Written By: Krunal Billimoria On: November 8, 2017
In our current financial systems, while assets such as currencies and securities appear to seamlessly be transacted with the help of software and the internet, there is an underlying complexity to the system: typically involved in clearing, reconciliation, and settlement of these assets in outdated structures. This system has many downsides: settlement of transfer can take days, transfers involve fee payments to multiple intermediaries, there is difficulty in knowing who the current owner is of an asset that is in the process of a transfer, and the complexity of the system makes it difficult to prevent fraud/theft. Many of these problems can be addressed if asset ownership were recorded on a single, shared ledger.
This is where Chain blockchain network comes in, where they manage issuance, ownership, and control of digital assets. Chain Core is an enterprise product which enables the blockchain platform for organizations to build better financial services from the ground up. Chain partners with leading institutions including Visa, Citigroup, Nasdaq, State Street, Fiserv, Fidelity, and many more to enable the blockchain infrastructure globally. A company can launch a blockchain network using Chain Core or connect to other blockchain networks with institutions listed above, to transform how assets move around the world. Some of the applications of this technology: transferring securities directly between asset managers, building a secure ledger for tracking assets across divisions of a large organization, and moving money internationally more quickly.
“Chain Core is infrastructure software that enables institutions to issue and transfer financial assets on permissioned blockchain networks”
Chain core allows entities (organizations) to digitize real world assets by creating and issuing them onto a network. Assets can range from native assets (ie. central bank issuing onto the network) to title assets (ie. ownership of assets held in a trust). Furthermore, there are three functional roles that an entity can take on a blockchain network: Asset Issuers (ie. Government/Corporations), Account Managers (ie Banks), and observers (ie. Regulators). Asset issuers have the ability to define and issue the digital asset. Account managers have the custody and are able to transfer assets. Observers receive blocks and view the blockchain data, but do not create transactions.
Chain Core is built on and uses the Chain Protocol. The Chain Protocol is a design created for a shared, multi-asset cryptographic ledger. Here are some of the Chain Protocol design features that allows Chain Core to do what was stated above:
- Programs: There are three types of programs that Chain Protocol blockchain supports:
- Issuance programs for issuing new units of an asset
- Control programs to establish rules for transacting existing units of an asset
- Consensus programs to establish rules for validating transactions
- Security: Security around direct asset ownership,
- Ability to maintain privacy while announcing transactions to network participants,
- Security against forks
- Ability to enforce policies created by entities
- Compact Proof: Ability for entities to participate in the network without seeing any transactions other than the ones they are involved in
- Verify transactions in parallel
- Participants do not need to keep track of the entire history of the blockchain
- Compact proofs allows participants to only validate transactions they are involved in
- Extensibility: the design allows considerations for future growth by various measures
- Interoperability: the design can power multiple blockchain networks simultaneously and allows cross-ledger interaction
There is also an open-source developer edition of Chain Core, which is freely available and allows developers to build applications using Chain Core.
Comparison with other blockchain networks:
While Bitcoin solves the problem of implementing decentralized digital cash, its security model limits its efficiency and throughput, and it only supports a single native asset. Similarly, while Ethereum includes a much more powerful programming language, there are challenges regarding its scalability and efficiency as well. As these systems are designed to operate on the public internet, most financial activity occurs within restricted networks, so a shared ledger operated within this restricted network can provide the advantages of blockchain technology without sacrificing efficiency, security, privacy, and flexibility needed by financial institutions.
To learn more about the Chain Protocol, here is the whitepaper to it: https://chain.com/docs/1.2/protocol/papers/whitepaper .
To learn more about the Chain Core Software, here is the brochure: https://chain.com/assets/brochure.pdf .
This article was written by: Krunal Billimoria for CryptoCanucks.com
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