcoin world.
RICHARD GENDAL BROWN As that article explains, it seems like the decision to use a non-replicating virus was a choice, presumably on safety and public acceptance grounds: it would have been possible to design a vaccine where the virus could replicate, and some vaccines for other diseases do work that way. The advantage of the latter, I guess, is that far fewer copies would have had to be injected to start with.ABOUT RICHARD BROWN
I am Chief Technology Officer at R3 The opinions that I express are my own and do not necessarily reflect the view of R3. At times, I comment on assets or companies in which I directly or indirectly may hold a position. I also advise several firms in the cryptocurrency A SIMPLE MODEL FOR SMART CONTRACTS Everybody I ask has a different definition of a “smart contract”; Here’s mine. I hear more and more people talking about “smart contracts” these days. But when you push them to define the term, the concept often dissolves in their hands. This isn’t a new observation: Peter Todd made a ON DISTRIBUTED DATABASES AND Why can't companies wanting to share business logic and data just install a distributed database? What is the essential difference between a distributed database and a distributed ledger? Last month, I shared the thinking that led to the design of Corda, which we at R3 will be open sourcing on November 30; and Mike Hearn and I A CENTRAL BANK “CRYPTOCURRENCY”? AN INTERESTING IDEA, BUT The retail use-cases get all the press but the killer-app for digital central bank money might be smart contracts This post on a concept called “FedCoin” by David Andolfatto of the St Louis Fed raises the really interesting possibility of a world with central-bank-issued digital assets which can be held by a broad range of people. A SIMPLE EXPLANATION OF BALANCE SHEETS (DON’T RUN AWAY… IT Shared ledgers could be revolutionary but do we need to share a mental model for banking to make sense of it all? What would be your first instinct if your friend were to tell you they had £1m in the bank? To congratulate them on their good fortune? To suppress a pang ofjealousy? Wrong,
A SIMPLE EXPLANATION OF HOW SHARES MOVE AROUND THE I explained here how money moves around the banking system and how the Bitcoin system causes us to revisit our assumptions about what a payment system must look like. In this post, I turn my attention to securities settlement: if I sell some shares to you, how do A SIMPLE EXPLANATION OF ENTERPRISE BLOCKCHAINS FOR And why R3’s Open-Source Corda platform is the one to watch We’re doing some really interesting engineering at R3 right now We have Java running in Intel SGX We’re hacking a JVM to make it deterministic We’ve proved you can suspend threads of execution to a database and bring them back to life across restarts HOW TO EXPLAIN THE VALUE OF REPLICATED, SHARED LEDGERS “Digital currencies” aren’t needed to explain why distributed ledgers are important. In this post, I develop an argument for replicated shared ledgers from first principles. It is intended to be an “education piece” aimed at those, particularly in the finance industry, who prefer explanations of new technologies to be rooted in a description of a real-world business A SIMPLE EXPLANATION OF HOW APPLE PAY WORKS (PROBABLY): IT Forget contactless point-of-payment that’s a solved problem. Apple’s use of tokenization is the interesting part I’ve been using a beta version of ApplePay on my iPhone 4 for some time now My very old, but very effective, Barclaycard contactless PayTag, stuckto my iPhone 4
RICHARD GENDAL BROWN As that article explains, it seems like the decision to use a non-replicating virus was a choice, presumably on safety and public acceptance grounds: it would have been possible to design a vaccine where the virus could replicate, and some vaccines for other diseases do work that way. The advantage of the latter, I guess, is that far fewer copies would have had to be injected to start with.ABOUT RICHARD BROWN
I am Chief Technology Officer at R3 The opinions that I express are my own and do not necessarily reflect the view of R3. At times, I comment on assets or companies in which I directly or indirectly may hold a position. I also advise several firms in the cryptocurrency A SIMPLE MODEL FOR SMART CONTRACTS Everybody I ask has a different definition of a “smart contract”; Here’s mine. I hear more and more people talking about “smart contracts” these days. But when you push them to define the term, the concept often dissolves in their hands. This isn’t a new observation: Peter Todd made a ON DISTRIBUTED DATABASES AND Why can't companies wanting to share business logic and data just install a distributed database? What is the essential difference between a distributed database and a distributed ledger? Last month, I shared the thinking that led to the design of Corda, which we at R3 will be open sourcing on November 30; and Mike Hearn and I A CENTRAL BANK “CRYPTOCURRENCY”? AN INTERESTING IDEA, BUT The retail use-cases get all the press but the killer-app for digital central bank money might be smart contracts This post on a concept called “FedCoin” by David Andolfatto of the St Louis Fed raises the really interesting possibility of a world with central-bank-issued digital assets which can be held by a broad range of people. A SIMPLE EXPLANATION OF BALANCE SHEETS (DON’T RUN AWAY… IT Shared ledgers could be revolutionary but do we need to share a mental model for banking to make sense of it all? What would be your first instinct if your friend were to tell you they had £1m in the bank? To congratulate them on their good fortune? To suppress a pang ofjealousy? Wrong,
A SIMPLE EXPLANATION OF HOW SHARES MOVE AROUND THE I explained here how money moves around the banking system and how the Bitcoin system causes us to revisit our assumptions about what a payment system must look like. In this post, I turn my attention to securities settlement: if I sell some shares to you, how do A SIMPLE EXPLANATION OF ENTERPRISE BLOCKCHAINS FOR And why R3’s Open-Source Corda platform is the one to watch We’re doing some really interesting engineering at R3 right now We have Java running in Intel SGX We’re hacking a JVM to make it deterministic We’ve proved you can suspend threads of execution to a database and bring them back to life across restarts HOW TO EXPLAIN THE VALUE OF REPLICATED, SHARED LEDGERS “Digital currencies” aren’t needed to explain why distributed ledgers are important. In this post, I develop an argument for replicated shared ledgers from first principles. It is intended to be an “education piece” aimed at those, particularly in the finance industry, who prefer explanations of new technologies to be rooted in a description of a real-world business A SIMPLE EXPLANATION OF HOW APPLE PAY WORKS (PROBABLY): IT Forget contactless point-of-payment that’s a solved problem. Apple’s use of tokenization is the interesting part I’ve been using a beta version of ApplePay on my iPhone 4 for some time now My very old, but very effective, Barclaycard contactless PayTag, stuckto my iPhone 4
BANKING | RICHARD GENDAL BROWN Posts about Banking written by gendal. Here’s what I think he means: A better airline miles system? As Antonis points out, airline miles systems are highly centralised: the airline is the issuer, redeemer, owner of the ledger, setter of the rules and controls everything elsetoo.
ARCHITECTURE
Posts about architecture written by gendal. And the other videos are pretty good too!. What that video doesn’t say (but should!) is the key point: in real-life scenarios, the dependency tree for any given transaction is invariably a very small subset of the overall set of transactions and so this technique (lazy on-demand provision of just the directly-required dependency tree and no more A SIMPLE EXPLANATION OF HOW SHARES MOVE AROUND THE I explained here how money moves around the banking system and how the Bitcoin system causes us to revisit our assumptions about what a payment system must look like. In this post, I turn my attention to securities settlement: if I sell some shares to you, how do A SIMPLE EXPLANATION OF FEES IN THE PAYMENT CARD INDUSTRY Richard. This is a nice, simple explanation, and the major themes largely hold true. However, it possibly misses a couple of key points – the first is the sheer variation (some might say cross-subsidisation) between different extremes of the market (eg A SIMPLE EXPLANATION OF ENTERPRISE BLOCKCHAINS FOR just comment on the Go vs. Java part to be fair, Go’s crypto lib is about 8 times faster than that of Java. for a basic ECC point multiplication operation, Java’s BouncyCastle benchmarked at about 257ns, where as in Go that number is around 35ns (using base point, which BouncyCastle does not implement, the test was performed on a Intel i7 3.2Ghz processor). TOWARDS A UNIFIED MODEL FOR REPLICATED, SHARED LEDGERS Don’t Say The “B Word”! I’ve come to the conclusion that saying “blockchain” has become unhelpful. It just confuses people. It means too many different things to different people and so it’s almost impossible to have a conversation in this space without talking past each other. So, as I argued in this piece on permissionlessledgers and this
FABRIC | RICHARD GENDAL BROWN Posts about fabric written by gendal. And the other videos are pretty good too!. What that video doesn’t say (but should!) is the key point: in real-life scenarios, the dependency tree for any given transaction is invariably a very small subset of the overall set of transactions and so this technique (lazy on-demand provision of just the directly-required dependency tree and no more) gives CORDA: AN INTRODUCTION Announcing the Corda Introductory Whitepaper The Wall Street Journal had a couple of good pieces this morning that describe some of the work we’re doing at R3 and our vision for the future of financial services. Project Concord is our codename for the overall vision, with Corda as our underlying distributed ledger software. I first wroteabout Corda
LESSONS FROM BITCOIN: PUSH VERSUS PULL Bitcoin is going to change the world - but not for the reasons we commonly assume. One subtle way in which it will change the world is through its influence on other players in the payment ecosystem. At the heart of the Bitcoin system is the idea of a transaction: at itssimplest, this is
A SIMPLE EXPLANATION OF HOW MONEY MOVES AROUND THE BANKING Hi Simon, I’m inclined to agree. I think there are two major forces driving us towards this sort of outcome. 1) the “average” user is likely to trust a reassuring brand more than themselves to manage their wallet, driving a move to a bank-like “safekeeping” business model and 2) the blockchain may not be the best vehicle formicro-payments.
RICHARD GENDAL BROWN As that article explains, it seems like the decision to use a non-replicating virus was a choice, presumably on safety and public acceptance grounds: it would have been possible to design a vaccine where the virus could replicate, and some vaccines for other diseases do work that way. The advantage of the latter, I guess, is that far fewer copies would have had to be injected to start with.ABOUT RICHARD BROWN
About Richard Brown. I am Chief Technology Officer at R3. The opinions that I express are my own and do not necessarily reflect the view of R3. At times, I comment on assets or companies in which I directly or indirectly may hold a position. I also advise several firms in the cryptocurrency and decentralised consensus space both formally and A SIMPLE MODEL FOR SMART CONTRACTS A smart-contract is an event-driven program, with state, which runs on a replicated, shared ledger and which can take custody over assets on that ledger. But that’s just my working definition. And there are lots of conceptual issues. I summarise some of them here, merely as signposts for further study (and future posts) ON DISTRIBUTED DATABASES AND And so we call Corda a distributed ledger, to distinguish it from distributed databases. A distributed ledger that is designed painstakingly for the needs of commercial entities. Put more simply: you simply can’t build the applications we envisage for Corda with traditional database technology. And that’s what makes this newfield so exciting.
A CENTRAL BANK “CRYPTOCURRENCY”? AN INTERESTING IDEA, BUT The retail use-cases get all the press but the killer-app for digital central bank money might be smart contracts This post on a concept called “FedCoin” by David Andolfatto of the St Louis Fed raises the really interesting possibility of a world with central-bank-issued digital assets which can be held by a broad range of people. A SIMPLE EXPLANATION OF BALANCE SHEETS (DON’T RUN AWAY… IT Shared ledgers could be revolutionary but do we need to share a mental model for banking to make sense of it all? What would be your first instinct if your friend were to tell you they had £1m in the bank? To congratulate them on their good fortune? To suppress a pang ofjealousy? Wrong,
A SIMPLE EXPLANATION OF BITCOIN “SIDECHAINS” Could sidechains be the enabler of “semi-decentralised” Bitcoin products and services? An important paper was published this week: If you've followed Bitcoin for any time, you'll know this is a seriously eminent group of authors It describes a way to build “pegged sidechains”. Sidechains themselves are not new – the idea, and how to build them, has been A SIMPLE EXPLANATION OF HOW MONEY MOVES AROUND THE BANKINGSEE MORE ONGENDAL.ME
A SIMPLE EXPLANATION OF HOW SHARES MOVE AROUND THE I explained here how money moves around the banking system and how the Bitcoin system causes us to revisit our assumptions about what a payment system must look like. In this post, I turn my attention to securities settlement: if I sell some shares to you, how do A SIMPLE EXPLANATION OF HOW APPLE PAY WORKS (PROBABLY): IT Forget contactless point-of-payment that’s a solved problem. Apple’s use of tokenization is the interesting part I’ve been using a beta version of ApplePay on my iPhone 4 for some time now My very old, but very effective, Barclaycard contactless PayTag, stuckto my iPhone 4
RICHARD GENDAL BROWN As that article explains, it seems like the decision to use a non-replicating virus was a choice, presumably on safety and public acceptance grounds: it would have been possible to design a vaccine where the virus could replicate, and some vaccines for other diseases do work that way. The advantage of the latter, I guess, is that far fewer copies would have had to be injected to start with.ABOUT RICHARD BROWN
About Richard Brown. I am Chief Technology Officer at R3. The opinions that I express are my own and do not necessarily reflect the view of R3. At times, I comment on assets or companies in which I directly or indirectly may hold a position. I also advise several firms in the cryptocurrency and decentralised consensus space both formally and A SIMPLE MODEL FOR SMART CONTRACTS A smart-contract is an event-driven program, with state, which runs on a replicated, shared ledger and which can take custody over assets on that ledger. But that’s just my working definition. And there are lots of conceptual issues. I summarise some of them here, merely as signposts for further study (and future posts) ON DISTRIBUTED DATABASES AND And so we call Corda a distributed ledger, to distinguish it from distributed databases. A distributed ledger that is designed painstakingly for the needs of commercial entities. Put more simply: you simply can’t build the applications we envisage for Corda with traditional database technology. And that’s what makes this newfield so exciting.
A CENTRAL BANK “CRYPTOCURRENCY”? AN INTERESTING IDEA, BUT The retail use-cases get all the press but the killer-app for digital central bank money might be smart contracts This post on a concept called “FedCoin” by David Andolfatto of the St Louis Fed raises the really interesting possibility of a world with central-bank-issued digital assets which can be held by a broad range of people. A SIMPLE EXPLANATION OF BALANCE SHEETS (DON’T RUN AWAY… IT Shared ledgers could be revolutionary but do we need to share a mental model for banking to make sense of it all? What would be your first instinct if your friend were to tell you they had £1m in the bank? To congratulate them on their good fortune? To suppress a pang ofjealousy? Wrong,
A SIMPLE EXPLANATION OF BITCOIN “SIDECHAINS” Could sidechains be the enabler of “semi-decentralised” Bitcoin products and services? An important paper was published this week: If you've followed Bitcoin for any time, you'll know this is a seriously eminent group of authors It describes a way to build “pegged sidechains”. Sidechains themselves are not new – the idea, and how to build them, has been A SIMPLE EXPLANATION OF HOW MONEY MOVES AROUND THE BANKINGSEE MORE ONGENDAL.ME
A SIMPLE EXPLANATION OF HOW SHARES MOVE AROUND THE I explained here how money moves around the banking system and how the Bitcoin system causes us to revisit our assumptions about what a payment system must look like. In this post, I turn my attention to securities settlement: if I sell some shares to you, how do A SIMPLE EXPLANATION OF HOW APPLE PAY WORKS (PROBABLY): IT Forget contactless point-of-payment that’s a solved problem. Apple’s use of tokenization is the interesting part I’ve been using a beta version of ApplePay on my iPhone 4 for some time now My very old, but very effective, Barclaycard contactless PayTag, stuckto my iPhone 4
A SIMPLE EXPLANATION OF BITCOIN “SIDECHAINS” Could sidechains be the enabler of “semi-decentralised” Bitcoin products and services? An important paper was published this week: If you've followed Bitcoin for any time, you'll know this is a seriously eminent group of authors It describes a way to build “pegged sidechains”. Sidechains themselves are not new – the idea, and how to build them, has been A SIMPLE EXPLANATION OF HOW SHARES MOVE AROUND THE I explained here how money moves around the banking system and how the Bitcoin system causes us to revisit our assumptions about what a payment system must look like. In this post, I turn my attention to securities settlement: if I sell some shares to you, how do CORDA: AN INTRODUCTION Corda is the outcome of the analysis we did on how to achieve as many of the benefits of distributed ledger and blockchain technology as possible but in a way that is sympathetic to and addresses the needs of regulated financial institutions. Corda is intended to be a contribution to the plurality of technologies that will be adopted inthe
THE CORDA WAY OF THINKING The Corda Way of Thinking Corda is a revolutionary new Distributed Ledger Platform, the only DLT specifically designed for the needs of financial services. This article introduces the “Corda Way of Thinking”: understand this article and you’ll be well on your way to being a Corda Expert Solution Designer! What problem are we tryingto
A SIMPLE EXPLANATION OF HOW APPLE PAY WORKS (PROBABLY): IT Forget contactless point-of-payment that’s a solved problem. Apple’s use of tokenization is the interesting part I’ve been using a beta version of ApplePay on my iPhone 4 for some time now My very old, but very effective, Barclaycard contactless PayTag, stuckto my iPhone 4
BITCOIN AND BLOCKCHAIN: TWO REVOLUTIONS FOR THE PRICE OF I gave a brief talk on Bitcoin and blockchain technology to an audience of non-specialists at a dinner last week. It covers many of the themes I’ve explored on this blog before. But the short, fifteen-minute, format forced me to be brief and clear. This is an edited version of the speech. A £20 note has an obvious, yet extraordinary super-power. LESSONS FROM BITCOIN: PUSH VERSUS PULL Lessons from Bitcoin: Push versus Pull. Bitcoin is going to change the world – but not for the reasons we commonly assume. One subtle way in which it will change the world is through its influence on other players in the payment ecosystem. At the heart of the Bitcoin system is the idea of a transaction: at its simplest, this is a transfer of BITCOIN MINING: THE FIRST TECHNOLOGY PLATFORM THAT WORKS They key to understanding mining is to realize we need blocks to be produced slowly! Whenever I present Bitcoin to new audiences, I avoid talking about mining. I find it confuse more than it enlightens. Instead, I simply give some intuition. I say: “Today’s value-transfer systems rely on central ledgers. Banks, telcos andother firms
TOWARDS A UNIFIED MODEL FOR REPLICATED, SHARED LEDGERS Don’t Say The “B Word”! I’ve come to the conclusion that saying “blockchain” has become unhelpful. It just confuses people. It means too many different things to different people and so it’s almost impossible to have a conversation in this space without talking past each other. So, as I argued in this piece on permissionlessledgers and this
COUNTDOWN TO CORDA OPEN SOURCE Countdown to Corda Open Source. R3 will soon be open-sourcing Corda. Here’s what to expect. As I confirmed a few months back, R3’s Corda platform will be open-sourced, under the Apache 2 licence, on November 30. Corda is a distributed ledger platform designed and built from the ground up for the recording and automation of legalagreements
RICHARD GENDAL BROWN As that article explains, it seems like the decision to use a non-replicating virus was a choice, presumably on safety and public acceptance grounds: it would have been possible to design a vaccine where the virus could replicate, and some vaccines for other diseases do work that way. The advantage of the latter, I guess, is that far fewer copies would have had to be injected to start with.ABOUT RICHARD BROWN
About Richard Brown. I am Chief Technology Officer at R3. The opinions that I express are my own and do not necessarily reflect the view of R3. At times, I comment on assets or companies in which I directly or indirectly may hold a position. I also advise several firms in the cryptocurrency and decentralised consensus space both formally and A SIMPLE MODEL FOR SMART CONTRACTS A smart-contract is an event-driven program, with state, which runs on a replicated, shared ledger and which can take custody over assets on that ledger. But that’s just my working definition. And there are lots of conceptual issues. I summarise some of them here, merely as signposts for further study (and future posts) ON DISTRIBUTED DATABASES AND And so we call Corda a distributed ledger, to distinguish it from distributed databases. A distributed ledger that is designed painstakingly for the needs of commercial entities. Put more simply: you simply can’t build the applications we envisage for Corda with traditional database technology. And that’s what makes this newfield so exciting.
A CENTRAL BANK “CRYPTOCURRENCY”? AN INTERESTING IDEA, BUT The retail use-cases get all the press but the killer-app for digital central bank money might be smart contracts This post on a concept called “FedCoin” by David Andolfatto of the St Louis Fed raises the really interesting possibility of a world with central-bank-issued digital assets which can be held by a broad range of people. A SIMPLE EXPLANATION OF BALANCE SHEETS (DON’T RUN AWAY… IT Shared ledgers could be revolutionary but do we need to share a mental model for banking to make sense of it all? What would be your first instinct if your friend were to tell you they had £1m in the bank? To congratulate them on their good fortune? To suppress a pang ofjealousy? Wrong,
A SIMPLE EXPLANATION OF BITCOIN “SIDECHAINS” Could sidechains be the enabler of “semi-decentralised” Bitcoin products and services? An important paper was published this week: If you've followed Bitcoin for any time, you'll know this is a seriously eminent group of authors It describes a way to build “pegged sidechains”. Sidechains themselves are not new – the idea, and how to build them, has been A SIMPLE EXPLANATION OF HOW MONEY MOVES AROUND THE BANKINGSEE MORE ONGENDAL.ME
A SIMPLE EXPLANATION OF HOW SHARES MOVE AROUND THEHOW DOES STOCK MARKET WORKHOW DOES STOCK MARKET WORKHOW DOES STOCK TRADING WORK I explained here how money moves around the banking system and how the Bitcoin system causes us to revisit our assumptions about what a payment system must look like. In this post, I turn my attention to securities settlement: if I sell some shares to you, how do A SIMPLE EXPLANATION OF HOW APPLE PAY WORKS (PROBABLY): IT Forget contactless point-of-payment that’s a solved problem. Apple’s use of tokenization is the interesting part I’ve been using a beta version of ApplePay on my iPhone 4 for some time now My very old, but very effective, Barclaycard contactless PayTag, stuckto my iPhone 4
RICHARD GENDAL BROWN As that article explains, it seems like the decision to use a non-replicating virus was a choice, presumably on safety and public acceptance grounds: it would have been possible to design a vaccine where the virus could replicate, and some vaccines for other diseases do work that way. The advantage of the latter, I guess, is that far fewer copies would have had to be injected to start with.ABOUT RICHARD BROWN
About Richard Brown. I am Chief Technology Officer at R3. The opinions that I express are my own and do not necessarily reflect the view of R3. At times, I comment on assets or companies in which I directly or indirectly may hold a position. I also advise several firms in the cryptocurrency and decentralised consensus space both formally and A SIMPLE MODEL FOR SMART CONTRACTS A smart-contract is an event-driven program, with state, which runs on a replicated, shared ledger and which can take custody over assets on that ledger. But that’s just my working definition. And there are lots of conceptual issues. I summarise some of them here, merely as signposts for further study (and future posts) ON DISTRIBUTED DATABASES AND And so we call Corda a distributed ledger, to distinguish it from distributed databases. A distributed ledger that is designed painstakingly for the needs of commercial entities. Put more simply: you simply can’t build the applications we envisage for Corda with traditional database technology. And that’s what makes this newfield so exciting.
A CENTRAL BANK “CRYPTOCURRENCY”? AN INTERESTING IDEA, BUT The retail use-cases get all the press but the killer-app for digital central bank money might be smart contracts This post on a concept called “FedCoin” by David Andolfatto of the St Louis Fed raises the really interesting possibility of a world with central-bank-issued digital assets which can be held by a broad range of people. A SIMPLE EXPLANATION OF BALANCE SHEETS (DON’T RUN AWAY… IT Shared ledgers could be revolutionary but do we need to share a mental model for banking to make sense of it all? What would be your first instinct if your friend were to tell you they had £1m in the bank? To congratulate them on their good fortune? To suppress a pang ofjealousy? Wrong,
A SIMPLE EXPLANATION OF BITCOIN “SIDECHAINS” Could sidechains be the enabler of “semi-decentralised” Bitcoin products and services? An important paper was published this week: If you've followed Bitcoin for any time, you'll know this is a seriously eminent group of authors It describes a way to build “pegged sidechains”. Sidechains themselves are not new – the idea, and how to build them, has been A SIMPLE EXPLANATION OF HOW MONEY MOVES AROUND THE BANKINGSEE MORE ONGENDAL.ME
A SIMPLE EXPLANATION OF HOW SHARES MOVE AROUND THEHOW DOES STOCK MARKET WORKHOW DOES STOCK MARKET WORKHOW DOES STOCK TRADING WORK I explained here how money moves around the banking system and how the Bitcoin system causes us to revisit our assumptions about what a payment system must look like. In this post, I turn my attention to securities settlement: if I sell some shares to you, how do A SIMPLE EXPLANATION OF HOW APPLE PAY WORKS (PROBABLY): IT Forget contactless point-of-payment that’s a solved problem. Apple’s use of tokenization is the interesting part I’ve been using a beta version of ApplePay on my iPhone 4 for some time now My very old, but very effective, Barclaycard contactless PayTag, stuckto my iPhone 4
A SIMPLE EXPLANATION OF BITCOIN “SIDECHAINS” Could sidechains be the enabler of “semi-decentralised” Bitcoin products and services? An important paper was published this week: If you've followed Bitcoin for any time, you'll know this is a seriously eminent group of authors It describes a way to build “pegged sidechains”. Sidechains themselves are not new – the idea, and how to build them, has been A SIMPLE EXPLANATION OF HOW SHARES MOVE AROUND THE I explained here how money moves around the banking system and how the Bitcoin system causes us to revisit our assumptions about what a payment system must look like. In this post, I turn my attention to securities settlement: if I sell some shares to you, how do CORDA: AN INTRODUCTION Corda is the outcome of the analysis we did on how to achieve as many of the benefits of distributed ledger and blockchain technology as possible but in a way that is sympathetic to and addresses the needs of regulated financial institutions. Corda is intended to be a contribution to the plurality of technologies that will be adopted inthe
THE CORDA WAY OF THINKING The Corda Way of Thinking Corda is a revolutionary new Distributed Ledger Platform, the only DLT specifically designed for the needs of financial services. This article introduces the “Corda Way of Thinking”: understand this article and you’ll be well on your way to being a Corda Expert Solution Designer! What problem are we tryingto
A SIMPLE EXPLANATION OF HOW APPLE PAY WORKS (PROBABLY): IT Forget contactless point-of-payment that’s a solved problem. Apple’s use of tokenization is the interesting part I’ve been using a beta version of ApplePay on my iPhone 4 for some time now My very old, but very effective, Barclaycard contactless PayTag, stuckto my iPhone 4
BITCOIN AND BLOCKCHAIN: TWO REVOLUTIONS FOR THE PRICE OF I gave a brief talk on Bitcoin and blockchain technology to an audience of non-specialists at a dinner last week. It covers many of the themes I’ve explored on this blog before. But the short, fifteen-minute, format forced me to be brief and clear. This is an edited version of the speech. A £20 note has an obvious, yet extraordinary super-power. LESSONS FROM BITCOIN: PUSH VERSUS PULL Lessons from Bitcoin: Push versus Pull. Bitcoin is going to change the world – but not for the reasons we commonly assume. One subtle way in which it will change the world is through its influence on other players in the payment ecosystem. At the heart of the Bitcoin system is the idea of a transaction: at its simplest, this is a transfer of BITCOIN MINING: THE FIRST TECHNOLOGY PLATFORM THAT WORKS They key to understanding mining is to realize we need blocks to be produced slowly! Whenever I present Bitcoin to new audiences, I avoid talking about mining. I find it confuse more than it enlightens. Instead, I simply give some intuition. I say: “Today’s value-transfer systems rely on central ledgers. Banks, telcos andother firms
TOWARDS A UNIFIED MODEL FOR REPLICATED, SHARED LEDGERS Don’t Say The “B Word”! I’ve come to the conclusion that saying “blockchain” has become unhelpful. It just confuses people. It means too many different things to different people and so it’s almost impossible to have a conversation in this space without talking past each other. So, as I argued in this piece on permissionlessledgers and this
COUNTDOWN TO CORDA OPEN SOURCE Countdown to Corda Open Source. R3 will soon be open-sourcing Corda. Here’s what to expect. As I confirmed a few months back, R3’s Corda platform will be open-sourced, under the Apache 2 licence, on November 30. Corda is a distributed ledger platform designed and built from the ground up for the recording and automation of legalagreements
RICHARD GENDAL BROWN THOUGHTS ON THE FUTURE OF FINANCEMENU
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August 15, 2019
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A BRIEF HISTORY OF MIDDLEWARE AND WHY IT MATTERS TODAY _This blog post is a lightly edited reproduction of a series of tweetsI wrote recently_
*
* This tweetstorm
is a mini
history of enterprise middleware. It argues that the problems we solved for firms 10-20 years ago are ones we can now solve for MARKETS today. This blog post elaborates on a worked example with @Cordablockchain (1/29)*
* I sometimes take perverse pleasure in annoying my colleagues by using analogies from ancient enterprise software segments to explain what’s going on with enterprise blockchains today… But why should they be the only ones that suffer? Now you can too! (2/29)*
* Back in the late 90s and early 2000s, people began to notice that big companies in the world had a problem: they’d built or installed dozens or hundreds of applications on which they ran their businesses… and none of these systems talked to each otherproperly… (3/29)
*
* IT systems in firms back then were all out of sync… armies of people were re-keying information left, right and centre. A total mess and colossal expense (4/29)*
* The solution to this problem began modestly, with products like Tibco Rendezvous and IBM MQSeries. This was software that sat in the _middle_ connecting applications to each other… if something interesting happened in one application it would be forwarded to theother one (5/29)
*
* Tibco Rendezvous and IBM MQSeries were like “email for machines”. No more rekeying. A new industry began to take shape: “enterprise middleware”. It may seem quaint now but in the early 2000s, this industry was HOT. (6/29)*
* But sometimes the formats of data in systems were different. So you needed to transform it. Or you had to use some intelligence to figure out where to route any particular piece of data. Enterprise Application Integration was born: message routing and transformation.(7/29)
*
* Fast forward a few years and we had “Enterprise Service Buses” (ESBs – the new name for EAI) and Service Oriented Architecture (SOA). Now, OK… SOA was a dead end and part of the reason middleware has a bad name today in some quarters. (8/29)*
* But thanks to Tibco, IBM, CrossWorlds, Mercator, SeeBeyond and literally dozens of other firms, middleware was transforming the efficiency of pretty much every big firm on the planet. “Middleware” gets a bad name today but the impact of ESB/EAI/MQ technologies was profound (9/29)*
* Some vendors then took it even further and realised that what all these parcels of data flying around represented were steps in _business processes_. And these business processes invariably included steps performed by systems _and_ people. (10/29)*
* The worlds of management consulting (“business process re-engineering”) and enterprise software began to converge and a new segment took shape: Business Process Management. (11/29)*
* The management consultants helped clients figure out where the inefficiencies in their processes were, and the technologists provided the software to automate them away. (12/29)*
* In other words, BPM was just fancy-speak for “figure out all the routine things that happen in the firm, automate those that can be automated, make sure the information flows where it should, when it should, and put some monitoring and management around the humans”(13/29)
*
* Unfortunately, Business Process Management was often oversold – the tech was mostly just not up to it at that point – and its reputation is still somewhat tarnished (another reason “middleware” is a dirty word!) (14/29)*
* But, even given these mis-steps, the arc of progress from “systems that can barely talk to each other” to “systems and people that are orchestrated to achieve an optimised business outcome” was truly astounding. (15/29)*
* Anyway… the point is: this was mostly happening at the _level of the firm_. The effect of the enterprise middleware revolution was to help individual firms optimise the hell out of themselves. (16/29)*
* But few back then even thought about the markets in which those firms operated. How could we have? None of the software was designed to do anything other than join together systems deployed in the sameIT estate. (17/29)
*
* So now let’s fast forward to today. Firms are at the end of their middleware-focused optimisation journeys and are embarking on the next, as they migrate to the cloud. But the question of inefficiencies between firms remains open. (18/29)*
* Take the most trivial example in payments: “I just wired you the funds; did you get them?”… “No… I can’t see them. Which account did you send them to? Which reference did you use? Can you ask your bank to chase?” (19/29)*
* How can we be almost a fifth of the way through the 21st century and lost payments are still a daily occurrence? How can it be that if you and I agree that I owe you some money, we can still get into such a mess when I actually try to pay you? (20/29)*
* As I argue in this post,
the problems we solved for firms over the last two decades within their four walls are precisely the ones that are still making inter-firm business so inefficient (21/29)*
* What stopped us solving this 20 years ago with the emerging “B2B” tech? Easy inter-firm routing b/w legal entities (the internet was scary…), broad availability of crypto techniques to protect data, orchestration of workflows between firms without central controller etc (22/29)*
* But we also hadn’t yet realised: it’s not enough merely to move data. You need to agree how it will be processed and what it means. This was a Bitcoin insight applied to the enterprise and my colleague @jwgcarlyle drew this seminal diagram that captures it so well. (23/29)*
* And my point is that the journey individual firms went on: messaging… integration… orchestration… process optimisation – is now a journey that entire markets can go on. The problems we couldn’t solve back then are ones we now can solve. (24/29)*
* What has changed? Lazy answer: “enterprise blockchain”… lazy because not all ent blockchains are designed for same thing, plus the enabling tech and environment (maturation of crypto techniques, consensus algorithms, emergence of industry consortia, etc) is not allnew (25/29)
*
* But the explosion of interest in blockchain technology was a catalyst and made us realise that maybe we could move to common data processing and not just data sharing at the level of markets and, in so doing, utterly transform them for the better. (26/29)*
* In my blog post I make this idea concrete by talking about something called the Corda Settler.
In truth, it is an early – and modest – example of this… a small business process optimisation (27/29)*
* The Corda Settler optimisation is simple: move from asking a payee to confirm receipt once sent and instead pre-commit before the payment is even made what proof will convince them it was done, all enabled through secure inter-legal-entity-level communication and workflow(28/29)
*
* But the Settler is also profound… because it’s a sign the touchpaper has truly been lit on the next middleware revolution… but this time focused on entire markets, not just individual firms (29/29)Standard
Posted by
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Posted on
August 9, 2019
Posted under
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, Uncategorized
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PROCESS IMPROVEMENT AND BLOCKCHAIN: A PAYMENTS EXAMPLE _“I just wired you the funds; did you get them?”… “No… I can’t see them. Which account did you send them to? Which reference did you use? Can you ask your bank to chase?”_*
The cheque is in the post… How can we be almost a fifth of the way through the twenty first century and this is still a daily occurrence? How can we be in a world where _even if you and I agree that I owe you some money,_ it’s still a basically totally manual, goodwill-based process to shepherd that payment through to completion?! THE “SETTLER PATTERN” REDUCES OPPORTUNITIES FOR ERROR AND DISPUTE IN _ANY_ PAYMENTS PROCESS – AND DOES SO BY _CHANGING THE PROCESS_ This was the problem we set out to solve when we built the Corda Settler . And I was reminded about this when I overheard some colleagues discussing it the other day. One of them wondered why we don’t include the _recipient_ of a payment in the set of parties that must agree that a payment has actually been made. Isn’t that kinda a bit of an oversight?! The Corda Settler pattern works by moving all possible sources of disagreement in a payment process to the _start_ As I sketched out the answer, I realised I was also describing some concepts from the distant past… from my days in the _middleware_ industry. In particular, it reminded me of when I used to work on _Business Process Management_ solutions. And there’s a really important insight from those days that explains why, _despite all the stupid claims being made about the magical powers of blockchains and the justifiable cynicism in many quarters_, those of us solving customer problems with Corda and some other enterprise-focused blockchain platforms are doing something a little bit different… and its impact is going to surprise a lot of people. Now… I was in two minds about writing this blog post because words like “_middleware_” and “_business process management_” are guaranteed to send most readers to the “close tab” button… Indeed, I fear I am a figure of fun amongst some of my R3 colleagues… what on earth is our CTO – _our CTO of all people!_ – doing talking about boring concepts from twenty years ago?! But, to be fair, I get laughed at in the office by pretty much everybody some days… especially those when I describe Corda as “_like an application server but one where you deploy it for a whole market, not just a single firm_” or when I say “_it’s like middleware for optimising a whole industry, not just onecompany._”
> “Application Servers? Middleware? You’re a dinosaur! It’s all > about micro-services and cloud and acronyms you can’t even spell > these days, Richard… Get with the programme, Grandad!” Anyway… the Corda Settler discussion reminded me I had come up with yet another way to send my colleagues round the bend… because I realised a good way to explain what we’re building with Corda – and enterprise blockchains in general – isn’t just “industry level middleware” or “next generation application servers”… it’s also _a new generation of Business Process Management platform_… and many successful projects in this space are actually disguised Industry Process Re-Engineering exercises. Assuming you haven’t already fallen asleep, here’s what I mean. ENTERPRISE BLOCKCHAINS LIKE CORDA ENABLE ENTIRE MARKETS TO MOVE TOSHARED PROCESSES
Think back to the promise we’re making with enterprise blockchains and what motivated the design of Corda: > “Imagine if we could apply the lessons of Bitcoin and other > cryptocurrencies in how they keep disparate parties in sync about > facts they care about to the world of regular business… imagine > if we could bring people who want to transact with each other to a > state where they are in consensus about their contracts and trades > and agreements… where we knew for sure that What You See Is What I > See – _WYSIWIS_. Think of how much cost we could eliminate through > fewer breaks, fewer reconciliation failures and greater data > quality… and how much more business we could do together when we > can move at pace because we can trust our information” And that’s exactly what we’ve built. But… and sorry if this shocks anybody… Corda is not based on magic spells and pixie dust… Instead, it works in part because we drive everybody who uses it to a far greater degree of commonality. Because if you’re going to move from a world where everybody builds and runs their own distinct applications, which are endlessly out of sync, to one where everybody is using a shared _market-level application, _what you’re actually saying is: these parties have agreed in some way to _align their shared business processes, _as embodied in this new shared application. And when you look at it through that lens, it’s hardly surprising that this approach would drive down deviations and errors…! I mean: we’re documenting – in deterministically executed code – and for each fact we jointly care about: who can update which records, when and in what ways. And to do that we have to identify and _ruthlessly eliminate_ all the places where disagreements canenter the process.
Because if we know we have eliminated all areas of ambiguity, doubt and disagreement up-front, then we can be sure the rest of our work will execute as if it’s like a train on rails. Just like trains, if two of them start in the same place and follow the same track… they’ll end up in the same place at the end. REDUCING FRICTION IN PAYMENTS: A WORKED EXAMPLE So, for payments, what are those things? What are those things that if we _don’t_ get them right up front can lead to the _“I haven’t received your payment”_ saga I outlined at the start of the post? Well, there’s the obvious ones like: * How much needs to be paid?* By whom?
* To whom?
* In what kind of money/asset? There are trickier ones such as: * Over what settlement rail should I pay? * To which destination must we pay the money? * With any reference information? These are trickier since there is probably a bit of automated negotiation that needs to happen at that point… we need to find a network common to us both… and the format of the routing strings is different for each and so forth. But if you have an ability to manage a back-and-forth negotiation (as Corda does, with the Flow Framework ) then it’s prettysimple.
But that still leaves a problem… _even if we get all of these things right, we’re still left hanging at the end. _Because even if I have paid you the right amount to the right account at the right time and with the right reference, _I don’t know that you’vereceived it._
And so there’s always that little bit of doubt. Until you’ve acknowledged it you could always turn around in the future and play annoying games with me by claiming not to have received it and force us into dispute… and we’d be _back to square one_! We’d be in exactly the same position as before: parties who are _not_ in consensus and are instead seeing _different_ information. And it struck us as a bit mad to be building blockchain solutions that kept everybody in sync about really complicated business processes in multiple industries, only for the prize to be stolen from our grasp at the last moment… when we discover the payment that is invariably the thing that needs to happen at the end of pretty much every process hasn’t actually been acknowledged. It would be as if our carefully tuned train had jumped off the rails and crashed down the embankment just at the last moment. Calamity! > So we added a _crucial_ extra step when we designed the Corda > Settler. We said: not only do you need to agree on all the stuff > above, you _also_ need to agree: _what will the recipient accept > from the sender as IRREFUTABLE PROOF that the payment has been> made?_
_And with one bound, we were free!_ Because we can now… wait for it… _re-engineer the payment process_. We can _eliminate_ the need for the recipient to acknowledge receipt. Because if the _sender_ can secure the proof that the recipient has _already said they will accept irrefutably_ then there is no need to actually _ask_ them… simply presenting them with the proof is enough, _by prior agreement._ And this proof may be a digital signature from the recipient bank, or an SPV proof from the Bitcoin network that a particular transaction is buried under sufficient work… or whatever the relevant payment network’s standard of evidence actually is. But the key point is: we’ve agreed it all up front and made it the sender’s problem… because they have the incentive to mark the payment as “done”. As opposed to today, where it’s the _recipient_ who must confirm receipt but has no incentive to do so, and may have an incentive to delay or lie. > But building on this notion of cryptographic proof of payment, the > Corda Settler pattern has allowed us to identify a source of > deviation in the payment process and moved it from the _end_ of the > process, where it is annoying and expensive and makes everybody > sad… and moved it to the _start_ of the process and, in so doing, > allows us to keep the train on the rails. And this approach is universal. Take SWIFT, for example. The innovations delivered with their gpiinitiative
are a perfect match for the payment process improvements enabled by the Settler pattern. The APIs made available by Open Banking are also a great match to thisapproach.
MIDDLEWARE FOR MARKETS, BUSINESS PROCESS MANAGEMENT FOR ECOSYSTEMS, APPLICATION SERVERS FOR INDUSTRIES..! And this is what I mean when I say platforms like Corda actually achieve some of their magic because they make it possible to make seemingly trivial improvements to inter-firm business processes and, in so doing, drive up levels of automation and consensus. So this is why I sometimes say “Corda is middleware for markets”. It’s as if the first sixty years of IT were all about optimising the operations of individual firms… and that the _future_ of IT will be about optimising _entire markets_.Standard
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January 14, 2019
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BUSTING THE MYTH OF PUBLIC BLOCKCHAINS FOR BUSINESS _It’s time to talk about transaction finality. Last week’s 51% attack demonstrates that Ethereum-style blockchains are not ready forbusiness_
A belief took hold amongst some of the tech community in 2018: “If you have an enterprise blockchain use-case you should build it on a platform based on Ethereum.” The argument was pretty well constructed and relied on several plausible-sounding claims so it’s understandable how it seemed pretty convincing. However, as 2018 unfolded, these claims began to be challenged. And as we enter 2019, the final remaining argument has been undermined with a public demonstration of how the lack of settlement finality in public blockchains such as Ethereum renders their immutability and security guarantees worthlessfor business.
> _In this piece, I will argue that it is now time to conclude that > Ethereum’s core technologies are the wrong foundation upon which > to build business blockchain solutions. My argument is: 1) the core > Ethereum technologies are due for abandonment, leaving businesses at > risk of technology dead-ends, 2) the Ethereum developer skill-pool > has been massively overstated and is in fact far tinier than that > for the purpose-built business blockchains based on existing > languages, and 3) the idea of building on Ethereum in order to > securely ‘anchor’ private blockchains to a public chain is now> discredited. _
In short, business blockchain applications should be built on technologies designed for the enterprise, not Ethereum. WHAT _WAS_ THE ARGUMENT FOR WHY BUSINESSES SHOULD BUILD ON ETHEREUM? To understand how we reached this point as a community, it’s helpful to review the thinking that led here. Here’s how the argument for why businesses should build on Ethereum went: * “GO WHERE THE SKILLS AND INNOVATION ARE: Ethereum has the largest community and the broadest availability of skills.” * “USE THE TOOLS THAT WILL BEST LET YOU INTEROPERATE WITH THE PUBLIC CHAIN: Even if you’re not using the _public_ Ethereum network you should use platforms that are _based_ on the EVM, and use languages like Solidity so you can inherit the innovation from the public chain and maximise the chances of interoperability in thefuture”
* “OVERCOME THE ‘WEAK’ SECURITY OF PRIVATE CHAINS BY ‘ANCHORING’ IN THE PUBLIC CHAIN: Public chains are more immutable than ‘insecure’ private networks and so you should ‘anchor’ your private transactions to prevent malicious parties rolling back your transactions behind your back.” By the end of 2018, there was ample evidence to debunk the first two claims, but the third claim persisted. Indeed, this third claim, that a public blockchain such as Ethereum offers a degree of transaction confirmation permanence that is otherwise unobtainable, has been repeated over and over again, even as late as December 2018.
_Until last week_, that is, when a 51% attack against the Classic (original) Ethereum network demonstrated for real what we already knew in theory: that history on a public blockchain like Ethereum can bearbitrarily rewound
,
money double-spent and network participants defrauded.
The rest of this article will review each of the three claims above in depth to explain why they are incorrect and how that makes Ethereum – and Ethereum-based platforms – unsuitable for business. But it’s important to note that the purpose of this blog post is actually to make a _positive_ message. Because the broader picture is actually one of success: Ethereum is proving to be a valuable tool for a wide range of isolated social and economic experiments. And plenty of blockchains _purpose-built _to solve business problems, such as Hyperledger and Corda, are live and are changing the world ofcommerce.
So my key message is that it’s the inappropriate _application_ of Ethereum technologies to the unforgiving world of real business problems, for which it was not designed, that we need to guard against. These two worlds have very different requirements. > _It’s time to declare in public what has been openly discussed in > private: Ethereum is currently unsuited to the world of business and > we should have the courage as a community to say so._ So let’s now review the arguments for using Ethereum in the enterprise, that have now shown to be incorrect. _CLAIM 1: “GO WHERE THE SKILLS AND INNOVATION ARE: Ethereum has the largest community and the broadest availability of skills.”_ This argument starts well. For example, ConsenSys claim that the “Ethereum developer community”
has 250,000 members, by which they presumably mean the number of people who can code using Solidity, the language in which almost all Ethereum apps are coded. But when you scratch the surface, reality begins to intrude: * Hundreds of thousands of Solidity developers _sounds_ like a big number until you realise that there are over a million developers with the knowledge to build applications for Hyperledger Fabric using the language _Go_ and _twelve million_ developers
with the knowledge to build applications for Corda using _Java_. In the latter case, our experience shows that any competent Java developer can pick up the Corda library and be productive in a couple of days. This means the Hyperledger and Corda developer skillpools are at least one, maybe even two, orders of magnitude bigger, even using ConsenSys’s figures. * But we need to challenge ConsenSys’s figures, small as they now seem. This is because there is minimal evidence to support even the 250k figure. The claim seems to be based on looking at how many people have downloaded one of the development tools that pretty much _every_ Ethereum developer has to use, and assuming half of them became Ethereum developers. But that methodology doesn’t work. To see why, let’s apply the same logic to the Java ecosystem to generate an estimate for how many developers there are and see if it matches the correct figure, twelve million. Now, we know that _one_ tool for developing Java applications, IntelliJ, had almost _twenty five million _ downloads in 2017 alone, and that product had barely ten percent of the huge and diverse market for Java development tools (Eclipse, Android Studio and NetBeans were all larger). This means we can estimate there were _at least _250 million downloads of Java development tools in 2017, which would mean there must be over 125 million Java developers by ConsenSys’s logic. Except, there aren’t… we know the correct number is about _twelve_. It’s out by a factor of ten. So the true number of people with Ethereum skills is almost certainly _much_ smaller than 250k; I would be surprised if it was even 50k or 10k, a rounding error in the world of developer communities. And the number of those who can write Solidity contracts _securely_, critical to avoiding another DAO-style bug, is
smaller still.
* And on top of this, we also need to add the _huge_ productivity gains that come from being part of established ecosystems. For example, the range of development environments, debuggers, testing frameworks, profilers and libraries available for the Java ecosystem is staggeringly larger than that for the Ethereum and Solidityecosystems.
The reality is that the developer ecosystem and momentum is with the Hyperledger and Corda communities, not Ethereum. So it’s perhaps no surprise that the overwhelming majority of truly ground-breaking, successful enterprise blockchain deployments to date run onHyperledger Fabric
and
Corda
,
not Ethereum.
_CLAIM 2: “USE THE TOOLS THAT WILL BEST LET YOU INTEROPERATE WITH THE PUBLIC CHAIN: __Even if you’re not using the public Ethereum network you should use platforms that are based on the Ethereum Virtual Machine (EVM) so you can inherit the ‘innovation’ from the public chain and maximise the chances of interoperability in thefuture”_
This argument is more pernicious than the previous one. It says to developers: “even if you’ve _correctly_ determined that a public Ethereum network is wrong for you, you should _still_ use the Ethereum toolset for your private project.” It is an argument that plays on people’s deep fears: stick with the crowd; after all, you won’t be fired if you make the same mistake that everybody else made! The problem is: as we demonstrated above, there _is_ no crowd and the Ethereum community plans to throw all the current technology away in any case: _the EVM is set for total replacement_. The plan,“Ethereum 2.0
”,
is to build a new design from scratch. So the world faces the possibility that, long after the public Ethereum community have moved on to something new, business leaders will wake up one day to discover critical parts of their business are running on technology that isn’t even being used any more for the purpose for which it was built. Talk about buyer’s remorse… This might be OK if the Ethereum Virtual Machine was a sound technology but, as the team from Kadena documented, the EVM is “fundamentally unsafe”.
And the team at Aion also independently reached a similar conclusion and have written eloquently why they didn’t use the EVM and chosen the Java ecosystem instead. And yet consultants, some from reputable firms, are pushing this technology _hard_ in to organisations that don’t always possess the technical expertise to realise the advice may not be appropriate. Genuinely ground-breaking work is, of course, being done by some very talented and committed people in the Ethereum community on the public Ethereum network, but it is – and should continue to be done – safely away from the back offices of the businesses upon whose data integrity the world depends. However, 2018 ended with one, last, _killer_ plank in the argument for why businesses should nevertheless build on Ethereum rather than a platform like Hyperledger Fabric or Hyperledger Sawtooth or Corda. And it was this last argument that was severely undermined this week. _CLAIM 3: “OVERCOME THE ‘WEAK’ SECURITY OF PRIVATE CHAINS BY ‘ANCHORING’ IN THE PUBLIC CHAIN__: Public chains are more immutable than insecure private networks and so you should ‘anchor’ your private transactions to prevent malicious parties rolling back your transactions behind your back.”_ This argument was actually pretty clever. Here’s how it went: * ‘The security of public blockchains is “backed” by the work performed by billions of dollars worth of mining equipment and electricity. To reverse a “confirmed” transaction would be economically infeasible and, since only public blockchains use proof of work, only public blockchains can provide this “immutability”guarantee.’
* ‘By contrast, blockchains that rely instead on identifiable parties to provide consensus cannot deliver this level of security and immutability; there is always the chance that parties could “collude” to reverse a transaction.’ And so, the proponents of Ethereum for the enterprise propose a clever idea: by all means, use a peer-reviewed fault-tolerant algorithm for your business transactions – you need rapid and _final_ confirmation, after all. But then, as an additional layer of safety, “anchor”
a summary of your transactions in the _public_ Ethereum network. The network that is massively more secure and resistant to mutation. Its proponents even claim this would provide ‘greater “proof of settlement finality”’ and that ‘any chance of counterparty disputes about membership is eliminated’. This _sounds_ perfect: the privacy, performance and settlement finality of a private chain and the security and immutability of apublic chain!
Except… there was always a problem with this argument: _finality_. In short, the two unanswered questions were: * If your enterprise blockchain needs settlement finality but the chain into which it is ‘anchored’ provides only probabilistic finality, when is it safe to tell a user of the private chain their transaction has been confirmed? What happens if two conflicting hashes might be vying for inclusion at the same time? Are users expected to constantly monitor the underlying chain to check the private chain hasn’t gone bad? And what exactly are they supposed to do at thatpoint in any case?
* If the ‘anchor’ gets washed away by a ‘reorganisation’ of the underlying public _probabilistic_ blockchain, what are you supposed to do then? The problem is: technically savvy people knew these questions made the concept highly suspect but the fact that there had never been any high profile examples of where this would ever have been a problem, nobody seemed to care. And the concepts were complicated in any case – probabilistic settlement, reorganisations. All too abstract! So the response seemed to be: “sure… this could happen in theory but it never happens in practice, so who cares?”.Until last week.
When a high profile Ethereum network suffered a devastating and unprecedented attack, that caused transactions _over one hundredblocks deep
_
to go from “confirmed” to “unconfirmed”. Any “anchor” that had been in one of those hundred blocks would have been _washed away_, opening up the possibility that a simultaneous attack on the private network could result in a conflicting anchor taking its place. In other words, the trivial ease with which the supposedly secure and immutable chain was rewritten means it failed in its only and single purpose for an enterprise deployment. _ _ The right approach to settlement finality for _business_ blockchains is to acknowledge things can go wrong and to plan for them up-front: accept that you need to know the identity of the consensus providers, which also ensures provider diversity rather than increasingly centralised mining providers; and that you need a governance process and dispute resolution forum for problems that cannot be solved solely with clever math or novel technology.CONCLUSION
So, here at the start of January 2019, what is left of the “Ethereum in business” story? * The number of developers with skills in Ethereum is far lower than Ethereum’s proponents claim and is orders of magnitude smaller than the programming language ecosystems supporting Hyperledger and Corda * The core ‘engine’ of Ethereum, the EVM, has been publicly disowned by the communities that spawned it and the platform is being expensively rewritten, yet enterprise Ethereum _vendors_ continue to push tools based on this dead-end into unsuspecting businesses. * And the only remaining plausible argument for using Ethereum in the enterprise, that it somehow makes it easier to secure your network by ‘anchoring’ into the public network, has been shown by the Ethereum Classic debacle to be false. > Be in no doubt: blockchain for the enterprise is real and it is here > to stay. But if you’re doing it on Ethereum, you’re doing it> wrong.
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CORDA: OPEN SOURCE COMMUNITY UPDATE _The Corda open source community is getting big… it’s time for a dedicated corda-dev mailing list, a co-maintainer for the project, a refreshed whitepaper, expanded contribution guidelines, and more..!__ ___
It feels like Corda took on board some rocket fuel over the last few months. Corda’s open source community is now getting so big and growing so fast that it’s just not possible to keep up with everything any more — a nice problem to have, of course. And I think this is a sign that we’re reaching a tipping point as an industry as people make their choices and the enterprise blockchain platforms consolidate down to what I think we’ll come to describe as “the big three”. _Read the rest of this post over at the Corda Medium blog…_
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INTRODUCING THE CORDA TECHNICAL ADVISORY COUNCIL I’m delighted to announce the formation of the Corda Technical Advisory Council (the Corda TAC). This is a group of technical leaders in our community — who most of you know well — who have volunteered to commit their time over and above their existing contributions to the Corda ecosystem to provide advice and guidance to the Corda maintainers. Members of the TAC are invited by the maintainers of the Corda open source project (Mikeand Joel
) and will change over time — the inaugural members are listed below. If you’re also interested in contributing to the TAC, please do let us know — most usefully through your technical leadership and contribution to the ecosystem! _Read the rest of this post over at the Corda medium blog…!_
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April 5, 2018
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UNIVERSAL INTEROPERABILITY: WHY ENTERPRISE BLOCKCHAIN APPLICATIONS SHOULD BE DEPLOYED TO SHARED NETWORKS BUSINESS NEEDS THE UNIVERSAL INTEROPERABILITY OF PUBLIC NETWORKS BUT WITH THE PRIVACY OF PRIVATE NETWORKS. ONLY THE CORDA NETWORK CANDELIVER THIS.
The tl;dr of this post is: * Most permissioned blockchains use isolated networks for each application, and these are unable to interoperate. This makes nosense.
* We should instead aspire to deploy multiple business applications to an open, shared network. But this needs the right technology with the right privacy model. * Corda, the open source blockchain platform we and our community are building, was designed for just this from day one. But there was a piece missing until now: the global Corda _network_. * In this post I describe the global Corda network for the first time in public and how it will be opened up to the entire Corda community in the coming months. * If you’re building blockchain solutions for business, you need to read this post… Think back to how excited you were (well, _I _was!) when you first heard about Ethereum. The idea of a platform for smart contract applications, all running across a common network, with interoperability between all these different applications written by different people for different purposes. It was _mind-blowing_. And it’s not just a vision, of course. The public Ethereum community have actually delivered it! Indeed, emerging standards such as ERC20 are a demonstration of the power of a shared, interoperable network and the power ofstandardisation
.
So the question we asked ourselves at R3 back in 2015 was: imagine if you could apply that idea to _business_… imagine if different groups of people, each deploying applications for their own commercial purposes, woke up one day and discovered that those apps could be reassembled and connected in ways unimaginable to their creators _but in a way that respected privacy and which could be deployed in real-world businesses with all the complexity that entails_. It seemed obvious to us that this was the right vision. And that it would require a universal, shared, open network, the topic of thispost.
But it dawned on me recently that this is not how everybody in the permissioned blockchain space sees it. The consequences for userscould be serious.
_The rest of this post is continued at our medium site here!_
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WHAT PROBLEM ARE WE TRYING TO SOLVE WITH CORDA? Todd pointed me at a great piece about “crypto finance” versus “regular finance”by
Bloomberg’s Matt Levine earlier. I thought he did a good job of nailing the essential contradiction that arises if one tries naively to apply Bitcoin or Ethereum principles directly to traditional finance. He uses the example of an Interest Rate Swap (IRS) and how a fully pre-funded model would kind of defeat the point… This caught my attention because an IRS was the _very first_ project we ever did on Corda!
So it’s something I know a little about… Anyway, I think the key to understanding the mismatch is captured in a post of mine from 2015 about how _two _revolutions are playing out in parallel.
_Anyway… full details over on my Medium page._
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February 6, 2018
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NEW TO CORDA? START HERE! _Are you just hearing about Corda for the first time? Want to understand how Corda differs from other platforms and how its unique architecture is perfectly suited to address the real problems faced by today’s businesses? _ I just posted to the Corda Medium pagewith a
list of links and background info that should help answer thatquestion…
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NOT ALL BUSINESS BLOCKCHAIN PLATFORMS ARE ALIKE. TO SUCCEED THEY NEED TO REIMAGINE BUSINESS COMPUTING. _Lessons from the world’s largest multi-year collaborative Blockchain research programme_ If you’re not part of the blockchain bubble, you probably think people in the blockchain world are all mad! Especially those of us in the enterprise space. How on earth could we believe a technology, originally built by a group of idealistic anarchists to solve a problem no financial institution actually has, could possibly be relevant to the challenges facing those trying to build and maintain complex IT infrastructures across the world? In this article, I explain how the work we’ve done at R3 over the last two years with hundreds of senior technologists from dozens of leading financial institutions has led me to some fundamentalconclusions:
* The promise of blockchain technology is real: new business solutions will soon be deployed which can eliminate huge amounts of cost, redundancy, error and needless reconciliation across entire business ecosystems, as well as opening up previously hidden new revenue opportunities. I provide concrete examples below. * This will be achieved by applying the fundamental blockchain insight: “I know that what I see is what you see”. This is the key to helping us move from a world of isolated, custom, inconsistent IT infrastructures in each firm, to one based on shared business logic, securely shared data, and common processes. * The new IT architecture that is needed to capture these opportunities is one that converges the complex world of application servers, messaging engines, workflow managers and databases into a unified, secure and private design that works seamlessly within andacross enterprises.
* _But not all blockchain platforms are alike: Only some designs will be architecturally suited to the challenge._ * Our research has revealed several key characteristics that are needed to succeed. An enterprise blockchain platform must: * Provide an integrated application, messaging, workflow and data management architecture. * Build on an existing technology “mega-ecosystem” to maximise skills and code reuse. * Eliminate unnecessary data “silos” to unlock new business opportunities by allowing real-world assets to move freely between all legitimate potential owners. * Embed legal entity-level identification into the programming model to enable legally enforceable and secure transactions. * Support inter-firm workflows for negotiating updates to the shared ledger to support real-world business scenarios. * Enable the inevitable move to the public cloud without requiring high-risk technology bets. For the last two years, I’ve been privileged to lead an intense research and development effort amongst the membership of the most vibrant consortium the financial world has seen. Hundreds of senior technologists from dozens of companies have worked with R3’s engineers to identify where blockchain technology can make a difference in large enterprises and also how it needs to be designed to achieve this potential. This work has convinced me that the judicious application of key blockchain principles is key to rescuing the world’s banks and other large companies from the corner into which they have painted themselves after decades of investment in previous generations oftechnology.
_In particular, we could be looking at the holy grail of enterprise software: convergence of application servers, messaging engines, workflow managers and databases in a way that works seamlessly within and across businesses._ The result is a model that delivers on the promise of blockchain inthe enterprise
:
a world where applications can be securely developed and deployed across trading partners, enabling them to transact securely and accurately and without endless reconciliation, inconsistent data, and duplication. It is why we are now able to think about building or replacing payments systems, syndicated
loans processing systems,asset
issuance and custody systems, FX
matching business processesand
much more. And these are just examples from the banking sector being addressed by just one platform, Corda, which itself turns out to be applicable far more broadly, in areas as diverse as healthcare and identity management. But our belief is that it is only by _converging_ previously diverse technologies that we can dramatically simplify how companies develop, deploy and manage applications that manage their business relationships with each other. Here’s what I mean. Through one lens, a blockchain is like an _APPLICATION SERVER_: it hosts business logic and ensures it runs at the right time and for the right reasons. But a blockchain is also like a _MESSAGING ENGINE_: it allows people and, importantly, their computers to exchange information and ensure that the right information gets to the right places in the right order – and to do so _between_ companies as well as _within._ And some blockchain platforms also have characteristics of _WORKFLOW MANAGERS_; they help coordinate the activity of different parties across time and space to achieve some business outcome. And, of course, they can be akinto _DATABASES_.
If we could somehow devise a platform that built on this insight and delivered a platform that could combine the function of these hitherto diverse technologies, and could do so in today’s adversarial security environment, with the necessary levels of privacy, and in a way that was easy to use and could reuse rather than replace what already exists, imagine how much simpler our future enterprise IT landscape would look! But building a platform that combines these separate concepts is easier said than done. There’s a reason existing vendors haven’t already built something that delivers on this vision. In what follows, I’ll share the output of the last two years of our work, which confirmed to me that, by judiciously weaving together existing technologies _and_ key advances from the blockchain world, it is indeed possible. I highlight some of the specific, key design choices you need to make in order to achieve this convergence and hence unlock the massive opportunity to transform the IT estates of existingcompanies.
I will refer at times to a key output from our work: the open-source Corda platform. We developed it in parallel with the research effort I describe above and, as a result, it benefited from a huge amount of expert input from across the R3 membership. No other enterprise blockchain platform has enjoyed remotely the same level of expert input. But I also refer to other enterprise blockchains where contrasts are helpful, paying particular attention to one that has come to prominence of late, Quorum, because it makes some very different choices and hence acts as a useful comparison point. This is intended to help make some of the points concrete and draw readers’ attention to areas of legitimatedisagreement.
_THE IDEAL ENTERPRISE BLOCKCHAIN IS A NEXT-GENERATION APPLICATIONSERVER…_
First and foremost, the opportunity that blockchain technology presents to enterprises is the ability to write applications that are shared between those who use them to transact. The key idea is this: rather than you and all of your trading partners each writing an expensive application to manage your participation in that trading network, you write it once. We thus share the cost and effort, whilst each running our own _instance_ of the application in order to maintain our own books and records. But to enable this vision, we concluded from our research that we need features that are unavailable in traditional application servers but which are common in the blockchain world. One such feature is cryptographic chains of provenance for all data in the system. When freely sharing relevant data with your trading partners, you must take nothing on trust but verify all proposed updates to the shared application state. This is also why all consensus-critical code on the platform needs to be digitally signed so you know that the code that is running is the code that _should_ be running. And we need to enable as much reuse of skills and existing technology as possible: you don’t save money by throwing away all the existing technology you have or by forcing all your staff to retrain! So you should be able to write applications in languages that have as large a population of developers as possible. Working with our diverse membership, we concluded that Java is by far the most widely deployed language across the business world and so we focused on that ecosystem. There are almost ten million people in the world who have these skills. But we also found that large enterprises hunger to bring their infrastructures right up to the contemporary cutting edge, so support for techniques such as reactive programming, approaches like functional programming and new languages like Kotlinand
others are also required. In short, the ideal application server for the modern era is one built for security, productivity, data integrity and cost minimisation. But don’t all enterprise blockchains do this? Actually, no. To see that, we can compare the approach we took with Corda – the result of our two year journey – with a competing blockchain platform such as Quorum . Although superficially similar to Corda in the way it describes itself it is, in fact, a relatively small fork of an existing _public_ blockchain platform called Ethereum – which was designed to solve a completely _different_ set of problems. Quorum inherits all of the associated advantages and disadvantages as a result. For example, rather than supporting a full range of modern and mature languages to suit different needs, for which there are abundant skills and existing libraries, as Corda does through its support for the Java Virtual Machine, Quorum only supports languages that run on something called the _Ethereum_ Virtual Machine. The EVM is a young, purpose-built virtual machine maintained by a community primarily focused on executing _cryptocurrency_transactions and associated business logic. No mainstream languages run on the Ethereum virtual machine. This raises obvious questions around skills and integration with heritage systems. But it also opens up serious new risks for those who try to apply Quorum to real-world business problems. For example, the most popular language for writing applications on Quorum has been repeatedly shownto
be impossible to use safely, suffering
from countless
bizarre language featuresthat
have led to people losing real money.
_Not all enterprise blockchains are alike._ _THE IDEAL ENTERPRISE BLOCKCHAIN IS ALSO A NEXT-GENERATION MESSAGINGPLATFORM…_
However, as I argued above, the exciting realisation during our research effort with our member banks was that good blockchain platforms are also inspiration for how to rethink enterprise messaging systems. Messaging systems are used by big companies to link computers and applications to each other securely and reliably. The need for this becomes acute when you talk about deploying _shared_ applications _between_trading partners. The applications running on different firms’ nodes need to be able to _communicate_. We need all parties to be securely identifiable and to be able to communicate with each other near-instantly over the internet or private network, addressing each other by _legal name_. It’s not good enough to take existing enterprise messaging platforms that let you communicate with an _address_ or a _queue_; you need to be able to talk to a _named legal entity_, anywhere inthe world.
In our work with the diverse group of technologists from across our membership, we identified that the way to achieve this was to take existing technologies – in this case, TLS, X.500 and more, and make them consumable and accessible to today’s application developers. It seems obvious when you think about it yet no mainstream platform offered it in this way until we supported it in Corda. It was necessary to weave insights from the cryptography community, where public key infrastructure is well understood, and the banking community, where financial networks between identifiable peers are common, to come up with the idea of “send to legal entity” as the natural and obvious way to communicate between parties. A separate finding from our work was that large institutions are institutionally _allergic_ to anything that looked like it could create new _islands_ of connectivity. They needed a platform that would allow multiple independent _Business Networks_ to operate within a single global namespace – perhaps something we could call a _Compatibility Zone_. No more tolerance for isolated silos of communication and data distribution (unless you want it of course…). And this turned out to be key for the delivery of the holy grail: true representation of real-world assets on a shared network, with no artificial barriers to exchange or transfer, which I talk about morebelow.
Achieving this level of seamless interoperability across multiple business networks, whilst retaining flat, transparent, legal-entity-level addressing is hard. But I think we’ve achieved it with Corda. And it’s something that is lacking in platforms like Quorum, where network membership is defined in text files which must be copied to each node, and where behaviour is undefined (or, rather, may have “adverse effects”) if they
don’t match perfectly. _Identity and legal-entity addressing can’t be an after-thought in a text-file: they need to be designed in from the start._ _THE IDEAL ENTERPRISE BLOCKCHAIN IS ALSO A NEXT-GENERATION WORKFLOWMANAGER…_
When I worked with clients in my previous jobs, I would find they deployed workflow management tools, also sometimes called “Business Process Management” platforms, inside the organisation to control and optimise the flow of work between people and systems. But all too often these systems would stop at the edge of the firm. The “other side” was treated as a black box. And yet, it is in the interaction _between_ firms that the risk and cost creeps in. Did they receive the message? Are they working on it? Did they understand it and process it correctly? _Do they see what I see?_
This isn’t actually something that existing blockchain platforms provide much help for. And yet it is a real need even for some simple cryptocurrency transactions such as implementing an escrow arrangement or telling somebody how to pay you! In essence, for every meaningful transaction on a blockchain platform, there is usually an out-of-band negotiation flow that needs to take place. Just like in realbusiness.
And as we worked through countless use-cases during our research, what emerged was a need to make it easy for developers to write this back-and-forth business logic for the collaborative negotiation of a deal or construction of a transaction. We discovered a need for an inter-firm workflow automation technology where developers don’t have to worry about any of the complex technical work necessary to orchestrate such co-operation at scale across a global network. In particular, it needs to be possible to define business processes that flow between, within and across firms, yet which can be coded in a simple and natural programming style, where you can express what each party in a transaction should do and have that work automated within and across your firms. Unfortunately, developing something so ambitious would be hard if implemented from scratch. So it provided further weight to our emerging belief back then, a certainty today, that a successful blockchain platform for the enterprise has to build on the work of an existing, massive ecosystem, where it can reuse as much existing infrastructure and code as possible. If we now turn to the specific case of Corda, we were able to take cutting edge technologies from the Java ecosystem and add some seriously clever engineering by the R3 engineering team to deliver something unique called the Flow Framework. In particular,
recent advances in automatic checkpointing of business logic, with restore across system restarts, means developers can write what looks like entirely normal straight-line logic and yet, behind the scenes, a complex international workflow is being orchestrated. The first time you use it, it feels a bit like magic. This is an example of why it’s so important to build on the foundations of an existing and robust ecosystem, such as that provided by Java, whilst at the same time bringing the programming model and tools right up to the contemporary cutting edge. _THE IDEAL ENTERPRISE BLOCKCHAIN IS ALSO A NEXT-GENERATION ASSETLEDGER…_
A repeated theme from our work with members was that the real wins come when the new enterprise blockchain applications become systems of record for real transactions. This means they need to provide _legal certainty_. Application developers need to link their contract _code_ to associated contract _legal prose_ to give certainty about how disputes will be managed. But, for this to work, one must go further. Just as a successful enterprise blockchain identity layer needs to be based on legal names, the actual nodes – the machines running the business logic – also need to be clearly associated with a specific _legalentity_.
Such a framework, provided by the legal prose, identity-driven messaging and legal entity association with nodes, means that contracts signed on platforms that support it can be legally binding if you choose. It’s a prerequisite to being safely able, at scale, to support direct issuance of _assets_ and the direct formationof _contracts._
It means that a bank or other firm can issue assets (cash, equities, even commercial paperor syndicated
loans
)
on to the ledger and have them be directly owned and seamlessly transferred to other members of an appropriate business network in near-real-time and with settlement finality. And make no mistake: that is a hard trick to pull off. For dematerialised assets to have full utility, they must be easily transferrable to any and all legitimate potential owners: isolated islands won’t do. So it turns out that this also has strong implications for the most fundamental aspects of the design: how data on the blockchain is managed, distributed and evolved, which I describe more below. The issue we found during our research was that if you get this wrong, you risk trapping assets in silos,
where they can only be transferred amongst members of a preconfigured list or through the involvement of third-party market-makers, or by asking the issuer to impose friction by cancelling and reissuing them. It’s a tough problem to crack, as the link above makes clear in its analysis of another platform. The criticism in that link also applies to Quorum: they both suffer from this stranded asset problem and it means apps you write for those platforms will almost certainly have to be extensively rewritten in the future when those platforms are redesigned to correct these shortcomings. A costly prospect. It’s one of the reasons we were so focused on delivering a version of Corda with “API Stability”: members and
other developers told us loudly and clearly that they highly valued knowing they wouldn’t have to redesign their apps in the future _AND THE IDEAL ENTERPRISE BLOCKCHAIN IS ALSO FIRST-OF-A-KIND DECENTRALISED DATABASE…_ At the heart of the enterprise blockchain vision is the idea that, if two or more parties are transacting with each other, then they should all have an identical copy of the associated data. _“I know that what I see is what you see”._ To achieve this, we have to ensure that all parties have fully validated that their shared state was indeed calculated correctly. At heart, it is _this_ that distinguishes blockchains from what went before: we don’t take things on trust; we _verify_. And to verify we need to run the logic for ourselves. We have to check the _provenance_ of data. What we want is, in effect, a globally shared database, but where each party only has the rows of the database that pertain to transactions they’re part of. So we need to make sure that you receive the rows you need and if anybody tries to change any of them, they can only do so if the rules are followed and that you get to sign off on it and/or get notified afterwards as appropriate. To get an idea of how this works under one architecture, see this simple analogy.
The design we concluded that best achieves this is one that builds on and heavily extends and generalises ideas that originated in _Bitcoin_ rather than Ethereum. This model, which Corda adopts, encourages developers to think of the fundamental units of information in their business problem and how they can evolve over time in isolation. Corda then adds the powerful _flows_ I described earlier to orchestrate their updates via _transactions_ that specify precisely which data units – “state objects” – are being referenced, created or replaced. This approach allows for arbitrarily rich scenarios and sophisticated negotiations and business processes to be modelled with ease, whilst allowing the system to tell precisely who needs to receive what data, when, whilst revealing nothing more than is needed to proveprovenance.
Other platforms take a different approach, based on an Ethereum-like model. They typically start with the idea of an “everybody sees everything” full broadcast blockchain, representing a globally shared computer, and go _fractal_ in order to correct for the privacy issues that result: they spin up tens or hundreds or thousands of separate mini shared-computers, one for each group that wants to transact in privacy. This approach can work but our analysis, confirmed by later experience, was that, for real world scenarios, it gets very complex, very quickly. In the case of Quorum, each “confidential contract” can be thought of as a mini Ethereum universe that is visible only to the participants in that contract. This idea of millions of mini-blockchains works for some scenarios, but as I described in thispost
the
approach, used by some other platforms too, fails completely if you ever need to support asset _mobility_. As soon as you need to prove provenance of _one_ piece of data in a confidential contract to somebody else, you have to show them _everything_ in that contract. Game over: you either lose privacy in the hunt for provenance or your assets are stranded, with their provenance impossible to be demonstrated to outsiders. _AND… THE IDEAL ENTERPRISE BLOCKCHAIN MUST ALSO BE DESIGNED FOR THECLOUD_
The world doesn’t stand still. The enterprise software market in 2017 is different to the market in 2000… In particular, most new applications that get deployed in the future will run in the cloud, increasingly in a public cloud. So this was inevitably a hot topic of debate throughout the consortium’s deliberations over the last couple of years: how can we support application developers who need to write applications that will form legally binding contracts and be the basis of their audited books and records yet which will run on other people’s computers in a potentially hostile environment? We considered the obvious options: zero-knowledge proofs, homomorphic encryption, secure hardware and more, and combinations of them all. Our first conclusion was that the answer needs to be multi-layered: deterministic sandboxes, signing of all code and transactions, everything underpinned by legal-entity-level addressing, support only for a well-understood and tested managed runtime (in Corda’s case, the JVM, which we heavily lock down) and so forth. But we also made a decisive choice: when weighing up risk, availability of skills, time to market and a collection of other factor, we concluded that the right initial approach is first to support hardware security technologies and, Intel’s SGXtechnology
in particular.
This allows users to deploy Corda applications to _other people’s computers_ (ie on public clouds) in a way that prevents those operators from interfering in transaction verification or accessing historical transaction information yet with no material limitation on the business logic that can be run. And we found that making this work well required it to be designed in from the ground up, which we did. We concluded that this approach contrasted favourably with a higher-risk one being taken by platforms such as Quorum, who are recommending today the use of zero-knowledge proofs. Zero-knowledge proofs are a very fine piece of engineering and mathematics. They’re almost certainly part of the future of privacy in the long-term on blockchains – and Corda is designed to adopt them when they have matured. But, today, the story is different. First, and as Mike and Kostas in our engineering team discussed atCordaCon
in
September, the world of Zero Knowledge Proofs is young, very few people have skills, it is almost _impossible_ to know what one of these things actually _does_ when written and the security assumptions they rely on are unproven. Indeed, the “zk-SNARK” technology being promoted in February this year by the inventor ofEthereum
is
now being challenged by something new, called zk-_STARKs__. _ This
is a promising sign of a vital research community, rapidly advancing a young field. But it’s a risky foundation upon which to build enterprise solutions before it has matured more. Secondly, the integrity of the financial system rests on the idea of _atomicity_: related activities should either _all_ happen or not happen at all. Inconsistent, half-complete exchanges just won’tdo.
This requirement was hammered home to us by our members during the design process for Corda and so the ability to do complex atomic “payment versus payment” and “delivery versus payment” transactions is a fundamental part of the architecture. Unfortunately, Quorum, which needs to use zero-knowledge proofs to achieve acceptable privacy in their system cannot, according to their own documentation,
achieve delivery-versus-payment: “_… the POC solution will not support cryptographically-assured DvP (i.e. atomic exchange of assets). This is because ZSL currently has no means of supporting shielded DvP-style functionality.”_ This is why it’s so important to distinguish between the _generic promise_ of enterprise blockchain technology and the _practical reality_ of specific implementations. Thirdly, we need to remember at all times that this whole emerging industry is about _consensus_, about being sure your counterparts really _do_ see the same things you do and that you agree on all important data, when it happened and in what order. But we learned from our members that how you _reach_ this consensus may need to differ based on the business context: maybe you’re trading amongst a group of peers who you know well: you may each need to participate in the decentralised consensus forming process by running a node as part of a consensus cluster and reach consensus quickly and with finality amongst yourselves. But, perhaps for some other line of business, you’re transacting with people all over the world and you want an independent, decentralised group of impartial observers to timestamp the transactions and help you reach agreement about ordering. That must also be supported: you need to be able to use a fully byzantine-fault tolerance decentralised cluster of consensus nodes, operated by mutually distrusting entities. And a successful platform needs to support all these modes – and more – and, here’s the key part: on the same network, at the same time! So when we designed Corda, we engineered it so that you’re not forced to pick one consensus model and expect everybody to accept a one-size-fits-all for every transaction they perform on their blockchain network. That would be the road to disconnected, isolated blockchain networks… and the fast lane to _stranded assets_. WHY I BELIEVE CORDA IS THE FUTURE OF ENTERPRISE SOFTWARE This piece began by outlining what I consider to be some of the critical findings of our journey so far. And we’ve embedded as many of them as possible into the design of the platform we jointly defined with this unprecedented consortium of institutions and the hundreds of technologists who so willingly gave their time to help us get itright.
It’s why I am so careful to stress that all enterprise blockchain platforms are _not _the same. There is a reason Corda looks different to platforms like Fabric and Ethereum. It’s because we’re not merely trying to take public blockchain technology – designed for a completely different purpose – and force it inappropriately into the enterprise._ _ Instead, we’re doing something altogether more exciting and ambitious: we’re building the future of enterprise software. We’re tapping into one of the largest technology ecosystems ever seen, the Java ecosystem, and building on the work of countless thousands of skilled engineers to deliver an enterprise blockchain that’s designed directly to solve real problems faced by businesses today. _It’s why I believe the Corda enterprise blockchain is the future of enterprise software._ Indeed, firms like Finastra, Calypso
, HPE
and
others discovered Corda for themselves after reaching similar conclusions as us about what the right design for a consensus system between identifiable parties in a regulated environment needs to look like and our large and growing roster of partners , including Microsoftand Intel
,
is a testament to the momentum. Perhaps I shouldn’t be surprised: we were immensely fortunate to have the deep and insightful input of literally _hundreds_ of senior technologists from across _dozens_ of the world’s largest companies help with the design. I hope one day to be able to list each and every one of them. Indeed, I hope we will look back on Corda in a few decades as one of the largest and most successful collaborative design efforts in the history of enterprise technology! _Finally: a note on terminology. In this post I used the word ‘blockchain’ to describe Corda. I tried for a long time to retain engineering purity (“Corda is very much like a blockchain and has chains of transactions but, strictly speaking, it doesn’t BATCH them into blocks – it’s REAL-TIME – so we probably shouldn’t call it a blockchain!”) But the reality is that the market uses the term Blockchain to describe all distributed ledger technologies, including ours. So I’m not going to fight it anymore…!_
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blockchain , Corda
, open source
, r3
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INTRODUCING CORDA 1.0 _Corda’s “API Stability” promise is an industry-first and means you can build on Corda with confidence. The roadmap for large-scale DLT deployment is now clear: it’s time to make your choice._CORDA 1.0 IS HERE!
Corda – the world’s only distributed ledger platform designed and built from the ground up to record, manage and synchronise contracts and other shared data between trading partners – reached a critical milestone today: version 1.0 and, with it, core API stability. API stability marks the point at which Corda’s contract with application developers is made firm: you can develop your applications on Corda 1.0 and, as we continue to enhance and mature the platform, you can upgrade with confidence, safe in the knowledge that the core APIs won’t change underneath you. _This is a critical landmark on the industry’s path to widespread adoption of enterprise blockchain technology and DLT and it is a promise that no other competing platform has made._ BUILD ON CORDA WITH CONFIDENCE. But why does this matter? IT MATTERS BECAUSE CORDA SOLVES A HITHERTO INTRACTABLE PROBLEM INCOMMERCE.
The problem is easy to state and hard to solve. Every major firm around the world has built systems to manage their relationships and contracts with their trading partners. And each of their trading partners has done the same. Information is recorded by each of them multiple times, in multiple places, in multiple different ways and the information just never lines up properly. Each system is different. Each system has different bugs. And it costs an _immense_ amount of money to keep them in sync and deal with the problems that arise whenthey’re not.
_And this means that business leaders simply can’t move as fast as they need to in today’s world._ Here are some examples of the problem: * The duplication and inconsistency in today’s payment systems means it takes too long to move money around the world: multiple banks have to update multiple different systems and reconcile to check they calculated the same balances. * _With Corda, banks can __settle their massive obligations to each other, round the clock, with maximal liquidity savings_ _, even as new payments are arriving all the time and without a stop-the-world centralservice. _
* Today’s supply chains and international trade are too expensive because, in part, of too much paper and too few systems that can talkto each other.
* _With Corda, innovative software firm __TradeIX_ _ and multiple major banks are __building a platform to automate the pre- and post-shipment financing__
for buyers and sellers around the world on an open account basis._ * The need for reconciliation and batch processing is one of the reasons why it takes so long to settle securities transactions, needlessly tying up liquidity and capital. * _With Corda, firms can transact commercial paper deals instantly __and without a paying agent or clearing system__,
as recently __proven by Commerzbank__.
Or they can enable collateral to move without friction __with new liquidity marketplaces_ _ from startupslike __HQLAx_ _._
CORDA IS THE ONLY DISTRIBUTED LEDGER PLATFORM DESIGNED FROM THE GROUND UP TO SOLVE THESE PROBLEM BY ADDRESSING THE ROOT CAUSE. WITH TODAY’S VERSION 1.0 RELEASE, WE TELL THE WORLD’S DEVELOPERS THAT IT’S TIME TO MAKE YOUR CHOICE: BUILD ON CORDA’S STABLE CORE APIAND CREATE THE NEXT
GENERATION OF DISTRIBUTED APPLICATIONS!
I wrote in 2015 that the wave of innovation that had been catalysed by Bitcoin was actually _two_ phenomena:
the emergence of decentralised crypto-assets _and_ an entirely new way of solving a hitherto intractable problem in finance and commerce more generally. With Corda 1.0, this second blockchain revolution is nowupon us.
With Corda, multiple parties _who don’t fully trust each other_ can nevertheless collaborate to manage their shared data and this can have _big_ implications for commerce. It means we can envisage a future where I can look at my books and records and know, for sure, that _WHAT I SEE IS WHAT YOU SEE_. And if I can do that then we can transact in confidence, making business decisions in real-time, automating our joint activities with certainty: the promise of _smart contracts_. Facts recorded by the ledger can be regarded as authoritative rather than “shadows” of authoritative data held elsewhere, enabling settlement to take place directly across the platform. COMMERCE WITHOUT FRICTION. This is the opportunity Corda was designed for and, with Corda 1.0, the world’s developer community now has access to an open-source platform with a solid foundation that will take you with it as it continues to mature. Corda’s unique design is the result of an intense period of research, development and design that included _hundreds_ of senior technologists from across the global financial system, and the open source community, who have been actively engaged with Corda since we open-sourced it in November 2016.
Indeed, it was through our open source community that we discovered that Corda is applicable to _far more _than just finance! We’re seeing use-cases in government, insurance and beyond. And, by working with experts and leaders at our extensive list of partners at firms such as Microsoft,
HPE
,
Cognizant
,
Calypso
,
our community gains from the collective wisdom and shared learning that comes from a true collaborative community. So why did the initiatives above (and so many more) choose to build on Corda, in many cases, switching to Corda after evaluating other technologies? We hear several reasons repeatedly given: * “My business problem is all about keeping records in sync with my trading partners and automating the activity that surrounds them.” * _Corda’s smart contract engine takes an __individual agreement or contract as its building block_ _. No need to worry about abstract concepts like shared virtual machines: think in business terms and solve your problem directly._ * “My business dealings are complex; agreeing new terms requires negotiation… I need to be able to communicate back and forth with my trading partners.” * _Corda’s unique __flow framework__ makes it really
simple to automate workflows between parties without writing complex event-driven code or dealing with asynchronous callbacks. No other platform has anything like Corda’s flow framework. The flow framework is what makes this __decentralised, confidential netting solution_ _ so powerful._ * “I need to integrate with existing systems easily.” * _Corda writes its data directly into a relational database for you to query and uses well-understood and time-tested integration tools such as message queues (MQ) to move information around. Corda is builtto integrate..!_
* “I need to deliver my solution quickly.” * _Corda is designed for developer productivity. Developers can write their apps in Java – which over seven million developers know and the platform has been engineered for a thoughtful and delightful developer experience. This is enterprise software that developers actually like to use!_ * _“ _I don’t want to have to build the solution myself.” * _Corda has a thriving ecosystem of software vendors and consultancies who have independently discovered the platform and are choosing to build their applications and delivery practices around it. Our __partner team__ can introduce you to a firm who can meet yourneeds._
* “I don’t want to be left on an evolutionary dead-end if I adoptDLT early.”
* _With Corda 1.0, you know your future is protected; you can upgrade to new versions of Corda and your applications won’t need to be extensively rewritten. What’s more, with 1.0, R3’s successful funding round, Corda’s large and growing open-source community and our extensive network of partners, Corda is now established as one of the few general-purpose DLT platforms that will still be standing when the market consolidates. _ * “I need my business dealings to be private.” * _Corda is designed only to share data with those with a legitimate need to know – just the information needed to allow them to validate the provenance of facts on the ledger and no more: provenance with privacy. And Corda is designed from day one to work with __Intel’s SGX privacy technology_ _as it rolls out._
GET STARTED WITH CORDA TODAY So, if you haven’t already, now is the time to jump in to the Corda community and on LinkedIn . The whole team is on slack.corda.net and you can get startedhere !
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