Facebook's Project Libra, Honda's Blockchain Push & Louis Vuitton's Aura
Off the Blocks | Vol 68, May 21, 2019
|May 21, 2019|| 7|
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.
An Unbounded Opportunity
Bitcoin was conceived as a peer to peer electronic cash system to allow online payments to be sent directly from one party to another without going through a financial institution. Dis-intermediating FIs and enterprises directly lowers the costs of transactions and allows value transfer without limiting the minimum transaction size, ensures anonymity and enables non-reversible payments for non-reversible services. With cash, these attributes are taken for granted, but Bitcoin enabled these for online transactions with an added advantage in operational transparency. 10 years ago, all of this seemed esoteric gibberish to enterprises as long established business principles have relied on rent seeking to “create shareholder value.” Today, businesses are all in, eager to adapt the principles of blockchain and start moving towards “creating stakeholder value”. In fact, after years of criticizing bitcoin, JP Morgan just admitted that Bitcoin has an intrinsic value.
After the huge economic boom and subsequent crash of cryptocurrencies, enterprises are finding a renewed promise in adapting the principles of disintermediation and P2P transfer of value as they rethink their complex networks of supplier and consumer relationships. The emphasis in the enterprise world is to transparently address conflicts of interest and to have a synchronized ledger or database of transactions. Some of the advances are being led by highly unlikely participants - the Central Banks. Recently, Bank of Canada and the Monetary Authority of Singapore completed a digital currency swap on the blockchain - a first for cross border payments involving central banks.
Microsoft, long held as a company that had fallen behind on the innovation curve has been quietly but steadily sharpening its tools to compete in the decentralized economy. It’s partnership with JP Morgan’s blockchain platform, Quorum, promises to take on the enterprise world in a big way. Quorum boasts a list of 220 banks that have signed up on their Interbank Information Network (IIN) and the companies have spent enormous time and resources in catering to their need for security and regulatory compliance. Close on the heels of Microsoft is Facebook, with its announced intentions of creating a stablecoin to facilitate mobile payments.
At Proteum, we believe that the combination of blockchain technology with advances in mobile communications will usher new unbounded opportunities for enterprises and entrepreneurs alike. As 5G technology rolls out bandwidth is no longer a limitation. Mobile devices will be permanently and simultaneously connected to various affinity networks. In such an environment, where real time operations are critical, blockchain technology will be increasingly looked upon as an enabler for secure, transparent and trusted interactions amongst the network participants.
Telecom incumbents perhaps have the most to gain from this shift as they sit at a unique intersection of technology infrastructure, consumer information and payment systems. With such a diverse stack, operational efficiency is a challenge. Blockchain technology enables a simplification of services, where the network operator finds new business models: a cross-country secure identification system, a payment gateway for digital asset transaction, derivative applications for IoT and industrial systems to create collaborative ecosystems etc.
With a proliferation of various blockchain platforms, there is already a need being felt for interoperability. Blockchain platforms such as Cosmos provide exactly the framework to build commercial applications on. With backing by Binance, the largest crypto exchange, Cosmos launched its native token ATOM to work towards interoperabilty and scalability - two big challenges for blockchain systems. With their vast infrastructure and roaming contracts, telecom operators are interoperable globally and they can play from a position of strength, creating their own open financial system. .
Out of all these building blocks, [you’ll be able to compose] an entire … open system of finance that operates to scale and can be composed of individual, specialized chains that do different things.
- Zaki Manian, Tendermint, commercial arm of Cosmos
The above is but a flavor (not an exhaustive commentary) of the activities steering enterprise applications that are being reimagined or supercharged with blockchain technology. We are moving into a phase of slow but steady adoption that will only accelerate as traditional business models give way to transactional ones that create value for the ecosystem stakeholders.
Now for some other significant news form the world this week:
Hardware | Prototyping Board for Building Blockchain-Connected Devices: The team at Elk has had experience building open-source hardware for IoT. Now it’s trying its hand at blockchain. The firm will soon launch a tiny board that can connect to a blockchain and control electronic components like motors, sensors and switches. That means you can build an embedded blockchain system in a few minutes. Elk makes it easier to connect and program blockchain-connected devices. For example, you can use the board to accept payments and then turn on power to a device or even create a primitive ATM. The board has two processors, as well as storage and a WiFi module. The board will support ethereum and bitcoin and uses Whisper and Swarm for decentralized messaging and storage. The team plans to add support for other blockchains going forward. [... Read More on Coindesk]
StableCoins | Facebook Registers Libra Networks in Geneva in Latest Blockchain Move: Facebook may be heading to Switzerland to develop its stablecoin, opening up a financial technology company focused on blockchain, according to a public register. Geneva’s commercial register shows Libra Networks was registered on May 2 with Facebook Global Holdings as a stakeholder. The LLC is seeking to develop software and infrastructure connected with investment activities and data analysis among other services relating to finance and technology, according to the register. The public register also makes mention of trying to develop software and infrastructure related to payment operation. [… Read More on The Block Crypto]
Payments | Banks to Invest Around $50M In Digital Cash Settlement Project: Several of the world’s largest banks are in the process of investing around $50 million to create a digital cash system using blockchain technology to settle financial transactions, according to people familiar with the plans. The previously disclosed project, known as the "utility settlement coin," was first proposed by Swiss bank UBS Group AG and London-based technology startup Clearmatics in 2015. It aims to develop a system to make clearing and settlement in financial markets more efficient. Banks that had previously disclosed they were working on earlier phases of the project include UBS, Banco Santander, Bank of New York Mellon Corp, State Street Corp, Credit Suisse Group AG, Barclays PLC, HSBC Holdings Plc and Deutsche Bank AG. [… Read More on Reuters]
We are a member of the USC Project and can confirm that the Research & Development phase is coming to an end.
- Barclays spokeswoman
Stellar | Stellar’s Blockchain Briefly Goes Offline: Recently, blockchain-powered network Stellar stopped confirming transactions for more than one hour, effectively going offline. Although no money was reportedly lost as a result, Stellar’s major issue has now been highlighted publicly: The project is not decentralized, at least not to the extent expected at this point. Notably, the offline scenario was predicted by researchers earlier last month. Last month, three researchers from the Korea Advanced Institute of Science and Technology (KAIST) published a paper titled “Is Stellar As Secure As You Think?” concluding that the analysis of the Stellar network proves that it “is significantly centralized.” Specifically, the researchers stressed that the entire Stellar network rested upon a limited amount of nodes, primarily the ones controlled by SDF itself. [… Read More on Coin Telegraph]
We show that all of the nodes in Stellar cannot run Stellar consensus protocol if only two nodes fail. To make matters worse, these two nodes are run and controlled by a single organization, the Stellar foundation.
Automotive | Honda and General Motors Exploring Blockchain Platform: Honda is reportedly collaborating with General Motors (GM) on a blockchain research project. According to Nikkei Asian Review, the two automotive giants are exploring how a blockchain-based system could track the supply of power in smart grids and the amount of electricity stored in car batteries, and record electricity exchanges between the two. By tracking the amount of electricity stored in an electric vehicle (EV) and the amount that can be sent to a next-generation smart grid, the companies aim to create easy access to information between EVs and power grids. If successful, electric car owners could receive compensation for storing electricity and exchanging it with a smart grid. While infrastructure already exists for the transfer of surplus power between electric cars and homes the initiative tackles a new segment. [… Read More on The Daily HODL]
Systems to connect large numbers of electric vehicles to urban power grids remain in the experimental stage. One reason for this is that it is difficult to know the state of batteries – whether they are charging or discharging – in moving cars.
Image Credit: CoinTelegraph
ConsenSys has teamed up with LVMH and Microsoft to build a blockchain-powered platform that allows consumers to verify the authenticity of luxury goods. The consortium says the system, known as Aura, is designed to “serve the entire luxury industry with powerful product tracking and tracing services.” LVMH brands including Louis Vuitton and Christian Dior are already involved in the project — and discussions are underway to extend Aura to other high-end names within the group. The technology sees unique information about every product stored on a shared ledger. Customers are then able to use a brand’s official app to obtain a certificate offering details about its provenance. [… Read More on CoinTelegraph]
AURA is a ground-breaking innovation for the luxury industry
- Ken Timsit, managing director of ConsenSys Solutions
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.