Posts

Introducing Corda 1.0

By: Richard Gendal Brown

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 in commerce.

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 when they’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:

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 API and 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 now upon 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.”
  • “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 built to 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 your needs.
  • “I don’t want to be left on an evolutionary dead-end if I adopt DLT 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 started here!

The Weekend Read: Nov 27

,

by Todd McDonald

How do you write a summary of the weekly news when you are the news? I have been thinking about that for the last few days. I have mentioned in the past that one of the lessons that I took from my trading days is that everyone is talking their book, always, even if they don’t realize it (or won’t admit it). I try to guard against that in this blog, but it is inevitable to some degree. I also don’t want to pull a ‘Zuckerberg in China‘ gambit and ‘erase’ the news. So, for a selection of articles on R3 this week, click a few of these links.

With the Thanksgiving holiday here in the US, I was in a reflective mood on all the things that I am thankful for this year. I am thankful to be part of a wider ecosystem that is trying hard, in many diverse ways, to find the next thing. I am thankful to work with a team that has the strongest collective resolve I have ever witnessed. I am thankful for creative Tim Swanson memes. I am thankful to work with folks like Richard, James, Mike and our whole tech/product team who are focused on building things (instead of with those focused on trying to tear things down from the sidelines of life). I am thankful to be working harder than I ever have in my life and enjoying (almost) every minute of it. On to the links.

Corda Open Source

This Wednesday, November 30 is the day for Corda open source. Richard Brown weighed in with another update/preview of what is to come:

Distributed ledger technologies will have such phenomenally powerful network effects that it is unthinkable that serious institutions would deploy base-layer ledger software that is anything other than fully and wholeheartedly open. And it’s why we’ve been committed all along to releasing Corda just as soon as we were sure it was heading in the right direction. It is and so we are.

We’re really proud of Corda and its progress to date. But, that said, Corda is far from finished. Mike Hearn will soon be publishing a “warts and all” description of quite how much work we still have to do. This is true for all other platforms in this space, of course, but I feel a particular responsibility to be transparent given the ambitions we have for Corda and the uses to which it will be put.

How to get Corda on November 30: Corda’s home will be corda.net. Head over…for links to the codebase, simple sample applications and a tutorial to get started writing your own CorDapps.

Corda is still young, but to echo what Hyperledger’s Brian Behlendorf states below, we feel it is better to open up early rather than late. Now is the time to invite contributions from outside. As the code matures further in the coming months and reaches a stable enough point where detailed code review makes sense, we’ll be looking forward to analysis and review from the industry’s leading experts. And others.

American Banker has a fantastic review of open source in DLT, highlighting both the advantages and risks to this approach. It is worth a read in full:

“Let’s say someone wishes to connect a Chain network that has digital assets running on it with a Corda contract,” [Adam] Ludwin said. “If those projects are open source and well documented, and that documentation is public, then whoever might be building the interfaces or connectors for these networks and services will have a much easier time doing so. That’s why open source is a boon for interoperability.”

[SNIP] Moreover, it is a way for engineers to give back to the engineering community.

“When external engineers can review the architecture and code, they can assess the quality of the projects companies are working on. This serves as a great recruiting tool,” said Max Levchin, CEO of the digital lending startup Affirm and a co-founder of PayPal. “When you open-source, it allows third parties to build applications on top of yours, [a process] which acts as a distribution channel for your own product.”

Ethereum Forks

As the article points out above, open source is hard. This week saw Ethereum initiate a planned fork on Tuesday, which lead to an unplanned fork a few days later, which the Ethereum community rushed to fix. This seems to have led to a bit of schadenfreude twitter style from the Bitcoin community. as they reposted this article in quite a few threads. Meanwhile, earlier in the week the head of strategy for Ethereum-based Consensys penned this article entitled What Venture Capitalists Got Wrong About Bitcoin:

Instead, the infrastructure built for bitcoin can increasingly be co-opted for use by new tokens. These new tokens don’t necessarily add any value for the venture capitalists who originally invested in bitcoin. To illustrate what is happening: Imagine if a railroad company in the 1800’s spent millions laying tracks, only to see a second (and third, and fourth) railroad come along and use the finished tracks for free, to ship more cargo in faster and safer cars.

Interesting to see the perspectives of the two sides, with some viewing all this activity as zero-sum, winner (chain) takes all…while others share our view that success in one ‘camp’ can serve as a positive multiplier across the whole space.

RegTech (cont.) and LegalTech

This week saw the big finale of R3’s initial global regulatory tour, culminating in Eltville am Rhein, where our very own Charley Cooper spoke to the Deutsche Bundesbank’s Central Banking conference devoted exclusively to blockchain technology. For those curious about the participants, see this link. Here is Charley’s report:

The conference lasted for four days and covered a wide range of topics, with my remarks focused on the importance of public/private collaboration as a driver of technology innovation in the highly regulated financial services industry. In the lead up to that event, Isabelle Corbett and I barnstormed through four other countries in seven days, meeting one-on-one with Swiss and Nordic regulators as part of our relentless efforts to involve government agencies and oversight bodies in our work from the outset. A huge thanks to Credit Suisse, UBS, Danske Bank, Nordea, and OP Financial for helping us navigate their home turf. R3 representatives have now met with regulators in almost all of our member jurisdictions, including central banks, securities and derivatives overseers, consumer protection agencies, law enforcement, tax authorities, NGOs, trade associations and legislators. It feels good to be home.

Risk Magazine posted a very thoughtful piece as a follow up to R3’s Smart Contract Template Summit (it is even worth the pain of signing up for a free trial!). Our partners at Norton Rose Fulbright announced the publication of our joint white paper on the legality and enforcability of smart contracts. You can request a copy of the paper here or members can contact R3 directly.

Announcements

Swift announced this week that they would become more open and vocal about their exploration into DLT, which is very welcome news. They also announced some details on their latest POC.

Damien Vanderveken, head of R&D at Swift Labs, says: “Swift has been targeted in the press as a legacy incumbent that will be doomed by DLT. But we believe Swift can leverage its unique set of capabilities to deliver a distinctive DLT platform offer for the community.”

Congrats to our friends at the JP Morgan Blockchain Center of Excellence for their open sourcing of Quorum, which you can access here. This is yet another example that the above American Banker article highlighted of the growing acceptance of open source within finance, and the advantages that even the world’s biggest banks see in an open source approach. We look forward to exploring Quorum more during the upcoming Hyperledger events in December.

And finally, we are very happy to welcome China’s Minsheng Bank to the R3 consortium, as another member in our growing network China and North East Asia.

The Weekend Read: Nov 20

,
MAS MD Ravi Menon announces MAS-R3 Interbank Payments project at SGFintechFest

by Todd McDonald

Singapore Fintech Festival

MAS MD Ravi Menon announces MAS-R3 Interbank Payments project at SGFintechFest

I asked Antony Lewis for a field report on this week’s Singapore Fintech Festival:

11,000 sweaty people couldn’t be wrong…Singapore was the hottest place for FinTech this week, as the world’s first regulator-managed FinTech event kicked off for a week-long collab confab.  Ravi Menon, the MD of the Monetary Authority of Singapore, opened the festival by announcing R3’s collaborative efforts with 10 banks and partners to put the Singapore Dollar on a distributed ledger. (see BBG article here). This garnered quite a bit of inbound interest from other parts of the globe as the week wore on, and we look forward to pursuing this piece of collaborative work in a “jurisdiction near you” soon.

Tim Grant insists that he didn’t pay off the Audio/Visual crew during his panel on Wednesday when Blythe Masters’ microphone didn’t work. The whole panel, including Oliver Bussmann (independent) and Sandra Ro (CME), generally agreed that we need to see some traction next year.  Tim’s “5 Ps” of DLT (Proof-of-Concept–>Prototype–>Pilot–>Permission–>Production) crashed Instagram as the audience became bewitched by the power of alliteration. ABC (AI, Blockchain, Cloud) grew a little more mature and became ABCD (AI, Big Data, Cloud, DLT). Our CEO, David Rutter, was also featured at the ASIFMA Annual Conference (all pics above).

The above, and the MAS’ partnership with R3 announced last week, all paves the way nicely for our Lab of Excellence in Singapore. Lattice80, the world’s largest FinTech co-working space, will be the perfect location to light up those Bunsen burners. If you would like to join us, we are hiring in Singapore.

RegTech and CBDC (cont.)

Continuing the MAS RegTech focus elsewhere, there continues to be a steady drumbeat of news stories concerning the regulator’s role in fintech and DLT. First up is the U.S. SEC and CoinDesk’s profile of the SEC DLT lead Valerie Szczepanik. The article reviews the SEC working group’s focus to date, as well as raising the topic of regulation and ICOs:

Since an ethereum startup called The DAO raised over $100m by selling digital tokens without an exchange, a rush of companies have followed suit. So-called initial coin offerings can be launched from anywhere in the world and cross borders as easily as the Internet itself. With millions of dollars worth of capital raised so far and dozens of ICOs in the works, how the SEC will handle the technology is one of the biggest areas of regulatory uncertainty in the industry. Regardless of whether Gemini and SolidX ever win approval or if ICOs might displace traditional fundraising, the SEC will likely play a role.

Speaking of The DAO, the team behind the dream/nightmare, Slock.it, are back with another project, pushing the “fail fast, fail upwards” concept to its limits. I happened to see this being compared to the advent of flight and aviation inventors, yet the comparison falls flat (like many early aviators (groan)) as these innovators fail the “skin in the game” test popularized by Nassim Taleb. As far as I can tell, there was no repercussion from the absolute failure that was The DAO, whereas those early aviators had the ultimate skin in the game! (For more on that story, check out David McCullough’s excellent book on The Wright Brothers).

Sweden’s Riksbank made headlines this week with talk of issuing digital currency:

The so-called e-krona may be introduced within two years. “The less those of us living in Sweden use bank notes and coins, the clearer it becomes that the Riksbank needs to investigate whether we should issue electronic money as a complement to the money we have today,” Riksbank Deputy Governor Cecilia Skingsley told the Financial Times.

Sweden’s Riksbank is the world’s oldest central bank, and was the first to issue paper banknotes in the 1660s.

Central Bank Digital Currency (CBDC) remains an area of focus for R3 and our Research team. For R3 members, please reach out to us if you have seen our recently published private reports on this topic.

India has also made headlines with their recent demonetization scheme. Once again, many armchair economists/sociologists on the Twitter have been giving their “two paise” on the subject, but since I at least admit total ignorance to all the nuance, here instead is what looks to be a great run down of the issue at hand by The Diplomat.

Bonus link: no idea where to put this but here is CoinDesk’s summary of their recently released State of Blockchain.

R3’s Second Smart Contract Templates Summit & RGB on Corda

We were very pleased to host the second summit dedicated to all things smart contract, with participants in person in Barclays London and New York, with many more across the globe dialed in (Ed. note: need to clarify how time is measured by organizers of upcoming event billing itself as “The Industry’s First Event Exclusively Dedicated to Smart Contracts”…). Dr. Lee Braine of Barclays once again set a high standard for the proposed agenda, and all the contributors managed to outdo themselves. IB Times has a great rundown of the event, and we have provided all of the presentation materials via this link. Allow myself to quote…myself:

The summit featured presentations by Barclays, CIBC, Nordea Markets, ISDA, FIA, Norton Rose Fulbright, Thomson Reuters, University College London, Cardozo Law School, and R3. Todd McDonald, co-founder of R3, said: “We wanted to hold this second summit to keep up the cadence and to continue what we at R3 and all the participants feel is important: progressing this in the open and it being industry led, rather than by just one organisation or one company.”

Our CTO Richard Gendal Brown was featured on two 11FS podcasts this week. First up, RGB was joined by Richard Crook (Head of Innovation Engineering, RBS) and Ajit Tripathy (Fintech and Digital Director, PWC) for a more wide ranging chat. The second is a video link to a 1-on-1 chat with Richard Brown. Both pieces were moderated by our old friend Simon Taylor, aka The Blockchain Beard (who evidently put his size smedium t shirts on a high-heat drying cycle in order to show of his Blockchain Biceps in the attached video…). Richard as always delivers an extremely lucid explanation of not only the functionality but more importantly the benefit of DLT, and specifically Corda, to financial institutions:

On why anyone should care about blockchain and DLT: It just becomes self-evident that there’s a massive opportunity in finance, wherever firms record the same data that their counterparts do, and then have to manage it, that this blockchain technology…can be used to massively simplify and reduce that cost and complexity by just doing it once and knowing for sure that what you see is what your counterpart sees.

On how is Corda different from traditional blockchains: The short answer to your question…it is designed by and for financial institutions, its focus is not on crypto-currency or virtual machines; its focus is managing legal agreements between regulated institutions, is designed to integrate and inter-operate with existing systems in banks, and is designed to integrate well with the legal system…. So this isn’t the idea of computers running amok and controlling the world. This is computer code. This is computer data that, in the event of dispute, is grounded firmly in legal reality.

The Weekend Read: Nov 13

,

by Todd McDonald

An emotional week comes to an end in the US. This will be a thinkpiece-free zone save for one article written and posted by Ben Thompson back in March (but still very relevant today). I did a media detox (hence the late posting) and took a hike instead (literally).

On to this week’s links.

 

R3 Announcements

Another busy week here at R3. First up, we announced our partnership with the Monetary Authority of Singapore for the launch of R3’s first physical lab. We have been working with MAS on this concept for some time and they have already proven to be great partners. I am beyond excited for this collaboration, especially since it increases my chances of enjoying real nasi lemak again soon. This announcement comes on the eve of the Singapore Fintech Festival, which will feature both Tim Grant and David Rutter. David’s remarks at this week’s Risk USA event were featured in this article: “When I sit here today versus a year ago, this is no longer ‘if’ or ‘will’ this happen. I don’t think there any doubt that we’re going to see these distributed ledger technologies change how transactions are processed globally.”

Later in the week we announced the successful work to represent identity data on our shared ledger system Corda in collaboration with 13 member banks. This work showed how smart contracts could be used in the collection of relevant KYC data for both legal and natural persons, with the key twist being that the data remains in the control of the entity or person themselves. Another example of DLT helping to push power to the ‘edges’ of the system, with the various smart contract pieces then being able to represent a completely new (and potentially much less costly) way to conduct KYC and onboard clients. You can also reference this identity overview post for a different perspective, and R3’s Ian Grigg will be following up in the coming weeks with more on the R3 perspective to identity with (hopefully!) a series of posts.

Another week, another Gendal post (I told you he was back to the land of the blogging!). This is a short post titled On Distributed Databases and Distributed Ledgers:

In Corda, nodes are operated by different organisations and do NOT trust each other, but the outcome is still a consistent view of data.

Nodes of a distributed database trust each other and collaborate with each other to present a consistent, secure face to the rest of the world. By contrast, Corda nodes can not trust each other and so must independently verify data they receive from each other and only share data they are happy to be broadly shared.

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.

 

The Week in Links

Digital Asset paper to the Hyperledger project on The Global Synchronization Log (with Corda shout out)

FCA announces participants in their regulatory sandbox: Meet the 18 companies joining the FCA’s regulatory sandbox

HKMA and ASTRI: Whitepaper On Distributed Ledger Technology. Summary article here.

The Weekend Read: Oct 30

Our regular posting schedule was slightly waylaid by sweat tea and a bit of SEC football, as your author was busy “Grovin‘” this weekend.

ICYMI: Richard Gendal Brown on Corda: What Makes it Different

Our CTO has returned to the public blog domain with this post that goes into more detail on the origins and differences of Corda (speaking of blogging, rumor has it that Richard will be posting ~twice a month, so please watch this space for more updates):

Early results were promising: the reductive, bottom-up approach we took to architecture and design, which is explored in our introductory whitepaper and on which we’ll elaborate in the coming weeks, was solid: we could model a diverse range of instruments; the design would allow for significant parallel processing; we did not need to send all data to all participants in all scenarios; the use of a mainstream virtual machine and its libraries led to high developer productivity; we were able to support multiple consensus providers on a single network; the use of a flat, point-to-point queue-based, peer-to-peer network mapped well to real business scenarios; and more.

We worked with our members to test the maturing codebase in a variety of contexts: interfacing Ricardian Contracts and Smart Contracts in the context of an Interest Rate Swap with Barclays and others; managing trade finance flows; and more.

And this focus on validated client requirements and a willingness to question some hitherto sacred beliefs (we have no blocks! we have no miners! we don’t put ephemeral data in the consensus layer! we allow per-transaction specification of consensus providers!) led to a unique design.

Had Corda ended up being a minor variation on an existing platform or a me-too copy of something else, what would have been the point in pursuing the work? But that isn’t what happened: we ended up with something quite distinct, something we believe is singularly well-suited to a wider variety of financial-services use-cases and something adapted to the practical reality that the industry is regulated and some rules simply aren’t going to change overnight.

Straight Zcash Homie

I asked newest R3 Asia team member Antony Lewis for his perspective on the launch of Zcash this week. If you like the below, please check out his personal blog Bits on Blocks:

Zcash launched on October 28 with much fanfare and considerably more user-driven hype than other cryptocurrencies. While many cryptos are little changed from their parent (usually Bitcoin or Ethereum), Zcash promises to add an important privacy-preserving feature missing from bitcoin: the ability to hide transaction details on its blockchain and still have transaction validators validate transactions without knowing the financial details of the transaction in question!

Zcash is in implementation of the Zerocash protocol and uses “zk-SNARKS”, or zero knowledge proofs: Rather than submitting a transaction containing clear-text details of your account, the specific coins you’re sending, and the receivers account, you instead submit mathematical proofs that you have control of a certain number of funds. Unlike Bitcoin, where knowing someone’s address/account allows you to see all transactions in and out of that address, this data is obfuscated in Zcash, and can only be viewed with a viewing key.

BitMEX listed ZEC futures since September 16 – over a month before the cryptocurrency existed.  Since launch (and the necessary destruction of the cryptographic toxic waste), ZEC futures have traded as high as 10 BTC per ZEC before falling to 0.25 BTC per ZEC within a few hours.  The price action on Poloniex has been even more nuts printing a high of almost 3300 BTC per ZEC (yep, that’s $2.3m per ZEC).  Cryptos, eh?

Cottoning to the Blockchain

Excuse the dad-humor in the title, couldn’t help myself. This week’s announcement of CBA and Wells Fargo using blockchain tech to track the shipment of a specific bale of cotton got quite a few media hits (see here, here and here). The attention to this story shows how the concept of DLT-enabled trade finance has struck a chord with market participants, and more work continues at R3 and elsewhere to make this promise a reality.

Standard and Poor’s talks our book by highlighting the impact that DLT can have on banking:

S&P Global Ratings says it believes the rising investment in this technology suggests that a transformation of the global financial industry could be underway. 

We believe that, at the very least, blockchain presents an opportunity for  financial institutions to cut costs by streamlining back-office operations; to shorten clearing and settlement times; facilitate payments; and even generate new revenue streams. As with any innovation, however, companies also need to be aware of the risks and implications for their operations. Over the next two years, we expect blockchain will gain momentum and that larger financial institutions may start using it, albeit in a narrow context.

…and finally, a big R3 welcome to Synchrony Financial, our first member from the credit card space. We are excited to have you on board!