Ethereum's Hard Fork, Tokenizing Lyft and Ending Cannabis Smurfing

Off the Blocks | Vol 57, Mar 5, 2019

This newsletter is our weekly roundup of some of the significant blockchain news, that provides an overview of the rapidly changing blockchain landscape to help you map your blockchain strategy and be aware of regulatory announcements globally. Get your friends to Subscribe Here.

Towards Ethereum 2.0 | Hello Constantinople

Despite the so called “crypto winter”, by some measures, the Ethereum community has been steadily growing. On Feb 28, 7:52 PM at block #7,280,000, an upgrade to Ethereum’s main blockchain was completed. The event was uneventful and there were no technical issues that divided the Ethereum mining community. The upgraded version has been dubbed Constantinople. This is a significant development as it helps prepare for the transition from proof-of-work to proof-of stake on the roadmap for Ethereum 2.0.

Constantinople’s feature set was largely uncontested by the developers. The major change was a reduction in mining rewards from 3 ETH to 2 ETH for each block mined. This was a strategic and deliberate choice intended to discourage mining. This may seem counterintuitive to casual followers. However, the stated goal of Ethereum is to move towards a proof-of-stake (PoS) consensus (as opposed to proof-of-work (PoW)), and lower mining incentives are a major step forward. In order to encourage miners to move from PoW to PoS, and dis-incentivize PoW, mining will be made much more difficult with a “difficulty bomb” in about a year’s time. Additionally, it is hoped that a lower supply will keep inflationary pressures under check and prop up the price of the underlying ETH tokens.

There are other changes that aim to make the Ethereum ecosystem much more robust, secure, scalable and cheaper to use. Notably, the following improvement proposals are also incorporated:

  • EIP 1014: Similar to Bitcoin’s Lightning Network, this is intended to scale Ethereum’s network performance by using off chain solutions

  • EIP 145: Using bitwise shifting to enhance efficiency and reduce to costs of deploying smart contracts by 10x. Today it costs about 35 gas to bit shift using arithmetic operations, but in a native EVM operation, it is expected to cost only 3 gas.

  • EIP 1283: To further lower the costs and implement net gas metering, contract storage pricing is also being revisited through modifications to the SSTORE opcode.

  • EIP 1052: A new opcode for retrieving the hash of external contracts is a welcome addition and further blow to the high costs of external contract verification.

In short, the upgrade to Constantinople paves the way for an eventual move towards PoS. The previous upgrade Byzantium provided the security pieces and the Constantinople aligns incentives and reduces costs for the transition to the much anticipated PoS dubbed Serenity. Serenity is expected to be the final stage in Ethereum 2.0 roadmap, which will also incorporate “sharding”, the much discussed scalability and security solution.

The next major update, dubbed Istanbul, is expected in just about 8-9 months. Developers can submit their ideas and improvement proposals until May 2019 and more details can be found here:

Image result for ethereum 2.0 time line
Image Credit: Consensys/Pegasys

Now for some other significant news form the world this week:

  1. Wyoming | What do the 13 Blockchain Laws mean? Wyoming has now enacted a total of 13 blockchain-enabling laws, making it the only US state to provide a comprehensive, welcoming legal framework that enables blockchain technology to flourish, both for individuals and companies. These laws enable innovation and creativity, and are meant to bring capital, jobs and revenue into Wyoming. In sum, Wyoming is already the "Delaware of digital asset law," a reference to Delaware’s lead in corporate law.  More than a dozen other US states and Congress are now following Wyoming’s lead by enacting our bills (usually just one or two of Wyoming’s bills). But no other state is likely to catch up to Wyoming—it’s a very tall order for any legislature to enact 13 bills on a single topic in a compressed time frame, especially when another state has already claimed first-mover advantage. [… Read More on Forbes]

  2. Transportation | Lyft Embracing Tokenization of Healthcare Rides: Ridesharing app Lyft has partnered with blockchain startup Solve.Care to tokenize healthcare-related transport arrangements. Estonia-based Solve.Care is a decentralized, blockchain-powered platform that focuses on enhancing healthcare administration and access to healthcare services for users and insurers. The partnership with Lyft will allow Solve.Care users to schedule Lyft rides to doctors’ clinics, hospitals, and pharmacies, with automated payments using native utility token SOLVE via their Solve.Care digital wallets. [… Read More on CoinTelegraph]

  3. Education | Sony and Fujitsu Develop Blockchain Platform to Fight Fake Educational Qualifications: Japanese multinational conglomerate Sony and IT equipment services firm Fujitsu have created an encrypted database for educational proficiency documents. The database, which reportedly employs blockchain technology, is used to prevent forgeries of language proficiency documents, which some foreigners purportedly use to receive resident status to study in Japan. Foreigners must submit a Japanese language proficiency certificate to the Immigration Bureau in order to receive resident status to study in Japan. Said certificates can be issued by Japanese educational institutions abroad. Japanese language schools within the country will submit the certificates on behalf of institutions overseas. [… Read More on CoinTelegraph]

  4. Telecom | Turkcell Introduces Blockchain ID Management: At last week’s Mobile World Congress 2019 in Barcelona, Turkcell, Turkey’s largest mobile network introduced its blockchain service for identity (ID) management. Turkcell’s ID management solution aims to define access rights for either customers or employees. The company says it’s using blockchain technology to enable safer and faster transactions. Additionally, the telecoms company has developed blockchain applications for roaming clearance and donations. It‘s using the blockchain network it shares with Ukrainian Lifecell and Belarusian BeST, both companies owned by Turkcell. It gives users more control over their personal data, and the solution complies with the EU GDPR data privacy regulation. [… Read More on LedgerInsights]

  5. Stablecoin | Tether to Launch a New Version of USDT on TRON: Tether is gearing up to launch its controversial stablecoin as a native token on the Tron blockchain. For the effort, Tether is partnering with the Tron Foundation to launch the dollar-pegged USDT stablecoin as a TRC-20 token, the companies announced Monday. TRC-20 is a technical standard used by the Tron blockchain for implementing tokens, similar to and compatible with ethereum’s ERC-20 standard. Tether already exists as a stablecoin built on the bitcoin and ether blockchains. […Read More on CoinDesk]

    This integration underlines our commitment to furthering innovation within the cryptocurrency space as we continue to anticipate the needs and demands of the digital asset community.

The Final Word | Putting an End to Cannabis Looping and Smurfing:

Image Credit: @socialmktgfella

Today’s cannabis industry Smurfing and looping are the practices of evading top-down buyer restrictions designed with no forethought on how to enforce them. Legal cannabis states often set daily limits on how much marijuana a customer can buy. In Washington, for example, retailers can only sell recreational users one ounce of flower, 16 ounces in solid form, 72 ounces in liquid form, and seven grams of concentrate. In Massachusetts, recreational marijuana consumers are able to purchase up to one ounce of flowers or five grams of concentrates. For consumers, the workaround to this can take form in looping or Smurfing practices. Smurfing isn’t really all that creative, a customer simply purchases the maximum daily allowable marijuana products (one ounce of flower in Colorado, for example) in one dispensary, then heads on over to another and buys more. Looping is even easier and doesn’t necessarily require driving. Simply purchase the maximum allowed amount of product, depart the store, return, and make another transaction (sometimes with a different budtender).

Blockchain technology gives the cannabis industry an opportunity to record all verified, trusted records on a universal ledger that cannot be changed and can be universally accessed by authorized entities. For the purposes of looping and Smurfing prevention, all networked retail dispensaries. […Read More on Forbes]

About Proteum
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. |  | Twitter: @proteumio | ProteumX