R3 Appears to Admit Defeat, Stops Blockchain Development

R3CEV, the largest blockchain consortium of banks and technology firms includng multi-billion dollar institutions such as Barclays, Credit Suisse, Bank of America, Citibank and HSBC, has seemingly admitted defeat and moved on from blockchain technology development.

Over the past two years, various consortia and bank-funded blockchain startups raised billions of dollars to utilize blockchain technology in optimizing the global financial network. The vast majority of developers of actual cryptographic and open source projects such as Bitcoin and Monero have explicitly stated that the utilization of centralized blockchain networks isn’t efficient due to their severe security flaws.

More importantly, blockchain technology isn’t structured to handle millions of data sets and hundreds of millions of data points in real time. In fact, one limitation of bitcoin as a digital currency is its inability to facilitate massive amounts of transactions faster, like a settlement network to be critical. However, bitcoin users, companies and developers aren’t pushing for reckless developments on top of bitcoin to ensure appropriate security measures are maintained.

In a presentation about the R3 Corda, R3CEV engineers, developers and researchers stated “No blockchain because we don’t need one,” admitting that the utilization and implementation of blockchain doesn’t fit their vision and more importantly, technological capability.

The global financial industry, network and ecosystem are in urgent need of an overhaul of infrastructure and architecture. It is very difficult for anyone to facilitate payments efficiently through bank systems and regulated financial networks.

R3CEV still maintains a development team of high technological knowledge, foundation and experience. With its team of talented blockchain and bitcoin developers, the R3 consortium will be able to come up with a piece of software or financial network that could most likely drastically improve the global financial industry. However, blockchain technology isn’t what the consortium needs because it simply can’t be implemented into fully regulated markets without tampering with security measures of blockchain technology.

In the upcoming months, the R3 Corda and the R3 development team will allocate its resources in developing a platform that is compliant and compatible with industry-standard protocols such as AMQP, JDBC and PKIX, while sustaining a close relationship with regulators to avoid any potential regulatory conflicts.

Ever since its launch, the R3 consortium has emphasized the processing of massive volumes of data and maintenance of a transparent and immutable network of financial operations. It is certainly a smart decision to move on from blockchain technology which the consortium has failed to implement and commercialize in a large scale.

Peter Todd, Bitcoin Core developer and well renowned cryptographer, consistently criticized the efficiency of R3 Corda and the R3 Consortium’s other blockchain platforms. He described it as “bitcoin without blockchain.”

Now, the R3 Consortium and its developers can have the freedom to work on whichever software or technology they believe are most relevant in solving the global financial industry’s major problems.

Image Via: USC

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  • Hmmmmmm …

    So , after a series of massive multi-million funding investments from The Big Banks and Financial Institutions R3 are now abandoning “blockchain technology” ( which was hyped incorrectly as ‘the technology behind bitcoin’) because they assert it doesn’t work for them!

    Blockchain technology certainly does work – or rather the bitcoin blockchain works – and has done for eight years and counting.

    By abandoning using an open source decentralized blockchain, R3 have effectively opted for ‘utility over security’, or more accurately ‘hoping a centralized Admin System will guarantee that there won’t be hacks or insider fraud’ – spoiler alert; it won’t.

    Good luck R3, and all those initial clients that trust in your ‘not a blockchain solution’

  • Mr RCX

    I think I spotted a typo: when it says “the utilization and implementation of blockchain doesn’t fit their vision and more importantly, technological compatibility” the last word should say “capability”

  • Peter Todd

    Describing Corda as “Bitcoin without blockchain” is *not* a criticism; it’s a perfectly good architecture for some problems.

    See https://twitter.com/petertoddbtc/status/835750773418000384

  • Fu Manchu

    quelle surprise! An open, borderless, decentralized technology stack isn’t palatable for closed, regional, centralized businesses…

    Now just stand aside why we continue to dis-intermediate your entire industry, thank you.

  • Fred

    R3 never started to develop a blockchain to begin with. So it’s wrong to say they are stopping now. Check your facts. By the way try to understand what banks are trying to address. Their biggest problem is not security, it’s getting to synchronize the vision each bank has of the contracts/agreements compared to the vision their counterparts have. This is what R3 and Corda are trying to address. Rather cleverly it seems, and inspired by blockchain-like mechanisms.

    • Shakedog

      So if it’s not blockchain tech, then why couldn’t they have created this before blockchain tech existed? What part about it being inspired by blockchain gives it any merit?

      • Fabián

        Shakedog, dude nobody said it’s not a blockchain tech.. You should really study more and improve your literacy skills, since being like you are right now, is just like being controlled in the middle of a massive war and having no idea of what to do.

        This is not critique nor an attack, just a friendly recommendation with a bit of anger though.

    • none

      That is a database. D A T A B A S E!

      • Erwin Smout

        Good to see there are still some people left who actually know that. And that if and when you subject the database to distributed management, then CAP theorem applies.

        • Chhay Lem Lim

          Awesome to see. Does this mean that the CAP theorem doesn’t apply to blockchains? As availability and consistency are still there when a network (nodes) partition occurs.

  • Fabián

    This is fakes news. Moreover, the article is very poorly written from a truth-seeking perspective.
    Most of the time the author of the news gives biased opinions with no fundaments and use a wrong combinations of words which mislead readers. Also, he might have no idea (or he did in on purpose) that R3 never really tried to implement a blockchain. They knew from the beginning that blockchain technology as it’s can’t be used for banks; citing directly R3 giving a fundament of why from the beginning they choose to implement their own blockchain technology: “changes (to blockchain) must be made to satisfy regulatory, privacy and scalability concerns”.

    Scalability concerns is what being adressed, but satisfy regulatory as bank could need, is not really a concern for the bitcoin ecosystem.

    • none

      BULLSHIT! What you are writing is FAKE. R3 has since the begining branded themselves as a blockchain company.

      Now they realized there is no such thing as a blockchain without a decentralized setup and a token + PoW like Bitcoin, and they are trying to deny they ever said it. You seem to have fallen for it!

      Bankers discust me like no other type. The lies, the fraud, the ignorance and the fake forgery. And when something like Bitcoin comes along they all laugh, ignore and brand their own BS project as the next big thing.

      But they have failed and in a few year you will see a world where these monsters no longer run our lives.

      • Fabián

        Well, you can brand yourself in any way you like to attract customers.

        I think what you said I just as valid as what I said, but that doesn’t make my post fake; it’s just different point of views. Anyway, there is a trustworthy thing which is the fact that there are thousands poorly written news (or fake) in this internet era, since anyone without any degree nor systematic self education can write stuff, and you can distribute information very easily.. Moreover, the bitcoin world has been known for sensationalist propaganda.

        I agree with your other opinions however, corruption should be eradicated, but I can’t deny the fact of what I’m seeing and believe.

    • Shakedog

      You’re smoking crack. To your credit, that is some good stuff.

      • Fabián

        Thanks, you know you did something good when people is against you (I’m serious). I would be worried if my thoughts were more normal.

  • Alex Kontegna

    All these years, we just couldn’t believe our eyes someone deliberately finances that nonsense with the oxymoron-name “private blockchain”. http://ethereumcheques.com/index.html

  • Nice article. Along the lines of the talk I just gave at the Blockchain Summit 2017 here:

    https://youtu.be/Bphz8_Rpm_I

    There is no way R3 can say with a straight face that they did not make their name by saying they were bringing the Blockchain to banking. That is the only reason banks have heard of R3.

  • “We found that government regulation, which is allegedly implemented to provide security for the monetary system, is actually preventing us from implementing a secure monetary system.” FIXED. That’s all you need to say, and many of us had expected such a conclusion for a long time. Government is the problem, not the solution. Blockchain can and should decentralize all governments to restore power to the people. The powers that be won’t let it happen.

  • clixbou

    In private banking networks Flexible Paxos has to be better for high-throughput than proof-of-work.