Tuesday, November 20, 2018

About CULedger

The future of the Distributed Ledger and the credit union industry

Distributed Ledger technology offers a protocol that allows innovation around financial transactions.  This technology is not only here to stay, but also has opened up (democratized) the financial system.

What began as a cryptocurrency exchange may well become the system upon which the future of financial processes are built. Some of the world’s largest banks and financial institutions are forming private distributed ledger networks, and the future of distributed ledger technology is ever more clear.

Though early in terms of technology’s evolution and with a number of challenges still to be addressed, remaining competitive in tomorrow’s financial marketplace will require new methods and protocols based on distributed ledger technology.

The original aim of bitcoin was to be decentralized (i.e., no point of control), and be relatively anonymous. However, not all distributed ledger  ecosystems need to have the same mechanisms, especially if participants can be identified and trusted such as in a private network of known participants.  Further, there are different actors (or functions) in the distributed ledger – such as data storage, validation, distribution–not all blockchains need to be currency based. Therefore, a private distributed ledger  network where core providers participate and manage non-currency essential processes, offers a low-risk entry point for developing a networked distributed ledger among credit unions.

If you would like more information on the distributed ledger , you can register today by filling out the form to the right. Once registered, you will have access to our members area where you can download our distributed ledger  research paper.

CUBlockchain is now CULedger!

Why the change?

It once appeared that "blockchain" would be the universal term for Distributed Ledger Technology (DLT), as it has been used that way for some time. However, "blockchain" is increasingly associated with only one particular type of DLT: permissionless, proof-of-work ledger systems, such as Bitcoin. (In fact, you'll sometimes see references to "the blockchain," as if there were only one. This phrasing refers specifically to the Bitcoin blockchain, and its usage is often intended to further the hope--and the goal--that Bitcoin become the end-all be-all for all things DLT.)

In our view, the most exciting innovation (and most relevant to FI's) is happening in the field of "permissioned" DLT, which is fundamentally different than permissionless/proof-of-work blockchains. R3 CEV's Corda is one shining example of permissioned DLT. Another is Ripple. This paper, written by Tim Swanson, the Director of Market Research at R3, goes into the differences between permissionless and permissioned DLT in great detail.

To be crystal clear: Permissioned DLT, like R3's and Ripple's, is the core technology behind CULedger and Evernym's Sovrin identity platform, not permissionless/proof-of-work like Bitcoin.

So, to avoid conflating our "permissioned" DLT with this more narrow definition of "blockchain," we'll no longer be using the term "blockchain" in our name or in references to our own technology.

It is clear to us (and to R3, Ripple, and many others) that permissioned DLT will be the future for financial institutions, and for digital identity, and we're excited to help Credit Unions take full advantage of the exciting opportunities this technology brings.

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