Kate Baucherel's Blog, page 4

Lockdown sparks international collaboration on blockchain book

Two blockchain advocates have come together to produce a new series of inspiring success stories from around the world. What’s Hot in Blockchain & Crypto takes you on a global journey along the cutting edge of a transformative technology, meeting the people behind some of the most inspiring and innovative applications of blockchain. This first collection of seventeen fireside chats includes Genevieve Leveille of AgriLedger, whose work is transforming the lives of farmers in Haiti; Jeff Zirlin of Axie Infinity, the game which is providing real incomes for players in the Philippines; Charlie Northrup, architect of the Universal Framework of Things; and Walid Al Saqqaf whose initiatives in conservation with Re:Gen are reinforcing the concept of blockchain for good.

Former Blockchain Chamber of Commerce President and CEO Linda Goetze said, “This is an inspiring glimpse behind the hype, showing us how businesses are embracing the opportunities of blockchain and cryptocurrency to create new business models and solve real problems.”

The series is the brainchild of Ash Costello, a privacy and investment funds lawyer who advises international entities on privacy for blockchain and cryptocurrencies. She wanted to know about the latest emerging projects in blockchain technology and realised there was a gap in the market. Ash met established emerging technology author Kate Baucherel through women in blockchain network The Bigger Pie, and the two collaborated to launch the book in time for Paris Blockchain Week, 8-9 December. This is only the first in the series – work has already begun on the next volume, due for publication in March 2021,

‘What’s Hot in Blockchain and Crypto – Volume 1‘ by Ash Costello and Kate Baucherel, with a foreword by Linda Goetze, is now available on Amazon Kindle worldwide. If you have a groundbreaking project that could be featured in a future edition, please get in touch.

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Cybersecurity scifi series helps readers reduce hack risks

Press Release – 30th October 2020

A series of futuristic cybercrime novels is teaching its fans to be aware of the cybersecurity risks they face in the present day. Author Kate Baucherel was originally approached to write a serious guide to cyber risks, and the project grew into the SimCavalier science fiction thriller series. Readers rely on fiction as a source of fact and what they learn becomes part of their background general knowledge, according to studies . By building today’s cybersecurity risks into stories, the books make readers more savvy when faced with common threats such as phishing and data theft, and showthe potential harm that can come from an innocent click on an unknown link.

“All the tech in these books exists today,” says Kate Baucherel, “and many of the scenarios are based on real attacks, tools and cybersecurity operations. Setting the books in the near future allowed me the freedom to push new technologies further into the world, making drones and robots and driverless cars part of the tales, but the cybersecurity risk is just as real.”

Kate is an emerging technology consultant working with businesses who are at the cutting edge of innovation. She specialises in solving wicked problems using blockchain and cryptocurrency, machine learning, artificial intelligence and the Internet of Things. Her first job was with a software company in Denver, Colorado, back when computers took up a whole room, and the World Wide Web didn’t exist. Her science fiction is published by Billingham-based Sixth Element.

The third adventure in the series is set for release on 31st October, the last day of European Cybersecurity Month. Tangled Fortunes takes us to the mid-2040s where a terrorist group is holding the world’s attention. A nuclear explosion sparks an international fight against a cybercriminal network with a global reach. Cameron and the Argentum cybersecurity team in London join forces with undercover hackers, but while they tackle threats in Singapore, Wyoming and the North East of England, the danger may be closer to home than they realise.

All three SimCavalier novels – Bitcoin Hurricane, Hacked Future and Tangled Fortunes – are available on Amazon, and signed copies can be ordered directly from the author.

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The Dash for Digital Currency

PayPal announced this week that they are enabling customers to buy, hold and sell cryptocurrency on their platform. Although the news was cautiously received for several reasons, it’s just one symptom of the dash for digital currency which is gathering speed around the world. I expected that PayPal would eventually throw their hat into this ring. After all, in the years of development between the emergence of cryptography techniques for digital currency (Merkle and Chaum in the 1970s and 1980s) and the Bitcoin white paper in 2008, Paypal was one of many projects aiming at the holy grail of peer to peer cash. They evolved into the ubiquitous payment platform, of course, but this step to add crypto to their options comes as no surprise. There are many caveats, not least that users seem to be expected to buy crypto within the platform, any payment will be converted back into local currency for the recipient, and PayPal holds the keys. It’s a jump for the passing bandwagon, a crucial step to avoid being left behind.

Central Bank Digital Currency

The arrival on the scene of the Libra consortium in June 2019 started the race. Faced with the idea of Facebook’s 2.7 billion users getting their hands on an accessible non-sovereign digital currency, central banks who had been toying with the idea stepped up a gear. They recognised that to maintain the effectiveness of central bank currencies within fiscal policy, they needed to join the digital gang. Enter the Central Bank Digital Currency, or CBDC.

While Bitcoin and other truly decentralised cryptocurrencies such as Ethereum can be said to have systematic stability, what interests banks is financial stability and control. Strictly speaking, central currencies – fiat currencies – actually fluctuate against Bitcoin. They are controlled to give us financial stability, the comfort that a loaf of bread is worth the same today as it was yesterday. Consumers in countries that have lost control of their central currencies do not have this luxury, as anyone living in Zimbabwe or Venezuela will confirm. There is a rapid and determined movement to establish CBDC in many countries, and we expect that they will arrive in our lives as soon as 2025.

The Bank of England expressed interest in the concept in 2018 and they are clear about the benefits – one of which is that by issuing a digital pound themselves, it will prevent others from doing so. Consumer protection, privacy and security are clear concerns. CBDC will help the bank to provide a resilient payment infrastructure, particularly for cross border settlements (which was probably the impetus for PayPal’s move). The bank also recognises the needs of the emerging digital economy and the real decline in cash use which has been accelerated by Covid. Availability of central bank money 24/7 is also attractive. Crypto never sleeps.

There are other concerns to be addressed including digital exclusion, which still blights a surprisingly large proportion of our population in the UK. Unlike Asia or Africa where people are comfortably using WePay, AliPay and MPesa for mobile to mobile payments, our culture is bank-centric. To make a digital currency inclusive here, everyone needs to be online and have access to affordable banking services. It would be fantastic if a shift towards CBDC was the impetus needed to improve lives.

Who else is experimenting?

The list of emerging CBDC projects is long. The Digital Euro project is due to launch in 2021, and Estonia is heavily involved. The Estonian expertise in cryptography and blockchain applications is unparalleled and the country has already investigated CBDC along with their early work on digital identity. South Korea announced that they would be issuing bonds managed on blockchain, which would need a cryptocurrency in place to operate, and a pilot is expected in 2021. In China, the digital Yuan has already racked up over three million transactions in trials. In Japan, Line, a private company, is building infrastructure which would underpin a CBDC. Canada released a report within the last few weeks looking at the viability of CBDC, a first step, and France is reportedly working with Tezos to develop a proof of concept.

This global activity makes it clear that the dash for digital currency is well and truly on. This is going to be some race to watch.

You can read more about the origins of cryptocurrency in Blockchain Hurricane: Origins, Applications and Future of Blockchain and Cryptocurrency. Order your signed copy today – Bitcoin accepted.

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A Future of Work – Decentralised

The future of work against a backdrop of accelerating technological advances has been the subject of discussion for years, and the debate has intensified in the last few months. Our recent experience has focused on technology and best practice which enables effective communication and collaboration in a distanced setting. There is another dimension which is becoming relevant, however. What are the new ways of earning a living in an economy which has been damaged by measures aimed at limited coronavirus spread. How could blockchain and cryptoassets play their part?

Value in the real world is created through selling your skills, your time or your assets. To be clear, this is not about speculating on tokens, activity which has historically thrown a lot of shade over the blockchain industry. The value of such assets can rise and fall, as the world’s stock markets can attest. Economic conditions and human error can wipe out an investment overnight, and consumer protection is at the forefront of regulation that is being brought to bear across multiple jurisdictions.

I’m far more interested in the pathways to real economic value creation and reward. How could blockchain help us to earn from our skills, time and assets?

Creators Create Value

How can you be sure that a digital copy of any work is authentic, and that the creator will be rewarded if you buy or rent it? Artworks in the real world, once sold, can attract higher and higher prices as they change hands without the artist seeing any benefit. Music has been pirated since the days of recording the Top 40 from the radio on a Sunday night, and the technology which enables sampling and mixing of original works to produce new music complicates things still further. Illicit copies of films and TV productions, however well controlled, are still found on sites the world over. As an author, any mention of ‘free ebook’ websites fills me with horror. How can you be sure that these are legitimate copies of a book, for which the author will receive royalties?

The goal is to help people to earn a real living from the creative skills they have and the time they spend. Culturally we have to recognise the value of the art we consume, of course, but once money is flowing then emerging technologies hold the key to a new future of work.

Blockchain is already being used to confirm that content is authentic. The ARCHANGEL project run by the UK’s National Archives, in association with the University of Surrey and the Open Data Institute, uses content-aware hashing to verify original video recordings across multiple formats. The next challenge is to ensure that the creator is rewarded for your consumption of their artwork, tune, movie or book. Oddly, a bête noire of the early 2000s had the solution to this, but not the technology at the time to make good on royalties. Napster, which appeared in 1999 and was firmly closed down in 2001, and Pirate Bay which followed in 2003, had something of a cavalier attitude to music and film copyright which rightly triggered legal action, but they were pioneers in peer to peer sharing. Users of these and of BitTorrent, launched in 2005, circumvented centralised subscription services. A lot of our current viewing is still siloed in an effort to cling on to intellectual property. That model may not be sustainable in the long term, as peer to peer sharing and customised consumption rises. Blockchains, and the cryptocurrencies which flow on them, offer a way for copyright to be protected in a peer to peer environment, and for money to reach the right people.

Playing with Purpose

The skills honed through hours on a games console are already starting to deliver transferable real-world value at the highest level. We are seeing the rise of e-sports with the English e-soccer competition, the ePremier League (ePL). Among the new generation of Formula 1 racing drivers, 20 year old Lando Norris ascribed some of his success and his ability to read other drivers on the track to his years of sim racing and participation in the McLaren Shadow Esports competition. Even Fortnite has stepped into the arena with its 2019 World Cup Finals in New York streamed to millions of fans. However, deriving value directly within a gaming platform is an entirely new opportunity. If this can be harnessed – and blockchain offers the means to achieve it – the subsequent creation of value could kick-start a sustainable, democratised economy.

One aspect that is growing rapidly is ownership of the assets players create and win in a game. When you have walked miles to catch or hatch a rare Pokémon, earned or paid good money to buy special outfits for characters in anything from Angry Birds to Fortnite, or mined the materials to construct your diamond castle, it feels as if you should own something – but you don’t. Marketplaces already exist for the exchange of items in many role-playing games (RPGs), but the assets themselves do not belong to the players who are trading them. Shifting to a state where there is individual ownership means that the skills and time invested in building up game assets are rewarded when the assets are sold.

Trading in assets from virtual land to battle-hardened game characters is already established and active in a growing gaming community, and the current crisis has created conditions for the model to be proven. In the Philippines, trading activity on popular blockchain game Axie Infinity is netting enough for its players to provide pathways out of poverty, supplementing incomes through the COVID crisis. Their skills, time and assets are creating value. This is a real world blueprint for our decentralised future of work.

You can read more about how blockchain and cryptocurrency are changing the world in Blockchain Hurricane: Origins, Applications and Future of Blockchain and Cryptocurrency. Signed copies on sale from this website, international shipping and ebooks available from Amazon.

Image shows gameplay from Axie Infinity – yes, this is my own battle team.

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Blockchain book chosen by Harvard

Kate Baucherel has been helping business leaders to use emerging technologies effectively for the past three decades. Her latest book “Blockchain Hurricane: Origins, Applications and Future of Blockchain and Cryptocurrency” has been chosen by Harvard Business Publishing to add to their catalogue of learning materials and pair with their world-leading case studies.

Blockchain Hurricane gives business decision makers and students a clear overview of the history, current applications, and future potential of distributed ledgers and cryptocurrency. Reviews have praised its “authenticity, clarity and conceptual elegance” and the way it “illuminates the subject, goes beyond the jargon and throws enough humour into the mix to make reading it an informed pleasure.” Blockchain Hurricane explores the strengths and weaknesses of this disruptive technology and examines emerging opportunities and perceived threats. Technical frameworks are presented in a business context to help strategists understand the risks and rewards of different approaches to blockchain implementation, and the decision factors in determining whether it is a viable solution to the problem at hand.

Kate has held senior technical and financial roles in businesses across multiple sectors, leading several enterprises through start-up and growth. She is an active digital strategy consultant, a Fellow of the Chartered Institute of Management Accountants, and a lecturer at Teesside University Business School. She speaks on the effective use of emerging technologies in business and is the author of several books including Blockchain Hurricane (Business Expert Press, 2020) and the SimCavalier science fiction series.

Blockchain Hurricane: Origins, Applications and Future of Blockchain and Cryptocurrency is available in paperback and ebook from Amazon, Business Expert Press, and you can buy your signed copy direct from this website (UK delivery only)

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Durian and the Value Chain

While researching my latest book “Blockchain Hurricane: Origins, Applications and Future of Blockchain and Cryptocurrency” in summer 2019, I came across an article from Fintechnews Singapore that intrigued me. “Millions of Durians Will Be Tracked on the Blockchain for Thailand’s Largest Durian Exporter,” it said. Having eaten the legendary smelly fruit (once and once only) and seen it growing in remote Malay villages, it struck me that here was a supply chain with complexity and value which could be genuinely enhanced by the application of distributed ledger technology. I wanted to know more, and I hoped that the rollout would be successful. Two weeks ago, I spoke to Adrian Teo, COO of DiMuto in Singapore, and learned more about the success of their platform, which has been proven with durian and is now being used by clients to track other fruit crops world-wide.

Solving real world problems

Launched in March 2019, DiMuto’s platform addresses several genuine problems and offered a solution which had not previously been possible. Founder Gary Loh’s background in finance had led him into the world of agri-trading, and the specific challenges for fruit supply chains. The critical problem faced by suppliers was a significant loss of revenue in settling quality claims. Producers were losing 5-10% of revenue through disputes over fruit quality from further up the supply chain, depleting margins, reducing working capital, and stagnating growth. They needed a way to prove the condition of the goods they had shipped and trace the movement of their fruit through the supply chain.

At the same time, the world has seen a growing interest from consumers in the provenance of their food. Concerns over food safety and health, highlighted by the scandal of contaminated baby milk formula in China, and an awareness of climate change and sustainable farming practices, mean that reliable and verifiable information for the end consumer is increasingly important. Traceability of goods for supply chain management and traceability for consumer information can both be tackled with the same tool.

Listening to the users

Enter DiMuto. Their first proof of concept was released in October 2018 to their existing network, who recognised the effort to solve a real pain point and adopted the solution quickly. This proof of concept was developed on DiMuto’s in-house Multichain and used a series of smart contracts to manage the steps in the supply chain from the harvest consolidation point onwards. Thanks to the trust they had already established in the network, producers and wholesalers were able to give the developers clear and helpful feedback. The message was clear: they were solving the right problem, but the smart contract structure was too restrictive. Trust had been built in effectively but at the expense of flexibility.

DiMuto took this on board and stripped their approach right down to the basic needs of the user. They did not need to build smart contract into the process for error proofing, but rather needed to deliver proof of any errors. The smart contracts were mothballed, and the project moved onto the public blockchain for its full release in March 2019. The focus of the mature platform is maintaining trust in the transactions and achieving greater transparency.

Creating a digital durian

Development of the platform has benefited from the government’s push for “Smart Singapore”. Other projects under this umbrella have included recent fast response distribution of masks to citizens in a so-far effective bid to control the spread of COVID-19. DiMuto uses Singapore’s open source TradeTrust global trade portal for validation of the data packets which are recorded on their platform, and the transactional hash is recorded on the Ethereum blockchain.

DiMuto’s information flow and processes have been designed to fit with the existing working practices of the users, from consolidators on the ground through to the wholesalers and distributors further upstream. The first step is to create a digital asset – a Non-Fungible Token (NFT). Each harvested durian is tagged with a QR code and photographed. The QR code and images of the unique fruit are linked to a unique token, creating a digital twin which moves through the digital supply chain in tandem with the real fruit. There is also some content-aware coding in place around the photographic record to confirm the condition of each fruit at the outset. As durian are batched and safely packed in boxes of seven or eight fruit, the box is also tagged and given a unique identity and linked to the individual fruit it contains. This enables producers to prove to other actors in the supply chain when exactly a fruit or batch of fruit entered the supply chain and what condition it was in, allowing spurious claims for poor quality supply to be rebuffed and genuine claims to be laid at the correct door.

I asked Adrian Teo about the challenge of taking recording all the way downstream to individual trees; the economic viability of recording that initial mile is something that has to be addressed, but the consolidators who input the first records very close to the origin of the fruit and are keenly aware of the source of each individual durian. The use of NFTs to record the unique properties of a fruit also gives DiMuto the potential to expand the data points for each fruit. One of the most interesting is the idea of using audio tools to give each fruit a measure of ripeness, as this is a traditional method of determination.

Generating real value

Traceability and provenance are among the most significant things that can be achieved using blockchain and distributed ledgers, but there is often a feeling that this is “nice to have” rather than economically significant. DiMuto have taken on board the fact that “everyone wants traceability, but no-one wants to pay for it” and have turned their system into a value generator.

The reduction in quality disputes and lower claims against producers have not only improved margins, freeing up working capital and enabling growth, but have reduced the financial and insurance risk associated with perishable and fragile fruit. The data gleaned from digitised trade gives insights into the trade itself, and this is valuable risk data for underwriting. DiMuto have now partnered with a private equity fund to enable producers to access previously unavailable trade finance.

Going global

It’s brilliant to see a project delivering real value to the right people, and here blockchain has been used appropriately and specifically to plug a data gap and address very difficult pain points. Unsurprisingly, they are now dealing with more than durian fruit. Their platform is being used by the Port of Singapore and the Port of Rotterdam, key locations in the supply chain. It is recording the journey of Mexican avocados, Australian plums, citrus fruit and morning glory, and European tomatoes from farm to plate. It supports the people at the very start of the supply chain and gives the consumer confidence in the product. DiMuto are making a significant contribution to the digitalisation of the global food trade industry, and I look forward to seeing their reach grow worldwide.

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E-Voting systems under the spotlight

E-voting has been under the spotlight in the past few months, and as the world moves inexorably online in the face of COVID-19, how close are we to finding a real solutions? The adverse publicity around an apparently hastily-built voting app made all the wrong headlines as chaos ensued at the Iowa caucases. After all, voting feels like an instinctive, simple process. We raise our hands to elect the class president, drop slips of paper into hats, buckets or sealed boxes depending on the nature of the vote, phone a premium line to choose the winner or loser of a reality TV show, or pick an option on an app. The arrival of blockchain technology has added a new dimension to the public clamour for reliable systems of voting. How hard can it be to build something which works?

Complexity and security

The process is far more complex than you think, say academics who have been working on electronic voting (e-voting) for many years. There are significant cybersecurity risks to be addressed, including but not limited to system penetration, spoof voting sites, attempts to vote multiple times, and malware on devices. As voting is generally managed by a single central administration, whether that is a country, a political party, or a trade union, there may also be threats from within the organisation itself, whether that involves intentional manipulation of results or innocent parties falling for phishing scams. The natural centralisation of voting should also give blockchain enthusiasts pause for thought. This is not a process which can be rendered public and disintermediated, as electoral authorities have to run an election according to the laws of their country or the constitution of the organisation. However, blockchain does have an essential role to play in e-voting.

Secrecy vs transparency

The balancing act for voting is to manage security concerns and to ensure that the ballot is both secret and transparent enough for the result to be trusted. Cryptography is one of the tools available to achieve this, and blockchain is an important part of developing trustworthy e-voting. Writing for the New Statesman in May 2019, University of Surrey cyber security centre director, Steve Schneider, explained that “transparency and end-to-end verifiability are essential ingredients in electronic voting systems.”

Academics have been working on e-voting since before the advent of blockchain, developing ways for individuals to verify independently that their vote has indeed been counted as intended, and for the public to check that the votes have been tallied correctly. Pilots such as the Verifiable Classroom Voting (VCV) system developed by Professor Feng Hao of Warwick University, and Schneider’s own past work, originally relied on posting results to a bulletin board, but blockchain delivered the technology to make this public record immutable and fully distributed. There are caveats. The blockchain must be permissioned rather than public. There is a need for a two-stage consensus to ensure that voters get an immediate confirmation that their vote has been cast and recorded correctly: waiting for a Proof of Work consensus for each vote on a public blockchain would simply take too long to be practical. Trials of the Surrey team’s Verify My Vote (VMV) system took place in summer 2019, and while this work is a giant step towards a transparent and verifiable electronic voting system, it is likely to be some years before this is mature enough for a political or statutory election.

Digital inclusion, digital exclusion

There is already a mobile blockchain voting application on the market which tallies the vote from a known population. The state of West Virginia ran a pilot program enabling 150 overseas voters to participate in the November 2018 midterm election using the Voatz app, and the city of Denver also tested the app in its May 2019 municipal election for 4,000 eligible active-duty military and overseas voters. In both cases election officials reported an increased turnout in the small sample. E-voting in our online world may well offer a new route for people to participate in democracy. At the most public level, blockchain technology also has the potential to eliminate electoral fraud and ensure that no citizen is disenfranchised. The UN’s ID2020 programme is committed to improving lives through digital identity, and one of the outcomes is enabling the previously disenfranchised to vote. Digital identities are already used in Estonia to ensure that all those eligible to vote can do so, while maintaining anonymity in relation to the votes cast.

Emerging technologies give power to the people, and as a wise man once said, “with great power comes great responsibility”. On the flip side of the coin, we must be wary of digital exclusion. There are no digital skills required to put a cross in a box. If traditional systems are to be supplanted by the latest technology (properly tested and thoroughly reliable, of course) we must ensure that making the process more accessible for some does not disenfranchise others. Trusted e-voting is coming to a ballot near you. Be ready.

Originally published via LinkedIn Pulse, February 2020 https://www.linkedin.com/pulse/e-voting-under-spotlight-kate-baucherel/ You can read more about e-voting and other public sector blockchain initiatives in “Blockchain Hurricane“, available now.

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Blocked Borders

The one certainty around the January 31st Brexit milestone is that there is going to be an awful lot of work to do in the coming year and beyond. The time has come to flesh out the details of our future relationships and establish the systems and processes which will help the country’s infrastructure and economy and our trade across borders to function.

The thorniest issue throughout the protracted negotiation of the Withdrawal Agreement has been the land border with the European Union on the island of Ireland – although all borders are likely to present a challenge. At the 2018 Conservative Party conference, the then Chancellor of the Exchequer, Philip Hammond, was asked about possible solutions. He clutched at the straws of emerging technology as a way to maintain the existing freedom of movement and avoid imposing border controls. “There is technology becoming available,” he said. “I don’t claim to be an expert on it, but the most obvious technology is blockchain.” Fortunately, according to the BBC’s Rory Cellan Jones, this statement did not reflect the more practical opinions in the corridors of Whitehall. There is no existing technology solution which will allow a land border to be effectively controlled without some noticeable blockages. In the wider context of the passage of goods through our ports, though, there is rapid innovation. Blockchain is on course to help with smoothing trade routes and relationships around the world, part of a powerful toolkit which also includes the Internet of Things, Artificial Intelligence, and satellite technologies. There are many examples of effective applications in the supply chain which are are already running under our very noses.

A compelling future vision

At the ConsenSys Ethereal conference in New York in November 2018, the provenance of the tuna on the sushi served for guests was authenticated through an Ethereum application. This was a glimpse of a possible future. Transparent records, independently authenticated via an immutable, independent source, will give regulators confidence. Prime entry from sensors in the widening Internet of Things will mitigate human error and reduce the risk of deliberate falsification of records, ensuring that raw materials originate from a regulated source and that goods are transported under the right conditions. Hashed identity and qualification records will allow secure and reliable verification of current permits for people at every stage. A clear holistic chain will allow all parties to be properly rewarded. Artificial intelligence and machine learning will use the wealth of newly captured data to refine and improve our supply chains, optimising the carbon footprint. It is a compelling vision, and many of the building blocks are already in place in the present.

In October 2018 the IBM Food Trust platform went live as a commercial product. During the proof of concept phase, IBM worked with Walmart who challenged them to trace two mangos from farm to store. Using existing systems this process took almost a week to run, while the blockchain-based system completed the task in 2.2 seconds . Since then, IBM Food Trust systems have been adopted by other North American store chains, notably Albertson’s, and organisations including the National Fisheries Institute. In Thailand, exporters of the legendary durian fruit are working with DiMuto, a Singapore-based start-up, to transform fresh durians into traceable digital assets, tracking each individual fruit along the supply chain. So what are the other pieces of the trade jigsaw which are being addressed using blockchain and distributed ledger technology?

Building blocks of the supply chain

For a successful and reliable ecosystem, we need several things. First, we must have confidence in the prime entry, overcoming the problem of garbage in, garbage out. The very nature of immutable records promotes rigour and accuracy, as we saw in my previous article ‘Getting to Truth on the Blockchain’. We must also be confident in the authenticity of the asset, which is being addressed by the luxury goods market as it drives to combat counterfeiting and illegal trade. Top fashion brands Louis Vuitton and Parfums Christian Dior, under their parent umbrella of LVMH, collaborated with ConsenSys and Microsoft to develop the Aura platform, launched in May 2019. Aura was a natural extension of the Louis Vuitton Track and Trace program, building trustless authentication into the model.

Once we are confident in what our goods are, the next step is to understand where they are on their physical journey. The shipping industry has made strides towards this transparency while using blockchain to solve other problems. The Insurwave platform was launched in May 2018 by a consortium including Ernst and Young, Microsoft, network security experts Guardtime, and insurers XL Catlin (now AXA XL, a division of AXA), MS Amlin and Willis Towers Watson. Freight giants A.P. Moller – Maersk faced a challenge in managing the complex ecosystem of the purchasing and administration of their highly transactional insurance process. Now, the Insurwave platform’s smart contracts manage the insurance transactions when vessels are bought and sold. The system makes use of the Internet of Things for prime entry to the ledger, and the sensors are delivering additional benefit by collecting more data points than could be captured or processed previously. It has since widened its scope to include not just the hulls but each vessel’s machinery, and added a further piece to the jigsaw thanks to a partnership in May 2019 with China’s Zhuhai port.

Underneath all of this lies the paperwork. How are back office functions being transformed by blockchain? Payments across borders were some of the first fintech blockchain applications to go live, starting with the Santander One Pay FX product in April 2018. More prosaic administration has been tackled by Guernsey’s Northern Trust Bank, whose work on private equity audit via blockchain technology is now being rolled out at scale in Delaware, and whose continued innovation in collaboration with law firm Allen and Overy and tech startup Avvoka has delivered the capability to deploy legal clauses as smart contracts direct from a digital legal agreement.

Moving forward

These are just a few of the extraordinary blockchain developments we have been seeing in global trade since the Brexit vote in the dim and distant past of 2016. While the current climate for trade in the United Kingdom is one of uncertainty and anticipation, the rapid pace of innovation and emerging technology adoption gives us hope and may help to alleviate those blocked borders.

You can read more about the work of Kraken IM and other innovators in my latest book Blockchain Hurricane: Origins, Applications and Future of Blockchain and Cryptocurrency (Business Expert Press), available in paperback and ebook from Amazon and all good bookshops

Originally published via LinkedIn Pulse, January 2020 https://www.linkedin.com/pulse/blocked-borders-kate-baucherel/

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Getting to Truth on the Blockchain

The second phase of the enquiry into the tragic Grenfell Tower fire begins today. As the BBC reports, the first phase found that the cladding work on the tower did not comply with building regulations, and the role of the second phase is to unpick the complex records held by seven different contractors to determine accountability. The investigators are seeking evidence of the crucial twists and turns in the journey from a straightforward and compliant design intent to a deadly installation. For twists and turns there always are, at every stage of a project, and in this case a decision, or series of decisions, led to changes which proved fatal.

The long and winding design road

As Teesside information management company Kraken IM explained to me during research for my forthcoming book, the complexity of different systems across project contractors is matched only by the complexity of the tasks they are recording. A multi-billion-dollar infrastructure project may involve over a million individual items of equipment, and the data on each piece must include the design intent, its function, materials, and operational information such as maintenance manuals. The original design intent may be, as in the case of Grenfell and hundreds of other buildings around the country, to refurbish and improve the visual impact of the exterior. There will be engineering requirements, standards and local regulatory constraints which impact on the specification against which suppliers will be asked to tender. A supplier may propose a slightly different material which in their experience will be more effective in the setting. Even before cladding is fitted, changes are likely to have been made against the design intent. It is vital to accurately record the individual stages of approval, so that at sign-off and commissioning it is quite clear to the operator what has been supplied. In addition to this, the 2018 Independent Review of Building Regulations and Fire Safety led by Dame Judith Hackitt (the Hackitt Report) called for digital by default product specifications and persistent identity for components. Here is an industry where the specific properties of blockchain may have far reaching impact.

Provenance and the blockchain

The problem which Kraken IM has sought to solve is that when inevitable changes happen they impact not only the immediate build and commissioning of a project, but also its operation, maintenance and eventual decommissioning. You cannot rely on memory, or on systems of record which undergo changes through decades. When decommissioning an asset, going back to the original designs is not helpful. Local legend on Teesside speaks of a 36″ pipe on a rig in the Able UK yard whose purpose was unknown, and which therefore could never be safely recycled.

Blockchain offered a solution. By recording the detail of each change note and its approval process in an immutable and distributed form, the crucial evidence of a shift from design intent to build can be found quickly and traced to its source on Kraken’s Halcyon platform. It is a simple use of blockchain, but a powerful one, and it has demonstrated a more interesting phenomenon. A blockchain is not a repository of absolute truth, but of transactional truth. The change approvals recorded here have positional integrity, confirming the date and time of a decision, but crucially the fact that the change is both immutable and being “observed” affects the behaviour of the people responsible. Kraken’s clients in the oil and gas industry noticed that the real-world processes around change approval became more rigorous. People knew that they may have to stand by their decisions in any enquiry, and became very careful to do things right.

Persistent identity

The call in the Hackitt Report for better traceability of the parts used in a project represents the other piece of the puzzle. A change to design intent can be recorded immutably and highlight responsibility. Recording in the same way the identity of the actual parts used in construction ensures that what is commissioned matched what it says on the tin. We are seeing strides in the identification of assets across supply chains from food to aerospace, using blockchain constructs such as nonfungible tokens (NFTS) and protocols which record aspects of identity to avoid counterfeiting. There is huge complexity surrounding infrastructure projects, but if persistent identity and traceability of components become law in the UK as expected following the Hackitt report, blockchain is likely to be a significant tool in the solutions that are developed.

The multiple causes of the terrible events which unfolded at Grenfell in 2017 are gradually being teased out by the enquiries which were set in motion, and there is a clear desire to put regulation in place to avert such a tragedy in the future. Blockchain may well play a part in making our world safer.

You can read more about the work of Kraken IM and other innovators in Blockchain Hurricane: Origins, Applications and Future of Blockchain and Cryptocurrency (Business Expert Press, 2020)

Originally published via LinkedIn Pulse, January 2020 https://www.linkedin.com/pulse/gettin...

The post Getting to Truth on the Blockchain appeared first on Kate Baucherel.

Is Magic Internet Money going mainstream?

Spoilers: No. We are not all going to be using our cryptocurrency of choice on a daily basis any time soon. Here in our comfortable first world existence, the vast majority do not have a need for an alternative to established national currencies. However, there are emerging patterns and pockets of adoption which merit scrutiny. In my forthcoming book Blockchain Hurricane I’ve looked at the journey of cryptocurrencies from inception and through the era of scams to our present, where there are real examples of adoption through need.

Stability and perspective

Recent heightened tensions between the United States and Iran caused a frisson of excitement in the cryptocurrency community. The price of Bitcoin rose on major exchanges, causing some eager commentators to suggest that Bitcoin is claiming its place as “digital gold”. The more down to earth observers, as reported by the Financial Times, pointed out that while gold is a safe haven investment, Bitcoin is still in the realm of speculation. What is more interesting is the underlying story of increased Bitcoin purchases in Iran itself. A flurry of activity in a time of instability is indicative of a conscious step towards what Andreas M. Antonopoulos describes as ‘money of the people’. There is a fascinating case study of Bitcoin use in Venezuela, where trust in government-issued monies has all but disappeared. Rampant inflation of the Bolivar, reported by the IMF to have reached over one million percent in 2017, and utter distrust of the country’s national cryptocurrency, the Petro, have stimulated illegal mining and use of Bitcoin. Earnings are converted on receipt to preserve their value. Day to day spending on coffee, food and clothes is made by SMS transfer of Bitcoin. In Columbia, there are convenient Bitcoin ATMs at the Venezuelan border for people leaving the country for good, and independent reports also suggest that the main users of Columbia’s growing Athena Bitcoin ATM network are Venezuelans transferring cash back home.

While we see Bitcoin and other established crypto coins as unstable compared to our own mainstream currencies, in some economies they are comparatively steady and also offer a unique opportunity for the individual to take hold of the keys to their safe. It is all a matter of perspective. Where once citizens of countries with difficult monetary climates used the US Dollar to achieve stability, people now have the option to use decentralized, cross-border currencies.

There is also a fundamental difference between the monetary stability we expect from our national currencies and the systematic stability which cryptocurrencies have by design. As Wall Street veteran and blockchain champion Caitlin Long explains, government money is manipulated for price stability by monetary policy, whereas decentralized currencies have to respond to demand. Her analysis published in Forbes last year on price volatility versus systematic volatility is well worth reading.

Breaking down barriers

Holding the keys to your cryptocurrency may be a unique selling point, but it is also a significant barrier for many prospective users. What happens if you lose the keys, by carelessness, error or theft? What happens if you make a mistake in a payment? It is estimated that of the over 17 million Bitcoin already mined (out of a maximum possible supply of 21 million), around 4 million have been lost down the back of the virtual sofa. There are considerable efforts across the globe to make use of cryptocurrency simpler and safer. In Vietnam and Japan, the team behind Bitcoin Cash (BCH) are working with merchants to bring straightforward crypto payments into daily life. Today, you can buy your coffee in certain districts of Tokyo using BCH. In the United States, technology developed by Austin-based firm Abstrakt aims to deliver high levels of security for the cryptocurrency user, protecting against both external threat and user error. Regulated custodianship is also a path being explored by exchanges such as Gemini, whose founders, Cameron and Tyler Winklevoss, started out by acquiring a banking license before launching their cryptocurrency exchange.

Moving to the mainstream

Cryptocurrency is still largely speculative and investment-driven, but becoming more fluid where its use is driven by need or by utility. Blockchain gaming is an area where cryptocurrencies are in regular use, and are building much greater complexity onto the rich history of the Second Life Linden Dollar and the more recent Fortnite VBucks. Keep following my articles for more on this exciting sector.

There are challenges to overcome, not least scrutiny of the climate impact of Proof of Work energy usage, but cryptocurrencies offer a genuine utility in specific circumstances. Where users want greater control, there are barriers to using traditional systems, or cross border transactions are significant, they already offer benefits. It may not be in one year, or five, but Magic Internet Money is coming to a high street near you.

Originally published via LinkedIn Pulse, January 2020 https://www.linkedin.com/pulse/magic-internet-money-going-mainstream-kate-baucherel/

The post Is Magic Internet Money going mainstream? appeared first on Kate Baucherel.