On Governments, Invoicing Standards and Interoperability
Off the Blocks | Vol 92, November 5, 2019
|Nov 5, 2019|| 6|
At Proteum, we partner with entrepreneurs to develop and deploy innovative products and solutions built with blockchain technology - advising them on building sustainable companies in a rapidly changing investment, regulatory and tech landscape.
Crypto, Blockchain, and Governments
Governments are often looked upon as laggards when it comes to the adoption of novel ideas, technologies or ways of conducting its business. And rightly so, without proper vetting, it would be harakiri to disrupt the lives of so many people who depend on government services. Unfortunately, this is also an excuse for political forces to hide behind the scenes and do nothing. When it comes to blockchain, the attitude from governments has been mixed: from outright love to a cautious progression to a knee jerk banning of blockchain and cryptocurrencies.
Last week, the Chinese government went all-in into its push towards the adoption of blockchain technology. In order to help public officials and the general population understand the basics, the publicity department of the Central Committee of the Communist Party of China (CCPPD) released 25 instructional videos. The video series even includes information on Ethereum and Bitcoin. This should not be surprising - technology has obviously been a crucial part of China's plans for the future. Previously, The People’s Bank of China expressed concerns about the impact of Facebook’s Libra and cryptocurrencies in general and announced its own plans to launch a digital currency. Given the wide variety of applications, blockchain is as important a field as 5G and AI, other tech areas that seem to be increasingly complementary.
Governments ought to be playing a proactive role in understanding the implications of blockchain technology and the benefits it can provide for citizens. For one, it is about transparency and accountability of governance. Most governments have been notoriously slow in adopting digital records and management practices. An IBM study titled Building Trust in Government: Exploring the Potential of Blockchain , concluded that blockchain technology offers an opportunity to tackle a lack of trust and bureaucracy challenges. A significant percentage of ‘trailblazer’ governments are launching projects that apply blockchain to transform the way they provide services to their citizens.
Areas in which governments are starting to use blockchain include supply chain, health records, transportation, voting, energy, taxation, land titles, tokenizing welfare payments, digital currencies etc. Yet, in order to govern effectively, governments face many of the same challenges as enterprises, namely - how to manage interaction with citizens, utilize available information and adopt innovation. Each of these throws up its own set of frictions when applied to the real world.
Traditionally, government budgets have not allocated resources to uncover innovation, creating a broad bureaucracy with little depth of talent and resources to drive adoption. This means that the opportunity now is to partner with private sector firms and create an ecosystem that allows for the assimilation of knowledge and position for growth within particular sectors. For example, Ripple recently partnered with TPBank, a commercial bank in Vietnam for cheaper, faster money transfer operations. The partnership is also creating an educational environment that can inform legislators on the challenges and opportunities they need to address while crafting laws specific to blockchain technology.
From the government perspective, blockchain needs to be seen as an infrastructural component and public-private partnerships will play a big role in bringing the benefits out into the open. Instead of reacting to every bit of cryptocurrency news in the media, governments need a mindset shift to see blockchain as a bedrock for trusted societies, commerce, and social services. Or as Dr. Kieran Brown, at Berkeley Research Group points out:
Do governments and regulators want to be architects of the future, or victims of it?
Now some significant news from the world this week:
Fintech | Tencent to Lead Drafting of International Blockchain-Based Invoice Standards: WeChat parent company and Chinese internet giant Tencent has received the green light to draft blockchain-based invoice standards from China’s tax officials. Tencent’s blockchain invoice project was backed by multiple countries including the U.K., Switzerland, Sweden, and Brazil, as well as China’s State Administration of Taxation, at the ITU-T international meeting on e-voice standards Tuesday. Originally an anti-tax fraud initiative in Shenzhen, the company’s work on using blockchain tech to provide transparency in business reporting was announced last year. For the standards effort, Tencent is joined by The China Academy of Information and Communications Technology and the Shenzhen Taxation Bureau for the initial drafts, which Tencent and the related firms claim to be a step forward in realized blockchain business applications. [… Read More on Coindesk]
Blockchain marketing envisions an entirely new advertising and marketing environment, in which consumers are able to own and sell their data directly to marketers and advertisers. Built from the ground up to emphasize the relationship between brands and consumers,” Platz added, “blockchain marketing surpasses the middle-man.
- Brian Platz, co-founder and co-CEO, Fluree
This means circumventing platforms like Facebook and Instagram entirely, so there are greater trust and usability of consumer data. Blockchain is forming a direct data exchange between consumers and brands like never before. [… Read More on CMS Wire]
Enterprise | In 2020, Businesses Likely To Shift Blockchain Focus To Integration, Interoperability: As blockchain ledgers proliferate in the corporate world, enterprises will need to ensure their flavor of distributed ledger can communicate with other platforms deployed by potential business partners. The result: interoperability is expected to take center stage next year. Interoperability also applies to public and private cloud infrastructures; some enterprises host their own blockchain technology while also outsourcing blockchain services from vendors, such as Amazon AWS and Microsoft Azure. Some blockchain vendors, such as IBM and Oracle, have developed APIs to pass data from legacy systems or from one blockchain to another, but not necessarily between different platforms. And, once an external data source is added to a blockchain ledger, ensuring messages are secure and data is accurate and not duplicated becomes yet another issue. [… Read More on Computer World]
Rewards | Everipedia And Brave Join Forces To Win (And Reward) Your Attention: Everipedia and Brave are teaming up to help boost each others’ business. The blockchain-based digital encyclopedia Everipedia and privacy-focused web browser Brave announced on Thursday that two companies have entered into a “co-marketing agreement.” The move ties together two major blockchain brands that compete in different arenas of the Web 3.0 ecosystem. According to a joint press release, both Everipedia and Brave “boast millions of monthly active users.” Brave last month celebrated reaching 8 million monthly users, while Everipedia has seen its monthly visitors fluctuate between 1 and 2 million over the last 6 months, according to data from website analytics firm Similarweb. [… Read More on Decrypt]
Tokenization | IBM, Intel, J.P. Morgan and Microsoft Join Others On New Blockchain Token Spec: A business consortium led by the Enterprise Ethereum Alliance said their new blockchain-based token specification can create a regulatory compliant digital currency for use in any number of scenarios. A new specification to allow businesses to create blockchain-based tokens for international trade and finance has been published – and businesses have already tested digital money based on it for cross border payments and settlement. The Token Taxonomy Framework v1.0 (TTF) was developed by more than two dozen businesses and overseen by the Enterprise Ethereum Alliance (EEA). Its goal: give businesses and developers access to a set of reusable, cross-industry components to create usable tokens. Creating a single set of definitions and terms will help blockchain platform interoperability – regardless of the distributed ledger platform on which it resides. [… Read More on Computer World]
There are a variety of use-cases that have been identified as having the potential to enhance the function of financial markets empowered by blockchain. However, this new technology also comes with new risks. As operators of the infrastructure serving as the foundation for secure markets, we must not sacrifice the operational resilience and continuity of that infrastructure in pursuit of innovation.
A consistently popular cyber-attack vector focuses on the targeting and exploitation of the endpoint device with the objective to compromise user credentials or their private keys. Private keys, in the context of blockchain, serve as the identity and security credentials of the users of the distributed ledger supporting the ultimate anonymity of the ledger. Protecting the security of the private keys is critical for ensuring confidence in the blockchain. If a user loses its private key or it is stolen by a criminal through a cyber-attack, it cannot be recovered or worse, the user’s blockchain account is at risk. It is important that the implementation of a blockchain solution maintains a rigorous infrastructure supporting the custody, protection, and recoverability of its users’ private keys. […Read More on World Exchanges]
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.