Bitcoin is about to receive some serious competition from the financial services sector. More than a dozen of the biggest names in the industry have joined forces with IBM Corp. this morning to develop their own open-source implementation of the blockchain transaction processing model at the heart of the popular cryptocurrency.

The design pattern calls for every payment to be automatically registered in a record that contains information about the monetary unit that changed hands, whether it’s a Bitcoin or a set of shares, along with the log from the last transfer. That entry in turn links to its own predecessor and so on all the way to the first transaction in the chain, which becomes harder to compromise with each addition. It’s the same dynamic that makes forging a ledger so difficult, except on an incomparably larger scale.

The records of a blockchain implementation aren’t placed in any one physical location but rather spread across all of the machines that have the software installed, which exceed 5,000 in the case of Bitcoin.  The sheer amount of effort that would be required to breach every single participating node and then insert a falsified log without leaving even a single copy of the original behind makes the technology effectively immune to hacking, an appealing prospect to the members of IBM’s new initiative.

Many, including JPMorgan Chase & Co. and Wells Fargo & Company, have been independently pursuing the potential applications of blockchain technology in their industries for quite some time now. The Open Ledger project aims to focus their efforts into the creation of a new open-source implementation that can provide the high level of security and reliability needed for the sensitive financial use cases that stand to benefit from the technology. Details are scarce about exactly how they plan on accomplishing that, but an official name has already been decided for the system: Hyperledger.

IBM is jump-starting the initiative with a pledge to “contribute tens of thousands of lines of its existing codebase and its corresponding intellectual” during the initial stages of development. The R3 blockchain consortium, which includes several dozen banks from around the world, is matching the commitment with the donation of a transaction handling framework described as having been specifically developed according to the requirements of its members. Work on incorporating the components into Hyperledger is set to begin as soon as a leadership committee is assembled to coordinate the project a few weeks from now.

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