Like iOS and Android, there are numerous different Distributed Ledger Technologies (DLTs), which are being used to digitise various areas of trade, trade finance and supply chains. Here we explore Corda, Hyperledger Fabric and Quorum – and yes, despite sounding like intergalactic starships, believe it or not, they’re disrupting trade finance right now.
What is Corda?
The Corda DLT platform, developed by R3, employs a point-to-point data broadcast system. Such a design eliminates the notion of a single principal ledger, opting instead for transactional data to be shared only with those entities on the network specifically involved in the transaction. This ensures a higher level of privacy for all nodes by sharing data on a strictly need to know basis.
Corda is able to achieve this through a combination of states and transactions. “A state is an immutable object representing a fact known by one or more Corda nodes at a specific point in time.” Transactions consume current states as inputs, apply the desired action, and propose a potential new state. Once verified, the potential new states replace the previous current states with the latter being marked “historic”.
Corda binds all on chain contracts to a traditionally recognized written legal agreement outlining the intended use of each contract by allowing for an object to be included in the code. This helps to circumvent the current grey area surrounding the legal enforceability of smart contracts. Furthermore, as a permissioned network, each node must be certified and linked to a registered entity providing a further layer of legal accountability.
What is Hyperledger Fabric?
Hyperledger Fabric, an open-source blockchain infrastructure governed by the Linux foundation, facilitates a multichannel global broadcast infrastructure. Within a network, peers are able to interact with one another through a series of channels, which could include all of the peers on the network or smaller subsets of peers for ensuring the privacy of sensitive transactions. Each channel within a network maintains a separate ledger. The ledger consists of two parts: the world state and the transaction log. The world state is synonymous to a database containing the current state of the channel-specific ledger at any given time. The transaction log is an immutable record of all the transactions that have led to this current world state. It can be used as a verifiable provenance trail for the ledger. Individual peers on a network would maintain a ledger record for each channel that they are a part of.
Beyond this core infrastructure, hyperledger Fabric operates a very modular architecture. This means that aspects of the network such as identity management, consensus, or encryption can be selected from a ranging menu of options providing a comprehensive, yet customizable network. Such customization allows network administrators to select the features most suitable for their individual situation, allowing Hyperledger Fabric to be effectively applied to a wide array of use cases.
What is Quorum?
Quorum is an enterprise blockchain solution built on top of the standard Ethereum protocol layer. Essentially, the Quorum layer seeks to instill the permissioned structure and privacy controls necessary for enterprise use, specifically financial enterprise use.
To help ensure privacy, Quorum prevents all but the authorized parties from seeing a specific transaction. This is done by augmenting the shared, single blockchain with a smart contract architecture that provides for the segmentation of private data. under this approach, each node on a network maintains both a public state database and a private state database. Nodes then only execute ledger-update smart contracts if they are party to said contract. This is determined either by the contract being public or by the node being party to a private contract. This means that a node not party to a specific private contract, simply will not store that information. Despite this, each node can be assured that all network transactions exist in a cryptographically secure form somewhere on the network.
These different distributed ledger technologies are being deployed across the vast number of projects looking to accelerate trade finance digitisation. Find out more, by reading our free study, in partnership with the WTO – Blockchain & DLT in trade: Where do we stand?