Blockchain technology enables everyone involved in a transaction to know with certainty what happened, when it happened, and confirm other parties are seeing the same thing without the need for an intermediary providing assurance, and without a need to reconcile data afterwards.
The two terms “blockchain” and “DLT” are often used interchangeably and to understand blockchain, it’s important to understand Distributed Ledger Technology (DLT) — the framework that underpins it.
DLT is a decentralized database managed by multiple participants, across multiple nodes. Blockchain is a type of DLT where transactions are recorded with an immutable cryptographic signature called a hash. The transactions are then grouped in blocks and each new block includes a hash of the previous one, chaining them together, hence why distributed ledgers are often called blockchains.
Transactions on Corda are cryptographically linked or chained to the transactions it depends upon. So, by definition, Corda is a blockchain—with one key differentiator.
Corda does not periodically batch up transactions needing confirmation — into a block — and confirm them in one go. Instead, Corda confirms each transaction in real-time. With Corda, there is no need to wait for other transactions to come along or a “block interval”. Transactions are confirmed immediately. This means that your transaction is not dependent on any others, increasing both privacy and scalability.
So, Corda is both a blockchain and not a blockchain.
Prone to human error or fraud— each participant has its own separate ledger.
Inefficient — intermediaries are needed for validation.
Frequent delays & losses — paper-based and data stored locally by each party.
Peers have a single shared ledger — once the transaction is validated, the record is permanent, secure and immutable.
A smart contract — code running on top of a blockchain that contains a set of rules under which the parties mutually agree — eliminates the need for third parties.
Owner of the transaction has the power to move anything of value freely and instantly without intermediaries.
Eliminates or reduces paper processes, need for intermediaries, speeds up transaction times and increases efficiencies and transparency.