Two studies were published overnight which claim that distributed ledger technology, a variant of blockchain, is capable of scaling to support the level of transaction throughput required in mainstream financial securities markets.
DTTC, the New York-based financial clearing operator which has been actively exploring DLT tech, published a report showing that DLT can support trading volumes in the US equity markets.
DTCC’s study was conducted by Accenture, utilising technology supplied by leading financial market DLT platform providers Digital Asset and R3, and showed that DLT could support 6,300 tx/second for 5 straight hours.
DTCC noted that the study only tested basic functionality, and that further tests were required to establish whether DLT could meet the resiliency, security, operational and regulatory requirements of its existing clearance and settlement systems.
Separately, GFT, provider of IT and software services to the financial industry, published test results for the Digital Asset platform showing it was capable of exceeding peak equity trade volumes of 27,000 tx/second for a sustained period.
Comments
Scaling has been a key challenge to enterprise adoption of blockchain technology.
However, there are already indications that DLT technology, a variant of blockchain, is capable of supporting reasonably high transaction throughput – for example the Australian Securities Exchange already confirmed in late 2017 it would be adopting Digital Asset’s DLT platform to replace its current clearing and settlement platform.
There is an academic acknowledgement of the trade-off between transaction throughput and network size for distributed networks such as blockchains and DLTs. In short, they concluded ‘you can have your blockchain/DLT network large and slow, or small and fast, but not large and fast’.
In the details of GFT’s test results the ‘network size’ tested consisted of 25 exchanges, 25 brokers, and 1 central clearing operator. The DTCC test was conducted over a larger network of 170 nodes. Compared to the bitcoin blockchain (11,000 nodes) the GFT and DTCC tests used a relatively small network, albeit still relevant for financial security market use cases.
The test seem to me to confirm the trade-off of throughput against network size, so while the tests can be considered positive news for DLT in securities markets, but I would not see a positive read-across to popular public blockchain cryptocurrencies such as bitcoin and ethereum.
What do you think?
You don't want to miss a Crypto news?
Follow me on Twitter
Published on
"