Traditional blockchain platforms had a lot of problems which made them impractical to be of utility to large enterprises like banks and other financial institutions. Their low transactions rate and very high energy consumption were among such problems. They prevented these platforms to be useful in large-scale production and processing, which is typical of large enterprises. The traditional platforms also lacked regulatory engagement, which is a core component of the business world.
As per their claims, R3 was one of the first software firms to recognize these problems and decided to build a specialized blockchain platform from the ground up – a platform customized for large-scale commercial scenarios. This is a global corporation working with a network of banks, financial institutions, traders and regulators to develop an enterprise-specific blockchain. The R3 website says “[they] rethought the blockchain concept from top to bottom and uncovered a revolutionary new approach to linking businesses that massively reduces cost, risk, and duplication”. For two years, they developed a blockchain platform called Corda. The company’s aim behind Corda was to enable smooth and speedy commerce: “[Corda] meets the highest standards of the banking industry, and yet is applicable to any commercial scenario. It records, manages and executes institutions’ financial agreements in perfect synchrony with their peers, creating a world of frictionless commerce.”
Apart from the problems mentioned above, a crucial one for enterprises was that of privacy. All of the traditional blockchain platforms were public. As Nitin Gaur, director of IBM Blockchain Labs insightfully observed, “A shared ledger also implies shared data, which then means visibility of not only the transactions but even of the customer’s relationship data.” No enterprise wants its customer data to be leaked. There had to be a mechanism to ensure data security standards in a business network. R3 had these issues in mind while developing Corda, and they claim that Corda is the only platform that offers the “universal interoperability of public networks with the privacy of private networks”. Unlike traditional blockchain platforms, Corda minimizes information leakage by only sharing transaction data with participants that require it. Here’s more information on how Corda manages confidentiality and encryption of client data. Privacy is just one core element of Corda. Other elements of this platform include interoperability, consensus and, of course, being enterprise-ready as a whole. Among other things, Corda is a smart contracts platform and a host for distributed apps (dApps). It acts as a gateway to a network of fully interoperable dApps for finance and commerce, which are known as CorDapps. Also, the platform is designed to bring participants’ consensus on shared facts, removing the need for costly and time-consuming reconciliation. This is where it becomes “frictionless”. Furthermore, although Corda presents itself as an enterprise platform, it is available as an open source software. As per R3’s website, “Corda harnesses the most appropriate elements of traditional blockchain technology and fine-tunes them for enterprise usage.”
To conclude, unlike Ethereum or Ripple, Corda is not intended to be a general-purpose solution for all problems. It was built with the explicit purpose of recording and enforcing business agreements among registered financial institutions. As mentioned in the introductory Corda white paper, “it takes a unique approach to data distribution and transaction semantics while maintaining the features of distributed ledgers which first attracted institutions to projects such as R3, namely reliable execution of financial agreements in an [automated] and enforceable fashion.” Since Corda is still in its infant phase, only time will tell whether it achieves industrywide adoption. Indeed, there are many technical requirements in the enterprise world, like functionality for Know-Your-Customer (KYC), where Corda is still working and doesn’t have a production-ready tool as of this writing. But it is still leading the way in enterprise blockchain arena.
However, if Corda fails to accomplish its core mission of providing “frictionless” commerce, “the blockchain revolution may never see the light of day in the enterprise world”, as Nitin Gaur said. Otherwise, the commercial industry may soon have a new (and much-needed) business-boosting tool.
Saurabh Chaturvedi is a freelance developer and technical writer with a keen interest in blockchain, Bitcoin, and other cryptocurrencies.
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