In past issues, we’ve talked a bit about the impact of blockchain technologies (the technology underlying cryptocurrencies) on the world of movies, songs, and art… essentially revolutionizing how artists and other creators brand themselves, share and distribute their work, and get paid. But what we haven’t talked much about is how these same technologies (called enterprise blockchain when used in business cases) are transforming business.
So, let’s shift gears a bit… let’s have a look at one enterprise blockchain already prolific in the business world (and growing by leaps and bounds), and how this technology is playing into the development and launch of central bank digital currencies (CBDCs). Specifically, we’ll be having a look at the Hyperledger Foundation and the foundation’s pivotal Hyperledger (also known as the Hyperledger Project).
Beyond The Ledger
The Hyperledger Foundation is an open-source software project for business-oriented, enterprise blockchain projects that was set up by the Linux Foundation in 2015. It hosts multiple enterprise-grade blockchain software projects on the scale of Ethereum and Corda (an enterprise level, open-source blockchain project). The foundation is a key contributor to open-source development of blockchain applications, or technology that is developed on purpose to be freely used, modified, and distributed by anyone.
Upon launch, the foundation’s key goal was to create something that enterprises could build and scale easily upon. To facilitate this, they created Hyperledger, a global enterprise blockchain project that offers a framework, standards, guidelines, and tools needed to build open source blockchains and applications for use across industries. To date, Hyperledger has over 200 members from industries across the world, including healthcare, manufacturing, financial services, and technology.
Hyperledger allows organizations to deploy open-source platforms, create permissioned blockchain networks, individually granted user permissions to join the network, and then allow the execution of only certain authorized actions. This process is part of what makes Hyperledger fantastic for business use cases, it has an extra layer of control built in. This means the network has higher levels of privacy, speed, customization capabilities, and security.
As an example of the powerful capabilities of the technology, a key contributor to Hyperledger’s code base found that the application of blockchain to an in-house procurement solution allowed for the addition and management of 20% more contract cases, and over 1,200 person-hours per month savings is project costs. Yes… per month. Now, imagine this replicated and scaled across the globe, across markets. It boggles the mind to consider.
These capabilities allow for some pretty amazing stuff, like traceability along supply chains, truly paperless operations, democratized blockchains, and something called “devote less time”… called that because the time that is freed up allows for more business to be done, more efficiently, with less resources. All these attributes and capabilities are what make Hyperledger a fantastic solution for the build out and launch of CBDCs.
How CBDCs Play In
Do you remember when debit cards first became a thing? We do… and we remember the hubbub surrounding the newfangled “cashless money”. We remember how some balked at the idea of checking out and then putting a piece of plastic in another piece of plastic instead of counting out their hard-earned money with their own two hands. This is much like that… just as debit cards and Apple Pay are commonplace to our children, CBDCs will be common to our grandchildren, if not our children.
Hyperledger will help make this a reality… as Hyperledger Executive Director Daniela Barbosa aptly put it during a recent interview at the World Economic Forum in Davos, “CBDCs are the next natural evolution.” As far as Barbosa is concerned, digital and crypto currencies are now part of the financial club. She further stated that, in the few years she’s been attending the WEF, the presence of crypto has only increased… and that we should embrace, not resist CBDCs. We couldn’t agree more.
The Hyperledger Foundation has teamed up with The Digital Dollar Project and the Fintech Open Source Foundation (FINOS) to drive open development and collaboration for CBDCs. The Digital Dollar Project is a nonprofit created to encourage research and public discussion on a possible U.S. CBDC, while FINOS is also a nonprofit aimed at accelerating collaboration and innovation in financial services through open-source software, standards, and best practices.
These organizations understand the potential transformative power of CBDCs… they will essentially connect governments, people, businesses, and organizations in communities of all sizes around the globe. Together, they are experimenting, collaborating, and testing CBDCs in a controlled environment in preparation for actual launches in the wild. This same experimentation and research alone, on private blockchains, would vacuum up incalculable resources, and would leave room for mistakes and an absolute wasting of lessons learned.
This is necessary. For a truly global network of CBDCs to function, we must collaborate from the jump. By virtue of the technology, it requires an end to isolationist thought and secretive competition and the fostering of collaboration and cooperation for the good of all… is it a pipe dream? Maybe. Is it a pipe dream we seem to be working to attempt? It’s looking that way. Come back next week, we’ll keep covering what you need to know in the crypto space to keep up with its seemingly breakneck speed of development.