Smart Systems, Bitcoin Lightning Gaining Steam & Square's Crypto Initiatives

Off the Blocks | Vol 60, Mar 26, 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.

Smart Systems, Internet of Things, and Blockchain

Internet of Things (IoT) is an abstract distributed system of devices that are interconnected and cooperate to exchange information in the pursuit of certain common goals. As a result, each such interconnected device adds to the “intelligence” of the system and makes it smarter. As such, smart homes, smart cars, smart systems, smart cities etc are all concepts enabled by interconnected devices exchanging rich, real time information. Bain & Company estimates that the IoT market size will grow to about $520B by 2021.

The opportunity for enterprises is enormous in all aspects - hardware, software, systems integration, data and telecom services etc. However, the multifaceted functions and complexity of managing IoT devices across this broad range has meant that the solutions are disjoined, with few interoperability standards and fewer ways and means for ensuring data integrity and application provenance. IoT data and applications are already decentralized and distributed. This is where blockchain starts to make its presence felt. Bosch and Volkswagen, have both partnered with IOTA, a distributed ledger that powers machine to machine communication through micro-transactions and ensures data integrity. There are immense productivity gains that real-time data analysis and prediction can bring in conjunction with blockchain technology.

In the whole process of supply chain management, communication is very important, data needs to be collected, and through blockchain and AI, we can improve processes and enhance trust so that we can share information better, so a healthy process is established.

- Hong Yuan Zhen, CEO, Samsung SDS

Logistics seems to be a natural fit for integrating hte promise of IoT and blockchain technology. Travel companies, technology partners and governments all seem to have taken note of the developments and are finding uses for blockchain to ease friction across the ecosystem.

China has already taken a big lead in production systems that integrate blockchain technology and a variety of IoT sensors and systems. As of March 15, 2019, the Shenzhen City blockchain electronic invoicing system has issued more than one million electronic invoices backed with blockchain tech, with the total invoices amounting up to 1.33 billion yuan (around $200 million). This is a first step in the implementation of e-invoicing that will affect all public transport systems including taxis, airport buses and other traffic scenes. In another news, the Chinese province of Jiangsu, north of Shanghai, is leveraging both IoT and blockchain technology to overhaul local transport infrastructure. A multi-year project called the “Implementation Plan for the Promotion of Transportation Infrastructure Development” aims to update both passenger and freight networks to reduce pollution and increase efficiency. The Argentinian state transportation payments card SUBE (Sistema Único de Boleto Electrónico) seems to be following in a similar direction.

Biometric identification and tracking is another big area where IoT and blockchain are expected to converge. The US Government has created its own applications for facilitating travel, trade and security.

One area we’ve seen a significant amount of success in is facial comparison and biometric data. There is a service we’ve created to verify who an individual boarding an aircraft who is as they’re seeking admission into the United States. If we could have more data for the verification from another government party, that would be really great for us.

- Sikina Hasham, program manager at U.S. Customs and Border Protection

As almost every analyst likes to point out, these are early days for enterprise grade application deployment. Despite numerous proofs-of-concept, the blockchain ecosystem lacks standardized ways of communication between the stakeholders. However, leveraging the strengths of blockchain to manage IoT data offers new ways of automating business processes without setting up complex and expensive centralized IT infrastructure. As a result we will continue to see a reimagination of business models and a shift towards transactional mechanisms of digital interactions amongst connected devices and systems.

Image Source: Blockchain and the IoT

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

  1. Payments | Bitcoin Lightning Web Standard Is Gaining Steam: Sending bitcoin lightning payments over the web might soon get easier. That’s because a new bitcoin standard for simplifying lightning payments, the open-source WebLN standard, is gaining traction, now being used by Lightning Joule and Bluewallet, two of the more popular lightning wallets, as well as apps like Lightning Spin, to slim down the number of steps a user needs to make a payment. This is an important step for lightning, an experimental technology that is still risky to send real money over. Developer warnings aren’t stopping eager users from trying out what they believe to be the future of bitcoin payments, and as they’ve toyed with payments, they’ve bumped into issues trying to send or receive value. WebLN has some other features as well that aren’t quite related to payments. [… Read More on Coindesk]

    There’s also an element of identity where users could use their lightning node’s public key – a string of random letters and numbers showing – to login to a website. It could effectively replace passwords.

  2. Enterprise| Square Is Staffing up for a New Cryptocurrency Unit: Square CEO Jack Dorsey said he wants to hire a few cryptocurrency engineers and a designer, to conduct work that will contribute to advancing an accessible, Internet-based financial system that benefits the greater community. Square already allows people to buy and sell Bitcoin on its Cash App, which is also a mobile payments platform that competes with Venmo. […Read More on Fortune]

  3. Singapore | BMW, Intel Partner With Blockchain Accelerator: BMW Group Asia, Intel and Nielsen are now corporate partners of the Singapore government-supported blockchain accelerator Tribe. BMW will provide “masterclasses” and mentoring sessions on how blockchain solutions can be implemented in a mass market situation. Intel Corporation, on the other hand, will offer business and technical mentorship to startups. Meanwhile, Nielsen will provide “a sandbox with the objective of providing participants with a safe, controlled environment to test new technologies and accelerate the adoption of their solutions.” [… Read More on Coindesk]

  4. Payments | Western Union will use Stellar blockchain: Western Union has established a partnership with Thunes, a cross-border payments network formerly known as TransferTo, to provide the possibility for its clients to transfer funds directly into mobile wallets globally. Thunes, has been a partner of since July 2018, and will give Western Union the possibility to utilize Stellar’s distributed ledger to obtain instant clearing, settling, and execution, enabling value to move across borders and directly between banks and payment gateways.  [… Read More on Chepicap]

    Our goal is to make digital money transfer services more accessible, with a specific focus on enabling mobile transactions

  5. Exchange | Rakuten Readies Cryptocurrency Exchange for April Launch: Japanese e-commerce giant Rakuten has completed registration of its cryptocurrency exchange Rakuten Wallet, which will go live next month. Rakuten, which follows several major Japanese tech players in entering the crypto exchange market, renamed its product from Everybody’s Bitcoin earlier this month. The company had acquired the exchange under the former name in August last year for 265 million yen (at the time $2.4 million). Following a consolidation period during which Rakuten made changes to its structure, executives have now confirmed that Everybody’s Bitcoin in its current guise will cease operations at the end of March. [… Read More on CoinTelegraph]

The Final Word | Bitcoin Blockchain Costs Approx. $7 Million a Day to Stay Secure

It takes an average of $7 million every day to secure the Bitcoin blockchain network, according to Messari. The cryptocurrency data portal published a new screener which outlined the revenues paid to miners for top proof-of-work coins. The screener based its figures on new issuance and transaction fees, eventually finding that Bitcoin produced the maximum output among all the PoW assets, issuing $7.392 million worth of bitcoin tokens every 24 hours and distributing over $115,000 in mining fees. In contrast, Ethereum’s daily issuance rate was almost six times lesser at $1.85 million than that of Bitcoin. At the same time, it’s trading fees was nearly half at $58.23k than what Bitcoin network paid to miners.

Overall, both the Bitcoin and Ethereum networks were spending 0.1-percent of their current market capitalization. [… Read More on NewsBTC]

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