With the increase in popularity of enterprise blockchain companies there is also a reasonable number of technology experts who argue that such decentralization is not always needed. This is what Amazon Web Services Quantum Ledger Database (QLDB) is all about. It was first announced at AWS re:Invent 2018, and aimed at organizations that want to have transparent, immutable, and cryptographically verifiable transactions on Amazon Web Services (AWS) but without the need for decentralization and a blockchain.
Who doesn’t need a blockchain?
Well, in many financial services cases, like issuing and managing central bank digital currencies (CBDCs) or the Australian Stock Exchange (ASX) replacement of the CHESS clearing and settlement system, where a public ledger is not needed and there is a single governing authority in control of the data and the process, there is no need to include a consensus-driven blockchain. In the first case, we have a central bank who will manage and track all the transactions, and the centralized and easily managed digital assets that represent a unit of account perfectly matches with the central bank vision of money. Now, they have cash as a decentralized money that can’t be easily tracked, hence the push for the centralized digital assets. Things can get complex when designing such systems and requirements go outside of the realm of central banks, which is the case in Japan, for example, where SoftBank’s PayPay and Rakuten Pay are offering better incentives for customers than the central bank negative interest rates.
And in the second case, we have ASX, which has the golden copy of data for clearing and settlement and doesn’t need a consensus-based blockchain, and has leveraged an open-source smart contract functional language created by Digital Assets, called DAML. In cases where you don’t need a fully decentralized blockchain network, you can still use the power of immutable, programmable smart…