The blockchain technology – popularized by digital currency Bitcoin – is increasingly being used to enable trust across industries. On 30 November, the R3 blockchain consortium, a collective of roughly 70 banks and financial institutions dedicated to the development of distributed ledger technology, kept its promise to release the open-source Corda platform (link). [Article].
What exactly is a blockchain?
A blockchain — originally block chain — is a distributed database that maintains a continuously-growing list of ordered records called blocks. Each block contains a timestamp and a link to a previous block.By design blockchains are inherently resistant to modification of the data – once recorded, the data in a block cannot be altered retroactively.
Blockchains are secure by design and an example of a distributed computing system with high byzantine fault tolerance. Decentralised consensus can therefore be achieved with a blockchain. This makes blockchains suitable for the recording of events, title, medical records and other records management activities, identity management, transaction processing and proving provenance.This offers the potential of mass disintermediation and vast repercussions for how global trade is conducted. – Wikipedia
Management guru, Don Tapscott describes it thus:
What if there was an Internet of Value – A global, distributed, highly secure platform, ledger or database where value could be stored and exchanged and we could all trust each other without powerful intermediaries. Collective self-interest, hard-coded into this new native digital medium for value, would ensure the safety security and reliability of commerce online. Trust is programmed into the technology, which is why we call blockchain the Trust Protocol.
Why should you care? Maybe you’re a music lover who wants artists to make a living off their art. Perhaps you’re an immigrant who’s sick of paying big fees to send money home to loved ones in your ancestral land. Maybe you’re an aid worker who needs to identify landowners so you can rebuild their homes after an earthquake. Or a citizen fed up with the lack of transparency and accountability of political leaders. Or a user of social media who thinks all the data you generate might be worth something—to you—and that your privacy matters. Even as we write, innovators are building blockchain-based applications that serve these ends. And they are just the beginning.
Blockchain in 2017: From proof to pilot
Blockchain offers a way to track items or transactions using a shared digital “ledger.” Blocks of new transactions are added at the end of the chain, and encryption ensures that it remains unbroken—tamper-proof and error-free. This is significantly more efficient than the current methods for logging and sharing such information.
But the potential goes beyond finance. We at IBM estimate that applying blockchain to global supply chains could generate more than $100 billion in annual efficiencies. Toyota and the U.S. Postal Service are exploring this already.
Visa and DocuSign are working on a blockchain system that enables a car buyer to sit in the driver’s seat, configure the aspects of a lease on the dashboard, and drive away immediately. La’Zooz, an Israel startup, has a blockchain ride-sharing app that allows drivers to connect directly with customers, without needing a middleman like Uber or Lyft.
– Oped by Ginni Rometty, Chairman, president and CEO of IBM.
- From proof to pilot. 2017 will be the “year of the pilot” for blockchain in financial services, as it moves from a proof-of-concept technology into production, especially in the cross-border payment and trade finance areas.
- From slow to fast. This will move more quickly than expected, and we could reach a “tipping point” over the next 12 months if enough players with enough financial capacity come together, as seems to be the case in several areas at present.
- A better experience. Players have to prepare for the implementation of the revised EU payment services directive PSD2 in 2018. With the creation of open banking platforms, there will be opportunities for FinTechs to partner with banks to create more exciting customer experiences.
- Fending off the attack. Cyber-attacks on organizations are on the rise, with denial of service becoming much more threatening and dangerous for banks. 2017 will be a year to strengthen defenses.
- Banks still lagging. Financial services blockchain implementation will apply to the “low hanging fruit.” We stick with our main thesis that broad-based adoption of blockchains will happen more quickly outside of financial services – in areas like supply chain management, in e-government, or health care.
Blockchain Startup Solutions in the news
- UNICEF makes investment in a South African blockchain startup – The United Nations Children’s Fund (UNICEF) announced its first portfolio of investments in open source technology solutions, including a South African startup that uses blockchain technology. UNICEF’s first portfolio of investments includes five startups including support for 9Needs from South Africa that uses blockchain and advances in identity technology to create better management systems for early childhood development services. The other startups include Nicaragua-based Saycel, mPower from Bangladesh, Pakistan-based Innovations for Poverty Alleviation Lab and Cambodia- based Chatterbox, the release stated. econotimes.com
- Blockchain Real Estate Startup Bitmark Raises $1.7 Million – Taiwan blockchain startup Bitmark has raised $1.7m in a new seed funding round.Cherubic Ventures, a VC firm focused on early-stage companies, led the round. Bitmark, which is developing technology to register user generated content using blockchain tech, raised the funding from a group of investors that also included Digital Currency Group and WI Harper.Properties registered on its platform are tied to digital assets called “bitmarks” which can be sold and and exchanged with other users, creating an electronic record of their movements. Bitmark is among a growing body of startups seeking to leverage the technology in order to reinforce property rights in favor of their creators. – coindesk.com
- Irish blockchain start-up FXCH aims to overhaul foreign exchange – Dublin-based start-up Foreign Exchange Clearing House (FXCH) is turning to crowdfunding to raise €8.5m, to expand its operation that uses blockchain and overhaul how currency is exchanged between financial institutions.
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