Countdown to Corda Open Source

R3 will soon be open-sourcing Corda. Here’s what to expect.

As I confirmed a few months back, R3’s Corda platform will be open-sourced, under the Apache 2 licence, on November 30.

Corda is a distributed ledger platform designed and built from the ground up for the recording and automation of legal agreements between identifiable parties. It is heavily influenced by the requirements of the financial industry but we believe the community will find the underlying architecture will lend itself to a broad range of applications.

We’ve built Corda because we see requirements – especially in finance – that need a distributed ledger but which cannot be met by existing platforms.

  • Corda is the only Distributed Ledger platform designed by the world’s largest financial institutions to manage legal agreements on an automatable and enforceable basis.
  • Corda only shares data with those with a need to view or validate it; there is no global broadcasting of data across the network.
  • Corda is the only Distributed Ledger platform to support multiple consensus providers employing different consensus algorithms on the same network, enabling compliance with local regulations.
  • Corda is designed to provide a great developer experience and to make integration and interoperability easy: query the ledger with SQL, join to external databases, perform bulk imports, and code contracts in a range of modern, standard languages.

We designed it with the members of R3, the world’s largest financial services DLT consortium, but we think its applicability is far broader.  You can find out more in our introductory whitepaper and my blog post on why we’re building Corda and what makes it different. If you prefer videos, here’s a short interview I did with Simon Taylor of 11:FS that explains the thought process behind Corda.

What we’ll release on November 30 is pretty much the full codebase as it exists today and we will be improving it actively and openly from then on. In fact, the only code we’ve held back pertains to laboratory projects we’re working on with our members and work on our own commercial business products that will run on top of Corda.

So do take a look around when the code is released: there’s a lot in there that is still work-in-progress and not yet integrated. For example, you’ll find a fascinating approach to writing financial contracts in the experimental branch and ongoing work on our deterministic sandbox for the JVM.   We will, of course, also be developing a commercial version of Corda for those who need specific enterprise features and support, but the open source codebase is the foundation of everything we do.

This is a really important point: distributed ledger technologies will have such phenomenally powerful network effects that it is unthinkable that serious institutions would deploy base-layer ledger software that is anything other than fully and wholeheartedly open. And it’s why we’ve been committed all along to releasing Corda just as soon as we were sure it was heading in the right direction.  It is and so we are.

We will also be publishing a draft of our technical whitepaper.  This whitepaper outlines our roadmap to version 1.0 of Corda and production-readiness.

What to expect on November 30

We’re really proud of Corda and its progress to date. But, that said, Corda is far from finished. Mike Hearn will soon be publishing a “warts and all” description of quite how much work we still have to do. This is true for all other platforms in this space, of course, but I feel a particular responsibility to be transparent given the ambitions we have for Corda and the uses to which it will be put.

By way of example, perhaps a good way to help you figure out what we still have to do is to look at some items on the list of work we’ve set for the months ahead of us:

  • Functional completeness: Corda still has gaps in its functional capabilities. The technical whitepaper outlines the full vision and you’ll see us working on and merging a lot of functional enhancements in the coming months to implement the full vision in the paper.
  • Non-functional characteristics: We focused first on design and then on implementation of Corda’s core functionality. The work to ensure we meet our non-functional requirements, such as performance, is still ahead of us but we have a clear roadmap and have designed the platform with these needs firmly in mind.
  • Security hardening: There are lots of areas where we need to tighten up security. Much of this we know about and we have called it out in the code or associated docs. But there will, of course, be others. So just as you shouldn’t be using other enterprise DLT platforms in production just yet, please don’t download Corda and put it straight into production just yet either!
  • API Stability: Corda’s development is iterative and organic – and it is heavily influenced by the range of projects and applications to which our members are choosing to put it. As we learn about common patterns and discover assumptions that prove to be wrong, we adapt. In particular, this means that we do not commit to API stability or backwards-compatibility until version 1.0.  Expect parts of the implementation to change in the coming months, perhaps quite significantly!

But these things are transient: we know how to fix them and we’ll knock the issues off one-by-one in the coming months as we head towards version 1.0.  But we want you to be fully aware of them.

Why are we open-sourcing Corda now?

We had a vigorous internal debate about when was the right time to release Corda: wait until it was more mature, when we were confident we’d ironed out the bugs and made it fly?  Or wait only until the design roadmap was clear and then share it immediately with the world for comment, criticism, contribution and collaboration?

We’ve wholeheartedly chosen the latter path: to release early and to work openly.

We’re serious about inviting the community to critique, collaborate and contribute. To take one example, our friends at Digital Asset recently published an excellent paper describing a set of requirements for what they call a “Global Synchronisation Log” (GSL), encouraging those in the community to incorporate these requirements into their platforms. We think that Corda’s vision is extremely well aligned to the GSL concept and by open-sourcing our work whilst there is still time to tweak our design it means we maximise the opportunities for firms such as ours to collaborate.

But open-sourcing Corda when it is still fairly young is not without its risks!  In fact, I’m a little apprehensive. I’m a completer-finisher and I obsess over every detail. So the idea of releasing something before it’s perfect makes me feel uncomfortable.  You will find gaps, issues, problems. But that’s fine: please do share what you find.  Even better, submit a fix…!

In fact, I also have a hope that some of those who come to critique will find that they nonetheless like much of what they see, and may even join the community.

What happens next?

I performed a thought experiment a while back… I asked: what will the enterprise distributed ledger world look like when everything settles down in a few years? How many independent enterprise DLT platforms will the world need and which ones will they be?

My conclusion was that there will probably be at most three such platforms, each carefully designed and adapted for a specific set of requirements. They will all be fully open source. And they will be surrounded by thriving, inclusive communities.

And we firmly intend to ensure Corda is one of them.

Our open-source release next week is a key step on that journey.

How to get Corda on November 30

Corda’s home will be

Head over to on November 30 for links to the codebase, simple sample applications and a tutorial to get started writing your own CorDapps.



R3 Corda: What makes it different

As reported by Reuters last week, Corda, the Distributed Ledger platform we’ve been working hard on at R3 for the last year at will be open sourced on November 30.

What is it? Why are we building it? What happens next?

Corda is a distributed ledger platform designed and built from the ground up for the recording and automation of legal agreements between identifiable parties. It is heavily influenced by the requirements of the financial industry but we believe the community will find the underlying architecture will lend itself to a broad range of applications.

Corda is quite unlike any other Distributed Ledger platform that currently exists. So we’ll be releasing lots of information in the coming weeks and months. To understand why it looks the way it does, I thought I’d share the journey we went on to build it.  In subsequent articles, the team and I will share more detail about how it works and what to look for when it’s released on November 30.

But first, some history.

The very first decision made by the Steering Committee of the R3 consortium was to establish our Architecture Working Group, which I chair.  This group consists of hundreds of senior architects, technologists and developers, many with decades of experience in a dazzling array of areas, from across our membership over over seventy financial institutions.

We were given a simple-sounding mission:

“To establish the architecture for an open, enterprise-grade, shared platform for the immutable recording of financial events and execution of logic”.

There is quite a lot packed into that sentence..!  Let’s look at just two parts:

  • “Open”
    • I stated publicly in April that we would open-source Corda and I was serious. Our mandate, from our member banks, was that whatever base platforms we selected, built or adopted had to be open. We’re delivering on this commitment with the open-sourcing of Corda on November 30.
  • “Immutable recording of financial events and execution of business logic”
    • Notice what this doesn’t say. It doesn’t say “blockchain”.  Heck: it doesn’t even say “distributed ledger”!    Instead, it tries to get to the heart of what we think is the essence of this exciting new field.  And that’s what I want to talk about in this blog post.

We don’t like solutions looking for problems

I wanted us to be precise about what this field is all about.  After all, and as I wrote when we first announced Corda, Satoshi Nakamoto didn’t wake up one morning thinking: “I really need a blockchain!”.  No: he started with a well-defined business problem and engineered a solution to solve that problem.  And if you need a system of censorship-resistant digital cash, then Satoshi’s design – Bitcoin – is the elegant solution and it’s available today.

And that’s why Ethereum, to take another example, looks so different to Bitcoin.  Vitalik Buterin and his colleagues started with a different business problem, which I characterise as “I want an unstoppable world computer that can execute business logic and move value autonomously” and guess what? They ended up with a very different design!  Now sure:  there are many similarities between Bitcoin and Ethereum but also a lot of differences.

I was determined that we would not fall into the trap of taking technologies designed to solve completely different problems and blindly apply them to banking.  That way lies madness.

So we drove two key pieces of work: 1) characterising exactly what is new about this field and 2) identifying precisely where in finance it may have most applicability.

And the answer, as I outlined back in April, is that there is something genuinely new in this space and it’s something that is massively relevant to the financial system.

The definition I think best captures this is as follows:

“Distributed ledgers – or decentralised databases – are systems that enable parties who don’t fully trust each other to form and maintain consensus about the existence, status and evolution of a set of shared facts”

Let’s first test that this definition works for existing public systems:

Bitcoin: the participants don’t know each other’s identities and come to consensus about how many bitcoins there are, which addresses own them and what needs to happen for any of them to be spent without having to trust each other.  Check!

Ethereum: the participants don’t know each other’s identities and come to consensus about the state of a virtual computer.  Check!

In those systems’ cases, they achieve these outcomes in ways with which we’re both familiar and which address requirements related to the environment in which those systems are expected to run.

But how about finance… parties who don’t fully trust each other but whom need to be in consensus about a set of shared facts?

Where do we have that problem?

Erm… how about everywhere..?!!

It’s perhaps only a slight exaggeration to suggest that the financial industry is pretty much defined by the web of contracts that exists between its participants:  I deposit money with a bank? There’s a contract there that says the bank owes me that money.  You and I enter into a Credit Default Swap? There’s a contract there that describes our mutual rights and obligations.  And they’re recorded and managed in multiple places, on different systems, managed by different firms and it costs a fortune to keep them all in sync.

The shared facts in finance are the existence and state of financial agreements – ie contracts.

And the need for consensus is what amounts to the twenty-first century’s “paperwork crisis”: the tens of billions of dollars spent annually maintaining and managing the duplicated records that each firm maintain about the same deals.  The same information about a deal is recorded multiple times across these parties and in situations where a centralised solution can’t be deployed, which is in lots of places, small armies are required to ensure that these disparate records agree with each other, get updated correctly and in synchrony – and deal with the issues when they don’t.

A ha!  So now we have something phenomenally exciting: a new technology for establishing and maintaining consensus between parties who don’t trust each other.  And a multi-billion dollar business problem crying out for this solution!

There’s only one minor problem…

Public systems like Bitcoin were not designed to solve these problems. They’re excellent at what they do; but we’re doing something else.

And you only need to take a cursory look at the architecture of various public blockchain systems to see why this might be the case.  My business problem amounts to ensuring the Bank of Alice and Bank of Bob agree about a trade they just did and that it settles automatically and correctly.   A solution which not only shares this confidential data with every other bank in the world but which also requires them to process the deal and maybe even validate it doesn’t meet my needs. And yet… that’s how every single public platform back in 2015 worked.

Perhaps those architectures can be heavily re-engineered to solve such problems, as some groups are attempting but it’s not an obvious starting point, especially when you then layer on all the other requirements we identified.

So there’s a problem: Bitcoin and its successors taught us that a new way of building distributed systems was possible: one where mutually distrusting parties can maintain a shared database.  We identified a hitherto unsolved problem in finance. And yet the technology that existed simply wasn’t designed for this.


Coding, not talking

The reality is that finding fault is easy; proposing workable solutions is altogether harder.   So simply going out and shouting about how 2015’s platforms didn’t solve our problems was hardly a way to make friends.  No.  We needed to do better than that.

So once we had decided we needed to prototype the alternate approach we had identified, we made a critical decision to buttress my leadership team of James Carlyle and Ian Grigg:  we brought in Mike Hearn.

And he drove the prototyping effort to explore these concepts in the only way that gives you certainty that it can be done: by proving it in code.  As Mike enjoys reminding me: when it comes to core concepts, talk is cheap; at some point, the talking has to give way to coding.


Early results were promising: the reductive, bottom-up approach we took to architecture and design, which is explored in our introductory whitepaper and on which we’ll elaborate in the coming weeks, was solid: we could model a diverse range of instruments; the design would allow for significant parallel processing; we did not need to send all data to all participants in all scenarios; the use of a mainstream virtual machine and its libraries led to high developer productivity; we were able to support multiple consensus providers on a single network; the use of a flat, point-to-point queue-based, peer-to-peer network mapped well to real business scenarios; and more.

We worked with our members to test the maturing codebase in a variety of contexts: interfacing Ricardian Contracts and Smart Contracts in the context of an Interest Rate Swap with Barclays and others; managing trade finance flows; and more.

And this focus on validated client requirements and a willingness to question some hitherto sacred beliefs (we have no blocks! we have no miners! we don’t put ephemeral data in the consensus layer! we allow per-transaction specification of consensus providers!) led to a unique design.

Had Corda ended up being a minor variation on an existing platform or a me-too copy of something else, what would have been the point in pursuing the work?  But that isn’t what happened: we ended up with something quite distinct, something we believe is singularly well-suited to a wider variety of financial-services use-cases and something  adapted to the practical reality that the industry is regulated and some rules simply aren’t going to change overnight.

So that’s the backstory. Our large – and growing – technology team still has a large amount of work to do.  But now is the time to share our work with the broader community and encourage people – including in other industries – to use it for their own applications as it matures (it’s still a young codebase), to contribute to Corda itself, and to contribute to the architectural debate.

We’re looking forward to November 30. This is an exciting time!

Corda: An Introduction

Announcing the Corda Introductory Whitepaper

The Wall Street Journal had a couple of good pieces this morning that describe some of the work we’re doing at R3 and our vision for the future of financial services.

Project Concord is our codename for the overall vision, with Corda as our underlying distributed ledger software.

I first wrote about Corda back in April and we demonstrated it in public for the first time a few weeks later.  Since then, we’ve been continuing to develop the code base in collaboration with our members, trialling it through an ongoing series of proofs-of-concept, prototypes and more advanced deployments, refining the design and maturing our thinking.

As part of this process, we wanted to share more information with the broader community about what we’re doing.  I’m pleased to announce the release of our first whitepaper on Corda: an introductory, non-technical overview that explains our vision, some design choices and outlines the key concepts underpinning the platform.  We’ll follow this up in the coming months with a more detailed technical whitepaper.

whitepaperThe whitepaper, which you can download here, explains how we set ourselves the challenge of starting with the financial industry’s pain points: duplicated, inconsistent data and business logic and redundant business processes – and asked ourselves if we could apply breakthroughs in distributed ledger and blockchain technology to solve them.

Our conclusion is that distributed ledger and blockchain technology represents a once-in-a-generation opportunity to transform the economics of data management across the financial industry. But there’s a problem because the blockchain and distributed ledger platforms that led us to this exciting moment were never designed to solve the problems of financial institutions and do not meet all our needs: we need tight linkage to the legal domain; we have an obligation to prevent client data being shared inappropriately and so can’t send all transactions to all network participants; we must integrate and interoperate with existing financial infrastructure; and more.

Corda is the outcome of the analysis we did on how to achieve as many of the benefits of distributed ledger and blockchain technology as possible but in a way that is sympathetic to and addresses the needs of regulated financial institutions. Corda is intended to be a contribution to the plurality of technologies that will be adopted in the coming years, one that is targeted specifically and with a laser-focus on the needs of financial institutions.

I hope you find the whitepaper interesting and illuminating and we would love to hear your feedback.



Introducing R3 Corda™: A Distributed Ledger Designed for Financial Services

UPDATE: The Corda introductory whitepaper is now available! And this blog post gives more context.

As reported in Bloomberg this morning, I’m delighted to confirm that R3 and our member banks are working on a distributed ledger platform for financial services: Corda™. I explain it on our official R3 blog and reproduce it here.

For the last six months, my team and contributors from our membership have been building a distributed ledger platform prototype from the ground up, specifically designed to manage financial agreements between regulated financial institutions. I am massively excited by the progress our team, led by James Carlyle, our Chief Engineer, and Mike Hearn, our Lead Platform Engineer, are making and I think the time is right to share some details.

Corda: A Distributed Ledger for Recording and Managing Financial Agreements

Corda is a distributed ledger platform designed from the ground up to record, manage and synchronise financial agreements between regulated financial institutions. It is heavily inspired by and captures the benefits of blockchain systems, without the design choices that make blockchains inappropriate for many banking scenarios.

Corda’s key features include:

  • Corda has no unnecessary global sharing of data: only those parties with a legitimate need to know can see the data within an agreement
  • Corda choreographs workflow between firms without a central controller
  • Corda achieves consensus between firms at the level of individual deals, not the level of the system
  • Corda’s design directly enables regulatory and supervisory observer nodes
  • Corda transactions are validated by parties to the transaction rather than a broader pool of unrelated validators
  • Corda supports a variety of consensus mechanisms
  • Corda records an explicit link between human-language legal prose documents and smart contract code
  • Corda is built on industry-standard tools
  • Corda has no native cryptocurrency

Corda’s design is the result of detailed analysis and prototyping with our members and will be open sourced when the code has matured further.

In the remainder of this post, I want to share some insight into our thinking.  Why are we building Corda?  Why have we made some of the design decisions we have?  When will the code be ready for others to examine and build upon? How does this relate to other platforms and projects?

A thought experiment

When I joined R3 from IBM in September 2015, I forced myself to stop and think.  The blockchain bandwagon was running at full speed, I’d just been appointed CTO of a project intended to bring blockchains to finance but there was a nagging worry at the back of my mind…  how could I avoid falling into the trap of believing all the hype?!

I imagined myself sitting in front of the CIO of one of our member banks some time in the future.  I imagined we had naively selected a “blockchain for finance” based on what was popular at the time and widely deployed a range of products and services on top of it. And I imagined we had believed the hype, had suspended our critical faculties and had omitted any engineering.  In this imagined scenario, I now found myself facing an angry CIO, who wanted to know why the system I had built had just failed calamitously. Why on earth did I build it the way I did?!

I concluded that an entirely inappropriate answer to that question would be: “because blockchains were cool in 2015”!  No. That simply won’t do.

The reality is that solutions based on selecting the design first and then trying to apply it to arbitrary problems never work out well.  Every successful project I’ve worked on started with the requirements, not some cool piece of technology, and I was determined to bring that discipline into our work at R3.

Remind me again why a system designed to replace banks is also supposedly their saviour?

And there is a second reason for this caution: the technology and finance industries collectively “decided” some time in early 2015 that “blockchain technology” was somehow the future of financial services.

Indeed, I am one of the most active proponents of precisely that claim. But the reason for blockchain technology’s importance is extremely subtle – and this subtlety is something that most people seem to have missed.

To understand this, we need to look at Bitcoin.

Bitcoin’s architecture, as I have often written, is a marvel.  Its interlocking components are one of those rare examples of something so elegant that they seem obvious in hindsight, yet which required a rare genius to create.

But what is often missed is that the cleverest part of Bitcoin isn’t actually its architecture; I think the cleverest part was to articulate the business problem.  We don’t tend to think of Bitcoin as being the solution to a “business problem” but it can perhaps be thought of as a wonderfully neat solution to the problem of: “how do I create a system where nobody can stop me spending my own money?”   Now, I can’t claim to know the mind of Satoshi and he certainly didn’t write the whitepaper in this way but it triggers a very useful thought-experiment.

In fact, once you write this ‘business problem’ down, the design drops out almost trivially!  (Almost…) You want always to be able to spend your own money? Then you can’t have a central point of control.  It could be shut down by the authorities.  You can’t even have a collection of validators with known identities as they could also be shut down with concerted effort.  Very quickly you realise you need a massively replicated consensus system and, if you don’t want to tie actions to real-world identities, you need something like Proof of Work to make the voting work.  You work the logic through and pretty much the whole design (the blockchain, the need for mining, block rewards, maybe even the UTXO transaction model, etc., etc.) drops out.  Of course, it does push a lot of work onto the users: confiscation of somebody’s bitcoins is easy if you know their private key… but let’s leave that to one side for now.

And this way of looking at it is important because it highlights how Bitcoin’s blockchain can be thought of as the solution to a business problem.    Satoshi Nakamoto didn’t wake up one morning wanting to “apply Blockchain to finance”.  Blockchain was the tool that was invented to solve a real problem.

So we have a conundrum, right?  If that’s the case, then what on earth is the argument that says blockchain has any relevance at all to banking?!

Indeed, last time I checked, banks have the inverse of my Bitcoin problem statement!

What is the defining characteristic of blockchain systems?

So I spent most of October sitting in a dark room (really! This was our first London office… a tiny four-person room in a shared working space in the City of London) questioning some of the most fundamental assumptions about blockchains.  What is it exactly that makes them interesting to banks?

Most people had already made the mental leap that the “bitcoin package” was unacceptable as a take-it-or-leave-it deal: proof of work is unnecessary for private deployments, for example.  But, as I looked around, all I could see was firms who had accepted everything else…  It seemed strange to me that, as an industry, we could tease apart one part of the “blockchain bundle” but then stop there.

I spent several of my earlier, formative years at IBM in a role called “technical sales”.  If you’ve ever bought technology from a large IT vendor, you’ll have met somebody like me.  We’re the people who visit clients with the sales rep and act as the technical expert: we explain how the product works, make sure we’re proposing the right solution to the client and ensure there is no technical barrier to closing the deal.

A lesson I learned very early in that role was: it doesn’t matter how hard you wish or how many client meetings you schedule or how aggressive the sales rep gets, if you can’t show how your solution is going to solve the client’s business problem then the deal almost certainly won’t close.  And those that do are the ones you’ll live to regret…

Fast forward a decade, and as I surveyed the blockchain landscape in October 2015, all I could see was excitable (and vocal!) firms touting solutions that made very little sense to me for the kinds of problems I was trying to solve.  I will confess to many moments of self-doubt:  maybe they were all sane and I was the mad one..?!

But I ploughed on: even if they are right that a “take it or leave it” blockchain design is the saviour of the financial industry, I’ll be doing our members a favour if I could explain why.

So we started picking away at what can perhaps be called the “blockchain bundle”:  the collection of services that blockchains provide to those who use them.

We concluded that a blockchain such as the ones underlying Bitcoin or Ethereum or any of the private variations actually provide at least five interlocking, but distinct, services.  And the right approach is to treat them as a menu from which to select and customise… different combinations, in different flavours, for different business problems.


The first, and most important, feature of blockchains – and the thing that is probably genuinely new in terms of scale and scope – is that they create a world where parties to a shared fact know that the fact they see is the same as the fact that other stakeholders see:

“I see what you see… and I know that what I see is what you see”

And, critically:

“I know that you know that I know”! 


“I know that you know that I know that you know…”

And so on…

And it makes this promise across the Internet between mutually untrusting parties.  Sure: consensus systems and replicated state machines have existed for years but consensus systems at Internet scale, between untrusting actors, that work in the face of powerful adversaries? That’s a step forward.

In Bitcoin, the shared facts are things like: “What are all the bitcoin (outputs) that have not yet been spent and what needs to happen for them to be validly spent?”.  And the facts are shared between all full node users.

In Ethereum, the shared fact is the state of an abstract virtual computer.

But notice something interesting: there isn’t some law of nature that says the set of people who have to be in consensus is the whole world.  Bitcoin just happens to work that way because of its unique business problem.   If you don’t have Bitcoin’s business problem then be very wary of those trying to sell you something that looks like a Bitcoin solution.


The second feature in the “blockchain bundle” is validity. Tightly linked to consensus, this feature is the one that allows us to know whether a given proposed update to the system is valid. It is how we define the rules of the game.  What does a valid “fact” look like in the system?  What does a valid update to that fact look like?


The third feature in the blockchain bundle is its “uniqueness service”.   I can quite easily create two perfectly valid updates to a shared fact but if they conflict with each other then we need everybody who cares about that fact to know which, if either, of those updates we should select as the one we all agree on.  The “anti-double-spend” feature of blockchains gives us precisely this service and it’s hugely important.


The fourth feature in the “Blockchain Bundle” is often, if misleadingly, termed “immutability”: data, once committed, cannot be changed.

This isn’t quite true: if I have a piece of data then of course I can change it.  What we actually mean is that: once committed, nobody else will accept a transaction from me if it tries to build on a modified version of some data that has already been accepted by other stakeholders.

Blockchains achieve this by having transactions commit to the outputs of previous transactions and have blocks commit to the content of previous blocks.  Each new step can only be valid if it really does build upon an unchangeable body of previous activity.


The final critical feature in the “Blockchain Bundle” is authentication: every action in the system is almost always associated with a private key; there is no concept of a “master key” or “administrator password” that gives God-like powers.   This is quite different to traditional enterprise systems where these super-user accounts are prevalent and petrifying from a security perspective.

So what is the financial services business problem?

So why did I take us through this analysis?  Because it gets us to the heart of the distributed ledger domain: the thing that is genuinely new is the emergence of platforms, shared across the Internet between mutually distrusting actors, that allow them to reach consensus about the existence and evolution of facts shared between them.

So if that’s what this is all about, then what are the “shared facts” that matter in finance? What business problem would we need to have for any of this work to be of any use at all?

And this is the light bulb moment and the fundamental insight driving the entire Corda project:

The important “shared facts” between financial institutions are financial agreements:

  • Bank A and Bank B agree that Bank A owes 1M USD to Bank B, repayable via RTGS on demand.
  • This is a cash demand deposit
  • Bank A and Bank B agree that they are parties to a Credit Default Swap with the following characteristics
  • This is a derivative contract
  • Bank A and Bank B agree that Bank A is obliged to deliver 1000 units of BigCo Common Stock to Bank B in three days’ time in exchange for a cash payment of 150k USD
  • This is a delivery-versus-payment agreement
  •  … and so on…

The financial industry is pretty much defined by the agreements that exist between its firms and these firms share a common problem:  the agreement is typically recorded by both parties, in different systems and very large amounts of cost are caused by the need to fix things when these different systems end up believing different things. Multiple research firms have postulated that tens of billions of dollars are spent each year on this problem.

In particular, these systems typically communicate by exchanging messages: I send an update to you and just hope you reach the same conclusion about the new state of the agreement that I did.  It’s why we have to spend so much money on reconciliation to check that we did indeed reach the same conclusions and more money again to deal with all the problems we uncover.

Now imagine we had a system for recording and managing financial agreements that was shared across firms, that recorded the agreement consistently and identically, that was visible to the appropriate regulators and which was built on industry-standard tools, with a focus on interoperability and incremental deployment and which didn’t leak confidential information to third parties.  A system where one firm could look at its set of agreements with a counterpart and know for sure that:

“What I see is what you see and we both know that we see the same thing and we both know that this is what has been reported to the regulator”

That’s Corda.

How does Corda choose from the “Blockchain Bundle” Menu?

So now we understand the financial services requirement, we can look again at the “Blockchain Bundle” menu from above and outline the choices we’ve made.


A critical piece of the Corda philosophy is that our problem is to ensure that “I know that you see the same details about a shared fact that I see”.

But this does not mean that a third party down the road also needs to see it: our consensus occurs between parties to deals, not between all participants.


Furthermore, in Corda, the only people who need to be in agreement about a fact are the stakeholders to that fact:  if you and I agree about something that pertains only to us then why should we care what some completely unrelated third party thinks?  And why would we even think of sending them a copy so they could opine on it? So, in Corda, we let users write their validation logic in time-tested industry-standard tools and we define who needs to be in agreement on a transaction’s validity on a contract-by-contract basis.


Just like every other distributed ledger out there, we need to be sure that two valid, but conflicting, transactions cannot both be simultaneously active in the system.  But we also recognise that different scenarios require different tradeoffs. So Corda’s design allows for a range of “uniqueness service” implementations, one of which is a “traditional blockchain”. But it doesn’t need to be and, for our purposes, we also need implementations that make different tradeoffs under Brewer’s CAP theorem: in particular, some financial services use-cases need to prioritise consistency at the expense of availability in the event of a network partition.


Here, Corda’s design departs very little from existing systems: our data structures are immutable and our building block is the exchange of digitally-signed transactions.

So Corda is very traditional in some respects – we directly apply the “authentication”, “immutability” and “uniqueness service” features of blockchains but we depart radically when it comes to the scope of “consensus” (parties to individual deals rather than all participants) and “validation” (the legitimate stakeholders to a deal rather than the whole universe or some arbitrary set of ‘validators’).

How is Corda Different?

Hang on?  Isn’t this the same pitch that every other blockchain firm is making? Not quite.

Notice some of the key things:  firstly, we are not building a blockchain.   Unlike other designs in this space, our starting point is individual agreements between firms (“state objects”, governed by “contract code” and associated “legal prose”).  We reject the notion that all data should be copied to all participants, even if it is encrypted.

Secondly, our focus is on agreements: the need to link to legal prose is considered from the start. We know there will still always be some disputes and we should specify right up front how they will be resolved.

Thirdly, we take into the account the reality of managing financial agreements; we need more than just a consensus system. We need to make it easy to write business logic and integrate with existing code; we need to focus on interoperability. And we need to support the choreography between firms as they build up their agreements.

Different Solutions for Different Problems

But… we should be clear.  We are not viewing Corda as a solution to all problems.  This model is extremely powerful for some use-cases but likely to be less well suited to others.  It’s why we continue to engage extremely deeply with all our partners who are working on complementary platforms in this space; we are not omniscient.  Moreover, there are still many significant design and research questions we have to resolve: there is still a great deal of work to do.

Furthermore, I have been deeply impressed by the quality engineering embodied in the many platforms that have passed through our labs and you will continue to hear about projects we are delivering on platforms other than Corda: different solutions for different problems is our mantra.  Indeed, those who have attended panels or workshops in recent months will have heard me saying this for some time now.

Corda does not seek to compete with or overlap with what other firms are doing:  indeed, we are building it because no other platform out there seeks to solve the problems we’re addressing.  That’s what makes this space so endlessly exciting.

What next?

In the coming weeks and months, you’ll hear more about Corda, about our initial projects and about its design.  We will also be gearing up to release the core platform as open source, possibly as a contribution to other endeavours.  Watch this space.

And… we’re still hiring: there is a great deal of work still to do!