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SBI Holdings, R3 Embark on ‘Joint Venture’ to Boost Corda Blockchain Use in Asia

R3’s Corda platform aims for an adoption boost via a partnership with Japanese financial services giant SBI Holdings.

Japanese financial services company SBI Holdings will partner with software firm R3 to expand local use of its Corda blockchain platform, Cointelegraph Japan reported Dec. 5.

Quoting local news outlet Nikkei, the report reveals that SBI, which is involved in multiple cryptocurrency and blockchain-related activities, will expand on its existing investment in R3 to create a “joint venture” aimed at promotion.

“Europe is the most advanced in blockchain product development,” R3 CEO David Rutter told Nikkei in an interview:

“The new joint venture will strengthen the Japanese language service, and promote adoption.”

The company added its R3 partnership would extend beyond Japan to cover the wider Asian space.

R3 focuses on using Distributed Ledger Technologies (DLT), such as blockchain, to facilitate efficiency increases primarily for banking partners. Based in the United States, the startup has clients throughout the world, which currently number around 200.

Deals continue to come, Cointelegraph this week reporting on a group of French banks completing a Corda-based Know Your Customer (KYC) trial, while R3 also announced that the first cryptocurrency added to its payments DApp would be Ripple (XRP).

SBI is also deeply entrenched in XRP, its joint money transfer operation SBI Ripple Asia gaining Japanese regulatory approval in September.

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Amber Baldet: Don’t Force Public Blockchains ‘Down Enterprises’ Throats’

Having left one of the world’s largest financial institutions to build an ethereum startup, Amber Baldet appreciates both the needs of enterprises and the potential of open, decentralized blockchains.

But in the Clovyr co-founder’s view, it’s too soon for the former to start doing much with the latter.

“We want to build those bridges out to the public networks, but I don’t think you get there by shoving public chains down enterprises’ throats before they are ready,” Baldet told CoinDesk.

Rather, a gradual process of bridge-building between public chains and the private kind favored by corporations is needed, believes Baldet. This is the task Clovyr was designed to perform, while keeping decentralization front and centre.

“Until there is credible on-chain privacy or very well-designed privacy preserving architectures for enterprise applications on public chains, it’s a bit premature,” said Baldet, who oversaw the creation of Quorum, the private and privacy-centric fork of ethereum, when she was the blockchain lead at global megabank JPMorgan Chase.

Her comments come as enterprises, once dead-set against public chains, are tentatively exploring the possibilities there. The 500-member Enterprise Ethereum Alliance, for instance, is developing standards which will port privacy-enhancing modifications into ethereum, and global consulting firm EY has championed enterprise use of public chains.

On the other hand, some enterprise blockchain builders, such as the R3 banking consortium, believe the full-broadcast design of public chains, which is naturally disposed to sharing data with other nodes, is fundamentally the wrong architecture for businesses.

Another immediate concern is scale: Baldet said a single large enterprise moving any portion of its core operations to the ethereum blockchain would shut it down faster than CryptoKitties, the popular tokenized cat game that inundated the network with transactions.

Rather than being overloaded with computational complexity and burdened with a ton of smart contacts, a better endpoint for the public ethereum network is to be “a connective fabric between things that are happening elsewhere,” said Baldet, who chatted with CoinDesk while in London to cement her commitment to the Fintech Open Source Foundation (FINOS), a project to ensure financial services does not lag behind other industries in adopting open source practises.

Baldet and former lead Quorum engineer Patrick Nielsen launched Clovyr in May. Since then, Baldet said, it’s got some partnerships are in the pipeline, though none are ready to announce.

Earlier this month at Devcon 4, Clovyr released its first standalone tool, a code search for ethereum developers writing smart contracts in Solidity, the programming language.


Even in her banking days, Baldet espoused cypherpunk ideals about privacy. In her view, it is critical, not only so enterprises can protect their secret sauces, but also for human consent over how the data we generate is handled.

Hence, Baldet wants to make building and connecting decentralized applications (not necessarily blockchain-based ones) easy and intuitive, while eschewing centrally controlled, data-hungry surveillance capitalism.

Yet Clovyr also takes a practical approach. An example, said Baldet, could be something simple like creating a workflow for document signing and verification across different entities within a business, where DocuSign might have been previously used.

In that scenario, “you don’t need to do a $20 million infrastructure lift of an existing application, so much as you simply enable that connectivity – and from there it’s a more organic way to build the ‘blockchain use case.’ You don’t need to get 10 organizations around a table with a bunch of lawyers and spend six months deciding everything up front,” said Baldet.

While the blockchains being built by enterprise consortiums like R3 and Hyperledger will solve business problems of their target demographic, there’s much more on offer, she said, adding:

“What we have right now is great for the 1 percent of businesses that can afford the expensive consultants and pay for the use case creation.”

But like history, software development moves in cycles. ColdFusion, a scripting language used for web development in the 1990s, required expensive consultants, noted Baldet. Thereafter, a rapid period of evolution led to a point where thousands of mom-and-pop shops were registering dot-com addresses with reusable e-commerce carts they didn’t build themselves.

“So we want to create those reusable components that dramatically lower the barrier to entry for the 99.99% of people in the world who have not even begun to explore what blockchain can mean to their business,” Baldet said.

Regarding Clovyr’s business model, Baldet said she wanted to clarify that it is not a “dapp store” nor is it a pure interoperability play like Hyperledger Quilt or Polkadot.

And while Clovyr makes it easier to search libraries and use them to spin up networks, Baldet is careful not to have the model conflated with the notion of “blockchain-as-a-service.”

“Right now, what we have is everything that is ‘as a service’ comes to you from a central provider. Yes, we are creating that experience for developers, but we are not trying to create an intermediary that forces what they build to constantly phone home to Clovyr,” she said, concluding:

“Delivering the usability modern developers expect in a privacy-first way isn’t easy, but it’s a problem worth solving.”

Amber Baldet with Bob Underwood of FINOS photo via Ian Allison for CoinDesk

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19 Words Prove Just How Audacious Bitcoin Really Was

Richard Gendal Brown is CTO at R3. 

This exclusive opinion piece is part of CoinDesk’s “Bitcoin at 10: The Satoshi White Paper” series.

There is a phenomenon in anthropology called the “Cargo Cult.” It was first observed in Melanesia in the late 19th century and most famously chronicled after World War II when remote Pacific tribes created pastiche airplane runways and mimicked long-departed air-traffic controllers in attempts to stimulate the return of military airdrops.

Cargo-culting consists of groups of people mistaking form for substance, latching on to an easily visible concept without understanding the underlying reason for its existence.

As we celebrate the 10th anniversary of the email that announced the birth of bitcoin, I have been reflecting on the prevalence of cargo-cults in the blockchain industry, what caused them and what we should do about it.

For example, many of the first business blockchain platforms broadcast all data to all participants, or coarsely-defined subgroups of participants. This isn’t how business works – contracts should be private of course. But full broadcast was how bitcoin did it so it sometimes felt like those platforms ‘cargo-culted’ the same concept, even though it made perfect sense for Bitcoin but absolutely no sense at all for business. They have since revised their designs but, as a community, we should ask ourselves: how did that happen? Can we do better in the future?

Similarly, many business blockchain platforms run on something called the Ethereum Virtual Machine (EVM) and require developers to program in a language called Solidity. Not because businesses want to learn entirely new languages but because that’s how ethereum did it.

The problem is that, whilst the EVM was an amazing achievement, it was only ever a temporary stopgap: the Ethereum community publicly plan to abandon it in the near future. So it’s hard to think of a reason for adopting it for entirely unrelated purposes, except perhaps for reasons of cargo-culting. This has real consequences: learning new languages costs money and technical decisions made by businesses last for a long time.

If these EVM-based business blockchains take root, one could imagine the world’s business ecosystem could be running the EVM long after the platform for which it was invented had moved on!

This slavish adherence to one specific solution to one specific problem even extends to a core tenet of the enterprise blockchain revolution: the existence of blocks.

Satoshi Nakamoto didn’t wake up one morning thinking: “What the world really needs is for transactions to be batched up and confirmed slowly in blocks!” No, bitcoin is a batch system because physical reality – the speed of light – means it’s impossible to design it any other way if you also want to achieve the system’s design goals around pseudonymous cryptoeconomically-intentivised consensus.

If Satoshi could have built a real-time system he would have done so.

So if you don’t have some of bitcoin’s requirements, what’s the argument for why your solution should look identical and work like a 1960s batch mainframe computer?

An Example to Strive For

I’ve long argued that the world of enterprise blockchains will consolidate far faster than anybody expects, that a “day of reckoning” is coming. On this, the 10th anniversary of the paper that sparked bitcoin, we can, perhaps, use a worked example to see what we can learn from how Satoshi approached this question of design, a design that was truly novel, and free from cargo-culting.

Reproduced below is the email that announced the birth of the entire project. Its first line reads: “I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party.”

With that deceptively simple sentence, Satoshi Nakamoto announced the arrival of Bitcoin.

Captured in those 19 words was what amounted to a precise requirements specification. Not a cargo-culted replication of an inappropriate idea from the past, but a specific set of requirements, from which a specific design then followed.

Let’s unpack some of those words to see how Satoshi did it.

  • Fully peer-to-peer: so no central computers.
  • No trusted third party: so the electronic cash must be intrinsic to the platform. (Otherwise you would have to trust the issuer.)

This also explains why there is such a focus on network participants running their own nodes: if you can’t rely on software you operate and control, then you’d be reliant on a trusted third party.

Perhaps more importantly, the lack of a trusted third party also implies that the transaction confirmation providers – miners – cannot be forced to be identified or else the need for an identify provider reintroduces a trusted third party through the back door.

This deliberate absence of real-world identities means you can’t implement “one participant one vote” so you need some other way to link to the real world. This leads to proof-of-work that layers one confirmation on top of the last which, in turn, means you have to give time for confirmations to propagate around the world which, in turn, leads to a need for batching, and hence the confirmations must come in the form of blocks. And so forth.

It’s only a small exaggeration to say that the entire architecture of bitcoin unfolds inevitably and relentlessly from those 19 words.

You work through the details and the whole architecture falls into place.

Risks and Choices

In sum, bitcoin is an amazingly elegant solution to a very well specified business problem.

It’s not without its problems, of course. And many of them are deep and fundamental: technical, environmental and cultural. But we can’t underplay the scale of Nakamoto’s achievement. Ten years on, the proliferation of “blockchain technology” would seem to suggest Nakamoto has been highly influential.

And yet… As I argued above, not all of the business blockchain platforms of today derive from a precise requirements specification and arduous engineering process. Instead, they feel very different. Some are, effectively, cargo-culted replicas of systems designed to solve very different problems.

The resolution of this problem lies in engineering.

To see what I mean, let’s look at Corda, the open-source blockchain platform my team supports and maintains, with the help of a large and growing open-source community. I don’t intend this piece to be a sales pitch – so I’ll say up front that there are problems to which Corda is an amazing solution… and problems for which is it not! Study it for yourself – and apply it where it makes sense.

But that is also my point: Corda is an engineered solution to a specific problem.

It so happens that Corda shares a lot in common with other blockchain platforms (cryptographically chained transactions, byzantine fault tolerant consensus options, massive scale and far more). But it also looks different in some fundamental regards.

As a result, we in the Corda community have been criticized for these seemingly unconventional design choices. But I believe this criticism was misplaced. The reason platforms like Corda look different is because they solve different problems and were engineered from the ground up to solve them. The differences are a feature, not a bug, so to speak.

For Corda, our mission is to enable people and firms to transact directly, with legal certainty, settlement finality, strict privacy, and total assurance that “what you see is what I see.” As a result, its design is different. For example, there is an identity layer, transactions are sent only to those with a need to receive them, transactions are confirmed one-at-a-time in real-time and so forth.

Those platforms that have identified a clear problem to solve and engineered a good solution to that problem are in rude health. Fresh off the back of the largest CordaCon ever, we head into 2019 with production deployments under our belts and large-scale adoption just ahead of us.

Thank you, Satoshi, for showing us the way.

Astronaut image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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UK Land Registry Begins New Phase of Blockchain Research Project

The U.K.’s national land registry is moving into the second phase of its ongoing blockchain research effort.

The HM Land Registry announced Tuesday it was partnering with blockchain company Methods, which plans to build on R3’s Corda framework to develop a platform able to store land registration information and streamline the process for buying or selling properties, according to a press release.

Dubbed Digital Street, the HM Land Registry’s research began last year when it first announced the project. In addition for its desire to streamline the buy-sell process, the agency said it hoped to store more “granular information” using a blockchain platform.

In a statement Tuesday, HM Land Registry Chief Executive Graham Farrant said the agency aims to become “the world’s leading land registry,” citing “speed, ease of use and an open approach to data” as areas he wants to excel at.

Farrant added:

“By working with Methods on Digital Street we are taking another step toward that goal, as we explore how new technologies like blockchain can help us to develop a faster, simpler and cheaper land registration process.”

R3 CEO David Rutter said the company “looks forward to working with the world’s most well-recognized land registry.”

Like Farrant, he noted the technology’s potential to make transactions more efficient, and said R3 would be “working closely” with the Land Registry to “turn this potential into reality.”

HM Land Registry image via chrisdorney / Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.