joins

Who is really buying blockchain, who are the decision makers in businesses, enterprises and organizations?

Charlotte Dunlap, Technology Analyst at leading data and analytics company GlobalData, believes platform services providers are poised to dominate in the emerging blockchain industry, even as large enterprises and organizations continue to explore the practical applications of the decentralized ledger to enhance existing systems, or serve as a foundation for new ones.

“Developers are doing the most innovation, which follows on the Devops movement,” Dunlap said. “They understand the value of platforms, and platforms-as-a-service provided by the same large tech companies they are already working with to build competitive applications.

Using templates or embedded technologies to build smart contacts, for example, they are also leveraging APIs which provide the fastest way to connect and integrate.

”Dunlap, who has authored several notes on blockchain for enterprise, called out Applications Lifecycle Management (ALM) as a key trend, along with open standards being introduced and advanced by organizations like Linux Foundation’s Hyperledger project.

“None of us can predict how this will all shake out; the adoption and growth of blockchain will be a gradual process,” Dunlap said. “For the very high value applications, including sharing sensitive data between organizations, including through APIs, everybody has to be on board for federated blockchain communities to grow and eventually – potentially – replace legacy data exchange and management systems.

”In one of the reports published by GlobalData, Dunlap wrote “Businesses will come to realize that blockchain is a technology play and solution providers with expertise in infrastructure and platform technologies are most likely to successfully capitalize on this new market opportunity.

In particular, organizations are looking to application platforms giants such as IBM, Oracle, SAP and Microsoft, with their ability to gain traction through tens of thousands of customers in disparate industries.

”Dunlap also wrote, “These public cloud platform providers are actively building blockchain into their respective PaaS (Platform-as-a-Service) offerings, not only as an additional blockchain network service but also as a foundational platform capability; eventually these services will support and interoperate with line of business products.

Further, blockchain will be a future enabler of Internet of Things (IoT) efficiency, scalability, security and cost management and a facilitator of IoT applications such as supply chain track-and-trace. Software and equipment vendors and service providers are likely enterprise suppliers.

”Dunlap has followed and written about disruptive enterprise technologies through her career as a top global analyst and was drawn into covering blockchain as the next movement in improving digital systems, by providing better tools and more automation, with more efficient authentication contributing to securing data integrity, critical to multi-cloud, multi-app, multi-counterparty use cases.

“Initially we will see platform providers offer blockchain tools and frameworks to help application developers create smart contracts in which they can not only capture data but act on that data and attach rules to it so, for example, only appropriate parties may view documents,” Dunlap wrote.

“Consider the possibility of information on products and supply chains being able to reach customers and partners, weeks earlier than previously allowed through traditional business processes. Imagine the effect such efficiencies could have on businesses in terms of visibility, validation and ensuring accuracy.

”Dunlap, like other industry observers, sees supply chains as one of the most obvious opportunities for blockchain applications.

“Many in the industry have concluded that the current methodology for tracking and transporting goods and manually creating and maintaining legal contracts is broken,” she wrote.

“Therefore, computer leaders such as IBM, Microsoft, Oracle and others have stepped up technology investments in the past 18 months, largely through R&D labs and participation in open source software bodies including the Linux Foundation’s Hyperledger project, which is a series of OSS blockchain tools and solutions.

This activity alone is critical because, as participating vendors like to say, ‘Blockchain is a team sport’, because distributed ledgers are built out of a collaborative effort by multiple parties, so everyone has to be on board with the same methodology.

”Dunlap sees the buying decisions by enterprises for blockchain solutions coming from business unit owners, CIOs and more visionary IT leaders who are the ones ultimately responsible for systems integration and management.

“We’re moving from a phase of uncertainty and confusion to serious explorations within organizations who now see blockchain as a fundamentally more efficient way to do things,” Dunlap said. “As blockchain as a technology becomes more clearly defined away from applications like cryptocurrencies, which have been volatile, the practical benefits are starting to become more evident.”


Edited by Ken Briodagh




Author InfoCynthia S. ArtinContributing Writer
 Click here to read full bio

By On Yavin


Corruption creeps into everything. While the blockchain revolution was started with grand ideas of decentralization and privacy, its growing popularity has led to unsavory elements looking for ways to corrupt it for their own means. The ICO industry is an especially popular target for bad behavior.

Some people are just out for the money and the blockchain is a convenient tool for them; from fraudulent ICOs to advisors and rating agencies accepting payment to promote projects without doing basic due diligence. We’re here today to shine a light on some of the worst offenders and call for more vigilance and better behavior going forward.

Let’s dive into the rabbit hole…

The case of Cremit

My research team was analyzing Cremit’s ICO and found disturbing problems, as can be seen here. These issues are not even the worst part. When my head of research approached the advisors of Cremit, he received the following response to his questions:





Mr. Vladimir Nikitin is considered to be one of ICOBench’s top experts! How can a crypto expert allow himself to join the advisory team of an ICO without doing proper due diligence on the team?When my head of research approached another advisor, this was the response he received:





His team allowed him? He has been added as an advisor to ICO without even researching the ICO and the team himself? Tell me this is some kind of joke!ICO advisors – you have a responsibility to the blockchain and the crypto community.

You can’t keep joining ICO teams just because they pay you to do so! You should be joining teams because you believe that they have potential and you want to see them grow and succeed.

Still, the answers from these alleged top experts were better than what my head of research received when he tried to reach out to the rest of the team, including Cremit’s alleged CTO, marketer, developer, as well as a third ICOBench advisor.

None of these individuals could be bothered to respond. As of publishing, we’ve received no response from any of them. You can see here how multiple attempts to contact their brand manager and one of their developers went unanswered.

What are the ICO rating sites saying?

Now let’s continue to the ICO rating websites out there. While my research team was analyzing the ICO mentioned at the beginning of this blog post, they discovered the following:





ICO rating websites – stop assigning higher ratings to the projects that pay you. Doing so greatly impacts our industry in a negative way. If you can’t put in the effort to properly and professionally review ICOs before rating them, it’s better that you go offline rather than hand out fraudulent ratings. 

ICOBench continues to disappoint

I wish I could say that falsely inflated ratings were the only problems my team found on ICOBench in the course of their research. They found failures to provide accurate information about ICOs and failures to catch obvious scams. Let’s look at a couple examples.





For Ink Labs Foundation, ICOBench listed the wrong exchanges. As seen in the images above, CVProof’s coin is available on these two exchanges. Our research and discussions with members of the community suggest that this is an issue with ICOBench’s methods of collecting exchange data.


In order to save time, ICOBench uses a bot to crawl the various exchanges to see which ones are offering a coin with the ICO’s symbol. The problem arises when the ICO has chosen a symbol that matches one that is already in existence.

An easy example of this is the ICO BitChord. They chose BCD as the symbol for their token; however, BCD is already in use for Bitcoin Diamond, which would lead a bot to believe that any token offering Bitcoin Diamond is actually offering BitChord.

While this is a good reminder for ICOs to make sure that they’re choosing a unique identifier for their token, it also highlights the importance of not over-relying on automation. It’s one thing to have a bot crawl the exchanges to save you the time of manually checking them yourself, but there should still be some human oversight.

Before this information is added to an ICO listing, it should be checked and confirmed to avoid such mistakes. I would suggest taking an extra step in cases like BitChord/Bitcoin Diamond, such as making notes of tokens with identical or similar symbols; in this way, we will be able to avoid investor confusion.


More concerning than this issue, however, is the instance of Veio, where ICOBench failed to spot an obvious scam.Some scams are difficult to see coming. Some broadside experts who should know better. Some, like Veio, think they can fleece investors by creating a team populated entirely by stock photos.





It’s ridiculously easy to investigate this; just do a Google image search and you can trace an ICO team member’s photo back to its source. This isn’t the only example of scams making use of stock photos or other people’s social media profile pictures to create a team out of thin air.

We’re not sure how much longer ICOs will try to use this easy-to-spot method, but in the meantime, there’s no excuse for rating sites not to do this quick and easy research into the identities of the projects they’re rating.While ICOBench did eventually catch on to the fact that Veio was a scam, for a time this ICO was listed on their site with a 3.5 rating.





ICO ratings should never be done for payment. ICO rating websites need take extreme measurements to avoid corruption. Don’t get me wrong – I am not against profiting financially, but there are red lines that should never be crossed. Paying for advertisement, including premium listings, is fine and is a common practice.


To build brand awareness and exposure you need to pay for your marketing efforts. However, paying for ratings is completely different and doing so is misleading ICO investors, especially the inexperienced ones. The crypto industry has enough problems with world governments and banks, we don’t need to add to these issues by perpetuating the reputation that the industry is filled with scams and fraud.

We need to do everything we can to protect ICO investors so that the industry will continue to grow and continue to change our lives for the better.

The community has had enough!

I’m not the only whistleblower! A quick tour of the crypto experts on LinkedIn will turn up many others directly calling out ICOBench, fraudulent raters, and the pay-to-play mentality rearing its ugly head in the crypto community.





Hosam Mazawi called this issue out back in April, pointing out a couple of blatant examples of ICOBench advisors giving a scam a good rating, only to hastily revise their ratings when other, more vigilant sites spotted the truth.I enjoyed Hosam’s article so much that I reached out to him for his opinion about Cremit. He provided this insightful quote:

It doesn’t make sense to see ICO’s rated 4.9/5 or 9/10, when you compare them to ethereum ICO.Let’s assume that ethereum is 10/10, now compare every other single ICO to ethereum as benchmark, what rating would you give Cremit ICO with their “top star” ICO bench advisors?

 


Steven J. Bodnar spells it out clearly. “Web crawling does not equal due diligence.” It takes actual research to provide ratings of any value, and this combination of slap-dash effort and bribery is pulling the entire industry down into the mud.






Bruno Skvorc seems to believe that the writing is on the wall for ICOBench. He doesn’t think that they are going to be able to recover from this damage to their reputation, especially not since so many experts refuse to be associated with them, as seen here:






You’ve got to respect Jen Buakaew. She doesn’t pull any punches about the steamier side of the blockchain industry. She could have just stopped at ICOBench, but her other points have some real merit even if they’re outside of the scope of this blog post.





Other people seem optimistic. Sophia Ha Ho is refusing to take sides, and rightly pointing out that this is an embarrassing situation for all of us to be in. She’s holding out hope for ICOBench to turn things around, which may make her a minority in the crypto community.


In the meantime, those who still believe in the value of ICOBench’s ratings may find themselves ridiculed on social media, as happened to Zhazira Lepess, founder and CEO of ZAZA.






Getting a 4.9 out of 5 rating on a legitimate site would be something worth crowing about, but if you’re proud of your rating on ICOBench, people will be happy to drag you back down to reality. I especially like this pointed comment from Robert Herman:





A “pointless rating meaning nothing”. How much longer until it goes beyond meaning nothing? At this rate, anyone sharing their ICOBench rating may risk facing suspicion that they paid to get it.The fact that you can pay for a better ICOBench rating is an open secret, to the point where it’s no longer shocking when you hear about it.


Well, Markus Hartmann, co-founder of Alethena, might have some insight to share about that. You see, like me, Markus is concerned about the current state of ICO lists and ICO rating, so he decided to see what would happen if he tried to improve the ranking of his own ICO.There’s a lot of great stuff in Markus’s article, but this really brings it full-circle.

This needs to stop.

This behavior we have seen with ICOBench, Cremit, and others cannot continue. My team, and those who share our convictions, will continue to fight scammers. We will fight the ICO teams who believe they can fool investors and get away with it.

We will call out the corrupt ICO advisors who join projects without conducting their due diligence.We advise all crypto experts and ICO advisors to stop thinking about making a quick buck, and instead consider their own integrity and the future of the crypto community.

The blockchain can accomplish great things, but not if it’s being held back by greed and dishonesty.


Discover more from Cointelligence here: https://www.cointelligence.com/content/ico-rating-expert-corruption/

Gary Gensler, now a lecturer at MIT, says some popular cryptocurrencies should be regulated as securities.

• by Mike Orcutt
•  
• 
  
  More than 100 cryptocurrency exchanges and over 1,000 initial coin offerings are operating outside US laws meant to protect investors from fraud, says Gary Gensler, who chaired the Commodity Futures Trading Commission from 2009 to 2014. This must end before some of the most promising financial applications of blockchains can be realized, Gensler—now a lecturer at MIT and senior advisor to MIT’s Digital Currency Initiative—told the audience today at MIT Technology Review’s Business of Blockchain conference.

Even popular cryptocurrencies XRP and Ether might be securities and thus subject to relatively strict regulation, he said.
More than $10 billion has been raised via ICOs, a blockchain-based fund-raising method. But a significant fraction of these are fraudulent, and many were launched in a way that is not compliant with US securities laws established in the 1930s.

To reach its full potential “blockchain technology will need to come within the public policy framework,” Gensler said. “We’re not in very good shape right now.”Blockchain technology has a chance to lower costs, lower risks, and remove unnecessary middlemen in the global financial system, said Gensler, but “the question is: how do we move forward?

” First, what’s needed is a lot more clarity in the marketplace, he said. Regulators across the globe are scrambling to make sense of ICOs, trying to determine whether they are traditional investments like stocks and bonds—or something else that shouldn’t be subject to securities rules.

In fact, in many cases the answer is that they are both, said Gensler. If investors are buying tokens with the expectation that they will appreciate in value based on the efforts of others, that matches the traditional legal definition of a security, he said.

Related Story



What the Hell Is an Initial Coin Offering?

The ICO boom looks a lot like a bubble, but at its heart is a genuine innovation.That could spell trouble ahead for Ripple's crypto-token, called XRP. That’s because the company has so much control over XRP’s monetary policy, and because many XRP holders are hoping the token will increase in value thanks to the efforts of the company’s developers, he said.

Ethereum, the second most popular cryptocurrency network after Bitcoin, may also be a security, said Gensler, since its token was first sold in 2014, before the network actually launched. (Bitcoin, he said, does not have the features of a security.)

There are now a number of open questions for the SEC, said Gensler. Is it possible to design a so-called “utility token” that is solely about consumption, as opposed to investment? If developers sell tokens before a network launches, as a security, can it “evolve” into something other than a security after the network launches?

Cryptocurrency challenges the traditional definition of a security, and some rules may have to be “tailored” in some way, he said—“but I don’t think it means that we just exempt the whole field and say good luck to investors.”

Become an MIT Technology Review Insider for in-depth analysis and unparalleled perspective. Subscribe today 

Tagged
Ethereum, Ripple, Business of Blockchain 2018, blockchain, regulation,cryptocurrency






Mike Orcutt Associate EditorI’m an associate editor at MIT Technology Review, focusing on the world of cryptocurrencies and blockchains. My reporting, which includes a twice-weekly, blockchain-focused email newsletter, Chain Letter… More