In their research finding titled “Structured Finance — Global: Blockchain improves operational efficiency for securitizations, amid new risks”, US based rating firm Moody’s Investor Service studied how blockchain technology can impact and even disrupt structured finance. However, the rating firm is now warning considering firms to do their due diligence and critically study the advantages and disadvantages of private chains before adopting consensus free systems offered by private blockchains.
Unlike public blockchains which are free and anybody can join, read, write and participate in the development of the ecosystem, private chains are permissioned. That means, not everyone is free to develop or even effect transactions. Most of these private blockchains are designed for enterprises and include solutions offered by Hyperledger Fabric, Corda or even JP Morgan and Chase, Quorum. On the other hand, Ethereum, Litecoin and Bitcoin are examples of public chains whose source codes are open and open for scrutiny.
Moody’s Investor Service found out the firm’s decision to use a private chain is dangerous and “New risks with blockchain technology in securitizations may emerge as well as the reinforcement of some already existing ones.” They go on, adding that these “risks include counterparty concentration, IT and operational risks, inappropriate blockchain governance and legal and regulatory issues.”
The Migration from Private to VeChain Thor
Perhaps in anticipation of these dangers that VeChain, a blockchain powered platform designed specifically to increase efficiency and improve supply chain management processes, decided to launch their operations from a public blockchain unveiling VeChain Thor with the native coin, VET, acting as a store of value.
As we reported, the genesis block was mined on the same day allowing the platform to cheaply and transparently handle their transactions while simultaneously allowing their dApp ecosystem to flourish. By launching their mainnet, every operation would be done on an open ledger in the spirit of the blockchain pioneers as the platform edges toward its “vision of building a trust-free and distributed business ecosystem platform to enable transparent information flow, efficient collaboration, and high-speed value transfers.”
Besides, by addressing the pain points associated with enterprise blockchains, VeChain Thor now have new governance and economic models with Regulation and Compliance capabilities and a Mainnet and Matching Infrastructure Services. Furthermore, for interoperability, VeChain drew inspiration from Ethereum, incorporating a virtual machine for dApp development but with a different consensus algorithm in Proof-of-Authority