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A brief history of how IBM has established itself as a leader for innovative blockchain solutions around the world.

The adoption of blockchain technology is slowly taking shape across a multitude of industries. At the forefront of the amalgamation of payment systems and logistics is US tech giant International Business Machines Corporation (IBM), which has established itself as a leader in terms of blockchain-based products and offerings.

The latest developments aim at the logistics sector – but IBM has been keen on blockchain for over 5 years that reveals a slow and steady approach to the adoption of enterprise-scale blockchain solutions.

Exploring the Internet of Things

Their beginnings in the space were focused on research on the capabilities of blockchain. Back in 2014, IBM began a study into the Internet of Things (IoT) which led to a collaboration with Samsung in an effort to overhaul early developments with the IoT. The tech giants agreed to develop the ADEPT project, which stands for Autonomous Decentralized Peer-to-Peer Telemetry.

In essence, the ADEPT Proof-of-Concept explored the possibilities of appliances interacting autonomously with its environment. This was proved by a Samsung washer reordering detergent and service parts as well as calibrating its own power usage.

The project identified three crucial functions of a decentralized system for the IoT – peer-to-peer messaging, distributed file sharing and autonomous device coordination.

The ADEPT PoC used Telehash for messaging, BitTorrent for file sharing and the Ethereum blockchain to coordinate more complex functions requiring contract capabilities. This early PoC provided a powerful insight into the capabilities of IoT and was a major milestone for both IBM and Samsung.

With the apparent success of the project and the realisation of the applications of blockchain, IBM announced that it would invest $3 billion in March 2015 into a new business unit that would solely focus on IoT.

Putting the blockchain in IBM

With working experience using blockchain technology in their IoT project, IBM quickly went to work on creating a blockchain solution aimed at large-scale enterprises.

The realisation of usable blockchain-based applications came to the fore from 2015 onwards. Rumours that IBM was developing its own blockchain-based payment system were eventually confirmed, although it was initially dubbed an experimental project by senior vice president of IBM Research Arvind Krishna.

At the time, Krishna said the company was intrigued by the promise of the technology:

“Blockchain, as a technology, is extremely interesting and intriguing. I want to extend banking to the 3.2 billion people who are going to come into the middle class over the next 15 years. So I need a much lower cost of keeping a ledger. Blockchain offers some intriguing possibilities there.”

The project uses smart contracts to log transactions between different parties to facilitate large transactions across the world. Funds held in escrow are then transferred once contractual obligations have been met.

This payment system eventually became part and parcel of its main blockchain platform, which was launched in April 2015. The IBM Blockchain platform allows the operation of blockchain networks on the IBM cloud. The service was touted to meet exceptional security standards including Federal Information Processing Standards (FIPS 140-2) and Evaluation Assurance Levels (EAL).

The IBM Blockchain platform is fully functional today, utilising the Linux Foundation’s Hyperledger Fabric which IBM contributed to creating.

Overhauling IBM Global Financing

As part of its global offerings, IBM also provides a means for businesses to access finance through its IBM Global Financing platform, mainly for IT hardware, software and services.

As IBM’s focus on blockchain grew, there was a realisation that the the technology could fast-track their financing process in a massive way, especially when it comes to dispute resolution.

Jerry Cuomo, IBM’s vice president of Blockchain Technologies, told Cointelegraph in August 2016 that the project could help ease the time taken to resolve thousands of disputes every year.

“The fact that in any given year we see about 25,000 disputes within the lending network and this ties up cash, in some cases it can be significant cash, $100 million at any given time which could be held up in disputes. It should be made more efficient so a dispute did not take 40 days on average to resolve.”

The proof-of-concept for the project allowed two years worth of transactions on their lending network to be processed in under 10 days.

Partnerships abound

With its own blockchain platform fully operational, IBM has been able to provide a wide variety of industries with a blockchain-based solution for their specific needs. This in turn has led to a number of noteworthy partnerships around the world.

In June 2016 IBM agreed to work with a Finnish development agency to implement a smart contract application that would track and provide data on shipping containers.

The three year pilot project began in September 2016, aiming to reduce cargo transit times Baltic states of Finland, Sweden, Estonia and Latvia, and is still ongoing.

IBM also opened an Innovation Centre in Singapore in July 2016 to help drive the development of blockchain-based applications in the city. The collaboration with the private sector and government agencies promised to deliver a number of pilot projects for trade, finance and logistics industries.

As part of its dealings in Singapore, the company announced a partnership with a local startup that would develop Know Your Customer (KYC) projects using blockchain technology in November 2016.

Another major reason for setting up a base of operations in Singapore is the proximity of the Port of Singapore Authority (PSA) Terminal, which is the world’s biggest container transhipment port. In August 2017, IBM signed a deal with PSA International to test a new blockchain-based supply chain network.

IBM partnered with with Bank of Tokyo-Mitsubishi in September 2016 to explore the possibility of using blockchain-based smart contracts between its business partners. The aim was to automate transactions using the Hyperledger project.

A month later, a $200 million investment into China’s UnionPay Bank’s IoT project also made headlines, as IBM extended its support of blockchain-based developments into the Far East.

Land and sea – partnering with Walmart and Maersk

Blockchain technology is making waves in the logistics and supply chain industries and IBM’s enterprise solutions have attracted some global industry leaders in this particular space.

Firstly, IBM and American retail giant Walmart announced they were working together in October 2016. The retailer was looking to develop a blockchain platform that would allow it to drastically expedite the tracking of any products in its stores, from origin to shipment as well as the current status of the product.

At the time, Walmart’s IT department had to manually search through its database, which could take days to address complaints or issues with products which had been purchased by consumers.

The project was gradually developed and in December 2016, Walmart began a trial to track the distribution of goods in China with the help of the Tsinghua University.

The number of partners grew to incorporate Unilever and Nestle by August 2017, as IBM laid the foundation for its food-tracking blockchain platform. The Food Trust blockchain was formally announced in June 2018, as Walmart and IBM continued their collaboration with a number of other enterprises to begin tracking food supply within their supply chains.

At the same time, Walmart implemented a blockchain-based platform that its suppliers of leafy greens must use to track produce from farms to its stores in September 2018. These suppliers will have a year to implement the software, which uses IBM’s blockchain service. The technology has allowed the company to trace the source of goods in seconds, where conventional methods would have several days.

Frank Yiannas, Walmart's vice president of food safety, told Cointelegraph that decentralised systems would benefit all parties involved in their use:

“We never had the intention of creating a product, all this started with the notion that we want to create a transparent food system. The way forward is decentralised as opposed to a supplier getting into a centralised database and putting data in there and the central authority owning the data. In this blockchain ecosystem, if you get into it and give data, it is your data, you own it.

“No single entity, nor IBM as the tech service provider can monetise or benefit from that data alone.”

While IBM’s solution is the backbone of Walmart’s blockchain system, Yiannas made it clear that they were moving towards a more decentralised network:

“A very important concept is self-governance. We have an advisory committee made of participants in the system right now that are setting up the rules on how it operates. We have permissioning of data, and then in terms of the nodes themselves, this is a work in progress.

“The nodes are within the IBM solution, but there is already work underway to create nodes that are independent of IBM. We’re in the early days of this, those nodes will be decentralised and they won’t be all IBM nodes.”

While all of this was going on, IBM was also busy working on a collaboration with global freight company Maersk to launch a blockchain project to overhaul the logistics and shipping industry in March 2017. This came to fruition in January 2018 when the two companies announced that they would be launching a blockchain-based shipping and supply chain management company.

Finally IBM and Maersk launch their shipping solution, TradeLens, in August 2018. Upon its launch, 94 organisations and 154 million shipping events had already been recorded on the platform.

Blockchain hardware

While most of its work in the blockchain sector has been focused on software, IBM has a long history of manufacturing hardware. With that expertise, they have also dabbled in creating hardware focused on blockchain usability.

In July 2017, IBM launched IBM Z, a blockchain-powered mainframe server that was touted to process more than 12 billion encrypted cloud-based or database transactions in a big move for data encryption technology. The server was said to be able to encrypt data 18 times faster than conventional platforms available at the time.

Less than a year later, IBM stated in its annual 5 in 5 report that devices known as cryptographic anchors would be commonplace in everyday objects.

The company has been developing these devices, which could serve multiple purposes. The most powerful would be a microchip ‘smaller than a grain of salt’ which will be able to monitor, gather, communicate and act on data.

Legal frameworks

IBM’s work with blockchain has also been implemented in various legal spheres around the world.

In Switzerland, IBM and blockchain startup Proxeus were able to register a business in the country in record time, proving the capabilities of the technology to overhaul conventional processes in digital workflows in April 2018.

During the same month, IBM was also part of a ‘world-first’ as global insurance brokerage and risk management firm Marsh announced a blockchain solution for proof of insurance.

The online advertising space is also in state of flux, as the industry looks to cut out fraud and provide more transparency to advertisers on internet platforms. To this end, IBM began working with Salon Media in April 2018 to develop a proof-of-concept for the digital advertising space that will try address advertising fraud in the space.‘The Campaign Reconciliation Project’ is a blockchain-based platform that hopes to remove the need for intermediaries between advertisers, publishers and consumers. The project will use smart contracts to track various details of ad campaigns that will be immutable and transparent.

IBM’s global solutions leader of advertising Chad Andrews told about possible impact to the advertising sector:

“With a Blockchain backed peer-to-peer network,..

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A startup has shunned ICOs and launched a platform designed to make paying in crypto as easy as contactless cards without external funding.

The team behind a new cryptocurrency platform designed to transfer the way consumers and businesses are paid, says it is putting its money where its mouth is – and has managed to launch without the need for an initial coin offering (ICO).

BLOC argues that too many ICOs have been popping up in the crypto world – disappointing users by failing to offer real products at their conclusion. By contrast, the startup says its platform already boasts “an exclusive set of mining tools, world-first features, and an unrivaled ecosystem to connect buyers and sellers.” The upbeat company has a “strong belief” in its no funding strategy, saying: “If we make a cool product, the value will create itself.”

The buzzwords BLOC uses to describe itself are “fully decentralized, secure, private, fungible, fast, and egalitarian.” It wants to help the crypto world shake off its image of only being suitable for investment by enabling individuals to use coins, as they would any other type of cryptocurrency.

QR codes would be one of the driving factors in making this happen, enabling consumers to offer it for scanning whenever they want to pay a merchant. BLOC says that these transactions would be processed instantaneously – offering security, not dissimilar, from contactless payments.

BLOC says that its platform is going to be open to developers, enabling companies to build their own products and engage with clients in a tailor-made way. Ideas proposed in its white paper include loyalty programs and automated regular payments.

How to make money with sleep mining and a mobile phone - Banking the unbanked - YouTube

A busy time since launch

The company takes pride in the milestones it has achieved so far without the need of an ICO over a five-month period. As well as developing a BLOC crypto wallet for Windows, Mac, and Linux, it has created a bot and successfully translated its ecosystem into three languages: French, Russian, and Chinese. Mining pools are online in North America, Europe, and Asia, the platform for developers launched, and an “innovative dashboard” has been introduced. As of October, the crypto wallet has also been made available for iPhones through the App Store.

BLOC says it has made efforts to dismantle some of the barriers to entry for mining by ensuring that anyone – whether they have hi-tech hardware or a humble smartphone – can mine BLOC.money “with the same probability of coin reward, in what it describes as a “true egalitarian proof of work.”

Changing the way we are paid

One of the concepts BLOC has unveiled is PAYCHANGE, which aims to take advantage of the popularity of contactless payments by encouraging cryptocurrencies to be used instead of conventional credit and debit cards. It hopes to integrate into standard payment methods including Apple Pay – “creating bridges between the real world and cryptocurrencies.” In order to educate the public and fuel widespread adoption, PAYCHANGE plans to launch physical stores around the world for the “hassle free” purchase of cryptocurrencies – and provide visitors with the courses they need to understand more about how the technology works. From here, they would have the chance to purchase the accessories they need to make the most out of their crypto.

In a sign of how ambitious BLOC is, it has also created TRAAKX, which aims to “revolutionize the sport talent management system using advanced hardware to track and record the activity of an athlete.” This would enable members of the public to financially support their favorite athletes, and give up-and-coming stars the encouragement they need to thrive. Over time, the startup believes that tokenization of sports will help create a much-needed boost for the sector – enabling audiences to grow and new stars to be discovered.

 

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

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Hong Kong’s securities and futures commission chairman announces crypto regulation prior to his retirement.

Hong Kong’s securities and futures commission (SFC) is planning to introduce crypto regulation to protect investors, the SFC chairman told Hong Kong English-language newspaper the South China Morning Post (SCMP) Monday, Oct. 15.

Chairman Carlson Tong Ka-shing — who will pass his position in the SFC to Tim Lui Tim-leung on Oct. 19 — said in an interview that the watchdog is not considering a ban on cryptocurrency platforms as the Chinese mainland has done, adding that they don’t think that a total ban is “necessarily the right approach”:

“It will not work in today’s internet world when trading can cross national boundaries. Even if we were to ban them, transactions can still be easily conducted via platforms in overseas markets.”

The official added that a legal framework to regulate crypto exchanges is absolutely necessary, noting that the SFC is going to consider the approach carefully as such platforms are “new technologies” and cannot treated as securities. Despite the fact they do not fall under the SFC’s current requirements, Tong proposes equating them to traders:

“We need to see if and how these platforms can be regulated to a standard that is comparable to that of a licensed trading venue, while at the same time ensuring investors interest are being protected.”

According to the SMCP, the exchanges that are working in Hong Kong’s market have welcomed the move. For instance, BitMEX chief operating officer Angelina Kwan told the newspaper that the regulatory authority can help to develop a new industry. And Circle’s CEO Jeremy Allaire said the company will proactively work with the government on those frameworks.

As Cointelegraph previously wrote in a review of Hong Kong’s policy on crypto, the SFC has warned the public about the potential issues of Initial Coin Offerings (ICO) at least twice. Back in September, the country has issued a public warning on the dangers of crypto investments and stressed that ICOs might be considered as securities. In early 2018, a second warning was released, reminding the public about potential risks of ICOs and urging investors to do their due diligence.

This July, the SFC declared in its annual report that it is keeping “a close watch” on crypto and ICOs and will intervene when appropriate.

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Payment giants MasterCard and VISA to group crypto and ICO brokers into a new “high risk” category, sources say.

Payment giants MasterCard and VISA will soon group cryptocurrency and Initial Coin Offering (ICO) jurisdictions in a new “high risk” category, financial trading news site Finance Magnates reported Friday, October 14.

According to the Broker Complaint Registry, some details of the shortly upcoming classification by MasterCard had already become public in May of this year. The registry notes that binary options, CFDs, forex, cryptocurrency options, and ICOs will fall under a new category of “High-Risk Securities Merchants” starting on Oct. 12, 2018, and will be subject to additional monitoring.

According to Finance Magnates, the grouping means that chargebacks could now be executed up to 540 days after the actual date of the transaction.

Anonymous sources familiar with the matter confirmed to Finance Magnates that the new classification by MasterCard will reportedly start on Monday, Oct. 15, while VISA is planning to implement a similar grouping in December of this year.

The grouping targets all companies that operate their businesses without licenses or do not require them, the sources report.

Some associated businesses have already reported to their customers that they will stop accepting credit cards, according to Finance Magnates, meaning that the clients of brokers that operate poorly regulated businesses will have to rely entirely on wire bank transfers or turn to alternative payment options.

MasterCard’s reported announcement goes in line with the general anti-crypto stance publicly expressed by the company. In July 2018, MasterCard CEO Ajaypal Banga argued that anonymous, not-state-issued cryptocurrencies are “junk,” due to their high volatility and inability to operate as a medium of exchange.

VISA had stopped supporting crypto debit cards via a partnership with debit card provider WaveCrest in January of this year, with affected cards including products from CryptoPay, Bitwala, TenX, Wirex, and others.

Earlier today, Cointelegraph published an interview with well-known American economist Nouriel “Dr. Doom” Roubini, who had predicted the financial crisis of 2008. In the interview, Roubini again spoke negatively about cryptocurrencies, comparing them unfavorably to the traditional financial market, and claiming that major altcoin Ethereum (ETH) is a scam.

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Recently tested Ethereum hard fork Constantinople has reportedly caused a “consensus issue” on a testnet, which will delay its launch.

An alleged “consensus issue” in the testing of a planned hard fork of Ethereum, called Constantinople, has caused a testnet to be “not usable,” according to a tweet from Ethereum blockchain infrastructure firm Infura October 13.

Infura’s tweet also advises developers to use other testing networks while the Ethereum developer community is “investigating” the issue.

As reported by multiple Ethereum developers the hard fork became active on the Ropsten testnet Oct. 13 at block 4,230,000.

However, the testing reportedly caused a “consensus issue on ropsten,” which led Ethereum developer Afri Schoedon to state in a thread of tweets following the test that there would be “no constantinople in 2018,” adding “we have to investigate.”

As a clarification following the strong statement, Schoedon noted Oct. 14 that at the most recent Ethereum core developers call, developers had agreed they would “not be able to activate Constantinople this year if there are any major issues on Ropsten.” He also added that the next scheduled call on the topic would be Friday, Oct. 19, telling the community to “stay tuned” until then.

The Constantinople hard fork is a system-wide Ethereum update designed to increase the network’s efficiency.

Earlier this year, Ethereum developer Piper Merriam opened an Ethereum Improvement Proposal (EIP) suggesting the idea of a possible Ethereum hard fork to invalidate ASIC miners, which are regarded as highly centralizing.

At press time, Ethereum is trading at $197, down about 1.5 percent over the past 24 hours.

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An interview with Mr. Roubini about “buggy” smart contracts, Ethereum being a scam, why he might want to give the industry another try

The interview has been edited and condensed.

Nouriel Roubini is a New York-based economist that famously predicted the 2008 financial crisis when only a few considered there might be a threat to the existing course of events at the time.

A Harvard alumnus and now a professor at NYU Stern School of Business, Mr. Roubini has always been critical of the crypto and blockchain industry. Oct.11, 2018 he testified at the Congressional hearing on Capitol Hill, Washington D.C., warning U.S. senators about “the mother or father of all scams and bubbles," — crypto.

We met with Mr. Roubini during BlockShow Americas in Las Vegas and talked about why he doesn’t believe in smart contracts, thinks Ethereum is a scam, and the fact that he might want to give the industry another try.

On being “against” the crypto industry

“I'm not against [it], I'm open to any type of innovation, but I'm an expert on financial crises and asset bubbles. And I became famous [by] predicting the global financial crisis  — the burst of that bubble.

I can see a bubble when there is one — and to me, this entire space has been the mother and the father of all financial bubbles and now it’s [going to] burst

Last year, almost everybody I knew was asking me every other day, “Should I buy Bitcoin?”
And the price of Bitcoin doubled, tripled, quadrupled, and went to $20,000. And when that bubble burst, it collapsed — collapsed from $20,000 down to $6,000 today (at the time of the interview).

If you bought it at the peak, you lost 70 percent of your value. And it's typical of all these financial bubbles: They go up until they collapse. And Bitcoin is actually the best [example], because the average cryptocurrency has lost, in the last nine months, more than 90 percent of their value.

I spoke about the bubble existing and this bubble going bust. And guess what? In the last year, [it] has gone bust. So I think I've been vindicated and proven right.

Bitcoin could go to the moon or zero, I'm not going to make a penny either way because I'm neither short or long.

And I'm just an academic that speaks his mind. And I saw a big bubble, and I think that it's fair as an intellectual to discuss these things and then figure out what's going wrong.”

To watch the interview go here:

Nouriel “Dr. Doom” Roubini : “99 Percent of Cryptocurrencies are Worth Zero” - YouTube

On future price movement and Ethereum being a “scam”

“An academic study suggests that 81 percent of all ICOs were a scam to begin with; 11 percent of them have failed or have died; and of the remaining eight percent that is traded on exchanges, the top 10 have lost on average, in the last year, 95 percent of their value — more than Bitcoin.

So, there was a bubble — and everybody was riding the bubble, everybody was issuing an ICO, raising money — but now it's gone bust.

I think that they've lost already 95 percent of their value and they could lose another 95 percent.

I would say 99 percent of cryptocurrencies are worth zero. Just because some people believe in something alternative to fiat currencies — alternative to gold — then, like collectibles, some people are going to hold some Bitcoin. Bitcoin is not going to disappear. But, you know, Ethereum is a bubble and it’s a bit of a scam — it's worth nothing — XRP, all the other ones, they’re all going bust.”

Catherine Ross: Why do you think Ethereum is a scam?

It’s a scam because the technology. They talk about smart contracts — there's nothing about them that is smart, they’re all buggy. They’re not real contracts because you have to enforce certain contracts, you cannot have just the code.

They've tried things that have failed: Their DAO was a failure.

You know, there's a lot of people [who] talk about their DApps or their distributed apps. 75 percent of those apps are what? CryptoKitties, Ponzi schemes and other pyramid schemes, and other casino games, like Las Vegas. So, after a decade, what does Ethereum have to show us? CryptoKitties and Ponzi schemes? And that's what they're doing? They're not doing anything that is of any use to anybody.

CR: But if a smart contract is a technology, — and you said “it's buggy” — technology can be buggy and it can be fixed. Don't you think we need more time to see the technology rise and smart contracts working better?

NR: I don't believe, first of all, in smart contracts. By definition, any contract has to be enforced by lawyers — [there is nothing that is enforced] by itself. So, the idea that you put everything in a code in a contract is silly to begin with. And, you know, a typical other program has less than one percent of bugs in its code, and a typical smart contract has 10 percent of its code  is buggy [sic].

I mean, this is the reality where we are in now.

And by the way, the broader question about cryptocurrency is that they are not scalable, and there's no system that makes them scalable; they're not decentralized because the entire system is [becoming] centralized; and they are not secure because there are so many ways to hack them.

So, it doesn't have any functions [it] should have: It's not scalable, it's not secure, it's not decentralized. So, what is it worth for? With Bitcoin, you can do five transactions per second; with Visa, you can do 25,000 transactions per second.

They've [the blockchain community] been saying for a decade, “We are going to resolve it with proof-of-stake rather than proof-of-work.” It has not worked yet. And even if there was something scalable, it’s going to be centralized and therefore is not secure. So, there's a fundamental flaw in the technology.

At least financial systems that we know are centralized, yes, but they're secure and they're scalable.  

They've been talking about fixing it, but Vitalik Buterin, who is the creator of Ethereum, said you cannot have a blockchain system that has three characteristic of the same time: being scalable, decentralized, and secure.

On trusting financial system

CR: Even after the 2008 global financial crisis, you still believe in the traditional financial banking banking system?

Traditional financial systems are centralized —  and there's nothing wrong with institutional centralizing in my view. They [the blockchain community] criticize it, saying “We want it decentralized.”

But I prefer a centralized system with a trusted authority — but at least they're secure and scalable.

There's a lot of talk about decentralization: Miners are centralized as an oligopoly, coders are centralized, exchanges are centralized — as 99 percent of all transactions occur on a centralized exchange — and there's a massive concentration of wealth. This is worse than North Korea in terms of income and wealth inequality.

The reality is just the opposite: It's a totally centralized system.

[At the same time] there are many problems with the traditional financial systems. And I’ve been one of the biggest critics of the financial system. And I believe that there are ways to [democratize] finance and [to] make it more efficient, but this is not based on blockchain.

There is a revolution in financial services: It's called fintech and it has zero to do with cryptocurrency and  blockchain.

It’s based on AI, machine learning, Internet of Things and big data. It’s revolutionizing payment system, insurance, credit allocation, capital market functions, and asset management.

Take, for example, payment systems: There [are] already plenty of digital payment systems — that do billions of transactions a day, and are used by billions of people around the world — that are not based on blockchain. In China, you have AliPay and WeChat Pay; in India, you have all these UPI systems; in Africa, you have M-Pesa; in the United States, you have Venmo, PayPal, Square — and so on, and so on. These are useful transactions.

With these models, you can do millions of transactions — and there are billions of transactions done by billions of people today. They are digital payment systems based on [the] traditional financial institution and fintech. They have nothing to do with blockchain. We don’t need blockchain, we don't need crypto to [democratize] finance.

There is already a revolution: there’s going to be much more competition, there’ll be much more access. If you are a poor farmer in Kenya today, you are using M-Pesa. On your little smartphone, you can make transactions, you can borrow and lend, you can buy and sell your goods and services, you have a whole slew of financial services without the brick-and-mortar bank. And all these things are available to billions of poor people in Africa. What [do] they have to do with blockchain or crypto? Nothing, zero. So, there is a revolution and it has nothing to do with blockchain.

CR: The entire philosophy of the industry was to create a transparent system and create a new world from a financial system that you can trust, a financial system that thinks about a user, a client. So you think it failed to do what it was supposed to do?

NR: Of course, it completely failed: After 10 years, there is no killer app; the crypto assets are going bust; they’ve lost 99 percent of their value; all these experiments have led not a single corporation or single financial institution using this technology; and there is no reason why they want to use this technology. And why would you want [to]?

Why would I want to trust somebody in Russia or China to verify my transactions? It’s not safe. Why would I want to do it? There are central banks, there are corporations, there are institutions that have been existing forever that are based on trust — on the reputation. And I know what I’m dealing with.

I'd rather have those institutions verify my transaction rather than somebody in China who can manipulate everything I am doing. Why should I trust somebody while I don't even know what the name is, who they are, what they do.

CR: So, you would rather trust a bank? How can you be sure that your money is safe?

NR: We have security laws. If a bank manipulates, there’ve been hundreds of billions of dollars in fines on the banks and their misbehavior — people ended up in jail. There are lots of problems with the traditional financial system: Blockchain and cryptocurrency do not resolve this problem. Fintech resolves it, but fintech has nothing to do with blockchain or cryptocurrencies.

I'm the first one who criticized the financial system, I've been writing about financial crises, I've been criticizing [the] banking system. I don't believe that crypto or blockchain resolves any, any of the problems of our existing financial system, [and they] don't resolve anything.

It's just something for a bunch of self-serving people speaking about decentralization, speaking about freedom, speaking about [the] democratization of finance — and there is no democratization of finance, there is no more access to financial services through crypto or blockchain. There are other alternatives that exist out there, like M-Pesa, that are giving power and giving democratization of finance to billions of people in Africa. Those things have nothing to do with blockchain. I believe in those things.

I don't believe in blockchain.

CR: I see your point of view, but just to be clear, the banking system has been around for centuries, right? So, maybe you should give the crypto industry and blockchain industries a try?

NR: No. I'm not giving it a try. I'm gonna give a try to financial innovation that changes the financial system.

All those things [mentioned above] —  they are revolutionizing finance, they are leading to competition, they are forcing the banking system to innovate or not survive, and they are changing the world. But they have nothing to do with blockchain. Why should I give the benefit of the doubt to something that has not provided any application which is used by anybody. I don't believe in it and the proof is in the pudding.

CR: My last question is, have you ever tried trading cryptocurrency?

NR: I haven’t tried it. Some people say, “Oh, you are critical of crypto because you are shorting Bitcoin or cryptocurrencies.” I have zero position — I have no long position, no short position.

I may be right or may be wrong, but crypto could go to the moon to go to zero; I'm not going to make a penny out of it. I'm an intellectual. I'm an academic. I have no conflicts of interest.

My only thing is my own academic reputation. If I’m proven wrong, my reputation is going to be negatively affected. But I'm not going to make a penny. And therefore, I'm not going to take a position one way or another because if I take a position, I have a financial interest to talk down or up a particular cryptocurrency; and that's not my interest.

I'm an intellectual and I'm not going to make money —  one way or another — out of it.

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Crypto markets hold steady after the recent sell-off, most of the top 20 coins by market cap see slight growth, Bitcoin trading above $6,300.

Sunday, October 14: crypto markets keep their balance after the recent sell-off this week, with most of the 20 top coins by market cap slightly in the green. Fluctuations on the markets in both directions have for the most part been no more than 1 percent, as data from Coin360 shows.

Market visualization from Coin360

Bitcoin (BTC) has seen slight growth over the past 24 hours, having strengthened to above the $6,300 threshold. At press time, the major cryptocurrency is trading at $6,331, slightly down from its intraday high around $6,360, while recovering from its intraday low around $6,277. On the week, Bitcoin is down almost 4 percent from around $6,580.

Bitcoin 7-day price chart. Source: Cointelegraph Bitcoin Price Index

Ethereum (ETH) has also seen a slight rebound, up around half a percent over the past 24 hours to press time. The second cryptocurrency by market cap has been hovering just above the $200 price point in the second half of the day, and is trading at $202 at press time. In terms of weekly dynamics, Ethereum is down about 11 percent to press time.

Ethereum 24-hour price chart. Source: Cointelegraph Ethereum Price Index

Total market capitalization of all cryptocurrencies is hovering around the $200 billion threshold, appearing to stabilize after the crypto markets’ recent decline. At press time, total market cap amounts to $202.8 billion, slightly down from $204 billion earlier today.

Total market capitalization 24-hour chart. Source: CoinMarketCap

Bitcoin dominance — or the percentage of the total crypto market cap that is Bitcoin’s — has been steadily near 54 percent today. At press time, Bitcoin dominance is at 54.1 percent.

Among the top 20 cryptocurrencies by market cap, TRON (TRX), the eleventh largest, has seen the most notable change over the past 24 hours to press time, up a solid 3.66 percent.

TRON continues to see gains today following a recent cryptic announcement from its CEO of a partnership with an unnamed “industry giant” that is valued at “tens of billions of dollars.” Following the tweet an unconfirmed report was released claiming that TRON has partnered with China’s Internet giant Baidu.

Crypto analyst Joseph Young commented on Twitter today expressing concern about Bitcoin’s trading volumes, claiming they are “approaching yearly low once again” and adding “Decent short-term recovery earlier today (October 14) but low volume is really concerning.”

Young has also participated in an ongoing Twitter battle recently between the crypto community and American economist Nouriel Roubini, who has been posting particularly audacious anti-crypto Tweets — most recently calling the whole idea of crypto “fascist at core.”

The crypto commentator today retorted a recent Tweet from Roubini about Bitcoin transaction fees that claimed “the cost per transaction of bitcoin is literally $60.” Young clarified for Roubini that “cost per transaction” is in fact different from “transaction fee.”

Roubini — a New York University professor also known as “Dr. Doom” for reportedly predicting the 2008 financial crisis — recently testified in a U.S. Senate hearing on cryptocurrency.

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Roger Ver wants Bitcoin.com to have its own crypto exchange, while CNBC’s Ran Neuner thinks Bitcoin’s price could soon “explode.”

Coming every Sunday, the Hodler’s Digest will help you to track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions, and much more — a week on Cointelegraph in one link.

Top Stories This Week

CNBC’s Ran Neuner Claims Bitcoin’s Price Is Set To “Explode”

Ran Neuner, crypto analyst and host of CNBC’s show Cryptotrader, said this week that the price of Bitcoin is “about to explode.” In a series of tweets, the trader predicted that a notable Bitcoin rally could be tied to the SEC’s upcoming decision on several BTC ETF applications. Neuner hypothesized that Bitcoin’s climb to $20,000 in December 2017 was “on the back of  the expectation and launch of a cash settlement BTC futures contract.”

Venezuelans Must Now Pay Passport Fees In Cryptocurrency

According to an announcement from Venezuela’s vice president, Venezuelans can only use the state-backed cryptocurrency, the Petro, to pay for passport fees starting Oct. 8. The newly raised passport fees will cost either 2 petros for a new passport or 1 petro for an extension. According to Bloomberg, the average monthly minimum wage in Venezuela is four times less than the cost of the new fee.

Roger Ver Plans To Open Crypto Exchange Through Bitcoin.com

Bitcoin.com, a Bitcoin and Bitcoin Cash services firm with Roger Ver as CEO, is planning to either buy or set up its own cryptocurrency exchange. According to Ver, the crypto trading platform will be set up on the Bitcoin.com website, thus generating “thousands or tens of thousands of new users every single day.” Earlier this week, Ver underlined that digital currencies will lead the world to economic freedom, stating that he will “never give up” until cryptocurrencies accomplish this goal.

Study Shows Cryptocurrency Market Could “Implode” Soon

A recent study conducted by Juniper Research has found that the cryptocurrency market could soon “implode” and that transaction volumes are decreasing. In their report, Juniper looks at the technical, social, and regulatory concerns of digital currencies, also examining regulatory developments globally, exchange failures, hacks, and blockchain forking and how it all impacts crypto volatility. The report also found that daily BTC transactions have fallen from $3.7 billion to around $670 million from the end of 2017 to September 2018.

TRON CEO Hints At Partnership With “Industry Giant” Valued At “$10s Of Billions”

CEO of TRON Justin Sun posted a tweet Friday, Oct. 12, saying: “Finally, First time to partner with tens of billions USD valuation industry giant. Guess the name.” With Sun’s tweet revealing little information of the forthcoming partnership, Twitter followers have suggested a number of possible candidates, including Baidu, Clover, and even Disney. In a later tweet, real-time crypto market news service Coinness claimed that TRON’s new partner is indeed Baidu, citing former team members as its source.

Most Memorable Quotations

“TRON will be 200x faster vs. ETH, 100x cheaper vs. EOS. dApp developers & users, this one is for you!” — Justin Sun, CEO of Tron

“The inequality coefficient of BTC is worse than North Korea that has the worst inequality on earth. Crypto beats Kim Jong-un in regards to centralization and inequality," — Nouriel Roubini, New York University economics professor, known as "Dr. Doom" for predicting the 2008 financial crisis

Laws And Taxes

European Union Markets Watchdog To Examine ICOs, Considers Regulation

The European Securities and Markets Authority (ESMA) said this week that it will be looking into ICOs in order to determine how they should be regulated. The organization, established in 2011 with the aim of creating a common set of guidelines for E.U. financial markets and their supervision, plans to assess ICOs on a case-by-case basis to see how they comply with existing securities regulations.

Ukrainian Finance Ministry Creates Working Group For Crypto Taxation

Ukraine’s Ministry of Finance has announced the creation of a working group with the aim of discussing and developing a legal framework for cryptocurrency taxation. The group will begin work in mid-October, identifying crypto-related tax options within the current legal framework, and then presenting their findings by the end of 2018. Previously, a proposed bill for crypto taxation suggested a five percent tax for individuals and legal entities that possessed coins and tokens.

Legal Expert: Implementation Of Crypto Regulations In The U.K. Would Take About Two Years

Legal Director of a prominent U.K. law firm Reynolds Porter Chamberlain (RPC) Jeff Kaufmann has said that implementing cryptocurrency market regulations could take the country two years. According to Kaufmann, the new regulations would imply the involvement of the U.K.’s financial watchdog, the Financial Conduct Authority (FCA), which in turn raises concerns about the agency’s readiness for its upcoming role as a cryptocurrency industry regulator.

Adoption

IBM Announces Launch Of Blockchain Food Tracking Network Food Trust

U.S. tech firm IBM has launched its blockchain-based food tracking network, Food Trust, along with major food retailer Carrefour. The France-based company, which operates more than 12,000 stores in 33 countries, will begin by testing blockchain in their own stores, with the goal of bringing the tech to all its brands by 2022. Food Trust, which was announced back in 2016, has been tested by IBM for 18 months.

Dubai’s State-Backed Digital Currency Gets Its Own Payment System

Dubai’s government-backed digital currency, emcash, will get its own payment system through a deal with blockchain payment provider Pundi X and its partner Ebooc Fintech & Loyalty Labs LLC. The subsidiary of the Dubai Department of Economic Development will work with the two firms to facilitate point of sale payments in emcredit’s emcash currency. The digital currency is pegged to the United Arab Emirates fiat currency, the dirham.

Mastercard Secures Patent For Partitioned, Multi-Currency Blockchain

Financial services heavyweight Mastercard has been awarded a patent by the U.S. Patent and Trademark Office for a method to partition a blockchain. The proposed technology would allow a single distributed ledger to support multiple types and formats of transactions. In the patent, Mastercard noted that using multiple blockchains simultaneously leads to “significant” resource consumption – a problem their new solution is purported to solve.

Mergers, Acquisitions, And Partnerships

Oasis Labs Partners With Crypto Venture Capital Firms To Launch Blockchain Tech Hub

Blockchain cloud computing platform Oasis Labs announced a partnership this week with names including Andreessen Horowitz’s crypto venture fund a16zCrypto, Accel, Binance Labs, Pantera Capital, and Polychain Capital, who will assist developers in building “privacy-first” DApps in a new tech hub. The Oasis Startup Hub, which will focus on the creation of a space for collaboration between blockchain developers, investors, technologists, and industry key-players, will also get support from Oasis Labs engineers.

PwC To Bring Tech Expertise To Cred’s USD-Backed Stablecoin Launch

Auditing giant PwC has partnered with decentralized lending platform Cred to act as a tech advisor in the release of their USD-backed stablecoin. According to the press release, the partnership aims to bring more trust to investors, and solve the problems of transparency and “substantiation” that keep investors out of the crypto space. The firm also will give a perspective on enhancing standards in order to provide a “more transparent set of reserve functions.”

Forbes Partners With Civil To Publish Content On Blockchain

International business media outlet Forbes has partnered with blockchain-based journalism platform Civil to publish its content on a decentralized network. Initially, Forbes will only publish crypto-related news through Civil’s software — which will be integrated with Forbes’ own content management system (CMC) — but will move over more content if the testing is successful. Forbes will also use smart contracts to allow their contributors to upload articles to Forbes’ CMS and then share them on other platforms, such as LinkedIn and Medium.

Unconfirmed: IBM, Central Bank Of Azerbaijan Partner For Blockchain Implementation

IBM and the Central Bank of Azerbaijan (CBA) will reportedly collaborate on implementing blockchain technology for a digital transformation of the country’s economy. According to a local Central Asian news outlet, the director of the Information Technology Department at the CBA  revealed news of the five-year digital economic program this week, noting that IBM will work with the bank on blockchain development. The director also noted that a digital identification system is in the works.

Korean Plastic Surgeon Buys $352 Million Stake In Crypto Exchange Bithumb

A group led by startup investor and one of South Korea’s most famous plastic surgeons Dr. Kim Byung Gun, has made a major investment in Bithumb’s holding company. According to Bloomberg, 50 percent plus one share has been purchased, making the surgeon’s BK Global Consortium the majority shareholder of the Korean exchange. As of press time, Bithumb is the largest crypto exchange in the world by reported daily trade volume, which amounts to almost $1.04 billion.

Funding Rounds

ETC Labs Announces A Startup Accelerator Pilot, Applicants Number Over 100

Ethereum Classic’s investment branch ETC Labs has announced the launch of its business incubator, slated for Q1 2019. In an interview accompanying the announcement, Elizabeth Kukko, the director of the program, has revealed that the incubator plans to work with as many as 24 startups each year. According to Kukko, ETC Labs has so far received 120 applications from various companies in the industry.

Winners And Losers

Crypto markets experienced a sharp drop Thursday, Oct. 11, bringing BTC down to trade at $6,305, ETH at $200. The total market cap is at $202.4 billion.

Top three altcoin gainers of the week are Blazercoin, MedicCoin, and Motocoin.

Top three altcoin losers of the week are EagleX, RabbitCoin, and Minex.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

FUD Of The Week

“Dr. Doom” Nouriel Roubini “Debunks” Crypto Before U.S. Congress

American economist Nouriel Roubini has testified at a U.S. Congress hearing with a speech “debunking” cryptocurrencies and blockchain. In his scathing review, Roubini mentioned such factors as Bitcoin’s scalability problems, high energy consumption and low decentralization, among others. Roubini’s attack on the crypto space was not limited to the congressional hearing, as he made multiple anti-crypto tweets this week — after comparing crypto to North Korea he went as far as to claim that the idea of crypto is “fascist at core.”

Oldest British Crypto Exchange To Reportedly Lay Off Majority Of Employees

Coinfloor, the oldest British digital currency exchange, is laying off the majority of its employees, unnamed sources stated this week. The exchange, which was founded in 2013 and has traded $1 billion in Bitcoin over the past 12 months, is apparently going to let go most of its around 40 employees. When asked about the rumors, the exchange’s CEO Obi Nsowu said that they are “making some staff changes and redundancies” as part of a business restructure.

Report Shows Coinbase Hits One-Year Low For USD Volumes In Q3 2018

A Diar report this week showed that crypto exchange and wallet Coinbase has seen a 1-year low in U.S. dollar volumes in the the third quarter of 2018. According to the analysis, Coinbase’s USD volumes have dropped to the lowest level during the past year, although the trading volume of BTC is almost $1 billion higher than last year. Crypto exchange Bitstamp has seen a better performance in this regard, Diar notes, with the trading volume of BTC $0.2 billion less this year than last year.

China: Man Gets 3.5 Years Of Jail Time For Stealing Train Station Power To Mine BTC

A man in China has received three and a half years of jail time for stealing power from a train station to support his Bitcoin mining. According to court documents released this week, the individual was also fined around $14,500 for stealing electricity from a factory at the Kouquan Railway from November to December 2017 to power his 50 BTC miners and 3 electric fans.

SpankChain Suffers Smart Contract Breach Leading To $38,000 Loss

SpankChain, an Ethereum-based adult entertainment platform, lost around $38,000 when it suffered a smart contract breach this week. The anonymous hackers stoles around 165 ETH, as well as caused the immobilization of another $4,000 of SpankChain’s internal token, BOOTY. The platform has later said that it got in contact with the hacker and persuaded them to return the stolen assets for a “reward” of $5,000 in ETH.

Prediction Of The Week

Blythe Masters: “Tens If Not Hundreds” Of Blockchain Projects Coming To Commodities

Blythe Masters, a former JPMorgan executive who is now CEO of her own software digital firm Digital Asset Holdings, said this week that commodity supply chains would soon get an influx of “tens if not hundreds” of blockchain projects to improve efficiency. Speaking at the London Metal Exchange annual dinner, Masters noted the complexity of..

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What is a ‘subnet’ and how the financial services giant is going to partition a blockchain.

On October 9, American financial services giant Mastercard was granted a patent for a method to partition a blockchain so that it can store multiple transaction types and formats. The filing published by the U.S. Patent and Trademark Office (USPTO) reveals the details of the new system — not the first of the kind for Mastercard.

Why would you need to partition a blockchain?

Simply put, different blockchains store their transactions in different blocks — say, Bitcoin (BTC) uses one kind of system to record data on its blockchain, while Ethereum (ETH) opts for alternative metrics.

Now, imagine a company that wants to use blockchain technology to store different kinds of data or use multiple cryptocurrencies for their business. It will have to run multiple blockchains, because, as per the recent patent’s filing, the transaction records are “often required to be of the same format and include the same types, and sometimes even sizes, of data.” Consequently, this company will also have to be able to afford all the extra resources and computing power involved.

This problem might be caused by varying degrees of permissioned or open access of blockchains. On the one hand, there are non-permissioned blockchains that allow anyone to view record or be part of it — just like the aforementioned BTC and ETH with their public ledgers. On the other hand, they can also be permissioned — those require special permissions to read, access, and write information on them. They are more common among industry-level corporations, for whom security, identity and role definition are crucial.

Mastercard’s new patent claims the inflexibility of blockchains in terms of data formatting restricts the usage of permissions on permissioned blockchains:

“[...] an entity may want to operate a permissioned blockchain, where varying levels of permissions may be used for participation in the blockchain, such as by limiting the nodes that may add new blocks to the blockchain. However, because all transactions in a traditional blockchain are formatted similarly, the permissions may not be extended to access to the actual transactions in the blockchain … The patent authors say their partitioned blockchain could bypass such limitations and provide ‘enhanced usage of permissions’.

So how would that work?

Mastercard’s new system aims to expand blockchain’s utility by allowing blocks to receive data from “a plurality of subnets”.

“Subnets” are proposed partitions, which would be internally consistent but would interact in a wider, single system: “a subnet may have rules about data in a transaction record, the organization of the data, the size of each data value, and the hashing algorithms used in the formulation of the subnet’s merkle root.” Therefore, subnets would be able to receive information from different computing devices and allow to add data of any kind and size without following a standardized data format. However, the amount of subnets is limited, as the proposed system supports a maximum of three.

Not a first for Mastercard: ambitious plans for blockchain

Mastercard first applied for the above mentioned patent back in July 2016 — it is a time consuming process. The patent office publishes applications up to 18 months after they are filed, and it can take years to decide whether to grant patent protection.

However, the grant for a partitioned blockchain is just one of many for Mastercard. Its first blockchain-related patent was approved in November 2017 titled "method and system for instantaneous payment using recorded guarantees". Since then, the company has come a long way in terms of studying the technology: according to IRP Daily’s August report titled “2018 Top 100 Global Blockchain Patent Enterprise Ranking”, the American credit giant is the third largest with a hefty 80 patent filings, surpassed only by Alibaba and IBM, which makes it a key participant of the potentially forthcoming patent war in the field of blockchain.

Just last month, USPTO published Mastercard’s series of three similarly-written patent applications, where the company argued that the distributed ledger technology (DLT) could significantly simplify business-to-business (B2B) transactions, noting that “21st century B2B collaboration sits on an unwieldy, unconnected and largely unchanged mid-20th century B2B payments platform”. Blockchain, in turn, as the patent authors argued, would store data in a system that is easily accessible by involved firms and is highly-resistant to forging.

Previously in July 2018, Mastercard filed a patent for consumer protection and payment transactions based on DLT. In it, the company described the form of a public blockchain-based method for linking assets between blockchain and fiat currency accounts.

Securing blockchain-related patents does not necessarily mean that the company will go on to create those new systems — whilst blockchain remains a relatively new field, some players just want to stake their claim before taking action. For instance, Bank of America — another top patent applicant — so far have prioritized having a registered technology over actually using it.

In 2016, Catherine Bessant, chief operations and technology officer at Bank of America, told CNBC that having blockchain-related patents is “very important … to reserve our spot even before we know what the commercial application might be.” Notably, those endeavors didn’t prevent the company from calling Bitcoin ‘troubling’ and uplifting its decision to ban customers from purchasing crypto.

The notable activity of Mastercard towards blockchain is backed by the ambitious statements, highlighting the company’s fundamental interest to the technology. In September, Ken Moore, the executive vice president and head of Mastercard Labs, told The Irish Times — on of the biggest Irish daily newspapers —the company’s Dublin-based unit was going “beyond the hype that surrounds new technologies such as blockchain to develop real, grounded services and products” that would be introduced the wider group. “This is not exploratory work for us,” he added, following Mastercard’s announcement that it plans to create 175 new jobs in Dublin with “new roles including blockchain specialists, data scientists and cloud infrastructure specialists”.

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Why the European Blockchain Partnership proves Europe is getting serious about distributed ledger technology.

On April 10, 2018, 21 EU member states and Norway signed up to create the European Blockchain Partnership. Including the UK, France, Germany, Sweden, the Netherlands and Ireland, they committed themselves to "cooperate in the establishment of a European Blockchain Services Infrastructure (EBSI) that will support the delivery of cross-border digital public services, with the highest standards of security and privacy."

Since April, a further five nations have joined the Partnership, with Italy becoming the latest to do so after it signed the Partnership's Declaration in September. As a member, it has committed itself to helping to identify, by the end of 2018, "an initial set of cross-border digital public sector services that could be deployed through the European Blockchain Services Infrastructure."

By bringing distributed ledger technology (DLT) to European infrastructure, the Partnership hopes to make cross-border services – such as those related to logistics and regulatory reporting – safer and more efficient. However, progress towards this goal has so far been slow and piecemeal, with the Partnership's members having had only three meetings since April. Nonetheless, it retains ambitious aims, with the European Commission telling Cointelegraph that it wants the European Blockchain Services Infrastructure (EBSI) to become an international "gold standard" for large-scale DLTs.

Still deciding

So far, the Partnership's mission is vaguely defined. While there was already agreement in April that it would work towards developing cross-border, blockchain-based public services, there is still no actual agreement on what particular services to hone in on and develop. The European Commission's head of Digital Innovation and Blockchain, Pēteris Zilgalvis explains:

"The Partnership's mission is defined in the Joint Declaration and it is on that mandate that we have to deliver before the end of the year. In the Joint Declaration the signatories committed to working together and with the European Commission in order to develop an EBSI that can support the delivery of cross-border digital public services in Europe. So the description of what this services' infrastructure [EBSI] could look like is what we are currently working on."

In other words, the Partnership's membership is currently at the very early stage of negotiating just what kind of blockchain-based public services to develop. However, as Zilgalvis explained to Cointelegraph, it expects to have agreed on all the fundamental details by the end of the year, so that these can be used as the basis for actually building and rolling out distributed cross-border technologies.

"As stated in the Joint Declaration, by end of 2018 the Partnership must provide a set of use cases of cross-border digital public services that could be deployed through the EBSI, a set of functional and technical specifications for the EBSI and finally, a governance model describing how the EBSI will be managed."

A global reference for blockchain

The Partnership and its members will therefore be busy for the rest of 2018, although it has only three more meetings left to hammer out the all-important details, having already had three meetings so far. According to Finland's representative to the Partnership, Kimmo Mäkinen, a senior advisor at the Department of Public Sector Digitalization, the most recent meeting took place on September 17. "This was the third meeting," he tells Cointelegraph. "The main topic was to discuss about the most prominent cross-border blockchain use-cases that had been proposed by member states and by the commission."

As for whether the Partnership will successfully decide on all the necessary parameters before the start of 2019, Mäkinen doesn't offer confirmation. "We will have three monthly meetings by the end of this year during which we will have to agree not only on use-cases but also technical/functional requirements and governance model for European blockchain infrastructure," he says, his use of "not only" implying that the Partnership has a more-than sizeable workload to get through before Christmas.

Still, even though three meetings and no particular end-product hardly counts as an impressive achievement, these meetings were positive for the Partnership. More importantly, they've revealed a strong commitment among its members towards developing blockchain technologies, as explained by Pēteris Zilgalvis:

"At these meetings we found that the Partners were extremely supportive of collective efforts to establish strong EU leadership in distributed ledger technology, drawing on the Digital Single Market framework, and that EBSI could play a very important role in achieving this objective."

Indeed, it would appear that the European Blockchain Partnership is being used by the European Commission as a vehicle for the EU becoming a global leader on DLT.

"In the longer term, we would like EBSI to become a global reference when it comes to trusted blockchain infrastructures," admits Zilgalvis, "a 'gold standard' infrastructure that is governed through a transparent multi-stakeholder organisation, meets the most advanced cybersecurity and energy efficiency standards, is scalable to accommodate different use cases, is highly-performant in terms of speed and throughput, ensures the continuity of services on the long term, integrates eIDAS (electronic IDentification, Authentication and trust Services) and supports full compliance with the EU requirements on data protection (General Data Protection Regulation) and network information security."

So even if the Partnership hasn't really achieved anything concrete yet, its significance lies in the fact that it represents a massive vote of confidence in blockchain technology. By committing to it, and by aiming to build "highly-performant" blockchain tech, the Partnership's 27 member nations have effectively declared that they believe DLT is here to stay and that it has genuine applicability to a range of areas.

Separately, each member is for their own purposes interested in blockchain tech from a variety of different perspectives, further testifying to blockchain's growing status as a promising new solution to a range of problems. "Finland is interested and curious of new possibilities that are to be presented by blockchain technology," acknowledges Kimmo Mäkinen, "in order to boost cross-border services for example in matters related to document authenticity, data exchange and identity management."

Implementation mode in 2019?

Of course, while there's little doubt that the Partnership's signatories are completely serious about DLT, there still remains the unavoidable question of when, exactly, it will produce and begin introducing the platforms it was set up to build. Well, despite there not being anything absolutely definite on this front, Pēteris Zilgalvis states that we may begin seeing actual output as early as next year:

"These deliverables [functional and technical specifications, governance model] will be addressed to the political representatives who signed the Declaration, and if approved, the Partnership could move into implementation mode in 2019."

Once again, this time frame is ambitious. But even if certain differences of opinion may need to be ironed out between members before implementation can begin, the target of 2019 shows just how confident the European Commission is that the Partnership's member states are on the same page with regards to blockchain, which is further indicated by them signing its Declaration in the first place. If the Partnership does indeed follow through with its plans and implements blockchain-based cross-border infrastructure, this will only have positive ramifications and knock-on effects for wider blockchain adoption elsewhere. All of which means that the future of blockchain adoption in Europe looks increasingly bright.

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