Chain releases Chain OS 1, the first blockchain operating system platform for the financial industry

Crazy Review : Blockchain startup Chain today released a new open source licensed protocol based on cooperation with ten financial telecommunications companies. Chain CEO Adam Ludwin promoted the platform as a platform tailored for large-scale financial applications, including securities settlement and payment processing. Chain OS 1 is a "novel consensus model" in which even a large number of transactions can be processed in a few seconds. Ludwin sees Chain OS 1 as an "architecture" rather than a proposal, defining the platform as a licensed blockchain option considered by major institutions in the market.

Translation: Nicole

Blockchain startup Chain today released a new open-source permissioned protocol built on collaborations with ten financial telecommunications companies.

Partners in the project include major financial firms such as Capital One, Citi, Fidelity, First Data, Fiserv, Mitsubishi UFJ, Nasdaq, Orange, State Street and Visa, all of which are promoting the development of blockchain technology known as Chain Open Standard or Chain OS 1.

In an interview, Chain CEO Adam Ludwin touted the platform as tailor-made for large-scale financial applications, including securities settlement and payment processing. After a long period of development, Ludwin framed the release of the protocol as a way to standardize the platform, which is being used in test projects with First Data, Nasdaq, Visa and other partners.

Adam Ludwin

Ludwin told CoinDesk:

“You’re looking at the first step of a bottom-up process where the top-down approach has been getting a lot of attention in the last few months. Chain OS 1 was not built by a committee, where everybody got in a room and said, ‘Let’s build a network.’”

While Ludwin did not mention any one competitor in particular, he alluded to the open-source blockchain Hyperledger project led by the Linux Foundation and the ledger platform Corda developed by the R3CEV blockchain consortium.

Ludwin said such a process could be flawed in the way their technique involves, like trying to build a "rubber band ball" but expecting it to form a nice spherical shape just by shaking the box.

Ludwin said:

“You create a core and wrap something tightly around it, and then you can easily wrap a rubber band around it. That’s what we’ve done with Chain Open Standard 1.”

Ludwin sees Chain OS 1 as an “architecture” rather than a proposal, positioning the platform as a permissioned blockchain option that major institutions in the market are considering.

The announcement comes amid stiff competition from permissioned blockchain platform providers, a high-profile project.

In recent weeks, Barclays Bank has publicly tested a Corda smart contract template, while DTCC has announced a Hyperledger trial with Digital Asset Holdings.

Behind the Scenes

In the interview, Ludwin suggested that the project will take some time to take shape, outlining the company’s approach to creating Chain OS 1 through different avenues.

For example, Chain recently worked with its financial industry partners in New York to host a private conference that also included a software demo, Ludwin said.

He argued that the scale and depth of the presentation could easily attract news. However, he tried to portray Chain as a company that doesn’t want to attract too much attention, beyond making formal announcements.

Ludwin said:

“People underestimate blockchain technology and say it needs a press conference. This is arguably the largest and most in-depth blockchain event, and the reason we’re not doing a press conference is that we want to create an environment where people can share strategic ideas openly.”

Ludwin said Chain is trying to hold a second partnership conference in the fall of 2016, which will increase industry participation, and the startup hopes to hold such events twice a year in the future.

He added:

“All institutions that join our group will be invited to participate in the next three to five months.”

Specification details

In prepared materials, Chain likened OS 1 to a “novel consensus model” where even large numbers of transactions can be processed in seconds.

Moreover, the “private solution” under this model can encrypt blockchain data and provide “optional access channels” to counterparties and regulators. Chain OS 1 will also provide smart contract virtual machines, which may be the project most closely related to the open source Ethereum blockchain project.

Additionally, this allows participants to keep a complete historical copy of the network's distributed ledger, or an abbreviated version of it containing "unspent states", thereby reducing operational requirements.

Chain’s partners claim that this combined functionality will allow organizations to create projects that can become commercial applications.

Hu Liang

State Street senior management director Hu Liang said in a statement:

“Chain’s protocol can support some of the most complex use cases we can think of.”

Nasdaq revealed it is using the platform for private market securities testing as well as proxy voting and clearing.

Innovation Now

But Ludwin didn’t just criticize the group’s desire to develop a permissioned blockchain.

In the statement, Ludwin described Chain as a “Silicon Valley startup” that financial institutions would like to work with on blockchain because it does not conflict with their existing companies.

Ludwin said:

"With the big IT companies that are coming up now, you can't help but ask, 'Are they trying to sell us something else?' That's a constant question."

More and more traditional IT companies, including Microsoft and IBM, are trying to attract institutions to the various platforms and offerings they have developed.

Ludwin concluded:

“The advantage of a startup like Chain is that we can build whatever we need.”