Coinprism, the blockchain technology company that developed the Open Assets standard “colored coins” that is now used by the likes of NASDAQ and Overstock has released Openchain, an open source distributed ledger targeting financial institutions.
Openchain, unlike bitcoin is based on a central, distributed ledger that will allow any enterprise user, company or an institution to use their own version of the chain. This functionality helps with lowering costs, reducing transaction times and Openchain users can also use the chain to interconnect with each other.
Instead of transactions being validated by anonymous users, as in the case of bitcoin, Openchain offers the required features for an institution to gain full control on transaction validation while maintaining transparency with the ledger.
A press release from Openchain read:
Openchain features a powerful hierarchical account system, hybrid between a file system and a double-entry accounting system. This lets the administrator of an Openchain instance define their business rules (such as AML/KYC) by setting various permissions on accounts, with different levels of granularity.
Openchain takes from bitcoin’s functionality and features by giving the means for the Openchain ledger to be “fully transparent and auditable,” thereby lowering auditing costs as a transparent and verifiable ledger.
Additionally, the open-source distributed ledger also builds upon bitcoin’s features such as security and the irreversibility while ensuring low transaction costs.
Taking Away the Blocks and Faster than the Bitcoin Block Chain
In recognizing the limitations of bitcoin’s networks within environments where millions of regulated transactions are conducted on a daily basis, Openchain negates the need for miners by
chaining transactions directly.
Bitcoin movements are limited to 7 transactions per second with confirmation times taking anywhere from minutes to several hours. In contrast, Openchain facilitates instant confirmations of transactions. The ledger uses a “simplified and trust-based consensus mechanism,” allowing it to processes transactions at a much higher rate than Bitcoin with instant validation for transactions in real-time.
A two-way peg is also possible between Openchain and the bitcoin block chain or other Openchain ledgers, turning it into a federated, efficient and instant sidechain.
“While proof of work is central to building a fully autonomous, decentralized currency such as Bitcoin, it actually becomes a burden when you start tokenizing assets”, said Flavien Charlon, founder and CEO of Coinprism, “with Openchain, we have taken all the key characteristics of a Blockchain like immutability, auditability and programmability, but removed the legacy of proof of work. This allowed us to build an extremely efficient and scalable platform with no compromise”.
The open source ledger is available on GitHub and Coinprism is offering developers and users a test wallet at wallet.openchain.org. Charlon also adds that several enterprises and financial institutions are testing Openchain internally.
Images from Coinprism.