Prime Minister’s Son to Head Barbados Blockchain Startup

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October 1, 2017

Bitt, the blockchain payments startup backed by Overstock’s Medici Ventures, has announced the hiring of a new chief executive officer.

The new CEO, Rawdon Adams, takes the helm of the Barbados-based startup just months after it unveiled an ambitious plan to develop a pan-Caribbean settlement network built with blockchain tech. The plan, Bitt said in May, is to create a way to better connect a region with more than a dozen governments, each with their own currency systems.

The startup has also worked with the Central Bank of Barbados on pilot blockchain initiatives.

The appointment of Adams adds heft to the startup’s regional plans. Rawdon is the son of Tom Adams, who served as the country’s prime minister between 1976 and 1985. Tom Adams, in turn, was the son of Sir Grantley Herbert Adams, the first and only prime minister of the former West Indies Federation.

According to LinkedIn, Rawdon previously worked as an analyst for GE Medical Systems and founded market arbitrage software startup ArbMaker in 2008.

Jonathan Johnson, president of Medici Ventures, said in a statement:

“Rawdon is the perfect leader to grow and scale Bitt to the next level and bring to fruition Bitt’s initial vision in the Caribbean.”

Overstock, through Medici, invested $4 million in Bitt in April of last year.

Philly Fed Chief: Bitcoin Has Little Chance of Thwarting Monetary Policy

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October 1, 2017

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Bitcoin and other cryptocurrencies are unlikely to weaken the Fed Reserve’s influence on the U.S. economy.

That’s according to the president of the Federal Reserve Bank of Philadelphia, Patrick Harker, who issued the new remarks on the second day of a fintech event hosted by his organization, one of 12 regional institutions that today comprise the U.S. central banking system.

But while some have worried that the rise of a cryptocurrency would make it harder for the Fed to manage the rate of inflation, Harker showed that he isn’t concerned about the prospect.

Onstage, he went so far as to contend that bitcoin has yet to be tested by a real catastrophe, but that when one happens, people will be more likely to flock to government-backed money.

“The paper that’s in your pocket, that we call money, only has value because we believe it has value, because we believe the government stands behind it. It’s all trust issues,” Harker said.

He told attendees:

“And so, when cryptocurrencies and other forms of currency emerge, I think the basis of that has to be how do they create that trust?”

Trust in the government

Harker went on to acknowledge that while citizens have put varying degrees of trust in what he called the “sovereign states” that stand behind currencies today, other currency models might be possible. This includes, he said, ways in which trust might come from another “large player,” or as in the case of bitcoin, an algorithm.

But his most pertinent critique was perhaps that cryptocurrencies have not been significantly tested enough to ensure confidence.

Despite issues such as the collapse of Mt. Gox, once the bitcoin’s network’s largest exchange, or the ongoing bitcoin scaling debate, Harker argued that cryptocurrency has been largely insulated from “bad times.”

“Everything can work in good times,” he added.

This leads to the second reason Harker said he’s not concerned about cryptocurrency hamstringing the Fed’s monetary influence: If – and, according to Harker, when – things go wrong, the Federal Reserve and other state agencies will likely be asked to get involved anyway.

“When things really go bad, where do Americans turn?” he asked “Well, they’re going to come back to the government. That’s the history of the country.”

‘How do you regulate an algorithm?’

Elsewhere, Harker responded with his thoughts on cryptocurrency regulation, with his interviewer, Knowledge@Wharton founder Mukul Pandya, asking directly how the Federal Reserve might assist or advise on such a strategy. (The Federal Reserve has previously noted that it does not have the authority to directly regulate the technology.)

On this point, he was inconclusive, suggesting any ideation is today in early stages.

“How do you regulate an algorithm?” he asked, drawing laughs from the audience. “I don’t know yet. The answer is we have to continue to study this.”

Still, that doesn’t mean there aren’t possible next steps.

For example, those studies might include looking more closely at how another algorithm, perhaps one created by the Federal Reserve, might ensure fairness in mathematical form, something Harker said is crucial to any potential cryptocurrency controls.

He concluded:

“Before we even think about how you regulate an algorithm, how would you even build an algorithm that would have that sense of fairness in it? It is a fairly deep technical question.”

Sea Change? Deloitte Is Tracking Ships’ Certificates with Blockchain

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October 1, 2017

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Deloitte is taking non-financial applications of blockchain technology into uncharted waters.

To record the inspection certificates for ships, oil rigs and the like on a private, shared ledger, the consulting firm’s blockchain lab for Europe, the Middle East and Africa recently partnered with DNV GL, one of the world’s largest classification societies.

Such companies certify that vessels and offshore structures meet acceptable standards for safety and environmental impact. But, the certificates they issue can be forged, potentially undermining trust in the system. Further, checking that a certificate is real is a slow, cumbersome process.

Deloitte and Norway-based DNV GL see blockchain technology as the answer to both problems.

Their solution creates a digital ID of each certificate that is stored and accessed on a private blockchain. The decentralized approach is seen as a way to discourage fraud or otherwise tampering with the documents.

Lory Kehoe, Deloitte’s EMEA blockchain lead, explained:

“Instead of one record being held on one server, it’s held over many, many systems.”

Digital transformation

The existing system for issuing certifications had been in need of digital transformation, said Kehoe. “Some parts were manual, some parts weren’t exactly digital.”

One problem with the legacy system is that users need to go to a company’s website or send an email to check a certificate’s authenticity. This can now be done instantly with a blockchain, explained Renato Grottola, director of global digital transformation for DNV GL, which formed from a merger between DNV and Germany’s GL in 2013.

He told CoinDesk:

“Anyone can, by scanning the QR code on the certificate, check its validity and data. With the one-to-one connection between the certificate and the blockchain, verification is instant and easily done with a mobile device.”

“As the original data is stored and updated in the blockchain, it will quickly reveal whether a certificate is authentic or not,” he said.

The solution was officially deployed September 23, with 90,000 certificates currently on the private blockchain.

“It is quite early after the deployment, but feedback received so far has been positive,” said Grottola.

Protecting reputations

DNV GL’s business is based on trust and authenticity with industries trusting its certificates to be what they say they are – but that is an increasingly difficult balance to maintain.

“You can spend a lifetime building a reputation and it takes seconds for it to fall apart,” explained Kehoe:

“All it takes is one or two scenarios where DNV GL have put their name to something and another company in another part of the world replicates that and DNV GL’s name gets tarnished.”

It can take another lifetime trying to disprove those falsehoods and rebuild a reputation. Kehoe said he believes that Deloitte’s blockchain deployment will prevent that.

“In the world of certification, other companies presume we’re looking at this,” said Kehoe. “If I was in the business insurance industry myself beyond DNV GL, I would have been looking strongly at blockchain.”

The International Association of Classification Societies (IACS) is an organization whose members include DNV GL. A spokesperson told CoinDesk that it is currently neutral on blockchain, saying: “IACS does not have a position on blockchain technology and has not discussed this matter to date.”

However, IACS recently appointed DNV GL’s CEO, Knut Ørbeck-Nilssen, as its new chairman and upon his appointment, he spoke of the need to prioritize digitization.

London-based Lloyd’s Register, a competitor of DNV GL, on the other hand, said it is “is actively working at real-world applications of blockchain and distributed ledger technologies with our clients and partners.”

A spokesperson for Lloyd’s Register added:

“We believe blockchain and distribute ledger technology has wider applicability in industrial applications, especially around increasing transparency in supply chains and around safety and reducing risk.”

Grottola said DNV GL was aware that some its competitors are looking at blockchain initiatives and it was “keenly observing” new entrants in the market.

Growing trend

DNV GL’s blockchain solution is part of a growing trend of non-financial services firms turning to the technology.

Deloitte’s Kehoe said he has seen a notable increase in the number of such queries over the last nine to 12 months, and that clients are now coming to Deloitte with a greater understanding of blockchain technology.

“The work we’re doing now is kind of skipping the [proof of concept] phase because our clients understand the technology,” he said. “They’re coming to us with use cases with a clear problem to solve.”

He explained:

“We’re not talking about experiments anymore in dark rooms where people are playing with this technology. It’s now all about how do we integrate the technology in a meaningful way so that it solves the problem – it creates an opportunity, helping companies stay relevant, I think that’s a very important point too.”

Bahrain is Eyeing at Becoming Middle East Pioneer in Blockchain

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October 1, 2017

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Bahrain, one of the major oil-producing country in UAE, is turning to digital currencies as part of their financial structure. According to Khalid Al Rumaihi, the chief executive of the Economic Development Board of Bahrain, the adoption of digital currencies in the system of Bahrain had been suggested over time through the finance ministry of the country.

This has lead to a conclusion of the issuance of “bonds on a digital currency.”

Become pioneer of the growing cryptocurrency industry

Bahrain wants to become a pioneer in the burgeoning fintech space and according to Rumaihi, national adoption of Blockchain technology will be a key enabler of this.

Rumaihi stated that Bahrain is “open to Bitcoin” in response to a query made at the MIT Innovation Forum last Wednesday in the country’s capital city Manama. Adding to being open to cryptocurrencies and their potential in the country a regulatory sandbox is a key to allow the experimentation in a controlled environment like the island country.

Furthermore, the Bahrain Central Bank recently put in place a regulatory sandbox. Four companies applied so far, and two had already received approval. Rumaihi said at the GCC Financial Forum in Manama earlier this year:

“The ability for Blockchain to be adopted at the country level is a huge opportunity for Bahrain to move into the spotlight as a pioneer in this space. Blockchain will unlock so many different possibilities for business in the way email and Internet did years ago.”

Joint venture with Saudi Arabia

An opportunity for a partnership with an established Bitcoin company from Saudi Arabia has opened its doors for Bitcoin exchanges in Bahrain. Rumaihi said that they are working with the Central Bank of Bahrain in the proposal.

Last month, Bahrain-based Arab Banking Corporation, also known as Bank ABC, joined the R3 distributed ledger consortium, becoming the first bank in the Middle East and North Africa region to join the group.

The collaboration of the two countries will allow the bank to develop innovative financial products for its clientele and “propel us further to achieve our strategic goals” as stated by Sael Al Waary, deputy group CEO at Bank ABC. The change of digital currency in the Middle East is seen on a positive note that any country can develop into a more advanced country.

US State Department to Host Blockchain Forum on October 10

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October 1, 2017

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The US State Department will host a forum on Blockchain on Oct. 10. The event will take place in George C. Marshall Center, Washington, DC where various offices from the State Department and other parts of the US government, as well as those from the private sector, will join the one-day workshop organized by the Blockchain@State initiative.

According to the group, the mission of the event is to “explore both the policy implications and potential applications” of the tech within the context of US diplomatic efforts. The group was originally launched earlier this year.

Moreover, they have the goal of tracking Blockchain developments and keeping the department informed of new applications with the technology. The US State Department is looking to boost its research resources in support of a new working group focused on Blockchain.

Reporting to Thomas Debass, the director for innovation and the acting special representative for global partnerships, the group will track developments in Blockchain and prepare bi-weekly briefings to keep the initiative informed of new applications in the field.

Participating companies

Included in the list of participating companies are the IBM, Microsoft, Pricewaterhouse Coopers, ConsenSys, and many other firms. Part of the discussion in the Blockchain workshop is the presentation of cases among participating companies.

Furthermore, the workshop will also lecture about how Blockchain can assist with various global issues, including humanitarian crises.

Although some details are unclear at this time – the opening keynote speaker is only identified as a “High-Level U.S. Government Official”, per EventBrite – confirmed speakers include Toomas Ilves, former president of Estonia, and State Department chief information officer Frontis Wiggins.

“Blockchain is not just for Bitcoin. And it’s not just for the private sector. Nations and cities around the world are actively utilizing this technology to transform the work of government. This is happening now. And the Department of State cannot afford to wait to explore applications of this technology to the work of international development and diplomacy”.

This will be the second Blockchain-related forum involving the State Department this year, after an inter-agency event held in July.

Sweden Poised to Become Leading Scandinavian Cashless Society through Bitcoin

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October 1, 2017

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Sweden is fast-moving to follow through on its plans to become the world’s first cashless society.

While this is seen as a good sign for digital currencies on a new progressive frontier, it brings issues, such as privacy concerns, when every transaction is surveyed. Nevertheless, the country is still rooting for Bitcoin as the answer to provide anonymity similar to the traditional cash system.

Potential profits in cashless

As seen by many of Sweden’s financial institutions, companies make no profit from the use of cash, as it lacks harvestable personal data and it has to be physically managed. Due to this problem, finance is potentially changing to cashless transactions, with Sweden leading the way.

Reports show that 900 of Sweden’s 1,600 bank branches no longer store cash, and they will no longer accept cash deposits. There is a gradual decrease in numbers of ATMs, and the circulation of the Swedish krona fell from 106 bln in 2009 to 60 bln in 2016.

This has left Sweden’s central banks, such as Riksbank, wondering if the country should introduce a digital form of government-backed money. Bitcoin is one of the leading solutions.

Privacy concerns

According to Visa, cards are the main form of payment in Sweden, and the public uses them three times more often than the average European. Swish, a very popular mobile app in the country, uses phone numbers to allow anyone with a smartphone to transfer money from one bank account to another in real-time.

The developers of Swish include Nordea, Handelsbanken, SEB, Danske Bank, and Swedbank.

Gradual adoption of cashless society

Louise Henriksson, a Swedish teaching assistant says:

“I don’t use cash any more, for anything. You just don’t need it. Shops don’t want it; lots of banks don’t even have it. Even for a candy bar or a paper, you use a card or phone”.

Bjorn Ulvaeus of the Abba Museum, carries no cash at all, and cites personal safety as the main reason as to why a cashless Sweden is beneficial for its citizens:

“We don’t want to be behind the times by taking cash while cash is dying out… There was such a feeling of insecurity… It made me think: what would happen if this was a cashless society, and the robbers couldn’t’ sell what they stole?”

The downside of having to go cashless is that it marginalizes those who may not have bank accounts and a mobile phone.

Bitcoin does not require its users and adopters to have a bank account, making it at least an improvement in that area, and it also allows the user to spend their money, if not totally anonymously, in a way that is close enough to mimic the anonymous usage of cash.

Sweden, along with other Scandinavian countries such as Norway and Denmark have long said no to cash.

As previously reported, the Chamber of Commerce of Denmark has already proposed to allow most retailers, except for essential services like hospitals, post offices and the like, to ensure that all financial transactions are done electronically, and essentially ban cash. In fact, the Danish Government has “set a 2030 deadline to completely do away with paper money.”

By the looks of it, these Scandinavian countries are strong-willed in following through with their set goals, as Sweden has also explored other ways to use Blockchain in their public services, including land registry.

Senate 2018 Budget Adds $1.5 tln to National Debt: Bitcoin Bubble?

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October 1, 2017

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The US Senate Budget Committee has released its 2018 proposed budget for approval in the larger congressional body. The proposal will then be matched with the House proposed budget and worked out for final approval, before being sent to the White House.

The Senate proposal contains provisions that will increase federal spending for this year, adding a jaw-dropping $1.5 tln to the national debt over the next year. Committee members have suggested that the tax cuts would produce economic gains, which would offset the total debt spending.

After 2019, the proposed budget would begin to cut non-defense spending, resulting in substantial budget savings over the next decade. The goal of both the Senate and House proposals is to balance the budget in that time.

Bitcoin unstable?

After recent comments by the Federal Reserve officers regarding trust in the government, the new budget seems more confidence-eroding than building. While the government can continue to print money and increase the national debt (now nearly $19 tln), Bitcoin is held at a fixed supply.

Multiple analysts have pointed out that as long as Bitcoin continues to increase in use cases and liquidity, the price per Bitcoin will inevitably increase. Just as the Federal Reserve has printed money to maintain a debt ratio, Bitcoin’s stability will drive the price up, which should greatly ease investor fears of a bubble.

Companies Applying Blockchain For Better Loyalty Programs

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October 1, 2017

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Customer loyalty and engagement are among the most important metrics for measuring modern retail company’s success. To woo potential customers and reward the long-standing ones for their patronage, almost every successful business nowadays employs loyalty programs of some sort.

Statistically, you, dear reader, most probably have participated in loyalty programs on several occasions and used coupons, plastic cards and digital notes which had some value within the network of the company that decided to reward its customers.

And from personal experience, you can probably attest that traditional loyalty programs suffer from an entire host of maladies.

To name a few, there is an obvious lack of a unified system which leads to low liquidity of loyalty points. Rewards are only redeemable at certain establishments and often not easily so. And of course, digitization is a must in the modern world.

While some loyalty rewards are even now trackable or redeemable online, still they are not digital assets in and of themselves. And of course, there is always the necessity to use the intermediaries, like banks, which by itself increases the costs and introduces additional security risks.

Blockchain is the magic word

Those are all very familiar issues to anyone who’s been following the advance of Blockchain technology in the real sector of the economy. Many industries have by now experienced the new disruptive paradigm of Blockchain and loyalty programs could not remain an exception for long.

There are industries that can use Blockchain and there are industries that absolutely need it. Loyalty programs fall somewhere in between. The benefits are clear and real. Blockchain gives program providers simple and efficient tools which facilitate unmediated interaction between customers, managers and individual vendors.

We all know by now that Blockchain is tamper-proof and pretty secure. But perhaps the most compelling benefit of Blockchain is cost-efficiency. Loyalty programs cost a fortune to develop and maintain while Blockchain solution can do the job better at a fraction of the cost.

The last thing that has to be mentioned is the tokenization of loyalty points. Basically, being built on a cryptocurrency token, loyalty rewards can be freely transferred between people and even exchanged for fiat or other cryptocurrencies on crypto exchanges.

Does it work?

To this day a number of solutions facilitating an interlinked loyalty reward network have been created. Complete digitization provides a great opportunity for integration of many different loyalty programs on the same platform and that was the path chosen by most of the existing projects.

Although the decentralized nature of Blockchain compels every project to create their own financial ecosystem, loyalty programs may become an exception. As they are not the main business activity of any company, joining a consortium effort does not involve serious risks that could mitigate the benefits.

One of the most pressing challenges for a new Blockchain ecosystem is attracting enough participants to the budding market and a seamless loyalty reward space can be advantageous in accomplishing that task. A compelling argument not to be brushed aside easily.

With just one wallet to accumulate all reward points in an integrated financial infrastructure, customers would not need to memorize each program’s rules and redemption options and vendors will not have to worry about the liquidity of their reward points.

The first Blockchain-based customer reward program – Ribbit appeared back in 2014. Since then several other platforms like Loyyal and Blockpoint were launched.

The projects are quite similar and simplistic in nature but invariably we see new iterations of this concept resurfacing now and again. So is it a trend exploitation or does the market actually need more of those?

More of that, please

One would think that joining an already existing large conglomerate would always be more beneficial for the participants in the end. Not exactly. Turns out there is still great value in decentralization when it comes to reward programs.

To illustrate why under certain circumstances it is beneficial to create a completely separate customer loyalty system, one could take a look at the newest player on the market, BioCoin.

This Russian-based startup is not just a loyalty platform designed to incentivize consumers with Blockchain-based units of value. The platform’s broader goal is to facilitate the eco-friendly and healthy agricultural paradigm worldwide.

In a nutshell, BioCoin is meant to support eco-farmers and organic food retailers and allow them to return value right into their local communities via a system of rewards and discounts. To achieve this, a separate economy is necessary because it will allow to preserve and multiply value within the community.

To sum it up, there is a clear incentive to build loyalty platforms encompassing separate industries that rely on positive feedback from the community. Blockchain today is steadily permeating the loyalty programs sphere but its success depends ultimately on whether enough retailers and consumers around the world would dare to adopt this trending but still unpolished technology.

WSJ Cites Bitcoin’s Most Volatile Quarter, Facts Say Otherwise

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October 1, 2017

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A recent article in the Wall Street Journal critiqued Bitcoin for having an unusually volatile quarter, with prices ranging from peak levels at $5,000 all the way down to $3,000 lows. Such volatility is unprecedented, according to the author who said:

“Bitcoin more than doubled in price, then plunged by a third in what was a hectic three-month period even by the virtual currency’s Wild West standards.”

Not uncommon at all

Bitcoin did indeed have a volatile quarter, but not uncommonly so. Rather, the increase in price was followed by a consolidation period coupled with negative news being released regarding China. One observant tweet pointed out that the volatility in Bitcoin price was not, in fact, uncommon.

Statistics indicate that volatility is more the norm than a surprise, given the nature of the cryptocurrency. Additionally, the WSJ calculations do not take into account the substantial increase in price from the beginning the quarter as well. While prices did fluctuate, the drop from $5,000 was not as dramatic as the figures would suggest.

IBM’s Future Blockchain Projects May Give New Meaning to its Name

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October 1, 2017

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Juniper Research has released the results of a survey indicating that International Business Machines (IBM) is the top provider of Blockchain among all other companies, with 43% of the vote. Instead of “International Business Machines,” IBM could very well stand for “International Blockchain Model” in the near future.

On the same survey entitled, “Blockchain Enterprise Survey,” Microsoft came in second with 20% of the vote, followed by Accenture. Several factors were noted on the rise of IBM to the number one spot; however, most of them were credited to the use of Hyperledger and other research development efforts.

Difference between two tech giants

IBM and Microsoft have various differences in their approach to the Blockchain competition. While both are actually planning to use the dominant commercial Blockchain-as-a-service platform, that’s where their similarities end.

The code that Microsoft uses for deployment is more public and as such, whenever there are issues in the code, they automatically become public. The company has also shown a preference for the Ethereum Blockchain.

On the other hand, IBM has largely stayed out of the public eye. The company uses a privately-developed Blockchain based on Hyperledger. Its code is more restrictive compared to Microsoft’s. Because of that, the public is not instantly informed should there be errors or vulnerabilities in the code.

Perhaps the biggest consideration is the difference in the two governance styles. Microsoft just handed over control of their code to the Ethereum Foundation, of which Microsoft is not a member. This is risky for Microsoft as the Foundation may decide to implement certain use cases Microsoft has not considered.

IBM is a member of the Hyperledger Consortium, an open source effort for the advancement of the Blockchain. In the past, it has collaborated with other corporations such as Wal-Mart and Nestle in enhancing their supply chain through Blockchain technology. Its partnership with Sony allows it to start its early technological investments in the education space.

Conclusion

IBM has already claimed their place as one of the leading firms to advance the commercial application of Blockchain technology. The company has been relatively busy for the past few days as it has announced that it has been collaborating with various companies for the development of Blockchain solutions.

NPNewspaperPublication

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Trust in the government

‘How do you regulate an algorithm?’

Digital transformation

Protecting reputations

Growing trend

Become pioneer of the growing cryptocurrency industry

Joint venture with Saudi Arabia

Participating companies

Potential profits in cashless

Privacy concerns

Gradual adoption of cashless society

Bitcoin unstable?

Blockchain is the magic word

Does it work?

More of that, please

Not uncommon at all

Difference between two tech giants

Conclusion

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