Home / Industry / Infotech /  Blockchain group grows by 10 members as technology takes off

The Hyperledger Project, a group creating an open-source communications standard for financial firms wanting to use blockchain to speed up their services, has added 10 more members, including CME Group Inc., the operator of the world’s biggest futures exchange.

ABM Amro, Red Hat Inc. and Symbiont have also joined, according to a statement on Tuesday from the Linux Foundation, which advocates open-source software and is hosting the project. The consortium said in December that it counted IBM, Wells Fargo & Co., Cisco Systems Inc., Intel Corp. and London Stock Exchange Group Plc among its members.

The development shows how blockchain—the ledger technology that makes bitcoin possible—is rapidly gaining support on Wall Street and in Silicon Valley. In the world of finance, the technology offers the prospect of dramatically speeding up the often lengthy process of shifting assets to buyers from sellers.

The Hyperledger Project is growing as blockchain gets its first tangible applications in financial markets. Last month, Digital Asset Holdings, the blockchain startup run by former JPMorgan Chase & Co. executive Blythe Masters, won a contract to link every participant on the Australian Stock Exchange to allow real-time movement of assets (DAH is already part of the Hyperledger group.) R3, a blockchain startup backed by 42 banks, successfully simulated trades of digital assets on a private network made up of 11 of its members.

The Hyperledger Project got 3,000 inquiries in the first few hours after the initial announcement on 17 December, according to Jim Zemlin, the executive director of the Linux Foundation.

“This project is stunning to me in that it has all the open-source attributes akin to the Linux kernel," he said in a phone interview. The Linux kernel is the ubiquitous code that allows software to talk to computer hardware so that everything from Android phones to smart TVs and Amazon’s cloud service work. “This project has more critical mass at an earlier stage for open source than I’ve ever seen," he added.

To successfully overhaul how finance or other industries operate, networks such as the one being developed by the Hyperledger Project are needed. The group aims to create a public network that lets blockchain applications communicate with each other. The other new members are Blockchain, Calastone, ConsenSys, NEC, NTT Data and Guardtime, according to the statement. IBM said previously it will contribute tens of thousands of lines of existing code to the project, as well as dedicated developers and intellectual property.

Digital-ledger technologies have captivated Wall Street executives because they offer a way to process virtually any kind of trade or money transfer in minutes rather than days. That vastly reduces the amount of capital that must be set aside until trades are settled.

Still, the new technology faces obstacles to success. Fierce competitors will need to collaborate. Regulatory hurdles could kill or significantly slow progress. And although cross- border payment networks may save banks money, they could also drain revenue from other parts of their business. Another challenge is integrating new technology into existing systems.

Some detractors have said distributed ledgers are nothing new, they are only databases that have been around for decades. While Zemlin said there was some truth to that, what the Hyperledger Project and others are talking about today is new.

“Come on," he said. “These are cryptographically secure, this is a different approach to this than in the database space in the past," he said.

This year marks the 25th anniversary of Linus Torvalds’s announcement that he was developing Linux. It took him 10 years to sell the project to the world before “he became a rock star," Zemlin said. Compared with that, developments in distributed ledgers are moving lightning quick, he said.

“This technology in terms of establishing trust relationships across the Internet is applicable across more that financial services," Zemlin said.

“The amount of inbound interest on this project is tremendous." Bloomberg

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