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R3 launches Corda Network with nonprofit Corda Network Foundation as governor

Posted: 17 January 2019 12:34 pm
blockchain technology small

The Corda regime is stepping out into the world.

  • The Corda Network has been launched under the Corda Network Foundation nonprofit.
  • The foundation will be democratically elected by participants. Like all solutions, it's imperfect in its own ways.
  • It remains to be seen how reliable the governance mechanisms are regarded as being.

R3 has launched its blockchain, the Corda Network, according to an R3 press release. The new blockchain will be governed by the purpose-built Corda Network Foundation, a nonprofit created to reign over the network.

The Corda Network Foundation's board will be comprised of directors drawn from participants on the network who will be elected by members of the Corda Network. The press release assures that the board's decision making will be transparent and available to all network members.

Let the backroom shenanigans commence

"The governance system is inherent to the success of Corda Network. Involving many customers and esteemed partners illustrates the quality of the overall governance design and we are extremely proud having been invited to the Trust Root Ceremony at R3 headquarters," explained Manuel Sevilla, chief digital officer at Capgemini business services, a Corda participant.

Of course, once you start looking for "esteemed" partners you need someone to subjectively decide which partners are and aren't "esteemed".

"The launch of Corda Network is a wonderful signal for the entire Corda community and CorDapp developers that they will be able to bring their application to a truly open platform, supported by a non-biased operator," agreed Frederic Dalibard of Natixis, also a Corda participant.

Of course, Corda Network Foundation board members will be drawn exclusively from those who have express interests in the Corda network as a participant. It might be, almost by definition, unable to be entirely non-biased. It's almost guaranteed that all Corda Network Foundation board members will have goals beyond the strictest bounds of their role as a board member. A draft of the Corda Network Foundation constitution suggests only 11 directors, and also suggests that the foundation's "transparency" will be limited mostly to publishing approved discussion minutes. The discussions themselves will still be behind closed doors.

A cynic might reasonably assume that the primary purpose of the Corda Network Foundation will be to maximise the profits of a relatively small group of participants. While the constitution aims to ensure that foundation board members are drawn from a diverse range of industries, are of a diverse range of geographies and share few common goals outside the sanctity of the Corda network itself, it's easier said than done.

Corda certainly falls short of the level of decentralisation, censorship-resistance and immutability envisioned by public blockchains, but that's not necessarily a bad thing. True immutability is scary and potentially quite dangerous, and is in some ways incompatible with the objectives of a large business which needs to be able to comply with the regulatory requests.

On the other hand, it means the foundation might eventually find itself as the arbiter of questions with no answers, and that it's still a distinct entity which can be targeted from outside. Should the Corda Network foundation let itself be swayed by threats and lawsuits? Is it in the best interests of the network to comply with threats, or to push back against them? What if one foundation member starts insider trading on the information they find out during the meetings, or gives a competitive advantage to their buddies by sharing key information before it's publicly known?

And there's also a reason to expect that this type of governance structure naturally limits the size and importance of the applications which can be built on Corda.

For example, Thailand is experimenting with a prototype national digital currency on the R3 blockchain. But it will likely never be a good idea to hand control over something like an entire national currency to an organisation which will be changing unpredictably and uncontrollable over time. At the same time, the most ambitious world-spanning projects might find themselves steering clear of something as potentially unpredictable as Corda.

But at least the Corda democratic oligarchy might be more useful than EOS' pseudo-democracy, and it might still go a long way towards solving the current need for a "ground level" blockchain fabric to underpin a wide range of applications.

Disclosure: At the time of writing the author holds ETH

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