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The Weekend Read: April 9

1. Introducing

Many thanks to The Swanny for filling in for me last week. Its great to be back, as I have the pleasure to recap two pretty awesome announcements. On Tuesday, our CTO Richard Brown returned to the blogging world to announce Corda, a distributed ledger designed for, and with, financial institutions:

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.

Just reading a few pull quotes wont do the post justice, so I urge you to read it in full. I particularly liked this passage on Bitcoin as an odd architectural choice for financial institutions:

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?”
[Yet] 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!

Matt Leising at Bloomberg also has a great overview of the Corda approach in this article.

The announcement was followed up with Richard's participation in Money 2020 Europe, where his R3 panel was SRO.

On Monday, Microsoft CEO Satya Nadella used the first ever Envision event to announce an R3 - Microsoft partnership (see other coverage: WSJ, Bloomberg). We have been working closely with the Microsoft Azure team since the start of the year. The combo of Microsoft technology horsepower with the undeterred energy of the Azure team has been a massive help in launching our Global Collaborative Lab (thanks Marley!). Microsoft's EVP of Business Development, Peggy Johnson, also commented on the partnership:

Navigating the changing digital landscape can be daunting. Success demands a trusted and collaborative network of partners – particularly in a highly regulated industry with billions of dollars and sensitive financial data at play. We’re proud that organizations like R3 trust Microsoft as a partner to build the financial technology systems of the future. With next–generation technologies like blockchain poised to disrupt the way we do business in nearly every industry, we’re committed to continue earning the trust of business leaders and their customers around the world.
Change is never easy, but with partnerships built on trust, together we can change the idea of “disruption” from a threat to an opportunity – one that will empower us all to achieve more.

2. Blockchain Announcements

Our friends at Intel announced late this week the open sourcing of their blockchain approach, dubbed Sawtooth Lake, which was also one of the five protocols tested across 40 banks in our February Lab project. Intel has provided comprehensive documentation here if folks want to dive in. Their aim is to provide "a highly modular platform for building, deploying and running distributed ledgers," with an emphasis on unlocking the power of a Trusted Execution Environment.

IBM announced this week that they are in the midst of getting their Watson AI's chocolate into some blockchain peanut butter via an early prototyping exercise. If they manage to get some unstructured Big Data in there they will have hit the rather elusive Disruption Trifecta. And another win for the Axoni/TradeBlock team with the announcement of their CDS trial with Markit, DTCC and 4 banks.

3. Fintech etc.

The NY Times Dealbook posted a special section on Fintech this week, called "Fintech's Power Grab." It highlights that the sudden focus on all things fintech by the very institutions targeted as the 'disruptees' may signal a turning point, with the upstarts being consumed by the big guys. It also has some cool profiles and stories, including one on Chris Larsen at Ripple.

And in a different "tradition unlike any other" yet a tradition nonetheless, the long awaited decentralized marketplace OpenBazaar went live earlier this week...and within hours started to build up quite the inventory.