Hardware, Smart Contracts in Illinois and Tracking Mongolian Cashmere

Off the Blocks | Vol 98, January 14, 2020

At Proteum, we partner with entrepreneurs to develop and deploy innovative products and solutions built around blockchain technology - advising them on building sustainable companies in a rapidly changing investment, regulatory and tech landscape. We are industry and sector agnostic.

The State of Crypto

Last week, Laura Shin, crypto journalist and host of the Unchained Podcast, featured Alex Pack, and Haseeb Qureshi from Dragonfly Capital in a wide-ranging and fantastic conversation on the state of the crypto universe.

They talk about why Dragonfly has a global focus, how they choose investments, and why they try to be as agnostic as possible about asset type.

This is a fairly comprehensive commentary as they discuss:

  1. Why most protocols, including Bitcoin, still look like venture bets, why, at the moment, Bitcoin looks like a better investment than anything built on top of Bitcoin, and why Lightning hasn't yet taken off and why they think it won't.

  1. Why Ethereum is so far in the lead and whether anything will become an Ethereum killer.

  2. How Libra affects their investments in stablecoins,

  3. Why Xi Jinping's "blockchain, not crypto" emphasis is a dead end,

  4. Whether blockchain-based identity is an investable area?

You can listen to the podcast here:

I have a bit of a different understanding on the enterprise adoption of blockchain technology. Enterprises have gone forth with private blockchains not because they feel less disruptive. They know that the transactional business models being built atop private blockchains are inherently disruptive to their SaaS-based business as usual. The reason that many of the projects have reached a dead-end is that ironically, there is limited incentive to leave the confines of a safe innovation lab and create an ecosystem that can actually solve real-world problems. Most enterprises still have a myopic view of data ownership and control and within the confines of a walled data garden. It is all but impossible to foster the kind of partnerships that a blockchain ecosystem requires to build on a common understanding of data sharing with applications that can integrate seamlessly.

Take supply chains for example - how does one share multi-party data and preserve contractual confidentiality requirements (such as preferential discounts) on a completely public and transparent blockchain? Supply chains run on trade finance - how does an enterprise get access to credit on a blockchain - there are many unresolved questions in this area including identity management (both corporate and individual), credit provider, asset tracking, asset custody, payments, settlements, accounting, hedging volatility, complying with anti-money laundering laws and other regulatory aspects. To make things more complicated, the UI/UX issues are alien territory for most of the enterprise workforce in field operations. These are some of the questions that pop up constantly and are good reasons that enterprise projects have ended up on a bridge to nowhere. None of these issues have been sorted out in the crypto world either, although quite rightly, a number of startups are laser-focused on solving come of these. and To chart a way forward, we have to look at the developer community and entrepreneurs for ideas that can be integrated with enterprise applications, perhaps piecemeal, solving one small pain at a time, and not the other way around.

Now some significant news from the world this week:

  1. Hardware | Two Blockchain Devices Win Plaudits at CES 2020: In tech there's an old adage: "hardware is hard." It's much easier to prototype and test a product when a mistake can be fixed by deleting and rewriting a few lines of code. At the Consumer Electronics Show (CES) in Las Vegas this week, though, two crypto companies are leading with atoms rather than bits, and it seems to be working. The MakerDAO Foundation was showing off its integration with the XPOS point-of-sale system, a device that Pundi X made to both sell crypto and also for merchants to accept crypto as payment. XPOS isn't what earned Pundi X plaudits at CES, though. Instead, it was "Blok On Blok" (BOB), its blockchain phone, which got recognized in the trade show’s Mobile Devices & Accessories category. Similarly, “Internet of Trusted Things” startup IoTeX was showing off its Ucam device, a home security camera that shares footage to the cloud, but it isn't actually branded as IoTeX. [… Read More on Coindesk]

    Our company is a blockchain platform, and we are working with other IoT and hardware manufacturing companies to make private and secure IoT devices.

    - Dorothy Ko, IoTeX

  2. Fintech | Ant Financial Aims to Launch its Enterprise Blockchain Platform: Ant Financial, the financial affiliate of Chinese e-commerce giant Alibaba, is reportedly launching its enterprise-focused “Ant Blockchain Open Alliance” platform this month. The network has been live in beta as of Nov. 2019, and will imminently be launched as a fully operational chain. [… Read More on CoinTelegraph]

    In the past two years, Ant Financial has been working on two aspects about blockchain. One is to improve the technology, and the other is to open it up and accelerate the commercialization of blockchain applications.

    - Jiang Guofei, VP, Ant Financial Group

  3. Regulatory | Illinois Legalizes Blockchain Contracts: With the new year Illinois became the latest state to recognize smart contracts and other blockchain-based records as legal instruments. The state’s “Blockchain Technology Act,” sponsored by Rep. Keith Wheeler (R), took effect Jan. 1, opening a slew of potential new legal scenarios for blockchain-based contracts. These contracts are now admissible as evidence in court, recognized as a viable alternative to paper-based records and statutorily exempt from local taxation. The Illinois law extends the same legal recognition already enjoyed by paper contracts to blockchain contracts and agreements so that they are recognized as legally binding in the eyes of the state. It also shields the blockchain industry from local government interference, meaning cities and towns cannot impose taxes and regulations or require licensing or permits on blockchain systems or those who use them. [… Read More on Coindesk]

  4. Telecom | Telecom Giant Telefonica Pilots Blockchain Access on 8000 Spanish Firms: Spanish telecommunications giant Telefonica has reportedly partnered with the local Association of Science and Technology Parks (APTE) to grant access to its blockchain to about 8,000 firms in Spain. Telefonica will deploy nodes of its Hyperledger-based blockchain at APTE’s 52 sites. During the three-month-long testing period, firms will be encouraged to develop applications on the network and allowed to experiment with their own tokens. Telefonica partnered with IT giant IBM in November 2018 to apply blockchain technology to managing international mobile phone call traffic. [… Read More on CoinTelegraph]

  5. Payments | Samsung SDS, Syniverse Collaborate for Blockchain Mobile Payments: Samsung SDS and telecommunications service provider Syniverse announced a partnership to develop a blockchain-based mobile payments platform. The blockchain platform aims to enable seamless transactions between mobile operators and enterprises in the logistics, financial, travel and hospitality, media and entertainment, and retail markets. Major private equity firm Carlyle Group owns Syniverse, which says it processes $35 billion in mobile transactions a year and connects to 7 billion devices. Under the agreement, Samsung SDS’ blockchain-based Nexledger Universal platform will work in tandem with Syniverse’s blockchain solution Universal Commerce for clearing and settlement as well as its Mobile Engagement (messaging) platform. The goal is to develop a common platform which will work for any mobile operator, and any user can send money, loyalty points or digital currencies to other users or merchants globally. [… Read More on Ledger Insights]

The Final Word | Blockchain Powered App Helps Mongolian Herders Trace Cashmere

Blockchain-Powered App Helps Mongolian Herders Trace Cashmere
Image Source

Toronto-based startup Convergence.tech has successfully concluded a blockchain-based pilot to help Mongolian nomadic herders track and certify sustainable cashmere. The supply chain project, which was conducted with the United Nations Development Program (UNDP), is powered by Convergence.tech’s Ethereum-based traceability platform, Backbone. Convergence chose to focus on cashmere herders for its pilot, as many of these individuals face harsh working conditions and income instability. Moreover, the fashion supply chain lacks transparency, making it difficult for consumers to understand where cashmere products originate. [… Read More on CoinTelegraph]

“The nomadic community is one of immense pride but one with a volatile and unstable income. Leveraging blockchain technology within the transformation of the cashmere industry can provide numerous benefits for Mongolian herders, buyers, and sellers alike.”

- Chami Akmeemana, CEO, Convergence.tech

About Proteum
Proteum is a global blockchain investment and 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 startups and emerging ideas based on blockchain solutions.

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