Dr Gramoli said Red Belly Blockchain was based on a new blockchain "system" which fits between the two current models of public blockchains and consortium blockchains.

"These days there are multiple blockchain systems. There's public blockchains like bitcoin and Ethereum that don't try to solve consensus ahead of time ... but then later try to avoid forks … which means the latency is quite large," he said.

A third model

In a public blockchain, a "fork" happens when a blockchain diverges into two potential paths based on the network's transaction history or a new rule dictating what makes a transaction valid. Participants are forced to choose which path to take, effectively creating two different currencies and histories.

"Another type is based on consortiums. They allow a preselected set of members to join and that allows them to create new blocks," Dr Gramoli said.

"We're proposing a community blockchain in between these two models. It doesn't rely on a leader [unlike the consortium systems] because having a leader was a bottleneck to scaling … we discovered that transaction verification was also causing a bottleneck, so we improved consensus and the verification process and we were able to scale the performance."

With this new structure, using 300 machines in a single data centre, Red Belly Blockchain was previously able to achieve 660,000 transactions per second. This compares with traditional payments technology providers such as Visa, which has a peak capacity of about 56,000 transactions per second.

'Stunning' advance


Dr Gramoli said it would be able to be used across the banking and finance sectors to process transactions, and it already had some early stage projects in place in the banking sector, but emphasised that it could also be applicable to industries such as agriculture and education.

The company is in the middle of a Series A capital raise for an undisclosed sum to help it commercialise the technology and build out additional features. Kosmos Capital, a VC firm specialising in blockchain investments, is leading the raise.

"We're aware of several competing projects from heavyweights in the US, namely MIT and Cornell. They are also exploring ways to solve performance and scalability limitations of existing blockchain architectures. However, having invested time and research analysing Red Belly, it appears to be the first one to address lack of accountability in blockchain technology, unlike current blockchains like Ethereum and EOS," Kosmos Capital Australian general partner Anton Uvarov said.

"The first time we came across the Red Belly blockchain project, we were stunned by its technological advancement, protocol specifications and particularly, how well it was able to remain under the radar of so many investors."