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Posted 29 Sep 2017 | 15:00 GMT
By MORGEN E. PECK


According to a study released this July by Juniper Research, more than half the world’s largest companies are now researching blockchain technologies with the goal of integrating them into their products.

Projects are already under way that will disrupt the management of health care records, property titles, supply chains, and even our online identities. But before we remount the entire digital ecosystem on blockchain technology, it would be wise to take stock of what makes the approach unique and what costs are associated with it.

Blockchain technology is, in essence, a novel way to manage data. As such, it competes with the data-management systems we already have. Relational databases, which orient information in updatable tables of columns and rows, are the technical foundation of many services we use today. Decades of market exposure and well-funded research by companies like Oracle Corp. have expanded the functionality and hardened the security of relational databases.

However, they suffer from one major constraint: They put the task of storing and updating entries in the hands of one or a few entities, whom you have to trust won’t mess with the data or get hacked.

Blockchains, as an alternative, improve upon this architecture in one specific way—by removing the need for a trusted authority.

With public blockchains like Bitcoin and Ethereum, a group of anonymous strangers (and their computers) can work together to store, curate, and secure a perpetually growing set of data without anyone having to trust anyone else. Because blockchains are replicated across a peer-to-peer network, the information they contain is very difficult to corrupt or extinguish.

This feature alone is enough to justify using a blockchain if the intended service is the kind that attracts censors. A version of Facebook built on a public blockchain, for example, would be incapable of censoring posts before they appeared in users’ feeds, a feature that Facebook reportedly had under development while the company was courting the Chinese government in 2016.

I Want a Blockchain!


Do you really need a blockchain? Asking yourself a handful of the questions in this interactive can set you on the right path to an answer. You’ll note that there are more reasons not to use a blockchain than there are reasons to do so.

And if you do choose a blockchain, be ready for slower transaction speeds.However, removing the need for trust comes with limitations. Public blockchains are slower and less private than traditional databases, precisely because they have to coordinate the resources of multiple unaffiliated participants.

To import data onto them, users often pay transaction fees in amounts that are constantly changing and therefore difficult to predict. And the long-term status of the software is unpredictable as well. Just as no one person or company manages the data on a public blockchain, no one entity updates the software.

Rather, a whole community of developers contributes to the open-source code in a process that, in Bitcoin at least, lacks formal governance.Given the costs and uncertainties of public blockchains, they’re not the answer to every problem.

“If you don’t mind putting someone in charge of a database…then there’s no point using a blockchain, because [the blockchain] is just a more inefficient version of what you would otherwise do,” says Gideon Greenspan, the CEO of Coin Sciences, a company that builds technologies on top of both public and permissioned blockchains.

With this one rule, you can mow down quite a few blockchain fantasies. Online voting, for example, has inspired many well-intentioned blockchain developers, but it probably does not stand to gain much from the technology.

“I find myself debunking a blockchain voting effort about every few weeks,” says Josh Benaloh, the senior cryptographer at Microsoft Research. “It feels like a very good fit for voting, until you dig a couple millimeters below the surface.

”Benaloh points out that tallying votes on a blockchain doesn’t obviate the need for a central authority.

Election officials will still take the role of creating ballots and authenticating voters. And if you trust them to do that, there’s no reason why they shouldn’t also record votes.The headaches caused by open blockchains—the price volatility, low throughput, poor privacy, and lack of governance—can be alleviated, in part, by tweaking the structure of the technology, specifically by opting for a variation called a permissioned ledger.

“I find myself debunking a blockchain voting effort about every few weeks”—Josh Benaloh, Microsoft ResearchIn a permissioned ledger, you avoid having to worry about trusting people, and you still get to keep some of the benefits of blockchain technology.

The software restricts who can amend the database to a set of known entities. This one alteration removes the economic component from a blockchain. In a public blockchain, miners (the parties adding new data to the blockchain) neither know nor trust one another.

But they behave well because they are paid for their work.By contrast, in a permissioned blockchain, the people adding data follow the rules not because they are getting paid but because other people in the network, who know their identities, hold them accountable.

Removing miners also improves the speed and data-storage capacity of a blockchain. In a public network, a new version of the blockchain is not considered final until it has spread and received the approval of multiple peers. That limits how big new blocks can be, because bigger blocks would take longer to get around.

As of July, Bitcoin can handle a maximum of 7 transactions per second. Ethereum tops out at around 20 transactions per second.When blocks are added by fewer, known entities, they can hold more data without slowing things down or threatening the security of the blockchain.

Greenspan of Coin Sciences claims that MultiChain, one of his company’s permissioned blockchain products, is capable of processing 1,000 transactions per second.

But even this pales in comparison with the peak throughput of credit card transactions handled by Visa—an amount The Washington Post reports as being 10 times that number.As the name perhaps suggests, permissioned ledgers also enable more privacy than public blockchains.

The software restricts who can access a permissioned blockchain, and therefore who can see it. It’s not a perfect solution; you’re still revealing your data to those within the network. You wouldn’t, for example, want to run a permissioned blockchain with your competitors and use it to track information that gives away trade secrets.

But permissioned blockchains may enable applications where data needs to be shielded only from the public at large.“If you are willing for the activity on the ledger to be visible to the participants but not to the outside world, then your privacy problem is solved,” says Greenspan.Finally, using a permissioned blockchain solves the problem of governance.

Bitcoin is a perfect demonstration of the risks that come with building on top of an open-source blockchain project. For two years, the developers and miners in Bitcoin have waged a political battle over how to scale up the system.

This summer, the sparring went so far that one faction split off to form its own version of Bitcoin. The fight demonstrated that it’s impossible to say with any certainty what Bitcoin will look like in the next month, year, or decade—or even who will decide that.

And the same goes for every public blockchain.With permissioned ledgers, you know who’s in charge. The people who update the blockchain are the same people who update the code. How those updates are made depends on what governance structure the participants in the blockchain collectively agree to.

Public blockchains are a tremendous improvement on traditional databases if the things you worry most about are censorship and universal access. Under those circumstances, it might just be worth it to build on a technology that sacrifices cost, speed, privacy, and predictability.

And if that sacrifice isn’t worth it, a more limited version of Satoshi Nakamoto’s original blockchain may balance out your needs. But you should also consider the possibility that you don’t need a blockchain at all.

Discover even more in depth reports about the blockchain on Spectrum IEEE here: https://spectrum.ieee.org/computing/networks/do-you-need-a-blockchain

If you dropped by Starbucks (SBUX, -1.47%) for a free cup of coffee on National Coffee Day, you would instead have been greeted by signs
about the company's supply chain, ethical sourcing commitments, and support for coffee farmers.

(Starbucks didn't dole out goodies this year; for free joe, better head to Dunkin' Donuts, Krispy Kreme, Cinnabon, Tim Horton's, or another participating coffee shop.)

Rather than being handed freebies, customers were invited to pause and consider the global economy of the caffeinated bean, one of the world's most valuable agricultural products from the tropics.

Most of the world's coffee is grown by small farmers, many of whom depend on family labor and unreliable income—often less than $2 a day, the World Bank says. In fact, 25 million of these farmers produce an astounding four-fifth's of the world's total coffee supply, according to the UK non-profit Fairtrade Foundation.


Now there's a tech startup that wants to change the economics. Bext360, a year-old Denver-based company, is applying technology, like robots, mobile apps, and blockchains—the shared accounting ledger technology that paved the way for Bitcoin's rise—in order to, as it says, "improve the upstream supply chains of key commodities," starting with coffee.

It works like this. The firm builds big, sensor-laden machines to sort, weigh, and assess the quality of each coffee cherry plucked on a plantation. The devices analyze and grade the fruit based on its condition (riper, larger cherries generally fetch a higher price).

The resulting data—weight, grade, and other specs—are made visible to buyers who then bid on the beans."We're trying to provide more and more data at the farm level to make it more like the wine industry," says Daniel Jones, CEO of Bext360. He wants farmers to get paid "not only on quantity but on quality of yield," he says."People are willing to pay more for good coffee," Jones notes.

All of this coffee information—from provenance to purchasers to payouts—are recorded on a blockchain in Bext's system. The ledger is designed to help keep down overhead costs—replacing paper carbon copies and other inefficient record-keeping methods—while making the financials easier to audit.If one batch of beans ends up producing a superior, specialty coffee, farmers can potentially get compensated for it.

The blockchain that Bext360 is using was built by Stellar, a financial tech venture founded by Jed McCaleb, an entrepreneur whose previous crypto projects have included the ill-fated Mt. Gox Bitcoin exchange (he sold it years before the multimillion dollar hack) and the inter-bank cryptocurrency network Ripple.

By tying coffee to crypto tokens minted on Stellar, Bext360 says it is able to conduct cheap, instant cross-border trades, an important advantage for such a global industry.

"There are a lot of these stages in the process and the original farmer doesn’t capture the additional value added to the beans," McCaleb tells Fortune,describing traditional coffee commerce. With Bext360, he says, "farmers can get a higher value for higher quality coffee beans, rather than one fixed bulk price.

"Bext360 intends to host an "initial coin offering," or ICO, a controversial crypto-based funding mechanism for its "coffee tokens" in December or January, Jones says. The company has so far tested its machines in California this summer and it plans to set up a trial in Uganda in October.

Eventually, Jones hopes to use the blockchain to close the loop between cultivators and consumers. "We envision providing people with a link to see the origins of their coffee and the ability to tip the farmer—that’s the ultimate goal," he says.

Get Data Sheet, Fortune’s technology newsletterFor Bext360, coffee isn't a bad place to start, since demand for... continue reading: http://fortune.com/2017/09/29/national-coffee-day-starbucks-blockchain/

This month, Morgan Stanley issued a report in which it performed an analysis of the cryptocurrency ecosystem. Researchers at the Morgan Stanley Decrypted!

A Crypto/Blockchain Teach-in sought answers to gain a better understanding of the underlying features of various iterations of blockchaintechnology, as well as the cryptocurrencies that inhabit those ecosystems.

The researchers identified four big takeaways from the teach-in: the pace of development in the cryptospace is "mind boggling," seasoned players are ready to face challenges and are "self-aware of opportunities," platforms still must undergo a great deal of development before going mainstream, and incumbent investors will seek to "retain their moat.

"An analysis of Bitcoin versus Ethereum blockchains pointed out the pliability of executable distributed code contracts as well as the Ethereum blockchain's ability to create a means of broad-spectrum consensus, whereas Bitcoin is only a balance of accounts. Research was also performed on Ripple and its remittance solutions suite....continue reading on Ethnews: https://www.ethnews.com/morgan-stanley-report-analyzes-blockchain-based-currencies-and-industry

By David Trilling


Bitcoin is no longer just for geeks in obscure corners of the internet. Today you can use the digital currency to fly to Britain, buy an apartment and enroll in the London Sushi Workshop. Fans like its libertarian footing, how it dodges government control and how – especially in this privacy-challenged era – it boosts anonymity.

But some detractors blast bitcoin and other cryptocurrencies as a “fraud,” while others argue that they fuel cybercrime.Unlike the American dollar or British pound – which are guaranteed by central banks that set interest ratesand print currency, stabilizing their value – bitcoin is decentralized.

No one controls it. In part for that reason, its value has yo-yoed wildly.

After more than quadrupling against the dollar between January and August 2017, bitcoin fell by a third in the first two weeks of September. Some blamed a crackdown on digital currencies in China and the “fraud” comments from J.P. Morgan Chase CEO Jamie Dimon, who comparedbitcoin to the Dutch tulip bubble of the 17th century.

Yet as Fortune magazine noted, bitcoin meltdowns have been a regular feature of its brief lifetime.This volatility makes it unlikely bitcoin (or another cryptocurrency, such as ethereum) will become an effective store of value (like gold) or a unit of account (like the dollar) anytime soon. You wouldn’t want to be paid in bitcoin, since your real (i.e., dollar-denominated) salary would fluctuate all over the place.

And you wouldn’t want to spend bitcoin today if you think it’d be worth a lot more tomorrow.In this explainer, we discuss what makes bitcoin different from the old-fashioned greenback and why some governments are trying to ban it. We describe how the blockchain technology behind the system could revolutionize many other industries.

And we look at how a bitcoin outgrowth known as initial coin offerings (ICOs) is testing regulators.How bitcoin worksAny bitcoin transaction – let’s say between a buyer (me) and a seller (the London Sushi Workshop) – creates a unique digital code that is stored in an online, open ledger known as a blockchain.

Everyone has access to the blockchain, but no one can see who those buyers and sellers are unless they wish to be identified. Each has a unique, pseudonymous address for the transaction.





The London Sushi Workshop’s balance, which has grown because I paid my tuition, is a series of codes, also known as personal keys. The sushi school can keep them in “cold storage” – offline on something like a USB stick – or print them out. Or the school can keep them in something called a “wallet,” which is run by an online third party and, just like your physical wallet, can be stolen (or in this case hacked).

When the London Sushi Workshop wants to convert bitcoins to dollars or pounds, it can make the transaction through an online exchange (also third parties, which have likewise been hacked, resulting in losses for individuals) and transfer the cash to a bank account.This decentralization puts bitcoin beyond the reach of regulators, but also creates risks.

Third parties in the “wallet” or “exchange” businesses do not offer the kind of insurance you get at a bank. And, like with cash, if you print your bitcoin codes and stash them under your bed, you run the risk of losing all in a fire or robbery.

Blockchain and miningAn anonymous programmer calling himself Satoshi Nakamoto introduced bitcoin in a 2008 paper. The widely cited paper may be best remembered for something else, though: Nakamoto also introduced the first working blockchain, the technology underpinning bitcoin.

Blockchain is an online ledger of all transactions that’s available for anyone to view and copy, but that no one individual controls. Instead, it lives on many computers, where it is constantly updating itself. This decentralization and openness ensure a transaction can’t be faked – because that transaction wouldn’t appear on all the other copies of the ledger.

If one copy of the ledger does not match the rest, that copy will stand out. Thus blockchain is sometimes called a “distributed ledger” or “distributed ledger technology” (including by J.P. Morgan Chase, which is researching how to use it).For the bitcoin blockchain, powerful computer networks called “miners” validate the most recent transfers, ensuring someone doesn’t send money they don’t have.

These miners’ computers compete with one another to verify and then lock the transfers onto the ledger, where they never can be changed, adding a new block of confirmed transactions about every 10 minutes.

As an incentive for constantly checking and verifying bitcoin transactions, the miner that succeeds in creating a new block is rewarded in new bitcoins that he has created. These days, the reward is 12.5 bitcoins and there are about 16.5 million bitcoins in circulation (worth, as of this writing, about $65 billion in U.S. dollars). By design, the reward drops by half about every four years until, sometime a few decades from now, the miners have created 21 million bitcoins.

The creator artificially capped bitcoin at that number, ensuring the currency cannot be debased by oversupply; the coins can, of course, be divided into smaller and smaller units.Because the database is distributed across such a broad network, hacking it would require enormous computing power. Any would-be fraudsters with that much computing muscle would find it more profitable to mine the blockchain and create new bitcoins.

The blockchain solves the “double-spending problem” that plagued earlier cryptocurrencies, whereby someone could spend the same money in two places (or counterfeit it). Today, sending the same bitcoins to two different sellers would create a “fork” in the blockchain, immediately rendering one of the transactions invalid.

Likewise, it’s not possible to alter a transaction record. To go back and change a link in the chain, you’d have to change all the links that follow. That would require more computer power than all the computers that are managing the blockchain put together. The altered chain wouldn’t match; it would be a clear counterfeit.

These days, miners often work with specialized computer farms that use loads of electricity; sometimes they share resources to form “mining pools.” You could run a mining application in the background of your work computer, but it likely wouldn’t net you anything besides a slower computer.

(Check out this Quartz feature on a farm using subsidized, coal-powered electricity in China, which is home to 58 percent of the world’s major mining pools, according to a University of Cambridge study; the U.S., the second-largest host, has 16 percent.)  

The promise of blockchain

Some researchers see blockchain as having revolutionary applications beyond bitcoin, such as trading stocks, safely storing data and managing supply chains, all without a middleman. It is a “foundational” technology, argues a 2017 paper by two Harvard Business School professors, with the potential – perhaps in decades – to render accountants, traders and even contract lawyers superfluous.

Blockchain “has the potential to become the system of record for all transactions. If that happens, the economy will once again undergo a radical shift, as new, blockchain-based sources of influence and control emerge.”Initial coin offeringsA new trend in cryptocurrencies is the “initial coin offering,” or ICO.

ICOs raised $2.2 billion in the first nine months of 2017, according to one industry estimate. These are not bitcoins, but essentially a new digital currency used to fund a specific product.ICOs work like this: A company raises capital by selling virtual coins or tokens. Perhaps these coins could be used later to participate in the project, or they offer some other future reward.

But they do not offer the same rights demanded by a venture capitalist or shareholder. Indeed, though they sound suspiciously similar, an ICO is not an IPO – initial public offering (which is when a company begins selling shares to the public and becomes listed somewhere like the New York Stock Exchange).

Rather, an ICO happens well outside the regulated banking industry.The Securities and Exchange Commission (SEC) – the regulator of U.S. financial assets – has warned investors that some ICOs may constitute fraud, and that some coins may in fact function like securities and need to be regulated as such.

Canada’s securities regulator has issued a similar statement.Government responseGovernments don’t like bitcoin much. Its anonymity allows users to operate in the shadows, sell narcotics, capitalize on ransomware (software that hijacks a computer until the owner pays a ransom in a cryptocurrency) and maybe, some fear, finance terrorists.

Plus, there are tax implications. In most countries, citizens are required to pay taxes on earnings. But the taxman can’t peer into your bitcoin holdings the way he can look at your Bank of America statement (though, by law, Americans are required to pay taxes on bitcoin profits).

And finally, cryptocurrencies undermine government authority. North Korea may be using bitcoin to evade sanctions.

In September 2017, China took steps to ban cryptocurrency transactions shortly after banning new ICOs. After both announcements, bitcoin’s value tumbled.

Bitcoin supporters argue that the community can regulate itself. But Tim Swanson, a scholar of cryptocurrencies at the Singapore University of Social Sciences, wrote on his blog in September 2017 that the idea the cryptocurrency community can police itself ignores its users’ self-interested motivations.

Some users, trying to drum up demand, discount the threat posed by hackers (who exploit weaknesses in third-party systems used to store bitcoin). Others lobby against regulations because “much of the original bitcoin infrastructure was set up and co-opted by bitcoiners themselves, some of whom were bad actors from day one.

”A cat-and-mouse game between regulators and bitcoiners seems likely to occupy both communities, as well as scholars and governments, for the foreseeable future. Proposals for an outright ban are unlikely to end the conversation, since, to work, any ban would require harsh punishments, says a 2017 paper in the Journal of Economic Behavior and Organization.One potential solution is for governments to issue their own cryptocurrencies.

A September 2017 reportfrom the Bank for International Settlements – the Basel-based arbiter for central banks – describes some projects in the works. Sweden, for example, is thinking about using blockchain technology in some of its central bank’s currency-trading infrastructure.

In America, some have proposed “Fedcoin” as a government-backed crypto-dollar. Though Fedcoin may attract users, it is unlikely, suggests one American central banker, to satisfy diehard bitcoiners.

Other resourcesBecause there is no official organization or bank behind bitcoin, this explainer referenced a number of community forums for data, such as bitcoin.org and the Bitcoin Foundation, which the Washington Post once described as the “closest thing the anarchic bitcoin community has to an official public face.

”The Initiative for Cryptocurrencies and Contracts at Cornell University publishes some of the most cutting-edge research.This blogpost by freeCodeCamp is a fun and easy-to-follow bitcoin explanation.Oh and, by the way, the bitcoin blockchain occasionally splits. Fortune explains. Fortune’s blockchain reporter, Jeff John Roberts, also has an intriguing look at what happens to your bitcoins when you die.

A good overview of bitcoin, who uses it, who mines it and where, is this 2017 paper from the University of Cambridge Center for Alternative Finance.Selected studies:

• On bitcoin volatility:
  • Bitcoin is up to 30 times more volatile than the dollar;
  • How mining and economics affect bitcoin’s price;
  • “Bitcoin is a poor hedge and is suitable for diversification purposes only.”

• On security:
  • Bitcoin exchanges would be safer if they demonstrated solvency;
  • Cryptocurrencies like bitcoin risk routing attacks;
  • What would be needed to trace a bitcoin transaction.

• On blockchain:
  • Using blockchain to manage inventories;
  • Some blockchain security concerns;
  • Which industries and companies could benefit and be hurt by the technology.

Last updated: September 28, 2017  We welcome feedback. Please contact us here. 


A project of the Harvard Kennedy School's Shorenstein Center and the Carnegie-Knight Initiative, Journalist’s Resource is an open-access site that curates scholarly studies and reports.

Delaware is on the forefront of Corporate law. The most recent example happened on July 21 of this year, when Delaware Governor John Carney signed Senate Bill 69 into law which amended sections of the Delaware General Corporate Law (DGCL) to include blockchain (also known as “shared ledger”) amendments, giving legal efficacy to digital distributed ledgers.

This new record-keeping technology is used for tracking owners of a business. Likewise, it could be adopted to benefit people who manage multiple businesses or assets through a Series LLC.

Blockchain, within the definition of the law, is a technology that encrypts and replicates data across an array of servers to make the records more reliable than traditional cloud or single location based servers.

The data can only be modified when there is a consensus among all servers in the blockchain that a transaction occurred. A blockchain is a “self-auditing” network with no central authority approving the transactions.

 Therefore, blockchain networks are more redundant than traditional servers, leading to safer and more reliable record-keeping.The new legislation, which applies to the stock ledgers of Delaware corporations, raises the question of how blockchain could be applied to other non-corporate organizations to document their ownership, management, and even internal record keeping and bookkeeping. In particular, blockchain technology would allow the Series LLCs to maintain better asset records.

A Series LLC is a revolutionary type of LLC that allows assets to be segregated and compartmentalized. Traditionally, separation required forming multiple brother-sister entities. For some applications where multiple LLCs are not an economically affordable solution, the Series LLC may provide similar protection within a singular LLC structure.

The Series LLC allows for internal firewalls to segregate protected series under the LLC. A Series LLC is permitted to create and maintain an unlimited number of protected series with rules governing the establishment of each protected series written in its Series LLC Operating Agreement. The Delaware LLC Act (Title 6 Del. C. Section 18-215) recognizes each protected series as a separate person in the eyes of the law.

That means each protected series can have its own unique set of members, managers, assets, liabilities, and purpose. Some consider it superior to forming just one traditional LLC. In some situations, a Series LLC may be considered as analternative to forming multiple LLCs if the assets held are passive, low risk, and insured, such as real estate holdings.

The Delaware Series LLC internal asset protection is more vulnerable to attack by a creditor without archival records of current affairs and historical asset information. To minimize the allegations of either comingling or allegations of conspiring in mischief to move assets like a shell game from creditors, having a record of assets on the blockchain would be enormously helpful.

The current popular method of maintaining records in Microsoft Excel or an application, such as QuickBooks, is vulnerable to creditor accusations of manipulation.The immutable record provided by blockchain-verified transactions allows the Series LLC to be more defensible if the blockchain retains data on:

1. How assets were acquired;

2. From whom assets were acquired;

3. How much was paid for assets;

4. How assets were disposed of or transferred.

Blockchain ledgers could also be applied to the record-keeping of Series LLC ownership.This technology would enable managers to keep an iron-clad record of all issuances and transfers of member interests in the Series LLC.

 Because the records are encrypted, the member names, addresses and contact information would not be accessible outside of the company, nor would the intended asset ledgers be accessible outside the company without a private cryptographic key.

Courts and judges are tasked with weighing evidence presented by lawyers to determine which facts are more likely true than not. Blockchain records could help defendants prevail in cases by presenting to judges evidence that is more reliable than any other record-keeping evidence ever previously available.

These records would be extremely probative when determining whether a manager had shifted assets from one protected series to another to hide assets from a creditor or when and how many interests are owned by a member at any given time for various purposes such as ownership disputes.

This type of blockchain record may prevent a dispute in the first place or help resolve a dispute before trial because so little evidence issues would remain in dispute for a trier of fact to decide.

Although the new Delaware blockchain legislation seems to focus on express rules for digital stock ledgers and who has access to the data, it opens the door for “the creation and maintenance of corporate records…” in the blockchain. Extending this idea to Series LLCs means an LLC Operating Agreement and the agreements of the individual protected series could be authenticated by and recorded with a blockchain system.

In the future, it may be best practice for all members and managers of Series LLCs to use Blockchain, the most reliable technology available to maintain important entity records free from the accusation of retroactive manipulation.

About the author John Legaré Williams, Esquire practices business law through The Williams Law Firm, P.A. (www.TrustWilliams.com).

He is also President of Agents and Corporations, Inc. (www.IncNow.com), a family owned and operated incorporation service that provides filing and registered agent services in Delaware to business owners from around the world.

Nationally, Mr. Williams is a frequent speaker nationally on the topic of Delaware LLCs and in particular the Delaware Series LLC, the most cutting-edge entity on the market.

Discover more : http://www.delawarebusinesstimes.com/future-blockchain-blockchain-ledgers-help-protect-assets-within...

As Bitcoin and other cryptocurrencies have been on fire for a large portion of 2017, focus has turned to blockchain, the underlying technology that powers these digital currencies. But blockchain technology has many more potential use cases and applications other than just serving as the fuel behind Bitcoin.

Below, BI Intelligence, Business Insider's premium research service, has outlined those applications across finance, business, government, and other industries.

Blockchain Use Cases in Banking & Finance

International Payments

Blockchain technology is simple to understand at its roots. Basically, the tech exists as a shared database filled with entries that must be confirmed and encrypted. It's helpful to envision it as a strongly encrypted and verified shared Google Document, in which each entry in the sheet depends on a logical relationship to all its predecessors.

Blockchain provides a way to securely and efficiently create a tamper-proof log of sensitive activity.This makes it excellent for international payments and money transfers. Julio Faura, Banco Santander's head of R&D and innovation, told BI Intelligence that the bank is particularly interested in the potential of the technology in the payments space. 

That's because as a large commercial bank, Santander has numerous retail clients who would benefit from more efficient and cheaper payments, particularly in the area of international transfers. Blockchain technology can be used to decrease the cost of these transfers by reducing the need for banks to manually settle transactions.

And while that's something Santander isn't able to deliver using existing payment rails, it could potentially do so using a blockchain-based system, according to Faura.

Capital Markets

Banco Santander also sees potential for blockchain-based systems to improve capital markets, but Faura pointed out these solutions would be far more complex than those in the payments space. Therefore, they would take much longer to develop.

Credit Suisse, too, is focused on use cases for blockchain in capital markets and corporate banking.And money is already starting to flow into this space. Startup Axioni, which builds blockchain-based solutions for capital markets, won investment from JPMorgan in December 2016.

Trade Finance

Barclays conducted one of the first blockchain-based trade finance deals with live customers in September 2016, using a system developed in partnership with Israeli fintech Wave. The transaction was a letter of credit — a document that guarantees that the seller will be paid, and that the buyer will not have to make a payment until the goods are received. 

Executing a letter of credit is usually a slow, paper-based process, but Barclays' system was able to execute a deal in four hours that would usually take a week to complete. The letter guaranteed the export of $100,000 worth of agricultural products from Irish cooperative Ornua to the Seychelles Trading Company. 

This could prove very significant, as the global trade finance sector is worth an estimated $10 trillion per year. Historic methods of trade financing are a major pain point for businesses. That's because the slow processes involved interrupt business and make liquidity hard to manage. Barclays' successful transaction shows how blockchain could streamline trade finance deals, and highlights a concrete use case for the technology in financial services. 

Regulatory Compliance and Audit

The extremely secure nature of blockchain makes it rather useful for accounting and audit because it significantly decreases the possibility of errors and ensures the integrity of the records. On top of this, no one can alter the account records once they are locked in using blockchain tech, not even the record owners.

The trade off here is that blockchain tech could ultimately eliminate the need for auditors and erase jobs.

Money Laundering Protection

Once again, the encryption that is so integral to blockchain makes it exceedingly helpful in combating money laundering. The underlying technology empowers record keeping, which supports "Know Your Customer (KYC)," the process through which a business identifies and verifies the identity of its clients.





App Store

Insurance

Arguably the greatest blockchain application for insurance is through smart contracts. Such contracts powered by blockchain could allow customers and insurers to manage claims in a truly transparent and secure manner, according to Deloitte.

All contracts and claims could be recorded on the blockchain and validated by the network, which would eliminate invalid claims. For example, the blockchain would reject multiple claims on the same accident.

Peer-to-Peer Transactions

P2P payment services such as Venmo are terrific, but they have limits. Some services restrict transactions based on geography. Others charge a fee for their use. And many are vulnerable to hackers, which is not appealing for customers who are putting their personal financial information out there. Blockchain technology, with all its aforementioned benefits, could fix these problems.

Blockchain Applications in Business

Supply Chain Management

Blockchain's immutable ledger makes it well suited to tasks such as tracking goods as they move and change hands in the supply chain. Using a blockchain opens up several options for companies transporting these goods. 

Entries on a blockchain can be used to queue up events with a supply chain (allocating goods newly arrived at a port to different shipping containers, for example). Blockchain provides a new and dynamic means of organizing tracking data and putting it to use.

Companies like Skuchain and Factom offer solutions that utilize blockchain in supply chain management solutions.

Healthcare

Health data that's suitable for blockchain would include general information like age, gender, and potentially basic medical history data like immunization history or vital signs. None of this should be able to identify any particular patient, which is what allows it to be stored on a shared blockchain that can be accessed by numerous individuals without undue privacy concerns.

As specialized connected medical devices become more common and increasingly linked to a person’s health record, blockchain can connect those devices with that record. Devices will be able to store the data that they generate on a health care blockchain that can append that data to a person’s medical record.

A key issue facing connected medical devices is the siloing of the data they generate — blockchain can be the link that bridges those silos.




Sherwood CC/Flickr

Real Estate

The average homeowner sells his or her home every five to seven years, and the average person will move nearly 12 times during his or her lifetime. With such movement, blockchain could certainly be of use in the real estate market. It would expedite home sales by quickly verifying finances, would reduce fraud thanks to its encryption, and would offer transparency throughout the entire selling and purchasing process.

Media

Media companies have already started to adopt blockchain technology. In July, blockchain content distribution platform Decent announced the launch of Publiq, which allows writers and other content creators to spread their works via blockchain and receive immediate payment.

And Comcast’s advanced advertising group developed a new technology that allows companies to make ad buys on both broadcast and over-the-top TV through blockchain technology.

Energy

Blockchain technology could be used to execute energy supply transactions, but it could further provide the basis for metering, billing, and clearing processes, according to PWC. Other potential applications include documenting ownership, asset management, origin guarantees, emission allowances, and renewable energy certificates.

Blockchain Applications in Government

Record Management

National, state, and local governments are responsible for maintaining individuals' records such as birth and death dates, marital status, or property transfers. Yet managing this data can be difficult, and to this day some of these records only exist in paper form.

And sometimes, citizens have to physically go to their local government offices to make changes, which is time-consuming, unnecessary, and frustrating. Blockchain technology can simplify this record keeping and make them far more secure.

Identity Management

Proponents of using blockchain tech for identity management claim that with enough information on the blockchain, people would only need to provide the bare minimum (date of birth, for example) to prove their identities.




Voters check in to cast their ballots during voting in the 2016 presidential election in San DiegoThomson Reuters

Voting

Pete Martin, the CEO of mobile voting platform Votem, said the following to Government Technologyabout blockchain's application in voting:

"Blockchain technology provides all of the characteristics you would want in a platform that is arguably the most important part of a democratic society; it’s fault-tolerant, you cannot change the past, you cannot hack the present, you cannot alter the access to the system, every node with access can see the exact same results, and every vote can be irrefutably traced to its source without sacrificing a voter's vote anonymity.

End to end verifiable voting systems will give the voter the ability to verify if their vote is correctly recorded and correctly counted, for instance, if a ballot is missing, in transit or modified, it can even be detected by the voter and caught before the election is over."

Taxes

Blockchain tech could make the cumbersome process of filing taxes, which is prone to human error, much more efficient with enough information stored on the blockchain.

Non-Profit Agencies

Recent polls indicated that public trust in charities is at a record low. But the blockchain could solve that problem through transparency by showing donors that NPOs are in fact using their money as intended. Furthermore, blockchain tech could help those NPOs distribute those funds more efficiently, manage their resources better, and enhance their tracking capabilities.

Legislation/Compliance/Regulatory Oversight

Earlier this year, Irish Funds, Deloitte, Northern Trust and State Street partnered on a project to determine how blockchain could enhance regulatory reporting through what they called "RegChain.

" The proof of concept captured transactions, managed reporting with smart contracts capability, and enhanced compliance. According to the trial, the result was increased transparency and secure data storage.

Blockchain Applications in Other Industries

Financial Management/Accounting

If the blockchain is truly as secure as it has shown itself to be in the last several years, then such impenetrable security would be tantalizing for customers.

Shareholder Voting

Nasdaq conducted a trial in 2016 in which it partnered with blockchain startup Chain to develop a system in which digital assets indicated voting rights. Nasdaq, which considered the trial a success, described the system as follows:

"The system uses the blockchain in the traditional way to record the ownership of securities as reported by the CSD. Based on those holdings, the system also issues voting right assets and voting token assets for each shareholder. A user may spend voting tokens to cast their votes on each meeting agenda item if they also own the voting right asset."

Record Management

As stated earlier, the encryption that is central to blockchain makes it quite useful for record management because it prevents duplicates, fraudulent entries, and the like.





A lock icon, signifying an encrypted Internet connection, is seen on an Internet Explorer browser in a photo illustration in Paris April 15, 2014. Reuters/Mal Langsdon

Cybersecurity

The biggest advantage for blockchain in cybersecurity is that removes the risk of a single point of failure. Blockchain tech also provides end-to-end encryption and privacy.

Big Data

The immutable nature of blockchain, and the fact that every computer on the network is continually verifying the information stored on it, makes blockchain an excellent tool for storing big data.

Data Storage

The same principles for big data apply to data storage, as well.

Internet of Things (IoT)

Blockchain is poised to transform practices in a number of IoT sectors, including:

• The supply chain: Tracking the location of goods as they are shipped, and ensuring that they stay within specified conditions.
• Asset tracking: Monitoring assets and machinery to record activity and output as an alternative to cloud solutions.
• Health care: Enabling logging and sharing of medical data between numerous stakeholders with versatile permissioning, directly holding some data while offering encrypted links to other information.

More to Learn

The technological potential of blockchain is immense, and its uses will only grow with time. That's why BI Intelligence has put together two detailed reports on the blockchain: 

The Blockchain in the IoT Report and The Blockchain in Banking Report.

To get the full report, subscribe to an All-Access pass to BI Intelligence and gain immediate access to this report and more than 250 other expertly researched reports.

As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> 

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You can also purchase and download the full reports from our research store:   >> Blockchain in the IoT                           
>> Blockchain in Banking

In the current era of Blockchain evolution a new concept has emerged: tokenization. Tokenization is an intrinsic part of the Blockchain technology that serves the purpose of platform identification and accessibility.

The power of tokens

Every Blockchain platform is powered by tokens, sometimes also referred to as “coins.” Bitcoin is a token, as is Litecoin, Dash, and other currencies that function over a Blockchain. While tokens can represent money, as in the case of the above, they can also represent other things.

The demand for a particular Blockchain product is usually the main determinant of the value and eventual market price of its token. This is why there is a variation in the prices of different altcoins in the Blockchain environment.

For example, Bitcoin is more readily accepted by merchants than Litecoin, and is consequently more valuable.

The force behind Ethereum

Ethereum, despite coming after many older altcoins, remains the third most valuable cryptocurrency in existence behind only Bitcoin and the its recent fork, Bitcoin Cash.Ethereum’s value is largely determined by the demand for its platform by distributed application (dApp) developers.

Many of these developers issue tokens to grant access to their services, essentially building their own Blockchains atop Ethereum’s platform. In many cases, developers pre-sale their tokens as part of an initial coin offering (ICO), and they usually accept Ethereum’s token “ether” as payment.

In essence, the organic value of a given token or cryptocurrency is determined not just by the functionality, but the demand for its Blockchain product.

Blockchains and their tokens

There are numerous Blockchain products in existence claiming to offer different solutions to various problems. Many more are still in the development. Below are some examples of Blockchain products and what they do:

Steemit

Steemit is a social network that rewards users who participate in various ways. The Steemit token is called STEEM. It is used to reward content creators and curators of the best content on the site.

Dash

Dash, which stands for “Digital Cash,” is a fork of Bitcoin that is fine-tuned for more privacy and instant transactions. The platform’s token is called DASH. Dash is also self-funded through its own Blockchain (a portion of mining rewards fund the currency’s development) and features a working governance model.

ZCash

The token for Zcash is called ZEC. ZCash is a cryptocurrency that grew out of the Zerocoin project which aims to improve anonymity for Bitcoin users.

 Zcash payments are published on a public Blockchain, but users are able to use an optional privacy features to conceal the sender, recipient, and amount being transacted....continue reading: https://cointelegraph.com/news/tokenization-the-force-behind-blockchain-technology