Move over, Bitcoin, the Linux Foundation has big plans for an open distributed ledger system to track and record all sorts of transactions beyond currencies.
Blockchain technology makes cryptocurrency like Bitcoin possible, but it has a lot of potential beyond tracking currency transactions. The Linux Foundation wants to tap into that potential and is spearheading a collaborative effort to develop an enterprise-grade open source distributed ledger called Hyperledger.
At its core, blockchain is a record-keeping system running across a global network of independent computers. The distributed ledger, which records and verifies transactions, is write-only — that is, transactions cannot be tampered with or modified after the fact, so virtually anything of value can be tracked and traded using this system.
“This project has the potential to become a foundational technology — one that is used in a wide variety of applications across all major industries,” said Jim Zemlin, executive director at the Linux Foundation.
Some of the biggest tech companies and financial services players have joined this project as founding members, including ANZ Bank, Cisco, CLS, Credits, Digital Asset, Fujitsu, IC3, IBM, Intel, London Stock Exchange Group, Mitsubishi UFJ Financial Group, State Street, SWIFT, VMware, and Wells Fargo. These members are investing “considerable research and development efforts” to the project, the Linux Foundation said.
It makes sense that financial institutions are betting on blockchain, since the sector would be among the first to benefit from a widespread use of the technology. However, the fact that players like IBM, Cisco, Intel, and VMware are involved show that interest in blockchain goes well beyond finance. IBM has committed to contributing tens of thousands of lines of existing code, significant intellectual property, and full-time developer resources, the Foundation said.
Digital Asset, the company that originally developed Hyperledger as distributed ledger technology providing real-time institutional settlement, contributed the name to the project, along with enterprise-grade code and developer resources.
Blockchain’s potential
Blockchain is designed to provide a secure, transparent, and reliable way of tracking transactions, and most important, the process is largely automated. There is a lot of interest in financial markets on ways to take advantage of blockchain beyond bitcoin. Leading banks are investing $1 billion in blockchain-related projects, according to a recent report from Magister Advisors, and the Securities and Exchange Commission recently approved a plan from online retailer Overstock.com to issue its stock via blockchain (it already used the blockchain to issue private bonds). Nasdaq OMX, the company behind the NASDAQ stock exchange, wants to use blockchain to oversee trades in private companies.
“If you’ve got an incredibly powerful record-keeping system, one of the best uses for it [blockchain] is to track transactions,” said Nicholas Thorne, co-creator of Blocksign, an application that uses blockchain to legally sign documents, contracts, and agreements.
But blockchain can be used for a wider range of applications because the ledger provides transparency and accountability for every single transaction. It can help companies manage the flow of goods and related payments, let manufacturers share production logs with OEMs and regulators to reduce product recalls, help governments provide public records like vehicle registration, and allow systems to track individual device transactions.
“It’s the list of things we can’t even imagine that is going to make this technology transformative,” Zemlin said.
Everybody has to chip in
Establishing an open distributed ledger demands a cross-industry, open source collaboration to advance the technology so that everyone can benefit from the underlying architecture. After all, there are significant overlaps in requirements across various use cases. Different groups have developed their own forms of distributed ledger systems, but the Linux Foundation can coordinate between different groups across multiple industries to combine development efforts. The collaboration will also identify and address important features and currently missing requirements.
“Even beyond building out standards, creating common code will allow organisations to focus on creating industry-specific applications that enhance the value of this technology,” said Arvind Krishna, senior vice president and director of IBM Research.
There is a “lot of hard code that needs to be written” to create the underlying project, which can then support robust, industry-specific applications, platforms, and hardware systems. The collaboration will solve the underlying technology problem and free up developers to work on specific use cases.
Companies that want to build products and other technologies using blockchain need a strong foundation. Having a common underlying general architecture is incredibly beneficial. Zemlin likened the open ledger project to the Linux kernel, and how code submitted by the mobile device maker to save power and extend battery life can wind up benefiting servers in a large data centre. “You are going to see that kind of unexpected innovation and cross-pollination with this project,” Zemlin said.
The ultimate measure of the project’s success will be the quality of the actual source code and the kind of applications that can be built on top of the codebase. The Linux Foundation plans to release the source code under Apache License v2.
Some of the code has already been written, and while Zemlin refused to commit to a specific release date or timeline, he expects the source code to be available on a public GitHub repository “very soon.”
“I love this project mainly because it has all the makings of an open source success,” Zemlin said.
Fahmida Y Rashid, IDG News Service
Ltd
