In 2008, the first Distributed Ledger Technology (DLT) was created with Bitcoin. Immediately it became visible across industries that DLT technology could be very useful to transfer assets. As time passed, different implementations have come to light using the concept of the DLT which attempt to address different problems with different implementations of a similar idea.
One of these implementations is IBM’s Hyperledger. In late 2015, IBM partnered with 17 other companies:
- Blockchain software vendors such as Digital Asset, or R3
- Technology platform companies such as Intel, RedHat or VMWare
- Financial services firms such as CME, DTCC, Deutsche Borse, Swift or JP Morgan
- System integrators such as Accenture.
The Hyperledger project’s governance is chaired by Blythe Masters (Ex-JP Morgan Executive, CEO of Digital Asset) under the Linux Software foundation. This open governance allows the open source community to contribute to the project, read the source code, download it for free and use it to create new software.
The vision for Hyperledger is a tool for confidential asset transfers in an enterprise environment. These assets can be of any nature: Securities, gold, legal contracts, wills, patents, medical information… Key differences with other DLT solutions such as Ethereum, are that there is no cryptocurrency involved and that access to transaction information is restricted with access rights. Whereas in Ethereum every miner node has a copy of the whole blockchain and can access all the information of any transaction, in Hyperledger all information is encrypted, and only thanks to having the right access rights can you decrypt and access certain information. In a corporate environment this would be a mandatory requirement as you may want to give one client a 10% discount without all your clients knowing about this.
Some interesting projects going on in the corporate world using Hyperledger:
- CLS is working on a payment netting service
- DTCC is building a DLT based derivatives processing platform
- Japanese Stock Exchange is testing DLT for trading environments
- Walmart is building a platform with Hyperledger to track where a Pork chop came from in 7 minutes instead of the current 7 days
- Digital Asset are building a tool that will leverage hyperledger to offer DLT to the financial services community.
- Northern Trust has built a DLT for private equity
Currently there are hundreds of players in the DLT world, in my view the top 4 are R3 Corda, Ethereum, Bitcoin, and Hyperledger. It is hard to tell who will come out ahead in the end, but Hyperledger is certainly worth keeping an eye on.