Blockchain Builder Brings Protocol To CryptoCurrency Initiative - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Software // Enterprise Applications
News
8/17/2016
10:05 AM
Connect Directly
Twitter
RSS
E-Mail
50%
50%

Blockchain Builder Brings Protocol To CryptoCurrency Initiative

Chain, a San Francisco blockchain company, has joined the Initiative for CryptoCurrency & Contracts. With its membership, the firm brings a blockchain protocol to the party.

7 Cyber-Security Skills In High Demand
7 Cyber-Security Skills In High Demand
(Click image for larger view and slideshow.)

It may seem like a still distant prospect, but the possibility that your enterprise IT staff will one day need to implement a blockchain financial system -- for example, Bitcoin -- has come a step closer to reality.

A San Francisco company with a protocol for building blockchains, where transactions may be executed between two business partners without resorting to a banking system, has joined an effort to bring computer science and logic to blockchain-style currencies.

The company, Chain, has advanced a protocol for building blockchain networks that it hopes will become an open standard. On Aug. 11, it joined the Initiative for CryptoCurrency & Contracts, a primarily academic research group formed about a year ago.

In addition, Chain has agreed to sponsor a workshop for industry collaborators on blockchain technology in San Francisco in February 2017. Workshop attendance will be by invitation-only, according to the announcement of Chain's joining the initiative.

(Image: skodonnell/iStockphoto)

(Image: skodonnell/iStockphoto)

The group has only a few private enterprise members, although one of them is IBM. IBM opened a Bluemix Garage in New York with the goal of attracting developers interested in producing next-generation, blockchain-based financial systems.

The other company that is part of the initiative is Digital Assets Holdings, which has produced a modeling language that describes financial assets for use in blockchains.

The Initiative for CryptoCurrency & Contracts, or IC3, was formed with leading computer science institutions behind it. These universities include Cornell University, UC Berkeley, University of Illinois at Champaign-Urbana, the University of Maryland, and Technion in New York.

All are seeking to apply the rules of science to building blockchains.

The initiative gained $3 million in funding from the National Science Foundation on July 29, 2015, which was enough to allow academic work to get underway. Researchers at Cornell and the University of Maryland have already produced a joint blockchain system known as Hawk.

"Decentralized cryptocurrencies such as Bitcoin and altcoins have rapidly gained popularity, and are often quoted as a glimpse into our future," according to a research paper entitled: "Hawk: The Blockchain Model of Cryptography and Privacy-Preserving Smart Contracts."

"Blockchains allow parties mutually unbeknownst to transact securely without a centrally trusted intermediary, ... avoiding high legal and transactional cost," the researchers wrote.

Emin Gun Sirer, co-director of IC3 and an associate professor of computer science at Cornell, wrote of Chain joining the organization:

We are delighted to have Chain join IC3 as a sponsor member. The Chain team shares our vision of ubiquitous blockchain-based networks that are fast, scalable, confidential and secure.

A blockchain is a form of distributed database that is composed of blocks of transaction data and rules governing the use of the data. Each block is time-stamped and encrypted.

In effect, the blocks overlap, with a block on one node that archives part of the chain containing a link to a predecessor block. The distributed nature of the chain makes it extremely difficult to disrupt, even if an intruder succeeds in getting into one computer on the chain. Chains can be rebuilt, even if a block is lost.

Blockchains are also considered a possible future format for contracts.

"Smart contracts are user-defined programs that specify rules governing transactions, and that are enforced by a network of peers," according to a paper by University of Maryland researchers. "In comparison with traditional financial contracts, smart contracts carry the promise of low legal and transaction costs and can lower the bar of entry for users."

[Want to learn more about the origins of blockchain? Read Bitcoin, Security Concerns Drive Blockchain Technology Adoption.]

If they carry a great cost advantage, blockchain transactions and contracts will find traction among early adopters as a way for companies to do business with each other without intermediaries, including the traditional banking system.

That's what blockchain's advocates believe will happen.

However, even though the technology is past its early experimentation stage, it still must be fleshed out with supporting parts -- including the languages with which applications could be built and the methods it would use to guarantee compliance with regulations governing financial transactions.

Despite the obstacles, the money and research behind blockchain technologies keep lining up behind the prediction that they will one day be a mainstream approach.

Charles Babcock is an editor-at-large for InformationWeek and author of Management Strategies for the Cloud Revolution, a McGraw-Hill book. He is the former editor-in-chief of Digital News, former software editor of Computerworld and former technology editor of Interactive ... View Full Bio

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
News
Think Like a Chief Innovation Officer and Get Work Done
Joao-Pierre S. Ruth, Senior Writer,  10/13/2020
Slideshows
10 Trends Accelerating Edge Computing
Cynthia Harvey, Freelance Journalist, InformationWeek,  10/8/2020
News
Northwestern Mutual CIO: Riding Out the Pandemic
Jessica Davis, Senior Editor, Enterprise Apps,  10/7/2020
White Papers
Register for InformationWeek Newsletters
Video
Current Issue
[Special Report] Edge Computing: An IT Platform for the New Enterprise
Edge computing is poised to make a major splash within the next generation of corporate IT architectures. Here's what you need to know!
Slideshows
Flash Poll