What is the Canton Network TestNet?

Let’s start with an analogy. The Internet is what it is thanks to four key properties:

• Independent but connected apps. There is a common protocol, but application operators are in complete control of their system—from data permissions to SLAs. 
• API composability. Publicly facing APIs can compose together into new experiences on top of the underlying apps.
• Horizontal scalability. The Internet has unlimited horizontal scalability. Each new app and server increases the total network capacity, but no single server or database stores the entire network.
• A browser is the single-point-of-entry. Users have a single point of entry for the entire heterogeneous network of applications.

This is exactly how the Canton Network functions, along with additional critical guarantees like consistency, immutability and privacy. The Canton Network features:

• Sovereign, interoperable apps and blockchains. Each blockchain defines its data permissions into smart contracts and can run its own infrastructure.
• Smart contract composability. Any publicly exposed smart contracts can be composed into atomic transactions across blockchains.
• Horizontal network scalability. Each application can expand the capacity of the network by deploying more supporting infrastructure. Each node only stores its own data.
• A node is the single-point-of-entry. Having a node allows users to connect to any app registered in the network.

When the Internet was built, organizations worked together to lay the foundational infrastructure—from the protocols governing how data is sent and received and the way we discover domains, to the physical routers, servers, switches, and cables that connect the Web today. 

Canton TestNet lays similar foundational infrastructure for the Canton Network. It introduces an independently operated, globally available synchronization domain to participants. This enables the smart contract composability mentioned above (i.e., the ability for smart contract applications to compose atomically across applications). It is now possible to use multiple synchronization services depending on the needs of the use case and the trust requirements of the parties in a transaction, making cross application composability a reality for TradFi. 

Early adopter organizations are independently running this decentralized synchronization service and associated network utilities. Since the launch of Canton in May, they have been testing the infrastructure, including the governance mechanisms and network tools, such as the Canton Naming Service, which acts as the address book for the network.

Rewind: Why do we need another blockchain network? 

The Canton Network has been designed by financial institutions for financial institutions to provide a different type of network—one that can address the core challenges that still exist with private and public blockchains.

Public blockchains have interoperability, but sacrifice privacy and control

Public blockchains demonstrate the incredible power of interoperability through DeFi but to adopt a public blockchain, operators ultimately are forced to sacrifice control over their application to a pool of shared validators.

This exposes customer data to the world and makes it nearly impossible to meet regulatory and compliance requirements related to the movement of assets across regulated financial markets.

Private blockchains reclaim some control, but reintroduce the interoperability problem

Private blockchains claw back some controls for operators, who can pick validators and permission who can connect to the ledger. When you dive into the detail though, these platforms still don’t resolve the privacy problems of public blockchains.

Worse, there is no such thing as transactional interoperability across the subnets of private blockchains, even if the two applications are using the same blockchain platform. At best, interoperability only exists between applications operating within a walled subnetwork or zone.