Research
- by Francisco Gimeno - BC Analyst
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The bestselling author and historian offers his predictions on how technology will alter the evolution of humans and change society. Anderson Cooper reports.
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A perennial question surrounding blockchain technology is: When will it make a mainstream impact?
Understandably, enthusiasts in the industry are anxious to see this technology live up to its promise of empowering consumers, accelerating cross-border payments and bridging the financial inclusion gap for the under- and unbanked.
The reality is that today, its scope is limited. From what little data we have available about cryptocurrency adoption, we see that the pool of active users is relatively small in size and scope — largely millennial and largely male.
Related: Crypto could save millennials from the economy that failed them
Some countries have proven to be trendsetters; for example, one survey showed that 32% of respondents in Nigeria, Africa’s largest economy, said they’ve used or owned cryptocurrency.
To put that into perspective, only 7% said the same in the United States and 8% in China.In part, this limited adoption can be attributed to the fact that today’s products are designed for users who know what they’re doing.
It’s designed for people who know or are willing to learn the hoops they need to jump through to take their financial assets from fiat into crypto and back again and the benefits of doing so.
Crypto utility — that allows people to use it in their daily routine — will come from putting in the time to develop the right foundational infrastructure.
This infrastructure will enable some of the most powerful crypto use cases, such as hedging inflation in volatile economies, enabling remittance and cross-border solutions, paying bills, and charging for goods and services as a merchant.
Stablecoins — tokens backed by fiat currencies — are essential to that infrastructure; they create a bridge between the digital and physical worlds, between virtual and physical value.
They make digital currency useful so that they can be quickly and efficiently traded, exchanged, saved and spent — no matter where you are in the world. They represent the promise of blockchain technology.But stablecoins won’t be useful on their own.
They need a simple platform that makes it easy for consumers to use digital assets. Many of today’s platforms are designed for traders, sophisticated investors and experienced crypto adopters, not your average retail users.
Driving greater blockchain adoption will rely on creating platforms that are accessible and familiar to consumers so they can trust in connecting their digital and physical assets.
With mainstream consumers in mind, platforms that obfuscate the blockchain back-end should be designed in a way that is intuitive and integrates customers’ current digital habits.Blockchain for business
That last component is essential for building the right infrastructure for greater blockchain adoption. However, it nevertheless requires a business-to-customer focus, as well as business-to-business.
Blockchain infrastructure should be readily available and easy to integrate for businesses.
In its most recent analysis of the blockchain landscape, Big Four audit firm Deloitte argues that the appeal and sustainability of this technology hinge on “its use of digital assets and the roles those assets will play in the future of commerce.” To get there, it requires making crypto and crypto wallets business-friendly.
With digital payments on the rise, both e-commerce and brick-and-mortar — or, more generally, online and offline — businesses already have to adapt quickly to new payment methods.
To incentivize them to see blockchain and innovations like stablecoins as a compelling addition (or alternative), there needs to be the right infrastructure, such as one-stop API endpoints so shops and businesses can offer crypto payment methods without bearing a significant operational burden.
Building infrastructure with B2B in mind and creating the ecosystem to support it ultimately drive greater consumer adoption because it means blockchain technology is available where consumers use it, delivering portable, universal money that can be used across business platforms.
The momentum is here to move blockchain technology into the mainstream. In the same Deloitte survey, 89% of respondents said that they believe digital assets will be very or somewhat important to their industries in the next three years.
Now it’s up to us to build this technology to get the infrastructure right and prove that blockchain can live up to its promise.
This article was co-authored by Lisa Nestor and Mary Saracco.The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.-
Francisco Gimeno - BC Analyst The blockchain is coming into business because shows is useful for solving problems with more agility, saving money and time. However, crypto and tokens, theoretically aiming for the same, have a long way yet to be globally accepted, not just for its volatility, but also because is not user friendly or seen as useful yet except for some investors and few people doing transactions in emerging economies who prefer crypto to their useless national money. China can be the first to try to make it streamlined and easy to use for its citizens.
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The University of Cambridge and the school’s Centre for Alternative Finance has published the third “Global Cryptocurrency Benchmarking Study.” The 71-page in-depth study examines the current growth of the crypto industry, mining, offchain activity, crypto asset user profiling, regulation, and security.
The September 2020 third edition of the Global Cryptoasset Benchmarking Study concentrates on four market segments which include mining, payments, custody, and exchange.
A great number of participants from the cryptocurrency industry took part in the University of Cambridge (UC) study including wallet providers, exchanges, miners, cloud mining providers, crypto custodians, and more.
The 71-page UC report says it leveraged two surveys from March and May 2020 to get a number of report’s metrics.Employment Figures and Growth of the Crypto Industry
The UC report first delves into the crypto asset ecosystem’s employment figures and notes that even though the industry provides opportunity, there’s been a decline since 2017.
“Respondents across all market segments, reported year-on-year growth of 21% in 2019, down from 57% in 2018,” the UC authors detail.Furthermore, the mining sector was hit the hardest as it’s aggregated employment level saw a 37 point decline. Asia-Pacific (APAC) respondents recorded the highest share of high-growth enterprises in 2019 according to the data.
High growth is primarily younger firms that are 3-4 years old, and this represents 49% of the share of respondents. A few service providers polled detailed they saw an increase in profits in 2019 compared to years prior.
“Industry-wide, the growth in FTE employment declined by 36 percentage points between 2017 and 2019, whereas the median firm reported a 75-percentage point downward change in employment growth,” the UC benchmarking study notes.Hashers and Global Mining Operations
The UC study then discusses the cryptocurrency mining ecosystem and the report highlights that mining is steadily reaching an “industrial scale.” The findings detail the criteria miners (hashers) leverage in order to choose which coin the operation should mine is entirely based on profit scaling.
The utility cost for the average miner is roughly 79% of the aggregate operational expenditures.
The benchmark report notes that bitcoin (BTC) is the most popular coin with 89% of respondents mining the crypto asset. BTC is followed by ethereum (ETH – 35%) and bitcoin cash (BCH – 30%) respectively. Certain regions have different miner popularity ratings depending on the region and demographic.
“For instance, ethereum mining appears to be particularly popular among Latin American hashers, whereas bitcoin cash is more popular in APAC and North America,” the authors detail.
“The mining of privacy coins in Western regions also differs from the global average: 28% and 19% of European and North American hashers report mining zcash, and as many North American hashers also engaged in monero mining.”Crypto Mining Operational Expenditures and Renewable Energy
Moreover, the UC findings show that the utility cost for the average miner is roughly 79% of the aggregate operational expenditures. But there are differences that arise at the regional level, the study’s authors note.
“For instance, since the introduction of new tariffs on Chinese imports, US hashers have to pay 28% tariffs on ASICs shipped to the USA,” the report says.
While discussing electricity costs one takeaway from the study suggests the median Asian and North American miner pays roughly the same amount for electricity.
The mining section also examines Proof-of-Work’s (PoW) energy consumption, in general, and the subsidies or tax exemptions stemming from governments. Government benefits have entered the fray, but only “28% of the surveyed hashers report receiving support from governments.”
Additionally, the renewable energy estimate is much lower than prior reports concerning renewable energy and bitcoin mining. “39% of miners’ total energy consumption comes from renewables,” the UC study highlights. However, 76% of the survey respondents leverage a “mix” of traditional fuels like coal and renewables like hydropower.
“Hydropower is listed as the number one source of energy, with 62% of surveyed hashers indicating that their mining operations are powered by hydroelectric energy,” the UC study details.
“Other types of clean energies (e.g. wind and solar) rank further down, behind coal and natural gas, which respectively account for 38% and 36% of respondents’ power sources.”The Digital Asset Landscape and Crypto User Profiling
As far as the growing crypto asset landscape is concerned, bitcoin (BTC) is still the most popular cryptocurrency by representation on custodial services, payment processors, exchanges, and wallet providers. “Support has declined slightly over time from 98% of service providers in 2017 to 90% in 2020,” the UC authors mention.
Ethereum (ETH) is the second most commonly leveraged coin and the crypto asset is widely supported, while LTC, BCH, and XRP are available on at least 50% of 2020’s crypto service providers.Moreover, despite the negative news and delistings, “zcash and monero are still becoming increasingly more available, and are supported at 24% and 17% of service providers respectively
” Since the second UC benchmark report, identity-verified crypto asset users have increased significantly.The UC crypto study states:In 2018, the 2nd Global Cryptoasset Benchmarking Study estimated the number of identity-verified crypto asset users at about 35 million globally. Applying the same methodology, an update of this estimate indicates a total of up to 101 million unique crypto asset users across 191 million accounts opened at service providers in Q3 2020. This 189% increase in users may be explained by both a rise in the number of accounts (which increased by 37%), as well as a greater share of accounts being systematically linked to an individual’s identity, allowing us to increase our estimate of minimum user numbers associated with accounts on each service provider.
A Variety of Other Key Crypto Factoids
The vast amount of findings within UC’s study discusses a number of other subjects like stablecoins, IT security, and government regulations. Stablecoins like tether (USDT) have become very prominent and “increasingly available” the report highlights.
“Tether support [grew] from 4% to 32% of service providers and all non-Tether stablecoins [grew] from 11% to 55%. This increase is not simply from service providers holding stablecoins diversifying their holdings, but rather more service providers offering stablecoins,” the study insists.
The report also says, at the same time crypto asset companies are complying with new regulations, the “decoupling of duties, such as between custody, clearing and settlement responsibilities, appears to be underway” as well.
UC’s authors say the number of crypto companies that didn’t adopt know-your-customer rules (KYC), dropped from 48% to 13% during the last two years. This metric highlights that regulatory guidelines and compliance is on the rise. The UC study insists that the standards enforced by the Financial Action Task Force (FATF) invoked this significant change
Despite the increase of KYC/AML procedures, UC’s third benchmark study underscores the recent emergence of decentralized finance (defi) platforms.
UC’s authors Apolline Blandin, Gina Pieters, Yue Wu, Thomas Eisermann, Anton Dek, Sean Taylor, and Damaris Njoki emphasize defi has introduced “more risky and experimental innovations.” In the near future, it is possible that crypto service providers will be impacted considerably by the defi space, the study notes.
Defi will likely impact large crypto service providers in particular and their business models “in the next 12 months.
”The third “Global Cryptocurrency Benchmarking Study” in its entirety can be viewed here.- By Admin
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Way back in 2014, I debated the merits of bitcoin with cryptocurrency evangelist Andreas Antonopoulos. It was a wonderful, civil and not too disobedient dialogue. I was sceptical, not cynical.
Six years later, I remain sceptical but now have a cynical bias.Let me explain what I see as the good, the bad and the ugly across the cryptocurrency landscape. I won’t cover the blockchain (for that, I have only optimism).
Cryptocurrency: the good- A democratised currency can only be described as good.
- A decentralised currency that cannot be controlled by any — misanthropic, missing or maddening — government leader must be described as good.
- A digital currency that does not recognise sovereign borders and so requires no conversion taxation or limitations is good.
- A currency for places that do not have a stable or developed one is very beneficial.
- Hooray for a currency that is ready, maybe too willing, and able for our global, digital world without all range of account establishment hurdles, capital movement restrictions and other challenges.
If you believe the rule of three, then those five points ought to be more than enough to wipe out the scepticism and initiate our living the crypto dream.Cryptocurrency: the bad
What if the world fully embraced a cryptocurrency? No more paper money. The social contract that we fear is fraying today would be torn to shreds.Without delving into what led to our social contract challenges, how would ‘universal sovereign individuals’, based upon their money, be taxed to enable and support a social contract with their schools, police, fire stations and safety nets?
Answer: they could not, I cannot imagine, without creating a violation — breaking the sovereignty — that would tear down the crypto kingdom as it stands. Moreover, governments with social contracts know this and will do whatever it takes to stop any real breakaway from their currencies.
Now, re-visiting the five ‘goods’, because hope and hype is not a strategy, we can lose the first one because a democratised cryptocurrency is kind of fictional.
Why? Because today, big controlling hands exert an influence on the cryptocurrencies that exist through mining or any other process.
Cryptocurrencies have not been distributed like some type of universal basic income (UBI). To be sure, introducing a form of cryptocurrency could make for a brilliant UBI, but it would be guaranteed to be controlled by a central, sovereign state actor – so much for that idea.
And, for all those who think crypto is fabulously anonymous, it is not. Hello blockchain – the real dream tech!
There is a reason that governments have threatened or begun to remove from circulation larger denominations of paper currencies. Hint: cash is much more anonymous.Cryptocurrency: the ugly
All paper currencies can be lost or stolen. Ugh! But crypto is not demonstrably more secure. There are big thefts and hacks and people lose their crypto keys all the time (ugh again!).And, don’t forget the infamous American bank robber Willie Sutton.
When asked why he chose banks, Willie allegedly responded “because that’s where the money is”. Well, crypto exchanges are arguably bigger and easier targets than any individual bank today. And exchanges don’t offer complimentary insurance.As if that isn’t ugly enough, try to stomach these:- Cryptocurrencies can be manipulated or schismed – such as the schism in bitcoin’s most notable spin-off, bitcoin cash, in 2018.
- How would you feel about paying the equivalent of several thousand dollars for a pizza? If a cryptocurrency cannot remain stable, why would buyers/sellers be motivated to use it? Aside from potential illicit applications and maybe for collectibles, there is no use, no purpose. Unless…
- You view your cryptocurrency as an investment. Maybe just don’t. Investments offer dividends or a yield. Cryptocurrencies have neither. They are… speculations, collectibles? Does the world really need any more private ornaments? And digital gold? Really? That’s nice marketing. But why not just buy gold?
Be careful if you’re crypto dreaming
The sceptical me remains sceptical and not crypto dreaming. You may wish to be careful, too.Furthermore, the idea of sovereign digital currencies – the stuff of efficiency/effectiveness dreams – could be dangerous, too. Take a moment and think of the temptation to tax, repress, fine or devalue with the proverbial press of a button if there’s any form of centralised control.
Fiat currencies – that is, government issued money – are no panacea, but for me still, today, I’ll take paper or plastic/credit, please, at least until decentralised digital is a reality.
If you liked this post, don’t forget to subscribe to the Enterprising Investor.For more research and analysis, visit CFA Institute.
By Michael S. Falk, CFA, partner at the Focus Consulting Group.All posts are the opinion of the author.
As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.-
Francisco Gimeno - BC Analyst Interesting approach to crypto currency. Not everything that glitters is gold, even in crypto. There are many reasons why, even trusting that a new digital economy fuelled by 4th IR techs is coming, we can say crypto is yet in an infant stage, and many things have to change, develop or being solved before we can accept and use crypto currency all around. Time will say.
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The proliferation of digital currencies over the last few years has led to a rapidly growing list of use cases for tokenised assets.
Thanks in no small part to the development of blockchain technology, as well as the recognition and anticipation of what cryptocurrencies such as bitcoin and ethereum (ether) could achieve in the future, tokenised assets are hotly anticipated to deliver a variety of benefits to the world—from boosting specific industries such as banking and real estate to helping to solve global challenges such as supply-chain issues and financial inclusion.
Indeed, we are already seeing hundreds of projects issuing digital tokens with the intention of growing both user adoption and utilisation of the tokens as well as promoting the use of particular blockchain platforms.
But given that these tokens now represent an increasing array of useful assets and functions, each one is exposed to numerous economic forces, including supply and demand, changes in the prices of competitor currencies, and inflation.
And because each has an economic value that can change in response to such factors, it becomes crucially important to understand each token’s inherent utility.
This ensures that both token users and investors are confident that they are buying an asset that is valued accurately.
And it is also important for them to ensure that a token will be employed more extensively going forward, which in turn will mean that more people will demand to use the token, and thus its value should appreciate.
So, what is a token’s utility? This question has led to the early development of new economic models that aim to account for the forces that determine the value of digital tokens. As such, token economics seeks to analyse the various economic factors and mechanisms that are involved in the value-creation process of a tokenised ecosystem.
It refers to how economic forces lead to the creation of sustained user adoption of both the token and the ecosystem as a whole, and it is thus ultimately used to determine whether tokenised assets can be useful in the real world over the long term, beyond merely functioning as a digital currency.
The methods through which cryptocurrencies are created and issued into circulation play a significant role. Whilst some are issued in a one-off manner, others are circulated more gradually. This has significant implications for the relative scarcity of the token at any point in time, which in turn influences how much each token is worth.
Similar in manner to how real-world commodities such as gold derive much of their value from their relative scarcity and utility, the scarcity and utility of digital tokens such as ether also go a long way towards determining their value.
Token economics also deals with how robust blockchain systems can be designed to produce desirable outcomes for all network stakeholders, including token users and those responsible for validating transactions. With that in mind, one of the most important forces for which to account when designing such models is incentivisation.
With blockchains invariably involving a decentralised architecture, there is no need for relevant parties within the ecosystem to trust or rely on an intermediary entity to maintain the integrity of the ledger of transactions (as is generally the case with centralised applications such as Facebook or Google).
Instead, blockchain enables all validating nodes to maintain their own copies of the same ledger, which in turn greatly enhances the security of the data. But to ensure long-term sustainability, relevant stakeholders must be adequately incentivised to act in the best interests of the system as a whole.
If this is achieved, it should instil confidence in the integrity of the system and thus facilitate greater user adoption of the system’s token.
Bitcoin, for instance, involves senders and recipients of the cryptocurrency, as well as miners who are responsible for validating transactions and adding the next block of transactions to the blockchain.
This is done using cryptography, which provides irrefutable proof of all previous transactions within the system. Incentives are thus designed to ensure that the system continues to produce desirable outcomes.
The miner receives bitcoins as a reward for validating transactions in accordance with the network rules. If, however, miners break the rules in one way or another, they can be penalised, typically through a loss of their tokens.
This system incentivises miners not to behave nefariously and, as such, ensures individuals are acting to benefit the security of the system rather than for self-interest.
The world’s second-most valuable cryptocurrency project, ethereum, meanwhile, is designed principally to execute smart contracts that are employed for a variety of use cases, such as creating decentralised autonomous organisations (DAOs) and decentralised applications (DApps).
The smart contract code is stored on ethereum’s blockchain. And while it is similar to bitcoin, in that miners validate new blocks and are rewarded with ether, the ethereum ecosystem also requires users to pay ethers if they want to execute smart contracts on the platform.
Similarly, the actual users of each ecosystem (such as the senders and recipients of coins in the case of bitcoin) must be suitably incentivised to ensure that their behaviour promotes the continued sustainability of the ecosystem.
This means that issues such as the sustained growth in both the overall numbers of users adopting the token and the number of users actually using the token for its intended purpose are taken into account. As far as the latter is concerned, this is proving to be far from straightforward.
Given the massive price swings that much of the cryptocurrency space experienced until 2018, the myriad of opportunities to benefit from short-term price appreciations has caused most users to date to hold their tokens as an investment that could generate potential substantial returns rather than actually use the tokens.
Even today, many investors continue to hold on to their tokens in the hope of seeing bitcoin scale the heights it managed to achieve in late 2017.
Simply buying and holding is far from ideal from the perspective of the token issuer, especially given that such tokens have been created mainly to be used for a specific purpose within the ecosystem.
Indeed, it is unlikely that violent price swings will even be considered desirable by token issuers, especially if those price swings are not reflective of the endogenous value of the token itself but instead of the trading activities conducted by investors looking to exploit opportunities for profit.
Nor will a static price over the long term incentivise users to hold on to their tokens. As the ecosystem grows and more users begin to adopt the token, one would reasonably assume that the increase in utility associated with this growth will induce a steady rise in the price of each token, which in turn will deliver at least respectable returns for token holders.
The economics associated with designing such an ecosystem, therefore, is likely to prove challenging for token-project designers, especially for those projects for which the inherent value of each digital asset is not easy to calculate.
Some models have been posited to address some of these challenges. For instance, Factom, a system for securing millions of real-time records using blockchain, has tried to implement a “burn-and-mint” process, whereby users burn” their Factom (Factoid) tokens each month in order to use the Factom ecosystem, while the issuers separately mint 73,000 new tokens each month that are distributed to transaction validators.
Should users end up burning less than this figure per month, therefore, Factom’s overall token supply in circulation increases, which should exert downward pressure on the Factoid price. But the total supply will fall if users end up burning more than the 73,000 tokens, which in turn should boost prices.
As the usage of the Factom ecosystem grows over time, therefore, more tokens should hypothetically be burnt, which would help to progressively raise prices in direct proportion to network usage. But the burn mechanism should also incentivise token holders to actually use their tokens rather than simply hold them.
There may also be other issues that will have to be considered when ascertaining the token economics required for designing a suitably robust model, including the governance system, the mechanisms for revenue sharing and the ease of access for users.
Ultimately, with each protocol likely to be different and dependent on the specific utility of the token, the approach to token valuation will also be different for each project.
As such, designing the appropriate mechanisms and incentives to ensure that participant behaviours are always as desired will not be a standard process.
And that makes token economics a challenging field for project designers to navigate during these early years of blockchain’s evolution.-
Francisco Gimeno - BC Analyst Token economics is a new field for designers and those who wish to understand better the concept of tokenisation and its consequences. Make sure you are one of those who get to understand it by reading, debating and participating.
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Research: 80% of US and European Institutional Investors Find Cryptocurrency App... (news.bitcoin.com)A new survey of about 800 institutional investors in the U.S. and Europe shows strong cryptocurrency adoption, particularly bitcoin. About 80% of institutions said they find cryptocurrency appealing, and 60% believe cryptocurrencies have a place in their portfolios.
Crypto Appeals to 80% of Institutions Surveyed
Fidelity Digital Assets, the cryptocurrency arm of Fidelity Investments, announced Tuesday the results of a survey to better understand institutional interest and adoption of cryptocurrencies as well as key barriers to investing in them. It was conducted from November 2019 to March 2020.
Fidelity Digital Assets offers a full-service, enterprise-grade platform for securing, trading and supporting cryptocurrencies.A total of 774 institutional investors participated in the survey, 393 of which were in the U.S. while 381 were in Europe.
Respondents include financial advisors, family offices, pensions, crypto and traditional hedge funds, high net worth investors, endowments, and foundations. This is the second consecutive year Fidelity has surveyed U.S. institutions but it is the first time it surveyed European investors. According to the results:Almost 80% of institutional investors find something appealing about digital assets.
Fidelity Digital Assets conducted a survey of 774 U.S. and European institutional investors and found that about 80% of them find cryptocurrency appealing in some way.
Breaking down the number, 74% of U.S. institutional investors find cryptocurrency appealing, while 82% of European investors do.
“A notable contrast is that 25% of European investors find the fact that certain digital assets are free from government intervention to be appealing, whereas only 10% of investors in the U.S. feel this way,” the report further reads.
Moreover, 36% of respondents — 27% in the U.S. and 45% in Europe — revealed that they are currently invested in digital assets. Bitcoin continues to be the cryptocurrency of choice with over a quarter of respondents holding BTC while 11% have exposure to ETH.
“Looking out five years, 91% of respondents who are open to exposure to digital assets in a portfolio expect to have at least 0.5% of their portfolio allocated to digital assets,” the report adds.
Three characteristics of cryptocurrencies are most compelling to both U.S. and European institutional investors. 36% of respondents said “uncorrelated to other asset classes,” 34% are compelled by innovative technology, and 33% by the high upside potential. The report notes:The majority of institutional investors (6 in 10) feel digital assets have a place in their portfolio, though opinions vary on precisely where.
Despite growing interest among institutions, obstacles remain to cryptocurrency adoption. 53% of respondents cited price volatility as the main reason, 47% said market manipulation, and 45% said “lack of fundamentals to gauge appropriate value.
”Fidelity Digital Assets president Tom Jessop commented on the survey findings:
“These results confirm a trend we are seeing in the market towards greater interest in and acceptance of digital assets as a new investable asset class.
This is evident in the evolving composition of our client pipeline, which spans from crypto native funds to pensions.”What do you think about institutional interest in cryptocurrency? Let us know in the comments section below.-
Francisco Gimeno - BC Analyst Very interesting that, even with high volatility and a small market size, the crypto and token ecosystem is becoming with time very much valued by investment institutions, as a new asset class, and this interest is growing every month. Much work is needed yet to make this market also accesible through tokenisation, Apps and other tools to the general world. Meanwhile, another sign that times are changing in the financial and investment industry.
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5G networks are beginning to roll out across the UK as well as around the world. One of the biggest promises of 5G is the ability to connect millions of IoT devices. And Blockchain networks have three services they can perform to drive adoption and add value.
IoT stands for the Internet of Things. More simply, IoT is a network of things/devices connected to the Internet. These devices include sensors to collect data, and other functions, allowing them to engage with the world around them.
Some examples of IoT devices would be a temperature sensor with a 5G radio built-in or an automated door lock in a hotel room connected via WiFi.
Together all of these devices make up the Internet of Things or IoTWith potentially millions of IoT devices coming online soon, there will be substantial demand for network bandwidth, hence the importance of 5G networks. But what does blockchain have to do with any of this?
Blockchain networks will play a vital role in three main areas: value Transfer, Identity and Data Collection.
As early as 2012 there have been IoT devices connected to the bitcoin blockchain. Specifically, there was an internet-connected vending machine which accepted bitcoin as payment. The first purchase was for a bag of popcorn.
The system was simple enough. When the right amount of bitcoin arrived in a specified wallet, the vending machine would spring into action. Of course, there were some problems along the way.
The bitcoin network can take up to an hour to process a transaction. With some tweaking, it can be nearly instantaneous. The problem with this is that it removes some of the safety mechanisms to reduce fraud. For substantial transactions on the bitcoin network (like purchasing a house) it is best to wait for up to an hour to ensure that the network accepts the transaction.Today’s IoT systems need immediacy and may rely on blockchain protocols with significantly faster performance than available today.
Today’s IoT systems need immediacy and thus may rely on blockchain protocols and networks with significantly faster performance and assurance against fraud.
Equally, today’s IoT systems will not rely on the transfer of cryptocurrency direction to a device. Instead, payments will be made using traditional fiat currencies across existing payment systems – and then receive blockchain-based notifications.
For any of these systems to function, including peer-to-peer communication, there must be a decentralised identity framework. Every device is registered and identifiable across the network. Blockchain can provide this identity framework.
When implemented at an industry level, it allows for the identification of any IoT device, regardless of manufacturer, geographical location or purpose, to any other device.
An IoT Identity network can verify transactions as originating from authorised devices. Equally, the systems can ensure the sending of access transactions to the correct destination device.An IoT Identity Blockchain is a hugely ambitious project…
An IoT Identity Blockchain is a hugely ambitious project, but one which has sufficient advantages to all stakeholders to put aside competitive objections and get on with the creation of the governance, protocols and systems of such a network.
Last week Vodafone and Energy Web announced a partnership that could provide identities for billions energy generating assets.The last piece in the puzzle is the ability to automate the entire network. Enter smart contracts.
Smart contracts are programs which run on the network and orchestrate the automated communications between devices and the associated transfers of value. Smart contracts do not run only in isolation; they need input from the outside world.
A smart contract needs to created, executed, to check conditions from the outside world and to cause actions in the outside world.Connections between the outside world and smart contracts are known as oracles and oracle services (not to be confused with Oracle Corporation).
Every IoT device or group of IoT devices can act as an oracle. Smart contracts can check with an oracle service to determine the temperature outside or the arrival time of a cross-country train.
An oracle service can unlock the door to a properly rented Airbnb flat – or serve a bag of popcorn from a vending machine.
And all of these transactions, automated or not, can be recorded in a blockchain. By registering every transaction, transfer and transformation, a permanent, immutable record exists for independent verification and audit. And with appropriate access, there will live a vast amount of data.
Blockchain-based data records can prove useful for analysis but also for training machine learning and artificial intelligence models. Of course, these are not without their challenges.
Blockchain is not designed for storing vast amounts of data – whether in the number of transactions or data associated with single transactions. Equally, data stored on a blockchain must be masked in some way so as not to reveal personal, sensitive or competitively sensitive data inadvertently.
Masking or hiding data by maintaining a centralised database with appropriate access controls addresses this issue.Blockchain, IoT and 5G will provide an infrastructure allowing for extensive new business models and process automation opportunities.
It will require thousands of companies to agree to work together, and it will require an evolution of blockchain and other distributed ledger technologies. And it will require a keen focus on managing privacy and access to data that works for everyone.
Get in touch with us [email protected] / Twitter
@igetblockchainTroy Norcross, Co-Founder Blockchain RookiesTwitter: @troy_norcross-
Francisco Gimeno - BC Analyst The time is now for the enmeshing of 4th IR techs, working together, not for speed, but for better integration and results, creating the foundation for the digital economy, All economy will get in the wagon at seeing the opportunities brought by this. IoT and blockchain were the first in the streets. But something was amiss. Now with 5G expansion starting soon, both techs, together with a more powerful and evolving AI, the world is going to change very fast.
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Many enterprise IT teams feel there is no justifiable use case for blockchain. At the other end of the spectrum are those who believe in storing every last bit, byte and nibble of data on the blockchain. Neither of these is overly helpful in supporting the adoption of blockchain networks in industry.
A foundational premise of applying blockchain to solve business problems is Minimum Effective Blockchain (MEB).Perfection is achieved, not when there is nothing more to add, but when there is nothing left to take away.– Antoine de Saint-Exupéry
Tim Ferriss, in his book The 4-Hour Body, refers to the principle of Minimum Effective Dose (MED). The definition is straightforward: The MED is the smallest dose that will produce the desired outcome. Of course, in Tim’s context, it was related to sports nutrition and supplements. This principle can also apply in the context of blockchain.Minimum Effective Blockchain (MEB) is the smallest combination of data and nodes to create value for the broadest range of stakeholders.
Minimum Effective Blockchain (MEB) is the smallest combination of data and nodes to create value for the broadest range of stakeholders. Good data architecture design is critical. Blockchain networks are not designed for storing large amounts of data.
Neither are they intended for storing high volumes of transactions. Blockchain networks do not perform as efficiently as relational databases.
The data stored in the blockchain should be the minimum set of information necessary to ensure trust between counterparties and satisfy the requirements around tracking and tracing assets.And what of the rest of the data?
A blockchain project will often require more data than that which is on the blockchain. The additional data may exist in a distributed database or filesystem. These data stores can be designed to prevent unauthorised access using encryption and other established technologies.
In these cases, the information stored on the blockchain can contain time-stamped records of the original data. Any tampering with the data becomes immediately evident.
The blockchain can also store records of access to data and granting/revoking access to information. Inevitably, the distributed data will have a central point of control. However, so long as the underlying blockchain is decentralised, counterparties can be confident that the data integrity is maintained.What is the minimum number of nodes necessary to ensure the integrity of the network?
With the data architecture planned, what is the minimum network architecture required? Or, to put it another way, what is the minimum number of nodes necessary to ensure the integrity of the network? (A node in a blockchain network is a computer which contains a copy of the blockchain and participates in the process of adding new data to the blockchain) A vital aspect of the Bitcoin network’s security is a large number of nodes.
As a public permissionless blockchain, the Bitcoin network has an estimated 10,000 nodes. To compromise the network, an attacker must take control of more than half (the 51% attack problem).
In enterprise blockchain projects, there are a range of additional factors to consider.The minimum number of nodes necessary for network integrity varies based on how the network achieves consensus related to adding data to the blockchain. The Bitcoin protocol uses something called Proof of Work. A large number of nodes is critical for this protocol.
Other protocols like Hyperledger Fabric, use a different consensus mechanism and can operate with only a few nodes. A further consideration for enterprise or industry blockchains is private versus public. If a blockchain network is private, then all members are known to each other.
The closed nature of the network affords a trust which arises from every member knowing every other. Any node that attempts to behave like a bad actor is caught out and potentially thrown off the network. Operating and maintaining a blockchain node is one of the costs of the network. It is not likely that every member will want to run their node.
Many smaller stakeholders will have neither the competence nor the desire to run their nodes. The decisions of who will run the nodes – and how the cost will be absorbed – is part of the design.In applying the MEB principle to enterprise blockchain projects, determine the minimum number of nodes necessary for the network to be fully trusted and to operate securely.As with many things, the MEB approach – if taken to an extreme – can go too far.
As with many things, the MEB approach – if taken to an extreme – can go too far. In the case of blockchain it is possible to reduce the number of nodes and data to such a small amount that it is no longer blockchain – but only a DLT (Distributed Ledger Technology approach) – or possibly not even DLT.
If stripped back far enough, the solution has value only to one stakeholder. And for that, you can use a database.
Today’s primary objections to the use of blockchain technology focus on issues of scalability, performance and transparency. These objections are genuine and can happen with flawed blockchain design from the start.
When looking at how to solve a multi-enterprise industry problem with blockchain technology, begin by deciding the minimum amount of information which must exist on a blockchain network that is distributed and decentralised where data is immutable.
Then look at what data should reside in a decentralised filesystem or database with traditional technology solutions for scalability, performance and access control. Not everything belongs on the blockchain. Not every stakeholder should run a node.
Blockchain cannot solve every problem. To avoid problems in the future, apply the principle of Minimum Effective Blockchain (MEB) to the design in the beginning.
Get in touch with us [email protected]
/ Twitter @igetblockchain-
Francisco Gimeno - BC Analyst Reality check: the blockchain shouldn't be applied to everything every time and, the blockchain is not a solution but a tool. It must be used when its proven the better solution, and should be used as a support for other solutions when other solutions are better. The principle of Minimum Effective Blockchain (MEB) stated here is interesting.
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GBBC Open Source Ideas:
The Future of Urban Living
Part I:
The Rise of “Smart Cities”
17 March 2020
Washington DC,
United States
IntroductionUrban populations around the world are growing, putting new and unexpected strains on urban environments and governments. The United Nations estimates that 55 percent of the world’s population lives in urban areas; this is projected to increase to 68 percent by 2050, adding about 2.5 billion people to urban areas.
i.
In the face of this growth and pressing issues surrounding transportation, water management, energy, waste management, government service delivery, and much more, some cities are turning to technology with the goal of becoming “smart cities.” According to McKinsey, the smart city industry will be a $400 billion market in 2020.
ii.
If you ask people to define a “smart city,” you will likely receive a range of answers: from “I don’t know” to “cities where streets expand and contract based on traffic patterns,” or “cities where noise and light pollution iseliminated to improve the psychological wellbeing of inhabitants.” While there is no set definition of a “smart city,” this term generally refers to urban environments in which technologies, especially Internet of Things (IoT) and broadband, are used to improve the lives of citizens.
While splashier and more visible smart city innovations, such as applications that identify and alert users to open parking spaces, receive the bulk of media attention, there are many other “background ” innovations that can lead to significant quality of life improvements for citizens; this is where blockchain technology fits in. It should be noted that blockchain and IoT are an effective and popular technology pairing.
A recent Gartner survey found that 75 percent of IoT adopters “in the U.S. have already adopted blockchain or are planning to adopt it by the end of 2020. Among the blockchain adopters, 86 percent are implementing the two technologies together in various projects.”
iii.
Blockchain technology is distributed, transparent, and highly secure, three traits that can prove invaluable for certain smart city innovations. With blockchain’s massive potential in this area in mind, the Global Blockchain Business Council (GBBC) and respective collaborators conducted a survey of individuals in New York City, Los Angeles, Nur-Sultan (formerly Astana), and the United Kingdom regarding opportunities and roadblocks for blockchain implementation.
For this survey, questions were written by the GBBC team with the aim of understanding how individuals in the blockchain space view the implementation of blockchain technology for smart cities.
To disseminate the survey, the GBBC partnered with trusted local groups and institutions focused on blockchain technology in each of the target cities. Partner organizations, including NYC Blockchain Center, Los Angeles Blockchain Lab, Citigate Dewe Rogerson, and Astana International Financial Centre (AIFC), then agreed to share the survey with their respective....
Download the full report here: https://gbbcouncil.org/wp-content/uploads/2020/03/Future-of-Urban-Living_Part-I_Smart-Cities-.pdfhttps://gbbcouncil.org/wp-content/uploads/2020/03/Future-of-Urban-Living_Part-I_Smart-Cities-.pdfth their respective....
Download the full report here:
https://gbbcouncil.org/wp-content/uploads/2020/03/Future-of-Urban-Living_Part-I_Smart-Cities-.pdf
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Francisco Gimeno - BC Analyst There is a lot of literature on the issue of "smart cities", related with 4th IR techs like the blockchain. The world after this pandemic offers us also new reflections on how we want these smart cities to develop. We need smart cities to help developing new attitudes, new approaches and ways of living in a healthy, smarter urban society. Good reading.
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A few years ago, if you had heard that the U.S. government might mint its own digital currency, you might have dismissed the idea as starry-eyed futurism — or, less charitably, a joke.
Digital currencies, such as Bitcoin, were the purview of speculators and coders, not stodgy central bankers.
But this winter, the Federal Reserve announced that it’s investigating the possibility of issuing its own digital coin.
Speaking at Stanford, Federal Reserve Governor Lael Brainard noted that the “potential for digitalization to deliver greater value and convenience at lower cost” has piqued the interest of the traditionally risk-averse institution.
For now, the Fed’s interest in digital currency might be most notable as a sign of how the world has changed — and where the winds are blowing.
Because just as Paypal and eBay (or Alipay and Taobao, if you prefer) revolutionized how people shopped online and Amazon changed how people shop, full stop, digital payment services — powered by blockchain technology — could be the next great upheaval in global e-commerce growth.
For that to come to pass, however, four conditions need to align: appropriate technology, consumer demand, corporate champions, and an amenable regulatory environment. The question is how.
For all the hype around blockchain — the open-source digital ledgers that many have argued will do everything from make cash obsolete to remake the global economy — it can sometimes seem like a solution looking for a problem.
While it has found a place in niches such as supply chains and digital IDs, problems like price volatility and the need to comply with the existing regulatory framework have prevented mainstream adoption in currency.
But now, one promising category of cryptocurrencies known as “stablecoins” seems poised to succeed where its predecessors failed.
Uniquely positioned to act as a medium of exchange in e-commerce, stablecoins enhance both the efficiency and reach of e-commerce.Finding the Right Application for Blockchain
As their name suggests, stablecoins distinguish themselves from their more popular but highly volatile cryptocurrecy brethren, such as Bitcoin, in their focus on price stability. In striving for stability from the start, stablecoins hope to avoid situations like the one experienced by Laszlo Hanyecz in 2010.
Hanyecz was a U.S.-based software programmer who agreed to pay someone 10,000 Bitcoin for two Domino’s pizzas (a fair price at a time when Bitcoin was worth only a fraction of a penny).
Today, this transaction would be worth almost $100 million. Hanyecz was proving a point — this was the first instance of a good being purchased with a cryptocurrency — but the now-legendary story has also become an allegory of the pitfalls of using a notoriously volatile tender for day-to-day purchases.
Stablecoins have adopted a variety of approaches to solve this price volatility problem.
The highest profile attempt so far — and the most controversial — has been Facebook’s new, yet-to-be-released cryptocurrency project, Libra, which was supposed to be tied to a basket of short-term government securities and bank deposits in historically stable currencies such as U.S. dollars and Euros.
Pushback from regulators and traditional financial institutions has induced Facebook to pull away from its original vision of a global currency that competed with monetary authorities.
Although there is still a lot of uncertainty surrounding the project, it might look more like Venmo, with people sending dollars through Facebook.Terra (where Nicholas works) is a new stablecoin that has been adopted by several online merchants across Southeast Asia.
It’s less well-known in the U.S., but it’s an example of how stablecoins actually work in the wild — a blockchain currency with reliable value that normal people actually use.
In contrast to Libra, it employs a form of automated monetary policy to keep its price stable, contracting the supply when prices are too low and expanding it when prices are too high.
This is achieved using a second cryptocurrency, Luna, which acts as a monetary policy instrument and earns transaction fees as a form of reward.
And while criticism of Libra has mainly been centered on how its governance mechanism is controlled by a few large corporations — the Switzerland-based Libra Association — Terra’s policy is coded directly on its blockchain and therefore is transparent and impervious to human interference.
The stability and transparency of Terra are important because they harness the potential of blockchain in a form that’s useful for everyday people. That, in turn, sets it up to challenge existing technologies. In the case of Terra, that means taking on credit cards.Better Than a Credit Card
Enthusiasts often point to cryptocurrencies’ potential to enhance both the efficiency and reach of e-commerce. The existing financial system — while certainly functional — has its share of inefficiencies, including its reliance on middle men, which often come in the form of credit card providers that charge up to 3% per transaction.
Blockchain technology allows payments to occur directly between buyers and sellers, circumventing the existing system and reducing costs for both merchants and consumers.
Blockchain also allows for the automation of the transaction verification process, where most banks today still expend significant resources on expensive manual verification. In fact, Santander InnoVentures has estimated that “blockchain technologies could reduce banks’ infrastructural costs by $15-20 billion a year by 2022.
” These advantages will bring faster settlement times and cheaper international transactions.
As shown by the Square’s staggering success in attracting small businesses with lower fees, stablecoins’ higher efficiency is likely to translate into wider reach.
Merchants, who build those fees into their prices, might be more willing to offer their products online because of the lower fees.
Similarly, customers might decide to keep balances in digital currencies and complete more transactions online without ever going back to fiat currency or feel the need for a credit card account.
For the 25% of U.S. households that the FDIC has identified as unbanked or underbanked, lower fees and lack of barriers to entry could be transformative. Finally, the general mistrust in financial intermediaries that leads millennials to flee traditional banks for fintechs and challenger banks suggests they’d be willing crypto adopters.
These features could prove to be the edge that drives stablecoins into the financial mainstream. To understand the effects that they might have on the e-commerce ecosystem, we can use data from Terra, which has experienced explosive growth since launching in June 2019, growing at 35% month-over-month.
It now has over 1 million users, who frequently use it for online purchases ranging from groceries to hotel bookings. Due to easy onboarding and lower fees, merchants have been the first to promote Terra over alternative payment options, e.g. credit cards, thereby facilitating its rapid adoption.
Terra’s growth has been driven by a significant reduction in the adoption of other payment systems, including credit cards. This suggests what E-commerce 2.0 might look like in the western world as well.
If stablecoins are going to become mainstream, however, they need corporate champions as well as innovative outsiders, and they’re starting to win influential insiders over.
Facebook’s debacle in launching Libra has been instrumental in bringing attention to this opportunity and has accelerated similar developments elsewhere.
Financial institutions, including JP Morgan, have recognized the need for a digital currency for payments. Jack Dorsey’s Square has recently won a patent for a network allowing consumers to pay with cryptocurrency and merchants to receive the full value in U.S. dollars, eliminating any concerns about crypto volatility.
Finally, the whole financial ecosystem is evolving —challenger banks such as Revolut accepting cryptocurrencies, for instance — which makes future developments and integration more likely.But Will People Use It?
There are still major barriers for blockchain currencies to overcome, no matter what incentives exist. For most of the world, the use of cryptocurrency to pay for goods and services is limited to certain niches.
There are some major retailers — including Starbucks and Overstock.com — that accept crypto, but they’re outliers.
A blockchain research company, Chainalysis, found that a mere 1.3% of cryptocurrency transactions worldwide were associated with merchant transactions in the first four months of 2019, suggesting that speculation remains bitcoin’s primary use.
Regulation could change that. Banks have been reluctant to get involved in cryptocurrency projects because of potential scrutiny from skeptical regulators, which in turn has made most businesses suspicious of the technology and slowed adoption.
Policymakers worry about transferring control of monetary policy from sovereigns to commercial enterprises. The ability of central banks to expand and contract the money supply is an important part of their policy toolkit, allowing them to stabilize growth and inflation in times of need.
Data privacy is also a major concern. This is a particularly poignant issue after Facebook’s well-documented controversies on the data security and privacy front; it will be a key focus of any future stablecoin.
Right now, three of the four pieces necessary for an ecommerce transformation at the hands of stablecoins are in place — the appropriate technology, consumer demand, and corporate champions.
If an amenable regulatory environment materializes in the next few years, the adoption of stablecoins as a means of payment might boost adoption of blockchain technologies above and beyond the current niche uses, and has the potential to breach the barriers to entry in the e-commerce market.
If key financial institutions like the Fed give their stamp of approval, we might really see a lower reliance on fiat currency and actual paper money in our day-to-day lives. If more and more of our purchases are made online and cashless shops become more popular, why the need to exchange digital currency into paper money?
Large retailers like Amazon might launch their own digital coins. Soon, we may not be wondering whether crypto will ever catch on, but whether we’re going to miss seeing George Washington’s face.-
Francisco Gimeno - BC Analyst Today is Bitcoin Pizza Day! With China launching its own national crypto, French experimenting with a digital Euro, Libra trying again, we hear now about a possible digital coin from the US Federal Reserve. A good early step, fully understood when all conditions are suitable for their acceptance around the financial sector.
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Blockchain started as a way to move bitcoin from point A to point B, but it is now being used by a host of big companies to monitor and move any number of assets around the world as easily as sending an email.
Our second annual Blockchain 50 represents enterprises embracing the technology underlying cryptocurrencies like bitcoin and using it to speed up business processes, increase transparency and potentially save billions of dollars.
To qualify, Blockchain 50 members must be generating no less than $1 billion in revenue annually or be valued at $1 billion or more.
From the instantaneous settlement of German government bonds to verifying the provenance of diamonds mined in Africa and bringing liquidity to a small supplier of sliding shower doors in Zhongshan, China, this year’s members have largely moved beyond the theoretical benefits of blockchain, to generating very real revenues and cost savings.
While many companies on our new list are household names like Vanguard, Square and Microsoft, a few cryptocurrency native startups like Bitfury have already met our criteria and are on their way to becoming the blue chips of the digital age.Future of Blockchain: Fintech 50 2020
Amazon
Seattle, Washington
As an extension of Amazon Web Services, the e-commerce behemoth offers blockchain tools for companies that don’t want to build their own. In Australia, Nestlé used Amazon’s blockchain product to help launch a new coffee brand, “Chain of Origin,” where consumers can look inside the coffee’s supply chain: They can scan a QR code to see at which small farm the beans were planted and where they were roasted. Other Amazon blockchain clients include Sony Music Japan, BMW, Accenture and South Korean craft brewery Jinju Beer.Blockchain: Hyperledger Fabric
Key Executive: Rahul Pathak, general manager for databases, analytics and blockchain at AWS
—Ant Financial
Hangzhou, China
Its finance platform called Duo-Chain has facilitated $1.5 billion in quick loans and other transactions for cash constrained suppliers like Sichuan’s GuanYong Computer and others. Ant uses its own proprietary blockchain to verify the receivables and make payments.Blockchain: Ant Blockchain Technology, Hyperledger Fabric and Enterprise Ethereum (Quorum)
Key Executive: Geoff Jiang, vice president of Ant Financial
—Anthem
Indianapolis, Indiana
At the end of 2019 the health insurance company started rolling out a blockchain-powered feature that allows patients to securely access and share their medical data. In the next two to three years, all 40 million members will gain access to it.Blockchain: Hyperledger Fabric
Key Executives: Mariya Filipova, VP Innovation, Plamen Petrov, VP Exponential Technologies, Rajeev Ronanki, Chief Digital Officer
—Aon
London, England
Besides brokering a $255 million policy protecting Coinbase against losses from hacking, Aon is building a blockchain platform to speed up insurance operations. Creating a new reinsurance contract—where insurers buy their own insurance to hedge their risk—is clunky, with insurers using different systems to send and receive quotes. Aon is building a shared platform, where big reinsurers can work off of the same system. So far Everest Re and RenaissanceRe have signed on to test and help design the project.Blockchain: R3 Corda
Key Executive: Robert Olson, chief information officer of Aon Reinsurance Solutions
—Baidu
Beijing, China
Search giant Baidu has been bullish on blockchain for years. One of its affiliates Duxiaoman Financial, built a canine version of Cryptokitties in early 2018, which allows millions of Chinese to adopt and trade cute digital puppies, each distinct, that “live” on the blockchain. Another Duxiaoman service offers student loans, but funds are disbursed only after the technology is used to verify grades. At Baidu itself there are also numerous projects including XuperChain, which uses artificial intelligence to analyze copyright infringement allegations and reduce the time to a judgement from three months to one week.Blockchain: Hyperledger Fabric
Key Executive: Li Feng, head of blockchain
—Bitfury
Amsterdam, Netherlands
The mining—cryptocurrency, not minerals—equipment maker has also customized the bitcoin blockchain so that clients can build their own apps. Graduates of Dubai’s Synergy University, for example, can use a Bitfury’s Exonum blockchain to verify their credentials for potential employers.Blockchain: Bitcoin, Exonum
Key Executive: Chris Dickson, head of blockchain solutions
—BMW
Munich, Germany
The luxury automaker currently has a pilot program with suppliers with plants in Europe, Mexico and the U.S. and is using blockchain to track materials, components and parts across its supply chain. BMW is also a member of the Mobile Open Blockchain Initiative (MOBI), which is made up of a consortium of auto manufacturers including Honda and Ford. In July 2019, Mobi launched the auto industry’s first blockchain vehicle identity standard, which gives new cars a digital identity. The technology could eventually track events throughout a car’s life and be used to connect vehicles to share information, track speed, location, direction of travel, braking and even driver intention (like changing lanes).Blockchain: Hyperledger Fabric, Ethereum, Quorum, Corda and Tezos
Key Executive: Andre Luckow, head of distributed ledger and emerging
technologies
—Broadridge
New York City, New York
Last summer, ADP spinoff Broadridge acquired blockchain software built by financial services firm Northern Trust designed to help manage the entire life cycle of private equity investments. The tool automates the manual middle office functions of PE transactions, like managing legal agreements, and streamlines the process of gathering data and communicating with investors. It’s currently available for funds based in Guernsey and the state of Delaware. In the second half of 2020, Broadridge has plans to go live executing bilateral repurchase agreements (repos) on the blockchain.Blockchain: Hyperledger Fabric, Quorum, Corda, DAML (Digital Asset Modeling Language)
Key Executive: Mike Tae, Head of Broadridge’s Corporate Strategy
—Cargill
Wayzata, Minnesota
America’s largest private company launched an open-sourced privacy-focused platform called Splinter in 2019, which enables members of its vast supply chain to use distributed applications to communicate and transact. Cargill is mum on details but says the applications are vast and touch all aspects of the company’s business transactions. Cargill began testing Intel’s Hyperledger Sawtooth before Thanksgiving 2017 to track turkeys from farm to supermarket and also previously helped build a customized blockchain called Hyperledger Grid.Blockchain: Hyperledger Sawtooth, Hyperledger Grid
Key Executive: David Cecchi, senior director, engineering
—China Construction Bank
Shanghai, China
The world’s second-largest bank has nine blockchain projects in operation, including one that helps trace pharmaceuticals to their origin, another that tracks carbon credits, and one that shows how government grants are spent. BCTrade is farthest along connecting 60 financial institutions including Postal Savings Bank of China, the Bank of Shanghai and the Bank of Communications, to 3,000 manufacturers and import & export trading companies involved in commerce. Today, a cash-strapped exporter waiting for a shipment to be confirmed can take out a loan in a matter of minutes by sharing a record of the future receivables on the blockchain.Blockchain: Hyperchain, Hyperledger Fabric
Key Executive: Lei Xing, blockchain as a service platform lead
—Citigroup
New York City, New York
Citi recently digitally issued its first letter of credit using its trade-finance-focused blockchain Komgo. Citi is also working with Goldman Sachs and 13 other trading firms to automate the matching and reconciliation of equity-swaps derivative contracts using Axoni’s Axcore blockchain. By moving the entire workflow to blockchain, Citi hopes to reduce errors and operational costs and minimize disputes over the valuation of assets. Click here to read more.Blockchain: Axcore, Symbiont Assembly, Quorum
Key Executive: Puneet Singhvi, markets and securities services lead for Blockchain
—Coinbase
San Francisco, California
Eight years after its start, Coinbase has opened 35 million accounts, presides over $21 billion of assets and is on target, we estimate, to top $800 million in revenue this year. Think of Coinbase as the blue chip among dozens of cryptocurrency exchanges, abiding by regulations and serving institutional investors, pension funds, endowments and retail investors alike. In February 2020, Coinbase announced that it had received authority from Visa to issue its own credit cards. Click here to read more.Blockchain: Bitcoin, ethereum, XRP and 24 others
Key Executive: Brian Armstrong, cofounder and CEO
—Credit Suisse
Zurich, Switzerland
This Swiss banking giant has been investing in blockchain since 2015, when it became a founding member of blockchain consortium R3. It is now working with the parent company of bitcoin exchange itBit, to settle U.S.-listed equity securities using a blockchain. Another blockchain partnership with Deutsche Börse has reduced settlement times for government and corporate bonds to the same day.Blockchain: Corda, Paxos
Key Executive: Emmanuel Aidoo, head of digital assets markets
—Daimler
Stuttgart, Germany
The German auto giant has overseen a number of blockchain pilots, ranging from letting Daimler truck owners make payments for fuel using e-euros to issuing a one-year €100 German debt instrument known as a Schuldschein. It is also using blockchain technology to track contracts along the supply chain through subsidiary Mercedes-Benz.Blockchain: Hyperledger, Corda, Ethereum
Key Executive: Jonas von Malottki, Open Source Priority Lead
—De Beers
London, England
The end of blood diamonds? De Beers’ new software, Tracr, follows diamonds, which have undergone 3-D scans, as the gems are mined, cut, polished and sold. Already more than 30 participants, including Signet Jewelers—owner of Kay, Zales and Jared—have signed on. Tens of thousands of stones are being registered per month.Blockchain: Ethereum
Key Executive: Jim Duffy, CEO of Tracr
—Depository Trust & Clearing Corporation (DTCC)
New York City, New York
Global securities warehouse DTCC will soon move its $10 trillion credit derivatives business to a blockchain. These derivatives represent some 50,000 accounts held by some of the largest financial institutions in the world. Previously each institution would keep its own record requiring continuous reconciliations and redundant efforts. DTCC’s new shared ledger will eliminate waste and paperwork.Blockchain: Axcore
Key Executive: Rob Palatnick, global head of technology research and innovation; Jennifer Peve, managing director, business innovation
—Dole Foods
Charlotte, North Carolina
After several high-profile recalls last decade, Dole has adopted blockchain across all vegetable processing, for millions of pounds of lettuce, spinach and coleslaw. Customers at Walmart can now check where their fruit comes from by scanning a code used by farmers. Dole’s fruit business is next. Dole’s new level of traceability starts on the farm and ends at the grocery aisle. Current transaction volumes through partner IBM Food Trust are about 11,300 transactions a day, or 2.3 million a year.Blockchain: IBM Blockchain, Hyperledger Fabric
Key Executive: Natalie Dyenson, Vice President, Food Safety & Quality
—Facebook
Menlo Park, California
Last June Facebook boldly announced its plans for libra, a cryptocurrency backed by a basket of stable assets including the U.S. dollar and government bonds. The announcement brought Facebook haters out of the woodwork who were loath to cede monetary control to the same company whose laissez-faire approach to its technology may have contributed to the unexpected outcome of 2016’s presidential election. Already many original libra backers, including Visa and Mastercard, have dropped out of Facebook’s consortium. Stay tuned, however: The Libra Association that administers the blockchain code says it will launch the cryptocurrency in 2020—if it can get regulatory approval.Blockchain: Hotstuff
Key Executive: David Marcus, head of Calibra, Facebook’s cryptocurrency wallet; Morgan Beller, co-creator of Libra, Head of Strategy at Calibra
—Figure
San Francisco, California
This unicorn has facilitated more than $800 million in home equity loans, mortgage and student loan refinancings for lenders including Caliber Home Loans. Franklin Templeton is among the financial service firms that manage nodes to validate transactions on its Provenance blockchain platform. All documents are stored and algorithmically verified on the blockchain.Blockchain: Hyperledger Fabric
Key Executive: Mike Cagney, cofounder and CEO; Jennifer Mitrenga, head of Americas, Provenance
—Foxconn
Taipei, Taiwan
The iPhone maker’s trade-finance venture, Chained Finance, pays more than 20 electronics suppliers using digital coins minted on the Ethereum blockchain. The result: Financing costs have plummeted from annual percentage rates as high as 24% to 10%, and the time needed to get funding has been cut from seven days to same day. Foxconn uses Ethereum’s blockchain, famous for innovating so-called smart contracts, which automate financial transactions.Blockchain: Ethereum
Key Executive: Jack Lee, acting CEO, Chained Finance
—General Electric
Boston, Massachusetts
GE is actively exploring blockchain through its $30 billion (revs) Aviation subsidiary, which has built what it calls a “back-to-birth” record of an airplane engine that records important details of the manufacturing process and specifics about maintenance performed. In an industry where complete, easily accessible records are critical to productivity (airline parts without proper documentation are not easily bought and sold), GE’s blockchain team has created a digitized paper trail in order to prevent engines with incomplete paperwork from sitting unused.Blockchain: Microsoft Azure, Corda, Quorum, Hyperledger
Key Executive: David Havera, Blockchain Lead
—Google
Mountain View, California
In June, the search giant announced that it was integrating its BigQuery data analytics platform with Chainlink, allowing data from outside sources to be used in applications built directly on the blockchain. The partnership could help process futures contracts, settle speculative bets and make transactions more private. Earlier in 2019, Google launched a suite of tools on BigQuery that made blockchain data for bitcoin and seven other major cryptocurrencies fully searchable.Blockchain: Chainlink, Bitcoin, Ethereum, Bitcoin Cash, Ethereum Classic, Litecoin, Zcash, Dogecoin, Dash
Key Executive: Allen Day, developer advocate, Google Cloud
—Honeywell
Charlotte, North Carolina
Honeywell has developed a blockchain-based marketplace for used aerospace parts, a $4 billion industry full of expensive, specialized equipment and rigorous safety requirements. Honeywell’s GoDirect Trade platform collects information about aircraft parts over their entire life cycle and makes it available to potential buyers prior to the sale. Using a blockchain ledger allows Honeywell to securely aggregate this information from multiple, often competing, players. In its first year, GoDirect Trade processed more than $5 million in online transactions.Blockchain: Hyperledger Fabric
Key Executive: Lisa Butters, Blockchain Product Applications Leader and General Manager of GoDirect Trade
—HSBC
London, England
HSBC has conducted one million foreign exchange trades totaling $1.2 trillion on its FX Everywhere platform built using a modified version of ethereum. Another HSBC endeavor, Contour, is a blockchain that provides letters of credit to global exporters whose ships sometimes travel faster than the loan paperwork, resulting in long waits in port. Contour uses blockchain software Corda to connect buyers, sellers and trade finance banks to a single shared ledger. Of the 14 letters of credit so far issued on the platform, totaling $30 million, the most recent was issued in November 2019, when HSBC issued a letter to Romania-based Kingfisher for a shipment of sliding shower doors from China’s Zhong Shan Neptum. In a separate project, the company plans to move $20 billion in securities to its Digital Vault, also built on Corda, cutting out brokers and connecting investors directly to private market assets.Blockchain: Ethereum, Corda, Hyperledger Fabric
Key Executives: Joshua Kroeker, blockchain lead, growth and innovation; Mark Williamson, global head of FX Everywhere
—IBM
Armonk, New York
Big Blue has fashioned a proprietary version of its Hyperledger Fabric the code called IBM Blockchain that is faster to set up and easier for noncoders to operate. The IBM Food Trust is one of several blockchain consortia assembled by the company, and is designed to move complicated food supply chains to one shared, distributed ledger. In January 2020 olive oil giant CHO announced that it has been tracking its gourmet Terra DeLyssa oil on the Food Trust blockchain since the November 2019 harvest. The Tunisian company that creates a total of more than 24,000 bottles a day analyzes the oil in its own laboratories accredited by the International Olive Council, helping generate eight data points, including the orchard where the olives were grown, the mill where they were crushed, and the facilities where the oil was filtered, bottled and distributed, each captured on the blockchain and accessible via a QR code on the bottle. Similarly, the Food Trust has now tracked 18 million transactions for 17,000 products.Blockchain: Stellar, Hyperledger Fabric, Burrow and Sovrin
Key Executive: Bridget van Kralingen, SVP, global industry platforms and blockchain
—ING Group
Amsterdam, Netherlands
ING’s most mature blockchain project is decentralized trade finance platform Komgo, which eliminates the delays and redundant paperwork involved with issue letters of credit used to finance trade. Normally when commodities traders needed to borrow money to buy crude oil being shipped around the world, for example, every counterparty, including traders, banks, inspectors and agents, would hand over paper documents, resulting in vessels frequently needing to wait for a loan to clear after docking. But in July 2019 ING conducted its first commodity trade on Komgo, powered by the Quorum blockchain. The $43 million letter of credit was processed and approved by ING Geneva for Mercuria Energy Trading SA in a matter of minutes.Blockchain: Corda, Quorum, Ethereum, Hyperledger Fabric, Hyperledger Indy
Key Executive: Mariana Gomez de la Villa is ING’s Global Program Director Distributed Ledger Technology
—Intercontinental Exchange
Atlanta, Georgia
In 2019 the parent company of the New York Stock Exchange launched Bakkt, one of the first regulated bitcoin futures exchanges. Since launching in September, Bakkt has settled 117,000 bitcoin futures contracts and plans to add support for other digital assets soon. Bakkt also makes fee income helping customers store their bitcoin and by selling market data about how its products are used. In the first half of 2020 Bakkt will launch a consumer-facing payments app allowing customers the ability to pay merchants like Starbucks with cryptocurrency.Blockchain: Bitcoin
Key Executive: Mike Blandina, Bakkt chief executive officer
—JPMorgan
New York City, New York
America’s biggest bank is keeping mum on the progress of its JPM Coin, the digital currency it announced in February 2019 to help banks settle transactions more quickly. It does however, admit, that 100 institutions are now using its new “Interbank Information Network,” a blockchain that speeds up cross-border payments between banks by using a shared ledger to resolve delays that arise when, for example, one bank thinks a transfer might violate an international sanction. Previously, those discrepancies were resolved with phone calls and emails, which could take from two days to two weeks. Now they’re resolved in minutes, JPMorgan says.Blockchain: Quorum, a private version of Ethereum
Key Executive: Christine Moy, head of the Blockchain Center of Excellence
—LVMH
Paris, France
The luxury goods maker is using blockchain technology for traceability and proof of authenticity. To this end, LVMH, ConsenSys and Microsoft announced in May 2019 the AURA blockchain platform, which uses ethereum and Microsoft’s Azure cloud service to track and trace luxury products. Among its brands, Louis Vuitton is already tracking millions of its products in an effort to reduce counterfeiting.Blockchain: Ethereum
Key Executive: Eric Pradon, senior vice president of innovation
—Mastercard
Purchase, New York
Rather than be disrupted, America’s second-largest credit card company has applied for 116 blockchain-related patents and has several projects in process. It’s working with wholesale food buyer Topco to give consumers a peek into where their groceries came from. It’s testing a faster, more transparent cross-border payments network with banks. And it’s trying to convince central banks who are looking to issue digital currencies to use its rails to help move the new coins.Blockchain: Its own platform, built from scratch
Key Executive: Ken Moore, EVP and head of Mastercard Labs
—Microsoft
Redmond, Washington
The software giant offers blockchain-as-a-service through Azure, its cloud computing arm. Last fall, it introduced a new product designed to make it easier for companies to mint their own digital assets (tokens) using a standard set of criteria. Like its other offerings, Microsoft’s new tokenization framework is designed to lower the barriers to entry to blockchain for major enterprises.Blockchain: Ethereum, Corda, Hyperledger Fabric
Key Executive: Matthew Kerner, General Manager Industry and Blockchain
—Nasdaq
New York City, New York
As of one blockchain’s earliest enterprise adopters, Nasdaq has moved beyond pilots and proofs of concept and has released several blockchain products designed for capital markets, including an electronic voting tool for South Africa’s central securities depository. It’s now reaching into other industries like insurance and logistics after finding that the solutions it originally developed for the finance industry could be applied in other fields. It has also provided blockchain tech to NYIAX, an advertising exchange that lets publishers buy, sell, and trade contracts.Blockchain: Assembly, Corda, Hyperledger Fabric, DAML and others
Key Executive: Johan Toll, Head of Digital Assets
—National Settlement Depository
Moscow, Russia
After a few early tests issuing bonds on a blockchain, Russia’s central securities depository has helped to create the Distributed Digital Depository (D3Ledger) for storing and exchanging crypto assets even if they are issued on different blockchains. The NSD is also working with the Russian Agricultural Bank to issue grain tokens that more transparently track the movement of grain stored in Russian silos—often used as collateral in swaps transactions. In April 2019 NSD parent company Moscow Exchange discovered shortages in six such grain silos resulting in $37 million in losses, something the depository thinks could be fixed if its technology was integrated at every layer of the supply chain.Blockchain platforms: Hyperledger Fabric, Hyperledger Iroha, NXT, Ethereum, Waves, Bitcoin
Key Executives: Artem Duvanov, the head of innovation, Alexander Yakovlev, Head of blockchain lab
—Nestlé
Vevey, Switzerland
The world’s largest publicly traded food company launched three products thanks to IBM Food Trust in 2019, with another two slated by the spring. European customers can now scan QR Codes and track organic infant formula, baby food and instant mashed potatoes, from manufacturing to grocery shelf. Through OpenSC, Nestlé is also piloting another project with dairy farmers in New Zealand and palm oil producers in South America.Blockchain: Hyperledger Fabric
Key Executive: Benjamin Dubois, Corporate Operations–Supply Chain Transformation Manager
—Optum
Eden Prairie, Minnesota
In 2018, the healthcare company cofounded the Synaptic Health Alliance to explore blockchain in healthcare. The Alliance has built a blockchain that allows its members, including Aetna, Humana and Quest Diagnostics, to view, input, validate, update and audit healthcare provider data within the network. The technology is currently running in three pilot programs in Texas with the goal to test whether blockchain can simplify the process of updating healthcare provider information. The healthcare industry estimates that at least $2.1 billion is spent annually to maintain provider databases.Blockchain: Ethereum
Key Executives: Mike Jacobs, senior vice president of engineering
—Overstock
Midvale, Utah
Despite the inglorious departure of its crypto evangelist CEO Patrick Byrne, struggling Overstock is still developing its blockchain-based trading platform, tZERO, which would allow investors to trade digital versions of traditional assets like stocks, bonds, real estate and art. Investors can currently trade just two tokens on the platform—representing Overstock’s and tZERO’s own shares. To date, Overstock has squandered some $200 million in 18 early-stage blockchain companies and has yet to derive meaningful revenue from any of them. An SEC investigation into various matters related to the company’s blockchain efforts is ongoing.Blockchain platforms: Bitcoin, Ethereum, Hyperledger Fabric, Ravencoin, Florin and others
Key Executive: Jonathan Johnson, CEO, Overstock; President, Medici Ventures
—Ripple
San Francisco, California
Most banks use global intermediary Swift for international money transfers, a system born in the pre-internet age that enables banks to send secure messages to each other and makes transactions slow and inefficient. Ripple’s global payments network RippleNet offers a faster, secure solution, and transaction volumes on the network are growing. Ripple isn’t hurting for cash—it sold $500 million of XRP in 2019, surpassed 300 enterprise customers in November and raised $200 million in December. PNC became the first U.S. bank to use RippleNet for all its cross-border payments last year.Blockchain platforms: XRP Ledger
Key Executive: Brad Garlinghouse, CEO
—Royal Dutch Shell
The Hague, Netherlands
Shell is currently working on nine blockchain projects that are in various stages of maturity. It’s a founding member of Vakt, a blockchain platform that went live in November 2018 that processes post-trade transactions of Brent crude. Vakt simplifies the global commodities trading industry that still largely relies on a mountain of paperwork by moving it to a shared digital ledger. Shell is also working on a pilot program using blockchain to authenticate and verify the origin and provenance of safety-critical process equipment with the hope of deploying it in the second quarter of 2020. The company is first focusing on the valves used in Shell’s plants and will then likely expand the functionality to pumps, while at the same time aiming to generalize the system to suit any type of equipment or device.Blockchain: Ethereum
Key Executive: Sabine Brink, blockchain lead
—Samsung
Seoul, South Korea
Samsung SDS’s blockchain, Nexledger, helps parties to a contract prove their identity and execute agreements. The platform is already being used by a group of 18 Korean banks in an application called BankSign, which quickly let retail customers of the banks prove who they are, even when visiting a bank where they’re not a customer. Since its launch in August 2018, the system has signed up 235,000 individual users. The information and communication technology branch of Samsung Group is also using the Nexledger to help patients prove their identity, speeding up the time it takes to process a health insurance claim.Blockchain: Nexledger, Ethereum
Key Executive: Jeanie Hong, head of blockchain center
—Santander
Madrid, Spain
Best known in crypto for its work using Ripple’s payment system to build a cross-border payments app, this Spanish banking giant broke new blockchain ground in September 2019 when it issued a $20 million bond on the public ethereum blockchain. The 1.98% bond was notable in that it showed how traditional securities could instantly trade in secondary markets if counterparties used a shared, public blockchain, instead of the three days in typically takes.Blockchain platforms: Hyperledger Fabric, Ethereum
Key Executive: Coty de Monteverde director, Blockchain Center of Excellence
—
Signature Bank
New York City, New York
JPM got more headlines, but Signature was the first FDIC-insured bank to actually launch a dollar-backed cryptocurrency, called signets, in January 2019. In the second half of 2019 some $10 billion in transactions on the ethereum-based platform. One longtime client, the New York Air Courier Service, which helps exporters clear customs from the bonded area and pay fees for delayed shipments, started using signets to make payments instantly, instead of the three days it often takes using the Automated Clearing House bank transfer.Blockchain platform: Ethereum
Key Executive: Frank Santora, Senior Vice President & Director of Digital Asset Solutions
—Silvergate Bank
La Jolla, California
In January 2014, Silvergate became one of the first banks willing to open accounts for cryptocurrency exchanges. Since then, the bank has grown to serve 750 cryptocurrency exchanges, including Bitstamp, Coinbase, Kraken and Gemini and institutional cryptocurrency investors like Block Town, Polychain and Figure. In 2017 Silvergate launched its proprietary exchange network that lets investors move funds to cryptocurrency exchanges around the world, 24 hours a day, seven days a week. Dubbed the Silvergate Exchange Network, it is currently built using a traditional centralized database, meaning only Silvergate can use it, but a blockchain version leveraging shared databases is currently in the works.Blockchain platforms: Bitcoin, Ethereum, XRP, 20 other cryptocurrencies supported by its customers
Key Executive: Alan Lane, CEO
—Square
San Francisco, California
In the third quarter of 2019, Square generated $148 million in revenue from fees charged to users who paid with bitcoin. Just revealed: a service that lets people instantly send and receive crypto payments. Click here to read more.Blockchain: Bitcoin
Key Executive: Steve Lee, Square Crypto project manager
—Tencent
Shenzen, China
The Chinese internet titan is helping build a trade finance blockchain application to simplify bulk metal purchases. For example, commodity e-commerce company Gangjuren is working with Tencent and several small and medium-size steel traders to simplify the financing process. The blockchain technology works by collecting enormous amounts of traceable data about metals in a warehouse, enhancing the creditworthiness of warehouse receipts. The sale and purchase of metals can then be accelerated because all parties involved are using the trusted information from the blockchain. As of September 2019, transaction value had exceeded $100 million.Blockchain: TrustSQL, Hyperledger Fabric
Key Executives: Carlos Hu, head of blockchain team
—T-Mobile
Bellevue, Washington
T-Mobile’s NEXT Identity Project, created using blockchain Hyperledger Sawtooth in collaboration with Microsoft, is meant to improve the way the telecommunications company manages who can gain access to employee and customer data. Currently hundreds of admins have access to company and customer data, but the new blockchain system would tighten controls and grant access only to those who fit within a very narrow framework defined by the company’s auditors. No humans are ever involved in the process. Since January 2019, Next has run alongside existing production systems and completed roughly 60,000 transactions that resulted in new information being added to the blockchain in the first six months. T-Mobile is also working to leverage blockchain technology to execute and implement wholesale roaming agreements.Blockchain: Hyperledger Sawtooth, Hyperledger Fabric, Ethereum
Key Executive: Chuck Knostman, vice president, emerging technology strategy
—UBS
Zurich, Switzerland
UBS’ utility settlement coin became a reality in June, when the Swiss bank led a consortium of 14 financial institutions, including Barclays, Nasdaq and Santander, in a $63.2 million investment to launch a new company, Fnality International. The spinoff will control development of the Utility Settlement Coin, a trade settlement vehicle that reduces the time and cost it takes to process a transaction.Blockchain platforms: Hyperledger Fabric, Ethereum, Quorum, Corda
Key Executive: Sam Chadwick, head of blockchain
—United Nations
New York City, New York
The 75-year-old organization connecting 193 countries has numerous blockchain initiatives. To combat warlords who steal aid using pilfered ID cards, the UN has over the past two years disbursed funds to 106,000 Syrian refugees in Jordan, using blockchain-verified iris scans instead of ID cards.Blockchain: Bitcoin, Ethereum
Key Executives: Christina Lomazzo, UNICEF blockchain lead, Houman Haddad, WFP head of emerging technologies
—Vanguard
Valley Forge, Pennsylvania
Since February 2019, the fund giant has been using a blockchain to set security prices on some $1.5 trillion of its $6 trillion in holdings. Vanguard relies on tech developed by Symbiont, a New York-based startup.Blockchain: Symbiont Assembly
Key Executive: Warren Pennington, a principal in Vanguard’s investment management group
—VMware
Palo Alto, California
The $60 billion software provider partnered with the Australian Securities Exchange last summer to work on developing an application to replace the exchange’s 25-year-old system for making post-trade settlement efficient. The technology behind Facebook’s libra is also derived from software called HotStuff developed by VMware.Blockchain platforms: Project Concord, its proprietary blockchain that supports multiple frameworks including Ethereum and DAML
Key Executive: Brendon Howe, vice president & general manager,
blockchain
—Walmart
Bentonville, Arkansas
The retail conglomerate’s Food Traceability Initiative tracks its fresh leafy greens and green bell peppers along its supply chain. The initiative helps Walmart pinpoint where a shipment may have been contaminated, allowing it to target recalls more narrowly and accurately while reducing food waste. Walmart also joined a pilot program last summer supervised by the U.S. Food and Drug Administration to trace the distribution of prescription medicines and vaccines on a blockchain. IBM, KPMG and Merck collaborated with Walmart in the pilot, which addressed the regulatory requirements of the U.S. Drug Supply Chain Security Act.Blockchain platforms: Hyperledger Fabric
Key Executives: Tejas Bhatt, senior director, Food Safety Innovations; Archana Sristy, senior director, Blockchain Platforms, Walmart Technology
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Michael del Castillo
I report on how blockchain and cryptocurrencies are being adopted by enterprises and the broader business community. My coverage includes the use of cryptocurrencies such… Read More-
Francisco Gimeno - BC Analyst The use of the blockchain in different sectors by different companies is growing. We understand better how, when and if to use it to improve business, services, save time and money and increase the adoption of disruptive techs of the 4th IR. Very interesting list, indeed.
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A new study suggests that organisations adopting emerging technologies in finance operations are growing their annual profits at a vastly accelerated rate.
The international research asserts that artificial intelligence, Internet of Things, and blockchain are finally passing the adoption tipping point to deliver a competitive advantage for businesses.
Digital technology has long been discussed as a potential ‘game-changer’ in modern business, with artificial intelligence (AI), blockchain and Internet of Things (IoT) all being labelled ways for companies to save large sums of money in efficiencies, and improve security, productivity and customer experience in the process.
As a result, investors have been diving into various pilot schemes over the last two years. However, new technology’s often expensive application has often been said to be over-hyped.
While it has seen a great deal of excited uptake, for example, the volume of trade through various blockchain schemes has been so negligible at time of writing that it is too early to tell how soon blockchain might reach a critical mass, if at all.
Similarly, many firms are still finding that AI and automation are not yielding the benefits they expected – something which is often blamed on firms merely applying it as a cost-saving exercise, but still throws up questions about the technology’s true value.
IoT meanwhile continues to struggle to drum up significant interest in the automotive market, among others.
However, while all these factors do merit closer inspection, a new study from Enterprise Strategy Group and Oracle claims that new technologies are finally having a big impact on business performance.
According to a survey of 700 finance and operations leaders across 13 countries, AI, IoT and blockchain deployments are passing their adoption tipping point, creating significant competitive advantage for organisations.
Respondents from organisations adopting emerging technologies in finance and operations told the researchers they were growing their annual profits 80% faster than those who did not.Benefits
Focusing on the financial sector, the study found that the highest number of solutions currently in use to improve financial systems came in the form of IoT – at 43% of respondents. Meanwhile, 36% said AI and machine learning functions were fully operational, and 30% were fully using blockchain to that end.
The highest number of respondents (38%) also said they had AI pilots in place, suggesting this will soon be the most common form of emergent technology used to improve financial systems.
Almost three-quarters of respondents using AI said it was most commonly benefitting finance teams by delivering an improved understanding of why a business is performing at its current level.
This was followed by more than seven-in-ten of those quizzed, who said AI was enabling for faster analysis and insights – a key advantage in the rapidly changing businesses environment. The other stand-out response was that 68% of the sample said AI had helped reduce errors in automated tasks.
In terms of IoT, meanwhile, respondents suggested the technology is now surpassing expectations of it on most fronts. While only 40% of those not currently enhancing their finance systems with IoT expect it would lead to better inventory and asset management, a majority of 51% among those using it reported it had done just that.
Similarly, while 42% said they thought IoT might improve their forecasting of demand, income, and costs, 50% reported it was fulfilling that role. While it would be wrong to say that means IoT is ‘11% more useful’ than expected, it does suggest that at least a portion of firms are missing out by not applying it.
Similarly, blockchain seems to be beating expectations in this manner.
As data security is noted as one of blockchain’s key strengths, it’s not particularly surprising that a similar number of firms thought it would improve their ERP system’s safety to the number saying it had done so.
Elsewhere, however, a scarce 22% of non-users said they thought it would enhance their ERP system’s ability to reduce reliance on manual processes if deployed, but 37% of those using it said that it had done so. On top of this, 26% said they thought it might improve corporate governance, whereas 37% asserted that it had helped achieve this.
Speaking on the findings, Juergen Lindner, Oracle’s Senior Vice President in SaaS product marketing, said, “AI, IoT, blockchain… capabilities enable organisations to innovate faster, creating significant competitive advantage and driving increased profit for companies embracing those technologies more decisively than their competitors… The research finds that these technologies have become mainstream and organisations that sit on the sidelines risk their business relevance.
”“This study makes it clear that emerging technologies have passed the trial phase and are moving toward a state of widespread adoption,” added John McKnight, EVP of Research and Analyst Services of Enterprise Strategy Group.
“The business case for these technologies in areas such as finance and operations is maturing at a rapid pace – and in most cases benefits exceed expectations.
Furthermore, the research shows that emerging technologies complement and amplify the benefits of one another, which underscores the importance of taking a holistic approach.”-
Francisco Gimeno - BC Analyst We have said several times that the blockchain hype era is over. Now it's the time to see how and where the blockchain needs to be used, and its real benefits. This study from Oracle shows how the blockchain is making possible that AI, IoT and other emergent techs get together and producing tangible benefits. What do you think?
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As 2018 drew to a close, crypto skeptics were ready to write obituaries after the devastating bear market that year. Talk of blockchain and cryptocurrency demise was rife among seasoned analysts. Just over twelve months later, the industry has shown remarkable resilience to rebound back.
Regulators are a segment of stakeholders who seem to be appreciating that crypto is here to stay, with Federal agencies in the US and Chinese authorities praising the potential of this technology in their respective countries’ digital future.
Blockchain technology has gained independent credibility over and above its application in cryptocurrency.
The opportunities are endless as the emerging enterprise sector continues to draw plaudits. So far, this technology has grown in spite of regulatory infrastructure rather than because of it. A suitable regulatory climate is essential for widespread adoption.
This is how Jason Lee, Vice President of NEM Foundation, describes the industry’s evolution:“2017 was the year of the blockchain craze. In 2018, we hit the brakes towards the end of the year.
For 2019 and the start of 2020, Don Tapscott at the World Economic Forum Annual Meeting reports says that the ‘blockchain revolution ground to a halt.’ This is because not all initiatives are going past the proof of concept stage just as blockchain regulation shapes progressively as it moves forward in the right direction.
In 2020, real use case projects are starting to shape up and will play a crucial role.
”Therefore, industry leaders and enthusiasts at large are eagerly following regulator sentiment. Themes like consumer data protection and harnessing tech will be constant in these discussions. What is going to be the major themes around blockchain regulation in 2020?Privacy and anonymity on enterprise blockchain
Anonymity and privacy were defining aspects of the decentralized blockchain projects. This sector went mostly unchecked until blockchain platforms became increasingly popular.Last year, the release of the Libra project whitepaper by Facebook brought these issues to the fore.
Specifically, concerns about blockchain enterprises, including cloud services and handling customer data gave regulators an opening to legislate on such platforms.
Blockchain enterprise will continue to draw unprecedented legislative scrutiny in 2020.In late 2018, the US Department of Homeland Security started scrutinizing privacy tokens that shield user information.
Similarly, G20 countries issued regulations in June 2019 for exchanges to comply with “anti-money laundering” (AML) and “know your customer” (KYC) requirements. In February 2019, the Cyberspace Administration of China (CAC) implemented additional guidelines specifically for blockchain companies.
Chinese regulators claimed that these measures are aimed at settings the standard for blockchain development in the country. In the US, the Blockchain Promotion Act of 2019 focuses on finding potential applications for the distributed ledger and opportunities through which government agencies can explore and incorporate the technology.
2020 is sure to bring more scrutiny and legislation on this premise.Crypto regulation over perceived threats to national currencies
Many countries initially took a position of ignorance about cryptocurrencies. However, as bitcoin took a larger-than-life profile after the monster rally in 2017, this position was no longer tenable. The only reason that blockchain experienced the crypto winter was due to being unregulated rather than the breakdown by governments.
The unchecked printing of money before and after the financial crisis of 2008 by the Central Bank led to some people becoming disillusioned about centralized financial systems. Bitcoin and other cryptocurrencies offered an alternative to these people.
As with any power structure, the entities in charge will not relinquish power with ease.
China took drastic measures against trading cryptocurrencies in 2017. Last year, India went even further and completely banned non-sovereign cryptocurrencies.
The fundamental aspect of decentralization is an existential threat to the ability of major central banks to control monetary policy. Even without expressly stating this position, the Securities and Exchange Commission in the U.S. decided to classify coins like Telegram Open Network (TON) as securities to regulate their rise.
Regulators in the U.S. see blockchain currencies and commerce as an issue that needs to be addressed.
As 2020 begins, some countries are looking at digital currencies as an opportunity rather than a threat.
China astonished the world last year when the People’s Bank of China announced that it was researching on a national digital currency. Such a development could trigger an arms race of sorts between nations that want to be the first to innovate in this space.China as an emerging leader in regulations
China has openly embraced blockchain technology. President XI Jinping gave a ringing endorsement to the power of this sector in October 2019.
During his speech, Jinping said blockchain is an “important breakthrough in independent innovation of core technologies” and will “help China gain an edge in the theoretical, innovative and industrial aspects of this emerging field.
”While this announcement came as a surprise, it is a well-calculated and probably necessary move on the part of China’s government.
NEM’s Lee sees the big picture in understanding why China is suddenly keen on blockchain optimization. “Embracing blockchain was a smart move by President Xi Jinping; policymakers are starting to realize the benefits of decentralization,” he says.
“Blockchain is an enormous cost saver for many industries, and not only is it more resilient to hacks, [but] it also does not bind you to a specific platform, which makes it the ideal solution for multi-vendor cooperation.
”Lee states that the People’s Bank of China is almost ready to launch a sovereign digital yuan with a global use case. “President Xi urges China to seize the opportunity to accelerate the nation’s innovation.
Enterprise blockchain can potentially see a clear pathway of growth in China as they ride the coattails of excitement,” he says.It will be interesting to see what direction China’s regulations take.
This jurisdiction is particularly interesting for enterprise blockchains that major on anonymity. China is obviously keen on being a leader in the blockchain space.
On the flip side, China ordinarily wants to have a level of control over tech platforms in the country, which is the antithesis of fully anonymous platforms. What will the future look like for enterprise blockchains in China?
But even before China formally embraced blockchain technology, other states were already active in the space. An example is Singapore, which has established itself as a regional hub for blockchain and crypto platforms.
Startups like NEM have found a suitable environment in the city-state in a quest to transform the industry. The Singapore-based NEM offers businesses a quick and secure way to deploy blockchain in their operations.
The blockchain is built from the ground up and focuses on solving real-world needs on a global scale with high performance, customization, and security.
Enterprises can utilize NEM’s powerful API interface with any programming language for secure transactions and impeccable record keeping.
Accordingly, developers and enterprises have an efficient hub to innovate and work. Permissioned private blockchains ensure trailblazing transaction rates for internal ledgers.
The acceleration in regulation is favorable for platforms with proven use cases and reliable track records.
Enterprise blockchain platforms that maximize the impact of blockchain by facilitating developers and commerce are first in line.“It will be harder for individuals to pull off new blockchain projects—at least anything that would be regulated and gain widespread acceptance,” Lee says.
“Regulations will raise the bar, and while that serves to protect the users, it will make innovation more challenging. But regulators that develop policies for flourishing will attract the opportunity.
Blockchain platforms that would help the developers with compliance have the highest chance of gaining traction in such environments.”Probable evolution of regulation in 2020
Regulations are taking a more facilitative approach rather than being primarily restrictive. Governments now appreciate the power of blockchain technology better because of its proven capabilities and efficiency.Lee thinks that industry leaders should embrace and be leading voices in shaping regulations.
“Enterprise blockchains—like tech in general—have to learn that regulation is not something they should avoid, break or fight; they should play along, and that will even lead to better products for their customers,” he says.
The possible unveiling of China’s national digital currency can be a real game-changer, especially for stablecoins, cryptocurrencies that have been pegged to a fiat counterpart. It will be interesting to see whether other countries follow China’s lead.
Given the disruption that blockchain is already causing through sectors like fintech, other developed countries will be monitoring China’s moves closely because of the potential overhaul blockchain can bring to their financial systems.
The bottom line is that blockchain and cryptocurrencies have the tag of opportunity rather than a threat. Countries that take the initiative to develop a suitable regulatory framework will likely be leaders in the blockchain space.
Andrey Sergeenkov is the founder of BTC Peers-
Francisco Gimeno - BC Analyst Read this if you need information on what most of the experts broadly think it will happen with the blockchain and crypto industry this year (notwithstanding Black Swan events!). The key words are evolution, resilience and opportunity. What do you think?
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Report: Will blockchain deliver across industries? Or will the tech fall flat? (information-age.com)As more blockchain-based companies spring up, Information Age wanted to ask the question: Will blockchain deliver across industries?
Despite the hype that surrounds emerging technologies, it is evident blockchain will impact most industries.
Crypto Valley reported last week that there has been an increase in the number of blockchain companies.
The latest CV VC Top 50 Report found a moderate rise in from 810 in the first half of 2019 to 842 in the second half.
The report’s fourth edition takes into account blockchain companies with over 4,400 employees, and includes new additions, such as Bittrex and CasperLabs.Compiled by investment firm Crypto Valley Venture Capital (CV VC), the report also found that the valuation of the top 50 blockchain companies in Switzerland and Liechtenstein adds up to $25.3 billion.
Following this news, Information Age wanted to explore whether blockchain will deliver across industries by speaking to a number of industry-experts.Based on their comments, it was evident the tech will not fall flat.1. Supply chain
Perhaps the most obvious application for blockchain is found in the supply chain.
Today, there are already a number of use cases in production.“The supply chain is a great practical example of blockchain in action,” confirms Todd Moore, vice president of Encryption Products for Cloud Protection and Licensing Activity, Thales.
“With the ability to span across multiple industries, it ensures products can be traced, authenticated and verified on digital ledgers. In the pharmaceutical industry, organisations can apply blockchain technologies to ensure tailored drugs are delivered to the right person.
By utilising a secure IoT platform to make sure medications are the right quality and don’t fail during the supply process, which can ultimately affect the efficacy when taken by the patient.
“Through blockchain, these companies are able to verify where their product has travelled, and which components have been added at each transition point.
In industries where each product can use components from tens or even hundreds of companies at one time, blockchain technologies ensure that the whole supply chain is more transparent, accountable and secure.”Understanding the viability of blockchain in supply chain management
There’s a lot of hype around blockchain in supply chain management; can it help enterprises escape their siloed insights and enable them to take a more integrated and holistic approach? Read here2. Financial services
Financial services is another industry where the application of blockchain technology is already in use, especially with the booming fintech arena.
Daumantas Dvilinskas, founder and CEO of fast growth London based fintech, TransferGo, explains that blockchain is already delivering in financial services.
“At TransferGo, we use Ripple’s blockchain technology to establish real-time communication between us and our banking partners in India, allowing consumers to send money to family and friends or make international payments immediately.
The technology replaced older incumbent communications systems, where typical transfer to India took around two — three days and decreased costs by up to 90% in some instances.
“It’s just one example of how blockchain technology has the power to make money move as quickly as information moves today. It’s been a huge success and proves that blockchain provides tangible customer value.”
There are challenges, however, as Akber Datoo — CEO of D2 Legal Technology — highlights.Blockchain in financial services and the rise of digital assets
In the financial services industry, digital assets are one of the most interesting innovations that blockchain has introduced. Read here
Blockchain and distributed ledger technologies have “run into problems in respect of scalability and interoperability,” he says.“In particular, there are significant issues in respect of a lack of data governance for client, transaction and legal data in financial services which have to date, held back blockchain from delivering on its true potential.
“Firms have realised this is the case, and there seems to be growing market impetus to develop the required standards and utilities that would address this — such as the work being done by ISDA on the Clause Taxonomy and Library in the OTC derivatives space. These initiatives should allow blockchain to better deliver within financial services in the next two to three years.”3. Transport
Transport, with the advent of autonomous vehicles, is an industry ripe for disruption. Perhaps more so that any other industry.
Irra Ariella Khi, CEO of UK-founded Zamna, the blockchain-enabled data verification platform used by airlines and governments, believes that “blockchain principles of decentralisation and immutability make it ideally suited to tackling data verification and security challenges.
“In the context of international transport and border security, we are dealing with highly sensitive data sets and a need for 100% data accuracy. In the aviation industry in particular, we are reliant on silos of independent data that cannot be shared or connected.
That’s where we can use blockchain as an enabling layer to connect these silos and extract value for airlines without exposing or storing any of the underlying sensitive data.
“In practice, this means that airlines and government agencies can verify and match a passenger’s identity across jurisdictions without ever having to share their personally identifiable information. This streamlines transport operations, cross-border government compliance, and ultimately facilitates the passenger experience.”Airports, blockchain and the seamless passenger journey
It may be a generation before administration is managed by machine and human contact is for assistance, exceptions and courtesy. Blockchain may be the technology that makes it all possible. Read here4. Healthcare
In an industry under increasing pressure, healthcare needs technology solutions that help reduce the strain. But, as with the introduction of any new technology, “the adoption of blockchain on a widespread level will be gradual,” advises Dr. Nick Lynch, investment lead at Pistoia Alliance.
He says: “In the healthcare industry, blockchain enables healthcare organisations to store and share patient data securely with better privacy protection, since they have reassurance it cannot be tampered with — whether through intention or accident — lowering the risk barriers currently associated with data sharing and collaboration.
“Healthcare professionals who are typically more risk averse would be more likely to support wider data sharing and collaboration, which in turn opens up even greater possibilities in drug discovery and development based on the volumes of data available.
“Blockchain also offers patients great access to, and control over, how their medical data is used. In the future patients could not only give companies access to ‘blocks’ of their data for specific research purposes (potentially for payment), but it can help ensure electronic health records (EHRs) are kept secure and private, safeguarding the transferral or sharing of patient medical data with other institutions or specialists.
”He does suggest, however, that the technology has gone through a ‘peak hype’ — “with groups now looking at more practical use cases covering a breadth of healthcare applications. This includes interest in health supply chains, digital identity and preserving privacy.”
René Seifert, co-founder of TrueProfile.io, also believes that blockchain has the potential to revolutionise the UK healthcare sector and ease pressure on staff shortages by authenticating the credentials of healthcare professionals more quickly, “particularly the verification of job qualifications and background checks of prospective healthcare professionals who wish to work within the UK healthcare system,” he says.Blockchain’s potential role in securing the healthcare industry
Blockchain, the much hyped technology, has the potential to impact almost every industry. Jake Meisenbach, Senior Consultant at DMI, argues it merits in the healthcare sector. Read here
“For example, TrueProfile.io uses blockchain technology to give applicants full control over their documents, both online and offline. By storing employee records on the blockchain, applicants can easily provide potential regulators and NHS recruiters with their verified employment data, such as employment history, letters of recommendation and educational records.
This eliminates the continual churn of verification requests on employers and educational institutions every time a healthcare professional applies for a new role.
“The verification can be done once and can be shared with the relevant healthcare employer, regulator or professional body for the lifetime of the individual’s career.
The latter are able to securely verify the validity of the shared verification in real time against the Ethereum blockchain.“More importantly, however, for the regulators, industry bodies and NHS recruiters themselves, using blockchain also offers an online on-demand Primary Source Verification (PSV), ensuring that candidates’ credentials are authentic and issued by an accredited institution.”-
Francisco Gimeno - BC Analyst A killing word for any development is "potential". 2020 seems the year where sceptics apply it to the blockchain. "It has potential", they say. "But maybe is a hype", they add. The reality has already gone beyond this. The blockchain is impacting many fields, some more openly than others. This year we will hopely see more consolidation and good developments.
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The digital asset industry went through many ups and downs in 2019, and that’s without even taking prices into consideration. But let’s first address price. 2019 was a tale of two halves (first half of the year was good; the second half of the year was bad).
But price is fickle, impossible to forecast, and a lagging indicator. Instead, this piece will focus on the bigger picture themes and narratives that shaped 2019, and what we expect in 2020 and beyond.
2019 Recap: What we got right / What we got wrong in Digital AssetsFirst, let’s look back quickly at our 2019 predictions, in digital assets and how close we got:
Prediction #1: Valuation metrics for crypto will become more mainstream
FALSE. Crypto valuations has made a lot of progress this past year , including:
- Messari’s efforts to create standardized reporting
- An incredible working group of crypto analysts that are publishing mainstream valuation metrics
- Numerous independent sites posting usable metrics (like this and this)
However, the masses have certainly not caught on yet. We rarely see crypto valuations cited in mainstream media like we do with equities and debt.
Prediction #2: The ICO “Distressed” opportunity will emerge
FALSE. We expected there to be M&A, tender offers, activist campaigns (we even unsuccessfully attempted one) and just plain distressed value investing (like buying tokens where cash value in Treasury was greater than token value). But none of these have materialized yet.
This is partially due to lack of transparency from token projects, but is mainly due to a lack of capital into funds dedicated to these strategies - the legal bills alone will be massive. There is a still a huge opportunity here, and only a select group of former Wall Street-run crypto funds are positioned to take advantage of these dislocations.
Prediction #3 Bitcoin and Bitcoin Cash will not become a Medium of Exchange
TRUE. Thus far (at least in developed countries). Stablecoins have and will become mediums of exchange, whereas Bitcoin will continue to be a store of value, and other select digital assets will simply be quasi-equity like assets. We believe this can change in the far distant future once tax consequences are loosened, mobile “banking”-like apps become more user-friendly, and volatility subsides. As such, Bitcoin’s progression will be SoV->MoE->UoA.
Prediction #4: Value accretion will switch from service providers to applications
MIXED. On the one hand, equity valuations of crypto service providers (exchanges, miners, data providers, trade systems, custodians, OTC desks) have been trending down because the market has way too many service providers relative to the people/firms that they service. On the other hand, we still haven’t seen many “killer apps” develop.
This shift is starting to happen - it’s just taking longer than expected and there are fewer success stories. For example, companies like Brave, Flexa, HXRO, and Lolli are growing users at a rapid clip and have increased their equity valuations, but this is still a small sample size of everyday crypto apps that have penetrated the market.
Prediction #5: The market will separate into “Haves versus Have nots”
TRUE. We’ve been pretty vocal on this topic, and it has been quite accurate. There are far more losers than winners in 2019, and this has largely been based on themes.
Bitcoin aside, most of the legacy decentralized digital assets that took the market by storm in 2017 have largely died out or moved out of favor with the possibility of never recovering, while new up-and-coming companies that utilize tokens have moved into favor. We think this trend will continue.
Prediction #6: ETH will underperform ETH-related tokens
TRUE. We made this argument pretty succinctly, and took a lot of heat for it from Ethereum fans, but we were pretty accurate. Ethereum is one of the most important developments in all of crypto, with so much of the ecosystem built on top of, or connected to the Ethereum blockchain.
But the ETH token itself has failed to capture this value (negative 2019 return), while tokens of projects that are derivatives of the ecosystem (MKR, SNX, LINK, etc) have performed much better.
What else happened in 2019 affecting the Crypto Markets?
Aside from our predictions, 2019 added several new narratives that affected the crypto markets:Bitcoin officially entered the Global Macro spotlight
- The Federal Reserve, Treasury Secretary, US President, G7 and every major global central bank talked about Bitcoin, and now every macro hedge fund is involved in some capacity.
- Geopolitical instability (Venezuela, Argentina, Hong Kong, Lebanon, Iran, etc) has increased use of Bitcoin in these locations.
- China introduced its own Digital Currency (DCEP), that led to a series of copycats from other Central Banks. This will lead to tighter controls on monetary policy and flow of capital within borders.
- Facebook’s Libra project woke up US regulators creating a short-term negative effect for digital assets, but will lead to a long-term positive outcome on adoption and interest.
- Bitcoin dominance grew from 53% to 70% in 2019 (meaning Bitcoin represents 70% of the value of all digital assets). The “Have Nots” took the brunt of this Bitcoin explosion, and will likely continue to fall versus Bitcoin, but new versions of digital assets backed by real assets (like the ArCoin US Treasury token) are on their way which should help the overall asset class grow.
Rise of innovative token uses cases beyond currency
- In fact, we think the word “cryptocurrency” is one of the most misleading terms, because Bitcoin is the only true “currency” while every other use case of blockchain and tokens is completely different and potentially more innovative.
- In 2019, we’ve seen the rise of digital contracts: DeFi, equity-like features with a burn model (i.e. LEO), traditional bond settlements, legal contracts, voting rights, and more.
- On the horizon, even more interesting tokens are on their way, like a token representing future interests in NBA player salaries (thank you Spencer Dinwiddie).
Infrastructure Boom
- Newcomers to crypto, but powerhouses in the traditional world (Fidelity Digital Assets, State Street, Bakkt / ICE, the CME, State Street), are now challenging the crypto incumbents (Coinbase, Binance, Deribit, Bitmex).
- The rapid rise of derivatives exchanges has come with consequences, as we’ve seen the “tail wagging the dog” where futures markets drive spot prices, leading to market manipulation.
- The US has been left behind, as Binance and others have officially shut out US customers after skirting the law for years on the KYC/verified account front.
And That’s Our Two Satoshis! Thanks for reading everyone! Questions or comments, just let us know.
The Arca Portfolio Management TeamJeff Dorman, CFA - Chief Investment OfficerKatie Talati - Head of ResearchHassan Bassiri, CFA - PM / AnalystSasha Fleyshman - Trader Wes Hansen - Head of Trading & Operations
To learn more or talk to us about investing in digital assets and cryptocurrencycall us now at (424) 289-8068.-
Francisco Gimeno - BC Analyst Read this piece of writing. A resume on what was foreseen and what really happened with digital assets during 2019. A lot of small pearl of knowledge here, and a big find: the whole digital assets, cryptos, tokens world, is evolving and maturing for the best. We believe 2020 will continue with the consolidation of 2019 and new better developments.
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Report: The race to integrate crypto into global banking is real | Computerworld (computerworld.com)Central banks in Asia and Europe are in the final stages of launching digital currencies for future payment systems and cross-border transactions, according to a new report from accounting firm KPMG.
And governments around the world see the launch of these blockchain-based central bank digital currencies (CBDC) as something that could one day give them a competitive advantage in global trade.
“In 2020, we at KPMG expect to assist regional and central banks in the development of well-defined technology frameworks that can anchor private-sector initiatives,” Arun Ghosh, U.S.
Blockchain Leader at KPMG, said in a blog post.Among other banking entitires, the International Monetary Fund (IMF) has shown support for fiat-backed cryptocurrencies, saying they can reduce the reliance on government-issued money, "and unlike bank transfers, crypto asset transactions can be cleared and settled quickly without an intermediary,” Dong He, deputy director of the IMF’s Monetary and Capital Markets Department, wrote in a post for the IMF.
“The advantages are especially apparent in cross-border payments, which are costly, cumbersome, and opaque," He said. "New services using distributed ledger technology and crypto assets have slashed the time it takes for cross-border payments to reach their destination from days to seconds by bypassing correspondent banking networks.
”In a blog post, the IMF said today’s fiat currencies are in flux “and innovation will transform the landscape of banking and money.”Other countries are already looking to innovate in ways that given them an advantage.
[ Further reading: Blockchain: The complete guide ]
China is reportedly close to releasing a national cryptocurrency that, because of greater efficiencies, could challenge the U.S. dollar as the de facto currency for international trade. Other smaller countries such as Sweden are planning their own state-sponsored cryptocurrency.
(Sweden’s would be called the e-Krona.) And the Bank of England has been researching cryptocurrency since 2015. Even though theit does not currently plan to issue a cryptocurrency linked to Pound sterling, it has published extensive research on the monetary policy and financial system implications of issuing CDBCs.
“If a central bank issued a digital currency, then everyone (including businesses, households and financial institutions other than banks) could store value and make payments in electronic central bank money,” the Bank of England said in a research paper.
“While this may seem like a small change, it could have wide-ranging implications for monetary policy and financial stability.
”Regardless of any movement by central banks, Ghosh said, fiat-based ‘stablecoins’ are already being issued by the private sector to support enhanced value exchange and settlement within organizations and across banking networks.
For example, JP Morgan Chase announced last year it had developed what was seen at the time as the first cryptocurrency backed by a major bank – a move that could legitimize blockchain as a vehicle for fiat cryptocurrencies.
JPM Coin, as the bank calls its new digital money, is considered fiat currency because it's backed by U.S. dollars in accounts designated at JPMorgan Chase N.A.Each JPM Coin is equal in value to one U.S. dollar.
Wells Fargo has also announced it will pilot its own cryptocurrency to enable near real-time money movement and cut out settlement middlemen, thus reducing fees.
And the Reserve Bank of Australia has conducted pilots with Ethereum-based cryptocurrency in the hope it could be used by third parties for cross-border payments. So far, the bank has not found a significant case for its use in light of Australia’s relatively stable banking system, according to a Senate inquiry into the matter last month.
“The upside for businesses and consumers will trickle down through adoption..., Ghosh said, nothing that the new systems could result in "near instantaneous value settlement" with "enhanced cash flow realization and/or liquidity of certain positions.
" Blockchain is being piloted by financial services institutions in five primary areas: for clearance and settlement, trade finance, cross-border payments, insurance claims processing and anti-money laundering (AML) and know your customer (KYC) efforts.
For cross-border transactions, stablecoin could cut settlement times from days to minutes by eliminating the need for private organizations such as Depository Trust and Clearance Corp. (DTCC) in the U.S. and Euroclear in the European Union. The DTCC and Euroclear now handle securities settlements.
Blockchain-based systems could also streamline the process of buying and selling stocks and bonds. Those transactions can take up to three days, with longer delays of up to 10 days not uncommon, according to Bruce Fenton, founder and managing director of Atlantic Financial and a board member of the Bitcoin Foundation.
"The challenge with securities now is you need a trusted third party to say what's true," Fenton said. "It's not your broker. It's not Merrill Lynch or Fidelity and it's not the issuer either; Apple has no clue who their shareholders are, either.
The function is performed by these large centralized groups because the brokers don't necessarily trust each other; they're dealing with their competitors.
"The problem with relying on central settlement organizations is that transactions can get bottlenecked through the use of a single ledger, such as VisaNet or SWIFT, he said. With blockchain, trust becomes moot since digital tokens representing securities or money are inextricably linked to the funds or securities – and transfers can be done in hours, Fenton said.
Given those efficiencies, more than a half dozen universities are already working on developing a payment system to rival today’s conventional clearance and settlement networks.
In addition to the scaled adoption of cryptoassets now being driven by the public sector, Ghosh sees four other crypto trends likely to emerge over the next year or so as business executives apply “an unprecedented level of innovation ... driving new revenue models by leveraging blockchain and tokenized assets.”Those trends include:- Advances in cryptoasset custody technology, or how digital assets are owned, stored, secured, transferred and accessed in a decentralized environment.
- A shift from private-permissioned to interoperable blockchain implementations. With many private blockchain implementations coming to fruition, the next step is interoperability.
- More success when scaling the technology with a converged artificial intelligence (AI) framework – and better results when initializing their AI investments.
- The convergence of AI, blockchain and the Internet of Things (IoT) to help manage climate change.
Related:- Blockchain
- Emerging Technology
- Financial Services Industry
- Government IT
- Cloud Computing
- Artificial Intelligence
- Internet of Things
Senior Reporter Lucas Mearian covers financial services IT (including blockchain), healthcare IT and enterprise mobile issues (including mobility management, security, hardware and apps).-
Francisco Gimeno - BC Analyst Banking is starting to realise they can't stop the crypto movement. So they are trying to control it or at least participate in it in a way they can control it as much as possible. Some will try to domesticate the crypto, some will see the chance to really start to change into financial institutions for the 4th IR. Everything is changing too fast.
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Not long ago investors were getting hyped up about blockchain. Then they dropped it. But they should take another look, says Ben Judge.Just a few years ago, blockchain – also called digital ledger technology (DLT) – was the next big thing.
It was going to transform every facet of our lives, including the entire global payment system; back-end office systems; and supply chains from beginning to end. The hype was immense. Every spivvy entrepreneur and their dog set up a company that somehow had its value inflated by some version or other of blockchain.
Some didn’t even bother coming up with a blockchain business. They just slotted “blockchain” into their name and watched the share price shoot up. The Long Island Iced Tea Corp., which notoriously became the Long Blockchain Corp., immediately enjoyed a share price surge of 458%.What exactly is this technology?
At its simplest, blockchain is a ledger: a way of storing and manipulating information, like a spreadsheet or database. Crucially, though, where a normal database is a single, centrally controlled entity, a blockchain is a public “distributed ledger”. Each computer that has access to the chain has its own copy. It is literally a chain of blocks of information.
As a new piece of information is added to the ledger, it creates a new block in the chain.The block stores the information, but also who added the information and who has access to it. Once a block has been added and verified, it is given a “hash” – a unique, immutable code that identifies that transaction.
You cannot go back and change any of the information stored. Any changes are recorded as new blocks in the chain with a record of who has done what.
Another unique feature of blockchain is its ability to use “smart contracts”.
A smart contract is computer code stored on the chain that can execute transactions between parties once certain conditions have been met: for example, to automatically transfer the ownership of property once funds have cleared; to release funds to a supplier once goods are confirmed as having arrived; or to impose financial penalties if certain conditions are not met.
All of this is “permissionless” – it can be done with no need for someone to provide access. It is all coded into the blockchain when the agreement is initially drawn up. And it is this security, and the fact that all parties have access to the information so that there is no need for a middleman, that makes blockchains so useful.
In situations where multiple parties need to access and update data in the knowledge that it is secure and cannot be tampered with, and where intermediaries can be eliminated, a blockchain system is an ideal solution, according to IBM, which employs more than 1,000 people on blockchain products. It is making its blockchain platform available to other organisations that want to create their own versions.
The blockchain hype of recent years went hand in hand with the meteoric rise of bitcoin, whose price peaked at almost $20,000 this time two years ago only to come crashing down in the subsequent months. Blockchain was, after all, created to track ownership and transactions of the digital currency.Now, however, it all seems to have gone quiet.
Many of the promised fabulous enhancements to our lives have yet to happen. Other digital currencies launched to cash in on blockchain have withered away. People are now asking whether blockchain was all just a load of hype. Is that true?Slowly but surely gaining ground
Blockchain is still here and is slowly but surely gaining ground rather than disrupting everything in one fell swoop. Big business is quietly adopting this technology to do the things it’s good at: settling transactions, recording ownership and verifying identities, for example. It may not be a purist’s idea of what blockchain should be – a public, permissionless ledger open to all. Instead, what we are seeing are private, permissioned blockchains.
That means that, unlike public blockchains such as bitcoin, only certain users with the appropriate privileges can add blocks to the chain.The technology is following the classic example of “hype cycle” first observed by research firm Gartner. It consists of five key phases.
A new technology is developed and enters the “trigger” phase. Publicity explodes and everyone wants a piece of the action; the cycle enters the “peak of inflated expectations”. That was the bitcoin peak that prompted chancers to launch new cryptocurrencies. Then, when the technology doesn’t seem to change everyone’s lives as promised by the early adopters, we enter the “trough of disillusionment”. Investors lose interest.
But then, after a while, people find uses for the new technology and we begin to climb the “slope of enlightenment”. Then comes the “plateau of productivity”. With blockchain we’re just past the “trough of disillusionment”, having risen over the peak of inflated expectations and we’re now in the foothills of the slope of enlightenment.Big business is adapting to blockchain
There have been flops. Insurance giant Axa trialled a blockchain-based flight insurance product called Fizzy. It used smart contracts to pay out automatically if your flight was delayed. But just the other week it decided to shelve it. And some projects have had a rather longer gestation than was originally envisaged.
The Australian Securities Exchange ASX has been planning to replace its clearing system with a blockchain-based system. It has been in development since 2015; the latest estimate for its deployment is spring 2021.
Australia is not the only exchange looking at using DLT. Shanghai, Hong Kong and New York are interested too. As Joshua Oliver noted in the Financial Times a year ago: “Worldwide, three quarters of the financial market infrastructure operators surveyed by Nasdaq and Celent are working on DLT pilots or already using DLT”.
“Enterprise” blockchain is now most definitely a thing, having moved from proof of concept to real-world applications. Big business has bought in.
Along with IBM’s platform, other big enthusiasts include Amazon and Oracle. Amazon’s clients include management consultants Accenture, AT&T and Guardian Life Insurance. Oracle’s clients include a Jordanian investment bank using blockchain to facilitate cross-border payments; a healthcare technology company providing a network for healthcare organisations to share data and processes securely; and a brewer tracking its supply chain.
Much of the activity is in financial services. One high-profile trading platform is we.trade, set up by a consortium of big banks including HSBC, Societe Generale and UBS. It allows small and medium-sized businesses to guarantee and process transactions digitally, cutting down on paperwork and speeding up trades.Another area where DLT is useful is in identity verification.
In Canada, Verified.Me is a system that has been developed between government agencies and private companies. Customers of five banks including Royal Bank of Canada and Scotiabank can now verify their identities using blockchain technology.
But it is in supply-chain management that it is really proving itself. Last year, IBM launched its Food Trust platform, a blockchain-based system for tracking the supply chain of food.
It was originally trialled by Walmart, but is now being used commercially by, among others, Nestlé, Carrefour, and Unilever, says Forbes. Walmart Canada has now developed its own system with DLT Labs, a Canadian blockchain developer, for tracking deliveries, verifying transactions and automating payments among suppliers to its 400 retail stores. Shipping giant Maersk developed the TradeLens supply chain platform with IBM, to track cargo around the world. Maersk now wants to monetise the platform and it has recently been joined by Hapag-Lloyd and Ocean Network Express of Singapore.What is China planning?
But perhaps the most fervent adopter of blockchain technology recently is China. President Xi Jinping recently praised blockchain as a “core technology” and called for more support and investment. China’s tech-focused shares surged. Over 500 new projects have been registered with the Cyberspace Administration of China.
China’s big tech companies are involved, says Jane Cai in the South China Morning Post, and there are “dozens of government-led initiatives and schemes, in areas ranging from communications to land development”.
It is somewhat ironic given the technology’s libertarian origins. “China is now pushing toward global blockchain dominance,” says Kevin Werbach in Wired. That’s something that should get the rest of the world – and especially the US – worried, says Biser Dimitrov on Forbes.com. “Having a superior blockchain technology will give China an enormous trading opportunity with the emerging technology markets.” And then there’s the spectre of a digital renminbi.
A digital currency controlled by the People’s Bank of China has the potential to usurp the dollar as a global currency.While blockchain in the West is mainly business-driven, China is adopting it to strengthen its grip on its population.
Mu Rongping, director of the innovation and development research centre at the Chinese Academy of Sciences, told Cai that “The potential is huge for the use of new technologies, such as in areas of public security, public transport, crime investigation and anti-corruption campaigns… Blockchain could open a new chapter on the integration of governance and technology”.
Rather than fulfilling its original imperative of shifting power away from centralised authority, it could actually help China’s government cement it.Still, what is clear is that, for good or ill, blockchain is no longer the brash shouty new kid on the block; it’s maturing.
Slowly but surely distributed ledger technology is integrating itself with public and private systems. It’s here to stay.-
Francisco Gimeno - BC Analyst The New Year brings the same idea around in different articles: the blockchain is here to stay, has evolved from being ignored to be a tool for even governments (China) and there is the need to change and mature even more, once we understand better the scope of possibilities the blockchain brings for the socia economic and political changes we are living.
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Three-Quarters of IoT Technology Adopters in the U.S. Have Already Adopted Blockchain or Are Planning to by the End of 2020
Recent survey results from Gartner, Inc. reveal that the majority of Internet of Things (IoT) technology adopters in the U.S. are also adopting blockchain and combining it with their IoT networks.“The integration of IoT and blockchain networks is a sweet spot for digital transformation and innovation,” said Avivah Litan, distinguished vice president at Gartner.
“It is actually moving ahead at a much faster pace than expected, according to the survey.
”The Gartner IoT Implementation Trends Survey was conducted via an online survey from May through June 2019 with more than 500 respondents from the U.S. Respondents were required to be at manager level or above and should have a primary involvement and responsibility for making decisions in IoT implementation.
IoT Implementers Are Big on BlockchainSeventy-five percent of IoT technology adopters in the U.S. have already adopted blockchain or are planning to adopt it by the end of 2020. Among the blockchain adopters, 86% are implementing the two technologies together in various projects.
“These results are significant and much stronger than we anticipated. They emphasize that although both blockchain and IoT technologies are still in the early stages of adoption, coupled with the fact that blockchain technology is still immature itself, enterprises have started combining them to drive favorable business outcomes,” said Ms. Litan.
Increased Security, Trust and Lowering Costs Cited as Top BenefitsOf the survey respondents who are implementing blockchain technology in conjunction with IoT, nearly two-thirds chose “increased security and trust” as either the primary or secondary driver for implementation.
More than half of respondents said the top benefit is an increase in business efficiency and lowering costs.“As enterprises implement IoT projects, many of them focus their efforts on building more security, trust and transparency around the management or movement of physical things, so that they can improve situational awareness and greater efficiencies,” said Ms. Litan.
In fact, through 2024, more than 80% of implementers will have to upgrade their combined IoT and blockchain solutions at least once or twice to address technical challenges such as scalability, security and reliability.
Blockchain Adoption Among IoT Implementers Varies by Industry
Blockchain adoption is significantly impacting every industry that manages connected IoT “things.” Organizations that are relatively more mature in adopting IoT are also seen to be way ahead in their implementation of blockchain technology.
The highest rate of blockchain adoption among IoT implementers is companies in pharmaceuticals, energy, natural resources, utilities and transportation.
“These industries all have business models that include the movement of physical goods, so they benefit from links that bridge the physical to the digital world, especially those enabled by a combination of blockchain and IoT technologies,” said Ms. Litan.
The lowest rate of adoption in any one industry was reported by respondents in financial services, given that financial services deals primarily with virtual goods and services rather than physical things that are tracked by IoT networks.
“In the long term, we expect the combination of IoT and blockchain to enable innovative devices and business models, but the necessary evolution in both blockchain and IoT will take five to 10 years to achieve maturity,” said Ms. Litan.
Gartner clients can read more in the report: ”Survey Analysis: IoT Adopters Embrace Blockchain.
”Gartner IT Infrastructure, Operations & Cloud Strategies ConferenceGartner analysts will provide additional analysis on cloud strategies and infrastructure and operations trends at the Gartner IT Infrastructure, Operations & Cloud Strategies conferences taking place April 14-15 in Brazil, April 22-24 in Tokyo, April 27-28 in Sydney, May 15-15 in Mumbai, June 16-17 in Frankfurt, June 23-24 in Mexico, November 23-24 in London and December 7-10 in Las Vegas.
Follow news and updates from these conferences on Twitter using #GartnerIO.
About Gartner
Gartner, Inc. (NYSE: IT), is the world’s leading research and advisory company and a member of the S&P 500. We equip business leaders with indispensable insights, advice and tools to achieve their mission-critical priorities today and build the successful organizations of tomorrow.
Our unmatched combination of expert-led, practitioner-sourced and data-driven research steers clients toward the right decisions on the issues that matter most. We are a trusted advisor and objective resource for more than 15,000 organizations in more than 100 countries — across all major functions, in every industry and enterprise size.
To learn more about how we help decision makers fuel the future of business, visit gartner.com.-
Francisco Gimeno - BC Analyst The IoT industry was advancing very slowly until the development of the blockchain as a tech which helps to integrate and enable devices and business models. In the last months we hear more and more on how IoT is steadily advancing. This is good news and other sign of the blockchain being the key tool for the enmeshing of all new 4th IR techs in a new paradigm.
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Yesterday, Netherlands-based credit management firm Onguard published results of a survey conducted by Verdict about the awareness of blockchain and its benefits in the financial services industry.
The report found that about 29% of finance professionals had no idea what blockchain is, and 19% did not know how it could be used within finance, giving a combined 48%.The results are based on a survey of 1,000 finance professionals by Onguard.
However, the most significant lack of awareness was in the more junior ranks. Over 57% of CFO’s are already using or planning to use blockchain. But it seems this knowledge is not trickling down the hierarchy.
About 52% of finance professionals said blockchain was never mentioned in meetings. However, 45% of CFOs said they talk about blockchain once a week, and 17% said they discuss the technology every day.
Onguard found that only 10% of financial professionals perceive blockchain to be a disruptive technology. Cloud solutions (38%), AI (32%) and big data (30%) are expected to have the most significant impact on the finance sector, the survey said.
Greater awareness of these other technologies contributed to the 67% of finance professionals who were either planning deployment or using new technologies such as AI and blockchain.
Those who understand the disruptive potential of blockchain and allied technologies (about 38%) believe financial services firms must update their business models.
About 39% of respondents believe AI and blockchain will have a significant impact on employment in the sector.“In 2018, technologies such as blockchain and artificial intelligence were mostly discredited and labelled as ‘hype’.
However, we can now see that organisations have actually started adopting them,” said Marieke Saeij, CEO, Onguard.Saeij further added:
“While the exact uses of blockchain are not yet defined, the level of activity using this form of technology is only going to increase. […] With nearly two-thirds of CFOs already preparing an initiative related to blockchain, I expect that this is just the beginning of a blockchain revolution.
”Meanwhile, Gartner’s Blockchain Hype Cycle shows finance as in the trough of disillusionment.Below are recent blockchain surveys:
Accenture: blockchain for aerospace
Boston Consulting Group: blockchain for transport and logistics
Cap Gemini blockchain survey
Deloitte 2019 blockchain survey
Deloitte 2018 blockchain survey
EY blockchain (finance and tech professionals) survey
EY fintech adoption survey
EY APAC blockchain survey
IDC semi-annual enterprise blockchain forecast
IHS Markit survey
KPMG technology industry innovation survey
PwC blockchain survey
PwC China blockchain survey
World Energy Council / PwC blockchain survey
SAP blockchain survey
TD Bank payments industry survey
BNY Mellon payments survey
Friss insurance survey
Juniper enterprise blockchain survey
BIS Central Bank Digital Currency survey
IBM / OMFIF Central Bank Digital Currency survey 2018
IBM / OMFIF Central Bank Digital Currency survey 2019
ING general population cryptocurrency attitudes-
Francisco Gimeno - BC Analyst Surveys are very useful to detect adoption in economic and financial sectors. In this case, the title seems to be pessimistic However, we see a good trend. In 2017 very few have heard or even thought about applying the blockchain technology to their companies or sectors. The fact there is yet many who haven't heard or don't understand about this show us how much work is yet needed to make possible the paradigm shift which the blockchain and other techs are bringing. Those who are pessimists are the ones who don't want to adapt to what is already coming or happening.
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In 2020, businesses likely to shift blockchain focus to integration, interoperab... (computerworld.com)As the hype around blockchain cools and enterprises continue to cut their tech teeth on the distributed ledger, non-technical challenges and interoperability hurdles are emerging
By Lucas Mearian
Senior Reporter, Computerworld | OCT 29, 2019 10:18 AM PDT
Ismagilov / Getty Images
After several years of proofs of concept testing, followed by pilot programs, enterprises deploying blockchain should turn their focus toward integrating the distributed ledger technology (DLT) with legacy data systems and making sure they can communicate with other external blockchains.
That advice is part of Forrester Research's 2020 Predictions, which highlight several upcoming challenges for the nascent electronic ledger technology.In the world of enterprise blockchain, the shift from irrational exuberance to realistic assessment is almost complete, Forrester said.
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[ Related: The top 8 problems with blockchain ]"While we still see a lot of excitement around what DLT can or could do, the focus has expanded to include questions about how DLT is going to deliver a particular benefit," the report said.
Among Forrester's predictions: the battle between private and public blockchains will heat up and the debate will reach corporate executive teams; 80% of blockchain deployments will be hybrid, multi-cloud or both; and non-technical issues will represent some of the biggest hurdles.
"It really is first agreeing on what data is to be shared among partners, what that process should look like, and then putting everything on an appropriate legal footing," said Martha Bennett, a Forrester vice president of research. "You need to understand what yours and others' contractual obligations are. No one has done this to scale.
"For example, when a company rolls out a blockchain ledger, it will not likely integrate with existing corporate single sign-on capabilities. So, for a time – perhaps even permanently – a blockchain project will likely function on an exception basis, which propagates discussions around security and risk management.
"It sounds like a minor thing, but I've seen projects grind to a halt over it," Bennett said.Governance of a permissioned business blockchain is also a critical non-technical issue that hampers deployments.
Most often, determining how a distributed ledger will be managed falls to a single third party in charge of key considerations, such as who has access and who can invite new members onto the ledger.
Additionally, while early governance models have basic rules about onboarding new users, rarely do they address the offboarding process, according to Forrester – especially if rules have been broken and legal issues arise.Hybrid blockchains, which are expected to dominate ecommerce, also face hurdles such as scalability and privacy.
For example, supply chain partners who enter into a blockchain must be extremely careful about data they place on the electronic ledger and the ledger owner should be aware of throughput issues that could affect costs.
Hybrid blockchains are a combination of a permissioned blockchain (for backend transactions between businesses) and a public blockchain, which enables a public-facing application.
That would allow consumers, for instance, to see how produce was grown on a farm and transported to grocery store shelves. Mastercard recently partnered with track-and-trace software provider Envisible to create a blockchain-based supply chain platform to help supermarkets trace the origin of seafood while also enabling consumers to see the history of the catch.
When Facebook launches its Libra cryptocurrency in 2020, it will need a public-facing blockchain network for users who purchase items with the digital currency and a private blockchain network for the banks backing it.
As blockchain ledgers proliferate in the corporate world, enterprises will need to ensure their flavor of distributed ledger can communicate with other platforms deployed by potential business partners.
The result: interoperability is expected to take center stage next year.Businesses should be "extremely" concerned about interoperability and integration, according to Bennett.
She said many of her clients building multiple blockchain networks began pinging her four or five months ago with questions about how they could all interoperate.
"The whole public-versus-private blockchain argument is the reason enterprises are becoming interested in the interoperability discussion. If I'm building silos with permissioned blockchains, is there an alternative?
If I want to run something hybrid, things would need to be interoperable," Bennett said.Interoperability also applies to public and private cloud infrastructures; some enterprises host their own blockchain technology while also outsourcing blockchain services from vendors, such as Amazon AWS and Microsoft Azure.
Some blockchain vendors, such as IBM and Oracle, have developed APIs to pass data from legacy systems or from one blockchain to another, but not necessarily between different platforms. And, once an external data source is added to a blockchain ledger, ensuring messages are secure and data is accurate and not duplicated becomes yet another issue.
For example, if a company has tokenized assets – meaning it created a digital representation of the value of an asset, such as oil or other commodities – the company must be able to ensure those tokens are deleted from the original ledger once they've been traded or transferred to a secondary one.
Otherwise, the assets would be duplicated.It's already clear that there are several blockchain-based networks covering many of the same functions, such as trade finance, invoice factoring, shipping documentation, and product provenance.
There are also networks with adjacent functionality, such as supply chain track-and-trace and financing. To deliver on the promise of frictionless processes, those networks will need to talk to each other somehow.
Much of the debate for 2020 will be around exactly what it means for one blockchain network to talk another and how that happens: simple message passing? transfer of value between chains? interoperability at the state level?
"We've already got a plethora of startups and other initiatives promising (sometimes miraculous) solutions; expect the battle to heat up, but don't expect neat, widely applicable solutions," Forrester said in its report.
Many businesses risk creating siloed networks if interoperability isn't baked into a platform or the industry doesn't settle on standards.
Earlier this month, Gartner released a report predicting that by 2021, 90% of current enterprise blockchain platform implementations will need replacing within 18 months to remain competitive, secure and to avoid obsolescence.
Among the issues leading to obsolescence: blockchain interoperability, smart contract integration with legacy corporate data systems, and scaling issues.
Several industry groups are now working to address interoperability and scaling (the ability for a blockchain ledger to handle data traffic generated by hundreds or thousands of users).
Earlier this year, the Enterprise Ethereum Alliance (EEA) announced new and updated specifications aimed at helping developers create business-class blockchain networks that are faster, easier to use and capable of interacting with other DLT networks.
And the Linux Foundation is working on developing smart contracts that can be used across industries to create business automation processes via blockchain.
Those efforts are expected continue into the new year as the blockchain industry evolves.-
Francisco Gimeno - BC Analyst The blockchain is slowly integrating in the economic world and with it, problems arise which need to be solved, as interoperability, scaling issues and secure smart contracts. Issues which will be solved in the next iterations, surely. Time, research and a lot of work is yet needed to make a full integration of blockchain in all areas where is needed.
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At 10 a.m. ET this morning, Facebook CEO Mark Zuckerberg was the sole witness to testify in front of the United States House of Representatives Committee on Financial Services about his role in developing libra, a cryptocurrency backed by a basket of stable international assets and designed to be spendable anywhere in the world.
But as is typical of such hearings, an unabridged written testimony was submitted in advance so members of Congress and others could prepare their lines of questioning.As governments and central banks grapple with what it would mean to have a global currency backed by their own assets, in some ways Zuckerberg’s comments were disappointingly predictable.
But as three new bills introduced to Congress in the days leading up to the testimony could spell doom for Facebook’s plans, a closer analysis of Zuckerberg’s comments shines a light on the social media giant’s bigger strategy.
The submitted written testimony is broken down into five sections: introduction, a summary of the Libra Project, combating discrimination, a commitment to diversity, and a conclusion.
The introduction is interesting for three reasons. First, Zuckerberg plans to position Libra in the global context as a reaction to China’s plans to release a similar cryptocurrency that will be spendable anywhere in the world and will be distributed via a consortium of state-owned companies.
While Facebook has previously emphasized that the libra cryptocurrency would be backed by a basket of international currencies, perhaps giving a broader group of people a stake in the technology, today Zuckerberg will use the political undertones and his audience of U.S. elected officials to refocus the project on its American roots.
Today In: Money
“Libra will be backed mostly by dollars and I believe it will extend America’s financial leadership,” Zuckerberg will say, according to the prepared notes. “As well as our democratic values and oversight around the world. If America doesn’t innovate, our financial leadership is not guaranteed.
”The introduction is also notable in that it foreshadows a surprising amount of attention on questions of diversity and civil rights, topics he’s previously addressed in front of Congress but that are only tangentially related to the cryptocurrency, which is being designed to serve with unbanked people typically consisting of underrepresented groups.
Zuckerberg wraps up his address with what appears to be a hat-tip to the religious inclinations of some elected officials and U.S. voters. “I feel blessed to be in a position where we can make a difference in people’s lives,” his prepared remarks say.
The second section of Zuckerberg’s remarks to Congress largely rehash the already well-known definition of the Libra Association founded by Facebook, the libra cryptocurrency, and Facebook’s Calibra wallet for storing the cryptocurrency, with one small change.
Since Facebook’s head of cryptocurrency, David Marcus, testified before Congress in July, four U.S. lawmakers have sent a letter to association members asking them not to participate in the group, which was followed by an exodus of every major financial player in the group, including PayPal, MasterCard and Visa.
Not all elected officials responded so harshly, with U.S. senator Mike Rounds of South Dakota calling his colleagues’ “ominous tone” “disappointing” and expressing support for the financial innovation.This section concludes by distinguishing Facebook’s cryptocurrency wallet, Calibra, from the libra cryptocurrency and clarifying Facebook’s intention not to sell data about Calibra wallet users to third parties.
The section also reiterates Facebook’s desire to position libra as a U.S. tool for global financial competition. “If America doesn’t lead on this, others will,” the submitted comments read. “Foreign companies or countries may act without the same regulatory oversight or commitment to transparency.
”Sections three and four really address the same subject of combating discrimination. Reading between the lines however, the comments could serve two goals related to libra. First, they focus on some of the positive changes Facebook has made recently, including the establishment of a civil rights task force, which could leave a good taste in congress members mouths while so much negative news about Facebook fills the headlines.
Second, the groups of people typically addressed in these civil rights campaigns, women and other underrepresented groups, are among the same people Facebook has publicly identified as its target users for the cryptocurrency: the under-banked.
The conclusion is largely aimed at reiterating Facebook’s previously stated intention of not launching without regulatory support, which in increasingly looking like a tough sell. As of early last week there were 21 bills relating to blockchain in various stages of passing through congressional review.
But on Friday, October 19, three new bills were introduced aimed at undermining Facebook’s efforts. An updated version of the “Keeping Big Tech Out of Finance Act,” appears to be largely aimed at keeping Facebook away from cryptocurrency, according to Jason Brett, CEO of the Value Technology advocacy group.
The “Stablecoins are Securities” bill could have far-reaching implications to companies like Gemini, Circle and Coinbase, which have already created stablecoins similar to libra but backed by different assets. The “To Prohibit The Listing of Certain Securities,” appears to seek to prevent stablecoins like libra from entering the capital markets space, according to Brett.
“As Congress attempts to reign in Libra from its perceived impact to the strength of the U.S. dollar, policymakers are creating broad measures that has an impact beyond Facebook,” says Brett.
“If the three bills were actually passed, no Big Tech company could offer a cryptocurrency, all stablecoins will be treated as securities, and any company or its officers profiting from a stablecoin will face being delisted from a stock exchange.”
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Michael del Castillo
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The total transactional volume of blockchain apps (dapps) across the six major dapp-centric networks hit just $2.03 billion last quarter, down by nearly 40 percent.More troubling, just 148 dapps launched in Q3 of this year.
That’s less than the monthly average of the first half of 2019 (when 164 new ones were deployed every month).Still, over half of those transactions were related to cryptocurrency gambling, reports dapp explorer Dapp.com with its latest quarterly analysis.
The one shining light, however, is the rising popularity of decentralized finance (DeFi) dapps — particularly those that run on Ethereum.Users aren’t sticking around to use their favorite dapps
Dapp.com’s research indicates that over $525 million flowed through DeFi dapps last quarter, and 88 percent of that was processed on the Ethereum blockchain.
The firm recorded more than 500,000 new dapp users last quarter. Approximately 138,000 (27.6 percent) arrived just for DeFi, while over 170,000 (34 percent) were brought in by the allure of gambling their cryptocurrency.This made DeFi the second-largest category in terms of volume, after gambling.
The thing is, just 36 percent of users from Q2 used their dapps at least once in Q3. But, thanks to DeFi apps like MakerDAO and Nest, an influx of new users has kept Ethereum dapp activity relatively steady.“Only slightly more than 80,000 ETH holders used dapps in both Q2 and Q3,” said Dapp.com.
“But the wave of DeFi has given the best growth for Ethereum dapp users — over 310,000 new dapp users in a quarter, the highest of all time so far.”EOS users are still all about cryptocurrency gambling
User retention for rival network EOS is reportedly relatively strong. The amount of mainnet accounts and new dapp users on EOS grew slower than Ethereum and TRON last quarter, but 40 percent of previous EOS dapp users actually stuck around. To compare, just five percent of Ethereum users remained quarter-to-quarter, while 15 percent of TRON users did the same.
“Less than 220,000 new EOS accounts were created in Q3, and 80,000 EOS holders have started using dapps in Q3,” said Dapp.com.TRON stats still show its users love to gamble
According to Dapp.com, TRON added another 500,000 mainnet addresses last quarter, pushing its total to over 3.7 million, the highest of any blockchain platform that launched since 2017.
The firm also noted that TRON is still the second most popular blockchain for deploying dapps, just after Ethereum.However, just like last quarter, most of TRON‘s active dapp users, dapp transactions, and transactional dapp volume directly relates to gambling.
Eighty-six percent of TRON‘s dapp volume is gambling-specific. This makes TRON the least diverse of the major dapp-centric blockchains.
The unfortunate truth is that still, years after the most popular blockchains launched, those running dapps are primarily here to gamble away their cryptocurrency.
You can read Dapp.com’s full report here.
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Francisco Gimeno - BC Analyst Dapps are in its infancy but they should learn from the reality of Apps. There are very many Apps which have been never or scarcely used. Dapps follow the same path. And those used are mostly gambling-specific and launched either in Ethereum or EOS. Anyone thinking in launching a Dapp has to really ask themselves if it is really useful and moreover practical and fun to use for the customer, not just for the team building it or the investors which are involved in it.
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Many people have heard of blockchain technology, but few know what to make of it. Some people will tell you that it’s the next big thing, poised to disrupt almost every industry under the sun and reshape the world, affecting everything from real estate to education to the very structure of modern democracy.
Others will assert that blockchain is technically advanced and theoretically interesting, but overhyped and impractical. Many proposed uses for blockchain will remain forever implausible: Blockchain will not bring peace to the Middle East, and today’s blockchain solutions are inefficient.
But the technology is improving and the ecosystem is maturing; tomorrow’s blockchain may have a profound effect on the ways we lead our lives and conduct our businesses.It just might take a little while. Even Facebook, which have announced their own cryptocurrency, acknowledges in its white paper that problems yet remain:“As of today we do not believe that there is a proven solution that can deliver the scale, stability, and security needed to support billions of people and transactions across the globe through a permissionless network.”
Related: Libra Seen as Threat to National Currency Sovereignty, Pleads With G-7What needs to change before blockchain thrives in corporate America?
Some analysts prefer to call blockchain “distributed ledger technology,” and the name, even if it doesn’t roll off the tongue, is an accurate one. Blockchain enables businesses to create ledgers that are immutable and secure; the ramifications for payment processing, remittance transfers, supply chain tracking and digital distribution are profound.
Blockchain possesses capabilities even the most sophisticated traditional ledgers (paper or digital) do not. Smart contracts allow the trustless automation of value or data transaction when certain predefined conditions are met. In the coming years, these pieces of code may streamline and accelerate vital, but slow, economic processes like real estate transfer and insurance payments.
And they may open markets for new products that couldn’t exist today.Unfortunately, blockchain systems, despite using thousands — or even millions — of computers, have not yet solved the problem of scale. To take a familiar example, consider payments: Visa and PayPal process thousands of transactions every second, providing one-click and zero-wait payments.
Bitcoin (BTC), the world’s leading cryptocurrency, clears roughly five transactions a second, and it often takes an hour for transactions to finalize. Facebook has designed Libra to clear around 1,000 transactions a second.
That’s impressive, but it’s not enough for a firm with billions of users. Once problems of speed are solved, blockchain pioneers still need to address privacy concerns, since anyone with access to a given chain can view all of its associated data. After that, there are the legal and regulatory challenges that always accompany innovation.
Fixes to throughput, speed, privacy and regulatory compliance are all on the way. Thousands of the best developers are at work on protocols that will accelerate finality and move transactions per second into the five- or six-figure range, while permissioned blockchains will address major privacy concerns. Companies are increasingly engaging with regulators.
The United Kingdom Financial Conduct Authority earlier this year granted a license to a cryptocurrency investing firm, while regulators from groups like the Financial Action Task Force (FATF) routinely engage with blockchain firms and blockchain media.
That’s not to say that the road for regulator and business cooperation is an easy one: New technologies like blockchain force both parties to ask difficult questions. What convinces a regulator in one country or state might prove less compelling to a regulator elsewhere; we’ve already seen that some regions are more welcoming of blockchain innovation than others. Today, the world’s blockchain laws are a patchwork. Let’s hope they grow more consistent in the years to come.Different layers of blockchain
Blockchain insiders often speak of Layer 1, Layer 2, and Layer 3 technologies; each new layer builds off a previous level of technology to provide greater utility and efficiency. Much of the activity so far has been in Layer 1. What are the differences between the various layers? Transit and commerce provide a good model. Vehicles and a road network might constitute a Layer 1; Layer 2 would be a state-of-the-art logistics structure for moving goods and people on demand. Layer 3 might be an e-commerce system that relies on the Layer 2 logistics to move goods.
Blockchain needs strong solutions in all three layers, and there’s every indication that Layers 2 and 3 will blossom in the next few years. In fact, depending on how you define the term, some Layer 2 solutions have already debuted, though they are limited.
The Lightning protocol, for example, speeds up Bitcoin transactions but does not allow crucial blockchain features like smart contracts and will not work with other blockchain protocols. If Layer 2 protocols are to transform blockchain, it’s clear that protocol-agnostic tools, equally well-suited to different chains, must appear. Microsoft has stated that it anticipates Layer 2 blockchain will move the technology from the niche to the mainstream, but such success seems unlikely if systems aren’t interoperable.
Once the technology is better understood and the legal situation codified, we can expect early-adopter companies to make extensive use of blockchain. Already, major companies like Bank of America, Microsoft and JP Morgan have begun investigating blockchain, but most enterprises have remained cautious and have contributed a relatively small portion of their resources to distributed ledger technology.
Related: Libra, TON and JPMorgan Coin Compared: Are They Heroes or Villains?
The exception to this rule might be Facebook, which claims huge plans for its announced Libra cryptocurrency, but blockchain is not yet central to the social network’s value proposition and the launching itself might be postponed.
Enterprise understands the value of patience, and we’re unlikely to see mass implementation until early adopters demonstrate that blockchain saves money and opens new markets. If rapid settlement of complex transactions via smart contract becomes standard, for example, we can expect a new technological gold rush.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.Ed Felten is the Robert E. Kahn professor of computer science and public affairs at Princeton University, the founding director of Princeton's Center for Information Technology Policy, and he serves as a member of the United States Privacy and Civil Liberties Oversight Board.
In 2015–2017, he worked in President Barack Obama’s White House as Deputy United States Chief Technology Officer. He has published more than 150 papers in research literature and three books.- By Admin
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Blockchain has the potential to better navigate risks around investments. What other future applications could there be?
There's been a great deal of hype surrounding blockchain since its capabilities were first promoted to underpin and support the cryptocurrency Bitcoin over a decade ago. Billions have been invested, and indications in both the PwC 2018 and Deloitte Global Blockchain 2019 surveys suggest that the technology is increasingly becoming an area of organizational attention and focus.
While the fintech industry remains the blockchain leader, organizations in other sectors including healthcare, technology, media and telecommunications are expanding their blockchain initiatives.
According to the Deloitte 2019 survey, which polled 1,386 senior executives across the globe, 53% of respondents identified blockchain technology as a critical priority for their organization this year. Despite its prioritization, adoption is in its infancy, with just 23% of the respondents reporting the initiation of blockchain deployments.
Today In: Leadership
Still, the Deloitte survey shows that there seems to have been a shift in organizational and executive attitudes towards this technology. The question is no longer whether blockchain will work, but how companies can potentially make blockchain work for them.
This uncertainty is an issue that's becoming increasingly relevant in the family office space. There are several areas of interest and potential benefit when it comes to blockchain implementation within family offices.
Investment due diligence
Family offices are increasingly seeking direct investment opportunities for both financial and emotional reasons. These types of investments require a greater focus on due diligence which is often costly and time-consuming, slowing deal flow.
Blockchain has the potential to provide a robust solution.While it will probably not ever replace due diligence in its entirety, it can be used to automate and even share the burden amongst the investor and investee.
This potential is already being harnessed by companies who offer blockchain software as a service. The software which employs smart contracts and identity technology built on top of the blockchain framework allows startups and companies seeking funding to automate their document-based due diligence.
As a result, they're able to securely record their financial and growth data and share this with investors. Investors can then efficiently assess the credibility and potential of the company seeking investment, cutting closure times, and increasing the number of successfully closed deals.
Risk management
Immutability, automation and transparency are vital characteristics of blockchain technology. Given these, the technology's potential is not only limited to applications within financial risk management but in many other non-financial risk areas.
According to Paolo Tasca, Executive Director, UCL Centre for Blockchain Technologies, blockchain has applications in various areas of preventable, strategy-related and external risk management.
Some of which include:
1. People, processes and systems related risksWhen it comes to people, processes and systems, Tasca states that blockchain is "fit and proper to perform monitoring and risk assessment." Data loss and tampering are key risk factors within any organization.
The use of smart contracts and automated procedures employed by blockchain technology helps to reduce the necessity for human intervention in routine processes, helping to mitigate these risks.When humans must perform certain functions, blockchain can be implemented to assess and monitor the integrity of these transactions.
This is achieved by capturing and securely storing information on various tasks and operations performed by both staff and management, affording a higher level of accountability and reducing operational risk.
2. Strategy risk managementStrategy-related risks are unavoidable in the general course of business and investment. While blockchain cannot prevent these risks, when intelligently implemented, it has the potential to reduce the probability of risk materialization.
It may also assist in improving the company's ability to mitigate risk events, should they arise.
3. Compliance riskBlockchain may also be employed to reduce compliance risk. Thanks to its real-time recordkeeping abilities and the use of smart contracts, rules can be embedded into the blockchain database to monitor organizational transactions and create real-time alerts.
As a result, those involved in compliance and auditing can monitor all transactions that occur and receive any alerts for events when they occur. The implications of this are significant.
Not only can blockchain increase compliance efficiencies by reducing the delay in compliance satisfaction, but it also has the potential to stop unsanctioned transactions or those with incomplete due diligence, while notifying the relevant parties of these actions.
This transparency enables compliance to address any issues that arise quickly and effectively.From a financial point-of-view, real-time rules and audits enable the rapid identification of irregularities, offering internal auditors a more efficient way not only to detect possible fraud but also investigate transactions by employing surveillance based on predetermined rules.
All of which reduce compliance risk. Particularly relevant in Impact investments
A growing number of family offices are seeking to generate environmental and social impact along with financial returns.
Using blockchain to manage assets has several potential advantages that could benefit impact investing. These include enhanced security and traceability, greater transparency, efficiency, increased speed of transactions and reduced costs, all of which add real value when it comes to impact investing.Many impact investments involve startups and companies in developing countries. This often equates to low institutional capacity and environments which are not always conducive to trust. Blockchain, with its inherent trust-generating features, reduces the need for trust and lowers reputational risk exposure.
In terms of impact investment due diligence, measurement and verification, blockchain technology can be employed to automate and accelerate the process, which, with current models and methods is slow and expensive. The increased speed and reliability that blockchain affords means that impact creation can be used as a performance measure when managing impact investments.
The blockchain journey has only just begun, yet it is evident that this technology has numerous applications for family offices. Still, its success or failure within these organizations will come down to its implementation.
Defining business objectives and then looking at ways that blockchain can assist with these remains the differentiating factor.Follow me on Twitter or LinkedIn. Check out my website or some of my other work here.
Francois Botha
I help family offices to define their purpose and align it with their investment strategy. Starting with soft assets, we help plan for continued family involvement over... Read More-
Francisco Gimeno - BC Analyst Good article on investment strategy. The blockchain is creating new paths for this, and family offices are starting to get involved in what it is now a growing market. Money doesn't like risk. The blockchain is been seen now more and more as a safe and secure technology, and money can be invested wherever it is used.
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The price of bitcoin has recovered pretty well from lows hit late last year. But investor enthusiasm for all things crypto and blockchain remains far below peaks scaled several quarters ago.
Subscribe to the Crunchbase Daily So far in 2019, the pace of private funding for blockchain and crypto deals lags sharply behind last year.
The downward trajectory applies to both initial coin offerings and venture rounds for companies in the space.Altogether, investors have put an estimated $3.38 billion to work in initial coin offerings and private funding rounds for companies in 2019, according to Crunchbase data.
* At this pace, annual investment portends to be a fraction of the 2018 investment total of $12.86 billion. The declines come as major cryptocurrencies continue to trade well below prior peaks, although they have rebounded from last year’s lows. And new cryptocurrencies have failed to deliver breakout hits.
Out of the roughly $250 billion in total valuation for the crypto space, roughly 70 percent comes from bitcoin alone.Below, we break out numbers for both investor-backed rounds and ICOs, looking at trendlines for investment totals and round counts.Not A Popped Balloon, But Certainly A Deflated One
The current crypto and blockchain funding environment looks less like a popped bubble than a deflated one. Currencies are still trading and startups are getting funded. There’s just less money chasing the space.In the chart below, we look at total funding across both initial coin offerings and private funding rounds for crypto and blockchain-focused companies globally:
Cryptocurrencies hit their bubbliest highs around late 2017 and early 2018. That’s when bitcoin passed the $20,000 mark, and total crypto market cap peaked at around $700 billion.
Venture funding of blockchain-related startups was also on a roll around then, buoyed by bullish memes about the technology’s game-changing potential.This past December, by contrast, looks like the lowest point for the crypto space in the past couple years, with total market cap down to about $75 billion.
Crypto bears, some of whom predicted an eventual bitcoin valuation of zero, were starting to look rather prescient.Now here we are in early September, and neither the bull nor the extreme bear case appear to be winning out.VCs Still Like Blockchain, But They Like It LessIn short, blockchain is still a thing. It’s just not the thing that everyone’s talking about.
That includes venture capitalists, many of whom have been outspoken boosters of all things blockchain. As a group, they’ve been putting less money into the space of late.
So far this year, investors have put about $2 billion into rounds for companies tied to crypto and blockchain technology, not including ICOs. That’s on pace to come in well below the $4.65 billion tally for all of 2018. We have more numbers in the chart below:
Some of the most prominent VCs active in the blockchain and crypto space have been cutting back in 2019. For instance, Andreessen Horowitz participated in 14 funding rounds with an aggregate value of nearly $850 million in 2018, per Crunchbase data. So far this year, the firm has backed five deals valued at a little over $75 million.
They’re not alone. Digital Currency Group and Blockchain Capital, two of the most active investors, have also cut back sharply in deal count and aggregate value of rounds they’ve backed.It also should be noted that the numbers include companies for which crypto or blockchain is a component but not a core focus of the business.
For example, the largest crypto-related round for 2019 is a $323 million Series E for Robinhood, which offers cryptocurrencies but is best-known as a commission free stock trading app.But there have been other big rounds this year for companies more exclusively focused on crypto.
That includes a $200 million Series A for Bithumb, a South Korean crypto exchange platform, and $100 million in Series C funding for Kraken, the San Francisco-based crypto trading provider.Little Punditry For Blockchain And Crypto Slowdown
So, the data speaks pretty clearly: Blockchain and crypto-related funding is down but by no means dead after the cryptocurrency bubble popped. What’s lacking, however, is much in the way of punditry regarding why things are playing out this way.
The blockchain and crypto camps, as aforementioned, are mostly populated with extreme bulls and extreme bears. There are those who think bitcoin is the younger generation’s version of gold, and blockchain represents the most disruptive technologies in a generation. And there are those who consider crypto the mother of all scams and blockchain the most over-hyped technology ever.
One possibility, laid out by Andreessen Horowitz, is that blockchain will present disappointments in its long march to widespread viability. The firm writes:
“Blockchain computers are new types of computers where the unique capability is trust between users, developers, and the platform itself… In exchange for these new capabilities, blockchain computers trade off other capabilities such as transaction scalability.
This can lead people to dismiss them, in the same way people dismissed early smartphones because they traded off computing power and screen size for portability and new sensors.
”Personally, I’m not buying the firm’s comparison here. No one really dissed the future of smartphones, even back in the flip phone era. We just weren’t sure exactly when all the pieces – price, portability, durability, computing power, etc. – would come together in a package that warranted mass adoption.
Blockchain, by contrast, has some pretty hardcore doubters. And cryptocurrency, in particular, has some real pessimists among the world’s wealthiest, including Warren Buffet, who compares bitcoin to rat poison squared.
That said, we’re still in early innings. And for now, it looks like neither the blockchain boosters and detractors have sealed a winning case.Methodology
Crunchbase’s ICO data is not exhaustive but does capture broad trendlines for growth and contraction in ICO funding.-
Francisco Gimeno - BC Analyst All new technologies suffer from peaks and troughs. The blockchain and crypto are growing and evolving, and investors and traders are more cautious with their money. There is also a "wait and see" mood from many investors waiting for regulations which are coming from everywhere to this new sector. Overall it is a necessary step for further and better developments.
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Some crypto-criminals think jumping across blockchains covers their tracks. Big ... (technologyreview.com)By now, savvy cryptocurrency users looking to cover their tracks are well aware that Bitcoin and blockchain systems like it are far from anonymous. Law enforcement officials can trace transactions and even identify who is making them.
Some users believed they’d found a way around this. They thought investigators could only track transactions within blockchains, so they could stay anonymous by moving from one blockchain to another. A number of startups have sprung up that offer exactly this service. Well, blockchain sleuths may have this avenue covered now too.
The hypothesis used to be that criminals using Bitcoin would eventually try to cash out into fiat currency, using an exchange. In 2013, Sarah Meiklejohn, now an associate professor of cryptography and security at University College London, helped pioneer blockchain tracking methods that rely on this theory.
The details of the approach are technical, but at a high level it involves creating network maps based on the movement of coins between addresses, the strings of numbers and letters that identify every Bitcoin account on the blockchain.
“Clusters” of addresses that frequently send coins between each other can be tied to individuals (using multiple addressees is a common practice) or organizations, like exchanges.
Law enforcement officials now use similar approaches to track coins as they move between addresses and eventually to an exchange, which they can subpoena for more information.
But the cryptocurrency scene has changed dramatically since 2013, when there were very few coins besides Bitcoin. Now there are around 2,500 cryptocurrencies, and as of this writing 14 are worth north of a billion dollars.
This has given people trying to maintain their anonymity opportunities to be more creative, says Meiklejohn, whose team has published a new research paper exploring how to track users across blockchains in addition to within them.
As more crypto users grew aware that Bitcoin isn’t so private, some switched to alternative currencies that claimed to offer anonymity—most prominently Zcash, Monero, and Dash. These three networks use different privacy-enhancing technologies, but in each case, researchers have shown that it’s possible to de-anonymize users.
Anyone wanting to avoid leaving traces soon had another tool, however. Remember WannaCry? In 2017, the global ransomware attack hit hundreds of thousands of computers all over the world, making them inaccessible and demanding that their owners pay a ransom in Bitcoin to regain access.
The perpetrators then tried to launder around $143,000 worth of Bitcoin by using a service called ShapeShift to change them into Monero. ShapeShift and services like it are automated systems that allow users to convert one currency directly into another, via a minutes-long process that doesn’t require the service to ever take custody of the coins.
A user simply tells ShapeShift what currency to exchange for what: say, Bitcoin for Dogecoin. ShapeShift then provides an exchange rate and an address to which the user is to send the Bitcoin.
The user sends the Bitcoin to that address and, for a fee, gets the equivalent value back in Dogecoin. Criminals using this strategy are banking on investigators’ inability to follow the transactions anymore once they leave the original chain.
But according to the new research, their assumption is wrong.Using ShapeShift’s application programming interface (API), the researchers gathered detailed information about its users’ transactions, spanning eight different blockchains, for nearly 13 months between late 2017 and late 2018. They combined this information with previously established techniques to identify many “cross-chain” transactions.
This meant they could document both the first transaction, in which money moves from the user to ShapeShift, and the second one, on a different blockchain, in which ShapeShift sends coins to the user.
The researchers then went a step further, cataloguing distinct patterns of what could be anonymity-seeking behaviors linked to specific addresses. Besides simple “pass-throughs” to a different currency, many users engaged in what the researchers call “U-turns,” changing currencies and then immediately switching back to the original, and “roundtrips,” which are more complicated combinations of the other two.
The main take-away: given the information ShapeShift makes public via API, the service is not anonymous. “By moving from one chain to another, you’re not really doing anything more than you can do within the chains anyway,” Meiklejohn says.
It should be noted that although ShapeShift is the most popular service of this type, copycats have cropped up too, and not all offer the same level of detailed transaction information via their APIs.
Though it is still possible to track transactions across chains without using this kind of information to help link them, it’s much more difficult, says Meiklejohn.
Either way, it’s not clear that the promise of anonymity—false as it may be—is the only or main reason people use ShapeShift or similar services, she says. For instance, her team concluded that some of the behaviors they observed could have reflected traders switching back and forth between currencies in an attempt to profit from price movements.
Whoever ShapeShift’s users are, there are apparently a lot fewer now than there were before October 2018. That’s when ShapeShift made a big change to its policy: it stopped letting users trade without providing identification information, a move made to comply with anti-money-laundering regulations.
Erik Voorhees, the company’s CEO, recently said the change “essentially gutted” its customer base.
Even if users flock to copycats that don’t require personal information, though, Meiklejohn’s team's research suggests they would be wise not to assume they are anonymous.-
Francisco Gimeno - BC Analyst Safety and security in crypto doesn't mean anonymity. Money laundering regulations have to apply to crypto too. This new digital landscape is evolving to allow mass adoption and globalisation, so even if fraudsters and criminals will try to go a step ahead of authorities, new tools are developed to make sure this doesn't happen.
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Research: Binance Research: Too early to rule out Ethereum blockchain competitor... (finance.yahoo.com)Binance Research, the market research and analysis arm of Binance, has published a report on tokenization and the key factors when evaluating and developing on-chain token economies.
The World of Tokenization states that, in spite of Ethereum’s current dominance, it is too early to rule out potential competing blockchains.Ethereum has played a major role in spurring the tokenization of the blockchain universe. It is currently the most used blockchain worldwide for developers to issue new tokens.
Specifically, there are hundreds of thousands of tokens already issued on Ethereum, along with many token standards either fully developed or in progress.
Scalability constraints have, however, paved the way for competing programmable blockchains to support their own token standards, either natively or constructed, Binance Research observes.
“In the long-run, a wide variety of programmable blockchains will likely coexist if interoperability solutions across chains develop and prove to be secure and usable,” it commentsBinance Research flags up several examples of competition occuring between different blockchains, such as:- dApp availability or growing use cases: the more applications a blockchain has, the greater the value proposition is.
- Transactions and pace: the faster a blockchain is, the more appealing it generally becomes. On-chain transaction frequency also reflects the popularity of a network.
- Blockchain fees: the lower on-chain and token issuance fees are, the higher the incentives to interact within the on-chain ecosystem.
- Easiness to build: elements like a test-net, EVM-compatibility and number of smart-contract languages play a key factor in attracting users.
- Security and blockchain development: general activity on the blockchain, reflected by the number of improvement proposals or the count of developers on layer 1, is generally an accurate measure of the health of a blockchain. In addition, blockchain security remains essential with vector attacks and past attacks being focal points.
- (De)centralisation: the degree of centralisation impacts the value proposition of a chain, particularly from the perspective of potential token stakeholders.
At the same time, however, ‘impossible trade-offs’ remain, which ultimately stem from the blockchain triangle (i.e., scalability, security, and decentralisation cannot be achieved simultaneously).
“As a result, key drivers such as on-chain metrics, level of adoption, or the size of the developer pools remain as some of the core factors to consider,” according to Binance Research.
Read the full report here.
The post Binance Research: Too early to rule out Ethereum blockchain competitors appeared first on Coin Rivet.-
Francisco Gimeno - BC Analyst This Binance report on tokenisation is a must reader those involved into this topic. Ethereum continues to be the platform where most tokens are built but the necessary growth and evolution of the ecosystem will probably bring either an Ethereum.2 or other (better) platforms and protocols in the next future. Read and let us know what you think.
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Blockchain-based smart contracts were supposed to revolutionise transactions, however, use cases are hard to come by and they appear unable to meet the needs of businesses
Smart contracts are only a good as the quality of the data they receive; the well-known garbage in, garbage out conundrum.
Blockchain-based smart contracts are getting more than their fair share of attention in the media these days. There’s no shortage of ‘influencers’ in the blockchain community leaping to the technology’s praise.
Smart contracts, they say, make business deals more efficient and cut out the need for the middleman.But what exactly is a smart contract and are they all that smart?
The concept of smart contracts was first conceived by Nick Szabo, a legal scholar and cryptographer known for laying the groundwork for digital currency. Back in 1994, he had the idea that decentralised ledgers could be used as self-executable contracts.
Essentially, smart contracts are software codes that contain a set of rules which executes automatically, without a third party, if the rules of the contract are met.
Advocates of smart contracts say they enable transactions and agreements to be carried out without intermediaries such as banks and lawyers. They also make transactions traceable, transparent, and irreversible, thus reducing conflicts and increasing oversight.
Furthermore, they offer the opportunity to automate transactions.But despite all the excitement, the commercial use of blockchain-based smart contracts remains nascent with many initiatives stuck in a sort of proof-of-concept limbo.Are smart contracts ‘stupid’?
Perhaps this is because smart contracts aren’t smart enough yet. There’s a huge amount of nuanced legal and practical expertise that goes into drafting contracts in the real world that you’re never going to get from smart contracts in their current iterations.
Contracts are subject to interpretation, and a computer algorithm doesn’t have the autonomy or ability to make the necessary judgements.According to Ollie O’Donoghue, research VP at HFS Research, smart contracts are also proving difficult for enterprises to build.
He said: “You need people that understand data because smart contracts need data flows, you need developers that understand blockchain, and you need developers that understand the specific business use-case; then you need lawyers because contracts require and understanding of local legislation and regulation.Information Age’s guide on how to introduce blockchain to your enterprise in the face of the digital skills crisis. Looking at everything, from upskilling schemes and outsourcing to how CTOs can impact change in relation to how universities shape their degrees
“It’s almost like a mythical unicorn team that you need to be able to build these smart contracts. I’m not saying it’s impossible, but organisations are not doing it and why should they?
”Perhaps smart contracts have a place in more simplistic use cases. For example, smart contracts could ensure that more simple, straightforward transactions are made if certain conditions are fulfilled.
But is this anything new? Isn’t a vending machine technically doing the same thing that a smart contract promises to do? Once a vending machine confirms that you have inserted the right amount of money, it is pre-programmed to dispense your order without the need for anyone to operate it.The immutability problem
One of the common allures of smart contracts today hinges on their deployment in a decentralised blockchain. Why? Immutability. Once a smart contract is deployed, it cannot be altered by a party unilaterally.
However, while many say this is a good thing because it means the actions specified in the contract are guaranteed to take place in the precise manner it was first coded, it causes a lot of practical problems; parties are unable to make amendments to smart contracts. If there are errors in the initial code, immutability also means smart contracts cannot be rectified.
According to Cornell University Professor Ari Juels, technical mechanisms in smart contracts can overcome these hurdles.
Speaking with Capgemini, he said: “One possible approach is what we often refer to as an ‘escape hatch,’ a preprogrammed way of changing the terms of a smart contract. Ensuring that the right permissions are incorporated into the escape hatch itself is tricky, though, as is ensuring its correct implementation.”Can they be trusted?
When smart contracts first came into prominence, one of the most talked-about benefits was around the trust they would bring to transactions. But according to O’Donoghue, smart contracts are only a good as the quality of the data they receive; the well-known garbage in, garbage out conundrum.
He explained: “Traditionally, when you bought eggs in a shop and the package said free-range, you just had to trust it was true because there was no other information available.
As we know, with news like the horse meat scandal, supply chains are pretty murky, and suppliers lie. Smart contracts were going to be the solution according to blockchain evangelists because you could lock all the information down in the code.
Consumers would be able to scan an egg packet with their mobile and confirm it comes from a free-range farm and see the chickens having a wonderful time.
“The problem is that you can defraud that really quickly because it relies on the data being put in to be true. All a supplier has to do is just say they’re a free-range farm; all they’re doing is building a network of trust with rubbish information.”Security issues
To top things off blockchain-based smart contracts posses inherent risks, such as vulnerabilities in the code which can be exploited by malicious hackers.
In 2017, Parity’s smart contract for multi-signature wallets was breached by a hacker which resulted in the loss of 513,774.16 ethers from 587 wallets, as well as additional tokens (back then that was about $152 million).
Just a few months earlier, a bug in an earlier version of the same wallet allowed hackers to snatch roughly 150,000 ethers. Shortly before that, a Canadian exchange accidentally trapped $13 million in its own broken smart contract.
Perhaps one day smart contracts will reach a point where they can truly upend the status quo. CTOs looking to utilise blockchain-based smart contracts right now should be very careful in adoption. Assessing technical maturity is a vital component of a successful deployment of any shiny new piece of tech.- By Admin
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Download the full 108 PDF Report here:
https://institute.global/sites/default/files/articles/Adapting-to-the-4IR-Africa-s-development-in-the-age-of-automation.pdf
FOREWORD FROM TONY BLAIR
The rate of technological change is the defining characteristic of
our generation. Its impact on work, labour, how people live, our
social and political interactions, have all been and are being
transformed by the digital revolution.
This change is likely to be a net good for the world. But progress
is not always smooth.
In the developed world this tension is playing out in the debate on
automation. New technologies have provided a wider array of
goods, at a lower cost.
They have also helped spur new industries,
creating new jobs and opportunities.
But there have also been downsides. Employment in some
industries has been eroded, often to the detriment of whole
communities.
From the American rust-belt to British ports and
industrial-towns, automation has transformed the manufacturing
process, making it far more advanced and technologically driven and far less labour intensive.
The cost has been the livelihoods of
many people, which has often been underappreciated when looking
at progress as a whole.
The impact of this revolution on Africa and other developing
countries is likely to be even more seismic.
Rapidly evolving
technologies and the astronomical proliferation of smartphones
across Africa have already changed lives on the continent and
increased aspirations, but they are also altering the development
pathways available to these countries.
Historically, manufacturing has been the development escalator
for poor countries.
Now, the labour-substitution effect of
automation threatens African economies’ ability to leverage
manufacturing for job creation, as the emerging Asian economies
did in the second half of the twentieth century.
This will drastically change the process of development, although
how is anyone’s guess.
Only one thing is for certain: success will be
premised on how African governments and their economies adapt
to technological change.
This new policy framework published by my Institute helps
African governments navigate this.
It sets out the wide plethora of
policy choices available to governments to leapfrog into the digital
era: from investments in AI-powered personalised education
platforms to address the severe gap in learning outcomes, to the
application of advanced technology to transform the continent’s
agricultural productivity.
It also offers a means by which to navigate the opportunities and
political considerations inherent in making such hard and
contentious policy decisions. Faced with multiple priorities, the
tendency of governments is to try and do too much, often to the
detriment of the truly urgent issues.
But no government can implement everything; hard policy
choices and trade-offs have to be made. And if understanding this is
essential, so too is the need to be adaptive. Expectations are often
stratospheric for leaders first coming in to office. Yet these often
come into conflict with a government’s capacity to deliver
This was true for me coming into office, and it is perhaps even
more so for the leaders we work with today. The challenges they
face are far more complex, and nowhere is this more acute than in
Africa.
Not only is government delivery hard in a low-capacity
environment, but the policy choices to be made are no longer clear.
The ‘rule-book’ for manufacturing-led development is becoming
obsolete.
Being adaptive doesn’t mean leaving development pathways to
chance; governments must create the policy space to allow
innovation to flourish.
They must be clear on their goals for
inclusive growth, and then step back to allow actors across the
economy to innovate, creating a learning ecosystem through which
they can identify successes and be prepared to shore up investment
to back emergent ‘winners’ across the economy.
A digital framework to identify and open up these opportunities
will be an essential first step.
Furthermore, African economies on their own are by and large
not big enough to attract significant investment, as compared to
the markets of China, India or the US.
As such, African countries
should unite to create a digital single market in which to generate
the opportunities entrepreneurs and investors need to stimulate
innovation.
Such a big hurdle, however, cannot be grappled by Africa alone.
All the opportunities that the digital revolution represents are
premised on super-fast, reliable and affordable connectivity.
African
economies cannot shoulder this investment by themselves. It
requires the financial heft of the multilateral investment community
in collaboration with the leading global tech innovators to find
viable solutions to connect the bottom three billion, many of whom
are in Africa, by 2025.
This does not necessarily mean laying fibre optics everywhere to
the last mile. To start, we need dialogue between multilateral
investors and Big Tech to work out how those still unconnected can
be best served, drawing on frontier models of financing with the
most innovative forms of connectivity
Kenya’s Minister of Information, Communications and
Technology, Joe Mucheru, sets out some of the challenges and
questions that many African governments are asking today around
this question in his foreword to this report.
As he writes, a growing
youth population has different aspirations today – and as Africa’s
population is likely to double by 2050, dwarfing Europe 3.5 times
over, these desires are almost certain to increase with it.
His government and many others we work with, including those
of Ethiopia, Rwanda, Ghana and Togo, are pressing on with reforms
to make their countries prosper in the digital era. Yet it is for all of
us – African governments, multilateral investment actors and the
international tech community – to ensure that the fruits of this are
shared.
My Institute’s recommendations are the first steps towards
that goal.
FOREWORD FROM JOE MUCHERU
Africa is characterized by a fast-growing, youthful, rapidly
urbanizing and extremely well-connected population whose
aspirations and expectations have been set by their wide exposure
to global media.
Our people expect technology to improve the quality of their
lives and their economic participation, and it already is.
Mobile
money transfers have revolutionized the banking sector; farmers
can now get more and better produce because of farming and
weather apps while children are having their curriculum delivered
through digital devices.
However, every indication and fear has been that as technology
moves into the job space and automation of blue-collar work
becomes mainstreamed, that low-skill repetitive jobs will become
extinct and the very nature of work will be transformed.
What are the changes to expect? Are these expectations wellfounded? What are their scope and scale? How do we prepare our
countries for this emerging revolution? What does it mean for
developing economy countries and how can we change our lot? Is
winter coming?
Crystal gazing is a notoriously parlous, uncertain and error-prone
profession. In this insightful monograph, Kartik and Georgina give a
reasoned prognostication of the future and the options to shape it.
They anticipate how some of the changes may play out and what it
means for Africa.
The changes that are anticipated require a whole-of-society
response - the government can set policy direction and control, to
some extent, the incentives that drive the private sector, but each
player in the national ecosystem needs to understand the
parameters.
The traditional economic factors - money, machines,
manpower, materials, and markets all need to adapt to the new
environment.
The fact that change is coming, cannot be gainsaid - it always has
and always will - how we react to change determines the fate of our
peoples and nations.
If Africa is to participate meaningfully in the
global economy of the future, outside of its traditional role as a
resource extraction continent and market, then governments and
corporations need to re-assess the priority of their investments.
This analysis of the factors, nature, and levers in the hands of
governments and corporations is worth a close and thoughtful look.
The confluence of climate change and the fourth industrial
revolution mean that the geographic, economic, technical and
social environments are transforming simultaneously. This is either a
boon or a bane for developing countries.
The rapid transformation of so much, all at once, can lead to
analysis paralysis. It is necessary to skillfully, knowledgeably and
carefully navigate this new emergent terrain.
The seismic changes that portend on the horizon due to the rapid
evolution of the technical environment cause forward-thinking
policymakers concern.
The advance of artificial intelligence and
machine learning, the adoption of blockchain, and the manifest
automation of jobs, the advent of 3D printing and additive
manufacturing, nanotechnology, and the logistical impact of selfdriving cars mean that the very structure of society will change.
This paper provides a preliminary framework for thinking through
these challenges.
Hon. Joe Mucheru,
EGH
Cabinet Secretary
Ministry of Information,
Communications and Technology
KENYA
EXECUTIVE SUMMARY
The Fourth Industrial Revolution (4IR) is upending the nature of
work as we know it. Policymakers are struggling to grapple with this
future in the West, but for African countries—and developing
countries generally—the outlook appears even more bleak.
Advancing technology will narrow the traditional route to
economic transformation through manufacturing.
This is a matter
of when, not if—many of these jobs as we know them will be
displaced.
Yet tech will transform Africa too, offering new avenues to
leapfrog the old systems of the West.
To achieve this, African
governments, the international community and the tech community
must come together to harness the power of the 4IR. If this does
not happen now, a new tech inequality will further entrench the gap
between the developed and developing world.
KEY FINDINGS
• Automation in manufacturing presents a threat to labour. The
nature of manufacturing is changing in ways that may diminish
opportunities to move low-capacity, low-productivity labour into
more productive sectors and activities at scale. Automation is
not only reshaping the structure of Western economies, but is
also threatening Africa’s ability to emulate the development
pathway of earlier industrialisers.
• Automation’s impact on Africa poses a challenge to the West.
Africa’s development and population trajectory could blow
Europe’s current migration crisis out of the water. If migration
continues to be thwarted without many productive jobs
emerging in Africa, increased insecurity and instability are likely
to prevail across the region.
The threats that automation poses
to inclusive growth in Africa must be understood in this context,
to see why the West has as much of a stake in promoting
economic prosperity in Africa as Africans themselves.
• Automation will offer opportunities for development, too.
Despite the impact of automation on manufacturing, 4IR
technologies will offer diverse ways to overcome social
EXECUTIVE SUMMARY
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challenges and fuel economic growth. The use of sensors, big
data and machine learning could transform Africa’s agricultural
productivity, releasing labour for more productive use. Artificial
intelligence applied to personalised learning platforms could
transform literacy and numeracy outcomes, which have been
plagued by poor learning outcomes despite increases in
enrolment.
POLICY OPTIONS AND RECOMMENDATIONS
Embracing vs Managing Automation
African governments face two sets of policy choices:
• Governments can embrace automation and the opportunities of
4IR technologies. If they do, a plethora of policy opportunities
are available, from health and education to more decentralised
models of advanced manufacturing and technologically
enhanced service-sector development.
Governments can also
make complementary investments to prepare for the future
economy, such as reorienting education around high-end
cognitive and non-cognitive skills.
• Alternatively, governments can manage the impact of
automation by focusing on traditional pathways for
development, specifically manufacturing. For countries with the
right endowments—such as abundant cheap labour and low-cost
inputs that can rival Asian markets—this policy choice may be
the optimum one for the near future.
However, countries on this
industrialisation path should not ignore the opportunities that
the future economy will offer, and should simultaneously invest
in alternative pathways for growth and development.
These policy choices are not mutually exclusive.
Each country
must make its own choices based on its unique economic,
demographic and political conditions and development plans.
An Adaptive Policy Environment
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As the pathways to economic transformation are currently
unknown, experimentation will be key.
This will require a shift in
government: adaptability will be king, and governments must
become directors of improvisation and innovation. To do this,
African governments should:
• Set a clear overarching policy goal. Based on a shared vision of
inclusive growth which all actors—firms, entrepreneurs, local
government, bureaucrats and civil society—can support.
• Encourage variation and not be constrained by planning. All
actors in the system must understand the parameters of reform
and be encouraged to experiment in pursuit of the overarching
policy goal.
Where policies are reversible (and most are),
governments should be biased towards action, making a range of
policy decisions so that successes can balance failures, and
provide political cover for them.
• Establish a learning ecosystem. As innovation occurs,
governments must be able to identify successes in response to
policy goals. Current investments in detailed policy design and
planning should be redirected into a learning ecosystem that
fosters experimentation and empowers actors to solve problems
from the bottom up.
A Call to Arms: Investment in the Foundations for Technological
Innovation
All opportunities to embrace automation require super-fast,
reliable and affordable connectivity, available to the bottom three
billion, many of whom reside in Africa. African governments – and
governments of other low income countries – cannot shoulder this
investment alone.
The urgency of this investment cannot be
stressed enough if Africa is not to be left behind. The international
community must stand and invest together—traditional donors and
global tech giants alike. To do so, they should jointly:
• Explore innovative financing arrangements, and experiment
with emergent technology.
This could take the form of a global
commitment to ensure the bottom three billion have reliable
and fast access to the internet by 2025, overcoming Africa’s
fundamental barrier to future prosperity.
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The 4IR era will require African governments to apply a digital
lens to their socio-economic development strategies.
Without this,
low-income countries may find themselves unprepared for the
challenges that 4IR poses to traditional structural transformation
strategies and miss the key opportunities it offers. African
governments should:
• Develop their own digital framework to support development
plans. This framework should ensure that digitally enabled
opportunities are not just accounted for, but underpin all
economic development strategies.
African markets on their own are not big enough to attract
significant investment away from larger markets such as India, the
US or China. Consequently, African governments should:
• Unite to create a digital single market. Whether championed by
one government or tabled at the African Union, a digital single
market will offer more attractive opportunities for domestic and
international entrepreneurs and investors than individual
countries alone.
Appropriate External Support
Adaptive policymaking requires a new type of external support.
External actors must understand where they can be most impactful
and avoid areas where they are not.
Tech firms, entrepreneurial corporates and impact funds should:
• Engage in policies that require experimentation. Organisations
with ‘fail-fast’ mindsets and innovation in their DNA are best
placed to tackle challenges with no proven solutions, especially
where technology is part of the proposed solution.
Traditional donors should:
• Engage in policies requiring systemic change if they can
commit for long periods of time. This includes policies that
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require change across an entire system involving many actors,
such as teachers across a school network.
Traditional donors
with experience of engaging with developing country
governments, and with reporting cycles that allow long-term
engagement, should focus their efforts here.
• Be astute and cautious when engaging in politically complex
policy areas. External engagement in policies that are politically
contentious should be avoided until an opening for change
emerges domestically.
This applies to all external actors, but
traditional donors, with strong links to local actors on the
ground, may be best placed to advise when this is the case.
If
anything, traditional donors can offer political cover for
domestic reformers in these policy areas.
The 4IR does not mean the end of development. It means a more
innovative and experimental journey for policymakers and
governments, who will have to let go of detailed planning and be
prepared to try things, learn and adapt.
The path to the future
economy is there, but governments will have to take that first step....
Download the full 108 PDF Report here:
https://institute.global/sites/default/files/articles/Adapting-to-the-4IR-Africa-s-development-in-the-age-of-automation.pdf
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Francisco Gimeno - BC Analyst The African continent is ripe for the 4th IR arrival. The disruption and transformation brought by it in Africa will be of epic proportions. However, "Africa is not a country". The continent has to prepare for what is already coming, beyond individual countries, strengthening continental unity and social/economic reforms in order to be really successful. This pdf is a must for African leaders, influencers and anyone who is working for a new Africa.
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SimplyVital Health Inc. was assessed no fine by the Securities and Exchange Commission to settle an enforcement action alleging that it engaged in an unlawful securities offering without registering the securities when it offered and sold digital tokens to raise funds for a new venture in 2017 and 2018.
The firm consented to a cease-and-desist order and agreed never to violate any US securities registration requirement again.
According to the SEC, during the relevant time, SimplyVital sought to develop a blockchain-based system – Health Nexus – through which healthcare providers could share patient data. To accomplish this, it organized a sale of a proposed new digital token know as Health Cash or HLTH – which ultimately would be used as the currency on Health Nexus.
Although SimplyVital planned for a pre-sale of HLTH solely to so-called “accredited investors” relying on an exemption from registration (click here to access information regarding Regulation D), the company did not take “reasonable steps” to verify that purchasers were appropriately qualified, claimed the SEC.
Moreover, the SEC said that SimplyVital expressly solicited investors through general solicitations “including through internet postings and direct communications with US persons”.However, after being contacted by SEC staff, SimplyVital determined not to generate any HLTH tokens and returned “substantially” all funds claimed by investors as a result of their initial investment.
The SEC said this represented “substantially” all of SimplyVital’s assets.In other legal and regulatory developments involving cryptoassets:- Major Cryptocurrency Exchange Cited for Misleading Ads by UK Overseer of Advertising Standards: The Advertising Standards Association – the UK’s independent regulator of advertising – upheld complaints against HDR Global Trading Ltd. (BitMEX) for allegedly running a newspaper advertisement that it concluded was misleading. The regulator said that the advertisement overstated the profit potential of bitcoin without referencing the risks of investing in the digital asset. ASA stated that the advertisement – which appeared on January 3, 2019 – could not run again in its same form and that, going forward, financial information included in advertisements by BitMEX must be understandable and adequately address risks. No fine was assessed. BitMEX claimed that the advertisement was not a promotion for investing in bitcoin, but instead was published as a commemoration of the 10th anniversary of the mining of the first bitcoin block.
- NYDFS Designates Bakkt as Limited Liability Trust Company; ICE Futures U.S. Schedules Physically Deliverable Bitcoin Futures Launch to Begin September 23: Bakkt Trust Company LLC was granted a charter to operate as a New York State limited liability trust company. In connection with this authority, Bakkt will be authorized to provide custody services for bitcoin in connection with the launch of potentially physically settled bitcoin futures contracts listed on ICE Futures U.S. and cleared through ICE Clear U.S., both Bakkt affiliates. According to NYDFS, Bakkt will service institutional customers. Separately, IFUS announced it will launch trading in its Bakkt Bitcoin Monthly and Daily futures contracts beginning September 23, 2019.
Additionally, Eris Clearing LLC was recently approved by the CFTC as the first derivatives clearing organization authorized to clear fully collateralized virtual currency futures contracts; it intends to offer the clearing of bitcoin futures contracts traded on its affiliate Eris Exchange LLC (together, branded as ErisX) beginning later in 2019. (Click here for further background in the article “CFTC Approves New Clearing House as First Derivatives Clearing Organization for Fully Collateralized, Deliverable Virtual Currency Futures” in the July 7, 2019 version of Bridging the Week.)Legal Weeds:
To date, the SEC has treated gingerly firms that engaged in what it considered unregistered digital securities offerings, provided no fraud was involved, and the entities returned raised funds to investors among other remedial measures.In addition to its settlement with SimplyVital Health, earlier this year, the SEC settled charges again Gladius NetworkLLC alleging that the firm’s initial coin offering of GLA tokens intended to be used as the currency for a blockchain-enabled cybersecurity service constituted an offering of unregistered securities in violation of applicable law.
Although Gladius’s Terms and Conditions of Token Sale expressly noted that GLA tokens were “not being structured or sold as securities or any other form of investment product,” the SEC said that the firm’s principals and agents discussed the prospects for investment returns from GLA tokens on various social media; Gladius took steps to have GLA tokens traded on significant digital asset trading venues; and Gladius pronounced after the ICO that it entered into a “partnership” to list GLA tokens on “one of the top cryptocurrency exchanges in the world.
” As a result, said the SEC, purchasers of GLA tokens “would have reasonably expected that they could obtain a future profit from GLA [t]okens if the entrepreneurial and managerial efforts of Gladius’s founders, employees and agents succeeded” regardless of whether they ever used the Gladius service.
The SEC did not charge that Gladius committed any fraud in connection with its ICO.To resolve the SEC’s allegations, Gladius agreed to register GLA tokens as a class of security and compensate investors, among other undertakings.
However, the SEC imposed no fine on Gladius because of the firm’s remedial steps, including its self-reporting of a possible securities law violation and cooperation with SEC staff. (Click here to access the Gladius settlement order.)
In November 2018, the SEC filed and settled two enforcement actions against issuers of ICOs – Carrier EQ Inc. d/b/a/ AirFox and Paragon Coin, Inc. – for violating securities registration requirements.
These cases represented the first time the SEC assessed fines in connection with a non-fraudulent ICO.
At the same time it published the AirFox and Paragon settlement orders, the SEC’s Divisions of Corporation Finance, Investment Management and Trading and Markets issued a “Statement of Digital Asset Securities Issuance and Trading” that, among other things, noted that the two settlements provided an express “path to compliance” for prior issuers of unregistered or not lawfully exempt cryptosecurities. (Click here for background regarding the SEC’s Divisions’ statement as well as the Air Fox and Paragon settlements in the article “SEC Assesses Penalties for Non-Fraudulent Initial Coin Offerings and Requires Registration; Issues Advisory on Issuance and Trading of Cryptosecurities” in the November 18, 2018 edition of Bridging the Week.)-
Francisco Gimeno - BC Analyst This is a call or attention. The Wild West era for ICOs and IEOs is mostly over in USA and Europe. Regulators are balancing the need for the blockchain and crypto market to grow and develop but also protecting the investors and customers from any possible abuse or fraud. Investors see this and are asking new ICOs and IEOs or STOs for SEC approval in USA or other regulators in other parts of the world.