Any product launch which has a tagline “The Exponential Power of Connection” would, of course, catch our research eye. The Canton Network is the platform behind this bold “exponential” marketing message:
“A new partnership between financial giants, tech behemoths, media monsters, and leaders in digitization just announced plans to launch what they call Canton. What is Canton?… The Canton Network says it is “the industry’s first privacy-enabled interoperable blockchain network designed for institutional assets and built to responsibly unlock the potential of synchronized financial markets.” The announcement describes the Canton Network as building toward being an interoperable blockchain with privacy features designed for the institutional asset management industry. It aims to allow “previously siloed” financial assets to synchronize, making it possible to interconnect diverse financial markets.
Canton participants include 3Homes, ASX, BNP Paribas, Broadridge, Capgemini, Cboe Global Markets, Cumberland, Deloitte, Deutsche Börse Group, Digital Asset, The Digital Dollar Project, DRW, Eleox, EquiLend, FinClear, Gambyl, Goldman Sachs, IntellectEU, Liberty City Ventures, Microsoft, Moody’s, Paxos, Right Pedal LendOS, S&P Global, SBI Digital Asset Holdings, Umbrage, Versana, VERT Capital, Xpansiv, and Zinnia. (1)
How and if The Canton Network has an impact and thrives over the long run is all we are able to track. As the analysts mention in the video above, it represents a reformulation of blockchain in the space – after other organizations tried to put in a stake in the ground early in the financial services sector (only to suffer new market creation and first mover woes). The Canton Network is attempting to do it “right” this time. We will keep you posted on how they fare.
For now: The analysis of the Canton Network found here is the first in our series of best-in-class blockchain technology case studies in the financial sector. We include the aforementioned white paper, which describes the Canton Network as “a smart contract network of networks that overcomes these limitations and enables each application provider to define their application’s privacy, scaling, permissions, and governance while being part of broader decentralized and permissionless public networks.”
Of the industry sectors exploring Blockchain technologies the Financial Services sector (Banking & Capital Markets, Insurance, Investment Management – including Real Estate and Digital Assets/NFTs) seems to have the most activity-based simply on the sheer volume of projects. According to analysts and industry research, interest and investments in blockchain remain strongest in the financial sector. (2) It makes sense, as crypto disintermediates money, so too blockchain technology will reshape financial services not much unlike the way the Internet reshaped media.
Blockchain-based Innovative communities of practice, along with bottom-up, open-source development, and exponential innovation will transform the financial services sector. And like the trajectory from Real Media codec servers pushing 320×200 encoder crunched video in the 1990s, to the billions of minutes of high-resolution long-form and short-form video viewed daily on YouTube and TikTok, respectively, the way the blockchain-based financial sectors ecosystem will look in the next 20 years is anyone’s guess.
What we do know is that current projects reveal that traditional institutions and enterprise-level platforms and solutions will be incumbent players – as the list of participants in Canton validates. The Canton Network addresses why “smart contract blockchain networks have not achieved meaningful adoption among financial institutions and other enterprises because of three significant shortfalls:
- The lack of privacy and control over data: other chains have shortcomings around privacy that prevent the use of the technology by multiple regulated participants on the same network. There are currently no other blockchains that can offer data protection or control at any layer of its network.
- Other blockchains have had to accept trade-offs between control and interoperability: other chains require operators to forfeit their full control of applications by using a shared pool of validators to gain interoperability.
- The inability to scale: with applications competing for global network resources and the inherent capacity limitations caused by how public blockchains operate, achieving the scale and performance financial institutions need remains challenging.
The Canton Network expects to remove these obstacles by balancing the decentralization of a network with the privacy and controls needed to operate within a sound regulatory environment. The network expects to raise the bar on safety and soundness in blockchain financial interactions by enabling network users to safeguard permissions, exposure, and interactions across Canton, to comply with security, regulatory and legal requirements.” (1)
The white paper describing the smart contract application developed for the project points out other limitations: “The current smart contract networks suffer two constraints that significantly limit meaningful adoption by traditional financial institutions and other enterprises:
- They require every application to inherit the governance properties and the fully transparent privacy model of the underlying network; and
- Applications compete for transaction throughput. (2)
Digital Asset Will Start Global Blockchain Network With Deloitte, Goldman Sachs, and Others
Other participants of the network include BNP Paribas, Cboe Global Markets and Microsoft.
As reported by Coindesk:
- Financial technology company Digital Asset will start a privacy-enabled interoperable blockchain network designed to provide a decentralized infrastructure for institutional clients, the firm announced on Tuesday.
- The Canton Network is a powerful answer to industry calls for a solution that harnesses the potential of blockchain while preserving fundamental privacy requirements for institutional finance,” Chris Zuehlke, partner at DRW and global head of Cumberland.
- “This unique approach, coupled with the ability to execute an atomic transaction across multiple smart contracts, is the building block needed to bring these workflows on chain” said another participant in the project.
- The network connects applications built with Daml, Digital Asset’s smart-contract language, allowing various systems in financial markets to interoperate and synchronize.
- “Such solutions are a key building block for future digital and distributed financial market infrastructures,” Jens Hachmeister, head of Issuer services and new digital markets at Deutsche Börse Group said.
- While Digital Asset provides and owns the technology behind the infrastructure, the Daml smart contracts, and the Canton protocol which enables the applications, it does not own the network itself. Applications on the network are owned and managed by individual application operators. (2)
Canton Network: A Network of Networks for Smart Contract Applications
Several smart contract blockchain networks exist, but they all impose problematic constraints on assets and applications built on top of them. Specifically, on these networks:
(1) all assets and applications share all data permanently and publicly with all users;
(2) interaction with assets and applications is all-or-nothing; application operators cannot easily control how different users interact with their applications; and
(3) applications compete for global network resources; application operators cannot independently scale or choose which infrastructure to deploy. Furthermore, fees are interconnected and unpredictable, with increased usage in one application raising costs for all users.
In contrast, most of the world’s assets are heterogeneous and are governed by unique rules for how users and businesses transact with them. Operators of applications that interact with these assets need control over the privacy, scale, service availability, and infrastructure cost of their applications. As such, the limitations of existing blockchain networks prevent the onboarding of the bulk of the world’s assets and processes into an interconnected network, reducing public blockchains’ ability to build substantial network effects outside of crypto-native assets.
The Internet as Contrast
For illustration purposes, we contrast existing public blockchain networks with the most successful public network, the Internet.
- The Internet is a heterogeneous network hosting independently operated applications; e.g., Wikipedia is fully public and coexists with gated banking portals on the same public Internet.
- High-volume, low-value services co-exist on the same network as low-volume, high-value services.
- Each application provider has the sovereignty to control its application’s unique permissions, fees, scale, service levels, and more.
- The Internet has unlimited horizontal scalability and grows with each application contributed to the network. As a service’s traffic increases, the application provider adds resources; the growth of one service does not reduce the resources available to others. The heterogeneity of the applications found on the Internet helped it reach billions of users. Some users want to go to Wikipedia, and some want to access their banking portal; both go to the same place – the same Internet.
The lack of support for application heterogeneity in public blockchains has led to two significant negative outcomes:
- First, due to these networks’ privacy limitations, only assets and data which can be part of the permanent public record are brought into public blockchains; we see experimentation with cryptocurrencies and non-fungible tokens (NFTs), but we don’t see enterprises and governments bring traditional assets and records to public blockchains; and
- Second, to overcome the contention on shared global resources, the bulk of application logic for blockchain applications is built ‘off-chain’ under the control of centralized application providers, meaning key functionality is operated off the shared network, negating the independent verifiability users expect of public blockchains.
Limitations of Existing Blockchain Networks
Concretely, in Ethereum, and similar smart-contract networks:
(1) data is fully transparent to anyone who can connect to the ledger;
(2) there are strict, vertical limits on transaction capacity on layer 1;
(3) layer 2s, rollups, and similar scaling channels lack transactional composability; and
(4) issuers of assets forfeit control of that asset to a pool of pseudonymous validators. From a regulatory perspective, the data transparency and loss of control over assets make these networks unsuitable for use by financial institutions.
When smart contract applications hit transaction throughput limits, the results are catastrophic for the network and providers of smart contract applications on the network. For example, in 2017, Axiom Zen launched the wildly successful application CryptoKitties on the Ethereum network, exceeding 12% of all network transactions and causing massive network congestion.
As a result, other applications on Ethereum at this time experienced very high fees and latencies. Following this, the company behind Axiom Zen built and commercialized a new blockchain, moving away from the network upon which it built its success, and fragmenting the market. The scaling limitations of existing blockchains are not inherent to the synchronization of application data and state; we propose a design that avoids these limitations. Existing public blockchains force all applications through a single ordering service, even where this isn’t necessary. But this bottleneck is not required; for example, the order of text messages in one messaging application should be independent of the order of a social network feed of another application. These two applications should have independent ordering mechanisms for their state. Likewise, a network of smart-contract applications should allow for a similar localization of transaction ordering. However, ordering across these applications must also be possible, as necessary, to be an interoperable smart contract network. That requires a shared protocol to synchronize transactions composed across multiple applications. Current attempts to allow independent scaling with synchronization across applications, typically known as layer 2 protocols, rollups, and cross-chain bridges add significant complexity and security problems, as evidenced by numerous recent hacks [E.g., Ronin ($615m), Binance ($570m), Wormhole ($320m), Nomad ($200m].
In contrast, the Canton Network enables applications across multiple subnets to natively interoperate between them without requiring a layer 2 protocol or asset bridge.
In this paper, we introduce the Canton Network, a network of networks for smart contract applications with heterogeneity and scalability properties similar to the Internet, giving application providers control over their applications. Like existing blockchain networks, the Canton Network provides real-time synchronization of sensitive data across participants. It has the privacy of a private blockchain on a public network; applications on the Canton Network see a single public ledger. The Canton Network has an expressive smart contract language called Daml, which has programmable privacy built into every asset or piece of data. The Canton protocol allows each application to scale independently, increasing availability and keeping fees low.
Thus, the Canton Network fills a major gap in the public ledger space: it has smart contracts on a single virtual ledger, similar to Ethereum, Solana, Tezos, and many more, and it has built-in privacy with selective transparency, similar to the bitcoin lightning network and Zcash. As of early 2023, financial institutions transact over $50 billion daily on limited-access subnets of the Canton Network. (2)
Canton Network participants will begin testing interoperability capabilities across a range of applications and use cases in July, followed by the “opening of the Canton Network to public use with the launch of a virtual Canton Service Provider (vCSP) operated by a Super Validator Collective (SVC). Permissioned Canton networks currently in production will be subnets of the open Canton Network, making the Canton Network the first public blockchain for institutional assets.”
The network will become publicly available with the launch of a permissionless sync domain operated by a vCSP that will accept all incoming connection requests from participant nodes. A group of independent companies called the Super Validator Collective (SVC) will run this public sync domain. The SVC will charge a fee for network bandwidth consumption. Fees are fixed per unit of bandwidth and denominated in United States dollars; thus, network users have predictable network usage costs. The SVC may revise these fees occasionally. Use of the SVC public sync domain is optional; any network participant may choose to launch additional public or private sync domains with different payment mechanisms and fee structures. (2)
Open Source And API Development Opportunities
The OODA Network’s experience over the last 40 years in cybersecurity and the commercialization of the internet validates that The Canton Network’s underlying technologies – Daml’s data model, the Daml mart-contract language, and the Canton protocol – are the real story here. While The Canton Network traction and adoption rate may be uncertain, experience shows that if the tools are robust enough, a community of practice will emerge and take the data model, smart contract language, and Canton protocol in bold and unanticipated directions – which may prove a robust marketplace in and of themselves over time.
It is worth taking a look at these technologies now:
Daml is an open-source 6 smart-contract language and framework designed to make it easy to develop, operate, and maintain multi-party applications in a way that preserves privacy and data consistency. Daml is an enterprise-grade, open-source smart contract language for building multi-party distributed applications on a safe, privacy-aware runtime.
- Daml provides concepts to capture rules that govern real-world business transactions. This helps programmers focus on business logic only while avoiding common security pitfalls (e.g., Reentrancy bugs in Ethereum’s smart-contract language, Solidity).
- Daml allows specifying access and authorization policies within the smart contract code, making it easy to keep them in sync. Data is confidential by default, and access policies are easily defined so that the smart contract programmer can understand and maintain them effortlessly.
- Daml supports application interoperability by enabling the composition of workflows into more complex ones, including when the workflows are already deployed across different applications on different networks. A party can unilaterally extend functionality by composing existing workflows into more complex ones. This ability for any party to extend functionality fosters organic growth of ledger usage and helps manage complexity. Daml enables the composition of workflows across a network of applications while maintaining the confidentiality and authorization requirements of each application.
- Daml supports interoperability with other systems through integration tooling, including auto-generation of bindings for common programming languages, bridges to other blockchains, and common standard and domain-specific libraries
Daml defines a contract as a codified agreement on a workflow between multiple parties on the network; these parties are called contract signatories. In addition, other parties may observe the contract; these are called contract observers. A party can be an individual entity signing with a private key or a consortium signing with a flexible multi-signature confirmation policy; as such, assets can be issued, and contracts can be signed by central parties or consortiums.
Daml enables parties to exchange value (in the form of smart contracts) in a way that is unique among currently available technologies. A smart contract update is nothing more than an authorized and validated update to entries on a ledger. The fundamental challenge when trying to accomplish this update without a trusted, central intermediary is ensuring that the ledger entries reflecting the smart contracts are accurate and can be proven to a third party. A common approach to address this challenge is to decentralize the ledger among the parties on the network by requiring every party to hold and update a copy of the ledger for the entire network. A consensus mechanism is used to ensure accurate replication of the ledger to all parties. But this leads to networks devoid of privacy with hard caps on scalability.
As discussed in the Transactions section, Daml’s ledger data model takes a different approach to address these privacy and scalability challenges. In Daml’s ledger model, the ledger is not fully replicated among the parties; it is segmented according to privacy rules, and each party stores only its view, or shard, of the ledger. As a result, there is no ledger view common to all parties in the network. Instead, there is a ledger for each party that includes only the contracts of that party. As a result, instead of one ledger that all of the parties in the network must replicate, each party to a transaction updates its ledger to reflect that transaction. However, this creates a problem: if the record of smart contracts is spread across many ledgers, each visible to a certain party, then it would be difficult for any party on the network to know whether their smart contract is accurate.
Daml solves this problem by ensuring that each party’s view is a subset of a single global, virtual ledger. In other words, conceptually, all parties of Daml ledgers perceive a single ledger while each party has read-access only to a subset of this ledger’s state. This global ledger is virtual in the sense that it does not exist in any one data store. Since, conceptually, all users are reading from the same ledger, all users have a consistent view of any application state they share, for example, ownership of assets. The Canton protocol, described below, is the mechanism that ensures that the views of all properly functioning nodes in the network are consistent subsets of a single valid, global, virtual ledger. All of this is done while ensuring that no party sees or stores information to which it is not a party. As a result, parties can transfer digital assets with the confidence that the party transferring the digital asset actually owns that asset while also being certain that no other party on the network will know of the transfer unless such party is explicitly permitted to do so. Daml’s fully decentralized and party-centric ledger model enables decentralization in one additional way – rather than being structured as a single network, Daml enables users to create.
The Canton Protocol
Canton is an open-source 15 privacy-enabled blockchain protocol. Canton implements Daml’s ledger model as described above. Canton currently supports the Daml language, though it can support any language with a similar hierarchical sub-transaction privacy model. (2) Key features of the Canton protocol include:
Global composability: Different Daml applications can interoperate using the Canton protocol. Digital assets and workflows can move between participant nodes and be recorded in multiple ledgers.
Privacy and GDPR compliance: The Canton protocol supports sub-transaction privacy, meaning that parties can only see the part of a transaction that specifically applies to them. It is built around the principle of data minimization and enables adhering to the right to be forgotten regulations.
Integrity: The Canton protocol ensures your ledger is always in a valid state, and a corrupted state never occurs—even in the presence of malicious actors.
Horizontal scalability: The Canton protocol has no upper bound on how many transactions per second it can process. It can be scaled to achieve any transaction processing speed.
Elements of the Canton Protocol
Parties In Canton: Parties can create, or participate in, distributed workflows written in Daml. A party can be a legal entity, a physical person, or just one of many accounts for a person/entity.
Participant nodes: Parties register with one or more participant nodes. Nodes can host multiple parties and facilitate party access to the ledger.
Sync domains: Every participant node can connect to any number of other participant nodes using the Canton protocol. These connections are managed by synchronization domains, aka sync domains. Sync domains route messages among a set of participant nodes, provide a consistent transaction order for those nodes, and confirm transaction commits on those nodes. A sync domain can be implemented in different ways, depending on trust requirements. If a highly trusted operator exists the sync domain can be implemented in a centralized way. Sync domains can also be implemented in a decentralized deployment to reduce trust requirements for its operators. All transaction data transferred between participant nodes is end-to-end encrypted and only selectively shared with other participant nodes, on a strict need-to-know basis. The sync domains, therefore, do not learn the transaction contents. Also, the Canton protocol guarantees the integrity of ledgers across participant nodes, even in the presence of malicious participants.
The Virtual Global Ledger
Participant nodes can at any point choose to connect to multiple domains and transfer workflows between those domains.
Therefore, domains do not impose hard boundaries, and participant nodes effectively participate in a virtual global ledger, which is composed of all participant nodes, linked via multiple sync domains.
The virtual global ledger is the underlying concept and does not exist physically, but is the result of the Canton protocol’s integrity, privacy, auditability and transparency guarantees.
Segregated Private Sync Domains
While all sync domains are conceptually part of the virtual global ledger, they can also be operated by private entities, and limit connections by participant nodes. No outsider will know that a private sync domain even exists. Nevertheless, participants are not locked into their decision, as they can always connect and transfer their smart contracts to other domains and still benefit from the integrity, transparency and privacy guarantees of the virtual global ledger.
The Canton protocol also supports the option to create public sync domains on the Canton Network which can act as a generally available infrastructure for linking participant nodes and forming distributed ledgers on demand. (3)
The Disruption and Disintermediation of the Financial Services Sector
Customer Development, Business Model Generation, and Value Proposition Design
Following are some examples of interesting business models and value propositions for blockchain in the financial services sector:
1. Digital identity management based on the blockchain is used to create a secure and decentralized digital identity management system that can help reduce fraud and identity theft in the financial sector.
2. Smart contracts: Blockchain technology can be used to create smart contracts that can automate the execution of financial transactions and reduce the need for intermediaries (i.e. the Canton Network).
3. Blockchain-based Cross-border payments can be used to create a more efficient and cost-effective cross-border payment system that can help reduce the cost of remittances.
4. Supply chain blockchain-based finance will create a more efficient and transparent supply chain finance system that can help reduce the cost of financing for small and medium-sized enterprises.
5. Asset tokenization: Blockchain technology can be used to create digital tokens that represent real-world assets such as stocks, bonds, and real estate. This can help increase liquidity in the financial markets and make it easier for investors to invest in these assets.
Sebastian Higgs, Chief Strategy Officer at Fraction (a hybrid cloud security engine enabling institutions to define and control how they work with digital assets) hits the nail on the head:
- After reading the white paper, which purports to have solved the issues of web3, it’s clear that it is not aiming to deliver on the promises of Web3 technology but rather right-size it for today’s world – a different problem domain requiring a different solution.
- In this game the incumbents are good at what is classically termed sustaining technology, something that improves the performance of established products and value chains for the needs of mainstream customers in major markets that are well-defined – Canton Network fits the description, potentially moving tech along this curve as “next-gen”.
- Conversely, disruptive technology brings to market a very different value prop to what was previously available, new entrants tend to be good at this game e.g. Ethereum.
- For disruptive tech there are a lot of unknowns however the relevant performance attributes are by definition different from the long-standing value network, and early adoption/commercialization is seen in emerging markets or insignificant markets (revenue-wise) – Ethereum fits the description.
- Mainstream customers of Big Co. don’t want, and indeed can’t use, products based on disruptive technologies; and small markets don’t solve the growth needs of shareholders in large existing companies.
- However, over time, disruptive tech in small markets can become fully performance competitive to the mainstream market with established products.
- While the white paper described the future of one curve: “private blockchain on a public network…no competition for block space or shared resources” it didn’t talk about how the tail risk of disruptive technology may evolve.
- It correctly identified that Ethereum’s main net has struggled to scale and its transparency-by-design doesn’t meet the needs of data privacy and governance. However, the next step function on this technology curve is the advancement of Zero-knowledge Proofs (ZKP) closing in on two things
- Making privacy widely available (like the SSL certificate did for the internet); and
- Aggregating large blocks of transactions to produce a single succinct proof of computational integrity that is published to the Ethereum mainnet.
This improvement in design allows for a leap forward in the progression of cheap computation, like GPU for graphics ZKP, will be a vital cog. From a use case and investment standpoint, this is a dramatic advancement that would allow engineers to innovate and build more complicated programs requiring a backend of cryptographic provability and minimizing of trust assumptions to a degree that was not previously possible.
In this extrapolation of different value networks, we see how Canton is more of a specific implementation for a specific problem, whereas Ethereum is more of a general implementation for a generalized problem set that may one day break into the mainstream market to be the backbone for a variety of applications, bringing forth a new value network. That is the bet of disruption – and it’s all or nothing. (5)
Disruption of the Financial Services Sector
Blockchain technology will disrupt the financial services sector by making banking services seamless, transparent, and more secure for customers, while also reducing fraud, cybercrime, and the cost of transactions while also increasing efficiency. Blockchain technology will also help banks and other financial institutions to improve their compliance with regulations. It will also help banks to improve their customer service by providing faster and more efficient services.
The Central Blockchain Council of America breaks it all down:
“As per a statistic published by the Static Research Department, the United States was the world’s leading country for financial institutions investing in Blockchain companies. The United States recorded 52 investments in 2019 by financial institutions in blockchain companies that operate in the financial service sector. Japan came in second place with six investments. The banking industry is poised to be disrupted by blockchain technology in many ways. Here are some examples:
- Lower Payment Costs: Technological innovations have enabled more people to work online and even receive payments for work-from-home jobs through smartphones or computers. The cost of sending payments will drop dramatically if banks adopt blockchain technology. This will eliminate third-party verification requirements during bank transfer transactions. It will also reduce the processing time for payments and eliminate the additional fees that banks charge. Bitcoin and Ethereum, for example, can be settled in 30 minutes to a few hours compared to bank transfers which can take up to three days.
- Direct Clearance and Settlement of Transactions: Traditional banks use SWIFT to transfer money between two people. Intermediaries process the actual cash. Processing SWIFT payments take approximately 30 minutes, assuming both parties approve the transaction. The transaction will be rejected if the banks involved fail to reconcile their ledgers on time. Blockchain technology allows transactions to be cleared and settled instantly. Banks can track and keep decentralized ledgers in their public network instead of relying on custodial services and correspondent banks; this is possible because of blockchain technology. Goldman Sachs estimates that banks will save $6 billion annually in settlement fees and associated costs by adopting blockchain technology.
- Reduced Security Exchange Fees: Before the transaction is completed, brokers, central security depositories, banks, and clearinghouses are responsible for purchasing and selling securities on the current financial markets. It is time-consuming, inaccurate, and vulnerable to deception because it goes through multiple parties during an exchange. Blockchain technology will help eliminate intermediaries and brokers present during the transfer of stocks and assets, saving $17 to $24 billion in processing costs. In addition, clients can quickly and easily transfer their assets and securities using blockchain technology. Large banks adopt blockchain technology like JP Morgan and CitiBank, custodians for assets worth more than $15 trillion.
- Blockchain in International Payments: It may take several days for a payment to be processed using your bank account. International payments can be expensive because of the high transaction costs. Blockchain finance is a new technology that allows central and commercial banks around the globe to use it to process payments and possibly issue their digital currency. Cross-border payments made using traditional technologies are slower and more costly than a bank blockchain. Blockchains are global ledgers, which aren’t constrained by borders. They don’t require middlemen. Whether the transaction involves a local or cross-border transaction, the slowest blockchains can complete it in 15 minutes while the fastest one can do it in seconds.
- Blockchain in Stock Trading: Blockchain-based trading transactions reduce information redundancy, which in turn increases performance. Because of this, minor transactions between traders can be done quickly outside of the Blockchain. Only the final transactions are recorded on the Blockchain. As a result, Blockchain can be used to trade stocks without the need for intermediaries. Without a third party, rules can be easily implemented into smart contracts and deployed to ensure that no one cheats on anyone.
- Blockchain for Trade Finance: Even in the age of technology, many trade finance activities still require a lot of paperwork. To keep their ledger current, every middleman involved in international trade prepares all documents themselves. All parties involved in international trade can view and update a single ledger. Blockchain-based trade finance can streamline trading by eliminating bureaucracy and unnecessary paperwork.
- Blockchain in Accounting and Audit: Blockchain standardization would allow auditors to automatically validate financial accounts’ most important data, reducing costs and saving time. In addition, it is easy to verify the integrity of electronic files using blockchain technology. One way is to create a hash string representing a file’s digital fingerprint and then put that hash string onto a blockchain as a timestamp.
- Blockchain Credit Reports: Blockchain-based credit reports reduce data verification difficulties and costs. Because the data is not stored in a central repository, it can be returned to the individuals. A bank must verify that you can repay the loan or mortgage as well as the terms of the credit card before you consent to it.
- Blockchain For Digital Identity Verification: The evolution of Blockchain came early & it came as a significant improvement on the distributed ledger technology created to track Bitcoin owners. This technology can replace traditional systems and provide a trusted method of managing identities. Blockchain technology has enabled the creation of self-sovereign identity. Furthermore, this identity is more secure and inherently unalterable than traditional systems. This could change how we connect to online services and use our identities. Individuals could use their self-sovereign IDs to verify their identities, eliminating the need for passwords. The solution, backed by blockchain innovation, gives individuals complete privacy and control over their personal data while sharing data on a trusted network and protecting identity transactions.” (6)
Web3 Security: How to Reduce Your Cyber Risk
Security, Privacy and Interoperability: Blockchain-based Decentralized Identifiers 1.0
NIST on Blockchain and Cybersecurity at the Physical Layer (Access Control Systems)