Nov 28, 2017 - New Zealand FinTech startups need to be braver and take advantage of rapid innovation and change happening in Asia, says a Kiwi-Asian business and technology trade expert working to attract Asian FinTech startups to take part in version 2.0 of Kiwibank’s FinTech Accelerator, run in partnership by Kiwibank and Creative HQ. Darshan Shetty, of Auckland and Beijing-based Xing Cheng Xing (Rising Star), says Kiwi startups can learn much from what’s happening in FinTech markets in China, India and Vietnam.
Many Kiwi ventures are too focused on breaking into the United States and European markets, Shetty says.
“Of course, we need to focus on the US and Europe markets, but innovation and change is happening a lot more – and lot faster – in Asia than the US and Europe.
“China is way ahead of the game, especially with WeChat and Alipay leading the charge. India and Vietnam are not far behind but are catching up fast.”
The onus was on Kiwi FinTech startups to be much more agile in putting ideas into practical application – and to take a few risks.
“Compared with Asian startups, Kiwi startups tend to move much slower. Having a clear idea of things is crucial, but there can be a tendency to overthink things, rather than taking action.
“We need to start taking a few more risks as a startup ecosystem and be braver in working closely with Asian markets.”
New Zealand’s reputation in Asia was as a primary producer. That reputation needed to be diversified into FinTech and innovation.
“On the whole, no one knows much about New Zealand when it comes to tech innovation,” Shetty says. “We’ve always positioned ourselves as a country that makes meat, milk and manuka honey and, of course, the Lord of the Rings movies. These are maybe the only topics we ever talk about (in Asia). But New Zealand is much, much more, it just seems we’ve forgotten and ignore the innovation success of Kiwis.”
Shetty says blockchain, cryptocurrency and app-based FinTech innovation was exploding in Asia and were areas Kiwi startups would be well advised to focus on.
“Another area would be to simplify ways to get smaller investments into the New Zealand marketplace from investors who actually want to invest here, rather than just coming here as immigrants. Stock market apps are another growth opportunity in Asia in the automation of market prediction and advice.”
The inaugural Kiwibank FinTech Accelerator resulted in the successful launch of startups including Sharesies, Accounting Pod and Tapi with support, funding and expertise to build, develop and expand their products in New Zealand and world markets.
That success had encouraged Kiwibank and accelerator partners Creative HQ and Callaghan Innovation to launch version 2.0 of the programme, which will be run by Creative HQ’s Lightning Lab accelerator.
Kiwibank’s Peter Fletcher-Dobson says focus of the new accelerator is on helping Kiwi FinTech startups develop a “global first” approach.
“FinTech’s a $1 trillion global industry, with investment increasing every year. As a country with talented people and a good regulatory environment, we can be at the heart of development.
“By having overseas ventures involved, we can expose Kiwi startups to the thinking and technology being applied internationally. The global networking potential alone will be invaluable.”
James Hartley, Manager of Financial Markets Policy at the Ministry of Business, Innovation and Employment, agreed that New Zealand was well-placed to be a leader in FinTech innovation.
“We’ve got some of the most modern and supportive financial markets legislation in the world. On top of that, the World Bank ranks New Zealand as the easiest country in the world in which to both do business and start a business. We’re also the least corrupt country in the world and sit high in financial literacy and innovation rankings.
“Because we’re a small country, we can co-ordinate and act quickly when responding to change. Our policymakers and our Financial Markets Authority are engaging with the FinTech sector and taking an agile approach to innovation. We know larger countries struggle to provide the level of access and openness we have here.”
Nov 23, 2017 - Air New Zealand is exploring the use of blockchain-based systems within its business, reinforcing its global reputation for innovation and embracing new and emerging technology. Blockchain is being used globally to build encrypted, shared platforms, providing a secure and efficient way to track the exchange of goods or information. Air New Zealand is looking at a number of potential use cases for the distributed ledger technology including cargo and baggage tracking, retail, distribution and loyalty programme opportunities. Air New Zealand Chief Digital Officer Avi Golan says applications of blockchain are developing rapidly, and the airline is excited by the possibilities. “With its built-in efficiency and security, blockchain has the potential to trigger huge innovation in travel, paving the way for new business models and collaboration.” Air New Zealand is partnering with Swiss travel platform Winding Tree, which is developing the world’s first travel marketplace on blockchain to connect suppliers such as airlines and hotels directly to sellers. “While we are still exploring its benefits, blockchain may offer a streamlined way to retail airfares and ancillary products alongside our current channels. In removing complexity from the sales chain, customers benefit from reduced transactional costs, and airlines benefit from swift and secure sharing of information,” says Mr Golan. Winding Tree Founder and Chief Executive Officer Maksim Izmaylov says Winding Tree is a decentralised alternative to the current travel distribution landscape. “With a business-to-business marketplace system powering blockchain-based travel booking transactions, startups and companies will be able to gain direct access to travel service providers’ offerings.
“We are very excited to be partnering with Air New Zealand, as it’s an important step in bringing blockchain technology to the travel industry and creating opportunity for innovation,” says Mr Izmaylov.
Air New Zealand has worked with a range of leading technology partners to introduce innovations to enhance the customer experience. These include its artificial intelligence backed chatbot Oscar, who helps customers with queries online and through the Air New Zealand mobile app, and its experiment with the social robot Chip, who assisted customers with check in at Sydney Airport earlier this year. German carrier Lufthansa has also recently announced a partnership with Winding Tree.
| An Air New Zealand release || November 23, 2017 |||
Nov 21, 2017 _ On October 20, 2017, Mastercard announced that developers would be able to access its blockchain technology platform via its Mastercard blockchain API published on Mastercard Developers writes Giulio Prisco on nasdaq.com.
The new service was launched during the Money20/20 Hackathon in Las Vegas after testing and validation had been completed. According to the company, Mastercard's blockchain solution "provides a new way for consumers, businesses and banks to transact and is key to the company's strategy to provide payment solutions that meet every need of financial institutions and their end-customers."
Mastercard wants to provide an easy-to-use, permissioned platform to its network of developers and partners, designed for privacy, flexibility and scalability. According to the company, Mastercard's blockchain technology platform provides privacy by ensuring that transaction details are shared only amongst the participants of a transaction while maintaining a fully auditable and valid ledger of transactions; flexibility by providing the blockchain APIs and a wider suite of Mastercard APIs, with software development kits available in six different languages; and scalability to commercial processing speed. Mastercard emphasizes that its blockchain technology is integrated into the company's widely popular payment network.
At this moment, the Mastercard blockchain website for developers states that, due to an overwhelming amount of interest in Mastercard's blockchain, "We are limiting access to our API documentation to a select audience at this time."
Besides specific use cases such as Proof-of-Provenance and vehicle service history, Mastercard notes that the global market opportunity for peer-to-peer (P2P) bank transfers is $16 trillion. Mastercard intends to take advantage of blockchain technology and the Mastercard Settlement Network to transfer funds between bank accounts.
"The Mastercard Settlement Network reads the blockchain and will transfer the funds between two banks," stated Mastercard. "It then writes a confirmation of transfer to the Mastercard blockchain."
According to Mastercard, the company operates the world's fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. Besides developing its own blockchain platform, Mastercard had previously filed for over 35 patents related to blockchain technology, invested in Digital Currency Group and joined the Enterprise Ethereum Alliance to explore the possibilities of Ethereum technology across a wide range of potential use cases.
"This move comes as a bit of a surprise, as Mastercard previously issued a blanket rejection of Bitcoin," reads a commentary published in Futurism . "Still, Mastercard's blockchain service heralds what Ethereum co-founder Vitalik Buterin described to be blockchain's potential to replace credit cards."
It appears that the payment processing giant, realizing that blockchain technology is here to stay and disrupt the credit card industry, is accelerating its blockchain-related plans. Last week, Mastercard filed a new patent for a " Method and System For Instantaneous Payment Using Recorded Guarantees ."
While it may seem that Mastercard is trying to patent blockchain technology itself, the filing is more specific and targets fast, verifiable and guaranteed payments on a blockchain network.
Mastercard noted that, while fiat currency enables merchants to receive instant payments, it may take several days for a merchant to receive electronic payments due to processing, clearing and settlement times. On the other hand, credit cards are more convenient for consumers. Therefore, according to the filing, there is a need for a technical solution that allows merchants to receive instantaneous, guaranteed electronic payments while maintaining a high level of consumer convenience.
| A Nasdaq release || November 20, 2017 |||
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Nov 20, 2017 - AirAsia is the best low-cost airline in the world and CEO Tony Fernandes wants to shift the airline’s business towards e-commerce launching a payments platform called BigPay. Fernandes also believes the first class cabin is going away within five years. Sixteen years ago, Tony Fernandes, with a small group of intrepid entrepreneurs, took over a failing Malaysian Government-owned airline for $US0.25 and the promise to assume its $US11 million in debt.
Since then, AirAsia has helped bring affordable flying to the masses in South East Asia. In the process, the Kuala Lumpur, Malaysia-based company has become one of the most disruptive forces in commercial aviation history while making the always affable Fernandes a rockstar in the business world.
What started as a two-plane operation has now expanded to a fleet of more than 150 Airbus A320 jets with another 200 aircraft on order. And for the past nine years, AirAsia has been named the best low-cost airline in the world by Skytrax and its reviewers.
Recently, Fernandes spent a morning with the Business Insider at our headquarters in New York. Our conversation touched upon several topics including the company’s future endeavours in e-commerce, AirAsia’s move towards fintech, where the airline industry is going, and advice from his mentor Sir Richard Branson.
AirAsia is betting big on e-commerceFor the airline’s next great adventure, Fernandes wants to move AirAsia’s revenue model beyond simply selling tickets and into the world of e-commerce. With an ample supply of customer data, AirAsia wants to anchor its new e-commerce operation around the sale of duty-free goods.
“So when you book your ticket (online), we’ll offer you the chance to buy duty-free and you can pick it up on the plane or at the airport,” Fernandes told us. “It gives our customers much more time to browse and potentially we can create a marketplace for shops to put content on our website.”
According to Fernandes, the average passenger has an hour to an hour and a half to shop at the airport. With the online shops, AirAsia passengers can shop 365 days a year with personalised recommendations.
Further, Fernandes wants to use the airline’s fleet to transport goods purchased to destinations throughout Asia, thereby creating a logistics business.
“If you take Amazon, they started with a website and great distribution, now they are buying planes,” Fernandes said. “We’ve got the planes and we’re working backward.”
Of course, AirAsia’s e-commerce revolution won’t get off the ground without retrofitting its fleet with high-speed Wifi, a process that’s currently underway. It’s an element of the passenger experience Fernandes admits had been lacking onboard his flights.
The airline is focused on getting rid of cashThese days, cabin crew on board AirAsia flights wear several hats, among them salesperson. But due to the nature of AirAsia’s network that spans the entirety of Southeast Asia, cash poses a major problem. Which is why Fernandes is excited to jump into the financial technology (fintech) business.
“We’re so excited about the fintech revolution,” Fernandes said. “We hate cash. It’s a pain for our cabin crew. FX is a super pain. It leads to fraud. It tempts my crew to do things they shouldn’t do.”
As a result, AirAsia launched a new payment platform called BigPay that will allow the airline’s customers to buy products through their smartphones. According to Fernandes, the platform is built with group travel in mind. Which means it will allow people to share bills and transfer money to one another.
Initially, BigPay will also be available with a pre-paid card, but Fernandes and his team are working to make it more app-focused using QR codes and near-field-communications.
There will be a currency exchange feature as well.
“We think our customers are being ripped off by banks,” Fernandes said. “If you were travelling to Bali, [Indonesia] from Da Nang, Vietnam and wanted to exchange your Vietnamese Dong to Rupiah, we would facilitate that for you at a much lower rate.”
BigPay currently works with 10 currencies, but Fernandes expects to up that figure to 14.
Ultimately, the AirAsia boss believes BigPay will be able to expand beyond the airline ecosystem and into mainstream retail.
Where AirAsia and the airline industry are headedEven though AirAsia is thriving, the airline won’t be expanding beyond its bread and butter low-cost economy model. When asked if AirAsia is looking to offer a low-cost, long-haul business-class-only product like La Compagnie, Fernandes quickly shot down the idea.
“No, not while I’m at AirAsia,” he told us. “I think focus is key and we’re good at what we do and [long-haul business-class-only] is a different model.”
With that said, Fernandes understands the reasoning behind a dedicated business-class airline and is baffled by why airlines would offer so many different cabins on board a single aircraft.
“Airlines were crazy to have first class, business class, premium economy, and economy on one friggin plane,” Fernandes said. “That’s four business models on one plane.”
“You don’t have Four Seasons hotels with budget rooms and super suites, they basically have one standard, but with bigger rooms,” he added.
Instead, the AirAsia boss believes market segmentation in the future will see airlines specialize in one or two particular products.
“I’ve always said airlines will eventually become low-cost carriers and business class,” he proclaimed.
According to Fernandes, we will see the end of the first class cabin within the next five years. In addition, the economy cabin on full-service airlines could disappear altogether with dedicated low-cost carriers taking over that segment of the market. This means traditional, full-service airlines could be left operating flights with only business and premium-economy cabins.
The best advice Sir Richard Branson told him during the early days of AirAsia During the mid-1980s, Fernandes spent several years as the financial controller for Virgin Communications. Through the years, he’s become known for his close friendship with Virgin Group founder Sir Richard Branson.
But Fernandes makes it clear that he has no ambitions to become Asia’s Branson.
“Everyone thinks I want to be Richard, but I can confirm to Business Insider that I don’t,” he said. “I have no preconception of going on a balloon at 36,000 feet nor do I have any intention of going to the moon.”
While at Virgin Group during the early days of Virgin Atlantic Airways, Fernandes told Branson that his decision to go into the airline industry was crazy and advised him to sell Virgin Records. It’s something Branson remembered during the early days of AirAsia.
“One of the first people to call me up when I started AirAsia was Richard who said, ‘I thought it was really stupid to start an airline’,” Fernandes said jokingly.
As far as advice goes, it was pretty simple, yet profound.
“He just said have fun and make it a fun place which we’ve tried to do,” the AirAsia Group CEO added. “But we would have done that anyway.”
“Virgin was very informative in my whole cultural experience in that it was a fun place, it was a place where there were no suits, it was informal and ideas and innovation are encouraged,” Fernandes said.”That rubbed off on me.”
According to Fernandes, this open and innovative culture has defined the company’s success. For example, AirAsia encourages its employees to design their own uniform choices and to show off their personality as individuals.
“If they’re comfortable coming to work, they will be happier and more themselves,” he said.
17 Nov 2017 - American Express business customers will be able to then to make “instant, trackable, cross-border payments” to Santander UK accounts. American financial services giant American Express has announced that it has teamed with Ripple and Santander UK to develop a blockchain-based solution for instant business-to-business cross-border payments between the US and the UK.
In a statement published today, the US revealed that Ripple’s blockchain technology had been integrated into its FX International Payments (FXIP) platform, meaning that payments made by business customers of the service will now be routed through Ripple’s enterprise blockchain network, known as RippleNet. The project will initially connect American Express’ customers to Santander UK, allowing them to make “instant, trackable, cross-border payments” to accounts in the British bank. However, both companies hinted that the project could be substantially expanded in the future.
This is major development for blockchain technology and particularly Ripple, which has been working with a number of leading banks and financial institutions, including MUFJ, UBS, UniCredit, Bank of America and Standard Chartered.
“We’re taking a huge step forward with American Express and Santander in solving the problems corporate customers experience with global payments,” Ripple’s chief executive officer Brad Garlinghouse said in the statement. “Transfers that used to take days will be completed in real-time, allowing money to move as fast as business today. It is just the beginning, and we look forward to growing this partnership to help other American Express FXIP customers.”
Meanwhile, American Express’ executive vice president and chief information officer Marc Gordon, commented: “This collaboration with Ripple and Santander represents the next step forward on our blockchain journey, evolving the way we move money around the world.”
The Ripple price (XRP/USD) has surged in today’s trading. As of 14:53 GMT, Ripple was trading at $0.249, having gained nearly 20% since the start of the session.
For further information on how to buy and trade Ripple, see our comprehensive Ripple guide.
14 Nov 2017 - Former Prime Minister Sir John Key spoke to a crowd of 350 at the launch party of professional services firm K3 last Thursday night. he event at Auckland’s Maritime Room celebrated the establishment of K3, a professional services firm which brings together legal, accounting and consulting services under one roof. With more than half of K3’s Legal team fluent in Mandarin and the firm’s extensive links with the Chinese community, Sir John spoke at length about New Zealand’s relationship with China.
“As PM I went to China seven times and everyone knows that I’m a massive China fan. I think the opportunities are enormous, the country is amazing, and the leadership is doing extremely well,” said Sir John, who noted he arrived at the K3 event in an Uber, not a Crown car.
Challenging convention was a subject also covered by K3 Directors Mark Kirkland and Marcus Morrison who spoke about how K3 is looking at business differently, and their desire to make a genuine difference to New Zealand businesses.
“Professional services firms have been run in the same way for generations. But the market has changed extremely rapidly so we think that traditional model needs to change too. Businesses today want a greater depth and breadth of service that is outcome oriented. Our goal is to become New Zealand’s most trusted professional service firm,” said Morrison.
Reflecting on his time as Prime Minister, Sir John said while he has no wish to be PM now, he is extremely grateful for the time he had as leader of New Zealand
“One of the things you can do when you’re Prime Minister is you can shape the country and you really can make a difference. Hopefully [during] the time I was there, we were able, as a government, to economically put New Zealand on a much stronger footing.
“Whatever you think of the world, I reckon most people get up in the morning and they don’t want to be dependent on the state and they do want to look after themselves, they do want to look after their family and they have a lot of personal pride,” said Sir John, to much applause from the audience.
He’d been doing a lot of travelling and had realised New Zealanders tended to overestimate how much other countries knew about “a country of 4.8 million at the bottom of the planet. New Zealand has an amazing reputation but, man, we have to keep fighting for our place in the world.”
The impact of technology was covered by Sir John, who recalled a recent incident at an Under Armour store in China, where he wanted to buy a pair of Jordan Speith golf shoes. At the counter he tried to pay for the shoes using AMEX, Visa, Mastercard and even cash, all of which were rejected by the salesperson.
“So I said, what do you take? And she said, WeChat or Alipay, and that’s it, that was the only thing they accepted. There’s a lot happening in the world that’s really changing. If you look at China, they have some of the most impressive leadership that you’ll find and they’re developing some of the most amazing technology.” He said China’s tech industry was out-stripping Silicon Valley and predicted it would be well ahead of the USA in a decade.
Although Sir John avoided talking specifically about the new coalition government, he did allude to it. “There’s a lot of rhetoric out there that’s anti-migration, anti-investment, anti-trade. But we have to back ourselves to succeed and not be afraid of people coming to New Zealand, don’t be afraid about foreign capital coming in to our companies, don’t be afraid about engaging in free trade deals. If we buy into the Trump rhetoric, we’re going in the wrong direction,” he said.
14 Nov 2017 - According to Forbes, more than $2.3 billion has been raised in token sales, aka “ICO’s” so far in 2017. As an entrepreneur who has raised more than $300 million of venture capital equity financing in my career, and whose company is holding an ICO in just a few days, I have mixed thoughts about the current ICO bubble. Like many, I’ve been enthralled by the technical elegance and enormous potential of blockchain technologies. And, one cannot help but be fascinated by the amount of capital flowing into cryptocurrencies and ICO’s.
Like many, I’ve also been repulsed by the ICO scams and hype marketing, turned off by the pay-for-play ICO cottage industry, and frightened by the speculative dynamics of cryptocurrencies and token markets.
In a previous post I discussed some of the cringiest moments we’ve encountered during the ICO process.
In this post I present some of my thoughts on the ICO Bubble, implications of the increased ICO volume and noise, and my suggestions for the community to adopt requirements for better ICO’s.
This is a work in progress, intended to spur conversation, and I encourage and welcome everyone’s feedback.
The ICO Bubble in ContextFrom a macro perspective, bubbles serve as an acceleration purpose in technology cycles. The capital markets are currently sizing up cryptocurrencies and blockchain technologies much like they did for the emerging Internet companies in the late 1990’s. Back then, hundreds of dot-com companies raised globs of money pre-revenue on big ideas alone and went public long before they should have. Most of those companies didn’t survive, while a handful of the dot-com bubble babies like Amazon and Google went on to dominate. However, any way you slice it, the capital markets’ appetite for speculating on the future value of Internet technologies fueled a massive wave of innovation that fundamentally improved and connected the world. And, many of the ideas that initially failed were recast and reborn years later as successful ventures, once ideas caught up with technical realities and consumer adoption.
Bubbles reflect investor excitement and optimism for game-changing ideas and outsized returns. Bubbles also educate markets. Many consumers first got intrigued by the Internet by following booming Internet stocks, just as many consumers today are first becoming familiar with blockchain and crypto by learning of booming Bitcoin prices.
Blockchain today is like 1993 internet — we’re still at the early stage of building protocols and middleware — albeit with 1999 bubble hype. The current cycle is more compressed than the 1993–2000 dot-com cycle because blockchain technology is based on immediately recognizable economic value, whereas Internet companies were valued based on potential future profits and stock prices. The dot-com bubble was fueled by investor enthusiasm to get into those zero-to-one projects, much as the crytpo bubble is today.
10 Nov 2017 - Blockchain is an emergent technology that may be as transformative as the internet, according to many predictions. But this innovative new technology has a surprising link to the days of medieval treasuries. Blockchain is a distributed ledger that uses cryptography—mathematical code—to chain together records of transactions in a tamper-resistant and transparent manner. It is being used as an alternative or replacement for national currencies, contracts, internet device authentication and more.
This form of record-keeping, though technologically novel in the digital era, is not so new after all. Historian M.T. Clanchy tells us that it existed in the medieval era, during the transition from oral to written forms of memorialization. At that time, symbolic objects played a crucial role in providing evidence of transactions, rights and entitlements.
I've been researching how governments and businesses around the world are either planning for or already piloting the use of blockchain for record-keeping. The goal of my research is to determine what these applications of the technology actually do—as opposed to what the marketing hype says they do.
I've been to Estonia to study how the government there is using distributed ledger technology to protect the integrity of citizens' medical records. I've been to Sweden to discuss how its land registry is testing blockchain to record the transfer of land ownership. I've reviewed proposed blockchain systems for land title registration in Honduras, new pilot implementations for land transaction records in Brazil. And I've spoken with innumerable new ventures looking to transform record-keeping with blockchain technology.
Three patterns for blockchain records
From this research, I've noticed three specific design patterns for blockchain record-keeping, which need explanation to understand how blockchain relates to medieval practices. I have classified these categories as mirror, digital record and tokenized systems.
The first of these design patterns is what I call the "mirror" type system. I characterize this type of system as being the most similar to current centralized record-keeping.
In these types of systems—be they for medical records, land titles, public archives or some other kind of records—digital records are neither created nor kept "on chain," despite some claims by blockchain companies to the contrary. Instead, a kind of digital fingerprint of the records in the form of a 256-bit random number, known as a "hash," is entered into the blockchain.
The purpose of recording this digital fingerprint in the blockchain is to protect the integrity of the records and be able to detect if they were tampered with. To prove that the records are tamper-free, the original digital records must be preserved in off-chain trustworthy digital repositories alongside preservation of their hashes in the blockchain.
Proving integrity of the records involves matching the hash of the record you want to validate with its digital fingerprint on the blockchain. If the hashes match, then the record you hold has not been altered.
The second type of approach I've noticed is one that I call the "digital records" design pattern. In this type of system, new digital records are actually created within the blockchain itself, primarily by using smart-contracts.
Smart-contracts are computer programs that instruct the blockchain when to carry out a transaction, such as sending funds from one user to another. In these types of systems, the text of records is no longer in natural language that people can read. It is written in computer code for machines to read.
How blockchain technology has medieval roots
Three major categories of blockchain systems classified with examples. Credit: Victoria Lemieux
The rise of the smart contract raises a number of challenging and currently unanswered questions, such as what to do in case an error occurs and a smart contract doesn't behave as expected.
In the 2016 Decentralized Autonomous Organization (DAO) incident, for example, the attacker exploited poorly written smart code to siphon off 3.6 million Ether—an alternative to the popular cryptocurrency Bitcoin—roughly equivalent to $68 million at the time of the attack.
Equally importantly, current principles, standards and practices for managing and preserving digital records are not designed for smart-contracts and other distributed autonomous records created on chain. Ensuring that society's evidence infrastructure remains intact presents challenges similar to the early days of email and other electronic records. New approaches, yet to be developed, will be needed.
The third type of blockchain record-keeping design pattern is the "tokenized" type of solution. This is arguably the farthest from our current form of record-keeping, and many would argue the most innovative. With this type of system, not only are records captured on chain but valuable assets are represented and captured on chain.
These assets can symbolize anything of value: currency such as a primary use blockchain, Bitcoin; land, fine wine, food, diamonds, artworks—you name it.
In this third, tokenized form we can find centuries-old predecessors to blockchain.
Medieval objects parallel digital tokens
Are these assets really records? For answers, we may turn to the English archival theorist Sir Hilary Jenkinson, who observed in his 1937 Manual of Archive Administration that "there is a case where an old pair of military epaulettes; and among enclosures to letters, forming in each case an integral part of the document, the writer can recall portraits, human hair, whip-cord (part of cat-o'-nine-tails), a penny piece inscribed with disloyal sentiments, and a packet of strange powder destined to cure cancer."
In Jenkinson's view, these "exhibits" formed part of the archive, or collective body of records, because they provided evidence of business transactions.
We now have come to view these so-called exhibits more as museum objects than records because before the digital era, the physical awkwardness of these objects meant that they could not be managed with other records. Just as coins and paper currency once represented records of reserves of gold in a national treasury, Jenkinson's exhibits were themselves tokens that represented other things.
Today, what once had a material form can be essentially dematerialized. Paper currency can be transformed into cryptocurrency. Land, fine wine, artwork, diamonds, food and other material objects—though still physically in existence—can be transformed into virtual representations called "tokens." In this way, in a tokenized, blockchain record-keeping system, literally every thing potentially becomes a record.
This is not a new idea.
At the time of the Norman Conquest, many grants were conferred by the bare word (nude verbo) without a writing or charter, but only with a sword, helmet, horn or cup. One example is the broken knife of Stephen de Bulmer kept in the archives of Durham Cathedral. It bears a parchment label recording the details of a gift of land made in the middle of the 12th century—which the knife itself symbolizes.
Just like the knives, horns, cups, rings and other objects customarily used in the conveyance of land during the medieval period, today's tokenized blockchain record-keeping systems use valuable cryptocurrencies such as Bitcoin as symbolic representations of assets like land.
This raises the question of whether blockchain technology will return today's archival repositories to their medieval roots as the treasure storehouses of kings. Will it be back to the future?
| A The Conversation article || November 11, 2017 |||
7 Nov 2017 - MyBitcoinSaver, the New Zealand micro-savings platform for Bitcoin, has today announced the closing of $400,000 in seed round funding. The platform, launched by Aucklander Sam Blackmore in November last year, makes it easy for New Zealanders to invest small ongoing amounts in the world’s most popular cryptocurrency, which has grown in value by almost ten times since January. The startup plans to use the funding to continue driving growth in New Zealand while also expanding into the UK market.
Investors in the seed round included Brian Cartmell, investor in the billion-dollar US Bitcoin exchange Coinbase; David Smith, director of Caci Clinic; and Techemy: the parent company of Bitcoin analysis and news company Brave New Coin.
"Bitcoin is one of the most exciting things to happen to the financial world in decades," Blackmore says.
"But until recently, the cryptocurrency world has been an exclusive little club of early adopters. Unless you were very smart or willing to spend hours hunting for them, buying Bitcoins in New Zealand hasn’t been easy. We want to help all New Zealanders tap into the exciting opportunities Bitcoin presents."
Once registering to MyBitcoinSaver, users can set up automatic bank payments of between $10 and $200 on a weekly, fortnightly, or monthly basis.
The startup then bulk buys Bitcoin from an overseas exchange and distributes it to users’ wallets that same week.
MyBitcoinSaver has grown by more than 4000% in its first year with 1460 New Zealanders signed up to the service so far.
Blackmore has been investing in Bitcoin since 2013 and initially built the early prototype of MyBitcoinSaver - with a few lines of code - for himself, friends and family.
With a limit of $200 per week per user, MyBitcoinSaver aims to be a responsible and safe platform for buying Bitcoin, encouraging its users to use a Dollar Cost Average savings approach.
"Public interest in Bitcoin has exploded and people see buying it as a sensible addition to their savings plan," Blackmore says.
"We take the stress and complication out of buying Bitcoin and help anyone - from millennials to grandparents - take part in this revolutionary financial technology."
MyBitcoinSaver will be soft-launching in the UK within the next two months with plans to roll out the service publicly after three months in Beta testing.
The startup decided to extend its operations there because London is the financial capital of the world and there’s an appetite for a safe and reliable way to buy Bitcoin with Pounds Sterling.
The $400,000 seed money will be used to hire development staff and fund marketing here and in the UK.
4 Nov _ As blockchain and IoT converge, the push to commercialize applications leveraging both technologies grows. The latest industry to embrace this confluence is the transportation and logistics industry. In late August, the Blockchain in Trucking Alliance (BITA) launched with 150 or so member organizations — including transportation management companies, brokers, carriers, shippers and technology vendors. BITA’s stated goal is to create standards and educate industry stakeholders about the promise of blockchain. And at last week’s Connected Fleets USA event in Atlanta, BITA co-founder Craig Fuller, CEO for TransRisk, stressed that the combination of IoT and blockchain in logistics and transportation will be a formidable one.
Blockchain “has the power to transform almost every element of this industry,” said Fuller, whose company develops products to help stakeholders in the transportation industry manage price risk. In the future, blockchain systems will work in tandem with data from IoT devices used in transportation and logistics. Business transactions surrounding the shipment of freight will be automated using blockchain-based “smart contracts,” which improve upon traditional contracts by enforcing the rules controlling the transfer of currency or assets under specific conditions. In simplified terms, blockchain systems use a chain of cryptographically protected records to expose the details of transactions to all participants and distribute records across the network of participating “nodes,” or computers, thereby eliminating the need for a central authority to maintain records, which makes processes more efficient and cuts costs.
The benefits according to Sandeep Kar, chief strategy officer for Fleet Complete, include:
Accelerated payment, better security and reduction of fraud.
Simplified claims settlement.
Improved traceability and trackability.
Elimination of the middleman, which cuts costs, reduces paperwork and shortens the supply chain.
Reduction in the cost of regulations and compliance.
Increased transparency of price, ownership and the entire process.
But there are, of course, challenges to blockchain in logistics and transportation, which Kar summarized as:
Lack of initial knowledge, skills, expertise and trust in the technology.
Limited easy availability of cryptocurrencies, which may or may not be coupled with a blockchain system.
A bias toward the established infrastructure.
Lack of a central authority to mitigate risk.
Potential cryptocurrency volatility because no central authority governs cryptocurrencies.
To help the industry get past the obstacles and reap the rewards of blockchain, BITA is attempting to address the education gap, as well as help develop standards that are specific to the transport industry. Education is critical, Fuller said: “People don’t understand the use cases for it. They know the buzzwords, but they don’t know how it’s actually used in the market.” Fuller said he’s been on the receiving end of a number of questions about how to create commercial uses of blockchain in logistics and trucking. Questions like those are what led to the formation of BITA. “We’re bringing disparate, sometimes competitive parties together to create a common framework to solve problems. … We’re trying to bring together the folks [who] can actually have an impact,” he said.
Performance history records. Potential use cases for blockchain in trucking include maintaining accurate performance history records. When a truck enters the secondary market (that is, gets sold as a used vehicle), questions come up around how the vehicle was maintained. “In a blockchain environment, you can have a trustless record” of that maintenance, Fuller said. Because blockchain transaction records are considered immutable and transparent, parties in a transaction don’t need to have established trust with one another beforehand. “The beautiful part is, I don’t have to trust the other party, the seller or an intermediary. The data is flawless.”
“The analog [to the performance history use case] in the consumer car industry is Carfax,” Fuller said. “Except [with blockchain], there’s no reporting agency. [The records] are distributed [across the nodes in the blockchain system built for this purpose].” All records pertaining to the truck would be recorded to the blockchain, from the moment it rolled off the assembly line until it entered the market as a used vehicle — using IoT sensor data as well as other transactional data related to the vehicle. A potential buyer of the truck therefore would be able to make a purchase decision with full knowledge of the vehicle’s history.
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Capacity monitoring. Another potential use of blockchain in the trucking industry is capacity monitoring. One of the factors determining the cost of shipping freight relates to cargo volume. IoT sensors can be used to detect the amount of space a particular party uses; that info is used in determining cost associated with shipment. In the future, pouring that data into a blockchain-based system, enabled by a smart contract, will mean self-executing payments against the amount of space used by the freight, as measured by the IoT sensors. In other words, a much more efficient process than what exists today.
Gray trailers. Blockchain also could level the playing field between truck owners and third-party logistics companies when it comes to “gray trailer pools.” Today, Fuller said, truck owners have an advantage over third-party logistics companies because they own access to freight trailers. Blockchain could enable a business model whereby “the trailers will be owned by a third-party entity and shared collectively with fleets. … You can have a fleet of gray trailers and use blockchain to not only know who had access to that equipment but also charge for it. And you can tie a contract to it and settle it in real time so there is no collection process,” Fuller said.
Dispute resolution. Blockchain will also have a role resolving disputes, he said. “Every single day, there’s $140 billion tied up in disputes for payment,” Fuller said. “The shipper says, ‘You didn’t send me a proper bill. … Your rate is $1.90, but [the bill] says $1.89.” And guess what? The shipper … doesn’t pay it until that price is exact.” Such wrangling creates a strain on the trucking payments environment, he said. With a blockchain system and a smart contract, the transaction would be handled according to the smart contract terms and the contract would be executed and the transaction cleared at the same time, eliminating the current back and forth between parties as they hash out the finer points of their agreement. “In a blockchain environment, you have a transaction standardized and anonymized, and [it’s subject to] what we call smart arbitration,” in which disputes or controversy related to the contract are settled immediately according to the blockchain system’s arbitration rules. And because the facts of the transaction are viewable by all parties, fewer disputes are likely to occur.
Fraud detection. Blockchain will also be useful for fraud detection. The example Fuller cited was the practice of “factoring” in trucking, or assigning unpaid freight bills to a third-party company for less than — perhaps 60% to 90% of — the value of the bill. Trucking companies use factoring to improve their cash flow since it gives them access to the money right away, but it costs them a percentage of the bill. “One of the reasons factoring companies charge so much [is because a significant portion of] factoring receivables end up getting duplicated, [when trucking companies] send multiple bills of lading to multiple factoring companies, or [a company might] create a false bill of lading.” Factoring companies charge a very high rate because a portion, which Fuller said was likely low, of transactions it engages in is fraudulent. With blockchain, as long as the sensor data itself is not falsified, the transactions represent what actually happened as opposed to what someone says happened. But perhaps more importantly, factoring itself would become less necessary since a blockchain system with smart contracts would govern the payment for transactions in an automated way.
Making all these use cases a reality, of course, will require the various stakeholders in the process to work together. “True implementation of blockchain involves both the shipper and carrier using this platform and so far what we have seen is a few shipping companies using it,” Kar said. “The real market pull, not push, will start … once the shippers start demanding carriers to start using this platform.”
When will that happen? At this point, it seems too soon to tell. Kar said, “I believe we’re at least two to five years out, or maybe sooner.”