San Francisco

Balaji Srinivasan’s distrust of authority began as early as first grade, when boys less cerebral than he was would beat him up at recess for reading a book. “Literally, like, ‘Oh, look at that nerd,’ and they’d go attack you.

” That was in 1986, in Plainview, N.Y., an undistinguished Long Island hamlet where his parents, immigrants from South India, worked as physicians. “Being the only brown kid among hundreds of people, lots of kids would gang up on you and call you ‘Gandhi,’ and you could say, ‘It’s not an insult,’ and run, but they’d just chase you.

”Mr. Srinivasan is now 37 and an eye-catching innovator in the world of digital currency. “I learned that the first guy who comes at me, I need to hit him—Bam!—with the book, and just act crazy so the other folks don’t jump on you.” Later, at the principal’s office, the assailants would have “crocodile tears” about how the little Indian boy had started the fight. “Their parents knew the principal,” Mr. Srinivasan recalls. “He’d say, ‘Balaji, why did you attack young Jimmy and Jamie?’ So, I learned early on that you’ve got to stand up for yourself, that the fix is in. . . . The state is against you.

”That experience informs his current work. Mr. Srinivasan has called the stateless digital currency bitcoin “the most important technology of the decade.” I ask him to explain why, and he says, in fact, that he’s amped up the description. “I’d update that today,” he tells me, “to say that the blockchain—which is not just bitcoin—is the most important invention since the internet.” My eyes widen, and he says: “Yep. I’m not sure if that’s consensus among Silicon Valley now, but it’s getting there.”

The “blockchain,” he will explain, is like the internet of money—with similar decentralizing and liberating potential.Mr. Srinivasan, who describes his school years as “completely wasted,” founded his current company, 21.co, in 2013 with $115 million in seed money from Silicon Valley’s leading venture capitalists.

Plainview is now, mercifully, out of sight. “Life in the United States starts with a 13-year mandatory minimum K-12.” Mr. Srinivasan calls it the “school-ag archipelago,” an awkward pun on the Solzhenitsyn tome about Soviet prison camps. He has a 1-year-old son, whom he will not send to school. Instead he plans to band together with like-minded parents from the tech world and “crowd-fund a tutor.

”With his ill-fitting sweatshirt and sweetly inexpert haircut, Mr. Srinivasan doesn’t look much older than a schoolboy. One would be inclined to think of him as a typically arrogant tech-meister were he not so earnest and amiable. In 2006, immediately after earning a doctorate in electrical engineering at Stanford, he co-founded a genetic testing company, which was “conceived in a dorm room.

” He was on President Trump’s shortlist to lead the Food and Drug Administration before ruling himself out for the job, and he has courted controversy by calling for Silicon Valley to “exit” from as much government control as possible. He has, in the past, invoked the notion of the “inverse Amish,” a society that “lives nearby, peacefully, in the future,” where “we can experiment with new technologies without causing undue disruption to others.

”Some of Mr. Srinivasan’s views were distorted in news reports, with the now-defunct Gawker describing him as a “secessionist” (and, for good measure, as “bats— insane”). With evident distaste, he describes the Gawker story as “fake news, avant la lettre,” and notes: “Last I heard, they’d been sued into bankruptcy by profiting from revenge porn. Bitcoin is at $4,000, and Gawker is dead.

”Mr. Srinivasan’s present company enables people to be paid in digital currency for replying to emails. It cost me $20 to reach him, payable upon his response, which was almost instant. We met for lunch at his office earlier this week.“Initially, and in the near future, 21.co is like a better version of LinkedIn InMail,” Mr. Srinivasan says. “Senders attach digital currency to messages to pay people they don’t know to reply.

” That’s better than LinkedIn, he suggests, “because users are actually paid to reply, senders can mass-message people, and they can send complex surveys to people rather than just simple emails.”

The ultimate goal is to facilitate paid work: “Anywhere there’s a phone, there’s a job. You just pick up a phone and whatever your skills, people will send you digital-currency-based jobs. You can click buttons and make money anywhere in the world.”

When I ask him to explain the “blockchain,” Mr. Srinivasan starts to roll with relish. “Short version? Bitcoin is a way to have programmable scarcity. The blockchain is the data structure that records the transfer of scarce objects.” I ask him to regard me as a dummy, and to give me the longer version.We can understand bitcoin and blockchain in four steps, he says. “One, cash. When A gives a dollar bill to B, he’s transferring a physical object.

B has it, and A no longer does. There’s implicit scarcity in the physical world.”Step 2 supposes that we treat the serial numbers on those Federal Reserve bills as “a form of naive digital cash. Then A emails those numbers to B. Now B has a copy. But A still has a copy!

” So if those serial numbers were treated as cash, A can “double-spend” the numbers by sending them to another party, C. This, Mr. Srinivasan says, is the fundamental issue with digital cash: “the double-spend problem.

How do we introduce scarcity into the digital system?”The way we resolved this problem before bitcoin, Mr. Srinivasan explains in his third step, “was through the use of centralized institutions called banks. Whenever you use PayPal or a similar technology to send money from A to B digitally, the bank is trusted to debit A and credit B.

” This, he says, is how “scarcity” is introduced into a digital system; but it is “inelegant, from a computer-science perspective, to have a central, trusted node in any networking topology”—a word my dictionary defines, in this context, as being the way in which constituent parts are interrelated or arranged.




Mr. Srinivasan doesn’t care for this arrangement: “There are downsides to implicitly trusting banks, as the 2008 financial crisis showed.” So rather than require a bank to approve transactions, “Bitcoin figured out how to split this power across many different transaction approvers, called ‘miners.’ ” They “compete to approve transactions and integrate them into the so-called blockchain.

Every time they integrate a new block of transactions into the blockchain, they receive a ‘block reward’ and are entitled to print digital currency.” The key point, he says, is that any computer could, in theory, approve transactions, and no single computer could block transactions.

Mr. Srinivasan concedes it’s “a big claim” to say the blockchain is the most consequential technology since the internet. “The internet is programmable information. The blockchain is programmable scarcity.” He elaborates: “All of these previously disparate things—from physical mail to television to music to movies to telephony—basically got turned into packets of information and got remixed by the internet.

Plus things that we normally didn’t even think of as information—your Fitbit, your steps, your Facebook settings—became programmable.” It’s fair to say, he continues, “that the internet and all things downstream—search engines, social networks, ride sharing, and so on—have basically been the technological story of the last 25 years.”The blockchain is the next phase, Mr. Srinivasan says with some zest. “With the blockchain, everything that was scarce now becomes programmable.

That means cash, commodities, currencies, stocks, bonds—everything in finance is going to be transformed, and aspects of finance baked into everything else.” By way of example, Mr. Srinivasan suggests that there could be “a spot market for the cost of storing one megabyte on 1,000 remote computers.” He then offers a slogan for the new age: “If you deal with information, you need the internet. If you deal with money, you need to deal with blockchains.” Pretty much everyone, he adds, deals with information and money.

The blockchain, Mr. Srinivasan continues, “is a religion that works.” Here’s why: “If you take 10,000 people and put them in a circle and they close their eyes hard and say, ‘Let this plane fly,’ it’s not going to fly. But if they close their eyes hard and say, ‘Let this thing have value,’ and they all value it, they’ve suddenly got a price for it.” They will exchange things of economic value among themselves, and the external world can interact with them. “In the same way that once you’ve got enough people, you’ve got a nation, you’ve also got a currency.

So, belief is actually something you can now materialize into currency.”I steer our conversation, here, toward China, where the government has cracked down hard on digital currencies, banning citizens from exchanging them online. Is this the first major blockchain crisis? Mr. Srinivasan ponders the question before noting that “the Chinese government is actually run by engineers.

Hu Jintao was an engineer, as is Xi Jinping. One of the things they do in China is that they actually give seats in government to folks who are successful in technology.”He tells me—“not necessarily in an admiring way”—that there are “probably not many people in the U.S. government who could explain to you exactly what a ‘firewall’ is, but that’s a fundamental instrument of policy in China.

” Chinese politicians, he says, are more conversant with the long-term implications of information technology than their American counterparts.

But what does China’s crackdown on bitcoin mean? Mr. Srinivasan believes that Beijing is doing something similar to what it did when it deployed the so-called Great Firewall in the early 2000s. “It wanted the internet, but it wanted a controlled internet.” It now has a vigorous and competitive Internet economy, with Alibaba, Tencent and Baidu, “but it also takes measures that Western societies would not, in terms of explicit internet censorship.

”If the Chinese government wants the benefits of the blockchain “without the decentralization of bitcoin,” Mr. Srinivasan says, “we might see a ‘Great Blockchain of China’—perhaps a ‘Chinacoin’ issued by the People’s Bank of China.” It may seem too early for “something of that magnitude” to happen, Mr. Srinivasan says, “but sometimes the future happens more quickly than we expect.

” An interesting question, he adds, “is whether this ‘Chinacoin’ would just be directly pegged to the renminbi, as seems most likely, or whether it would be freely floating like bitcoin.”A more plausible short-term alternative, in Mr. Srinivasan’s view, may be that “the Chinese government asserts its jurisdiction over the Chinese miners who provide most of the world-wide mining capacity of bitcoin and Ethereum,” the latter an open-source blockchain-based platform.

Mr. Srinivasan imagines a “cat-and-mouse game would likely ensue, after which the Chinese government would gain control of a fork of bitcoin and Ethereum chains, but the rest of the world would fork to different versions of those chains.” The Chinese government could even attempt a hostile takeover of bitcoin.

Mr. Srinivasan is confident, however, that the protocols that sustain a decentralized, global digital currency will weather a crisis of this sort. “This is the kind of test these protocols were built for. If they survive, which I think they will, then we’ve proven something amazing.

” We’ll have proven, he says with a smile, “that there’s now a new kind of digital asset which even a very technically competent and motivated government cannot seize.”Mr. Varadarajan is a fellow in journalism at Stanford University’s Hoover Institution.

Continue reading to discover even more stories and content like this on Yahoo here: https://finance.yahoo.com/news/blockchain-internet-money-223000709.html

By now, the finance and enterprise business sectors are well acquainted with technology shifts that happen at lightning speed–but even by those standards the coming blockchain revolution has moved from speculation to near-certainty with marked rapidity.

But despite its light speed inception, experts and financial leaders are now near-unanimous in the judgment that blockchain is the mode of the future and are planning accordingly.

Global investment in the blockchain revolution

Nearly every major financial institution is already investing heavily in blockchain and the distributed ledgers it enables. With the promise of a peer-to-peer structure facilitating simultaneous editing and real-time synchronisation, blockchain has become an irresistible lure for financial and banking executives, who are throwing money at the technology with a fervour that surprises even the most optimistic analysts.>

See also: Blockchain in the financial post-trade area

According to a Deloitte survey, “blockchain technology is emerging as a key business focus for US companies in many industries, with many executives in the consumer products and manufacturing and technology, media and telecommunications sectors planning their biggest investments to date in 2017.”

Managing compliance through real-time reconciliation

When it comes to blockchains selling points, few are as tantalising as the prospect of a business world where accountants never need to manually reconcile an inter-company account again, and where every change to a financial database is recorded and propagated in real-time.

While that utopia is likely a few iterations away, the foundation will be laid the moment an enterprise switches to a blockchain or distributed ledger, and it’s increasingly difficult to understate the ramifications.>

See also: Blockchain: Helping secure digital identities

The simple act of having to manually manage a database enables the entire universe of accounting errors, malfeasance and compliance headaches, and those problems are only amplified when the ledger is shared between multiple partners.

By collecting data in distributed ledgers, and feeding that into a corporate single ledger finance system, like Unit4 Financials, in real-time, reconciliation suddenly becomes a constant, innate operational function that requires no additional effort.

Boosting performance and insight

As the distributed ledger promises the literal incarnation of the “single version of the truth,” the entire data landscape will transform, and the sheer quality of the resultant data is expected to enable significant gains in decision-making capabilities.Better data will yield better insight, empowering companies to maximise the value of their own data and focus on high-value activities, rather than time-and labor-intensive digital housekeeping.

>See also: The business of Blockchain in financial services

The ripple effects are profound, and the elimination of the locked-in capital paradigm inherent to manual processes is likely to be a budgetary treasure trove in itself.

Unifying technology to maximise efficiency

Beyond the attention-grabbing promise of unified data, blockchain is also set to ease the transition into a unified technology landscape. As leading companies work to demolish their data silos and move toward cloud-driven platforms, financial processes are often a sore thumb whose legacy procedures slow the entire endeavour.

With its innately decentralised structure and baked-in peer-to-peer architecture, blockchain will make it easier than ever to integrate financial data into cloud-based systems, smoothing over one of the last remaining speed bumps on the road to the genuinely digital future.

The hype heard round the world

The instinct to view hype as being inversely correlated to true potential is easily defensible for most CFOs, but in the case of blockchain the hype is likely accurate.

>See also: Blockchain: separating hype from reality

Far from being a fad or gimmicky software feature, blockchain represents a new foundational technology on the level with world-shifting developments like the codification of internet protocols or the move toward cloud-based systems. It will be the biggest change cloud has driven for finance.

With significant gains predicted in compliance, performance and efficiency, it seems all but certain that forecasters have it right when they say that companies sticking to non-unified ledgers are likely on a one way path to obsolescence, and CFOs must take note.

Continue reading and discover even more stories like this on Information Age here: 
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As many as four blockchain-related amendments, funding various initiatives, could find their way into the European Union's 2018 budget.

Public documents published yesterday reveal a proposal to use blockchain as a payments rail for an EU-wide free Wi-Fi access project, as well as funding proposals for two working groups dedicated to the tech.

There are actually two amendments related to the idea of using blockchain as part of the "WiFi4EU", including one from the Group of the Progressive Alliance of Socialists and Democrats political party as well as the Parliamentary Committee on Industry, Research and Energy. The party has proposed allotting €10 million euros to the initiative, whereas the committee has proposed just €1 million euros.

The aim, according to the amendments, is to test "the feasibility and demonstrate the usefulness of using blockchain technology in the interaction between the EU Institutions and the citizens."The budget document goes on to explain:

"As a starting point, the project will aim at underpinning the voucher scheme of the Wifi4EU project with blockchain technology, allowing for transparent and traceable payment of EU funds to the private companies, which install the Wifi4EU infrastructure. It will also provide the citizens with the tools to examine the transactions registered in the ledger. It will rely on Open Source software and seek collaboration with Member States for providing blockchain services (also known as Govchains)."

WiFi4EU was first unveiled in May with a budget of €120 million euros, with a goal to offer free connectivity across the bloc over the next three years.The 2018 budget also includes a proposal to use DLTs as part of humanitarian efforts by the EU to help companies and groups which aid "migrants [and] displaced groups," among others.

CoinDesk previously reported on efforts within the European Parliament to advance this use case.

The €1 million euro investment will also go in part towards companies developing DLT platforms which can aid the union in this effort.An additonal €1 million euros will go toward the Horizontal Task Force on Distributed Ledger Technology, which aims to analyze how the parliament can effectively utilize DLTs applications.

The task force was first announced in 2015, and was originally formed to watch the development of blockchain and DLT platforms.

Continue reading to discover even more stories like this on Coindesk here: 
https://www.coindesk.com/eu-budget-amendments-call-millions-blockchain-funding/

If you are in the startup ecosystem — or just a casual reader of tech sites — I’m sure that the majority of the fundraising stories you must have heard in past few months had a new term attached to them — ICO.

The fundraising didn’t happen by selling out the equity of the company but by selling something called ‘tokens.’It might be hard to believe for some, but companies have actually raised more money through ICOs than from VCs in 2017. Getting money for your business is of course awesome, but I believe that ICOs are more than just a tool to raise some capital.

To explain the economics and incentives behind the ICOs, I’ve put together this ultimate guide for you to understand ICOs. Unfortunately I won’t be able to cover how you can carry out your own ICO, or how to participate in ICOs, but fear not because those might be coming soon. 

The C in the ICO

While the world calls it “an unregulated means of crowdfunding via use of cryptocurrency,” I believe it’s much more than that for business because of the implications it brings along. The acronym ICO stands for Initial Coin Offering. Just from the name, we can easily figure it out that companies can raise money by offering the initial (and/or the only) set of coins.

Sounds simple enough, but what are these ‘coins’ that are being offered?In this guide, we’re going to delve into the coins first, and then move up the ladder to understand the initial offering of the said coins. It’s time to understand the C in the ICO.

To get the most out of this article, it really helps to understand how a blockchain works. To make this whole thing easier, I suggest we create an imaginary scenario to shed some light on the ICO process.Let’s say you want to build a business — an app store just for mobile games.

Through your cool new app store, gamers will be able to download free and paid games. They can upgrade the power-ups or unlock bonus levels in the games  they’ve bought through your app store. Whatever money the gamers would spend playing the games, you would pass it to the game developers after deducting your commission.

Seeing that you’re a great entrepreneur, your app takes off and becomes a thriving ecosystem of gamers and game developers. The biggest game development companies would start releasing their games, and the world’s most hardcore gamers would play them on your platform. Truly, a dream come true.

But that’s just it, it’s just a dream — certainly beautiful, but ultimately not yet a reality. In order to make your app store really happen, you’d have to hire engineers to build up the platform, hire people to get game developers on the platform, and spend loads of money to evangelize the platform to gamers.

 You realize there’s a long road ahead, but your pockets are empty.And even if we’d allow us to imagine that you’d somehow manage to put together the app store with all it’s amazing features features — you’d still have problems. Game developers would need to start upload their games, so the gamers could buy them, but why would the developers do that? 

Without any gamers already using the platform, ready to pay for the games, developers won’t make any money. That’s not a situation they would like to be in because they need to feed themselves and their teams too.To fix it, we go back to the whiteboard to plan out something to bring in a desperate mob of gamers on the platform to lure the developers.

But why would they come when there aren’t any games readily available to download and play? Gamers won’t come till the games arrive and games won’t arrive till the gamers come. Our newly released platform will become a victim of the typical catch 22.

Realizing all these hurdles ahead on your journey, you could either let it overwhelm you and give up — or find a creative solution to realize the imaginary app store. You aren’t a quitter. Smart entrepreneurs find a solution.

Answers to profound questions are never obvious. Recently, we found a solution that would fix all of the above problems, powered by blockchain tech — the C in the ICO.

C is for coins

In the above example, you, being a smart entrepreneur, think of something unusual. A lightbulb goes off above your head and you realize that you can introduce your own game coins in the ecosystem. Instead of asking gamers to pay in dollars or euros, you would ask them to pay you in your own game coins.

On the other side of the spectrum, instead of paying the developers in dollars or euros, you would pay them in your own game coins. The coins can be utilized to derive some value from the ecosystem, therefore, giving the coin owner a privilege. The coins with a utility attached to them are also known as ‘tokens’ — that’s the term you’d get to hear about when reading more about ICOs.

Introduction of your own instrument to exchange value in the ecosystem lets you use it to solve all the problems we listed above. The accounting of your own coin/token won’t be done by you alone in an opaque database; instead, it would be done on a public blockchain where anyone can verify their ownership of the token and can transfer it to anyone else freely.

Even before one creates and markets their platform, they can set up and sell a bunch of these coins at a fixed nominal price. And this brings us to the other two letters of the ICO — I and O.

Initial Offering

As an entrepreneur, you build a business plan with all the economics of your coin/token taken care of on the platform, and you announce an initial offering of the coins. You convince the world by telling a story about how credible and capable you are to pull off building such a platform for gamers and developers.

You also narrate the story of your coin and how it would be valuable to the world. You offer potential buyers to purchase your coins at a fixed discounted price right now — even before the platform is built — to allow you to raise enough capital to go ahead and actually build it.

You tell them that because your ecosystem would thrive in years to come, the coin, which is in limited supply would appreciate in value.

Then, they could either use the coin themselves to pay for the games or sell them to the gamers at an appreciated value.The initial coin offering happens on top of a public blockchain like Ethereum, NEO or Waves to provide the trust of ownership and transferability.

So in reality you wouldn’t be creating an entirely new coin. Instead, you built your own coin on top of another coin. Interesting! If you don’t realize it yet, money or any digital value is actually just an entry on a ledger. (Mind blown?)

If enough people believe in your story and buy your coin/token, your earlier empty pockets would now be bursting at the seams with cash — giving you enough leverage to go and build the platform. But we know building the platform wouldn’t be enough. We would eventually have to face the catch 22 deadlock which threatened to make our platform a ghost town.

Interestingly, because how our minds work, there’s an interesting side effect of making people own your token before it’s usable in the ecosystem. Individuals who own your token want it to become usable and appreciate in value.

During the coin offer, you promised them that the value of the token would appreciate, but after the coin offer, the token owners would evangelize your token and platform so that the value really appreciates.

That’s how, by making people vested in the success of your platform, you would be incentivizing them to build and play games on your platform. Thus, solving the catch 22 deadlock.

Token owners not only become your investors but they also become your potential customers.

Fraud, lies and despair

Like with any new fancy thing, there are going to be people that find loopholes in the entire process and exploit them to favor themselves. ICOs are no different. You can find bad actors telling the fake stories of what they would build if enough people buy their tokens — while in reality they’re not planning to put the money to good use.

They will encash it and fade away or let them sit idle and appreciate in value forever. Not all stories are rosey. Not all stories will be. There’s a skill that one has to develop to identify bad ICOs from the good ones. If you want me to do an ultimate guide on that, let me know on Twitter.

Doesn’t the law protect the investors?

Short answer: not much right now. Most of the ICOs label themselves as utility tokens — something that can be used to get some utility on a software platform. They sideline the definition of ‘securities,’ and therefore the law.

Some argue that it’s good because lack of regulations will help keep the innovation and development faster. It’s a valid argument, but it allows thieves to prey on investors who don’t fully understand how ICOs work.

There are ICOs out there that include regulatory measures in their token sale to provide more trust to the investors.

One common practice is to put in a functionality that says that if the target amount isn’t raised during the ICO, the raised money will be refunded to the investors — sounds fair, right?

Because of how economies work, companies doing ICOs might start to regulate themselves in the Smart Contracts through which they sell their tokens.

Conclusion

I don’t find it a flawed analogy to think of tokens as fuel. Tokens to a platform are what fuel is to a vehicle.An ICO is a way to create the fuel (that is, utility token) that will be used in the vehicle (that is, the platform) that you’ll be creating. If enough people buy the fuel, you get money to build the vehicle.

 And when the vehicle actually gets built, there would be an audience ready with the fuel to ride the vehicle. Therefore, an ICO is not just a new way to raise money. It’s also a new way to get customers and create network effects in business.

Tokens are fantastic, and when you understand what they are capable of accomplishing, you’ll have your mind blown. When a company sells a token in a crowdsale, they get three things in return — investors, customers, and evangelizers. What else, as an entrepreneur, could you possibly want?

Read next: The ultimate beginner's guide to trading online

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How far are we from mass adoption of the blockchain technology? originally appeared on Quora: the place to gain and share knowledge, empowering people to learn from others and better understand the world.

Answer by Samantha Radocchia, Co-Founder & CMO at Chronicled, on Quora: The 2 Things Holding Blockchain Back From Large Scale Adoption

Bitcoin and Ethereum are all over the news these days.The problem is that not very many people understand why. The vernacular used to describe the space is highly technical, and is deeply rooted in the financial space. In the same way acronyms like CDOs confuse everyday consumers looking to manage their money, words like “mining” in the crypto and blockchain spaces are equally confusing.

This, in itself, is a huge obstacle for both cryptocurrency and the underlying blockchain technologies—the fact that its value cannot be easily explained. And the people who came up with a lot of the words we use to describe what’s happening in these industries are not necessarily marketers, but cryptographers who may not be the best spokespeople for introducing innovations to the masses.

Which means, if people can’t understand the value, they won’t buy in. 

Education is the first obstacle.

I am very involved in the blockchain community, and I know I’m not the only one who can see the knowledge gap. I frequently attend events and watch presentations on use cases for blockchain technology, and it’s fairly obvious why most people haven’t been able to grasp many of these new concepts.

How do you explain to someone what it means to “create a new block” on the blockchain? What is a “block” in the first place? What’s actually happening?For those of us who believe wholeheartedly in the future of this technology, it’s up to us to figure out how we can best explain what’s actually happening and why it’s important.

For example, I recently spoke at the 100x Blockchain Online Summit, and it was enthralling to dive into such deep use cases and talk through specific problems that blockchain can solve, one of which was counterfeiting in big pharma. But to an everyday consumer, or even someone with a strong tech background, the terminology alone creates some roadblocks.

The biggest reason education is the first obstacle is that you have to consider who really needs to buy into using blockchain technology in order for it to scale.

It’s not just theorists and coders. It’s CEOs, heads of marketing and business development, even investors who are going to decide to foot the bill—or invest in the Ethereum platform, period.It’s worth noting, too, that this doesn’t mean every single consumer needs to fully understand how to build a block on the blockchain, for example.

Just like everyday tech users don’t really know how the Internet itself “works,” but they have enough working knowledge to be able to use it—and use the programs built on top of it.That’s all that needs to happen. We just need a language understandable enough.

Scaling the technology is the second obstacle.

The second obstacle has less to do with everyday understanding, and more to do with how the underlying technology will scale as mass adoption begins to occur.

From what I’ve seen so far, the problem is being approached from a few different angles. Right now, there are mostly public ledgers with a handful of permission ledgers—but a permission ledger, at the end of the day, is starting to feel very similar to a database. This poses the question, “How special is it then if every company or every industry has their own permission ledger?

”That’s no different than the pharmaceutical industry in Europe, which operates on one big database controlled by the government.Blockchain is supposed to be the opposite of that. The idea is to be decentralized, not a newer form of centralized technology.

The real roadblock, then, is to have the public ledgers store data so that it’s giving the promise of inner accessibility, while also being able to anonymously store and transfer data—which is where SNARKs and Zero-Knowledge Proofs can help tremendously. Being able to anonymously transfer serial numbers is really important in terms of leading to large-scale adoption of blockchain.

However, on the Ethereum public ledger, the ‘gas’ prices are so high that for one individual asset to be registered to the public chain, it is three or even five dollars, which isn’t scalable. The platform can’t handle the transaction volume of even, say, all the serial numbers transferred in the pharmaceutical industry per day, let alone every potential industry that begins implementing blockchain technology.

One way we are looking to solve for this second obstacle here at Chronicled, is in creating a common command language and global protocol through the Trusted IoT Alliance. The idea is to create open source methods to allow for compounding growth in the blockchain space.

Neither one of the above obstacles will be solved overnight. It takes time for new technology, especially something as foundational as blockchain, to weave itself into the fabric of modern society.

When we look back at the early 90s, these were the same obstacles that confronted the Internet. People struggled to understand it, and others questioned how such complicated tech would scale to mass adoption.

Look where we are today.I’m confident that blockchain will overcome these same obstacles.

This question originally appeared on Quora - the place to gain and share knowledge, empowering people to learn from others and better understand the world. You can follow Quora on Twitter, Facebook, and Google+. More questions:

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“What the internet did for communications, blockchain will do for trusted transactions.

”- Ginni Rometty, CEO of IBM

Although there’s debate about how long it will take for this statement to come true, since we’re in the midst of the blockchain transformation, most industry experts concur that’s where we’re headed. The impact of blockchain technology will be enormous.

Because it is changing the foundation of our economic and social systems, full integration into our infrastructure will likely take years if not decades. Since there’s been a tremendous amount of hype—negative and positive—about blockchains, we’re going to break it down into what it is and what you need to know.

What is blockchain?In the simplest of terms, blockchain is just a new form of decentralized database.

You can think of blockchain as the “internet of value.” It’s a real-time ledger of anything that can be recorded (financial transactions, contracts, physical assets, supply chain info, etc.) but there is no one person or organization in charge of the entire chain.

In fact, it’s open and everyone in the chain can see the detail of each record—what’s known as a block. Each block is time stamped and encrypted; the only person who can edit a block is the one that “owns” it. Owners gain access to their block through a private key that only they have. When there are changes to an individual block, everyone’s distributed blockchain is updated and syncs in real time.

There are several benefits of blockchain technology that promise to revolutionize business and finance. Blockchain technology establishes a peer-to-peer network within one system, so it cuts out the time and costs of intermediaries (the “middle man”) and the complexity of using disparate ledgers and processes throughout the lifecycle of any transaction.

As one example, a stock purchase that’s transacted in a blockchain would settle in minutes. There would be no need to have another entity process the transaction or be required to wait for them to do so. Every transaction goes into a block, and each block connects to the one before and after it which amps up its security.

While nothing is fully hackproof, blockchain is significantly more secure than anything else we have today.

Everyone should know these 14 things about blockchainsI’ve pulled together a list of things that I believe everybody should know about blockchains. These facts will not only help you make better sense of this new technology, but it may even equip you for your next trivia hour or business exchange.

• Bitcoin, a money exchange system, pioneered blockchain technology and today, it has more than 8 million accounts and grew by more than 100% per year since it began in 2010. The person or team behind the service is known by the pseudonym Satoshi Nakamoto, but the entity’s real identity is cloaked in secrecy.
• Blockchains can be public (like the internet) or private (like an intranet).
• In terms of its development, blockchain is where the internet was 20 years ago.
• Only 0.5% of the world’s population is using blockchain today, but 50% or 3.77 billion people use the internet.
• There is significant investment by today’s tech giants such as IBMand Microsoft in blockchain technology. IBM dedicates $200 million and 1,000 employees to blockchain-powered projects. The average investment in blockchain projects is $1 million.
• Over the last five years, VCs have invested more than $1 billion into blockchain companies.
• The global blockchain market is expected to be worth $20 billion by 2024.
• 90% of major North American and European banks are exploring blockchain solutions.
• Blockchains are highly transparent, because anyone with access to a blockchain can view the entire chain.
• Similar to a Google doc, all participants within a network see all changes to the ledger. The ledger is constantly updated and each participant has their own copy of it.
• A blockchain is most vulnerable to a breach when it first come online.
• 9 out of 10 agree that blockchain will disrupt the banking and financial industry. It is estimated that banks could save $8-12 billion annually if they used blockchain technology.
• One-third of C-level executives are considering adopting or are using blockchain technology.
• Just like with the internet, there will be jobs that become obsolete. But, there will be new careers that we haven’t even dreamed up yet that will be created as a result of the blockchain transformation.

Continue reading to page 2 of this article here: 
https://www.forbes.com/sites/bernardmarr/2017/09/21/14-things-everyone-should-know-about-blockchains...

It’s time to learn all you can about blockchain technology and get your team working to figure out what opportunities it will create for your organization.Bernard Marr is a best-selling author & keynote speaker on business, technology and big data. His new book is Data Strategy. To read his future posts simply join his network here.

One of distributed ledger technology's most promising attributes, the power to enable smart contracts, has applications that reach far and wide. As blockchain technology becomes more widely adopted, many of these applications are coming to fruition.

A 2016 Forbes story titled " Smart Contracts May Create Significant Innovative Disruption " noted that smart contracts could soon extend far beyond the movement of digital cash and be used "to effectuate business activities involving purchases and exchanges of virtually any tangible or intangible goods, services and rights (e.g., sales of securities, commodities, personal property, real estate, digital rights, etc.).

"There is, however, one important roadblock to the widespread adoption of smart contracts for tangible goods, as well as non-blockchain-based intangible goods: smart contracts are confined within their native blockchain network, and unable to operate in the rest of the world.

"Smart contracts are simply software and as such they can 'enforce' or, better, administer the state of the data to which they have access on the blockchain," noted a 2015 BBVA research report . "Yet, beyond that, they have little reach.

For the foreseeable future, they will not be enforceable in any court and few parties will be able to rely on smart contracts alone to structure all of the terms of a commercial transaction."Tangibility is not a main issue in itself. In fact, one of the first conceptual examples of smart contracts, proposed by legendary cryptographer Nick Szabo in 1997, used a very tangible item: a car. 

Szabo spoke of smart contracts that solved the problem of trust by being self-executing and having property embedded with information about who owns it. For example, the key to a car might operate only if the car has been paid for according to the terms of a contract.

Now there are companies implementing Szabo's vision, with smart locks driven by smart contracts, for example.If the car has been paid for in cryptocurrency through the same blockchain where the smart contract lives (or a pegged blockchain), the loop is closed and everything is crystal clear.

 But what if the car has been paid for with a credit card or a bank transfer? Sure, the owner of the car can signal to the blockchain that the payment has been received, but then we fall back into the problem of trust: What if the owner just takes the money and runs?

A better option is using an oracle to fetch the information that the payment has been received automatically from the bank or credit card company, but that requires the cooperation of the external operator. Conversely, a smart contract on a blockchain is unable to trigger a wire transfer from one traditional bank account to another.

Therefore, smart contracts are of limited utility in the real world of business, where most financial transactions take place in "real" fiat currency through legacy payment infrastructures. So, the main issue for the widespread adoption of smart contracts is the availability of smart interfaces between the blockchain networks in which the smart contracts run and the rest of the world.

This includes the banks, of course, but also the tax and compliance monitoring offices.It seems likely that major banks could, in a few years, adopt smart contract technology themselves. It's worth noting that virtually all major banks have blockchain pilot projects. A 2016 Capgemini report titled " Smart Contracts in Financial Services: Getting from Hype to Reality " noted that innovative banks have started experimenting with smart contracts and "several of them are optimistic about the evolution and mainstream adoption of smart contracts within the next few years.

"Earlier this year, FinTech Network and Zerado issued a white paper on smart contracts for banks. While acknowledging the challenges that must "be overcome to allow for traditional legal contracts to be coded into smart contracts," the white paper concludes that "[blockhain-based] smart contracts can offer many benefits for a wide range of applications for banks.

If properly implemented banks can benefit from reduced risk, real-time accurate and verified transactions, fewer intermediaries and lower costs.

"Once banks adopt smart contract technology and develop interoperability infrastructure, a blockchain-based smart contract could trigger a payment in fiat currency from a pegged bank account, with all necessary exchanges and transfers taking place automatically once the conditions for the execution of the smart contract are met and all needed reporting to tax and compliance authorities done on the fly.

In the meantime, however, it seems more likely that smart contract applications for banking will be first developed by a new wave of "blockchain banking" startups that could "[zero] in on delivering entirely new financial products," as argued in an insightful article titled " What Is the Future of Digital Banking?," recently published by The Next Web .

One of these startups, Bankera , wants to support both fiat currencies and cryptocurrencies and provide services like any traditional bank, including payment processing and debit cards.

"[Although] Bankera acts like a traditional bank, it is crypto first by nature, pioneering innovative services like taking crypto assets as collaterals for loans," noted The Next Web .

The Bankera website states that all services will support both traditional fiat currencies and cryptocurrencies such as bitcoin, ether and ERC20 -compliant tokens.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Start-ups are opting for private investment rounds and are shying away from the public scrutiny of the global capital markets, but one fund manager says he knows the solution.

"Quite frankly, there is no profit to be made for the banks for having companies go public under a three- or four-billion dollar valuation," said Jeff Stewart, co-founder of the Global Public Offering Fund and the former CEO of Singapore-based Lenddo, a credit score firm.

Stewart said public offerings by small growth companies once opened a door for further growth, but now that path to list in the United States is nearly impossible."At the end of the day, companies in the $100 million to $200 million market cap range can't go public. 

Oracle, Cisco and Intel would be deemed too small to go public today if they decided to list," he told CNBC's "The Rundown."Last year, only 18 American companies completed IPOs that raised less than $50 million as compared with 557 companies in 1996, according to the fund.

Stewart and Key Compton, who founded several North America-based technology companies, are setting up a fund to invest in U.S. firms and take them public on Asia-Pacific exchanges.And it's not taking the traditional financing route.

The ICO approach

Designed to capitalize on what the pair describe as the coming decentralization of capital markets, the Global Public Offering Fund plans to use an initial coin offering (ICO) to raise capital to invest.

"Long term, ICOs are the future of the capital markets," he told CNBC, pointing to that increasingly popular process in which start-ups bring in millions of dollars by issuing blockchain-supported virtual tokens to investors in exchange for money.

"The tokenization of capital is really the future. It's going to provide new levels of liquidity and new levels of transparency. You already have most of the major exchanges with major blockchain initiatives," said Stewart.In fact, he said, blockchain-based tech will "evolve the global capital markets and create new paths for capital raising, liquidity and governance.

"ICOs are essentially a form of crowdfunding, allowing a larger and wider pool of investors to buy into a company or technological idea, but it's not without controversy.

The ICO market is largely unregulated, but it continues to attract mainstream investor attention. There is still a lack of consistency in the methodology of pricing a token, and the limited due diligence required to initiate a sale presents both risk for participants.

"Conducting our own ICO will provide valuable learnings and allow our portfolio companies to have a front row seat in defining what constitutes a global public offering," said Compton.

"There are obvious advantages to blockchain-based technologies, distributed ledgers and smart contracts and they will help to evolve financial systems everywhere. Our hope is to advance the current state of the art and utilize the GPO Fund to make long-term and constructive contributions to the global capital markets."

The new fund

The GPO Fund will be focusing on founder-lead technology companies that can grow aggressively in the Asia-Pacific region. It's seeking companies with private valuations in the $100 to $200 million range, with the goal of listing on a major Asia-Pacific exchange within 12 months of investment.

"Our strategy is to invest in companies, well-run companies that we think can be worth substantially more in the U.S., and then bring them public globally," Stewart said.The fund is looking at exchanges in Asia, including Singapore, Hong Kong and Australia, depending on the company.

Discover even more stories like this on CNBC here: 
https://www.cnbc.com/2017/09/20/the-us-ipo-market-is-dead-but-icos-are-the-future-says-entrepreneur....

By Alex Lielacher“Blockchain” has grown from a popular fintech buzzword into a technology that is currently disrupting a wide range of areas within the financial services industry.

Trials using the distributed ledger technology that underlies the digital currency bitcoin are currently underway, with the aim to digitize and improve the operational processes of securities settlement and clearing, debt issuance, global payments and more.

Another area within the financial sector that is ripe for blockchain disruption is the mortgage market. A market that currently involves lengthy paper-based processes could easily be digitized and made more efficient through the adoption of distributed ledgers and smart contract technology.

Today, the mortgage process can take up to 60 days from offer acceptance to sale completion and involves a number of financial, legal and real estate intermediaries, each adding time and fees to the transactions. Also, real estate registry records are largely paper-based and centralized, involving several governmental agencies, making the title transfer a lengthier process than it needs to be.

Blockchain and the Mortgage Market Blockchain technology can provide solutions that would greatly improve the mortgage transaction process in two main ways. First, a public ledger that includes real estate titles, planning permissions, deeds as well as other associated information could be developed for the mortgage industry.

Such a ledger could be easily accessible and publicly available to make the mortgage process more efficient by reducing the time it takes to collect all required information to conclude a mortgage transaction. 

According to business consulting firm Synechron, “[The] blockchain could save the mortgage industry over £0.5 billion per annum and reduce typical real-estate transaction times from 40 days to 30 [in the U.K.]. And, if the Land Registry put title documentation and asset ownership on a public blockchain we believe further savings of a similar size could be realized.

”In countries such as Sweden, blockchain-powered land registry projects are already underway. Second, a permissioned ledger could be used for the mortgage loan funding management process that would involve leveraging smart contracts to digitize mortgage documents and include automated mortgage payments.

This, in turn, would result in a substantial drop in operational costs and processing time of mortgage transactions, which would be beneficial to both the consumer and mortgage industry players.According to a report by Capgemini Consulting, “The mortgage loan industry will benefit significantly by adopting smart contracts.

Consumers could potentially expect savings of $480 to $960 per loan and banks would be able to cut costs in the range of $3 billion to $11 billion annually by lowering processing costs in the origination process in the U.S. and European markets.

”The report also noted: “Smart contracts could reduce the cost and time involved in this process through automation, process redesign, shared access to electronic versions of physical legal documents between trusted parties, and access to external sources of information such as land records.

”Not Without ChallengesGiven the benefits the blockchain can bring to the mortgage market, it should only be a matter of time before mortgages will be “on the blockchain.” However, blockchain adoption in the mortgage industry as well as in the overall financial industry does not come without its challenges.

Currently, there is no legal or regulatory framework for blockchain applications, which also means that smart contracts are not (yet) legally binding. Before smart contract legislation will be written, it will be very difficult to enforce them in dispute scenarios.

The interoperability with existing systems in the financial industry could be another challenge that blockchain adoption must overcome, at least until the industry is able to agree on the use of a select few blockchains for each sub-sector of the industry.

Furthermore, data privacy can become a hindrance to blockchain adoption as all distributed ledgers will have to be able to adhere to each jurisdiction's data privacy laws, which can be tricky for publicly-viewable ledgers.

However, once lawmakers have caught up with the technological innovations in the blockchain sphere and can agree on adequate rules and regulations governing distributed ledger solutions and smart contracts, we can expect to see a more efficient mortgage market as well as cheaper mortgages in the future.  

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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 http://www.nasdaq.com/article/how-blockchains-can-disrupt-the-mortgage-market-cm848889

By John Bonar :

Russian interest in cryptocurrencies is blossoming with the endorsement of the country’s president Vladimir Putin. While some within the country’s financial sector, including Bank of Russia chairwoman, Elvira Nabiullina, remain cautious, others are embracing the crypto currency phenomena enthusiastically.

Vitalik Buterin, the Russian-Canadian founder of Ethereum the second largest blockchain platform after Bitcoin, hosted the “Ethereum Russia 2016” conference in Skolkovo, and later announced the formation of Ethereum Russia in partnership with Vladislav Martynov, CEO of Yota Devices, a mobile communications and connectivity devices company based in Russia and financed by Russia’s state-owned Bank for Development and Foreign Economic Affairs, (VEB).

Ethereum Russia was created to enhance the country’s ability to implement blockchain technology which underpins the cryptocurrencies.

Martynov explained that Ethereum Russia will provide education, events and architecture review for VEB, and guide the development of a new centre for blockchain research in the National University of Science and Technology (MISIS). It is funded by VEB. The centre in Russia’s Silcon Valley emulator will aim to introduce blockchain technology to the financial, banking and state sectors, as well as the industry of commodity exchange. Another function of the centre will be the support IT projects and startups working with blockchain technology.

Vice President of Skolkovo, Igor Bogachev, has said, “The Skolkovo Foundation, in co-operation with Ethereum, will organize the selection and acceleration of promising projects and teams, and provide support to blockchain startups in the form of tax benefits and grants.

The development centre will not only be able to satisfy the current demands of the state and business, but also the future ones: Internet of Things micropayments, complex smart contracts execution, creation of hybrid platforms and state registers of any kind.”

In early June this year The 23-year old Russian-born Buterin attended the St. Petersburg International Economic Forum and met with Mr. Putin. During the Forum the Russian President declared,” The digital economy isn’t a separate industry, it’s essentially the foundation for creating brand-new business models.”

The Moscow government plans to regulate cryptocurrencies like securities rather than outlawing them, Finance Minister Anton Siluanov told reporters in September. 

“The state certainly understands that cryptocurrencies are a reality, there is no point in prohibiting them,” Siluanov told reporters in Moscow. “It is possible to regulate them, so the Finance Ministry will draw up a bill by the end of the year.

”Alexander Dunaev, COO at emerging markets fintech company ID Finance, told Forbes magazine that the Russian government is recognizing the change in financial services caused by technological disruption. ‘The last time the world saw such an unprecedented change was in the second half of the 20th century with the adoption of personal computers - which Russia missed due to geopolitical isolation. There is a lot of will to avoid this pitfall in the future.’

Thanks to the original cryptocurrency Bitcoin’s widespread use for cross border anonymous transfers, many Russians consider bitcoins and other cryptocurrencies as money surrogates which have previously been linked with fraudulent pyramid schemes.

According to Bloomberg, Putin was attracted to Ethereum as a ‘potential tool to help Russia diversify its economy beyond oil and gas’. 

‘Blockchain may have the same effect on businesses that the emergence on the internet once had - it would change business models, and eliminate intermediaries such as escrow agents and clerks. If Russia implements it first, it will gain similar advantages to those the Western countries did at the start of the internet age,’ Martynov has said. 

The concern about cryptocurrency pyramid schemes has crystalized around Initial Coin Offerings (ICO’s) which have been used to raise millions virtually overnight and created millionaires out of the founders of a flood of new cryptocurrencies. 

These concerns prompted China’s draconian clamp down on ICO’s and cryptocurrency trading earlier in September which reverberated through the blockchain market....continue reading: 
http://www.marketoracle.co.uk/Article60281.html

We all know that the financial world typically embraces technology faster than healthcare. The era of Finance 2.0 began several years ago with the advent of blockchain backing up the crypto market. Since then, and with the further development of Cloud and Big Data, the use of blockchain is being examined as a means to revolutionize the way finances are being conducted across the world.

Healthcare has and will continue to look at and learn from other industries about the advantages and lessons learned from the use of blockchain. While blockchain may have originated in the finance world, its attributes have applicability in healthcare.

The use of blockchain in healthcare can reinvent the ecosystem in limitless ways to benefit the patient and advancements in treatments, outcomes, security and costs. Like the introduction of the cloud years ago, everyone is asking what is blockchain and its applicability to healthcare? 

Wikipedia defines blockchain, “as a decentralized and distributed digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the altercation of all subsequent blocks and the collusion of networks.

” Thus, blockchain is a distributed tamperproof database that can be shared and maintained by multiple parties. Through the use of technology known as “cryptography,” data can be stored in “blocks” in a manner that only the


intended users can open and read.


There is definitely a role for blockchain in the future of healthcare. The technology has implications that span a gamut, including patient medical records, conducting clinical trials, master patient index, supply chain, and revenue cycle management, to name a few.

The potential to establish a longitudinal health record for patients that is also securely accessible to all of their clinicians could be supported by blockchain. This, of course, would significantly increase patient quality care.

Blockchain can also be applied in the context of precision medicine and to population health. The importance of population health is a given in healthcare and blockchain can provide the means to aggregate and identify where data are so that organizations can access patient data on a large scale.

The advancement of interoperability and security are of paramount importance in healthcare and blockchain technology is being considered as a resource that can significantly increase the efficacy in these two important areas of healthcare.

Clearly, blockchain is a topic and opportunity with many facets and its applicability in healthcare is in an embryonic stage and being examined carefully by organization leadership. Healthcare organizations who are not cognizant of the importance of this digital strategy will find themselves left behind and have difficulty in adapting to what will likely be a relatively rapid transition.

It will be important for healthcare providers, including complex health systems, academic medical centers and managed care to take heed of this new technology since it’s not a specific initiative.

IT vendors, consulting firms and pharma are also included in organizations who will be utilizing this digital technology to their advantage. Google and IBM have been developing blockchain tools for some time, and have more recently stepped up their interests in healthcare. Other healthcare giants will likely offer their own versions. There is no denying that blockchain is a new and important strategic resource for healthcare.

Blockchain also has caught the attention of the Office of the National Coordinator for Health IT. ONC hosted a blockchain challenge that solicited creative and transformative ways that it can be applied to healthcare. ONC received more than 70 proposals from a broad spectrum that included organizations, companies and individuals.

The final winning 15 papers are posted at HealthIT.gov. ONC also has hosted workshops on blockchain and remains a valuable resource for those looking to educate themselves on its applicability to healthcare.Who will lead blockchain innovation? Leadership for this new and important strategy is key to the success of its implementation and utilization.

Senior level leadership will be tasked with defining the vision and setting the path for achieving benefits within the healthcare ecosystem. Highly strategic, blockchain-related roles either belong in the C-suite or reporting there. Is it part of the CIOs office, senior administration, quality/innovation or its own department?

With its relatively complex technical nature, blockchain-related roles will absolutely need a highly skilled team of support. In addition to a specialized team, there also will be a budget to support the initiatives involved.  The background for these leaders will likely emanate from technology-minded professionals who can easily transition into this space.

Those with degrees and advanced degrees in computer science, engineering, and IT architecture will meet the learning curve. Also, those coming from cybersecurity and finance could transition into blockchain leadership roles.

Other potential backgrounds can include, senior software writer in medical field, CTO/master developer, digital designer and data scientist. Core competencies will include leadership, change management, agility, innovation and an entrepreneurial spirit. The expectation is for the compensation to be commensurate with the high demand for this role...continue reading to part 2 : https://www.healthcare-informatics.com/article/interoperability/blockchain-healthcare-will-you-lead-...

Michael J Casey is chairman of CoinDesk's advisory board and a senior advisor of blockchain research at MIT's Digital Currency Initiative. In this opinion piece, the first of a weekly series of columns, Casey outlines why he believes tokens, despite the excessive fervor and hype around ICOs, could hold the key to solving some of humanity's most pressing problems.

The secret? It's all about incentives and collaboration.




A surefire way to be accused of over-hyping blockchain technology is to make some sweeping, breathless statement like, "It can solve climate change!" Even better: declare you have a token that can do that.

Well, bring it on.The more I've thought about this technology, the more I've come to believe that saving the environment is exactly the kind of problem that energetic crypto minds should be focused on.

It's why I recently hosted a #Hack4Climate workshop at MIT Media Lab, one of 17 worldwide promoting a "climate change and blockchain" hackathon at the United Nation's forthcoming COP 23 climate conference in Bonn, Germany.Of course, a distributed ledger of transactions can't directly resolve the planet's climate problems.

If our home survives this threat, it will be thanks to experts in energy, forestry, vehicle design and urban planning.  What blockchain technology and crypto tokens can help with, however, is the political problem – the core challenge of how to get mistrusting people and institutions to work together in pursuit of a common goal.In short, it might finally enable us to unite and implement the steps those scientists have been urging us to take.

The problem of trust

What does this have to do with blockchains and digital assets, you might ask? Well, it comes down to how this technology tackles the root cause of humanity's inaction over this environmental crisis: mistrust.The reason it took 27 years after the 1988 founding of the Intergovernmental Panel on Climate Change for the world to agree on a common set of targets and policies at the COP 21 in Paris, 2015, is not because scientists didn't know what to do.

It's because people, companies and governments don't trust each other.With no international authority ordering governments around, states that were otherwise willing to take growth-constraining action couldn't trust that others would follow suit, which made it hard for them to commit.

It was a classic misalignment of interests, consistent with what the ecologist Garrett Hardin called the "Tragedy of the Commons" – the idea that mistrust and self-interest prevent communities from properly protecting public resources even when not doing so goes against their long-term interest.It's also a problem that's been with us through human history and that is closely related to another long-lasting economic dilemma: the failure to price "externalities.

" The departure of the world's largest economy from the Paris agreement reminds us that, when it comes to climate change, these problems will persist. Yet, it's here where blockchains and tokens can help. The core, transformative feature of this technology is that it confronts the deep human challenge of how to intermediate trust and incentivize collective action.

To me, the most remarkable aspect of bitcoin is that it solves the Tragedy of the Commons, albeit in one specific use case.We can think of the blockchain ledger as bitcoin's "commons," a public resource that the entire community of users depends upon. And whereas traditional economic theory tells us that actors pursuing self-interest aren't incentivized to protect that resource, absent external government intervention, that's not the case with bitcoin.

Embedding rules into money

Bitcoin does have rules for protecting its commons – strict ones, in fact. It's just that the "governance" isn't external, it's baked into the system. Compelled to follow the protocol's instructions, miners, seeking personal profit and nothing else, constantly maintain the public ledger, the bitcoin commons. It's hard to overstate how much of a breakthrough this coincidence of interests represents.

The question is whether this concept can be extended beyond value transfer to other types of "commons." I think the answer may lie in developing what's being described as the "token economy" – which, not coincidentally, is the name we've decided to give to this new weekly column.

This, and not the crazy dollars generated by initial coin offerings (ICOs), is what makes tokens interesting.  With cryptographic tokens, rules are embedded into the smart contracts that dictate their use. This opens the door to programmable money, in which the governance of a community's interests is contained within the medium of exchange itself.

It's a concept that's impossible with non-crypto fiat currencies, which are agnostic as to the community's interests – and, in places like Venezuela, can even be hostile to them. (It's worth remembering that money is merely a technology, a tool humans developed to enable wider exchange; it has changed its form many times through history and will continue to do so.)

A community of shared values

Under this new model, all who share the interests of a community should, in theory, be acting in those interests whenever they exchange tokens. And as more people do the same, the token's value should rise in line with its network effect. The hope is that a positive feedback loop of rising value creation emerges, one that serves both the interests of the community and the token holders.

This, in essence, is what Filecoin is doing as it incentivizes people to collectively build the file-sharing commons of the InterPlanetary File System (IPFS). It explains Brave's bet that the Basic Asset Token (BAT) can improve the market for user attention – the hitherto poorly managed commons of the online ad industry. And it's why Augur and other blockchain-based prediction markets that feature reputation tokens can be thought of as encouraging the commons of honesty.

It's also the idea behind a "Climate Coin" proposed by a team from Coin Circle, UCLA and the World Economic Forum, which would rise in value as tokens are "burned" in response to proven environmental improvements.This is all theory right now, of course. And it's not clear that the current reality of the token market is yet in line with it.

Are all those excited ICO investors intending to use the token or just hoard it for profit? Does that deplete its ability to solve the commons' needs?With a series of rapid-fire, nine-digit ICOs and $1.8 billion raised in total, not to mention talk of scams and "vaporware," there's a wide gulf between the utopian vision I've laid out and the get-rich-quick mania of ICO-land in 2017.Still, as the fallout continues and as regulators in China and the U.S. warn of risks to investors, we risk missing the forest for the trees.

Of course, this industry needs to breed more confidence among investors, but whatever the policy or self-governance solution, it should not lose sight of the huge potential this technology poses for fixing the biggest problems in economics.

Whether it's the encouragement of cross-company collaboration, the efficient use of materials within a supply chain or the shared protection of vital natural resources, tokens point to a complete redesign for capitalism, one that could bring it in line with the digital, globalized, environmentally challenged economy of the 21st century.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Brave. 

Climate change protest image via Shutterstock

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The databases used in the company typically focus information at one point of access (and vulnerability). In the case of Blockchain technology, however, the total database consists of the set of single encrypted data and stored anonymously at the level of the individual elements (nodes) of a network, all of which are concatenated.

Each new record is stored in such a way that it includes a portion of the information that relies on all previously stored data. The correlation between records makes it virtually impossible to tamper with them without this being immediately highlighted on all the others in the database.

The ability to rely on a form of distributed trust allows parties involved in a process – such as distributing a product – or in a contract – as a transaction – to use a system that automatically ensures the legitimacy and fairness of the operation of services/activities without having to rely on a super parts authority that makes it a guarantor.What are the major sectors involved in the Blockchain technology?

“Blockchain can be used as a tracing and identity verification system, property, transaction, or digitized event of any type. You can tell us, for example, whether an event happened when and with what outcome, and it can also confirm that the subjects involved in the event had permission to act. With Blockchain, you can therefore efficiently manage any public and private registry.

The areas of application are diverse and include e-government, document retention, notary services, health data management, supply chains, and supply chains. But Blockchain applications can also significantly complement the Internet of Things and M2M (machine-to-machine) interactions.What are the most immediate benefits?At the organizational level, Blockchain technology allows for the whole or part of the governance of many public and private services.

The benefits are remarkable and include greater efficiency, automation and simplification of large-scale workflows, reduced management time and cost, greater data integrity protection, and more fair and transparent involvement of the various stakeholder’s involved system.There are different applications and benefits for each industry, but in general, the ability of cryptographic protocols to make data resistant to changes or arbitrary exploitation by third parties is very interesting.

What are the organizational implications?The profound and systemic change of digital services through Blockchain is a major technical and regulatory challenge that needs to be dealt with gradually and takes a long time. You must consider the needs of all participants in the system and proceed to progressive adjustments, possibly at low risk.

Today, markets are experiencing a stage of great fervor. However, this does not mean that application paths are always valid or consistent.

The blockchain is not an end in itself and cannot be applied indiscriminately. Rather it is a means to have something else, it is a driver to gain benefits that would otherwise be foreclosed. It is necessary to always consider practical usage contexts in technical, economic and social terms, and to identify with great lucidity and good sense the real benefits of any applications.”What are the long-term benefits, though?

A widespread diffusion of decentralized architectures would allow complete re-engineering of all processes of data creation, management, and storage, both public and private. The bureaucracy, the need for infrastructure and the workload of the public administration, for example, would be drastically simplified and lightened, with considerable time and money savings.

Even in the corporate context many of the current centralized and verticalized organizational models could radically change. Algorithmic governance would also allow companies that do not have fiduciary relationships among themselves, or who are even competitors, sharing or exchanging data with mutual benefit, always maintaining confidentiality and privacy, and thus creating new business models that are based on cooperation.

7 Principals of Blockchain Technology

A successful system design for the corporate network necessarily needs to align well with the blockchain tenets that includes ownership, trust, trade, and transactionality in case of a multi-party system. In other cases, the business network may never realize the goal of blockchain technology is a sustainable form.

Here are the seven principals to be kept in mind:• The network participant should have their business control:

• The network needs to be extensible so that the participants enjoy flexibility of leaving as well as joining it
• The networks need to be protected and permissions to protect itself from competitive data and facilitating the peer to peer transactions.
• It should provide with an open and free access and global collaboration via collective innovation
• It should be scalable for encrypted data and transaction data processing
• It must accommodate certain enterprise security while addressing the new challenges of security within a shared business network
• The network should co-exist with the current system of transaction systems and records

Discover more content like this on CustomerThink here: https://customerthink.com/7-principles-for-designing-a-blockchain-network-to-power-and-sustain-your-...

Blockchain is a hot topic at the moment. The revolutionary new technologywhich underpins Bitcoin has the potential to disrupt many of the industries that currently take their seeming invincibility for granted. Disruption is coming, from healthcare and remittance to banking, real estate and – yes – venture capital.

For venture capitalists, disruption is nothing new. They often make their living off the back of the companies that embrace disruptive new technologies and find ways to monetize them, and they’re always on the lookout for new trends that are shaping different industries and which could be applied elsewhere.

Blockchain more than fits the bill when it comes to disruptive new technologies which could change the way we do business. That’s why it’s so important for venture capitalists and other investors to take note of blockchain’s potential. Here’s what VC's should keep in mind when it comes to blockchain technology.

1. New ecosystem of founders

The first and most obvious reason why blockchain technology matters to venture capital is the fact that it’s a vital part of many of the new startups that are springing up on the scene. Each of these new blockchain startups represents a potential new investment, and venture capitalists are likely to find themselves dealing with more and more blockchain entrepreneurs as the years go by.No self-respecting venture capitalist would invest in a company if they didn’t understand how it works. That’s why it’s so important to pick up a thorough understanding of blockchain technology and why its new way of storing and securing data makes it almost impossible to spoof or alter it.

2. Competition from new funding options

Established companies and new startups alike are able to launch new tokens and to raise money through initial coin offerings (ICOs), and this new route to market could pose an attractive alternative to traditional venture capitalism funding.This means that VCs may find it harder to find companies to invest in, but it also means that the companies that they do invest in may offer up ICOs as a potential route to monetization. Venture capitalists are all about monetization, but they also have a duty to do their research and to check that the business model is actually feasible.

3. More hobbyists

Initial coin offerings (ICOs) and tokenization are making it easier than ever for amateur or hobbyist investors to join the venture capital market. We’ve already discussed how new funding options could reduce the demand for traditional venture capitalists, but we haven’t talked about how it could also lead to an influx of newbie VCs with the talent and determination to take the big dogs down.


With new technologies emerging every day, it's never been easier to propel your enterprise into the future. Discover how CIO collaboration & IoT adoption can help you reimagine your business processes and deliver...Many people are referring to it as the democratization of venture capitalism, and that’s not actually far off the mark.

That’s also a sure sign that disruption is to come in the same way that blogging, social networking and self-publishing led to the democratization of publication. Whenever there’s a power shift from the few to the many, it’s the many who inevitably win.

4. New ways of operating for existing investments

It’s not just potential new investments that are taking advantage of blockchain. Many existing companies are starting to use blockchain and its derivative technologies by integrating it within their existing products.Take, for example, free gaming apps that pay users for every new game that they download.

They do this by matching advertisers to users and taking a cut of the profits – but what’s to say that they can’t start rewarding users with cryptocurrencies instead?As blockchain and digital currencies become more prevalent, more and more developers are going to start to play with them. Whether VCs invest in blockchain companies or not, they’ll inevitably find themselves brushing up against it.

5. A new wild west in need of a sheriff

One of the interesting challenges that VCs face when dealing with ICOs is that many of them rely on open source software, which have traditionally been bad business for investors. With no intellectual property and so many ICOs, it can be hard to tell the legitimate businesses from those who are just after a quick buck.

On top of that, there’s little to no regulation in place, which means that it really is like the old Wild West out there. Venture capitalists are in the perfect place to become sheriffs of this new Wild West, but they could also end up as pariahs that are overlooked completely. Relevancy is key, which is why there’s really no place for VCs who fail to get to grips with technologies like blockchain that come along and blow their industry wide open.

What’s next?

When it comes to blockchain, the only real certainty is uncertainty. The technology is still in its infancy and so it’s hard to tell what its ultimate impact will be, but what we do know is that if the current indications are anything to go by, disruption is coming whether we like it or not. The only real question is whether to adapt to change or to fall behind.

This is a blessing and a curse for venture capitalists and will create an atmosphere in which there are huge rewards available to those who are the top of their game. Unfortunately, there will also be huge failures lining up for those who can’t quite cut it.It’s a disruptive world out there. Good luck.

Discover more stories like this on CIO here: https://www.cio.com/article/3226727/venture-capital/what-blockchain-technology-means-for-venture-cap...

Non-profit eco-driven company Poseidon has announced the launch of a partnered-venture into the creation of carbon pricing technology, beginning January 2018.

Effectively, once created, the carbon currency will enable companies to measure the carbon footprint of their transactions in real terms.“The landmark Paris Agreement confirmed that a global market for carbon credits is inevitable with a growing demand for emissions reductions and a need for complete transparency and trust in carbon accounting,” Poseidon said.

See also:

• The first ever blockchain solution for the US crude oil market has been created
• Barrie Cressey on evolving electric distribution networks
• Gazprom Energy launches energy management tool ‘InSight’

It will be created using blockchain, the technology behind Bitcoin that acts as an open source digital lender, facilitating online dealings in secure manor.

“There is significant scope for companies to capitalise on the increasing demands of their consumers, investors, and employees to demonstrate sustainability, responsible supply chains, and positive environmental action,” said Poseidon Founder Laszlo Giricz, speaking at New York Climate Week.

“As momentum builds, Poseidon’s blockchain technology presents an opportunity for early involvement in a transparent, accountable carbon market that can provide both financial and ecological returns, offering a host of benefits to natural ecosystems, and the habitats and livelihoods they support.

”Poseidon will conduct a fundraiser for the initiative in January 2018, where after the company will aim to source carbon credits through Ecosphere, an environmental consulting firm that finances a range of environmental assets globally....continue reading: http://www.energydigital.com/utilities/poseidon-create-blockchain-carbon-currency

It had been assumed that, if Africa was to see the development of a local digital currencies scene, that this would be based primarily around payments.

Given the failure of traditional banking methods, the high cost of sending and receiving money via established services like Western Union and MoneyGram, and the proven willingness of Africans to utilise alternative financial platforms like M-Pesa, a number of companies decided to bet on a role for bitcoin in the payments space.

This seemed to make sense, with more than 30 million diaspora Africans sending home billions of dollars each year. But it hasn’t quite turned out that way. Kenyan startup BitPesa is well-funded and seen good traction, but companies like Nigeria’s Bitstake and Ghana’s Beam launched amid much fanfare but quietly died.

G-J van Rooyen, whose South African startup Custos Media Technologies uses bitcoin and blockchain technology to cut down on digital piracy, told Disrupt Africa the digital currencies space in Africa was moving away from the payments narrative.In this regard, he said, it is not too dissimilar to the evolution of the internet.

“The early internet mimicked traditional publishing: early news sites looked and functioned a lot like daily newspapers. We used the new technology to create improved versions of the communications paradigms we were familiar with,” van Rooyen said.

“Over time, the internet became more interactive, connected and social. It would have been very difficult to conceive something like Snapscan or Pinterest in the 1990s-era internet. These innovations emerged after we started to figure out the new ways in which technology could be used, that had no pre-internet equivalents.

”He believes we will witness a similar evolution when it comes to blockchain technology, where “better payment” is the first-order “killer app” for the blockchain.

“Over time, new use cases will emerge that would have been difficult to conceive initially,” he said. Van Rooyen is certain cryptocurrencies like bitcoin will find their role in Africa, as they are “programmable money” that makes various existing fintech applications more efficient.

“Many innovators work on such applications, which include remittances, microloans, fundraising, microjobs, and other ways of moving money around in faster and more flexible ways than were possible before,” he said.However, cryptocurrencies also enable concepts that just weren’t possible in the past.

 One of these, used by Custos, is that it is now possible to embed digital cash directly into other files. The cash is replicated in all copies of the file, but only the first person to claim it gets to keep it. Custos uses this novel aspect of cryptocurrencies to implement a “finders fee” for copies of pirated media.

 This would simply not have been possible without the unique properties of blockchain-based digital currencies.Van Rooyen believes bitcoin offers two very distinct advantages in Africa.

“Firstly, it is very useful as a remittance currency. Africa has a large number of countries and territories, with a mobile workforce that often migrates between territories for jobs and business. I think we’ll see an increase in the use of bitcoin as a currency held for brief periods just to remit between countries,” he said.

“Secondly, bitcoin is emerging as as a separate asset class, and is increasingly referred to as “digital gold”. Like gold, Bitcoin is scarce, is valuable, and can be exchange for fiat currency in most countries. Unlike gold, bitcoin is very easy to purchase and transmit.

Bitcoin and other cryptocurrencies are likely to become a common component of a balanced investment portfolio, especially as a hedge against currency volatility in emerging markets. ”There are still hindrances to the uptake of digital currencies in Africa, such as the fact obtaiining them is still a cumbersome process.

“It’s difficult to get your first bitcoin without having a bank account that you can use at an exchange,” said van Rooyen.“A significant step in digital currency adoption will be the ability to earn such currencies directly.

Custos pays our anonymous bounty hunters directly in bitcoin; companies like 21.co facilitate cryptocurrency payments for knowledge tasks. I’d love to see a new Money4Jam, or a pan-African TaskRabbit, that allows direct digital currency payments for microjobs."

Discover more stories on Disrupt Africa here: http://disrupt-africa.com/2017/09/african-blockchain-moving-away-from-payments-narrative/

One of the hottest emerging technologies is blockchain. It’s the underlying technology that makes Bitcoin work, but the potential applications are far larger than cryptocurrency.

Blockchain is a distributed ledger. Instead of a single database or organization holding transaction records (or other data), the records are available to millions of computers anonymously. Through massive distribution of these records, a nearly tamperproof data record is created. (Harvard Business Review recently published a good overview of the technology.)

Currently, the primary applications for blockchain are in the financial industry, where it has the clearest value proposition.Don Tapscott, author of Blockchain Revolution, delivered a TED talk and summarized why transactions backed by large financial institutions are problematic.

First, the holders of the data are centralized and can be hacked. Second, these institutions are not accessible to everyone. Third, transactions are slow, taking hours or days for money to change hands. Additionally, the institutions charge a fee and take personal data (which may be detrimental to vendors and customers in the future).Within energy, blockchain is a strong candidate to support the distributed electrical grid.

Rocky Mountain Institute has written about how blockchain will impact the energy sector and how it will be a key to cyberdefense on the grid. Greentech Media also hosted a podcast on blockchain exploring the possibilities for applications.In short, blockchain can record and facilitate transactions between many entities that buy and sell energy.

As more homeowners and businesses become electricity suppliers by installing solar and investing in batteries, there will be a much more complicated and interconnected web of energy buyers and sellers. Many individuals and businesses will be buyers and sellers, in some cases simultaneously, depending on the time of the day.

Blockchain is a foundational technology that can make this complex marketplace work efficiency, securely, and without significant overhead costs. 

There are a number of firms talking about blockchain applications in real estate, but it’s typically on the brokerage side. For example, blockchain could eliminate the need for title insurance, reducing the costs of purchasing a home. 

Increasing marketplace efficiency is advantageous in facility management, too. The use of blockchain in building operations has received less attention, but there are many opportunities that the technology enables.

Given that blockchain is a secure way to automate transactions and the transfer of data, here are a few leading ideas about how blockchain may change the way buildings are operated.

Facility management services

Many organizations hire outside vendors to manage their offices. These contracts can include managing capital projects, operating the subsystems like HVAC, and running the cafeteria. The middleman approach works well, because most large offices require dozens of different services.Managing the facility services and the business may be too much for most corporations.

A corporation can realize significant efficiencies by paying a single trusted entity for facility management services. Additionally, the corporation may not have the resources to properly vet all the necessary vendor relationships. The efficiencies of scale are compelling, and may outweigh the contract fees paid to the facility management company. 

Blockchain may obviate the need for such a middleman. One concept within blockchain is the “smart contract.” Also known as a “self-executing” contract, it is a set of instructions, conditions and outcomes that are built into the blockchain.

The smart contract defines how money should change hands and automatically executes the transfer as conditions are met. This replaces the legal contract or other paper agreement. Explained one way, “If blockchains give us distributed trustworthy storage, then smart contracts give us distributed trustworthy calculations.

“ Here is a simple example in shipping and delivery: Instead of signing a paper agreement with a delivery service, a smart contract could simply release the prearranged delivery fee when the package is delivered (which could be verified using GPS).

Supply chains have been viewed as a good target for blockchain, but the same can be said of facility management. “All too often, supply chains are hampered by paper-based systems, where forms have to pass through numerous channels for approval, which increases exposure to loss and fraud,” notes a great summary of smart contracts.

This approach also would automatically create a record of past maintenance calls and could automatically identify HVAC components that need to be replaced.

Equipment warranties

The worldwide market for building automation is about $120 billion. Smart equipment and the internet of things, which will connect these systems to the cloud, are becoming more common. Smart contracts could serve to automate warranties and provide refunds when equipment does not perform as expected.

Jeff Garzik, who co-founded blockchain services startup Bloq, notes that “smart contracts...guarantee a very, very specific set of outcomes. There's never any confusion, and there's never any need for litigation. It's simply a very limited, computer-guaranteed set of outcomes.

"With onboard sensors to monitor equipment performance, any warranty issue could be automatically identified and the refund would be transferred automatically. This would give building operators more confidence in the products they purchase and reduce administrative costs for the vendors. 

Tenant billing 

Billing individual offices for actual energy within a commercial building is a significant energy management challenge. There are regulations in some cities, such as New York, that require submetering to enable tenant billing.

 Right now, the process is manual and requires a fair bit of administration. Just as blockchain is starting to impact the energy grid at large, it also could provide the backbone for billing within individual buildings.

Indoor occupancy tracking 

Tracking individuals within a building will enable the space to be more efficient and personal. That said, valid privacy concerns arise as more data is collected about more occupants. Blockchain could provide security and anonymity while also enabling building systems to collect more detailed data about individual occupants.

Blockchain can be used as a secure way to store personally identifiable data. For example, the United Nations is working on a digital ID system based on blockchain. Similarly, Civic is focused on blockchain-based identify management solutions to securing an individual’s sensitive, personal data.

The solution is a bit technical, but in short, blockchain enables Civic to verify someone’s identify but not store the personal data on a server. Then, by decentralizing the data, Civic generates about the given identity, they ensure that it can’t be tampered with.

Data about how someone works within a building could be stored in the same way, reducing worker concerns about indoor sensing being used as “big brother” technology. 

Co-working spaces

Most co-working spaces have fairly simple tiered pricing plans: a monthly fee to access the office space, a higher fee for a reserved desk, and an even higher fee for an enclosed office. The administrative effort to bill on a per-use basis is cost-prohibitive.

But more workers would join co-working spaces if they could pay for only the time spent in the space, which could be as little as a few hours per week. Blockchain and smart contracts would remove the administrative effort to implement such a dynamic pricing model and would be highly secure. Deloitte notes in its white paper:

“As the framework illustrates, blockchain seems to be most applicable to dynamically configurable or co-sharing spaces, which have a relatively higher number of tenants and shorter duration leases compared to traditional property types.

“WeWork raised a Series G round at a $20 billion valuation. Many speculate that this valuation is justified by its goal of taking over significant shares of existing commercial office space, even spaces owned and operated by corporations.

WeWork may also see blockchain as a way to increase demand for co-working space. Other co-working space operators may view investments in blockchain as a way to differentiate their offerings and capture market share. 

These are just a few of the many opportunities for blockchain in facility management. The technology has the potential to disrupt facility management, just as it is positioned to fundamentally change the financial sector.

Facility data may not be as sensitive as credit cards or financial information, but there still are risks. Additionally, blockchain provides benefits beyond security, such as a reduction in overhead costs. Building and facility management operators and vendors should embrace blockchain and consider how it may help them deliver next-generation solutions.

Entrepreneurs also should consider how blockchain can remove steps in complex transactions and increase efficiency. A blockchain-based building automation system (BAS) may seem far-fetched, but it would enable a “pay for performance,” or “BAS as a service,” business model. Additionally, the building could improve operating efficiency by accessing trend data for similar peer sites.

Such a BAS would also be more resistant to hacks. For example, setpoints would be distributed in blockchain instead of being on a single server.Additionally, just as blockchain is being used to track food supply, it could be used to track the source of building materials to ensure a high level of indoor environmental quality, which is an emerging issue for worker health. 

***Joseph Aamidor is a 12-year veteran in the building and energy management industry. He frequently speaks at industry events and contributes to industry periodicals including Greentech Media. Joe has held product management responsibilities at Johnson Controls and most recently served as director of product at Lucid Design Group.

Discover more stories like this on Greentechmedia here: 
https://www.greentechmedia.com/articles/read/blockchain-coming-to-a-smart-building-near-you

The drive to discover alternate ways for a new company to raise money has birthed many experiments, but none more prominent than the 2017 rise of so-called Initial Coin Offerings, or ICOs.

The decades-old, tried-and-true way for a technology company to raise cash:

A company founder sells some of his or her ownership stake in exchange for money from a venture capitalist, who essentially believes that their new ownership will be worth more in the future than is the cash they spent now.

But over the last year — and especially over the last four months — a new craze has overtaken some influential subsets of the technology industry’s powerbrokers:

What if companies had a more democratic, transparent and faster way to fundraise by using digital currency?So as the first ICOs surpass the $1 billion marker that typically jettisons a company to some Silicon Valley stardom, let’s explore what is going on.

What exactly is an ICO?

An ICO typically involves selling a new digital currency at a discount — or a “token” — as part of a way for a company to raise money. If that cryptocurrency succeeds and appreciates in value — often based on speculation, just as stocks do in the public market — the investor has made a profit.

Unlike in the stock market, though, the token does “not confer any ownership rights in the tech company, or entitle the owner to any sort of cash flows like dividends,” explained Arthur Hayes of BitMEX, one bitcoin exchange.

Buyers can range from established venture capitalists and family offices to less wealthy cryptocurrency zealots.Investing in a digital currency is extremely high-risk — more so than traditional startup investing — but is motivated largely by the explosive growth in the value of bitcoins, each of which is now worth around $4,000 at the time of publication. That spike helped introduce both fanatics and professional investors to ICOs.

How big a deal are ICOs?

We’ve seen over $2 billion in token sales in about 140 ICOs this year, according to Coinschedule, quieting arguments made by some that ICOs are merely a flash in the pan likely to fade any minute now when a new fad emerges.It can feel like ICOs are everywhere — at least a few typically begin every day.

Buyers during a presale period might email a seller and personally conduct a transaction. Later on, a purchaser tends to use a website portal, hopefully one that requires an identity check, explained Emma Channing, general counsel at The Argon Group.

“The froth and the attention around ICOs is masking the fact that it’s actually a very hard way to raise money.”

“I don’t think that there’s been an obsession of Silicon Valley that has overtaken seed and angel investing in a single year,” said Channing, who helps companies execute ICOs. She argues: “I don’t think Silicon Valley has ever seen anything quite like ICOs.

”Channing said it is possible that more than $4 billion will be raised through ICOs this year. But she advises that ICOs are typically only successful for the very small number of companies that have “blockchain technology at their heart.” 

ICOs commonly fail when that’s missing or when the marketing and message are poor, she warned.“The froth and the attention around ICOs is masking the fact that it’s actually a very hard way to raise money,” Channing said.

Who are its biggest proponents?

A number of more forward-thinking venture capitalists, such as Fred Wilson at Union Square Ventures and Tim Draper at Draper Fisher Jurvetson, have been some of the most vocal believers in ICOs.

Draper earlier this year participated for the first time in an ICO, buying the digital currency Tezos, a rival blockchain platform, in what was a $232 million fundraising round.

Wilson has not proclaimed it to be a panacea.“Contrary to the hype machine working on ICOs right now, they are not simply a funding mechanism. They are about an entirely different business model,” Wilson wrote on his blog this summer.

“So, while ICOs represent a new and exciting way to build (and finance) a tech company, and are a legitimate disruptive threat to the venture capital business, they are not something I am nervous about.

”Other leading ICO investors include Chris Dixon at Andreessen Horowitz and entrepreneur and self-described “crypto capitalist” David Sacks.“Any startup that can ICO will ICO (barring a regulatory intervention),” Sacks tweeted last month.

What are its risks?

There are certainly some losers if and when ICOs win.One group, as Wilson knows: Venture capitalists. Much of investors’ power derives from their supposedly superior judgment — they fund projects that are deemed worthwhile, and if the VC industry decides your startup isn’t promising, you’re left with little choice beyond bootstrapping or crowdfunding.

ICOs offer another option to founders who are skittish about handing control of their baby over to outsiders driven above all else by financial return. “Every VC firm is going to have to take a long hard look at the value they bring to the table and how they remain competitive,” said Brian Lio, the head of Smith & Crown, a cryptocurrency research firm.

“What do they have other than prestige? What are they offering to these companies that are more advantageous than going to the community?

”But Lio noted that buyers are also possibly in peril and should be cautious: Risk is higher than buying stock, given the complexity of the system. And it can be difficult to vet an investment or the technology behind it. Other experts have long worried about fraud in this largely unregulated space.

Is the government okay with this?

That’s TBD. In the U.S., the Securities and Exchange Commission requires private companies to file a disclosure whenever they raise private cash. After largely letting the ICO market develop with no guidance, the SEC this summer warned startups that they could be violating securities laws with the token sales.How governments choose to regulate this new type of transaction is one of the big outstanding questions in the field.

The IRS has said that virtual currency, in general, is taxable — as long as the currency can be converted to a dollar amount.

Some expect the SEC to begin strictly clamping down on ICOs before the cash is raised. That’s already happened in other countries, most notably China — which this month banned the practice altogether.

ICOs, while hosted in a certain country, are not confined to a certain jurisdiction and can be traded anywhere you can connect online.

“Ninety-nine percent of ICOs are a scam, so [China’s pause on ICOs] is needed to filter the crooks out,” tech investor Chamath Palihapitiya tweeted this month. “Next phase of ICOs will be real.”

Discover more stories like this on ReCode here: https://www.recode.net/2017/9/19/16243110/initial-coin-offering-ico-explained-what-is-money-bitcoin-...

Beyond the hype of Bitcoin in the financial world is a growing movement in the social sector to leverage digital currencies and their underlying technology (called blockchain) for social impact.

An Overview of Bitcoin and Digital Currencies

What is Bitcoin? Bitcoin is an online currency which can be used for payments and as a store of value, but that operates outside of existing monetary and financial systems. One way to think of it is as a virtual alternative to dollars or gold which individuals, and not the banks or Federal Reserve, control.

With only minimal transaction fees and complete security, the currency can be used for direct transactions between individuals, exchanged for dollars, or utilized for purchases at a growing number of companies like Overstock.com, Dell, Expedia, Dish TV, and Intuit. In some places you can buy a Burger King hamburger or Subway sandwich with Bitcoin, and there are even Bitcoin ATMs.

Bitcoin is also the darling of an increasing number of individual and institutional investors. This is due to the fact that the virtual currency has risen in value by over 300% this year, and a single Bitcoin is currently valued at more than three times the price of one ounce of gold.

Not only is the interest in and demand for Bitcoin growing, but also for the other more than 2,000 digital currencies now in existence. Bitcoin’s currency cousins have allowed startups in the blockchain technology space to raise billions of dollars through Initial Coin Offerings (ICOs).

An ICO is a company’s direct issuance of its own branded digital token, which can then be purchased and exchanged for the issuer’s services or for other currencies, including fiat currencies like the dollar or yen. These “cryptocurrencies” are traded through online exchanges and appreciate or depreciate in value like stocks.

Digital Currency and Fundraising

Sensing an opportunity to leverage these new currencies for fundraising, a number of nonprofits and foundations now accept Bitcoin donations, which they can later exchange for dollars. The Red Cross, United Way, Greanpeace and Save the Children all accept bitcoin donations, as do the Wikimedia and other Foundations.

There is even a new crowdfunding site for social and political causes, called Bithope, which hosts fundraising campaigns that only accept donations in Bitcoin.

In addition, a handful of digital currency projects have been launched which generate their own “charity coins” to support specific nonprofits or charity work. The Clean Water Coin, for example, was created specifically to help fund the work of the NGO Charity:Water.

So far Cleanwater coin, has raised over $2,000 through the “mining” and sales of the Clean Water Coin.

Another initiative, the RootPoject, is soon to launch an official Initial Coin Offering to support anti-poverty work. Their new digital currency, called Roots tokens, will be sold and exchanged for dollars to fund community projects targeting the poor.

Some Roots tokens will even be reserved to support a pension fund for individual project workers. The RootsProject’s presale of Root coins alone generated well over $200,000 for the organization.

One incentive for nonprofits to accept Bitcoin is that premier digital currency payment processors and “wallets,” like Coinbase, do not charge processing fees for digital currency donations to 501(c)(3) nonprofits. If a donor wishes to donate Bitcoin, for example, the organization receives the entire donation.

By comparison, Paypal, which has among the lowest transaction fees for nonprofit donations, charges 2.2% plus $.30 per donation. Also, Bitcoin donations are tax deductible and treated by the IRS in the same manner as stock and bond donations to charity.

Transparency in charity giving is another way in which Bitcoin and blockchain are being tested in the donations space. For example, the BitGive Foundation has launched an initiative called GiveTrack, which they call the “Bitcoin charity 2.0 initiative.

” According to Bitgive, the system will “allow donors and the public to trace nonprofit transactions on a public platform in real time to see how funds are spent, ensure they reach their final destination, and track the results generated from contributions.”

Blockchain in the Social Sector

The technology which supports many cryptocurrencies, known as blockchain, holds even greater promise for advancing social sector work. Blockchain is being explored and experimented with by a number of international aid agencies and foundations, such as Unicef, the World Bank, and the Bill and Melinda Gates Foundation.

Projects cover a variety of areas such as transparency of aid, international and local remittances, the protection of property rights, secure voting, and environmental protection. The technology itself is complex (and geeky), but at its core blockchain provides a digital mechanism for transparently recording and viewing any transaction ever.

It operates through a decentralized computing network over which a record of transactions cannot be hacked or altered. While the Internet serves as an information exchange, Blockchain offers a “value exchange.”

One specific example of how blockchain is used in the social sector is a pilot recently conducted by the United Nations World Food Program (WFP) that provided Syrian refugees based in Jordan with cryptocurrency vouchers to trade at selected markets. The platform was successfully used to record and authenticate transfers for about 10,000 individuals.

Another example is a just announced “liquid democracy” experiment which allows users of an encrypted, blockchain-based app called Sovereign to vote peer-to-peer (not through governments) on any issue, or to transfer their vote to another trusted party anywhere.

The creators of the tool, Democracy Earth, wish to enable a new form of global governance which transcends national borders and to fully establish democracy as a universal human right.

In the environmental arena, powerful new blockchain-supported supply chain management systems, which are transparent but cannot be tampered with, can be employed to determine if a food product is organic or fair trade - from producer to table. (see Provenance)

This May 2017 report from Mercy Corps describes many of the other innovative projects aimed at transforming international development and NGO work through digital currencies and blockchain.

Challenges and Possibilities

Digital currency and blockchain projects are still new and yet uproven in many cases, and the cryptocurrency market is still largely unregulated and extremely volatile. Blockchain is not a silver bullet for addressing social challenges, but the technology will continue revolutionize how individuals and systems interact across sectors.

Financial institutions, corporations, and governments around the world are already actively utilizing or planning to adopt digital currencies and blockchain technologies in new and innovative ways.

In the social sector we can see a growing number of possible use cases, even to help address the needs of those now being effected by the devastating hurricanes in the Caribbean and southern United States.

The blockchain could potentially support the immediate and direct transfer of financial support to hurricane victims for when banks are inaccessible or aid agencies and the government are too slow to respond, and for the tracking of donations to make sure they are received by the intended recipients.

Philanthropies might eventually benefit from automated “smart contracts” with their grant recipients, which only receive funds when grant conditions are met. Blockchain could also provide foundations and social impact investors with more robust and transparent impact tracking and measurement systems.

Foundations could even issue their own digital currencies or operate charity-specific cryptocurrency exchanges? Some are suggesting that philanthropies and charities could be overstepped or removed altogether, leveraging blockchain’s core capability as an “intermediary killer.”

The possibilities for cryptocurrencies and blockchain for good are unlimited. As Kavita Gupta, who is managing a new $50 Million venture fund to support new companies addressing global challenges through blockchain says, “We haven’t even begun to tap the depth of its social impact potential.”

The future is now for digital currencies and blockchain in the social sector. The question is not “when will these tools transform the space?” In fact, they already are.

Note: For a listing of resources on Digital Currencies and Blockchain in the social sector see here.

Discover even more stories like this from HuffPost here: 
http://www.huffingtonpost.com/entry/transforming-the-social-sector-bitcoin-and-blockchain_us_59c169e...

There is no doubt that interest in blockchains as a technology is running high, nor that this is a global phenomenon. Two contributions, with very different considerations, illustrate this:

• Chris Berg, Sinclair Davidson and Jason Potts are with the RMIT Blockchain Innovation Hub in Melbourne, Australia; their opinion piece, entitled ‘Institutional Cryptonomics: A New Model for a New Century’ appears in Coindesk
• in contrast, Morten Bech and Rodney Garratt opine for the Bank of International Settlements (BIS) on the topic of Central Bank Cryptocurrencies.

 That their analyses are different is not surprising. They approach the cryptocurrency topic from very different starting points.A New Model for a New CenturyThe following captures the essence of the RMIT argument: “The rollout of blockchain technology raises complex questions in economics, public policy, law, sociology and political economy.

What we call ‘institutional cryptoeconomics’ starts from a simple premise – the blockchain is not just a new general purpose technology, it is a new institutional technology.

“This may sound like a pedantic distinction, but the difference between these two conceptions is profound. General purpose technologies allow us to do what we already do better, faster and cheaper. Economists understand general purpose technologies (like steam power or the semi-conductor) as great engines of economic growth.

“There is no doubt that the blockchain is a general purpose technology, but it is much more. Rather, the blockchain is a new mechanism to coordinate economic activity and to facilitate cooperation between individuals. It opens up new opportunities for exchange, for collaboration and for building communities that were previously closed off due to high information costs and transactions costs.

”Old thinking and new paradigmThey continue by drawing out a perceived difference between:

• ‘old thinking’, essentially the traditional transaction model
• the new paradigm, where the “blockchain breaks this relationship between size, opportunism and asset specificity”.

 For the authors, “blockchain breaks this relationship (between size, opportunism and asset specificity). … Institutional cryptoeconomics offers an exciting way to understand what features of the ancien régime we’re about to lose, and what might take its place.

”The central bankers’ bank contributionThe BIS contribution focuses on...continue reading: https://www.enterprisetimes.co.uk/2017/09/19/two-blockchain-reveal-different-visions-future/

DAC Beachcroft report predicts blockchain impact, another IPT rise and increased focus on corporate governance for brokers.

Brokers could be eliminated from some parts of the insurance distribution chain if blockchain is used to implement what is known as smart contracts.

According to a report by DAC Beachcroft blockchain/smart contracts can be used to automate digital claims.The report, Insurance Market Conditions & Trends 17/18, stated:

“They can automate the claims process, enabling digital claim submission (via sensors or internet-connected data sources) and processing (eliminating the need for brokers and loss adjusters) and making payments.”

The document further explained that distributed ledgers (the block chains) are shared databases comprising digital lists of transaction records. Their unique characteristic is that identical copies of the ledger are ‘distributed’ among multiple hosts, who validate transactions written as ‘blocks’ through a consensus process. The blocks are then encrypted.

However it was also noted that large complex claims may still require human intervention.

IPT

The report examined the top trends likely to impact the insurance world in 2017/18.It also warned that there could be further changes to the IPT rate. 

DAC Beachcroft partner, Helen Faulkner noted in the report: “The industry has made a powerful case for not increasing IPT further after the sharp rises of the last two years with the core rate now at 12%.

“IPT is already set at 20% for travel insurance and mechanical breakdown and closing this gap could be tempting for the Chancellor.


”The sector has already witnessed numerous IPT increases and the idea of raising the tax to 20% has already been mooted.GDPR
In addition the report also examines the impact of GDPR regulations and Senior Managers’ Regime.

It noted there will be an “increased focus” on corporate governance. GDPR comes into force in May 2018.Partner Matthew Rutter pointed out...continue reading: 
https://www.insuranceage.co.uk/insurer/3142746/blockchain-could-eliminate-the-need-for-brokers

The applications of blockchain are many, and businesses are finding new, unique ways of implementing the technology with each passing day. 

Blockchain is already changingbanking, and threatens to disrupt industries far and wide, from music and film-making to cyber security and cloud storage.

Companies with an eye on the horizon are looking to adopt blockchain technology to improve their processes, maintain a qualitative edge, and fend off future competition.

While the technology has found its strongest proponents in the financial sector, it is also gaining immense popularity among serious supply chain managers.

There are several reasons why blockchain and supply chain logistics are a good match, and it’s not because they both include the word “chain”.

Connecting the Chains

Blockchain’s ledger-like capabilities are perfect for bitcoin, the cryptocurrency that was its first real-world application. It is very hard for a single piece of software to support an enormous financial network, as bitcoin has become, but thanks to some creative coding by a still-unrevealed founder, blockchain has true longevity.

The users of the blockchain provide its real power and keep it running in an incorruptible state. Simply put, each computer connected to the blockchain is an individual node in a decentralized web. This web employs its collective power to process transactions, while a democratic algorithm keeps everything in order and uses encryption to ensure the safety of all.

The result of such a system is an irrefutable timestamp of all transactions that took place using the blockchain, and no single entity can alter the data. While obviously suitable for financial purposes, developers and entrepreneurs also quickly realized that blockchain is perfect for supply chain logistics as well.

As for finance, blockchain is a supply chain solution by design. Proper logistics requires meticulous record-keeping for inventories, transactions and locations. Unlike complicated custom solutions, blockchain can deliver this without much trouble.

Evolving Supply Chain

The field of chain logistics is rapidly changing, and will likely continue to evolve with or without blockchain’s help. The industry largely lives behind the scenes, supporting retail markets with little fanfare. However, big things are coming.

Supply chain departments around the globe are increasingly reliant on robotics and digitization to fulfill their goal of reaching peak efficiency with promising results. Blockchain may just prove the technology to get them to that plateau faster.

These days, every stage of the supply chain is digitized with bar code scanners, warehouse robots, QR codes, or some other data creation tool. This is one relevant use of the “Internet of Things”, a new tech field based around internet-connected devices and mobile technology. It’s only logical to use blockchain to collect all this information.

Having a trusted platform for data gathering is a blessing for supply chain, because there is no chance that the data could appear in any other way. The transparent “story” that blockchain data tells makes it easy to identify errors and their source to fix them accordingly.

This will empower supply chain managers to streamline their processes to be as lean as possible.

Companies like Modum are already entering the space and have proof of their blockchain solution’s efficacy. Modum’s system uses an array of IoT sensors connected to the blockchain to log product movements and provide data integrity for the whole supply chain.

The sensors will record changing environmental conditions and other critical information, and then check with a smart contact to ensure that everything is accounted for properly before the goods change ownership. This hands-off, reliable supply chain solution is currently being tested by a slew of partners, and may be one of the first blockchain products to impact the industry at large.

modum.io has allocated 20.1 million of the total 30 million MOD Tokens for public crowdsale. With 2.1 million already sold in the invite-only pre-sale, the remaining 18.1 million are sold in three tiers during their token sale. The funds raised will help to bring their working hardware and tested service to market.

“We have a solid product with several successful pilot tests completed, a working hardware prototype, a strong team of developers, and a handpicked team of advisors.

We are running this token sale to fundraise for the future development of modum.io and will give our crypto-currency backers the same rights that institutionalized investors have,” said Modum’s CEO Malik El Bay.

Boost Productivity with Blockchain

It could be that the “killer app” for blockchain has not even been discovered yet. The technology has certainly pushed the boundaries of many existing paradigms, but its potential has not been properly expressed due to its relatively limited embrace. Though bitcoin’s massive gains might...continue reading: http://www.huffingtonpost.com/entry/blockchain-in-the-supply-chain-the-hype-is-justified_us_59c13dcf...

What’s all the hype about cryptocurrency, Bitcoin, and blockchain technology? Cryptocurrencies like Bitcoin are digital money that’s decentralized (no banks needed!), and that offers the potential for secure – and transparent - online transactions.It’s the encryption techniques behind blockchain technology that make digital currencies possible.

A blockchain is a public electronic record of every cryptocurrency transaction that’s ever occurred. Because these records can’t technically be modified, businesses are beginning to take notice of the enormous market potential of blockchain technology.

Where are Cryptocurrencies Headed?

Deloitte has claimed that 10% of global GDP will be built on blockchain applicationsby 2025. Some of the exciting possibilities that exist with this new technology include:

• Using cryptocurrency to power the Internet of Things (think consumer devices like vehicles and washing machines buying their own oil or milk).
• Using software in the form of “smart contracts” to store, verify, and execute retail or ecommerce agreements (terms and events are recorded in secure blockchain databases).
• Combining blockchain technology with crowdfunding to improve the accountability of businesses seeking capital.
• More uses for blockchain tech listed here.

Individuals and commercial entities alike are also getting involved with cryptocurrencies through Initial Coin Offerings. ICOs are much like IPOs (Initial Public Offerings), but company “shares” take the form of cryptocurrency tokens.

The value of cryptocurrencies like Bitcoin and Ether have grown as their potential expands. This makes them an ideal investment in many people’s eyes. Valued at just $0.07 in 2010 for example, Bitcoin currently (September 2017) trades at around $4,800 on the NYSE!

Why is the Cryptocurrency Space Dominated by Men?

http://www.motherjones.com/kevin-drum/2015/04/bitcoin-women-problem/Cryptocurrency and blockchain tech world dominated by men.

The cryptocurrency space suffers from significant diversity issues. In fact, there are even fewer female entrepreneurs in the Bitcoin industry than there are in other tech sectors. Meanwhile, surveys indicate that more than 90% of Bitcoin users are male.  

According to The Cointelegraph, only 1.76% of the Bitcoin community are women.              

Why such glaring gender disparity? Several factors are responsible:

• The well-documented gender gap inside the tech industry itself.
• The under-representation of females in the financial industry in general.
• The theory that women are more risk-averse than men when it comes to dealing with money.

So, as I myself have just briefly skimmed the surface of the potential of this new technology, it’s critical to ask what can be done to get more women involved in blockchain technology and reverse what is yet another massive gender divide?

According to an article depicting the prevalence of sexism in the Bitcoin world, “If you are a woman involved with Bitcoin, you are invariably going to get treated like an outsider.” This is even more reason to change this while it’s still fresh.

This shouldn’t scare women away from the crypto currency world, but rather aggressively influence and motivate more women to get involved.




https://cointelegraph.com/news/its-a-mans-world-only-176-of-bitcoin-community-are-women

Only 1.76% of Bitcoin Community Are Women

For those deep into cryptocurrencies and blockchain technology, the early adopters, the success of Bitcoin hinges on mainstream adoption. That means getting more women onboard. Opportunities exist for women to earn more income and impact the global economy - through Bitcoin trading, investments, and virtual spending.

Tech-savvy female entrepreneurs are also looking to ICOs to fund their startupsrather than relying solely on venture capital investment; yet another financial sector that is still dominated by men.Women have significant power as consumers, and are quickly outpacing men as entrepreneurs. However, tech knowledge and talent needs to be encouraged through:

• Education
• Mentoring
• Internships
• Advocacy
• Publicity
• Importance of diversity in hiring talent

While a handful of talented females are already impacting the Bitcoin and blockchain tech sector, it’s vital that more women take part in this disruption.

 I highly encourage women to simply start talking to people who are immersed into cryptocurrencies and blockchain tech, attend some meetups, get into the conversations in person and online, listen to influencers in the industry via podcasts, read about it, educate yourself and get involved by experimenting with cryptocurrencies. 

Don’t get left behind, you just have to....continue reading: 

BY BEN PAYNTER

The future of world food aid arrived, in early May, unnoticed by its first recipients: the grocery shoppers inside a supermarket at the Azraq camp in Jordan, home to 36,000 Syrian refugees. To be fair, their buying process already looked pretty high-tech, especially for a store with a dirt parking lot in the middle of the desert.

Before paying, each shopper peered into a black, rectangular iris scanner mounted at eye-level, which confirms users’ identities with the camp’s organizing group, the United Nations High Commissioner for Refugees, and allows them to access a food stipend from the United Nations’ World Food Programme (WFP).

That’s a spiffy authentication process, but it had been there for months. What the shoppers didn’t see was the new back-end procedure. Instead of receiving WFP funds via a third party, such as a bank, the grocery store was reconciling each purchase directly with the aid group through a secure platform called Building Blocks, based on blockchain technology.

Inside the store, Houman Haddad, a finance officer for the WFP and the founder of Building Blocks, watched as each eye scan led to a cashier’s tablet flashing a green check mark, signaling a completed transaction. “It was the moment when I knew this was technically possible,” he says.

The technology behind cryptocurrencies such as bitcoin and ethereum, blockchain is essentially a shared digital ledger system: a decentralized database that allows information to be exchanged among several parties but not altered. Transactions become blocks of data that are chained together, making everything transparent and easy to review.

The concept arose in 2008 as a way to securely track and transfer bitcoins. Today, blockchain is being applied to everything from energy trading to legal contracts, and is poised to transform how we store and share personal information. But one of its most profound uses, say advocates, may be in international aid, where documentation is scarce and operating budgets are low.

By eliminating intermediaries, blockchain technology creates faster, safer, and, ultimately, cheaper ways of doing business. Organizations working in international relief can lose up to 3.5% of each aid transaction to various fees and costs. What’s more, across the industry, an estimated 30% of all development funds don’t reach their intended recipients because of third-party theft or mismanagement.

In Jordan, the WFP can use Building Blocks to audit each beneficiary’s spending in near-real time. And by paying vendors directly, Building Blocks has reduced money-management costs by 98%, according to Haddad. For an aid organization spending $6 billion annually across 80 countries, that adds up to tens of millions of dollars in savings.

Bernhard Kowatsch, who heads the WFP’s Innovation Accelerator, which incubated Building Blocks, sees more value: “[Building Blocks] provides even higher assurance to individual donors that if you give to the World Food Programme, that money actually reaches the people it’s intended for.”

Haddad, who has worked for the WFP for seven years, approached his employer in mid-2016 about developing a blockchain-based business through its accelerator. The WFP incubator offers intensive coaching and up to $100,000 to social entrepreneurs who share its goal of eradicating global hunger.

Once in the program, Haddad joined forces with Alexandra Alden, a Silicon Valley–based mentor, refined the concept during a boot camp run through California’s Singularity University, and, in January of this year, began testing a prototype in the Sindh province of Pakistan, whose rural inhabitants are dependent on food entitlements and direct cash distributions. (This trial didn’t involve fancy iris scanners, relying instead on text-based mobile voucher codes.)

The WFP initially scheduled just a one-month trial of Haddad’s technology in Azraq, but the program was surprisingly successful. The organization has asked Building Blocks to stay—and expand to other camps later this year, reaching a total of 100,000 people.

An even wider rollout to the country’s half million refugees scattered throughout different host communities will follow. Haddad expects the system to be available in other countries sometime in 2018, along with the ability for recipients to review their balances and itemized lists of purchases.

Because the design for Building Blocks is largely open sourced—its ethereum-based operating system allows for customizable applications—Haddad envisions the technology being used well beyond grocery stores. For instance, the WFP’s recipient rolls could be tethered to health data from the World Health Organization, or educational information from UNICEF.

That would give aid groups a better understanding of their recipients, and refugees a better way to manage their affairs. And the technology would be easily transferable across borders. “That’s when [it] starts getting pretty interesting and powerful,” says Haddad’s mentor, Alden.

Ben Siegel, an impact policy manager at ConsenSys, an ethereum development company that has helped form the Blockchain for Social Impact Coalition, considers Building Blocks a “superb” first step, and several UN organizations are exploring how to take it further. The ultimate goal, Haddad says, is to give uprooted people “as much control as possible” over their own lives.




[Illustration: Francesco Ciccolella]

BLOCKCHAIN FOR GOOD
These other organizations are using secure technology to bring stability to vulnerable communities.  

Alice: This London-based platform brings transparency to philanthropy by collecting and holding charitable donations—and releasing them only after an organization shares metrics demonstrating its success. Its first project is with a local homeless charity.

Banqu: Minneapolis’s BanQu uses blockchain to establish “economic identities” for people who lack access to banks. In Kenya, it’s helping refugees secure government aid and services. In Latin America, it has created shareable property registries to help female farmers prove ownership and secure loans.

Aid: Tech: Like Building Blocks, Aid:Tech eliminates transaction fees and fraud by allowing NGOs to disperse digital cash vouchers directly to recipients.

The Irish Red Cross has used it to help Syrian refugees in Lebanon.Project

Amply: The Cape Town organization, which is running a pilot with South African preschoolers, creates immutable digital identities to help children in Africa receive educational services and subsidies.

A version of this article appeared in the October 2017 issue of Fast Company magazine.

Opportunity or Trap?

For seemingly every expert making bold claims that cryptocurrencies are the future of finance and are capable of “freeing humanity from tyranny,” there’s another expert decrying the rise of bitcoin and the like as nothing more than an unstable “bubble” built on hype and bound to pop.

Perhaps the strongest criticism levied at crypto companies, however, is that they’re massive scams — that they don’t deliver anything of material value and are intentionally designed to make money for those at the top by taking advantage of those at the bottom.

Case in point: “In my view, digital currencies are nothing but an unfounded fad (or perhaps even a pyramid scheme), based on a willingness to ascribe value to something that has little or none beyond what people will pay for it,” Howard Marks, Co-Chairman of Oaktree Capital Group.

So, who is right? Is crypto a legitimate new type of finance system or a modern take on snake oil, one peddled by supposed tech revolutionaries instead of seedy profiteers?

In order to answer this question, it is important to first understand how token launches (sometimes called “ICOs” or “Initial Coin Offerings”) work in relation to IPOs (Initial Public Offerings) — to understand how crypto startups are funded in comparison to other companies.

Understanding the Terms

When a private company decides it wants to start raising funds from the public, it has what’s known as an initial public offering (IPO). For a certain fee, interested investors can purchase shares in the company. Those shares make these investors, by law, part owners in the company and entitled to dividends if the company makes a profit.

The IPO process is typically facilitated by a team of experts — lawyers, accountants, underwriters, etc. — and it is overseen by the Securities and Exchange Commission (SEC), a non-partisan agency of the federal government with two primary objectives:

• Ensure that the companies raising fund are telling potential investors the truth about their business, including any potential risks to investing
• Ensure that the people facilitating the process, such as stockbrokers and exchanges, put investors’ interests first and treat them fairly and honestly

To meet these objectives, the SEC will require that a company register before their IPO, submit their financial statements to be audited, and meet a number of other requirements. In theory, the SEC acts as an unbiased third-party in the IPO process, ensuring that everything is aboveboard.

One very important point to note is that basically all brokerage firms require investors to meet some qualifications before they can participate in an IPO. Generally, you have to have a certain amount of money or a set number of transactions, which means that a vast majority of society is not able to participate.

This is the big difference between an IPO and the launch of a new blockchain token — token launches put the power, and the responsibility, in your hands.Instead of venture funding, many blockchain startups have a token launch or an ICO.

It is important to note that many individuals operating in the blockchain space, and other experts, prefer the term “token launch” instead of “ICO.” This is because some blockchain tokens/transactions do not qualify as “investment contracts,” meaning that they are not considered securities, and so the term ICO (given its similarity to IPO) may be confusing.

“A Securities Law Framework for Blockchain Tokens” sums the problem with the term ICO, noting that tokens have many different applications and utilities:

There are many different types of blockchain tokens, each with varying characteristics and uses. Some blockchain tokens, like Bitcoin, function as a digital currency. Others can represent a right to tangible assets like gold or real estate.

Blockchain tokens can also be used in new protocols and networks to create distributed applications…some tokens, depending on their features, may be subject to U.S. federal or state securities laws.

But, and this is the notable thing, not all tokens will have these features and be subject to security laws. With this in mind, for the purposes of clarity, we will be referring to the launch of a new blockchain token as “token launches.

”As Balaji Srinivasan, board partner at the venture capital firm Andreessen Horowitz, explained in an essay on Medium, the fundraising process that drives some token launches is a bit “like a Kickstarter on steroids.”


To raise funds through a token launch, a company will sell a certain percentage of the total amount of their crypto upfront. Purchasers of these crypto coins are not legally part owners in the company, and they don’t earn dividends if the company prospers.

The success of their investment is based on the market value of the coin. In other words, as long as they can sell their cryptocurrency for a value higher than what they paid for it, they can make a profit.Unlike the IPO process, token launches are unregulated.

Companies aren’t required to adhere to a path set forth by the SEC or any other government agency, which means there is no third party ensuring that either side is telling the truth or meeting any certain requirements.Token launches do tend to follow a certain format, however, and it starts with the company’s founders writing a white paper providing details on their startup.

This paper can be any length or format, but it will usually include the company’s strategy and goals, as well as their plans for funding (the amount of money they hope to raise, the per-token cost, the duration of their token launch, etc.).

Ideally, these white papers should provide a comprehensive business plan for interested parties.If the company does not meet their minimum funding goals, the money is returned to the would-be supporters and the token launch is considered unsuccessful.

Risks vs. Rewards

According to one crypto investment expert (who agreed to speak on the condition of anonymity), the token launch process can benefit both investors and innovators looking to get their projects off the ground.“Token launches allow the broadest amount of participation we have seen yet,” they explained.

“They’re a pure way to go from a creator of an idea directly to investors without a large number of middlemen. They allow investors to get in at an earlier level than an IPO.

They allow anyone anywhere in the word to easily participate with very low minimum investments.

”In this respect, token launches are all about total participation and democratizing power. Instead of just a few wealthy participants, anyone can participate in a token launch or even host their own token launch, allowing individuals in impoverished areas (or who are faced with other economic or social barriers) to participate in the global economy.

“Crypto is complicated, exciting, and the future.”Unfortunately, token launches also carry with them several inherent risks due to their unregulated nature. “With token launches, people are able to raise large amounts of money with very little evidence they can deliver,” the expert noted. This is mostly a matter of supply and demand.

Crypto has the potential to deliver high returns, so investors are eager to jump into the market. Unfortunately, the supply of crypto projects isn’t yet enough to meet this demand, which leads to investors who are more willing to take greater risks on companies with less evidence they can deliver on their claims.

“Investors are also willing to accept a longer lag between when they give their money to a token launch and when [the company] builds a product — another example of moving further out the risk spectrum,” they continued.

“This dynamic lends itself well to a Ponzi scheme, where a company does a token launch, promises a product in six months, builds nothing, and then uses the money raised to market and execute another token launch two months later.”

Investors in OneCoin know the dangers of investing in crypto startups all too well. Founded by Bulgarian national Rjua Ignatova, the company raised more than $350 million before Ignatova and nearly two dozen of OneCoin’s promoters were arrested for running a fraudulent business.

This, of course, is important to note: Just because token launches are not regulated does not mean that they are held to no standards and are free to do whatever they like. Those who act with malicious intent can still be held accountable, though this is admittedly a long and painstaking process.

After the arrest, Deputy Commissioner of Police (Crime) Tushar Doshi told The Indian Express, “It is clear that this is a Ponzi scheme,” but that fact obviously wasn’t clear to the thousands of investors who put money into the operation. How were they supposed to know where OneCoin landed on legitimate-to-scam spectrum of business models before putting money into it?

The Point: Don’t Invest Blindly

In the end, the expert consensus indicates that, although some cryptocurrencies and token launches are nothing more than schemes, there are a great many projects that are genuine and can (and have) delivered.

Indeed, some major financial institutions are already developing their own cryptocurrencies to ensure that they’re not left behind if the economy does undergo this major transition, and even JP Morgan is looking into ways to incorporate blockchain into their operations.Furthermore, more than a billion people worldwide don’t have a way to identify themselves, and they can’t open bank accounts and participate in the traditional economy as a result.

A cryptocurrency like bitcoin has no such barrier to entry.With this in mind, according to experts, the best way for investors to ensure they don’t fall victim to the crypto scheme is to do their due diligence. This is the big difference between an IPO and the launch of a new blockchain token — token launches put the power, and the responsibility, in your hands.

So, how do you safeguard yourself?“Investing in token launches is a really hard business,” the expert asserted. “I’d say the most important things are knowing the team and their business plan. If the team has a history of hopping from one project to the next, they’re probably going to hop on your project.

If they can’t explain their business plan in a way that makes sense to you, they probably don’t understand well what they are doing.”Following this advice could have prevented OneCoin’s many investors from falling victim to the scam, as it raised many red flags online long before arrests were made.

As The Cointelegraph pointed out, Ignatova’s qualification were inconsistent between her resume, personal websites, and OneCoin’s website, and several of the company’s directors had been linked to scam operations in the past. When combined with several other eyebrow-raising factors — the promise of huge returns, constantly moving goal posts, and a refusal to accept payment in crypto — the illegitimacy of the operation seems obvious in hindsight.


Of course, as previously mentioned and as evidenced by cryptocurrencies like bitcoin and ether, not every crypto will be a scam, and some can deliver remarkable returns. Over the course of eight years, bitcoin has increased in value from eight-hundredths of a cent to more than $4,000 per coin.

Ether has seen its own value surge over the last year, and Ethereum is now the blockchain technology of choice for some of the world’s biggest tech and finance companies, including Microsoft, JP Morgan, and Intel.No doubt anyone who bought in when either of those cryptos was in its infancy now thinks the gamble was worth it.

As our expert explained, “Crypto is complicated, exciting, and the future,” so as long as investors understand that token launches, by their very nature, are riskier than traditional investments, investing in them can be a potentially rewarding — and highly profitable — experience.

This interview has been slightly edited for clarity and brevity.

The term ICO has been changed to “token launch” throughout. Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

Discover more reports and stories like this on Futurism here: https://futurism.com/lets-have-a-heart-to-heart-are-blockchain-tokens-really-nothing-more-than-a-sch...

A quote often attributed to St. Augustine, the early Christian theologian, is: “The world is a book, and those who do not travel read only a page.” I feel blessed to be able to travel as much as I do—not because I’m a big fan of 10-hour flights or living out of a hotel room.

I feel blessed because travel allows me to meet and speak at length with some truly fascinating and successful people, from CEOs of firms both large and small, to deal lawyers, to audit partners.Hearing varying opinions on global issues and politics has helped expand the scope and depth of my “book,” or understanding of the world. In turn, I enjoy sharing some of these thoughts with you.

Opinions come a dime a dozen, of course, and in today’s hyper-partisan world, it’s impossible to expect everyone to agree on all things all of the time.

Case in point: I recently polled readers on their approval of the way Donald Trump has handled his job as president so far. This isn’t a scientific poll by any stretch of the imagination, but for whatever it’s worth, a combined 56 percent of participants said they approve of the president.

Amazingly, that’s roughly the percentage of Electoral College votes given to Trump in November. (The exact figure is 56.87 percent.)




Approve or disapprove of way Trump is handling his job as PresidentSome could easily take from this poll that my readers are huge Trump supporters—and many of them are—but that would be overlooking the fact that nearly 40 percent said they disapprove of the way he’s handled his job.

I share this because it serves as a relatively accurate cross section of the types of opinions and perspectives I come across during my travels. Some of those opinions end up informing my own thinking, some don’t—but all of them are added to my “book.”Now with North Korea launching even more rockets over Japan, the market continues to make new highs.

This is what I was asked most often last week on CNBC Asia, Bloomberg Radio and Fox Business. As I said then, I’m bullish because the purchasing manager’s index (PMI) is up and oil prices are down, thanks to the ingenuity of Texas fracking, which has created a global peace tax break. The weaker dollar is also favorable for exports and gold.

Bitcoin on Sale After the China-Dimon One-Two Punch

Someone whose opinion I greatly admire, even if I don’t always agree with it, is Jamie Dimon’s. The highly-respected JPMorgan Chase (NYSE:JPM) CEO was asked last week at a global financial services conference in New York to share his thoughts on Bitcoin—which can be as polarizing as President Trump.

Some people love the cryptocurrency, some people hate it.Dimon, who’s decidedly in the latter camp, didn’t mince his words. Although he likes blockchain technology, which Bitcoin is built on top of, he began by saying he would fire any JPMorgan trader who was caught trading Bitcoin, which he went on to call “stupid,” “dangerous” and “a fraud.”

“You can’t have a business where people can invent a currency out of thin air,” he said.With all due respect to Dimon, some might point out that “inventing a currency out of thin air” is how we got Federal Reserve Notes and other forms of paper money in the first place. Even he admits this:

“The first thing a nation does when it forms itself—literally the first—is forming currency.”

Bitcoin—and any of the 800 other cryptocurrencies—takes this idea to the next level, the main difference being that no third party or monetary authority controls its issuances or transactions. It’s all peer-to-peer.

Governments tend to resist anything that disrupts the status quo, which is why we saw China restrict new initial coin offerings(ICOs) the week before last. I suspect we’ll see a few more countries attempt to regulate ICOs in other ways, and as long as these regulations are fair and reasonable, I welcome them.

The Bitcoin price was knocked down following the one-two punch of China and Dimon, falling 39 percent from its peak of $4,919 on September 1. Last Thursday it lost more than $611 a unit, one of its worst days ever, but on Friday the cryptocurrency rallied strongly again.

However, at time of publication the cryptocurrency had slipped below the $4,000 mark.With its ability to validate all transactions in an immutable electronic ledger, the blockchain has the potential to be as disruptive as Amazon (NASDAQ: AMZN) was in the late 1990s.

When the company went public in 1997, there were serious doubts whether people would willingly give up their credit card information just to buy a book. Since then, Amazon stock is up 8,000 percent, and founder Jeff Bezos briefly overtook Bill Gates in July to become the world’s wealthiest person.If you’re curious to learn more about how blockchains work, I recommend that you watch this two-minute video.

Gold Price Correlated to Money Supply Growth

In some ways, cryptocurrency more closely resembles gold. Just as there’s only so much gold that can be mined in the world, the number of Bitcoins that can ever be mined is set at 21 billion. But the exact amount is irrelevant. It could have been set at 21 trillion—the point is that supply is limited and finite.

The same cannot be said of the U.S. dollar, or any fiat currency, which today is printed “out of thin air” with abandon. This has led to hyperinflation in some instances and destroyed the value of several countries’ currency, including the Zimbabwean dollar and, more recently, the Venezuelan bolivar.

I’m not suggesting we’ll see the same thing happen here in the U.S. Nevertheless, rampant money-printing has certainly contributed to many people’s dwindling trust in traditional monetary systems.


A 2016 Gallup poll found that Americans’ confidence in banks is stuck below 30 percent, where it’s been since the beginning of the financial crisis nearly 10 years ago. 

When more money is printed, gold has traditionally been a beneficiary, for two key reasons:

1) If the money-printing is accompanied by economic growth, greater access to capital might boost demand for luxury items, including gold (the Love Trade); and

2) If the money-printing isn’t accompanied by economic growth, inflationary pressures might prompt investors to increase their exposure to real assets, such as gold (the Fear Trade).

These were among the findings in a 2010 World Gold Council (WGC) study. Even after seven years, the findings still apply. As you can see below, the price of gold expanded over the years as more and more money was printed.




Gold price correlates with M2 money supplyIf we want to get really technical, the WGC estimates that for every 1 percent increase in U.S. money supply, the price of gold tends to rise 0.9 percent—nearly as much—within six months.

According to the most recent Federal Reserve report (September 7), more than $13.67 trillion in M2, or broad money, are now in circulation. That’s up about 1 percent since the end of June, when M2 stood at $13.54 trillion.So will the gold price climb 1 percent in response? That would amount to only $13 an ounce, but remember, there are other factors driving gold, including negative real interest rates and geopolitical uncertainty.

One final note: A former UBS metals trader was arrested and charged last week with fraud and conspiracy over his alleged role in placing “spoof” orders for precious metals futures contracts. Andre Flotron, a Swiss citizen, was arrested while visiting his girlfriend in New Jersey. Flotron began working for UBS in 1999 but was put on leave in 2014.

See Zero Hedge for more on conspiracies and convictions in court over price manipulation of precious metals. Many cryptocurrency advocates allege this is why Jamie Dimon is so aggressive in knocking down Bitcoin. The enthusiasm for Bitcoin has accelerated this year with South Korean and Japanese banks accepting them as a form of money.

Disclosure: All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. This commentary should not be considered a solicitation or offering of any investment product. Certain materials in this commentary may contain dated information. The information provided was current at the time of publication.

Earlier this week, JPMorgan Chase CEO Jamie Dimon made a controversial statement at a banking industry conference organized by Barclays, condemning bitcoin and threatening to fire portfolio managers within JPMorgan who have been trading bitcoin.

Despite the warning, according to sources, JPMorgan Securities Ltd. purchased massive amounts of bitcoin through Swedish Bitcoin exchanges when the price dipped to the US$3,000 level.

Dimon’s baseless comments toward bitcoin and his threats to traders led to criticism from bitcoin experts, bankers and former JPMorgan executives including former JPMorgan head of global macro Alex Gurevich.

More to the point, Dimon demonstrated a complete lack of knowledge of the structure of bitcoin and blockchain technology in general when he stated that bitcoin should be closed down by the government in the near future.

CNBC analyst Brian Kelly criticized Dimon’s statement, explaining that bitcoin was specifically designed to circumvent governments and authorities by creating a decentralized financial system.
Despite Dimon’s strong condemnation of bitcoin and his threats toward JPMorgan traders, many trusted sources including bitcoin developer Andrew DeSantis and bitcoin trader I am Nomad revealed that JPMorgan Securities Ltd. had purchased massive amounts of Bitcoin XBT, an instrument tracking the price of bitcoin, through a Swedish exchange.
Similar to Digital Currency Group’s Bitcoin Investment Trust (GBTC), Bitcoin XBT is an investment vehicle allowing institutional and retail traders to invest in bitcoin through strictly regulated channels in the public stock market.

Both DeSantis and Iam Nomad revealed that many accounts under JPMorgan Securities Ltd. purchased bitcoin as its price dipped below $3,000.


On the World Crypto Network, a YouTube news channel and cryptocurrency podcast hosted by Vortex, bitcoin consultant and derivatives trader Tone Vays noted that it is not possible any trader at JPMorgan directly invested in a bitcoin investment vehicle.

He suggested that a more likely scenario was that JPMorgan processed bank transfers to Nasdaq Nordic’s stock exchange, in which Bitcoin XBT is supported, on behalf of their customers.For his part, IamNomad noted that a department at JPMorgan could have invested in Bitcoin XBT since its traders are not allowed to invest in bitcoin directly.

However, a more reasonable explanation of JPMorgan’s bank transfers to Nasdaq Nordic was that JPMorgan clients were purchasing bitcoin exchange traded notes in Bitcoin XBT.
Whether JPMorgan itself purchased shares in Bitcoin XBT is of minimal importance. It is crucial for investors and traders to take away the fact that an increasing number of JPMorgan traders are willing to purchase bitcoin and demonstrate enthusiasm even after the harsh criticism toward bitcoin issued by the company’s CEO.

As mainstream adoption of bitcoin as a digital currency, a long-term investment and a safe haven asset continues to increase at an exponential rate, demand for the crypto from public markets as well as professional and institutional traders will increase rapidly.

Regardless of the recent closure of Chinese bitcoin exchanges, international markets and leading regional bitcoin exchange markets are strengthening with efficient regulations and the emergence of major conglomerates within the global bitcoin industry....
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