Bank-backed R3 launches new version of its blockchain
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Bank consortium R3 CEV, one of the most well-funded blockchain working groups, has been meticulous in developing its framework. For this it it has endured a fair amount of criticism. Since its inception the technology company has sought to build a shared ledger architecture fit for global financial institutions and get its more than 70 stakeholders on the same page before each next step.
In the last year, however, some have begun to doubt that model, deeming it slow and unproductive. By the end oftwo of r3 cev blockchain consortium meaning consortium's founding members, Goldman Sachs and Santander, ended their working relationship with R3, fueling negative notions in the banking and blockchain communities about its approach.
But r3 cev blockchain consortium meaning to doubt? It's just part of the evolution of any technology, according to Steve Wilson, a principal analyst at Constellation Research. They're actually supposed to slow you down because if you want everyone to be doing more or less the same thing, at the same level, then the price you pay is a loss of agility.
Blockchain technology will be most effective if there is a network effect. In the industry's broad definition, a blockchain is a shared ledger that is updated near-instantaneously, maintained and auditable by the participants, relies on no single party and cannot be doctored. As a value transfer system, the technology's impact will depend on its ability to interoperate with other systems.
If it can't do that — or if banks develop blockchain solutions for their own internal use — the industry could see small improvements in efficiency here and there, at best, but end up with fractured legacy systems unable to interact with each other.
There lies the problem with the idea of smaller but faster-moving working groups. Goldman and Santander have not spoken publicly about why they left R3 cev blockchain consortium meaning but reports suggest Goldman was unhappy with the way its stake was being diluted in R3's ongoing capital rise. R3 cev blockchain consortium meaning is concentrating on other group work; namely, the Utility Settlement Coin and the Global Payments Steering Group, according to Julio Faura, head of research and development for the Spanish bank's blockchain practice, although he would not comment directly on the bank's departure from R3.
Wilson suggested both firms may have just decided to forgo the standards setting process to move a little faster. Last May, as R3 was becoming a household name among bankers, San Francisco-based startup Chain debuted a blockchain protocol it had been quietly developing with nine financial institutions.
Rather than trying to get scores of financial organizations to agree on standards, the now three-year-old company focused on building software that incorporates the privacy, security and other specifications of its nine partners.
That was perhaps one of the first instances that made the industry question if a bigger consortium is necessarily better. In September Santander with five global banks formed the Global Payments Steering Groupthe standards-setting group for the use of distributed ledger technology developed by Ripple.
Some banks work in large and small networks — Citi is an investor in Digital Asset Holdings as well as R3, for example — and have r3 cev blockchain consortium meaning it's important to do both. Santander's R3 cev blockchain consortium meaning suggested the bank would rather work small now and scale later.
Chris Owen, vice president of TD Bank's r3 cev blockchain consortium meaning practice, said while it's certainly easier to move faster with, say, two participants than 10 to 15, the correlation between the number of players and the use case isn't nearly as important as looking at the level of complexity of a use case.
One such use case would be trade finance. TD finds industry consortiums like R3 valuable for such applications. The other end of the spectrum is for more localized activities. TD is exploring the implications of launching a digital currency in Canada with r3 cev blockchain consortium meaning country's other major banks.
Owen said TD actually did invite R3 into that exercise, but not to advance the use case. R3 is working with institutions in other geographies looking to do the same kind of work.
Engaging R3 allowed TD to learn from the digital currencies discussion in international jurisdictions, he said. R3's managing director of business development and marketing, Charley Cooper, said that considering the uncertainty about blockchain the industry is still experimentingnot everything tried has proved workable and newness of the space, his firm has moved pretty fast.
If that is not incredibly agile, effective and fast technology build, I don't know what is," he said. It's not like the early days of the internet when developers could freely "scramble, roll the dice, be agile. Still, r3 cev blockchain consortium meaning observers and enthusiasts constantly make the comparison to the internet. If you think that comparison is overused and exaggerated, you're partly right, according to Wilson. If we really believe blockchain is going to take over world we need to start to trade off some of that agility.
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