Off the Blocks | Vol 80, August 13, 2019
|Aug 13||Public post|| 9|
Our views on blockchain technology & the changing investment, regulatory and tech landscape.
Reliance’s Blockchain Ambitions
In Nov 2018, Reliance Industries, the largest Indian company, in a trade finance transaction, received a letter of credit from Tricon Energy. This would have gone unnoticed by everyone involved, except that the transaction, involving the exchange of export documentation, took less than a day, instead of the usual 7 - 10 days. This was the first transaction on a blockchain enabled platform involving Reliance.
Fast forward to August 12, and Reliance Jio Infocomm (Jio), Reliance’s mobile network subsidiary, announced that it is rolling our one of the largest blockchain networks across the world.
Over the next 12 months, Jio will install across India one of the largest blockchain networks in the world with tens of thousands of nodes operational on day one.
- Mukesh Ambani, CEO, Reliance Infocomm
Jio has over 340 million subscribers mostly for its mobile broadband access services and if it was listed as a separate business, it would still rank amongst the top 10 companies in India.
However, Jio is only a 3 year old company. For any other operator, such a public announcement would be seen as ridiculously ambitious. However, Jio is agile, digital first, data heavy and does not carry the burden of legacy technology.
In 2018, India had 432 million 4G users downloading more than 10GB of data per month. While 70% of the demand is from video streaming, this is expected to change dramatically as IoT, cloud applications and virtual reality content start to come online.
Jio also announced that it has entered into a globally unique long-term alliance with Microsoft to accelerate the digital transformation. Azure cloud services running on Jio datacenters creates a meaningful infrastructural play for localization of data, both physically and linguistically. With the explosion of data, telecom companies like Jio are in a perfect position to take advantage of other emerging technology, namely blockchain. The opportunity is not lost on Jio. With 5G services around the corner, and data explosion imminent, Jio is preparing itself to leapfrog technology cycles by adopting blockchain. The partnership with Azure is an astute way of brining managed blockchain services to Jio’s datacenters.
With hyper-connectivity telecoms know that they will be more than simple conduits of data. Using blockchain telecoms can deliver unprecedented security, trust, automation and efficiency to almost any types of transactions. Mobile carriers, with a unique access to subscriber’s phones or industrial IoT devices can be instrumental in creating local and global standards for identity management - for both humans and interconnected machines. These standards can help reduce fraud and cut down payment settlement times - specially for supply chains transactions in India that are notorious for delays. Jio, with its 340 million strong customer base, and an expanding business footprint, is an attractive partner for fintech companies. If together they can shave off a few percentage points off transaction costs it would be a highly lucrative business proposition. Other blockchain possibilities for telecom firms are detailed in a graphic below.
This is a vital capability for India especially for modernizing our supply chains for agricultural produce and other goods. Using blockchain, we also have an opportunity to invent a brand-new model for data privacy where Indian data especially customer data is owned and controlled through technology by the Indian people. Data is wealth and Indian wealth must remain in India.
- Mukesh Ambani
Expect countries to create regulatory environments that curtail access to local data for foreign entities.
Now some significant news form the world this week:
Mining | Blockstream Reveals Massive Bitcoin Mining Facilities: Blockstream revealed details related to their massive Bitcoin mining data centers in Quebec, Canada and Adel, Georgia. The facilities account for a combined 300 megawatts worth of energy capacity, and they’re currently available for hosting enterprise-level mining activities, in addition to Blockstream’s own mining operations. For now, two of their active customers include Fidelity Center for Applied Technology and LinkedIn founder Reid Hoffman. the facilities would account for roughly 6 exahashes of Bitcoin mining power if used at full capacity with the latest ASIC mining hardware. This would have equated to 10% of Bitcoin’s total network hashrate less than a month ago. [… Read More on Forbes]
Patents | IBM Files Patent for a Blockchain-Based Web Browser: A new patent application from IBM describes a blockchain-based web browser. IBM’s patent is for a web browser backed by a peer-to-peer network. The browser collects pre-specified information from web browsing sessions, according to the patent. The information is then transferred to a network of peer-to-peer nodes for collection and storage. Information collection depends on the type of browsing experience chosen. Browsing on a work computer versus a personal browser would demand different settings, for example. Types of potentially storable session information include what websites one visits, bookmarks, task performance, geolocation, plugin installation, and security patches. Interestingly, IBM included a token in their model. IBM says tokens will verify a users browser session activities as they are packaged into blocks for the peer-to-peer network. [… Read More on Coindesk]
Regulations | Crypto Regulations Are Changing Worldwide to Comply With FATF Standards: Fifteen nations are planning to create a global system “to collect and share personal data on individuals who conduct cryptocurrency transactions. The G7 members, Australia, and Singapore will develop the new system.” The G7 members are France, Japan, Canada, Italy, Germany, the U.K., and the U.S. The system will be designed in consultation with the FATF with the goal “to draw up detailed measures by 2020.” The FATF is an intergovernmental organization founded to develop policies for combating money laundering. It currently comprises 37 member jurisdictions and 2 regional organizations. [… Read More on Bitcoin.com]
Autonomous Driving | Commerzbank Develops Blockchain Payments for Automated Trucks: Commerzbank has developed a blockchain-based solution for machine-to-machine payments that it says could be used to allow automated trucks to pay for power charging without the need for a human to get out their wallet. The partners have already proved the system works, according to an announcement on Thurday. In test transactions, Commerzbank put euros on the blockchain system and sent it to Daimler Trucks for the settlement of the payment. [… Read More on Coindesk]
Following the recent digitization of securities transactions and the use of blockchain technology, we are now focusing on DLT-based payment structures. As a bank, we naturally also see our mission as creating new digital payment architectures for our customers.
- Stephan Müller, divisional board member of transaction banking at Commerzbank
Hashgraph | IBM and Tata Become Governing Council ‘Owners’: Public distributed ledger Hedera Hashgraph has announced that IBM and Tata Communications have joined its governing council.
Our governance model, which includes a robust system of checks and balances, ensures power can’t be consolidated, while at the same time providing a stable and scalable platform on which developers can build.
- Mance Harmon, the CEO of Hedera Hashgraph
Up to 39 multinational entities will make up the Hedera Governing Council. Each member can serve a maximum of two consecutive three-year terms, and they are responsible for eliminating the risk of forks and guaranteeing the integrity of the codebase. A variety of enterprises from telecommunications, retail, law, financial services and technology are now represented on the council. [… Read More on CoinTelegraph]
How seriously are American corporations committed to blockchain technologies? Are blockchain technologies materially significant yet? One place to find the answers to these questions is Form 10-K, a report the United States Securities and Exchange Commission (SEC) requires corporations to file annually. The following companies cited blockchains as a risk factor that could adversely affect their companies: Accenture, American Express, Eastman Kodak, Goldman Sachs, Northern Trust, Overstock, State Street and Visa. Note that Accenture and Overstock (like several other companies) discussed blockchain with both positive and adverse statements in their 10-Ks. Among the positive statements about blockchains in 10-K reports:
Accenture cited blockchain as one of its core consulting capabilities.
IBM identified blockchain as one of its core technologies, along with analytics, artificial intelligence, security and cloud computing.
Mastercard announced investments and patents in blockchain technology.
Nasdaq identified blockchain as a high-growth opportunity and mentioned investments in blockchain technologies.
Oracle listed blockchain as part of its software as a service (SaaS).
Proteum is a global blockchain advisory firm that works with public, private and start-up companies to help them transition into the world of blockchains and decentralized applications. We help companies strategically build their ecosystem and unique capabilities so that they can own and control their future. ProteumX, our accelerator program, invests in and accelerates the time to market for companies building blockchain solutions.