Banking consortium R3CEV (R3) has announced that it will open-source its code for the blockchain platform it has developed together with over 70 global financial institutions, in hopes that it will be adopted as the industry standard.
Code for the Corda platform will be contributed on November 30 to the Hyperledger Project – a cross-industry project led by the non-profit Linux Foundation to advance blockchain technology, according to a report posted on R3’s website.
The Corda platform represents the biggest shared effort among the finance sector to work on the development of blockchain technology. R3 says that while it hopes its platform will become the industry standard, its intention is for other companies to build products on top of it.
“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,” chief engineer James Carlyle told Reuters.
“If we have one platform with lots of products on top, then we get something that’s more like the internet, where we still get innovation but we can still communicate with each other.”
Commenting on the announcement, Zaki Manian, co-founder at blockchain-based supply chain finance company Skuchain, tells GTR: “The benefit of a blockchain that we are arguing for is building a technology without a single point of control, so that companies can do business with each other without creating a bottleneck.
“It was becoming unclear how proprietary platforms would deliver this, so that’s why R3 has recognised for this to reach its potential, open source is really the only way of moving forward.”
The news comes on the back of numerous announcements by various smaller bank consortiums and partnerships on their blockchain efforts, both in and outside trade finance, over the past year.
“Blindly investing millions of dollars in small, disparate technology projects is not appropriate for banks at a time when budgets are stretched,” adds Carlyle.“The risk of backing the wrong horse could far outweigh the potential gains. Given that the power of this technology lies in its network effect, the consortium model is the ideal method to get it off the drawing board and into the wholesale financial markets.”
Commenting on what this means to other platform developers, Manian says: “I think the benefits of additional ledger platforms are minimal. I suspect there is room for only one or two enterprise platform technologies. I expect that innovation will transition from new greenfield platforms to innovation on top of the platforms that successfully build an ecosystem.
“I have trouble seeing how platforms like Chain, Ripple Consensus Ledger, Eris, BigChainDB, Assembly, etc become widely adopted unless [Hyperledger’s] Fabric and Corda fail spectacularly. I don’t think enterprises will see much value from running a dozen different technology stacks. At the same time, extraordinary work has been done in many of the proprietary platforms and I think their leadership will have to either decide to embrace and extend non-proprietary platforms, or bet on their failure.”