CIOs have to continue to educate execs and senior leaders about blockchain opportunities and challenges and continue to develop proofs of concept to test its business worthiness, the research firm says.

Research firm Gartner, whose past evaluations of blockchain have been conservative to say the least, expects the distributed ledger technology to transform the ways businesses operate in most industries within five to 10 years.

Right now, however, blockchain for most industries remains mired between inflated industry expectations and general disillusionment with regard to how it can improve business processes, according Gartner's latest "Hype Cycle" report.The report includes a survey of CIOs on how they perceive blockchain technology.





[ Further reading: Blockchain: The complete guide ]"Even though they are still uncertain of the impact blockchain will have on their businesses, 60% of CIOs in the Gartner 2019 CIO Agenda Survey said that they expected some level of adoption of blockchain technologies in the next three years," David Furlonger, a Gartner distinguished research vice president, said in a statement.

"However, the existing digital infrastructure of organizations and the lack of clear blockchain governance are limiting CIOs from getting full value with blockchain."Gartner's annual survey of CIOs was conducted from April through June and had 3,102 respondents from 89 countries and across major industries, including manufacturing, government, professional services, banking, energy/utilities, education, insurance, retail, healthcare, transportation, communications and media.

Last year, a Gartner CIO survey revealed on average that only 3.3% of companies worldwide had actually deployed blockchain in a production environment.In a blog post at that time, Gartner distinguished research vice president Avivah Litan listed eight hurdles needed for the technology to meet the goals stated by tech  providers hawking it as a cure-all for virtually any international, transactional network need – from fee-less, cross-border payments to supply chain tracking.

Those hurdles included technically scalable blockchains, advances in smart contract technology, transaction risk assurance, data confidentiality, and an efficient consensus algorithm.

Blockchains require a consensus among users before new data can be saved to the immutable ledger; most often, at least 51% of computer nodes validating ledger entries must agree before new blocks can be added.In the latest Gartner research data, banking and investment services industries continued to see high levels of interest from innovators looking to improve decades-old operations and processes.

But only 7.6% of respondents to the CIO Survey suggested that blockchain is a game-changing technology. That said, nearly 18% of banking and investment services CIOs said they have adopted or will adopt some form of blockchain technology within the next 12 months, and nearly another 15% plan to do so within two years.

Blockchain proofs of concept or pilots are showing up in several key areas in banking and investments services, "primarily focused on permissioned ledgers," Furlonger said. That refers to centrally-controlled blockchain networks whose participants are previously vetted before being allowed to participate.

"We also expect continued developments in the creation and acceptance of digital tokens," Furlonger continued. "However, considerable work needs to be completed in non-technology-related activities such as standards, regulatory frameworks and organization structures for blockchain capabilities to reach the Plateau of Productivity –  the point at which mainstream adoption takes off, in this industry.

"Gartner gauges the maturation of new technology through its "Hype Cycle," a graphic-based life-cycle that follows five phases: from the Technology Trigger, when proof-of-concept stories and media interest emerges, to the Plateau of Productivity, when mainstream adoption occurs - if the technology is more than niche.

Among those five Hype Cycles is the "Peak of Inflated Expectations" followed by the "Trough of Disillusionment," when interest wanes as pilots and fail to deliver and tech providers either work out the kinks and improve the technology, or ultimately fall short and die out.



Gartner

In retail, blockchain is being considered for "track and trace" services, counterfeit prevention, inventory management and auditing – any of which could be used to improve product quality or food safety.

For example, Walmart has adopted blockchain to track produce from farm to shelf.While supply chains have value, the real impact of blockchain for retail will depend on supporting new ideas — such as using it to transform or augment loyalty programs, according to Gartner. For example, through loyalty cards, retail businesses can offer customers digital currency such as bitcoin that can be exchanged for various other currencies, goods or services.

"Once it has been combined with the Internet of Things (IoT) and artificial intelligence (AI), blockchain has the potential to change retail business models forever, impacting both data and monetary flows and avoiding centralization of market power," Gartner  said.

As a result, Gartner believes that blockchain has the potential to transform business models across all industries — but the opportunities demand that enterprises adopt complete blockchain ecosystems. Without tokenization and decentralization, most industries will not see real business value.

The journey to create a multi-company blockchain consortium is inherently awkward, Garter said.

"Making wholesale changes to decades-old enterprise methodologies is hard to achieve in any situation.

However, the transformative nature of blockchain works across multiple levels simultaneously (process, operating model, business strategy and industry structure), and depends on coordinated action across multiple companies."In particular, Gartner recommends that CIOs:


■ Continue to educate executives and senior leaders about the blockchain opportunities and challenges most critical for business.
■ Build thought leadership within IT and fight unwarranted vendor hype.
■ Expect different industry domains (upstream, midstream, downstream and marketing) and functional areas (such as commodity trading, international cash management, field supply chains and data integrity) to adopt blockchain on different timelines.
■ Continue to develop proofs of concept internally as well as part of market consortiums.
■ Expect complicated challenges as early solutions will likely be a mix of significant
process redesign, agile solution development, multiple cloud integrations and a large number of integration points with legacy systems.

The blockchain devices market is projected to grow from USD 218 million in 2019 to USD 1,285 million by 2024, at a CAGR of 42.5% from 2019 to 2024.

Some of the major growth drivers for this market include increasing adoption of blockchain technology in retail & supply chain management, rising venture capital funding, and growing market cap for cryptocurrency and Initial Coin Offering (ICO).

One of the key opportunities for the market is the increasing acceptance of cryptocurrency across various industries and regions. Whereas, major factors restraining the market growth include uncertain regulations & compliances and lack of awareness.

Wireless connectivity for blockchain devices to grow at higher CAGR during the forecast period

Blockchain smartphones, PoS devices, etc. use wireless connectivity for data transfer. They use Wi-Fi, Bluetooth, and near-field communication (NFC) technologies.

Based on type, the wireless connectivity segment of the blockchain devices market has been segmented into blockchain smartphones, crypto hardware wallets, and PoS devices. Major companies such as Ledger (France), and Pundi X (Singapore) are majorly focusing on blockchain devices that are implemented with wireless connectivity.

Other devices for Blockchain devices to grow at higher CAGR during the forecast period

Of all the types of devices, other devices such as blockchain gateways & pre-configured devices expected to grow at the highest CAGR during the forecast period. Blockchain is a universal purpose digital identity gateway, which enables corporations, governments, and institutions to bridge their legacy systems with the decentralized blockchain networks.

The pre-configured devices equipped with an operating system allow access to the blockchain network from a normal network. They are used to provide Web3 access and personal home servers to blockchain networks. This device majorly adopted in industries such as banking, financial service, and insurance (BFSI), government, retail & e-commerce, travel & hospitality, automotive, transportation & logistics, IT & telecommunication, etc.

North America to account for the largest market size during the forecast period

North America is among the major contributors to the blockchain devices market, and the US accounted for the largest share of the market in North America in 2018. North America dominates the global market as the region is an early adopter of blockchain devices.

North America is an early adopter of innovative technologies as banks, government agencies, and financial institutes in this region face ever-increasing challenges related to security & transparency of the data and the transactions.

Therefore, advanced technologies are implemented to manage this information via blockchain devices. Moreover, several blockchain devices vendors are based in this region, thereby contributing to the growth of the blockchain devices market in North America.

Key Market Players

Ledger SAS (France), HTC Corporation (Taiwan), Pundi X Labs Private Limited (Singapore), Filament (US), GENERAL BYTES R.O. (Czech Republic), RIDDLE&CODE (Austria), AVADO (Switzerland), Sikur (US), SIRIN LABS (Switzerland), Blockchain Luxembourg S.A. (UK), SatoshiLabs (Czech Republic), Genesis Coin Inc. (US), and Lamassu Industries AG (Switzerland) are some of the major players in the blockchain devices market.

Report Scope

Report MetricDetailsMarket size available for years2019-2024Base year considered2018Forecast period2019–2024Forecast unitsValue, USD thousand/millionSegments coveredBy type, connectivity type, application, and regionRegions coveredNorth America, Europe, APAC, and RoWCompanies coveredLedger SAS (France), HTC Corporation (Taiwan), Pundi X Labs Private Limited (Singapore), Filament (US), GENERAL BYTES R.O. (Czech Republic), RIDDLE&CODE (Austria)

Blockchain devices market segmentation:

 In this report, the blockchain devices market is segmented into the following categories:

Blockchain devices market, by Type:

• Blockchain smartphones
• Crypto hardware wallets
• Crypto ATMs
• POS devices
• Others (blockchain gateways and pre-configured devices)
• 
  

Blockchain devices market, by Connectivity:

• Wired
• Wireless

Blockchain devices market, by Application:

• Personal
• Corporate

Blockchain devices market, by Region:

• North America
• Europe
• Asia Pacific (APAC)
• Rest of the World (RoW)

Recent Developments

• Ledger launched a new product, Ledger Nano X in May 2019. This new product is similar to Nano S, but Bluetooth connectivity is the added feature in it. Users will be able to connect with their computers wirelessly, and Ledger’s Live Mobile app will be able to send and receive cryptocurrencies via phones.
• HTC launched its first blockchain phone, EXODUS 1 in October 2018. This phone provides the premium performance and quality of design expected from HTC’s flagship device lineup. It combines with blockchain technology and software necessary to create a smartphone experience fit for a modern user and the new internet age.
• Pundi X launched a new blockchain smartphone, Function X in June 2019. This new smartphone is based on Android OS 9.0, making it compatible with Android apps. Function X is a total decentralized solution and not just a public chain. It consists of five essential components—Function X OS, Function X Blockchain, Function X IPFS, FXTP Protocol, and the Function X Docker. The main aim of these features is to decentralize all apps, websites, communications, and data.
• Filament announced the launch of Blocklet for trusted vehicle applications (TVA) in November 2018. It is the industry’s first end-to-end automotive blockchain platform that allows vehicles to participate directly in blockchain and distributed ledger technologies (DLTS). The Blocklet hardware for trusted vehicle applications includes filament’s Blocklet technology as well as cellular connectivity, and environmental sensing and access to vehicle diagnostics. Blocklet TVA is a secure and flexible platform that enables a wide range of new products, services, and business models to be created at the intersection of vehicles and blockchains
• RIDDLE&CODE launched hardware-based blockchain car wallets to enable future mobility solutions. With the help of this device, Cars will automatically settle value and exchange data with charging solutions, smart city systems, or parking zones without human interaction.

Critical questions the report answers:

• Where will all these developments take the industry in the mid to long term?
• Which are the upcoming industries that expected to adopt Blockchain devices?
• How is Blockchain devices influencing the automotive market?
• How are the companies addressing the challenge of hardware and software integration for Blockchain devices market?
• How are companies tackling the increasing number of connected devices that result in increasing issue of security?

To speak to our analyst for a discussion on the above findings, click Speak to Analyst

Download the Report Here: 
https://www.marketsandmarkets.com/pdfdownloadNew.asp?id=177053178

If you are one of the 2.4 billion active Facebook users, the probability that your data has been leaked is around 17%, given the recent news of 419 million accounts being exposed.

This means that, unless something changes, every sixth active user could lose control over their personal data. Again and again, no matter the government or the company managing personal data or how secure their systems are, personal data leaks happen all the time.

But what are the fundamental problems of centralization and how can we rescue our data from criminals, greedy marketers and corrupt governments?

Leaks are inevitable

The last two weeks have brought us tremendous news about leaks. The most recent concerning the aforementioned database of 419 million Facebook accounts was found available to download on the internet and complete with details such as names, phone numbers, gender and country of residence.

A while ago, Mastercard officially reported about 90,000 exposed accounts to European Union authorities.

Once, when I was living in Ukraine, I went to a bank to apply for a credit card. I asked the clerk why she had not requested any proof of income to grant me a credit limit.

She replied that they had already checked the database of the pension fund. Any salary is taxed at a certain amount by the state pension fund, so by seeing my paid taxes, they could calculate my income.

"Oh, my God,” I thought. “They aren’t even trying to hide the fact that they are using a stolen database with the personal data of everyone in the country.”Hopefully, there is no need to prove that the security of personal data cannot be promised by anybody.

In some cases, the right to personal privacy will be ignored, while in other cases, users may never know about the violations (thanks for the tip, Edward Snowden).

For some people, these violations of privacy threaten well-being and freedom, such as the Chinese government hacking the iPhone’s infrastructure to capture Uyghurs living in China.

And the reason for that is centralization. Large clusters of personal datasets are concentrated on the servers of service providers, which makes this data vulnerable.

Can the blockchain help?

The answer is not obvious — but yes, it can help. We need to change everything fundamentally in terms of how we manage personal data. And it can be only done with the help of blockchain and government cooperation.

During the last few years, initial coin offering (ICO)-driven attempts were made to “disrupt” the digital ID industry. I don’t want to mention any of these projects. Maybe some of them had sincere intentions, but they appeared to be premature in solving issues at global and national levels.

Related: Online ID Control: Blockchain Platforms vs. Governments and Facebook

Two new terms pertaining to the changes in personal data management are DID, which stands for “decentralized digital identifiers,” and Verifiable Credentials (which is one step away from becoming a standard). New standards for sovereign digital identity are being devised by the Digital Identity Foundation (DIF) and the World Wide Web Consortium (W3C).

The W3C Community outlined a set of general concepts, standards and methods aimed to write a new page in information and communications technology.

DID-compliant methods that have been recently developed as a prototype may be unknown even to some DID enthusiasts.

The concept is as follows: Users store personal data locally on their devices, thereby contradicting the current paradigm of state-managed cloud-based registries with partially restricted access. Users never need to disclose all their data, but only partially and only when it is justified.

Authentication is performed using a Merkle tree and digitally signed roots, which are stored on the blockchain. Service providers (web-services, governments, etc.) do not store personal data but can verify your digital identity at any moment when interacting with you.


 

The concept authored by Mykhailo Tiutin from Vareger works as follows. First, the data can and must be stored on the user’s device instead of on a third-party server. In many cases, the data should not even leave the user’s device or be disclosed — but when disclosed, the agent receives only a fraction of the personal data required for the interaction in question.

For example, you walk into a liquor store. Both you and the cashier have mobile devices with a preinstalled identity verification service. United States law prohibits the sale of alcohol to persons under the age of 21.

Technically, the cashier does not need to know your name, your social security number or even your birthday — only whether you are over the age of 21, as per the law.

For an engineer who designs this system, the question, “Are you over 21 years old?” is just a Boolean variable of 0 = No, 1 = Yes. To design this system, one needs a few things: a Merkle tree, where the leaves are hashes of personal data (name, birthday, address, photo, etc.) and the root, which is a cryptographic string signed by a trust service provider (TSP).

The trust provider can be the government (for example, the Ministry of Internal Affairs), a bank or a friend — i.e., someone whom the parties mutually trust. The root and the signature, as well as the digital ID of the TSP, are stored on the blockchain.




The scene at the store goes as follows: You take out your smartphone, open your identity verification app, and select which data you would like to disclose to the cashier's device. In this case: the root, the provider’s digital signature, your picture and the “Over 21” Boolean. No names, no addresses, no SSNs.

The cashier will see the verification result on her device. The device will show the photograph sent from the customer's device and will check if the picture is verified by a TSP.

But because you could have taken someone else's smartphone, the cashier checks if the picture on the screen matches the buyer's face.

No data except the root and the signature is stored on the blockchain — everything stays on your smartphone. Of course, the seller may try to save your picture on their device, but we will discuss that later.The advantage of this scheme is that there can be multiple roots with separate TSPs.

For example, you can have a root for proof of education, for which your educational institution will be the provider certifying your credits and graduation. There can also be multiple trust providers for the same data.

For instance, as a person, you can have one identity verified in three different countries, but managing multiple digital IDs has become a nightmare — you need to remember dozens of passwords and methods of authorization — but with DID, you can have one universal ID.





You can also create a pseudonym on social media, forums and online stores. There, you can be a “kitty” or just a nameless ID, if you wish. Pseudonyms can be linked via zero-knowledge protocols to a TSP’s signature, which means there is a digital proof that your identity is verified, but it is hidden from the web service.





There are many ways and schemes on how to protect identity, but the core idea is that all data should be under your control — in most cases, you shouldn’t have to disclose your data at all (by zero-knowledge proof protocols) and in some cases, you only need to partially disclose.

Will they store your data?

W3C and different enthusiasts have been working on DIDs and Verifiable Credentials concepts for a few years now, but unfortunately, we have not seen any mass adoption yet and the major snag is governments.




There are two main things that need to happen for this to materialize:

1. Governments themselves cease centralizing personal data. 

As mentioned above, nobody — including the government — will guarantee the security of your data. One day, it will be exposed, and you should count yourself lucky if that leak does not lose your money or threaten your life. Therefore, first of all, governments must cease storing personal data.

This flip in practice is the only way to ensure secure personal data. This statement may be mind-blowing for “pro-state” thinkers, but DID and Verifiable Credentials methods ensure Know Your Customer, or KYC, without exposing personal data.

There is no need for a government to collect personal data unless it has sinister intentions.

A digital ID is necessary for certain activities on a federal level: registering a company, declaring taxes, voting, etc. At these moments, the ID must be verified with an acceptable level of certainty, which will be provided by blockchain and the infrastructure of trust service providers.

2. New privacy regulations impose such high standards for personal data storage and third-party fines that storage will become economically unfeasible.

“PDPR” must become the second step after General Data Protection Regulation (GDPR), where “P” stands for “personal.” While the U.S. and other countries are trying to recover from GDPR, the concept of “Personal Data Protection Regulation” is already being discussed in the EU.

A major factor in this is that politicians must have the courage to adopt the strictest rules and impose the highest fines that can be applied.

And there is only one purpose for this: Whenever any company, bank or public servant wonders if it is a good idea to store someone’s personal data, they need to think very carefully about whether their reasons suffice, because we know that whenever personal data is centralized, it will inevitably be exposed someday. 

Instead, data stored on the user’s device will create more barriers. It is easier to steal 500 million accounts from one device than from 500 million independent devices.

Every person should have the right to control the public availability of their personal data and to decide for themselves what they would like to share.

Therefore, new regulations and technology need to be angled toward stopping the practice of centrally storing personal data. If not, then relax and get used to losing your own — one “I Agree” button at a time.

Related: GDPR and Blockchain: Is the New EU Data Protection Regulation a Threat or an Incentive?


The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.

Oleksii Konashevych is a Ph.D. fellow in an international program funded by the EU government, Erasmus Mundus Joint International Doctoral Fellow in Law, Science and Technology. Currently, Oleksii is visiting RMIT and collaborates with the Blockchain Innovation Hub, doing his research in the field of the use of blockchain technologies for e-governance and e-democracy.

Dapper Labs, the company behind CryptoKitties and upcoming projects such as NBA Top Shot, has raised $11 million in funding. It also unveiled the development of Flow, a new blockchain built to enable decentralized applications at scale.

The largest investor in the round was Andreessen Horowitz’s crypto fund, with participation from new investors Accomplice, AppWorks, Autonomous Partners, Fenbushi Digital, and Warner Music Group.
Existing investors that also participated in the funding included Union Square Ventures, Venrock, Digital Currency Group, Animoca Brands, SV Angel, Version One, and CoinFund, among others. Angel investors who participated in this round included William Mougayar, James and Glenn Hutchins, Don Mattrick, and Nanon de Gaspe Beaubien-Mattrick.

“After almost two years of research, we’re excited to share Flow with the world,” said Roham Gharegozlou, CEO of Dapper Labs, in a statement. “Flow is a blockchain built from the ground up to support high-performance ecosystems of apps and games without compromising decentralization.

Bitcoin and Ethereum show how crypto can make the world of finance more open and transparent; Flow will do the same for consumers of entertainment and culture.

”Some of the types of experiences Flow will support include: artists or bands using crypto tokens to give music lovers new ways to show their fandom; games that reward players for adding value and enable interoperability with assets and identities that users can take across environments; or platforms for sports fans around the world to trade verified, authentic, limited-edition digital memorabilia in real-time.

“Warner Music is always searching for new opportunities for our artists and has dedicated itself to exploring emerging technologies to enable these,” said Jeff Bronikowski, senior vice president at Warner Music Group, in a statement.

“When we met with Dapper Labs, they immediately understood our vision so we sought to solidify the partnership through this strategic investment.”In addition to the new investment, Dapper Labs is announcing partnerships with leading entertainment publishers to ensure Flow is ready for enterprise-scale use-cases.

Ubisoft, well known for developing games like Far Cry, Just Dance, and Assassin’s Creed, is advising on Flow, providing valuable industry feedback.

“When it comes to new technologies and innovation, Ubisoft has always favored a collaborative approach,” said Nicolas Pouard, blockchain initiative director at Ubisoft’s Strategic Innovation Lab, in a statement.

“We are eager to learn more from Dapper Labs, some of the most talented pioneers in the field of blockchain-gaming while bringing our own experience of the gaming industry and triple-A development. As a player-centric technology, we believe blockchain can help make players true stakeholders and we can’t wait to see what we will achieve with this partnership.

”Animoca Brands, a renowned game developer and publisher that is currently developing a number of crypto games including F1 Delta Time and The Sandbox, will be one of the first game companies to build on Flow. These companies will contribute to making Flow a strong platform for consumer entertainment.

“We believe that crypto is the future of the gaming industry,” said Yat Siu, chairman of Animoca Brands, in a statement.

“In order to support the scale expected from games that reach and are adopted by mainstream consumers, we need a strong platform that takes into account the needs of developers and the superpowers of decentralized entertainment, which is why we will work with Dapper Labs to build fun, accessible experiences on Flow.

”Flow will launch in 2020, in time to support many of the company’s large-scale, consumer-facing entertainment, music, and gaming projects in the works. Dapper Labs has raised $40 million to date.

When most people hear the word “blockchain,” they automatically associate it with cryptocurrencies such as Bitcoin. This often has negative connotations given high price volatilities, shady use cases, and negative environmental impacts.

However, cryptocurrency production and trading is a small aspect of blockchain technology, which has numerous use cases. In fact, blockchain technology is already proving to be a critical tool for social innovation.

Affiliates of the Stanford Graduate School of Business recently released a report on the use of blockchain technology for social impact. Spearheaded by Douglas Galen, a lecturer at the Stanford GSB and co-founder and CEO of Rippleworks, the project brought together students from across the university to research and interview a diverse set of organizations who are using blockchain technology as an integral part of their strategy.

The majority of organizations surveyed said that their use of blockchain technology was motivated by providing a broader social good.The case studies that constitute the report are illuminating.

How organizations use blockchain for social impact varies considerably by sector. For example, in the climate and environment space, most of the interviewed companies used blockchain for the creation of marketplaces.

These companies process millions of transactions trading and distributing energy for the purpose of using natural resources more efficiently and mitigating environmental degradation. On the other hand, fintech companies focused on serving the unbanked population are more likely to use blockchain to facilitate and process payments and transactions.

This use of blockchain has the potential to disrupt and reform the financial sector, which has not traditionally served the poor effectively. Finally, in the healthcare space, blockchain technology facilitates secure and accurate storage and retrieval of electronic medical records.

Blockchain is very useful for maintaining patient privacy (thereby adhering to HIPAA standards) while at the same time ensuring the consistency of de-identified records and preventing mistreatment. 

Given the potential of blockchain to solve such challenges, are there any downsides to adopting blockchain technology in service of impact?

In terms of challenges facing the use of blockchain technology for social good, companies across many sectors had a similar response: (lack of) regulation. It is risky and costly to implement blockchain infrastructure in a nascent and undeveloped regulatory environment.

Hopefully, the report will allow companies to collaborate in working with policymakers and regulators. 

If you are interested in using blockchain technology in your own organization, or simply want to learn more about the space, I highly recommend reading the report.


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Neil MalhotraI am the Edith M. Cornell Professor of Political Economy at the Stanford Graduate School of Business where I direct the Center for Social Innovation (CSI). CSI’s mission... Read More

Samsung's crypto-friendly version of its flagship Galaxy Note 10 is the first of a new wave of blockchain handsets to hit the market.

The “KlaytnPhone" — named after the blockchain developed by South Korean messaging app KakaoTalk — was launched in South Korea last week. It features the same hardware as other Galaxy Note 10 devices, but with the additional software including blockchain apps and a cryptocurrency wallet.

Since testing the waters with the Galaxy S10 launched earlier this year, Samsung has ventured further into the blockchain world — making over a dozen Dapps available on its KeyStore, and now cementing its commitment to crypto assets by releasing a second blockchain handset.

Big tech takes the smartphone to the blockchain
Taking the lead from Samsung, other tech giants are also ensuring that users can access blockchain related services.

Arch-rival LG is reported to have completed market research on Dapp and blockchain providers, and has trademarked the “ThinQ Wallet” in the United States — a transaction and settlement product that could be the foundation for an upcoming crypto ecosystem.

South Korean media outlet Chosun claims that LG is close to releasing a crypto-friendly handset to rival offerings from Samsung. Meanwhile, HTC is set to release the second version of its Exodus handset before the end of the third quarter.Even the notoriously tight-lipped Apple is looking at the space.

“We’re watching cryptocurrency. We think it is interesting. We think it has interesting long-term potential” said Vice president of Apple Pay, Jennifer Bailey, in conversation with CNN Business in September.

Apple has been building the protocols that could form the foundation of a smartphone crypto ecosystem.

The iPhone CryptoKit, which was quietly unveiled at the Apple Worldwide Developers Conference in June, is described as a framework to "perform cryptographic operations securely and efficiently", and could allow developers to embed cryptographic operations into their apps.

China is working on similar innovations. According to local financial media, Sina has developed a "SIM card-based blockchain digital asset management system.

"State-owned China Telecom is developing the product and debuted it to the world at an industry expo in August. Somewhat ironically, the Chinese company appears to be positioning blockchain phones as essential to privacy in an era of cloud computing, mobile payments, artificial intelligence, big data, and 5G.

"Security, high-speed, multi-application and low-cost 5G blockchain mobile phones will create huge economic opportunities and business values. In the 5G era, people will increasingly trust the 5G blockchain smart phone," states the whitepaper.

The world's first true blockchain phone
Competing with the tech giants are small manufacturers of blockchain-powered devices.At a trade show in Berlin on September 10, Pundi X — a Singaporean company that calls itself the "Walmart and 7-Eleven of cryptocurrency" — unveiled the Blok on Blok, which it claims is the "world's first true blockchain phone.

”Unlike some crypto-friendly phones that differentiate themselves with wallet software and access to a secure enclave for the storage of private keys, Blok on Blok migrates the core phone functions to the blockchain.

Users can toggle between the traditional method of making calls through a mobile network or the secure method of making calls on-chain that prevents any third party from accessing user data.

At a cost of $599, the Blok on Blok is in the same price range as a new handset from Huobi that launches in South East Asia this week.

The Android-based Acute Angle retails for $515 and offers built-in cryptocurrency features including a Dapp wallet, optional cold-wallet plugin, and integration with a native NODE token that allows users to earn rewards for performing certain actions.

This is said to be the first of a future lineup of blockchain-based phones from Whole Network — a blockchain project funded by Huobi's venture capital arm.

Though blockchain phones remain niche products that appeal to existing cryptocurrency users, competition will force big players such as Apple and Samsung to offer blockchain services to their users or risk being left behind.

As we move into the 5G era, data security is expected to become increasingly important. Thus, giving users greater control over their own data could prove to be a good way for big tech companies to differentiate themselves.The blockchain phone era has just begun.

U.S.-based cryptocurrency exchange Coinbase is evaluating the launch of an initial exchange offering (IEO) platform in the near future.

Kayvon Pirestani, head of institutional sales in Asia at Coinbase, revealed the news at Invest: Asia conference on Wednesday, saying: “We think there’s a really interesting opportunity there for Coinbase.”

“In a nutshell, Coinbase is carefully exploring not only the IEO space but also STOs [security token offerings]. But I can’t make any formal announcements right now,” Pirestani added.

Last month, Japanese crypto exchange Coincheck was also considering launching an IEO platform to help firms raise funds via utility tokens.

IEOs, popularized by Binance, are fast becoming a theme of 2019. Already 12 cryptocurrency exchanges, including OKEx, Huobi and Bittrex, have announced their IEO platforms this year, and 39 projects have already participated in an IEO, according to The Block's research.

Last month, the U.S. Securities Exchange Commission (SEC) issued a no-action letter to Pocketful of Quarters, Inc. (PoQ), a Connecticut-based gaming start-up looking to issue tokens on the Ethereum blockchain.

The noaction letter paves the way for PoQ to legally sell its tokens (called "Quarters") to the public on an exempt basis, sparing PoQ from the requirement to file a registration statement.

The no-action letter is only the second ever issued by the SEC to a ryptocurrency company looking to launch a token sale, and the first in respect of an ERC-20 token.

The no-action letter, which distinguishes PoQ's Quarters from securities, offers fresh insight into the qualities that characterize a true "utility token" - i.e., one that will not fall under the umbrella of securities regulation.

Background

The question of whether cryptocurrencies offered to the public are securities that should be subject to securities laws has recently been a subject of focus amongst regulatory bodies, and a point of interest for market participants and observers.

In order to avoid the application of securities laws to their tokens, issuers have often attempted to classify their cryptocurrencies as "utility tokens", a term often applied in the cryptocurrency sector to tokens that are tied to a certain function, such as allowing the holder to purchase particular services using the token.

To date, regulators have been unwilling to accept as a rule that tokens characterized by issuers as "utility tokens" are not securities.

The SEC in the U.S. and the Ontario Securities Commission (OSC) and Canadian Securities Administrators (CSA) in Canada have taken the approach of considering cryptocurrency offerings on a case-by-case basis, considering each token in the context of its particular facts and circumstances to determine whether it constitutes a security for securities law purposes.

In 2018, the CSA issued a staff notice stating that characterizing a token as a "utility token" will not in itself rule out the application of securities laws to the offering of such token.

Instead, regulators in Canada will consider the characteristics of each offering of tokens to determine whether such offering involves the distribution of an "investment contract"2, or if the tokens offered can otherwise be characterized as securities.


For more information on the CSA staff notice, see our June 12, 2018 update Focus on Substance over Form – CSA Provides Further Guidance on Token Offerings.

The PoQ No-Action Letter

PoQ's Quarters, the brainchild of the company's 12-year old CEO, are intended to function as a "universal gaming token" that can be utilized by video gamers to make in-game purchases across multiple platforms and games.

PoQ will function as an exchange for the cryptocurrency, selling the Quarters on its website, and allowing Quarters holders to store the tokens in online "wallets".

On July 25, 2019, PoQ's legal counsel submitted a letter to the SEC's Division of Corporate Finance seeking confirmation that the regulatory body would not take enforcement action against PoQ if the company sold Quarters to the public without filing a registration statement for the tokens.

On the same day, the SEC issued a no-action letter confirming that, based on the representations made in PoQ's submission, no enforcement action would be pursued. The letter noted the following considerations in reaching the position that no action would be taken:Immediate functionality.

The SEC noted that the Quarters platform has been fully developed and PoQ will be fully operational prior to the sale of any tokens. Thus, the Quarters will be fully useable for their intended function as a universal gaming token at the time they are sold to purchasers.

This is in stark contrast to many other sales of utility tokens, in which the proceeds of the offering were stated to be used to fund the development of a platform or service in respect of which the tokens would have functionality at some future date. No secondary market.

As part of the offering of Quarters, PoQ implemented technological and contractual provisions to restrict the transfer of Quarters. Specifically, Quarters holders will only be able to transfer the tokens to game developers and influencers who have opened approved accounts with POQ, and to PoQ in connection with participation in e-sports competitions.

Developers and influencers who receive Quarters will be able to exchange them for "Ether" tokens at pre-determined exchange rates. These rules function to restrict secondary trading of the Quarters for investment purposes, which is one of the important indicia of a security token.

No profit potential. The Quarters are a "stablecoin", meaning that PoQ sets the price of the tokens as the only sellers thereof and the price will not fluctuate, removing the possibility of purchasers acquiring tokens for speculative investment purposes.

Implications

POQ's Quarters, and the SEC's no-action letter regarding the offering of the tokens, help to clarify the relatively narrow circumstances in which securities regulators will accept that "utility tokens" are not securities.

Though the SEC noted the functionality of the tokens was a factor in issuing the no-action letter, its comments regarding the lack of a secondary market, and the stable pricing of the Quarters, highlight other important considerations regarding the application of securities laws to cryptocurrencies, especially when the Quarters are compared against other purported "utility tokens" making recent news.

In particular, the SEC's treatment of PoQ's Quarters stands in sharp contrast with the ongoing case relating to the "Kin" tokens offered by Kik Interactive Inc. (Kik).

Though Kin tokens possess functionality tied to a messaging app developed by Kik, the SEC has taken the view that the Kin tokens are in fact securities, and that Kik's ICO of the tokens amounted to an illegal offering of securities.

Importantly, Kik purportedly represented to investors that rising demand for Kin would drive up the value for the tokens and that Kik's future business activities would spur this increased value, paving the way for token holders to turn a profit by trading the tokens on secondary markets.

For further background on the SEC's lawsuit against Kik, refer to our June 5, 2019 update, SEC Sues Canadian Company for Conducting Illegal Token Offering.

The PoQ no-action letter, combined with the SEC's arguments in the ongoing Kik litigation, highlight the relatively narrow circumstances in which the SEC will accept that a "utility token" should not be treated as a security.

Goodmans Tech Group

To assist clients in the technology sector, Goodmans brings together our acknowledged expertise in corporate/commercial, private equity, corporate finance, mergers and acquisitions, outsourcing, licensing, intellectual property, privacy, regulatory and media, cleantech, tax, litigation, human resources, corporate restructuring and administrative law.

We do so both for innovative businesses in their start-up phase and for well-established businesses of all types. Goodmans continues to lead in the technology sector and is partnered with the DMZ at Ryerson University.

The DMZ is a leading business incubator (selected by UBI as the top-ranked university incubator in the world), which connects its start-ups with resources, customers, advisors, investors, and other entrepreneurs.

Goodmans is also a proud partner of IDEABoost, an initiative of the Canadian Film Centre's Media Lab; building the next generation of technology-based media entertainment products, services and brands.

Through these partnerships, Goodmans provides legal advice, mentorship and networking opportunities to assist start-ups in maximizing their potential. Goodmans is also an internationally recognized leader in other aspects of technology law and transactions.

From our thought leadership, through participation on the Boards of associations such as CanTech (Canadian Technology Law Association), CORE (Centre for Outsourcing Research and Education), CIEG (Canadian Institute for Exponential Growth, which organized the Summit) and iTechLaw (International Technology Law Association), to our involvement in major technology procurement, joint venture and outsourcing transactions, to our representation, in court proceedings and in arbitrations, of major technology providers, and users of technology, in ground-breaking cases, our Technology Group is consistently at the forefront of leading technology transactions and cases.

Members of our Technology Group are recognized as leading technology lawyers in Chambers Global, Lexpert, Legal 500 Canada, Legal Media Group's The Best of the Best, The Best Lawyers in Canada, Law Business Research's The International Who's Who of Business Lawyers, and The Lexpert/American Lawyer Guide to the Leading 500 Lawyers in Canada, teach internet and communications law at Canada's largest law schools, are regular lecturers at technology industry events and legal conferences, and have published articles in the technology law field.

Footnote1 Quarters are built according to the ERC-20 standard, a technical standard applied to most tokens on the Ethereum blockchain.2 Case law in both Canada and the U.S. has identified that the four elements of an "investment contract" are: (i) an investment in money, (ii) in a common enterprise, (iii) with the expectation of profit, (iv) to come significantly from the efforts of others.The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.

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ContributorAllan Goodman

Wesley Snipes, center, his production company manager, Emmanuel Nmai (right); and LCX CEO Monty C. M. Metzger (left). Photo: LCX

Actor and black belt martial artist Wesley Snipes has partnered with a Lichtenstein-based crypto exchange to tokenize a $25 million movie fund with plans to invest in upcoming films and TV shows produced by Snipes.

The $25 Million Daywalker Movie Fund (DMF) will be tokenized as the DMF security token.

Snipes’ Hollywood production company, Maandi House Studios, has created hit films including the “Blade” trilogy, “The Big Hit”, “Down in the Delta” and “The Art of War.” His most famous roles include “Blade,” “White Men Can’t Jump” and “New Jack City”.

He recently announced that he’s teaming up with Eddie Murphy in the sequel to the ’90 classic, “Coming To America”. Together with the Liechtenstein Cryptoassets Exchange (LCX), Snipes plans to launch a fully regulated tokenized security.

LCX is a blockchain ecosystem for professional investors. The token will be based on the LCX blockchain infrastructure.

“It’s an exciting time now that all of my fans, old and new, can indirectly become co-producers of our upcoming movies,” Snipes said in a prepared statement.

“The tokenized Daywalker Movie Fund enables the audience to turn into investors and participate in the success.”The fund will be managed by Snipes and an investment committee of professional fund managers. It will allocate production budgets to future film productions alongside other Hollywood producers.

If you Google, “security tokens,” the results will likely fall into two camps: those who speculate on the potential profits to be made investing in security tokens, and those who claim that security tokens represent a short-lived and potentially dangerous bubble, according to The Tokenist. 

Blockgeeks explains security token as a digital form of traditional securities such as ownership in a publicly-traded corporation, a creditor relationship with a government or corporation, or rights to ownership as represented by an option.Most people are more familiar with utility tokens than security tokens.

A utility token is a coin backed up by a project. Security tokens differ in that they are much more heavily regulated by the government than utility tokens.

For those coming from more traditional forms of finance and investing, security tokens offer the speed and ease of blockchain without sacrificing strong legal protection. For those with a background in blockchain investing, security tokens bring enhanced protection against fraud and misselling. The Tokenist

The Snipes-LCX security token offering will lower the barrier of entry to investing in Hollywood and allow a broad audience of institutional and retail investors to benefit from the profits of Snipes’ success, according to a press release.

LCX has headquarters in Liechtenstein, a country known as a financial hub with groundbreaking blockchain laws. LCX’s blockchain technology platform will handle the registration and identification of investors and serve as the central hub for the security token offering.

LCX CEO Monty C. M. Metzger said compared the introduction of blockchain technology to the introduction of email. “Tokenization empowers a new class of digital assets and is redefining the financial industry,” Metzger said in a prepared statement.

“LCX has been preparing the partnership including evaluation of regulatory and legal aspects and we are excited to share this finally in public.

”Pre-registration is available at LCX.com.

Registered users will be prioritized when the security token offering becomes official.

We’re over two decades into an era of digital feudalism.Feudalism is a centuries-old concept. In medieval times, the nobility owned vast amounts of land. Serfs worked the land to create value, but most of that value was confiscated by the landlord.

Instead of farm produce, today the new asset class is data—created by us, but captured by digital landlords such as social-media companies, search engines, online retailers, governments, and banks.

“Surfing the internet” has become “serfing the internet,” with users giving up intimate details of their lives for the internet lordships to aggregate, expropriate, and monetize. We, as the serfs, only get left with a few lousy cabbages.

This is important, because this data isn’t just the biproduct of your labor. It is the stuff of your identity in the digital age. All this data constitutes a “virtual you.

” The digital crumbs that you leave in daily life create a mirror image that knows more about you than you do. You probably can’t remember dozens of your personal identifiers: your driver’s licence details, credit-card numbers, government information.

But you definitely don’t know your exact location a year ago; what you bought or what amount of money you transacted; what you said online; or what medication you took or diagnosis you received.

And that’s just the beginning. In the future, the virtual you will contain detailed medical information like your heart rate, blood pressure, or myriad other real-time measures of what you do, how you function, where you are, and even how you feel.

The trouble is that the virtual you is not owned by you. “Imagine if General Motors did not pay for its steel, rubber, or glass—its inputs,” economist Robert J. Shapiro once said. “That’s what it’s like for the big internet companies. It’s a sweet deal.”

We create the asset: They expropriate it. Yet we still thank them for use of their land, rather than demanding what is rightfully ours.

Why should you care?

There are problems with this new form of feudalism:

• First, we can’t use our own data to plan our lives. It’s stored in other people’s silos, which we can’t access—but third parties like Cambridge Analytica can, often without our knowledge.
• Second, we enjoy none of the rewards of this third-party data usage, yet we bear most of the risk and responsibility for its clean up, should they lose or abuse our data.
• Third, these elites are invading our privacy and telling us to “get over it,” when they know full well that privacy is the foundation of freedom; just look at the Chinese social credit scoring
• Fourth, we can’t monetize these data assets for ourselves, resulting in a bifurcation of wealth and all its discontents.

The serfs are starting to get mad as hell and are not going to take it anymore. But populism, from Brexit to Trump, is not the solution. Nor is the European Union’s general data protection regulation (GDPR), which is a partial measure at best, and hypocritical in light of the new EU common identity repository.

Nor is a heads-will-roll type of policy that calls for the breakup of Amazon, Facebook, and Google for violating anti-monopoly laws.

What we need is a wholesale shift in how we define and assign ownership of data assets and how we establish, manage, and protect our identities in a digital world. Change those rules, and we end up changing everything. It is a revolution to be sure.We’ve called it the blockchain revolution.

The self-sovereign identity

Identity is not simply endowed at birth; it is endowed by birth.State-run internet-based systems are problematic.

In the last ten years, at least 48 government databases have been breached, exposing the data of 1.44 billion people—and that number doesn’t include hacks to government-managed health-care and education records.

Yet, we’re dependent on system administrators who can freeze access, delete our voter registration or other credentials, and use banks, telecoms, and tech firms to surveil us.

Nothing about these institution-centric systems is citizen-friendly. They discriminate against the poor, the rural, the homeless, the imprisoned, and the overworked in society.

Syrian refugees in particular put a spotlight on the crisis of state-based identification. The reality of a government-sourced and -sanctioned identity is untenable—both administratively and philosophically.

Why should any government get to rubber-stamp who we are? We should be establishing our own identities and, as Joseph Lubin of ConsenSys wrote, bootstrapping ourselves into economic enfranchisement. We need to take action now.

What each of us needs is a self-sovereign and inalienable digital identity, one that is neither bestowed nor revocable by any central administrator and is enforceable in any context, in person and online, anywhere in the world.

As Alex Tapscott and I argue in Blockchain Revolution, the means now exist to assert what developer Moxie Marlinspike calls “sovereign source authority”: Identity is not simply endowed at birth; it is endowed by birth.Here’s how it works.

A list of identity commons

To bootstrap our identity, we first need a model that is distributed among and maintained by the people whose identities it protects.

This means that everyone’s incentives align in an identity commons, with clear rights for users to steward their own identity, protect their privacy, access (and allow others to access) and monetize their own data, and participate in rule-making around the preservation and usage of the commons.

Several identity projects in the blockchain space are working to provide such structure and capabilities.

• Blockstack, a public-benefit corporation in Delaware, incorporates the bitcoin blockchain in its open-source identity solution. Blockstack users can set the location of their user profile and application data, and Blockstack has no control over the identity information on the bitcoin blockchain or stored on Blockstack’s peer-to-peer network.
• Civic, a for-profit company based in San Francisco, offers an ID verification solution through an ethereum-based platform. Users collect verifiable claims of attributes from validators—such as banks, governments, and universities—but when a third party wants to learn something about a user, the user can decide whether and how much to reveal. The third party must then pay the validator of the relevant attribute, which is an incentive for validators to participate.
• Sovrin is an identity platform governed by the Utah-based for-profit Evernym and running on a distributed ledger based on Hyperledger Indy. The nodes maintaining the ledger are trusted entities such as banks, colleges, governments, and non-governmental organizations, which are approved by the Sovrin Foundation Board of Trustees. Users download the Me wallet app for storing their credentials and cryptographic tokens, as well as communicating with other wallets for peer-to-peer exchanges of data, which are stored locally in the user’s wallet or encrypted cloud backup.
• uPort, a platform built on the ethereum network and funded by for-profit ConsenSys in New York, enables users to create a decentralized identity (DID) based on the proposed ERC-1056 lightweight ethereum identity standard for ethereum wallets. The app manages user identities and credentials, such as keys, identities, and attestations, which are portable across service providers and client applications. The app can authenticate a user and disclose verifiable claims to whomever the user chooses.
• Veres One, a blockchain operating under the guidance of the Veres One W3C Community Group, may be the simplest self-sovereign identity infrastructure. It has no tokens and stores no user data—it only stores only the DIDs used for key management and service endpoints discovery. Through Veres One, anyone with a web browser can generate a DID compatible with other identity services, allowing for portability.

Many of these start-ups are collaborating in the Decentralized Identity Foundation, a consortium consisting of Hyperledger and R3, and incumbents such as Accenture, Microsoft, and IBM. Its working groups are focusing on three big areas—identifiers and discovery, storage and computation of data, and attestation and reputation—with an eye to developing use cases and standards.

Breaking free of our digital landlords

The self-sovereign identity is one the pillars of a new social contract for the digital economy.

The ultimate solution, however, must exist independent of any corporation, government, or other third party, and should not be subject to the agency risk of executives or political parties. It must interoperate with these institutions, even as it outlasts them. In fact, it must be built to outlive its users and enforce their right to be forgotten.

This would mean separating data rights from the actual data, so that the rights holder could delete it. To be inclusive, it must be user-friendly with a low-tech mobile interface and low-cost dispute resolution.

This transition will take time. We expect organizations to take at least three actions to rebuild the trust of those whose data they hold.The first involves governance.


Many large corporations and government agencies have strong governance mechanisms for their hard assets, but really poor governance of information assets.

Companies must define decision rights around their data and develop an accountability framework that disciplines how employees use data.The second involves the discontinuation of practices that collect and store customer data.

This could involve either destroying these massive customer databases altogether (after returning files and records to customers) or migrating this data to distributed storage systems, such as the IPFS, and then transferring control to customers.

The third involves the cultivation of a new core competence: the ability to work with huge anonymized datasets rented from large numbers of people, all handled in a distributed and trust-minimized manner. It will remove data as a toxic asset from the corporate balance sheet and make it a fundamental human asset from birth.

It will flip the data-analytics business model on its head and reward corporations for serving as data brokers on behalf of individuals. This will see the end of the large centralized data frackers that scrape, hoard, and rent, but don’t protect this data.

These new approaches to privacy and ID management give citizens ownership of their identities, the facts of their existence, and the data they create as they live their lives.

The self-sovereign identity is one the pillars of a new social contract for the digital economy, and will be critical to the transformation to a more open, inclusive, and private economy.

We need more than access to some of our data. We should own it.

Less than two years ago, when Bitcoin was at its peak near $20,000, every startup that was blazing the trail in the crypto ecosystem was celebrated as the darling of Silicon Valley. 

To some companies, that momentum even carried on into 2018, despite Bitcoin’s collapse, as trading platforms continued making money and the buzz around blockchain technology kept rising.

San Francisco-based crypto exchange Coinbase, for example, raised $300 million in fresh capital last fall (when Bitcoin fell to $6,000), which made its co-founder and CEO Brian Armstrong a billionaire, and was ranked by professional networking site LinkedIn as the third best U.S. startup to work for.

SEE ALSO: Is Facebook’s Libra Crypto Token Already Dead?

However, after another year of contemplation on Bitcoin and blockchain, it seems as if the world is losing interest in Coinbase and its many crypto peers.

On LinkedIn’s latest ranking of the 50 hottest U.S. startups to work for, Coinbase has dropped from last year’s No. 3 to a humble No. 29. LinkedIn said its rankings are based on an analysis of billions of data points reflecting a company’s growth potential and the level of interest shown by job seekers, as well as the company’s current employees.

Blockchain payment startup Ripple, the company behind popular digital token XRP, has also slipped from last year’s No. 7 to No. 28 this year. Other crypto companies in the top 50 last year, including Winklevoss twins’ Gemini crypto exchange (No. 25) and Ethereum co-founder Joseph Lubin’s ConsenSys (No. 26), have dropped off the list entirely this year.

Coinbase recently lost a crucial relationship with the traditional financial world when British bank Barclays ended its partnership with the San Francisco company last month. Until then, Barclays had acted as a middle man in connecting Coinbase to the UK Faster Payments Scheme (FPS), allowing users to withdraw and deposit British pounds on the crypto exchange.

Since then, Coinbase has found a replacement with UK banking startup ClearBank. The impact of this series of events on Coinbase’s valuation—as well as Armstrong’s net worth—is hard to quantify until the company’s next round of fundraising.

What are the best and most effective ways information security professionals can use blockchain technology?

Blockchain is distributed ledger technology. The premise of blockchain is that everyone involved in the chain has the same version of the truth at the same time. Each block in the chain builds on the previous and each has a unique identifier.

Blockchain technology is finding its way into more and more areas of global business, yet the use of blockchain in the world of cyber security is still nascent. Many of the most developed use cases involve financial transactions.

However, due to the inherent security attributes of decentralised, redundant ledgers, hashing/encryption, and other privacy-preserving techniques used by blockchains, security-related applications are also significant. Early forays have focused on identity, data, and the internet of things (IoT).

Identity and access management focuses on validating that someone is who they claim to be, a fact that attackers are keenly aware of when they target the credentials of privileged users in an organisation, such as systems administrators or C-level executives, to gain access to key digital assets.

A blockchain-based system could be used to track identities, entitlements, entitlement assignment, and access events, with any attempts at change, such as the privilege escalation, flagged and checked against policies before it is allowed.

From a data perspective, blockchain can be used to store data in a distributed manner. Today, data storage is often centralised, and cyber attacks frequently focus on accessing data in one location. Using distributed ledger technology lowers the risk if an attacker were to access the data – even if they were to get in, there’s less data to steal than with centralised data storage.

The internet of things is growing rapidly despite persistent concerns about the security of endpoints and the mission criticality of many IoT applications. 

Blockchain’s peer-to-peer (P2P) architecture and intrinsic security technologies – including the encryption/hashing of data, redundant and immutable ledgers, robustness of data to compromised nodes, and use of hardware wallets and chip-level trusted execution environments – bring the potential to increase IoT security.

These characteristics enable the development of networks of trusted devices – whether in private or public blockchain deployments.

Enterprise blockchain adoption in security is in its infancy and several enterprises have adopted a “wait and watch” approach owing to the ongoing development of blockchain technology, the need for significant investment, and the lack of a specialised workforce.

However, Ovum has developed a series of questions to consider for blockchain use in security: Does the use case require a database? Would there be several users updating the database? Is there a need for the users to establish trust between each other?

Are there any issues with the involvement of a central or third party? And do the transactions have dependencies between each other?If the answer to all of the above questions is “yes”, then this is a good use case for blockchain in security – or in any other potential use case.

In the cyber security world, blockchain should not be dismissed as emerging technology that has little value; instead, organisations should consider maintaining a watching brief and exploring possibilities.

Read more from Computer Weekly’s Security Think Tank about how information security professionals can use blockchain technology
Blockchain – balance risk and opportunity for smart security.Risk mitigation is key to blockchain becoming mainstream.Blockchain utility depends on business type and cost.Blockchain – not for everyone, so look carefully before you leap.Use blockchain for integrity and immutability checks.

The value of the blockchain technology in healthcare market is expected to surpass $1.6 billion by 2025, according to global market research and consulting firm Global Market Insights.In a press release published on Sept. 9, Global Market Insights estimated that the blockchain in healthcare market will grow due to a number of factors such as the implementation of government initiatives and increasing investment in the field.

Growth factors for blockchain in healthcare

Examination of medical outcomes, interoperability of health data and cost component reductions will further impact blockchain adoption, according to the outlook. The company states in the release:

“Growing awareness about implementation of blockchain technology and government initiative for data standardization and operational scalability constraint in data management will spur industry growth in upcoming years.”

As for the healthcare payers segment of the blockchain in healthcare market, Global Market Insights forecasts that it could see a 65.7% compound annual growth rate by 2025. This section of the market will purportedly grow due to the widespread deployment of blockchain tech in order to improve emergency care and clinical outcomes.

Promising outlook

Global Market Insights’ recent findings echo those of information technologies firm Acumen Research and Consulting in mid-July. At the time, the firm suggested that the volume of the blockchain in healthcare market worldwide will reach more than $1.7 billion by 2026,  with a compound annual growth rate of 48.1%.

As previously reported, the Ugandan government partnered with blockchain startup MediConnect to trace counterfeit drugs in the country. MediConnect’s blockchain-based platform enables the recording of prescription medication, thus identifying counterfeit drugs and preventing their distribution in the pharmaceutical supply chain.In July, blockchain healthcare startup Solve.

Care partnered with Uber Health to transport patients. A dedicated app will allow patients to schedule an Uber Health ride, which claims to be compliant with the Health Insurance Portability and Accountability Act of 1996.

China‘s upcoming state-controlled digital currency is to be similar to Facebook‘s proposed coin, which makes total sense, because Libra isn’t really a cryptocurrency.

Mu Changchun, deputy director of payments at China‘s central bank, explained the country was issuing its digital currency “to protect our monetary sovereignty and legal currency status,” Reuters reports.

“We need to plan ahead for a rainy day,” Mu added.It’s likely these concerns reflect those of the European Central Bank. Earlier this week, a representative claimed that Facebook‘s Libra could undermine its power if it was readily adopted, as it could reduce overall demand for the Euro.

Next week: China discovers its digital token is capable of alchemy

Amazingly, Mu mentioned that his government‘s proposed tokens will be just as safe as China‘s paper-based fiat.Payment platforms like WeChat and Alipay are to supposedly support them, and Mu promised they’ll even be usable without an internet connection.

More incredibly, Reuters reports that Mu said China‘s purported coin would find a balance between allowing anonymous payments and preventing money laundering.

Considering that China is considered by many to be a surveillance-state (with scholars now referring to its politics as “networked totalitarianism“), these claims are outright laughable.

So, while Facebook does its best to brand its Libra offering as a real “cryptocurrency,” China has taken notes on issuing an entirely centralized digital currency that’s susceptible to censorship.If anything, the two deserve each other.

The US could someday try to crack down on cryptocurrency by calling certain users financial institutions. Critics say that would be a terrible idea.

by Mike Orcutt

If you are interested in the future of cryptocurrency, you should probably get to know the Bank Secrecy Act, a nearly 50-year-old law that requires financial institutions in the US to help law enforcement agencies police money laundering. 

The government could someday try to use the law to impose strict controls on how—and whether—certain blockchain-based currencies can be used. 
Take it from David Murray, a vice president at the Financial Integrity Network, a consulting firm in Washington, DC, that focuses on illicit finance. In testimony this week before a Senate subcommittee, Murray called on the government to expand its powers under the BSA to combat the use of cryptocurrency by human traffickers.

“Virtual assets are vulnerable to illicit finance because they offer rapid and irrevocable settlement and the potential for anonymity,” he said. Traditionally, efforts to weed out illicit finance have focused on banks and other financial intermediaries. But public blockchain networks like Bitcoin pose unique challenges for law enforcement.

The BSA, for instance, mandates that financial institutions collect certain information about their users and file reports to the US Treasury Department when transactions are larger than $5,000 or otherwise qualify as “suspicious.

” But since a global network of computers—not a centralized institution—validates Bitcoin transactions, who are they supposed to regulate? 

To tighten its grip on cryptocurrency, Murray said, the Treasury Department should broaden the BSA’s definition of a “financial institution” to include certain cryptocurrency “service providers” as well.

While cryptocurrency exchanges and crypto-asset storage providers are already covered by the BSA, other important participants in blockchain systems remain outside the law’s scope, and that should change, Murray argued.

One group he mentioned specifically was “virtual asset transaction validators.” Different blockchain systems work in different ways, but in all of them, participants who run the software the network uses are required to validate new transactions. 

Bitcoin and similar cryptocurrencies call them “miners” because they receive newly minted digital money in exchange for this activity. Murray said the US should regulate miners as so-called money services businesses.

But regulating miners would “basically make the technology nonviable,” at least in the US, says Peter Van Valkenburgh, director of research at Coin Center, a blockchain policy advocacy group in Washington, DC. It’s also probably not even feasible.

Given the global, pseudonymous nature of Bitcoin and similar systems, it would be difficult if not impossible to identify and locate all miners, who could just move to other countries with less strict rules.

Besides, says Van Valkenburgh, it doesn’t make sense to force Bitcoin miners to keep track of their customers the way a financial institution would, since they don’t really have customers.

“They have no idea who has requested transactions on the blockchain,” he says, adding that they are “just running the protocol” in hope of a reward.

Van Valkenburgh notes that the Treasury Department has long had the power to broaden the BSA’s definition of a financial institution to include cryptocurrency miners, but thus far it has explicitly chosen not to.

The international body in charge of policing money laundering, the Financial Action Task Force, has also chosen to avoid regulating miners, instead focusing on cryptocurrency exchanges.

It’s not beyond the realm of possibility that this could change, perhaps in the wake of some future crime that involves the use of cryptocurrency.

If US authorities ever do try to expand their powers under BSA to crack down on cryptocurrency, though, they’ll be in for a fight. Van Valkenburgh argues that using the BSA to regulate cryptocurrency software developers and individual users would be unconstitutional.

Could bitcoin become part of our payments future? Apple seems to think so.In a recent conversation with CNN Business, Jennifer Bailey, vice president of Apple Pay, revealed the company’s awareness of—and perhaps optimism about—the crypto markets.

“We’re watching cryptocurrency,” Bailey said. “We think it’s interesting. We think it has interesting long-term potential.

”Although brief, her commentary offered a glimpse into how the tech giant is approaching bitcoin and the broader crypto market— that is, with an open mind.

Today, Apple’s market capitalization is more than five times larger than that of bitcoin (which stands at $188 billion).

Admittedly, it’s hard to discern much from Bailey’s crypto musings. Her phrase—”interesting long-term potential”—leaves the door open for Apple to dabble in crypto itself, or to slam it shut later on.

If Apple does pursue a crypto wallet for the iPhone though, it won’t be the first phone manufacturer to market. HTC’s Exodus 1 already comes packaged with a “secure enclave” meant to keep your crypto holdings separate from other apps on the device, and this week, Samsung launched a blockchain-enabled smartphone (paywall).

Samsung’s device is essentially the Galaxy Note 10 with some crypto-cobranding, courtesy of Klaytn, a South Korean blockchain platform. 

Apple recently launched its own credit card, backed by Mastercard and Goldman Sachs, which primarily exists within the Apple Pay wallet of the owner’s iPhone.

Apple’s reticence probably indicates the company would support existing cryptocurrencies as opposed to creating its own, like Facebook is attempting to do with Libra. 

It’s done similarly on other standards, such as the communication tech behind Apple Pay, and the wireless-charging standard its newer iPhones use.

Since its inception, blockchain has promised to make trusted third parties redundant. In practice, though, whether blockchain is actually decentralized depends on what is governed and how this governance is enacted.

As more businesses explore blockchain this distinction becomes increasingly important. There are many expected benefits from decentralization and those benefits may elude us if decentralization fails in practice.

How blockchain governance is enacted—what people do in practice—can differ considerably from how blockchain governance is envisioned—what people aspire to do.

There is no one commonly agreed upon definition of blockchain, but according to one often used in the common discourse, a blockchain is a distributed ledger shared by multiple parties who can add transactions to the ledger.

This implies that changes are reflected consistently for all parties. If reconciling contradictory ledgers is costly, this may be beneficial. Blockchain’s proponents expect it to be virtually immutable without being centralized, meaning that blockchain would not require a trusted third party that decides upon the ledger’s content.

Bitcoin, the first blockchain implementation, has succeeded in allowing for digital payments without having to rely on any trusted third party.

Such decentralization is expected to bring cost savings (through disintermediation), and empowerment to participants, since the parties using the blockchain do not need to trust a powerful third party to act in their best interest. But these benefits are realized only through decentralization.

If decentralization fails to materialize, we return to the problems of power and trust. We can understand this contradiction by identifying the different ways Bitcoin– as a prototypical example of blockchain– is governed, both in its envisioned form and in practice.

Four dimensions of Bitcoin governance

Governing new transactions

Millions of people use Bitcoin and anyone can submit a transaction. But in practice there are some elements of centralization. Users pay sometimes hefty transaction fees to encourage quicker validation of transactions. Consequently, users unwilling to pay high transaction fees may either choose to not transact at all or have to wait longer to get their transactions validated.

Governing consensus

New transactions need to be validated to become part of the blockchain. A consensus mechanism specifies how to get multiple nodes to agree on whether a transaction is valid and should be added to the blockchain. In Bitcoin, it is envisioned that anyone can validate and add transactions.

Only one user is allowed to do so at a time. Users repetitively compete for this right by letting their computer look for an unknown number. Participation in this process, known as mining, is resource intensive and costly. The winners receive bitcoins in return.

Consensus mechanisms allow for decentralizing the validation of transactions. They are crucial in arguments that the Bitcoin system could replace banks and function without trusted third parties safeguarding transaction ledgers.

Despite envisioned decentralization, the high cost of mining has led to considerable centralization of consensus in practice. In order to share the risk of spending the resources but failing to win the competition, groups of miners form mining pools. This resulted in just a few mining pools validating most transactions.

At the same time, mining pools charge miners for participation, with larger mining pools charging more. Therefore, they attract fewer miners and grow more slowly. It is unlikely that the environment would end up fully centralized with just one mining pool. So while in practice achieving consensus is more centralized than it was envisioned, a certain degree of decentralization is still retained.

Governing updates

Once the blockchain is operating, updates to the blockchain protocol may be needed or desirable. In Bitcoin, it is envisioned that anyone can develop and suggest protocol updates.

In practice, however, these changes are typically proposed by only a handful of developers and the discussions are highly centralized, with a small number of commenters provide significantly more comments than the rest.

Governing the design

Before, before the blockchain starts operating at all, the blockchain protocol needs to be designed. This governance dimension differs from the other dimensions in two ways. One is that the design is enacted before the other three dimensions.

Second is that there has been little debate on whether the initial design should be decentralized or centralized — which is surprising given the enthusiasm around decentralization in blockchain. In practice, the protocol development is typically highly centralized and coordinated.

In the case of Bitcoin, the initial design was proposed by Satoshi Nakamoto, an unknown entity that could be an individual or a small group of people.

This secrecy itself indicates that the process of developing the 2008 white paper could not have been very decentralized. Distinguishing between envisioned and enacted blockchain governance

The Bitcoin example shows us how real-life blockchain governance can differ significantly from how it is envisioned. For transaction submission and validation, as well as protocol updates, enacted governance appears to be considerably more centralized than envisioned governance.

Even if decentralization is envisioned, it may not materialize. We can see that in practice the dimensions that are design-related (protocol development and updates) tend to be marked by particularly centralized governance, while those that are related to the actual use of blockchain (transaction validation and submission) tend to be somewhat more decentralized.

Since blockchain technologies debuted, we’ve learned that despite how they were envisioned, governance is often more centralized in practice since decision-making power is often costly to acquire and exercise.

Expertise, reputation, time, or money can all be required to gain decision-making power. The higher these costs are, the fewer are the people who want to participate, which contributes to centralization in practice.

Bitcoin is a permissionless blockchain. For permissioned blockchains such as IBM’s Hyperledger Fabric, which restrict who can propose protocol updates, validate transactions, and submit transactions blockchain governance is envisioned to be more centralized than for permissionless blockchains such as Bitcoin’s. Weighing the potential for decentralization

The promise of blockchain is decentralized governance. However, managers need to carefully consider two things. First, decentralized governance is not a necessary feature of blockchain; it needs to be enacted.

Second, the benefits of decentralized governance may not always be worth the associated costs. Protocol developers may be able to work more effectively on their own or in small teams. Even the decentralization of transaction validation may not always be superior, as Bitcoin’s slow and energy-intensive consensus mechanism demonstrates.

Blockchain proved itself as a revolutionary technology. It has been transforming many sectors since its inception. Initially, change started with the finance and banking industry which soon spread to other sectors.

Retail, energy, governance, and healthcare sectors started experiments with blockchain. Agricultural industry, too, soon understood the potential of blockchain. Many countries, like India, are working to create a system which can help grow agriculture industry.

Supply chain is an essential part of the industry. Blockchain based applications are able to maintain every track record happening from farmer to consumer.

There may be a long chain of intermediates between a farmer and a consumer. Traditionally, It was not easy to trace every transaction happened among each intermediate. Blockchain can make these transactions traceable.

How it Works?

Farmers can create a small contract with the suppliers to whom they are selling their crop. This data will be saved in the blockchain database. Now, if suppliers sell this crop to the retailers, they will create the same contract with them.

When their transaction is complete, the data will be saved in the blockchain platform. This process can be followed by and with everyone in the chain. Whether it is transport service or port authorities or insurance agencies.

If this process is followed then the last person can check all the transactions happened in the database. This can help him know which farmer grew the crop, which supplier supplied it, and which transport company transported it.

We analysed some major challenges which farming sector faces and tried to understand how blockchain based application development can make a difference.

Food Safety: The consciousness about food safety is rising in consumers globally. Buyers are keen to know whether manufacturers have followed the food safety parameters or not.

The World Health Organization (WHO) found out that around 400,000 people die every year due to contaminated food.In 2017, more than 200 people were found infected with Salmonella infections in the US.U.S. FDA investigated and found that imported Maradol papayas from Mexico were the reason behind the infections.

Above are a couple of scenarios which can help you understand why food safety is important.Blockchain can solve this problem with traceability feature. Let’s understand this in the next point.

Traceability:As we discussed earlier that supply chain is an essential part of the industry. But now, tracing this chain is not easy. If you want to find out which farmer has grown the grains you bought, you will have to go through a long and hectic process. This may take some days or months.

Now, if this supply chain is using blockchain then you can know about the manufacturer or farmer within a few seconds. Blockchain based applications make the supply chain process transparent.If there is an epidemic due to poisonous food then the producer of the food can be traced within seconds.

 We can also trace where else that food was supplied and can pull all that back.This transparency will alert the manufactures and producers as well to not make mistakes.

Transportation & Logistics: The transport and logistics industry is enormous in itself and the challenges are also not less. Whoever has worked in this industry knows that this sector has many difficulties.

Logistics is the backbone of the supply chain industry. In that case, logistics is very important in the agriculture sector as well.Logistics industry always looks for innovative ways which can reduce their task force and improve functionalities.

With blockchain, this industry can improve the efficiency of the shipping process, they can track inventory easily, their transparency will improve, and invoicing will be more comfortable.

Transaction Costs: One of the most important features which made blockchain popular was its negligible transaction cost. Blockchain based applications can reduce the cost of a transaction.

Buyers and sellers can make transactions without the need for a third party (e.g. banks) using blockchain.Blockchain is a digital ledger which can not be hacked. One can only update it but practically it can not be hacked.

This means that blockchain will be a game-changer for supply chains because it will reduce the overall cost of a product.

Conclusion:Above are a few challenges which are important and very potential to the agriculture industry. It will be a massive task to reshape the complete framework of an industry which is so very vast. But we have to begin from any point to reach our goal.

Though, many organizations even countries have started working to implement blockchain development.Soon, we will see agricultural transactions, transportation, and contracts executing on the blockchain platforms.

Categories: Blog • Enterprise Technology






Kuldeep Kundal, Mr.

Cyber Infrastructure, "CIS"

As Technology Geek since 2002, Mr. Kundal, Founder & Chief Marketing Officer at Cyber Infrastructure Pvt Ltd., handled Global Technology and Business Leadership includes building world-class multinational organizations, centers of excellence to strategize.

He is a proven hands-on leader with a successful track record in business leadership and ownership, both offline and online. His strong personality and social skills have led to CIS’s consistent expansion. He is responsible for key alliances and has structured, managed large and complex contracts for CIS and its clients.

Bitcoin, cryptocurrency and blockchain startups exploded onto the London financial technology scene over the last few years, but now, due to a combination of potentially tougher new regulation and the UK's looming exit from the European Union, things could be about to take a turn for the worse for the fledgling bitcoin and crypto sector.

It could be about to all go wrong for London's bitcoin, crypto, and blockchain startups.

GETTY IMAGES

The U.K.'s prime minister, Boris Johnson, who has taken over from Theresa May after she spent two fruitless years trying to negotiate a Brexit deal with the E.U., has steered the country towards a feared so-called no-deal Brexit scenario, potentially causing chaos–though perhaps boosting the bitcoin price.

While Johnson has clashed with the U.K.'s parliament over the possibility of a no-deal Brexit, it remains on the table, fueling business uncertainty.

If the U.K. does eventually leave the E.U. trading bloc without a deal, financial technology companies would lose access to the bloc's single market–while bitcoin and cryptocurrency startups may struggle to justify a London office without an easy route into Europe.


"The uncertainty around Brexit has already taken a major toll, particularly for non-U.K. companies doing business in the U.K.," said Felix Shipkevich, a New York-based lawyer specializing in digital currency and financial technology.

Financial technology businesses have already been found to be moving from the U.K. to the E.U. in preparation for Brexit, according to report from capital markets think tank New Financial, out earlier this year.

"If fintech businesses in the U.K. can’t access international individuals working in areas such as machine learning, artificial intelligence and blockchain as easily after Brexit, this could cause a contraction in the sector because currently, up to a fifth of the skills used by the fintech sector in the U.K. have come from the EU," Sarah Hall, senior fellow at the U.K. in a Changing Europe research group, told bitcoin and crypto trade news website, Cointelegraph.

Last month, the U.K.'s financial services watchdog warned potential investors that bitcoin and cryptocurrencies have "no intrinsic value," with some taking the caution as a signal the country could be moving towards a bitcoin ban.

Just last week, the Bank of England governor Mark Carney, who has previously poured scorn on bitcoin and its crypto peers, said a global digital currency could replace the U.S. dollar as the world’s reserve currency–and likely directly compete with bitcoin and other major cryptocurrencies.





The bitcoin price has climbed this year, despite the U.K.'s financial industry watchdog warning it has "no intrinsic value.

"COINDESK

Meanwhile, one promising crypto startup has already run into difficulties, according to reports. Nodal Labs, a blockchain-powered freelance marketplace, has missed payments to staff with a boardroom battle underway for control of the floundering crypto company, according to AltFi, an alternative finance and fintech news website.

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Billy Bambrough

I am a journalist with significant experience covering technology, finance, economics, and business around the world. As the founding editor of Verdict.co.uk I reported ...Read More

The global lottery industry generates billions in sales every year. But despite being worth so much money, the industry is riddled with pressing issues, which include the lack of transparency and the growing doubt about the actual randomness of the draws.

This concern comes from the fact that a broad range of platforms use pseudo-random number generators often audited by questionable authorities. This is leading to lottery companies seeking alternative ways to create draws.

To help increase a lottery’s transparency, fairness, and credibility, operators are starting to use the latest technology. 

The Naija Lottery in Nigera, is one of the most recent examples, as they partnered with Quanta to introduce blockchain technology to the traditional lottery market. The blockchain lottery operator will use smart contract-based technology to make the number generation more transparent in order to increase the fairness of the draw.

Part of the deal between the two companies is to bring decentralised ledger technology to the traditional lottery market, especially across Africa and Nigeria, which could prove to be a lucrative business opportunity. In 2016, Nigerians spent $395.5 million (₦154 billion) per day on lotteries and other games, which increased to just under £1 billion (₦ 308 billion) in 2017.

According to a Lisbon Technical University study on Crypto Bit News, the growth of lottery sales depends on a country’s GDP per capita. And since the Nigerians are currently spending a lot of money on lottery tickets, with 13 out of 20 people saying that they participate in some form of gaming, now is the time to build on its momentum using blockchain.

Nigerian leaders are already working hard to build a safe and trustful platform to ensure fairness and transparency, and remove traces of corruption and inefficiency.

As blockchain does not involve a middleman and transactions are much more transparent, this will increase fairness in the gaming industry, improving the overall experience for the customers.

This adoption of blockchain technology in the lottery industry follows a global trend of using the latest technology to transform gaming industries. DAO Casino created a platform that runs on an Ethereum blockchain with the aim to reduce “fraud risk; hidden fees; high cost of entry for game developers; operational overhead; player access to funds; player withdrawal delays; and general lack of trust.

” The company will use the blockchain used for Ethereum to create smart contracts.The rise of blockchain also mirrors the increasing use of cryptocurrency as an accepted form of currency.

This is best represented in how it is now being used in international lotteries. The Express reports that as Bitcoin become more mainstream this has led to the creation of the world’s first licensed Bitcoin lottery by Lottoland.

The lottery has been a success since it launched with Lottoland putting the current Bitcoin Lotto jackpot at 2,040 BTC (₦4 billion). What makes this lottery different is that the value of the jackpot reflects the current price of the cryptocurrency.

With cryptocurrencies like DasCoin becoming more widely used in Africa, it is not hard to believe that cryptocurrency lotteries will become more commonplace across the globe.

In fact, the integration of blockchain into the Nigerian lottery could be the first step to an actual Nigerian cryptocurrency lottery.

Norwegian savings bank Sparebanken Øst has invested $1.65 million in a local bitcoin exchange as demand for cryptocurrencies booms amidst an ongoing economic slowdown.

Sparebanken Øst purchased a 16.3 percent stake in Norwegian Block Exchange (NBX), a digital assets trading platform founded by airline tycoon Bjørn Kjos.

The founder of Norwegian Air Shuttle, Scandinavia’s largest airline is set to launch NBX by mid-September after spending almost a year on its development. His new partners at Sparebanken sees the exchange as something that could “challenge existing financial ecosystems” with its range of services.

NBX plans to offer digital asset trading, payment and saving solutions, and other blockchain-based services.

“As these digital asset initiatives begin to become part of the mainstream, Sparebanken Øst has decided to take an ownership stake in NBX to obtain new knowledge and solutions as well as learn from and understand disruptive initiatives. This understanding will equip the bank to manage competition and future-oriented solutions for customers,” — read the bank’s press statement.

A Business Hedge Called Bitcoin

The announcement follows Kjos’ decision to interconnect his airline operations with their cryptocurrency exchange. The business magnate stated in late July that Norwegian Air would start accepting payments in bitcoin. Sparebanken believes it is a great strategy to drive airline’s as well as exchange’s operations. The bank wrote:

“Possible collaboration with the airline Norwegian Air Shuttle, a key player with NBX, could be a platform for launching new solutions on a mass scale, and the bank sees great market potential both nationally and internationally.”

Kjos’ interest in cryptocurrencies surfaced in public conscience right after he relinquished control of Norwegian Air Shuttle. The tycoon tended to fly into an unchartered territory of digital assets as his airline services delivered lower-than-expected results in Q2.

The shuttle’s net profit plunged 75 percent in a year to $8.5 million, marred by the grounding of the Boeing 737 MAX, which makes for over 10 percent of Norwegian Air Shuttle’s fleet.

Meanwhile, two weeks after his resignation, Kjos announced that he would launch NBX.

Around the same time, benchmark cryptocurrency bitcoin established its year-to-date peak of $13,868.44 on San Francisco-based Coinbase exchange, promising further gains in the wake of escalating trade tensions between the US and China, weakening China’s renminbi, and the potential launch of a string of bitcoin derivatives products on Wall Street.

“It is essential for Sparebanken Øst that the company can satisfactorily meet the quality requirements imposed by the authorities, including customer identification and anti-money laundering, with which NBX is aligned,” wrote Sparebanken. “NBX, as a company, is in an early development phase, and Sparebanken Øst believes that the potential for learning and development in this initial phase will be great.”

European Central Bank (ECB) president candidate and International Monetary Fund (IMF) chief Christine Lagarde stated on Sept. 4 that central banks and financial supervisors should protect consumers but also be open to innovation such as cryptocurrencies.

Changes are opportunities

During her opening statement, shared with Cointelegraph in an IMF press release, Lagarde told the Economic and Monetary Affairs Committee of the European Parliament that central banks and financial regulators should be open to the opportunities offered by change. She noted:

”In the case of new technologies – including digital currencies – that means being alert to risks in terms of financial stability, privacy or criminal activities, and ensuring appropriate regulation is in place to steer technology towards the public good. But it also means recognising the wider social benefits from innovation and allowing them space to develop.”

Lagarde’s promises

She also promised that, if she were to become the ECB president, her priorities would be commitment to the institution’s mandate and agility, inclusiveness and diversity. All while focusing on making sure that the institutions would promptly adapt to the rapidly changing environment.

As Cointelegraph reported in February, Lagarde claimed at the time that regulation of cryptocurrencies is “inevitable” and necessary on an international level.  April she also said that blockchain innovators are “shaking the traditional financial world” and having a clear impact on incumbent players.

Last week, Big Four firm Deloitte unveiled a mobile platform designed to host blockchain networks on a small scale for demonstration purposes. The product is “based on client interest in understanding blockchain capabilities in live interactions," as per the press release. 

With this move, the Big Four companies — comprised of Deloitte, PwC, Ernst & Young (EY) and KPMG — continue their expansion into the field of blockchain. Combined, the firms brought in over $148 billion in revenue last year, as they handle over 50% of audits for both public and private companies.

Consequently, their presence in the crypto space could be a reflection of the state of blockchain adoption.

So, how far have the Big Four gone while exploring distributed ledger technology (DLT), and can blockchain offer any particular perks for those companies?

Big Four: Consistent, but limited interest in blockchain

At this point, all of the Big Four companies have at least demonstrated some interest in blockchain, albeit their approaches tend to differ. Some companies, like Deloitte, have been mostly researching how this technology has affected the general market, while EY, for instance, has focused on releasing software solutions tailored for the needs of cryptocurrency businesses. 

Such diversity can be explained by the very nature of those companies — being professional services networks, they offer a variety of services, including audit, tax, consulting, enterprise risk and financial advisory.

It is also the reason why the Big Four have yet to fully dive into blockchain instead of merely flirting with the technology, as Cal Evans — the founder of Gresham International, a compliance and strategy firm — opined in a conversation with Cointelegraph:

“Because the Big Four work in such a wide scope of sectors, they are unable (or unwilling) to dedicate serious time to blockchain. This makes sense, given that they cannot invest in every new technology set which comes along (although we view blockchain as different). One key thing to note is that many of the big four only got into blockchain when Crypto projects began using them to show more transparency. The Big Four are known to only get involved with something when their client base is using it, blockchain was and is no exception.”

“These appear to be just early steps,” Juan M. Villaverde, chief crypto analyst at Weiss Ratings, said. “They [the Big Four] have begun to recognize the potential of DLT, but they have not yet figured out how to leverage that potential.

”According to recruitment platform Indeed, as of March 2019, PwC had 40 blockchain-related job offerings, being the top recruiter in the field among the Big Four. EY came second with 17 vacancies, followed by Deloitte with 10 job offers. 

Meanwhile, a more up-to-date search shows that PwC is still the most active professional services network when it comes to blockchain technology, but has only 13 positions directly mentioning the word “blockchain” left. EY has four job offerings, while apparently neither KPMG nor Deloitte are hunting for any blockchain talent at this point.

That seems to confirm that the Big Four’s interest in the crypto space is existent, but moderate: PwC, for instance, has a total of 1,010 open vacancies on Indeed, meaning that its 40 blockchain-related job offers account for a minuscule fraction of that number. 

Maurizio Raffone, CEO at crypto-focused consultancy and advisory firm Finetiq Ltd., told Cointelegraph:

“My impression is that the Big Four are keen on blockchain as an additional area where they can provide consulting services rather than audit services. There has been a trend by audit firms to move into more lucrative consulting and blockchain offers them yet another opportunity for that strategy.

”Related: How Blockchain Is Reshaping External Audit: Crypto Developments by PwC, KPMG, EY and Deloitte Nevertheless, blockchain itself should also prove especially useful in the auditing market due to its transparent nature, as Evans told Cointelegraph: 

“Blockchain is one of the few technology sets that can actually aid in most auditing respects. Financial auditing can be assisted by an end-to-end blockchain-based company as all transactions will be open and verifiable. They will also be contained within one ledger, which is one of the largest problems for an independent financial audit. Of course, there is more than one type of audit. Blockchain can be deployed across different sectors to make, for example, a service level agreement audit more effective. Companies could be monitored using blockchain to ensure that they are meeting compliance and the clients wishes.”

Raffone agrees that auditing practices could benefit from having blockchain in place. “I see blockchain as a cost-saving technology in the auditing space,” he told Cointelegraph. “Given the public nature of financial accounts, a blockchain solution would be rather efficient.

”However, Villaverde of Weiss Ratings is wary that the Big Four can stimulate crypto adoption only in certain scenarios. If the Big Four seek to involve themselves exclusively in the support of private blockchain solutions, the expert said, then it would hardly have any effect on the market at large, because “a private, permissioned blockchain is little more than a glorified database.” He went on, saying:

“It’s only when these firms decide to leverage the power of public blockchains, such as Ethereum or Bitcoin, that we envision these initiatives having a significant impact on public adoption.”

PwC

• Crypto/blockchain market reports: Yes
• Blockchain-based software solutions: Yes
• First-hand adoption (Bitcoin acceptance, crypto ATMs): Yes
• Investments in the crypto market: No

Having started accepting Bitcoin (BTC) as a payment for a part of its services back in 2017, PwC today is arguably the Big Four company that is the most proactive in exploring cryptocurrencies and blockchain. The company even has a major training program in place to boost its employees’ knowledge on the field. 

Thus, PwC is no stranger to the crypto space and its major problems: In its 2018 study entitled “Blockchain is here. What’s your next move?” the firm highlighted regulatory uncertainty and trust as major barriers to blockchain adoption among businesses.

Additionally, PwC has paid particular interest to stablecoins — another increasingly important part of the industry — and struck a partnership with decentralized lending platform Cred to advise on issuance of a United States dollar-pegged cryptocurrency. 

However, the firm has not limited its blockchain presence to its advisory department. In March 2018, it partnered with leading global asset management company Northern Trust in a bid to enable real-time equity audits via blockchain and hence make the underlying transactions more transparent.

Two months later, PwC invested in VeChain, a large cryptocurrency startup specializing in web services, supply chain management and anti-counterfeiting.

 In July of the same year, news broke that PwC was going to audit Tezos, the ambitious cryptocurrency project that was going through an internal dispute and several class-action lawsuits at the time.

As per the accompanying press release published by the latter, it was allegedly the first time a “large-scale blockchain organization” had been accepted as a Big Four audit client. Most recently, PwC announced the release of a cryptocurrency auditing software solution.

Specifically, the company updated its Halo auditing suite to accommodate “entities engaging in cryptocurrency transactions” by providing independent evidence of private-public key pairing and collecting information about transactions and balances from blockchains. Related: Will PwC’s New Software Solve the Cryptocurrency Auditing Problem?

EY 

• Crypto/blockchain market reports: Yes
• Blockchain-based software solutions: Yes
• First-hand adoption (Bitcoin acceptance, crypto ATMs): No
• Investments in the crypto market: No

EY has released more solo crypto-related software projects than any of its Big Four rivals. First, in April 2018, EY announced Blockchain Analyzer, becoming the first mainstream auditor to offer its services specifically for the needs of cryptocurrency companies, which allowed for the gathering of an organization’s entire transaction data from multiple blockchain ledgers.

A year later, the firm followed up with a major update, introducing “the second generation” of EY Blockchain Analyzer. According to Paul Brody, the global innovation leader for blockchain at EY, the new version can be used for multiple purposes — such as audit, tax and transaction monitoring.

Moreover, in March 2019, EY unveiled another software solution — this time, for tax purposes exclusively. Dubbed Crypto-Asset Accounting and Tax, or CAAT, the tool was designed to assist its U.S. customers — both public and institutional — in filing IRS tax returns related to crypto assets. 

Further, in May, EY open-sourced the code of Nightfall — its solution that enables the transfer of ERC-20 and ERC-721 tokens on the Ethereum (ETH) blockchain “with complete privacy” — and put it on GitHub. “It is an experimental solution and still being actively developed,” the company warned. 

Finally, the audit titan has applied blockchain to track wine. Specifically, the platform — titled Tattoo — helps consumers across Asia determine the quality, provenance and authenticity of imported European wines.

As with the aforementioned Nightall, EY's solution enables its customers to perform secure and private transactions on the Ethereum public network by using zero-knowledge proof technology. 

On top of releasing a number of blockchain-related software solutions, EY has also been supplying its regular services to crypto actors. Namely, the firm has been appointed by QuadrigaCX — a Canadian cryptocurrency exchange that went defunct under mysterious circumstances — as an independent third party to monitor the proceedings in a creditor protection case.

However, some of the exchange’s former clients are not happy with how EY has been handling the case: At some point, the auditor reportedly transferred 103 Bitcoins (approximately $1 million) to the exchange’s locked-out cold wallets. According to the reportreleased by EY in February, the loss was caused by “a platform setting error.”

KPMG

• Crypto/Blockchain market reports: Yes
• Blockchain-based software solutions: Yes
• First-hand adoption (Bitcoin acceptance, crypto ATMs): No
• Investments in the crypto market: No

KPMG has not only been increasing its presence in the blockchain space, but has also been a member of the Wall Street Blockchain Alliance (WSBA) since 2017.

Over the past 12 months, it has partnered with blockchain company Guardtime to offer blockchain-based services to clients; joined forces with the U.S. Food and Drug Administration to integrate blockchain in the pharmaceutical supply chain (the initiative will reportedly speed up the process of tracking inventory and boost the accuracy of data shared between members of the supply chain); and worked with United Arab Emirates officials to successfully test a blockchain-based Know Your Customer, or KYC, application.

Additionally, KPMG collaborated with three powerful software companies — Microsoft, R3 and Tomia — to develop a blockchain-powered solution for telecom settlements. Arun Ghosh, who leads KPMG's blockchain consultancy, said of the initiative:

"Blockchain has the potential to deliver transparency and visibility, providing the opportunity to help reduce reconciliations and increase efficiencies associated with traditional interconnect billing, roaming and partner settlement processes.”

Apart from working on blockchain-backed projects, KPMG has also studied the cryptocurrency market with an overall bullish outlook. In a November 2018 report, for instance, the auditing company invited institutional investors to “realize its potential.” which, in turn, would allegedly benefit the industry at large.

“Cryptoassets have potential. But for them to realize this potential, institutionalization is needed,” the document’s authors argued. 

KPMG’s latest survey on blockchain, however, suggests that most tax and finance executives are not considering adopting the technology. Regardless, David Jarczyk, innovation principal and tax leader for blockchain at KPMG, highlighted its potential benefits for the financial world:

“Blockchain is like a spreadsheet on steroids that can automate certain tasks, build greater transparency, speed and reliability, and provide a single source of transactional information.”

Deloitte

• Crypto/Blockchain market reports: Yes
• Blockchain-based software solutions: Yes
• First-hand adoption (Bitcoin acceptance, crypto ATMs): Yes
• Investments in the crypto market: No

Deloitte was the earliest Big Four player to delve into the crypto space, as it announced its first blockchain lab in Dublin back in May 2016. By that time, the company had already collaborated with the Bank of Ireland to complete a joint proof-of-concept blockchain trial.

Today, three of the Ireland’s four largest banks are reportedly using Deloitte’s blockchain solution (developed in its Dublin branch) to verify employees’ credentials.

Also in 2016, Deloitte installed a Bitcoin ATM on the premises of its Toronto office. Placed outside the security gates so it could be accessible to the general public, the machine showcased the firm’s interest in cryptocurrencies. 

Since then, Deloitte has kept a close eye on the market, releasing several reports that have recognized regulatory uncertainty and Bitcoin’s infamous scalability problem among the main hurdles for mass adoption.

Nevertheless, the company’s August 2018 report entitled “Breaking Blockchain Open: 2018 Global Blockchain Survey” predicted that blockchain technology was getting closer to a breakout moment.

Meanwhile, the newest issue of that report unveiled that as much as 73% of Chinese enterprises believe that blockchain is a top-five strategic priority, highlighting the nation’s focus on the technology.

This summer, Deloitte has also begun supporting a new blockchain accelerator program called Startup Studio in partnership with 22 other companies, including Fidelity and Amazon. Startup Studio will reportedly host workshops for blockchain startups to help them enhance a variety of skills important for the industry.

Finally, the Big Four giant has just rolled out its own blockchain-based platform designed to provide users with blockchain demonstrations and experiments. Called Blockchain in a Box, the new product is described as “a mobile, self-contained technology platform capable of hosting blockchain-based solutions across four small-form-factor compute nodes and three video displays, as well as networking components that enable integration with external services, such as traditional cloud technologies.” 

Are the Big Four doing enough?

As for now, experts seem somewhat skeptical of the Big Four’s progress in terms of blockchain, arguing that their knowledge on the subject seems limited at this point. Evans told Cointelegraph:

“There have been examples in the market where companies such as PwC have actually plagiarized and copied work from other companies within the crypto space, showing that their knowledge on the subject is incredibly limited. It is hard for a company to push something they don't fully understand themselves.”

Either way, most accounting and auditing functions have the potential to become automated with smart contracts at some point in the future, and the Big Four would have to drastically increase their presence to stay relevant, according to Weiss Ratings’ Villaverde, who continued:

“The main question is: Will the Big Four lead in the creation of this new technology? Or will smaller, potentially more nimble, players jump into the space and take over significant market share from the Big Four?”

Whether or not the Big Four will adopt blockchain in their regular service offerings, the fact that all four firms draw up regular reports on the crypto and/or blockchain market shows that they are interested and are closely following the developments in the industry.

Nowadays just about everyone understands the importance of data. And when it comes to AI, the more data the better. Data can be an incredibly valuable and powerful tool and it’s growing at an exponential rate. 

In just the past two years, 90% of the world’s data was created and companies are needing to store more data than ever before. Questions about privacy, security, and data governance including access are being asked by organizations. 

For many years the traditional formula for service on the internet was, give us your data, and we will give you service for free. However as data is becoming more valuable, will this formula stay, or be replaced? Should these companies own our data? Should we get paid for giving away data?

Should our data be stored on more secure blockchains? Siraj Raval, the creator of the School of AI and YouTube celebrity, addresses all these topics in a recent interview on the AI Today podcast. (Disclosure: I am a principal analyst at Cognilytica and co-host of the AI Today podcast) 

Who manages your data?

As more people become aware of how valuable their information is to companies, and how easily it can be used and sold, people are beginning to wonder just how easily they should give over their information. These kinds of questions were asked during the entire Facebook debacle with Cambridge Analytica.

Siraj explains the increasing importance of letting the public know the specifics of what data companies are using, what measures will be taken to secure that data, and how the data will be used.

Siraj goes on to explain that blockchain can help address many of these data-related trust and safety-related issues. According to Siraj, blockchain, which provides a secure, durable, distributed ledger, is known for its resilience and secure nature.

The public is most familiar with the use of blockchain in cryptocurrencies such as Bitcoin, but it is proving to have greater value in non-monetary realms. According to Siraj, providing data onto a secure blockchain paired with AI can become a tool to help humanity .

When used correctly, blockchain and AI could to provide greater trust on data-based systems, from facial recognition to voting and other applications where a distributed ledger can assist to verify results. It is also increasingly finding its way into applications of many different types, giving users a way to verify every action in the network so that people could view errors more easily. 

Blockchain and AI are also working together in self-driving vehicle applications. A fleet of fully autonomous taxis can work together to communicate about locations, routes, and where each car is relative to others on the road in real time.

And since actions and movements would be documented on the blockchain, this would also help provide transparency into the autonomous vehicle’s actions and routes. Siraj compares the blockchain network to a nervous system, always communicating with each other to learn from mistakes. 

Today In: Innovation

Are AI and Blockchain just two buzzwords?

AI, and blockchain for that matter, have become two very popular buzzwords. Many companies are throwing these words into their marketing to add to the excitement of their product. But do all these products really have AI?

Do they really want to use a blockchain to store and manage data? Is talk of AGI and doomsday scenarios overblown? Could these scary theories be more possible than we think? This fear brings about some great thoughts from Siraj urging us to be more cautious, and more careful about the AI systems we create. 

For many people in the industry, they know all too well the fears of an AI Winter. The fears of overpromising and under delivering can quickly lead to a decay of interest in AI. The media likes to play up the bad things around AI. For example, one incident in 2017 saw two AI facebook chatbots be shut down after creating their own language.

News outlets ate the story up, and exaggerated that “robots will take over the world.” This story was overblown and the real facts of the situation were far less interesting than the media led people to believe.

Facebook only shut them down because they did not operate as expected or wanted, and the explanation for the “new”language was that that is what AI does, look for a pattern.

These two AI fed off each other, which just dumb-downed the AI until they were speaking gibberish.  By educating the public, and giving valuable, and honest news these scenarios seem far less doomsday than they can be spun to be. 



Kathleen Walch

Kathleen is a serial entrepreneur, savvy marketer, AI and Machine Learning expert, and tech industry connector. She is a principal analyst, managing partner, and founder...Read More

Introduction

Innovation will always be marked by the influence of regulation around it, historically and also at present, technological entrepreneurs think that the absence of regulation accelerates innovation, while excessive regulation stagnates it.

Given this, it is important the surgical system of intermediate scenarios that create innovation-friendly ecosystems in a practical way, the so-called "regulatory sandboxes" which are consistent in small ecosystems that can test new technologies in sectors and markets that are not subject to the typical regulations of the traditional industry for each case.

This invites regulators to create balanced scenarios that can be the impetus for innovation and do not hinder it, always and in any case, taking care of the stability of the technological sector that is innovating, call Fintech, Healthtech, etc.

Together with “Big Data”, biometric mechanisms and artificial intelligence, Blockchain technology and Distributed Accounting Technologies (DTL), are fundamental pieces in current regulatory and technological innovation, so in this article we will focus on in them within the scope of Regtech.

RegtechWe can understand this term from two points of view, the first from the regulatory framework that encompasses technological advances (data protection, cybercrime, electronic commerce, etc.), and second, as the companies that are dedicated to providing technological compliance solutions of said regulatory framework for third parties.

We will understand this term in the words of my teacher, Lisa Rabbe, as the "digitalization of regulatory compliance", a clear example of the different programs affected to identify AML, KYC issues that financial institutions have. In this line the Regtech.

One of the main functions of the Blockchain and DLT technologies is to provide security for the capricious invariability of the records of the databases attached to each block.

This revolutionary technology undoubtedly issues of personal identification, the same modifications of AML, recruitment in general.The redesign of the regulation for financial and all kinds of services around the final recipients and not of the product itself, can grow exponentially (and securely), the degree of use or inclusion of people in sectors to which He hardly had access at any given time.

BlockchainNamed in global development forums as a "mega trend," Blockchain technology is here to stay. We have seen its development more than anything from the scope of Fintech (companies that use technology to provide financial solutions), which regulators created around the world.

However, despite its popularization through Bitcoin, the use of this technology is revolutionizing the forms of service innovation around the world, and we can say with ownership that it is, along with "Big Data" and "IoT" The most disruptive technologies of the moment.

In terms of financial and financial services, the Blockchain has allowed the growth of financial inclusion in our inhabitants are among the billions of unbanked people in the world, BitPesa in Kenya is used to consolidate different currencies of African countries to perform more Efficiently purchasing raw materials in dollars, Banqu in Indonesia offered bank services to refugees at the time.

Not to be said for the sending and collection of remittances, the CASHAA service has generated hundreds of miles in saving the costs of remittance transfers between the United Kingdom, Africa, India, among others.In terms of electricity, in Australia the Power Ledger platform (www.powerledger.io) was created, which allows those individuals who generate renewable energy to sell the excess generation to their neighbors who need it, this can be in person One person (P2P).

One of the benefits that DTL technology has and that fascinates me specifically, is the relationship with supply chains, since it allows transactions made between the components of that chain to validate the authenticity, certifications, provenance, The legality of all participants of all suppliers of a raw material for the final producer.

This allows you to verify that the diamond in your engagement ring is not a "blood diamond" or that the oranges in your morning juice are not checked for farms marked with child exploitation.From the legal point of view, the issue of identification is incredible, since DTL technology allows us to solve the problems of major frauds that we have today.

Due to its characteristic of validation and strong immutability, we will have certainty of the people with the contracts, of the goods that we are acquiring, of the price that we are paying, of the consequences of the breaches, all the foregoing in an automated way and without delays.

With the use of Blockchain technology, smart contracts are created, called "smart contracts" that are self-executing programs that can be interlaced via API with the financial institutions or records necessary to ensure compliance.

 This would allow closing a sale of real estate in less than 10 minutes, because at the moment it can be verified with 100% certainty who is the owner of the property, if the selected property is in accordance with the title (location, extension and debt free ), if the buyer has the resources to buy it and if those resources are lawful.

Not even its usefulness in promises, leases, insurance contracts, etc.

ConclusionThe regulatory technology issue is a great opportunity for the creation of Regtech ventures, it is something that all industries will need (Fintech, proptech, healthtech, insurtech, etc.)

The great challenges we face in applying technologies for regulation, using blockchain or other solutions, implying for the ease of interlacing actors, the speed of response, the adherence to the affected legal norms and specially to keep the contents of the databases intact and private.

The price of bitcoin has recovered pretty well from lows hit late last year. But investor enthusiasm for all things crypto and blockchain remains far below peaks scaled several quarters ago.

Subscribe to the Crunchbase Daily So far in 2019, the pace of private funding for blockchain and crypto deals lags sharply behind last year.

The downward trajectory applies to both initial coin offerings and venture rounds for companies in the space.Altogether, investors have put an estimated $3.38 billion to work in initial coin offerings and private funding rounds for companies in 2019, according to Crunchbase data.

* At this pace, annual investment portends to be a fraction of the 2018 investment total of $12.86 billion. The declines come as major cryptocurrencies continue to trade well below prior peaks, although they have rebounded from last year’s lows. And new cryptocurrencies have failed to deliver breakout hits.

 Out of the roughly $250 billion in total valuation for the crypto space, roughly 70 percent comes from bitcoin alone.Below, we break out numbers for both investor-backed rounds and ICOs, looking at trendlines for investment totals and round counts.

Not A Popped Balloon, But Certainly A Deflated One

The current crypto and blockchain funding environment looks less like a popped bubble than a deflated one. Currencies are still trading and startups are getting funded. There’s just less money chasing the space.In the chart below, we look at total funding across both initial coin offerings and private funding rounds for crypto and blockchain-focused companies globally:




Cryptocurrencies hit their bubbliest highs around late 2017 and early 2018. That’s when bitcoin passed the $20,000 mark, and total crypto market cap peaked at around $700 billion.

Venture funding of blockchain-related startups was also on a roll around then, buoyed by bullish memes about the technology’s game-changing potential.This past December, by contrast, looks like the lowest point for the crypto space in the past couple years, with total market cap down to about $75 billion.

Crypto bears, some of whom predicted an eventual bitcoin valuation of zero, were starting to look rather prescient.Now here we are in early September, and neither the bull nor the extreme bear case appear to be winning out.VCs Still Like Blockchain, But They Like It LessIn short, blockchain is still a thing. It’s just not the thing that everyone’s talking about.

That includes venture capitalists, many of whom have been outspoken boosters of all things blockchain. As a group, they’ve been putting less money into the space of late.

So far this year, investors have put about $2 billion into rounds for companies tied to crypto and blockchain technology, not including ICOs. That’s on pace to come in well below the $4.65 billion tally for all of 2018. We have more numbers in the chart below:




Some of the most prominent VCs active in the  blockchain and crypto space have been cutting back in 2019. For instance, Andreessen Horowitz participated in 14 funding rounds with an aggregate value of nearly $850 million in 2018, per Crunchbase data. So far this year, the firm has backed five deals valued at a little over $75 million.

They’re not alone. Digital Currency Group and Blockchain Capital, two of the most active investors, have also cut back sharply in deal count and aggregate value of rounds they’ve backed.It also should be noted that the numbers include companies for which crypto or blockchain is a component but not a core focus of the business.

For example, the largest crypto-related round for 2019 is a $323 million Series E for Robinhood, which offers cryptocurrencies but is best-known as a commission free stock trading app.But there have been other big rounds this year for companies more exclusively focused on crypto.

That includes a $200 million Series A for Bithumb, a South Korean crypto exchange platform, and $100 million in Series C funding for Kraken, the San Francisco-based crypto trading provider.

Little Punditry For Blockchain And Crypto Slowdown

So, the data speaks pretty clearly: Blockchain and crypto-related funding is down but by no means dead after the cryptocurrency bubble popped. What’s lacking, however, is much in the way of punditry regarding why things are playing out this way.

The blockchain and crypto camps, as aforementioned, are mostly populated with extreme bulls and extreme bears. There are those who think bitcoin is the younger generation’s version of gold, and blockchain represents the most disruptive technologies in a generation. And there are those who consider crypto the mother of all scams and blockchain the most over-hyped technology ever.

One possibility, laid out by Andreessen Horowitz, is that blockchain will present disappointments in its long march to widespread viability. The firm writes:

“Blockchain computers are new types of computers where the unique capability is trust between users, developers, and the platform itself… In exchange for these new capabilities, blockchain computers trade off other capabilities such as transaction scalability.

This can lead people to dismiss them, in the same way people dismissed early smartphones because they traded off computing power and screen size for portability and new sensors.

”Personally, I’m not buying the firm’s comparison here. No one really dissed the future of smartphones, even back in the flip phone era. We just weren’t sure exactly when all the pieces – price, portability, durability, computing power, etc. – would come together in a package that warranted mass adoption.

Blockchain, by contrast, has some pretty hardcore doubters. And cryptocurrency, in particular, has some real pessimists among the world’s wealthiest, including Warren Buffet, who compares bitcoin to rat poison squared.

That said, we’re still in early innings. And for now, it looks like neither the blockchain boosters and detractors have sealed a winning case.

Methodology

Crunchbase’s ICO data is not exhaustive but does capture broad trendlines for growth and contraction in ICO funding.