In race to bring blockchain to financial markets, developers embrace open-source

In race to bring blockchain to financial markets, developers embrace open-source

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.

Comments: (1)

John Candido
John Candido - Black Cabs - Melbourne 02 June, 2017, 03:54Be the first to give this comment the thumbs up 0 likes

What about transitioning towards the international use of the DLT through two phases? Firstly, using open source to initially set this technology up along with the use of hardware security modules that are used through the Swift Network as a preventative measure against hacking or the nefarious introduction of any infections or malware.

When this was bedded down, work could commence with the final development and transition to DLT version 2.0 that is not based on an open source format. This would engender a greater level of safety and surety, with fewer possibilities for security breaches and software infections, alongside the dedicated use of compatible, multi-signature hardware technology employing strong authentication and encryption, that interfaces with DLT 2.0.    

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