Consensus Décentralisé - Blockchains - Smart Contracts - Decentralized Consensus

Nearly two-and-a-half years have now passed since Marc Andreessen penned a widely referenced New York Times op-ed about how bitcoin reminded him of the Internet circa 1993. His forecast suggested that it would be only a few short years before the blockchain-equivalent of Web 1.0 world-beating companies like Cisco would emerge.

In contrast, a string of voices, ranging from author and consultant Chris Skinner to financial institutions such as Morgan Stanley, have suggested that blockchain maturity and adoption is likely to take much longer than Andreessen's forecast.

In other words (and to stay with the Internet analogy), the skeptics would say blockchain adoption is actually closer to 1970s-80s Internet time, when foundational protocols like TCP/IP were invented, rather early-1990s Internet time.

Who's correct in this debate remains to be seen, but the stakes are incredibly high for an industry with over $1bn in venture capital investment.

UK banking giant Barclays took another step toward positioning itself at the forefront of innovators in the blockchain sector last week with the news it had become the first to trial Corda, a new distributed ledger platform from partner R3CEV.

The prototype, demoed at the Barclays Accelerator in London last week, follows a particularly active period for Barclays, which earlier this month revealed it would provide banking services to blockchain payments startup Circle, and earlier this year, participated in a test of a private version of the Ethereum blockchain with 11 R3 member banks.

In interview, Dr Lee Braine of the Investment Bank CTO Office at Barclays, spoke to what it described as a broader need for leadership from the banking industry should the industry want blockchain technology to “reach maturity”.

Braine said that Barclays aims to devote time and expertise to the ecosystem, specifically to areas where banks have more experience than innovators. In particular, he cited Barclays and its drive to create smart contracts templates, as an example of this ongoing work.

Braine told CoinDesk:

"What we’ve been doing in the last year, working with other banks through consortium and directly with startups, has been providing feedback around tech… In this case, we have subject matter expertise around legal documentation around the bank. Startups may not have that, so we thought by showcasing this, we’d look to encourage other banks to move into this space."

To Braine, step one for the proof-of-concept was to determine how blockchain-based smart contracts could be connected to real-world legal contracts. This possibility, he said, could enable the simplification of legal documentation, while mutualizing costs.

Braine said that Barclays approached the challenge by devoting a full team to its incubator program for the project, during which these employees liaised heavily with internal legal teams working on derivatives.

"We’ve taken in their preferences in order to build the interface," Braine said. "The lifecycle, the workflow ... these aspects were driven by the legal document automation team."

But Barclays is not alone in identifying this area as one where blockchain and distributed ledger tech could play a role. Industry startup CommonAccord, incubated in the BNP Paribas accelerator, has also set its sights on codifying and automating legal contracts.

Intel, the largest chip-maker in the world, is looking to trusted execution environments on its hardware chips to enhance security and privacy for blockchain users.

Speaking at the Tomorrow’s Transactions conference in London this week, Kelly Olson, director of the distributed ledger technology group at Intel, discussed ways it is possible to use a "secure enclave", similar to what Apple uses for its Touch ID, to increase blockchain security.

Olson's group is conducting research on large-scale deployments of blockchains that could scale to several tens of thousands or millions of nodes, though he said the work is still in early stages.

Still, Olson made the case for using secure hardware solutions that can provide a trusted computation environment. The immediate use case of such a hardware solution would be for key management in blockchains.

Discussing bitcoin specifically, Olson noted that even though the public blockchain network itself has been very secure, users have experienced losses due to lost or stolen private keys.

Olson said:

"While initial blockchain deployments like bitcoin have proven to be quite secure, they have shifted the burden of security from the network to the endpoints that write to the blockchain."

Olson discussed the use of such a secured hardware computing environment not just in security, but also privacy.

The goal is to bring privacy to the blockchain without centralization, he said, which could prove a difficult task. One proposed solution is to treat the hardware itself as a trusted third-party that can provide a level of verification that is generally either publicly distributed or privately validated.

“Privacy is one of the most difficult problems to solve, as transaction validation and transparency often go hand in hand," he said.

Home-rental company Airbnb has “acqui-hired” the majority of the team behind ChangeCoin, a startup that runs a bitcoin-based micropayments service, according to four people with knowledge of the deal.
The alternative lodging site has been looking at a few bitcoin and blockchain startups, according to two sources, to study what the technology could do for its services. Companies like Uber and Airbnb are built on their ability to manage supply and demand, which could be aided by a powerful, open ledger system like blockchain.
Through a service called ChangeTip, ChangeCoin lets users send tiny amounts of money, or tips, over social networks including Twitter and Reddit. But Airbnb appears to only be interested in the talent behind the company: ChangeCoin is still shopping its intellectual property, sources said.
The firm is run by ex-Yahoo engineer and noted bitcoin entrepreneur Nick Sullivan, and has between 11 and 50 employees, according to CrunchBase.
Whereas financial firms have been devoting resources and announcing pilot projects around blockchain, consumer technology companies haven’t said much on the topic. But Airbnb recently hinted at its interest in the tech, with Nathan Blecharczyk, a co-founder and the company’s chief technology officer, telling CityAM that blockchains might allow Airbnb to share its user profiles with other companies. “The question is whether there’s a way to export [a user’s reputation] and allow access elsewhere to help other sharing economy models really flourish,” he said.
As Airbnb has grown its userbase to more than 17 million in summer 2015, according to the company (pdf), it’s also developed a valuable database of reviews and ratings that let hosts and guest judge the trustworthiness of who they’re dealing with. “Within the context of Airbnb, your reputation is everything, and I can see it being even more so in the future, whereby you might need a certain reputation in order to have access to certain types of homes,” Blecharczyk told CityAM.
Trust is something blockchains are uniquely suited to dealing with. They can provide a permanent record of transactions and other data, and, in some cases, can render that data universally readable, as in the case of the bitcoin blockchain.
If Airbnb can figure out a way to make its user profiles immutable and universally readable, they could become a trusted form of digital identity, a bit like the profiles that credit bureaus create for individuals. If these identities can be “exported” to other platforms, as Blecharczyk said, they could become hugely valuable. An Uber driver, for example, might know if his next passenger came with a history of leaving Airbnb properties damaged.

Efficiency of mining hardware

I started with the the amount of operational mining hardware (measured as the hashrate in number of hashes per second), and the efficiency of the hardware (which can be measured in Joules per hash).

The total bitcoin mining network currently comprises a calculation speed of over 800 petahashes per second, which requires over 10,000 metric tonnes of hardware, considering that even the newer machines weigh over 12 kilograms each (15 grams per GHash/sec. on average in the analysis below). That is enough material to build another Eiffel tower.*

In the beginning of the bitcoin phenomenon, miners used any laptop or computer to generate bitcoins. As the difficulty of mining bitcoin increased—part of the cryptocurrency’s design—miners upgraded to graphics cards, and then more sophisticated hardware. The state of the art is dedicated bitcoin mining chips (called application specific integrated circuits, or ASICs). ASICs have been available for three years, so we have a small basis to explore the improvements in the efficiency of mining hardware.

Let’s have a look at the efficiency of those ASIC miners over time. I took an existing comparison of bitcoin mining hardware, to which I added a few miners myself and looked up all their first shipping dates, based on various sources (company specifications, blog-posts, first reviews, etc.). After exclusion of the ones that were never actually shipped to customers, and after exclusion of some of the early highly inefficient ASIC miners because they didn’t fit any trend, I ended up with a list of 53 types of bitcoin miners and plotted their efficiencies against their original shipping dates as can be seen below.

http://www.colloque-blockchain.com/

Meet Stratumn, a Paris-based startup that wants to create a platform-as-a-service for developers interested in the blockchain. With Stratumn, you can build, deploy and run applications on the company’s platform, and these applications can communicate with the bitcoin blockchain. It’s like Heroku, but for blockchain developers.

The company just raised $670,000 (€600,000) from Otium Venture and business angels, such as Ledger Wallet CEO Eric Larchevêque.

At heart, the bitcoin blockchain is a distributed database that registers all bitcoin transactions with a timestamp. Many have taken advantage of the blockchain to build applications that were unrelated to bitcoin transactions.

For instance, Stampery wants to replace notaries with the bitcoin blockchain. The service can issue legally binding proofs for all your sensitive documents, and these proofs live on the blockchain.

But Stratumn is taking this idea one step further and saying that other startups like Stampery are going to appear. Instead of having to redo the hard work from scratch, Stratumn lets your application talk with the blockchain without any effort from your side.

In the early 1990s, we said the old media is centralized. It’s one way, it’s one to many; it’s controlled by powerful forces, and everyone is a passive recipient. The new web, the new media, we said, is one to one, it’s many to many; it’s highly distributed, and it’s not centralized. Everyone’s a participant, not an inert recipient. This has an awesome neutrality. It will be what we want it to be, and we can craft a much more egalitarian, prosperous society where everyone gets to share in the wealth that they create. Lots of great things have happened, but overall the benefits of the digital age have been asymmetrical. For example, we have this great asset of data that’s been created by us, and yet we don’t get to keep it. It’s owned by a tiny handful of powerful companies or governments. They monetize that data or, in the case of governments, use it to spy on us, and our privacy is undermined.

What if there were a second generation of the Internet that enabled the true, peer-to-peer exchange of value? We don’t have that now. If I’m going to send some money to somebody else, I have to go through an intermediary—a powerful bank, a credit-card company—or I need a government to authenticate who I am and who you are. What if we could do that peer to peer? What if there was a protocol—call it the trust protocol—that enabled us to do transactions, to do commerce, to exchange money, without a powerful third party? This would be amazing.

Several years ago, an unknown person or persons named Satoshi Nakamoto came up with the Bitcoin protocol. Once again, the technology genie has been unleashed from its bottle. It gives us another kick at the can, another go, to try and rethink the economic power grid and the old order of things. That, to me, is how big this is. It feels like 1993. 

IMAGINE that the paternity of a particularly brilliant child is in doubt, and someone steps forward to claim he is the father. In the real world a DNA test would sort the matter out quickly. In the confusing world of bitcoin, a cryptocurrency, things are not that simple. From the start bitcoin has rested on a mystery: the identity of Satoshi Nakamoto, the pseudonym of the author of the academic “white paper” published in October 2008 which first outlined the technology behind the digital money. This mystery may finally be solved: Craig Steven Wright—a 45-year-old Australian computer scientist and inventor who was outed against his will and with dubious evidence as Mr Nakamoto in December last year—now claims he is the real Satoshi. On May 2nd he published a blog post offering what he says is cryptographic proof that he is indeed the creator of bitcoin.

The Economist—along with the BBC and GQ Magazine—had access to Mr Wright before the publication of his post (see footnote). We interviewed him, reviewed the documents he has provided and talked to bitcoin insiders who have communicated with Mr Nakamoto in the past and who had access to the same information. Our conclusion is that Mr Wright could well be Mr Nakamoto, but that important questions remain. Indeed, it may never be possible to establish beyond reasonable doubt who really created bitcoin.

Bitcoin has become much bigger than Mr Nakamoto; he stopped participating in the project a few years ago, and his successors have written far more code than he ever did. Whether Mr Wright’s claim is believed, especially by bitcoin cognoscenti, matters nonetheless. The bitcoin project has been riven for months by what some call a “civil war” between two competing camps of developers and bitcoin companies (although the rhetoric has recently become less strident). One side wants to keep bitcoin smallish and pure; the other is pushing for it to grow rapidly, even if this means turning it into something more like a conventional payment system. The bone of contention is the size of a “block”, the name given to the batches into which bitcoin transactions are assembled before they are validated. The intervention of a resurrected Satoshi would certainly change the dynamics of this debate. First, however, Mr Wright has to persuade people of his claim.

Mystery man
Nobody, not even his closest collaborators, ever met Mr Nakamato in person. They only communicated with him electronically. He not only wrote the white paper, but also the first version of the software that powers the system and then worked with other developers to improve it. But a couple of years into the project, he stopped participating. “I have moved on to other things,” he wrote in April 2011. Except for a few messages, most of which are believed to be hoaxes, he has not been heard from since.

That suggests a huge desire to remain private—and extraordinary willpower. Thus far, at least, the person behind the pseudonym has forgone fame and kudos. Despite its shady side (for instance as an anonymous means of payment for drug dealers) the system has proven very resilient: its exchange rate has recovered after a steep fall last year (see chart). The invention that underlies it, called the “blockchain”, is widely considered downright brilliant. Nor does Mr Nakamoto seem to be motivated by fortune: all bitcoin in circulation are now worth about $7 billion, more than the basic monetary supply (cash and deposits) of many small countries. According to some estimates, Mr Nakamoto holds 1m bitcoin, worth about $450m at current rates, but they have never been touched.

In the coming years, the technology behind crypto currencies such as Bitcoin will inevitably and radically change the role of traditional trusted parties such as banks, accountants, notaries, and governments. The possibilities are endless. We invite you to explore this new technology constructively and critically, and have an open discussion about the potential applications.

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• Rutger van Zuidam
• Sebas van den Brink
• Patrick Loonstra
• Lykle de Vries

Christopher Woolard, Financial Conduct Authority (FCA) Director of Strategy and Competition, announced a regulatory sandbox for fintech companies, a first of its kind. Harriett Baldwin, Economic Secretary to the Treasury, described Bitcoin and Ethereum as “digital currencies” and proclaimed the start of a “beautiful friendship”.

Both have been speakers at Innovate Finance Global Summit in London. As Christopher Woolard said in a groundbreaking speech, the aim of the sandbox is to “test out their innovative ideas without immediately incurring all the normal regulatory consequences.”

FCA may waive rules

Companies and start-ups that participate in the sandbox will be issued individual guidance on how FCA will interpret the rules under the understanding that if the guidance is followed they are in full compliance. The FCA may further waive or modify the rules or, in rare cases, may issue a “no enforcement action”, in effect throwing out FCA’s rulebook during the sandbox stage. Normal laws in regards to civil and criminal liability, of course, still apply. In explaining, Woolard stated:

“These letters aim to give firms comfort that as long as they deal with us openly, keep to the agreed testing parameters and treat customers fairly, we accept that unexpected issues may arise and will not take disciplinary action.”

Similar to accelerators

Signalling a highly innovative and open approach, Woolard stated that the sandbox will run “not dissimilar to how accelerators operate”, with two cohorts a year. Moreover, the FCA intends to go further, announcing an “industry working group to explore options for industry led sandboxes.”

In a further speech at the same summit, Harriett Baldwin, Economic Secretary to the Treasury, indicated UK’s openness and welcoming of fintech innovation not only by announcing new measures, but also by the words she chose. Describing currencies such as BitcoinCT r:  8 and EthereumCT r:  26 as “digital currencies”, Baldwin assured attendees that this was just the start of a “beautiful friendship”.

Announcing an industry-led fintech panel, the addition of “digital experts” criteria to the Visa Scheme, an information hub to facilitate “practical and cost-effective” access to professional services and “fintech bridges” to help UK businesses expand internationally, building on a first of its kind agreement with the Australian counterpart to streamline regulatory access to each other’s market, Baldwin went further. 

More measures to come

“We will be announcing other ways we can help you help UK consumers.” - she stated.

Thus, expect even more measures in what seems to be a complete embrace of fintech, including digital currencies like Bitcoin and Ethereum, and not only a partnership, but a “beautiful friendship”.

The United Kingdom is widely recognized as the most welcoming regulatory environment for Fintech companies.

George Osborn, the Chancellor of the Exchequer, signaled UK’s embrace of Bitcoin and Fintech in 2014 by buying a bitcoin through an ATM, making him the highest ranking government official in the world to have publicly used bitcoin.

At the time, a number of measures were announced, including the incorporation of a Payment

Systems Regulator tasked with ensuring, among other things, access to banking facilities.

The decision to not only embrace, but champion fintech, may turn out to be one of the most astute in a century.

US overhaul ahead

US Regulators have noticed and many are now loudly calling for an overhaul of the complex and outdated US regulations to account for 21stcentury innovations, including a scrapping of the draconian double taxation by IRS and the disastrous bitlicense.

Beginning with CFTC’s commissioner who stated that blockchain tech could have prevented Lehman’s collapse, more and more have asked for a more welcoming regulatory environment, seemingly culminating in a whitepaper asking for recommendations by the Office of the Comptroller of the Currency (OCC), the independent department charged with overseeing banks and hailed by some as the appropriate body to usher in a new, more welcoming, regulatory approach towards Fintech.

The United States however has a more complex regulatory environment with numerous regulatory bodies and overlapping responsibilities as well as different states with different requirements. It is not clear whether US regulators will be able to move quickly, considering that UK has just upped a gear, but, undoubtedly, the whole world is paying great attention to UK's numerous innovative measures and their championing of Fintech.

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http://www.colloque-blockchain.com/