R3: There can be only one

there-can-be-only-oneThere’s a lot of talk about applications for Blockchain 2.0, a vague term that includes a host of ideas of things people can do with Bitcoin technology. Cryptocurrency consortium organizer R3 published Watermarked tokens and pseudonymity on the public blockchain, a discussion of why assets held in separate, blockchain-like structures (Blockchain 2.0) cannot achieve security and validity like the singular blockchain in which its clients are invested.

Despite the irreverence of the Highlander reference, the author Tim Swanson is correct, at least for the R3 group of banks. The point of the big financial blockchain is perfect knowledge and seamless execution. A singular blockchain opens up possibilities that fragmentation of assets does not, like cross-collateralizaton of blockchain assets and the ability to tag assets subject to claim similar to a lien or a notice of lis pendens. If the assets are all held in one blockchain “jurisdiction” they are all subject to the same rules, so summary justice can be dispensed. Once we fragment assets into sidechains, due diligence means establishing rules for the relationship between the different sidechains, creating complexity, delay and expense. Some might find those complications desirable, but for building a decentralized, unified, virtual financial system for establishment players, the image is a sphere that’s all center and no circumference, not bubbles in a tub.



Leave a Reply

Your email address will not be published.