Tag Archives: Blockchain

Blockchain: What we’ve learnt so far

As a group, we researched blockchain and identified multiple uses and functions of this groundbreaking technology. Central banks, corporations and financial institutions alike are understanding the importance of integrating this encrypted ledger. In doing so, they hope to ensure longevity by avoiding disruption.

Please enjoy the video below:

Blockchain Technology in the Next Election

The question of election rigging in the United States has now been addressed in more than one election: the 2ooo Bush v Gore presidential elections and this past presidential election and in other nations around the world, news of election rigging is all too familiar. How do we solve this, and more specifically how do we solve this problem for future generations?

To avoid rigged elections, the future is e-voting using blockchain technology. Follow My Vote is a company that is practically spearheading the innovation behind allowing voters to vote online using end to end blockchain technology whose aim is to combat electoral fraud and protect user credentials. Their goal for future elections is to have voting without endless lines, fraudulent registration practices by simply using a webcam and a government issued ID. Because of the underlying blockchain technology, the virtual electoral process assures a quick and auditable process. It guarantees real time reflection on the process and cryptography would then ensure the security of one’s vote in the blockchain enabled voting platform.

Watch the video below for a visual understanding of how Follow my Vote works:

Of course there are skeptics who are opposed to the sudden branching out into using blockchain technology in the electoral process. One of the main fears is that blockchain is not fully matured as a technology for it to handle something as sensitive as voting. The other fear is that an online platform present risks for hackers who might compromise the authenticity of the process by “interception or malware” as Jeremy Clark, a specialist in cryptographic voting systems at Concordia University, advises. Although the skepticism is rational, the underlying issues currently being addressed when operationalizing blockchain are the ones being solved constantly to make it a viable technology, not only by firms such as Follow My Vote, but by central banks and corporations alike.

The fundamental reality is that sometimes various technologies are invented to maximize profit and win wars, but other times they are actually created to transform or have the capacity to transform injustice and unfairness experienced today and in the past. Using them for good, not only in the United States but globally, is significant. Eradicating the reality of fraudulent elections means setting up a future framework for free and fair elections that enable administrations to work for the benefit of their citizens, not the corrupt.

Here’s a Ted Talk by Santiago Siri to sum it all up:

Will Central Banks Approve of Blockchain Technology?

Blockchain is the future. This statement has become a fact in recent months, and it is simply a matter of time before it is fully implemented into our financial system. The question we are faced with is simple: What will be the impact of Blockchain on Central Banks?

The argument presented by many technology websites is that Blockchain technology will free up billions of dollars for banks, in turn revolutionizing the finance industry. Financial institutions will completely change their system, a system that has been in place for over one hundred years.

Four major banks are at the forefront of the Blockchain revolution. UBS Group AG, Bank of New York Mellon Corporation, Deutsche Bank AG, and Banco Santander S.A. are teaming up in order to create a digital-only payment system that will improve trade settlements immensely.

This system will provide generous cost savings because it will allow back-office settlement systems to process trades far more rapidly than they do today. It is going to streamline the process and make it more efficient. Experts in the industry estimate that financial institutions spend over $65 billion each year to clear and settle trades.

This is where we get to Central Banks. All of these predictions about broad success and cost-savings will only work with adoption central banks. The Federal Reserve, the Bank of Canada, and the Bank of England have all launched investigations into digital currencies, questioning the security of digital currencies, and also the stability of the banking system.

If the plan succeeds, it will save billions of dollars for banks, however, for that to happen, the system would need to obtain approval from central banks.

The Dutch central bank is one that the Federal Reserve should be taking some notes from. They have begun developing an internal Blockchain prototype that they hope to launch in the next year. The Bank of England is not far behind, with the deputy governor for monetary policy, Ben Broadbent, indicating that a central bank-issued digital currency is soon to come. It will allow for the ability of banks to extend loans should consumers migrate to the digital currency. Researchers in the United Kingdom have also proposed a new cryptocurrency that the Central bank might look towards adopting. The French central bank said that distributed ledger models will replace the traditional operating mode clearinghouses.

Here you can see how the Hong Kong central bank is looking to leverage Blockchain!

One thing is sure for the future, the Central Banks will make sure to keep their leverage throughout the expansion of Blockchain.

Can Blockchain Help Solve the Refugee Crisis?

Earlier this week French officials announced that they would begin clearing out “The Jungle,” a refugee camp near the port city of Calais. More than 6,000 refugees ranging from Eritrea to South Sudan are set to be dispersed around France, many of these refugees are without proofs of citizenship and legally speaking they do not exist.

In June of 2016, The Atlantic reported that according to the United Nations High Commission for Refugees there are an estimated 60 million refugees or internally displaced people (IDPs) worldwide, the highest number since World War II.

Since 2015 over one million refugees have arrived in Europe alone. With the spread of terrorist organizations like ISIS, many Europeans fear that terrorists could be crossing the borders disguised as refugees. It is worth noting that in the aftermath of the 2015 Paris attacks a fake Syrian passport was found next to one of the assailants. Thus suspensions have been raised about migrants entering countries. Are these people who they claim to be? Where did they come from? Who is a danger and who is not?

Lack of ID creates problems for border countries, refugees, and the relief organizations attempting to help. Blockchain technology could assist in resolving all of these issues.

Identity is assigned and recognized by governments and governments only, and without a relationship to the state, you essentially are no one. Because blockchain relies on a network with no government or institutional association, it creates a decentralized data structure. Thus, who you are is no longer reliant on a relationship to a state, but rather an information contained in a trustworthy and accessible ledger.

With a distributed database a refugee could arrive in Greece, a popular destination for refugees fleeing by sea, border officials could check identity on their copy of the ledger housing the ID of a refugee. And because blockchain is almost tamper-proof, the refugee could present a far more compelling story of who they are.

Furthermore, because blockchain can handle digital assets of all sorts, relief organization and NGO’s could wire money to refugees who most likely have no money.

One firm has attempted to solve this problem Bitnation:
“BitNation, a blockchain-based Governance 2.0 initiative, is using the blockchain to help refugees in Europe. The organization’s new series of Refugee Emergency Response services allow refugees to create a digital identity, which can be used to cryptographically prove their existence and who their families are.” – Huffington Post

This is the process refugees have to face while trying to enter the U.S.

Ideally blockchain technology could ease the process for refugees attempting to enter the U.S. especially with the pledge to accept 10,000 refugees.

Blockchain can help ease political turmoil of all kinds and create a world in which a refugee, despite the collapse of their national state, can maintain their identity and dignity.

Beyond Bitcoin: Blockchain in Real Estate

With blockchains most prevalent and well known application being bitcoin, it is often initially associated with rocking the finance industry. But it is underestimated exactly how many other markets are being disrupted by this encrypted ledger and Real estate is one on the high end of this disruption with agencies and systems already taking place to support its integration. Ubiquity and The International Block Chain Real Estate Association are the first players in the property market to leverage blockchain to bring benefits to the industry. So where exactly does it all fit in?

Think of the copious amounts of paper record and book keeping that occurs every time a transaction takes place. Sometimes the property is flipped and sold before the record has even become permanent then it’s on to the next data entry on the books and online. Efficiency is brought about by the implementation of blockchain, bringing the transaction time down from months or weeks down to minutes or even seconds. Less time searching and less time documenting, the property will have closed in the deal in record time.

Intermediaries also slow down the process, in doing so charging highly for their time. Without the middleman (e.g. for this industry Escrow) there is no need to seek confirmation and approval from numerous parties because this system determines legitimate transactions. It can therefore verify them independently, rapidly reducing the time it takes to close on an estate or property and enabling the proof to be available almost immediately. It is understandable that these escrow companies are some sort of security to ensure each party holds up their end of the bargain, attempting to reduce fraud, but in removing the middleman and replacing it with one straight road to legitimate transactions a whole load of time is saved.

That leads us to our second point, proof. It is estimated that Real estate fraud is around hundreds of million dollars yearly. The system in place allowed for manipulation of documents, forged signatures and deeds being trusted to alternate parties other than those purchasing the place, even photo-shopped images of documents. A big economic view that also plays a key point in advocating block chain is the financial crisis which effectively was caused due to the housing bubble and ‘high rated credit’ loans/mortgages being sold on to the next deceived client. Block chain comes in as this safe, transparent ledger that enables every transaction to be seen and researched with all its information in one, un-manipulated place. Transparency is something which can only be beneficial when dealing with industries, with this disruption causing more symmetrical information leading to better choices for consumers and higher efficiency from vendors, an economic picture of bliss.

The use of bitcoin as digital currency in these transactions creates ‘‘smart property/contracts’.’ One article mentions Bitcoins can be used as secure digital tokens for any asset, and this is what we call smart property,”. “That’s where you take a physical piece of property, such as a car or house, and you associate it with a digital token; that’s called tokenization.” Essentially this token can then be traded as a bearer asset. This still requires some real life interaction in person to work, but none the less the technology will be at the forefront. It ties with the original idea of blockchain and its famous bitcoin currency using its ledger in financial systems, but this financial disruption can change not only regular everyday transactions and the financial industry, but now large hefty sums of money and the property being invested in and this property market.

What really is one of the major benefits with this implementation is the effect it has on developing countries and their emerging real estate markets. Better property records and effectively cheaper transactions from cutting out intermediaries can lead to the markets of these countries expanding at a great speed and connecting them in a way that makes international trade and investment much easier. Transparency plays a big part in blockchain in developing countries, especially ones where corruption is rife. An example by one article demonstrated ‘In Honduras, people were looking at using property titling with blockchain because if you have a padded envelope with the right amount of cash, you just slip it to the right politician, he goes in [and] changes a computer entry in a property database at the government that says, ‘Okay. You’re now the owner of this property,’”. It will level the ‘playing field’ so to speak for those with lower income and education to be able to access records the same as everyone else, but this decentralized system must be recognized by the state/government otherwise further problems of corruption that already existed will still take place.

The video above shows how Bitcoin itself and its ledger blockchain are already helping LEDC’S such as Ghana and their real estate markets flourish.

The mix between using the existing blockchain system and its famous bitcoin and the use of a new system will provide a great economic and social benefit. The problems lie with the corporations themselves, similar to banks, will they really want to cut out the middleman? The amount of money lost to such escrow companies and those in high positions with their secretive and lucrative deals could mean that this will be very slow to come into effect and if it does it will be controlled in some shape or form.

AI’s influence on Blockchain

Artificial Intelligence is intelligence exhibited by machines. It is a technology that continues to act as a disruptive force in the present world today, especially with the various technologies emerging from it. These technologies include autonomous vehicles, augmented and virtual reality, as well as blockchain technology. These technologies are just a few of the ones pioneered by, and continue to work hand in hand with artificial intelligence. The focus, however, is the specific impact it has on blockchain technology. Due to the nature of blockchain, artificial intelligence is embedded in order for it to work. For a digital ledger to succeed, there needs to be an active partner that  processes and authenticates users and transactions simultaneously and because AI continuously learns, it is the ideal technology necessary to supplement blockchain.

Corporations such as IBM are increasingly recognizing the importance of both blockchain and AI working simultaneously in order to achieve a more powerful optimized system. They have created ‘Industry platforms’ which are teams specialized to work on bridging the gap between the two, joining financial services and Watson artificial intelligence program to bring about a ‘blockchain powered internet of things’. “We found that there’s this interesting convergence between IBM Watson capability and the Internet of Things Foundation and we decided it would be even better if we combined the two.”- Tim Hahn, IBMs chief internet architect. Blockchain is a disruption to industries on its own but when combined with AI the impact and financial magnitude is huge. The expected revenue that could be generated from the disruption of the market and combination of both AI and blockchain was expected to be $135bn by the end of 2015. With this, the connection of devices as a result is predicted to reach as high as 20.8bn by the year 2020. Hahn also suggests that an artificially intelligent blockchain can help companies who have joint interest in a device.

There are a number of ways that blockchain can further utilize AI. Firstly, blockchain can use AI to determine and filter identities of those creating and carrying out transactions, whether private or public chains. This ID confirmation will eliminate the requirement for traditional intermediaries to be present to secure value transfers between parties, again reducing centralized control which can be prone to manipulation and hacking. On the flip-side, it would seem blockchain can also improve AI, creating a more secure way for AI applications and their administration. Safer cloud computing through the use of blockchain can lead to more optimized autonomous vehicles and other robotics. Featuring a system of checks and balances that cannot be manipulated forces ‘good players’ and a more transparent ledger on which to operate on. The existing problem with Artificial intelligence is the worry of a potentially dangerous future, narrowed down to the basis that it’s centralized and prone to outside regulation. The fear of who gets to control these machines, robots and other forms of intelligence and what happens when it falls into the wrong hands will be eliminated by Blockchain. As an independent third party mechanism mines, reviewing and recording transactions with blockchain, only valid transactions from ‘good players’ are able to be confirmed and then recorded. The combination of the two makes for ‘friendlier’ AI and certainly a safer future.

The two disruptive forces work hand in hand to allow a decentralized digital ledger that re-imagines hence reconstructing the centralized structures currently in use today.

In the video above, Patrick Schwerdtfeger explains how the two essential technologies, artificial intelligence and blockchain, interact. In fact, he uses a practical Tesla example to show how both technologies work hand in hand. In essence, he says that artificial intelligence allows the individual vehicle to learn how to take the corner as time moves on, but it is blockchain that allows the whole fleet of cars to know how to maneuver the bend.

In addition to what corporations are innovating to allow blockchain and AI to work hand in hand, the future of AI and blockchain is also present in Ethereum technology. The exploding technology is constructing an internet 2.0 with the fact that it will allow the blockchain network to create computation disruption. It allows a platform for smart contracts, decentralized applications, and decentralized autonomous organizations. As mentioned earlier, AI is embedded in blockchain to ensure an active partner in authorizing and processing data and Ethereum is no exception. Due to the fact that Ethereum allows for a custom built blockchain, it is able to engineer applications that run efficiently without any possibility of downtime, censorship, fraud or third party interference via smart contracts. JPMorgan Chase & Co. has taken a gamble on Ethereum by using it as an aid to their flagship blockchain innovation Quorum, a distributed crypto-ledger. This only proves further that innovation in AI and blockchain continues to grow as a key partnership that mainstream companies have recognized and begun to implement.

It is obvious to see how the merging of both AI and blockchain will prove to be a major disruption and key innovation in optimizing systems and markets, not only in the financial industry but also in robotics and other influential areas of study and practice.

Blockchain Technology and the Disruption of the Financial Services Industry

Blockchain technology can be applied to more than just money, but for today’s post, we will be focusing on its impact on the finance industry. As the weeks go on, we will focus on an individual industry, but since it is the most famous, we will dive deep into the rise (and fall?) of bitcoin along with other ways in which finance will change forever due to the growth of Blockchain. As you might recall from our first post, forty of the world’s top financial firms are experimenting with the technology. To this date, there has been over $1 billion invested in Bitcoin, the most popular form of Blockchain.

 

 

Bitcoin is possible because of Blockchain technology, however, Bitcoin is not Blockchain! Bitcoin has fallen short of expectations, so make sure to understand that finance and Blockchain in the future is not necessarily bitcoin. Bitcoin is a distributed and decentralized digital currency. Some of the cons of Bitcoin is that you can’t move your existing money, have to pay wildly unpredictable fees that are high and rising fast, its suffering large backlogs and flaky payments. Blockchain is the underlying protocol behind the technology of the currency. The strength behind Blockchain technology is in the authenticity of records, content and transactions, and its decentralized nature. This opens up the possibilities of many uses.

 

For starters, we have IBM working on harnessing the power of Blockchain. IBM’s Blockchain solution combines data provided by the participants in the network, creating a consolidated and detailed view of transactions that is visible to all parties. The outcome of this solution is a significant reduction in number of disputes, dispute cycle time, and improvement in productive use of working capital. Key features of IBM Blockchain are immutability, non-reputability, and privacy guarantees provide a safe, trusted and decentralized ledger for sharing information, while retaining role-based control of its visibility to other participants in the network.

 

 

 

J.P. Morgan Chase is also another financial giant jumping on the Blockchain train. They are working on using the technology in a manner that would allow the bank to use a publicly available system for confidential transactions. It is interesting to note JP Morgan’s outlook on making it a public network instead of a private one like most institutions have incorporated. Cybersecurity is one of the major benefits of Blockchain that we stressed in our first blog post.

Another giant, Barclays, has just completed a Blockchain trade finance transaction. Two of its partners, Ornua and Seychelles Trading Company, successfully transferred trade documentation via a Blockchain platform created by Barclays’ program Wave. This means that in the future, adding multiple parties to a distributed ledger system can remove one of the biggest “headaches” associated with global trade, the movement of the paper documents that track and authenticate the transactions that have occurred.

 

Blythe Masters, CEO of Digital Asset Holdings, has said that Blockchain will have a significant impact on Financial Industries. Economic transactions on a digital ledger can be programmed to record any type of financial instrument. These systems tackle settlement latency in mainstream financial markets. This means the entire lifecycle of a trade, including its execution, the netting of multiple trades against each other, reconciliation of who did what with whom, and whether they agree, can occur at the trade entry level. That’s much earlier in the stack of process than what you are accustomed to seeing in mainstream financial infrastructure.

 

Exploring the Future of Blockchain

Fortune’s 30-second definition of Blockchain is quite simple “the blockchain is a way to structure data…This coding breakthrough—which consists of concatenated blocks of transactions—allows competitors to share a digital ledger across a network of computers without the need for a central authority. No single party has the power to tamper with the records: the math keeps everyone honest” Notice that the definition makes no mention of money. That is because blockchain technology can be applied to more than just monies. Currently, forty of the world’s top financial firms are experimenting with the technology; there have been over $1 billion invested in Bitcoin, the most popular form of blockchain.

Blockchain technology is set to disrupt over 20 industries. Companies are going to harness the power of the Blockchain in the next several years. One already is attempting too, Bit Bastion. The banking system as we know it is going to get a complete overhaul. They will incorporate private Blockchain powered technology to create cryptographic ledgers to enable banks to deliver secure end-to-end financial systems.

Money transfers as we know it will be powered by Blockchain. Blockchain will create a more direct payment flow across the globe. There will not be any intermediaries to charge high fees.

Blockchain is also able to reduce conventional cybersecurity risk by removing the need for human intermediaries. This instantaneously lowers the potential security concerns from hacking to corruption. Blockchain technology will even be used in schools, to authenticate academic certificates. There will be no way to falsify student accreditation, not to mention the cost-savings potential.

Credit Suisse, recently conducted a project to demonstrate the potential of the blockchain, here are their findings: “This project demonstrates the potential for blockchain technology to fundamentally reshape the syndicated loan market and the capital markets more broadly,” said Emmanuel Aidoo, head of the distributed ledger and blockchain effort at Credit Suisse. “This demonstration sets us on a path to increase efficiency and reduce costs, which will benefit banks and clients alike. By connecting a network of agent banks through blockchain, we can achieve faster and more certain settlements in the loan market.

Throughout the world, nations are shying away from globalization and leaders promising an isolationist agenda are receiving more attention and votes… only look at the rise of party leaders like Donald Trump and Nigel Farage (the leader of UKIP and the Brexit movement). Some experts believe that technology could not only save globalization but spur it. In a world where everything from good and services to people will exchange almost instantaneously, blockchain will allow us to keep track of everything and one.  “By translating the language of the legal chain into a digital language — an achievement that required us to develop a set of 21 typologies — we have created a system that could locate and capture any ledger in the world and make it public.

For coming weeks our blockchain team will explore the wonders and capabilities of this increasingly prominent technology. In the coming weeks, our team will discuss how blockchain will impact the banking industry, cyber security industry, academia and more. We have already seen the capabilities of the blockchain, Bitcoin and Silk Road. However, for our first post, we thought it was paramount that we stress blockchain has more implications than transforming the way you send and receive money.

There are many questions associated with a technology like a blockchain. How long until central banks adopt the technology? How much money could be saved or even lost? What industries are set to benefit the most? Who will be left behind and who will prosper? How will blockchain shape our world? This technology has endless applications, and we only see the first stages of it. Much like the Wright brothers who were pioneers of flight; we will be the pioneers of the blockchain.