Hyperledger – the collaborative, open-source project to build a suite of blockchain tools for businesses – added eight new member organisations in December.
Among the fresh faces are Switzerland’s leading telecoms firm Swisscom, virtual-wallet fintech company Lykke, Korean financial software studio Koscom and digital transformation specialists CA Technologies.
Managed and coordinated by long-established open-source software advocates the Linux Foundation, Hyperledger is pooling its own technicians with those of its members. The goal: to create what it describes as an “enterprise grade, distributed ledger framework and code base” designed to enhance corporate transactions.
One month before the eight new firms joined the fray, Hyperledger announced that it had passed the 100 members mark, making it the largest collaborative initiative that the Linux Foundation has ever run.
The project’s membership now far exceeds that of the 70-strong R3 Consortium – a parallel initiative that is also working on business-based blockchain solutions, primarily for the banking sector.
Hyperledger executive director Brian Behlendorf said: “As 2016 was a year of exploration, R&D and prototyping, we’re excited for 2017 to be the year we start to see case studies of the technology in production environments.”
The blockchain community has touted an array of potential uses and applications for its software in the realm of B2B transactions. Indeed, as The Treasurer reported in August, Hyperledger has contributed the digital DNA of the blockchain technology it has developed so far to a scheme for enhancing letters-of-credit (LC) transactions in trade finance.
Working alongside IBM, HSBC, Bank of America Merrill Lynch and Singapore’s Infocomm Development Authority, Hyperledger has helped to create a prototype tool that simulates paper-intensive LC transactions by sharing data between importers, exporters and banks on a private, distributed ledger.
That echoes the overall objective behind every blockchain tool currently in development: to create a platform where the data set is constantly updated through a process of collaborative verification between its users, rather than relying on the management of a central authority.
In that way – at least in theory – blockchain aims to provide a more accurate, real-time view of large numbers of transactions within the same industry, with the additional benefit of greater transparency.
Some of the platforms already in use have been devised to handle more specialised business functions. In September, IBM president of payments and blockchain James Wallis told online journal Banking Technology that his firm had recently gone live with what it believes to be the first enterprise hyperledger project in the world.
“It’s for dispute resolution between us and business partners,” he explained, “covering about $100m every day. It’s released about $50m in working capital for us each day.”
Other platforms have emerged in the B2C environment, providing some eye-catching benefits for the retail sector. As the Harvard Business Review (HBR) notes in its latest issue: “To get traction, [blockchain-based] substitutes must deliver functionality as good as a traditional solution’s, and must be easy for the ecosystem to absorb and adopt.
“First Data’s foray into blockchain-based gift cards is a good example of a well-considered substitute. Retailers that offer them to consumers can dramatically lower costs per transaction and enhance security by using blockchain to track the flows of currency within accounts – without relying on external payment processors.”
Those gift cards, HBR added, even allow transfers of balances and transaction capability between merchants via their underlying common ledger.
However, progress with large-scale, transformative ventures involving multiple stakeholders is not always smooth.
As Hyperledger swept past its 100 members mark in November, the R3 Consortium went in the other direction – with Santander, Morgan Stanley, Goldman Sachs and the National Australian Bank quitting the initiative.
Speaking to online tech journal The Register, Centre for Alternative Finance economist Dr Garrick Hileman said: “While the assembly of so many major banks by R3 was impressive, such a large number of members inevitably leads to organisational challenges. It has not gone unnoticed that the proofs-of-concept that R3 has produced have had a very limited number of participants.”
He added: “What’s happening at R3 may be indicative of the distributed ledger space in general. Many executives over the past year were seduced by the blockchain buzz, but now, six to 12 months on, I expect we’ll see a blockchain shakeout in 2017.
“Some previously hyped blockchain use-cases are likely to be tabled or shelved, while others in less regulated areas than capital markets are more likely to be deployed.”