R3 started as an alliance of nine banks in 2015, with the aim of developing blockchain infrastructure for the financial sector. It has grown to include over 200 financial institutions in 2018. Banks believe that blockchain technology could save them money by making their operations faster, more efficient, and more transparent. They are racing to build products using the technology that will generate new revenue, with dozens of patent applications filed for blockchain-based products by banks around the world.
R3's main project is Corda, a blockchain, or as they call it, a distributed ledger technology (DLT) platform, designed specifically for financial agreements between regulated financial institutions. The main difference between Corda and the public blockchains we are already familiar with, such as Bitcoin and Ethereum, is that Corda is based on consensus only between the parties to individual deals, rather than consensus of the entire network. Corda transactions are validated by parties to the transaction rather than a broader pool of unrelated validators. Therefore, the entire transaction database in Corda isn't copied to all network participants. This design also doesn't need a native cryptoasset to incentivize and reward miners to validate transactions, as the PoW consensus algorithm is unnecessary for private deployments. Corda's architecture directly enables regulatory and supervisory observer nodes. Distributed applications can be built on Corda using the Java Virtual Machine (JVM), which facilitates user adoption and interoperability with legacy systems.
Notwithstanding the different design of Corda, the Chief Technology Officer (or CTO) of R3, Richard G Brown, describes neatly the evolutionary steps that led to Corda's creation, starting with Bitcoin, and giving credit to the brilliant innovation it brought to the world: