Adopting blockchain technology has until now presented a double-edged sword for businesses. The desire to keep up to date with transformative business practices has rightfully been balanced by a need to retain regulatory compliance. Numerous projects claim to offer blockchain architecture for big business, but most turn out to be either wholly private and unwieldy or precariously open, permissionless and unaccountable.
Concordium’s entrance to the blockchain space has already shifted that paradigm. As the Swiss non-profit Concordium Foundation leads the project towards Testnet 3.0, Concordium’s combination of the best of both public and private blockchains stands to immediately undercut the current crop of enterprise-focused projects. The project’s team includes the founder and former CEO of Saxo Bank, a former NASDAQ executive, world-leading cryptographers as well as a current Volvo and IKEA board member as CEO.
Privacy to a Point
By utilizing a unique identity layer on the protocol level, Concordium offers all the features of a public, open blockchain, while ensuring that a user’s anonymity can be revoked if, and only if, a relevant government authority requests it. On Concordium, it appears as if privacy is assured; anonymity is not. If a user on the Concordium network behaves badly, their privilege of anonymity is revoked by trusted ‘anonymity revokers,’ and they can be instantly exposed to the wheels of justice in their given jurisdiction.
Here Concordium highlights the failure of the present generation of blockchain technologies to self-regulate to a level at which the world of big enterprise would feel comfortable adopting it. Even now, over ten years on from the creation of Bitcoin, the constant proclamation that “the institutions are coming” has, as yet, failed to materialize. The reasons why are many-fold, but prominent among them is undoubtedly concerns over legal compliance.
Business on Top, Blockchain on the Bottom
Taking care of the regulatory side of blockchain-based identity has freed Concordium up to focus on other integral practical features which stand to make it compatible with the business world. The tendency to strategically cherry-pick the best features of blockchain technology is on show again, with Concordium’s combination of Nakamoto-style Consensus (NsC) and a proof-of-stake (PoS) Byzantine Fault Tolerant (BFT) staking mechanism, which ensures network security.
Transaction speeds on PoS blockchains are typically lightning fast. However, Concordium goes one step further and employs a layer of finality, which they call Finalization-as-a-Service (FaaS), which ensures transactions are confirmed almost instantaneously. Today, major PoS blockchains like Tezos are still subject to one-minute block times, which at busy periods could result in total confirmation times of several minutes. Imagine a busy checkout counter where each customer is forced to stand and twiddle their thumbs for an extra three minutes, and it’s obvious why such technology hasn’t caught on.
It’s not just Tezos that Concordium’s presence stands to neutralize. Smart contract compatibility and blockchain interoperability, combined with the features mentioned above, means Concordium also muscles in on Ethereum’s turf. What’s more, its use of a zero-knowledge proof protocol means that even new, would-be Ethereum competitors like Polkadot are matched, and even exceeded, on the tech level.
Following the launch of a final testnet phase in Q3 of 2020, Concordium is expected to go live in Q1 2021.