In race to bring blockchain to financial markets, developers embrace open-source
01 June 2017 | 19518 views | 1
We may be living in an era of data breaches and hacking scandals but more than half of financial markets participants working on blockchain see open-source as the best model for the technology.
Among technologists, support is even stronger at 61%, shows the Greenwich Associates survey of 402 people working on DLT in banks, brokers, tech firms and exchanges.
"The goal of many of these new technology companies is to replace the existing global financial market infrastructure with distributed ledger technology," says Richard Johnson, VP, market structure and technology, Greenwich Associates.
"This is a monumental task and as such, support for open-source technology reflects an understanding that transitioning to this new technology can only be achieved by having the widest possible community of developers working on the codebase."
While there is enthusiasm for open-source, there is also a recognition of the risks, with 46% of respondents concerned about damaging bugs being introduced into the system and 47% worried about being hacked through vulnerabilities inserted into code.
To tackle concerns, 58% see hardware security modules (already in use in retail banking and in payment transactions, such as those processed through the Swift network) that provide strong authentication and encryption as an important element. More than half also see multi-signature technology a valuable tool for adding security to DLT.
And, 81% see permissioned blockchains as inherently more secure than public blockchains. "In the end, a blockchain-enabled financial market will likely consist of a core plumbing of market infrastructure developed by the open-source community, operating beneath proprietary applications that provide a higher level of security," says Johnson.