Corda is a blockchain platform that does not use the typical format, such as the one used in bitcoin. Developed by financial firm R3, Corda is a distributed ledger platform used to differentiate the technology it uses from that of the cryptocurrency.
R3 started to develop a path in blockchain technology that would serve the particular needs of the financial industry in 2015. This week, R3 announced that it would release its work on Corda to the HyperLedger open-source initiative, a Linux Foundation Collaborative Project.
R3 Corda Makes Good on Its Promise
When R3 introduced Corda in April 2016, it pledged to open source the effort, which was designed to determine what sort of blockchain was suitable for a financial model. At the time, the company said the project was “greatly inspired” by blockchain systems, but that it would avoid the design choices that make traditional blockchains inappropriate for banking scenarios.
For instance, there is no unnecessary sharing of data to the entire community with the R3 model. Certain parties can see what data is held within an agreement on a need-to-know basis, but only those parties.
In bitcoin’s blockchain, all transactions are visible to the entire community. Corda’s transactions are validated by the specific parties to that transaction rather than the broader pool of validators who are not participating in the transaction. Corda can also orchestrate the workflow between firms without the need for a central controller.
Establishing a Consensus
Corda’s most important feature is its ability to establish a consensus between firms at the level of each individual deal, not at the system level, as bitcoin’s blockchain does. This greatly speeds up transaction validation.
“We want other banks and other parties to innovate with products that sit on top of the platform, but we don’t want everyone to create their own platform … because we’ll end up with lots of islands that can’t talk to each other,” James Carlyle, R3’s chief engineer, told Reuters.
If the major players use this platform for distributed ledgers, the usability of any Corda-based application will increase. This is just one step toward the proliferation of blockchain technology, but it could potentially be a giant step for banking security.