Colored Coins startup Coinprism has announced its release of ‘Openchain’, a distributed ledger solution intended for institutions.
The solution seeks to improve upon Bitcoin, whose transactions are validated by anonymous miners. Banks considering blockchain technology to improve their back-end processes have been testing ‘permissioned ledgers’, which are designed to provide transparency to blockchain-driven markets.
The Openchain software aims to provide companies with a suite of features needed for a regulated marketplace. An administrator would enable permissions to the chain and define businesses rules such as know-your-customer (KYC) and anti-money laundering (AML) controls.
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Coinprism’s development was previously in the realm of Colored Coins technology, which uses Bitcoin’s network as the underlying infrastructure for transactions. Small amounts of bitcoin are ‘colored’ to represent, for example, a stock. The asset is then propagated across the network like other bitcoin transactions. The technology is being trialed by Nasdaq and Overstock.com in their respective blockchain securities initiatives.
However, the startup now recognizes the limitations of Bitcoin’s network in regulated environments where millions of transactions are conducted daily. Whereas Bitcoin is limited to 7 transactions per second and is subject to confirmation times from several minutes to several hours, permissioned systems can be scaled to process thousands of transactions per second and can confirm them in real-time.
Openchain envisions different companies deploying their own ledger systems built on its software, but they would be compatible with each other.
According to its website, an optional 2-way peg can be created with tokens between Openchain ledgers and Bitcoin.