It happens quite often that serious task needs collaborative effort. Many companies are interested in the blockchain technology. So it’s no wonder that a number of consortiums and partnerships have appeared recently aimed at deep study and further practical employment of the blockchain.
As Bloomberg says, now they are “are trying to strike a balance between the open nature of blockchain, a ledger technology that could dramatically speed up transaction times and reduce regulatory costs, and banks’ desire to shield confidential details from competitors.”
R3 consortium, a blockchain startup backed by more than 40 financial firms , aims at advancing commercial apps and setting up coherent standards for distributed ledger technology across the fintech industry to stimulate broad adoption and profit from a network effect. The consortium has just added Microsoft to a large list of its members and has already conducted two tests.
The first trial included eleven major banks that tested a system intended to apply blockchain for making trading much faster and cheaper. They used a Microsoft platform, which runs on a blockchain built by Ethereum.
Each of the 11 banks from four continents used their own computer and transferred “Ether” to each other – Ethereum’s equivalent of bitcoin. The transactions were settled almost instantaneously. To compare, traditionally banks need several days for settlement, depending on the asset class.
The second test seemed to be more large-scale. Forty banks that checked five blockchain vendors and three cloud providers participated. They intended to see how different combinations handled simulated transactions in commercial paper.
The blockchain-technology providers were Ethereum, Chain, Eris Industries, IBM and Intel. For the experiment banks took three kinds of transactions for the experiment — issuing, trading and redeeming commercial paper. They created identical smart contracts for these transactions and ran the contracts on different combinations of ledgers and cloud platforms.
In September R3 hired Richard Gendal Brown, the former executive architect for industry innovation and business development for IBM. Brown is involved in developing a blockchain platform for Corda company.
“The banks touch everything,” said Charley Cooper, a managing director at R3. “The vast majority of all financial deals have a bank on one side of the trade. Because of that, the privacy piece becomes much more important.”
The Hyperledger Project, a partnership of numerous companies with one basic aim to create advanced blockchain technology, seems to be the main competitor of R3 consortium. The membership list of the consortium includes IBM, JPMorgan Chase & Co., Cisco Systems Inc., Digital Asset Holdings among others. One of the members, Intel, has just unveiled a modular platform called Sawtooth Lake for developing and maintaining of distributed ledgers.
The mission of the Hyperledger Project is to apply joint efforts to develop and establish an open, distributed ledger platform that will satisfy a variety of use cases across multiple industries.
“There is no other effort advancing an open blockchain with this level of broad industry representation and level of leadership,” said Jim Zemlin, executive director at The Linux Foundation. “The Hyperledger Project is among our fastest growing projects at The Linux Foundation. The opportunity is great. This leadership team and the community investments among members across industries put the project in the best position possible to accomplish its mission.”
Companies do not necessarily enter large consortiums to work with the blockchain. BNP Paribas Securities Services, a leading global custodian, and SmartAngels, the leading direct investment platform, have recently partnered to explore the use of Blockchain technology. The partnership will allow private companies to issue securities on the primary market and give investors access to the secondary market using Blockchain technology.