R3 Corda’s statement that “blockchain is not needed” is surprising. Is the private chain reaching a dead end?

Throughout 2016, there was a lot of hype surrounding the R3 banking blockchain consortium. With the backing of some of the world’s largest banks, the future of private blockchains looked surefire. However, a fascinating slide from R3 Corda told a different story. In fact, R3 did not use any blockchain because they “did not need one.” This rather unusual statement has now raised a lot of questions.

Many people are questioning the feasibility of the R3 Corda project. Private blockchains have been controversial in the cryptocurrency enthusiast community. In most cases, private chains cannot provide immutability because they are controlled by a centralized entity. This makes the entire concept of private chains a bit strange, as participating institutions can easily use traditional SQL databases instead of such private chain databases.

One of the attractions of blockchain is that it can speed up transactions. For some reason, the R3 blockchain consortium feels that they don’t need a blockchain at all. This is a very controversial statement to say the least. The bigger question is what technology their Corda is using if not a distributed ledger. For many, R3’s admission is proof that Corda never used blockchain technology in the first place.

Corda is a huge waste of money

One Twitter user believes that private blockchains are even worse than SQL databases. Even non-developers agree with this. If there is no guarantee that the recorded data is tamper-proof, then there is no point in using a distributed ledger. None of these private blockchain projects use the proof of work mechanism, which is necessary to ensure that the records are safe from harm and tampering.

Considering the hundreds of millions of dollars that R3 has raised, it seems like a complete waste of money. It’s unclear what the money was originally spent on, but it certainly wasn’t blockchain technology. For a blockchain-oriented project to claim that it “doesn’t need” blockchain is ridiculous. It’s unclear what R3 will do next. The entire project may end up being a waste of time and energy.

Interestingly, this news bodes well for Bitcoin and blockchain technology in general. It proves that imitating the Bitcoin ecosystem is not feasible. This is not unexpected, however, some institutions may continue to experiment with private blockchains. Corda is being developed on the Java Virtual Machine, which is three steps backwards. It is a shame to waste so much money knowing from the beginning that it will not work.