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Corporate and Government Blockchain Use

In the past few years, the public perception of blockchain has shifted from being an esoteric, little-understood technology to nothing short of a revolution that may define the future of the internet. We have been seeing massive venture capital being pumped into blockchain startups for a while now and blockchain based startups are now finding footing even in Asia and in emerging economies across the world.

Research shows that blockchain and blockchain startups globally received around $1.3 billion in investment capital in 2018 (since May). However, blockchain now brings with it a “fear of missing out” and everyone from tech giants to Fortune 500 companies to country and state governments want to be seen as adopting blockchain technology in a big way. Let’s talk about how major companies and governments are implementing blockchain solutions and whether it will lead to a long-term technology transformation for these institutions.

How Major Companies and Governments are Adopting Blockchain Technology

Corporations are starting to wake up to the need to invest in blockchain. It’s expected that corporate spending on blockchain software will reach $2.1 billion in 2018, up from $945 million in 2017.

Visa

One of the major uses of blockchain technology is bringing down the costs of international payments and money transfers by replacing a third party intermediary with a decentralized, trustless system. It’s no wonder that Visa wants to get ahead in the blockchain game and use the new technology to change its business model and retain market leadership.

Visa has filed as many as 17 blockchain patents. One of its important patents (patent number 20170237554A) describes the foundation of a fast and secure way to store and transfer digital assets of substantial value. In December 2017, Visa launched its B2B Connect platform based on this patent. This platform aims to reduce the friction and high cost of high-value international transactions. It is currently in its testing phase. Visa clearly takes the potential of blockchain technology and its future very seriously and the hype around its blockchain strategy is backed by substance.

Walmart

Walmart’s “Farm to Fork” blockchain project, launched in 2017, is a system that will help Walmart determine where the bad food came from once a product is recalled. This is expected to massively improve food safety standards, reduce food consumption related diseases, and reduce costs of waste.

Walmart now uses this blockchain to maintain the supply chain ledger for 30 products. The process is simpler and more secure than the barcodes, scanners, paper forms, and individual databases Walmart usually uses. For every 1% reduction in food-borne diseases in the United States, that’s a saving to the U.S. economy of about $700 million,” said Frank Yiannas, head of food safety at Walmart. The blockchain system takes 2.2 seconds to trace the origin of sliced mangoes, verses 6 plus days using other systems.

Air France

Air France started examining the possibility of applying blockchain technology to optimize aircraft maintenance workflows in 2017. It believes that the main advantages of blockchain – resilience, traceability, integrity, and disintermediation – are well suited to the aviation supply chain.

However, when it comes to making a complete switch to blockchain based systems, Air France has a major obstacle in the way. Most airline data is still maintained on paper, so Air France will first have to move towards digitization of data before it can implement a blockchain system with any kind of efficacy.

Estonian Government

The Estonian government has been one of the pioneers of blockchain implementation, starting as early as 2008 before the term blockchain was even coined. The E-Estonia program uses blockchain to integrate all Government services on one platform. The blockchain ledger protects sensitive data from the healthcare, judiciary, legislature, security, and commercial code registries from corruption and misuse.

They have also developed a blockchain-based security system called KSI which can function even under constant cyber attack. Estonia is a prime example of a proactive government that has persevered with blockchain implementation for a long time.

State of Delaware

The state of Delaware launched the Delaware Blockchain Initiative in 2016 which enables a more efficient governance structure for the 30,000 companies that are incorporated in the State. The government hopes that this will give the state a competitive edge and encourage more companies to be incorporated in Delaware.

However, the state has been slow to implement the initiative. This could be (at least partly) because the initiative would make agencies who make their living from company filings redundant. The government may be hesitant to implement this disruptive technology due to the potential job losses it could cause.

The European Union

Counterfeiting costs the European Union almost €60 billion every year. The EU Intellectual Property Office and the European Commission are working on a blockchain based solution to combat counterfeiting.

They are now in negotiations with a private company that can create blockchain based working products to deal with counterfeiting. It remains to be seen what the final solution will look like and how effectively it will deal with widespread counterfeiting of products all over the EU.

Blockchain Implementation by Corporates and Governments – Reality or Hype?

The major rush to announce blockchain projects to the media and jump on the blockchain bandwagon that was seen in the past two years has now cooled off significantly. According to Forrester Research Inc, a number of blockchain projects will be wound down this year, and many companies are scaling back on blockchain pilots that they were pushing aggressively just last year.

In 90% of the cases, blockchain experiments never become incorporated in the operations of the company. A survey of CIOs by Gartner Inc said that only 1% of them were implementing blockchain projects in their companies while 80% of CIOs said they had no interest in the technology. Other studies have shown different results, but similar sentiment… a majority of corporations surveyed say they don’t plan on using blockchain technology.

A major reason for this disconnect between hype and reality is that most companies had thought that it would be easy to find use cases for their blockchain projects. They are now realizing that introducing blockchain requires broad collaboration with many industry participants and scalable implementation could take 5 to 10 years instead of the 2 to 3-year horizon that had been expected.

The Future of Blockchain Implementation in Governments and Large Companies

While blockchain implementation among corporates and governments has seen a bit of caution throughout 2018, it seems to be a natural course correction after the exuberance and hype of the past couple of years.

Big tech players like IBM and Microsoft continue to invest heavily in blockchain software and have captured over 51% of the $700 million market for blockchain products. While there has been a tempering of enthusiasm when it comes to implementation of blockchain, and many companies are still testing the waters, it is widely believed by blockchain backers that there will be an upswing in blockchain projects next year and that the optimism of governments and companies will definitely return in good measure.

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A Passwordless Future | Is Blockchain the Answer?

We live in a time of rapidly advancing technology. Interconnectivity has brought the world closer than it’s ever been before, however, it’s also made our personal information far more vulnerable as a result.

Passwords have long been seen as the cornerstone of online security. Whenever we indulge in internet shopping, or access work emails, or log in to our online banking, we’re protected by a network of passwords that are designed to keep our data safe.

But do passwords really bring peace of mind and security at a time when hackers have so many tools at their disposal that can force breaches?

In 2017, Centrify, a leading digital security organization, found that 81% of data breaches involved compromised credentials. This, according to Verizon’s Data Breach Investigations Report (DBIR), represents an alarming increase from 50%, to 60% to over four-fifths of breaches coming down to stolen or weak passwords over the past three years, especially when you consider the fact that a lot of passwords are repeated:

Safety not Guaranteed

The fundamental problem with passwords often has roots in human error. Many organizations advise employees to change their codes repeatedly throughout the year and to keep hackers guessing by only opting for passwords that are longer than eight characters which include numbers and symbols.

This may seem like an obvious way of ensuring safety, but when people can expect to create dozens of password restricted accounts online every year, the chances of them keeping on top of their passwords decreases.

The notion of remembering such an unnatural combination of special characters and numbers within a long code is so difficult to some, that they instead opt for utilizing simpler passwords. Fortune published a list of the world’s most common passwords of 2017, and coming in at first place was ‘123456’, with ‘Password’ a close second, overtaking “Password1” in 2014, according to Statista.

Picking such generic passwords may seem like users are asking for trouble, but the reality is that for many, the task of remembering elaborate phrases and character combinations is simply too difficult. When customers are prompted to create passwords that they feel they won’t remember, oftentimes the solution is to record their new password somewhere, sometimes in their phone and sometimes physically, for future reference – but then this act only leads to increasing the chances of the code falling into the wrong hands.

Time for an Alternative?

Biometrics has long been touted as a successor to the flawed password system, but with Jonathan LeBlanc, Paypal’s Ex-Global Head of Developer Advocacy, already declaring the widespread fingerprint identification technology as obsolete, there’s something of a race emerging between companies searching for an even more reliable way of protecting private information with the help of our bodies.

A Toronto-based startup, Nymi, has recently developed a wearable wristband that utilizes its user’s ‘unique cardiac signature’ as a form of identification, while Paypal itself has been working on developing ‘wearable computer tattoos’ that’s capable of providing biometric confirmation of its wearer’s identity.

Another approach has been adopted by companies like Remme, which ditches passwords for SSL certificates and integrated devices coupled with blockchain technology to keep delicate information secure without the need for passwords. Alex Momot, Co-Founder and CEO of Remme explains “The new process of logging in without passwords can be compared with the airport registration. You show your passport, and if there’s no record (negative record), you’re good to go.

Because of the immutable power of blockchain, a business’ information can be kept safe with zero prospect of a brute force attack manipulating or stealing the data stored.

Is the Future Passwordless?

Passwords have been increasingly the subject of compromises in recent years. A survey by Kaspersky Lab found that 59% of people fail to store their passwords securely, while 63% use ‘easy-to-guess’ codes that are easy for hackers to interpret, and a further 39% select the same passwords for all of their accounts.

This evidence points towards frailty among password protected systems on a stage as large as the world wide web. They may make for an effective way of keeping information protected in a closed circuit intranet-based system, but at this time of unprecedented interconnectivity, a more intricate way of ensuring security needs to be devised.

Fortunately, as the tools at the disposal of hackers develop, so too does the technology that can be utilized to keep our information safe.

Blockchain is designed to flummox even the most persistent of codebreakers, with its “untamperable” chain of information spread across a series of networks, while the reliability of biometric encryption has proven popular enough for leading banks to adopt the form to provide enhanced security for mobile banking customers. 

IBM estimates that the average cost for a UK company to remediate a data breach is around £2.5m. This coupled with the collective fear at the effect a loss of data could cause to a company’s image necessitates a need for change within the old-fashioned framework of online security. A wholesale overhaul of passwords as we’ve come to know them today will be inevitable if businesses are to guarantee protection for its customers and values.

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Security Tokens | Are they On the Way?

I love a good western: the gunfights, the train robberies, the drinking and gambling. The name of the film I was watching escapes me – it may have been Tombstone – but I recall a scene where a few burly men were playing cards, and there was a whole stack of goodies on the table. Cash, jewelry, maybe a title deed, and definitely bonds of some sort were causing the game to become somewhat heated. Someone or other got shot, I think.

Now, this got me thinking about crypto – and not in the old cliched ‘Wild West of Crypto’ way either. It got me thinking about security tokens. It’s a natural progression. Cash, jewelry, and house titles have been represented and traded on a blockchain, so it follows that bonds will be, too.

A bond is a specific type of security – a debt security. Unlike stocks, in exchange for which you get specific rights for your investment into a company, a bond acts as a loan to a company. In exchange for your loan, you may receive interest and get repaid in full when the bond matures.

The bonds in the film I was watching were big sheets of official-looking paper – easy to lose, get stolen from you, lose in a house fire (much like a paper wallet). Having these types of assets tokenized makes absolute sense. Not only can you trade between each other without the added expense of a middleman, but you will also have an immutable record of ownership. Several projects have created platforms to create security tokens that meet regulatory requirements such as Polymath and TZero.

Not all blockchains can handle the requirements of handling securities, though, but the technology is definitely there to make it happen. Bytom’s three-layered blockchain has a contract layer specifically for applications such as this, and Medici Ventures recently completed a US$3.6 million security transfer on the Ravencoin blockchain.

Tokenization is definitely happening. Why wouldn’t it be? It’s a perfectly logical step for the industry to take. While we haven’t seen a mass migration towards blockchain-based securities on the level that many predicted at the start of 2018, it doesn’t mean it’s not on its way. The baby steps have already begun, and the stampede could be on its way soon.

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Blockchain Tech and Customer Loyalty

Customer loyalty is one of the cornerstones for every successful business, which is why it is no surprise that many businesses offer club memberships, frequent customer rewards and many other loyalty program incentives to their customers. However, the massive multitude of clubs and programs can be frustrating for customers to navigate, as they try to maneuver between the numerous club cards in their wallets and online, often finding it difficult to keep track of their point status and where they can be redeemed.

While cryptocurrencies made a splash in recent years, making headlines and causing general public interest, it is the underlying blockchain tech that is proving to be the real game-changer. The ability to transfer and verify information on a decentralized network opens up many possibilities across multiple industries and could become the new standard in many ways – including customer loyalty.

Using blockchain tech for loyalty programs is already showing great promise as several of the world’s biggest brands have already converted some or all of their programs using the technology. The ability to manage a large customer base while maintaining perfect tracking of each client’s token count, without the need for a central governing entity, is a major step up in this industry, which sees $360 billion in points go unredeemed each year. From airlines to small restaurants, it seems that any business can harness the new technology to benefit customers as well as themselves.

 

Major Brands Are Making the Move to Blockchain

On top of the decentralization and easy tracking, another main advantage of blockchain is the ability to exchange and redeem tokens of values, such as frequent flyer miles or phone minutes. While this ability is widely in use on cryptocurrency platforms such as Ripple and Stellar, it is also being used in other industries.

One such example is Singapore Airlines. Considered the best airline in the world, Singapore is also a pioneer in using blockchain for its business, introducing a loyalty program built on the technology. The advantages of Singapore Airlines’ loyalty program are twofold: Using blockchain to track each customer’s account status to accurately reward them with miles, and enabling clients to redeem them with other service providers that are partnered with the airline. Launched last July, if the loyalty program takes off, it could become the yardstick by which all other airline clubs are measured.

Naturally, blockchain-based loyalty programs are not limited to airlines. Car rental giant E-Z Rent-A-Car has also created a similar program, which includes features such as payment with cryptocurrencies and even redeeming points for crypto assets within the company’s app. Japanese technology giant Rakuten, HP, and many other companies are also in the process of creating blockchain loyalty programs.

 

Bringing Blockchain Technology to SMBs

But what about the little guy? Many small and medium businesses (SMBs) don’t have the resources to develop their own blockchain networks, but would still benefit from the advantages it has to offer. For that reason, several companies have begun offering services which take care of the infrastructure and enable these businesses to build blockchain-based loyalty programs of their own.

 

The Building Blocks of Brand Loyalty

As blockchain solutions become more widespread, it is safe to assume that a growing number of brands will implement blockchain into their loyalty programs. Larger brands will most-likely build their own blockchain, or use the services of companies such as IBM, which is already offering an API for creating loyalty programs.

As a growing number of businesses are looking into blockchain tech, it seems that these solutions could prove to be the holy grail of customer loyalty.

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Bitcoin and Blockchain | Banks Must Embrace or “Bite the Dust”

With all the constant news about the price of Bitcoin, it’s possible to forget what it was invented for. Cryptocurrency trading plays only a small role in what Bitcoin and blockchain technology can do for our world. Most importantly, they can end the hegemony central banks have on the way we make payments to each other.

Today, there are supposedly thousands of cryptocurrencies available. Many of which seeks to fix the issues central banks have created. However, they don’t all have the same goals. While some may wish to obliterate our current banking system, others simply want to improve it. Banks must find a way to work with these co-operative cryptocurrencies or they will likely face extinction.

The Current Banking System is Too Complicated

In 2015 a global financial literacy test found that 57% of adult Americans are financially illiterate. It’s not surprising then that most people don’t know how complicated it is to transfer money between banks. It’s painstakingly complicated, it’s the reason why payments can take so long – days or even weeks in some circumstances.

When money doesn’t leave a bank, transfers are easy. For example, if two people use the same bank and transfer funds between themselves it’s very straightforward. The bank simply debits the payer funds and credits the receiver.

But when we need to pay someone who uses a different bank this becomes an issue. You would assume that it would work the same way, but unfortunately not. Instead, each bank must have an account with each other to give and receive funds.

To pay someone who belongs to another bank, the funds must first be given to the bank. The bank then takes that money and puts it in their own account in the other bank. Once that money is there, it is transferred to the receiver. This means funds can sometimes be swapped between different hands numerous times before they reach their destination. This entire process becomes even longer when there are large quantities of funds involved.

Blockchain technology can simplify this process, making transactions more direct. Additionally, this also makes transactions cheaper as well.

Blockchain Technology is Ripe for the Globalized World

The old method that is currently in place does not fit in with the world we now live in. Companies are increasingly multinational with offices in many different countries. The process above becomes even more complex when it includes foreign banks. These banks may not have accounts with each other, which might mean a third country may need to be involved.

This is an irrelevant issue for blockchain technology which overcomes this issue. With Bitcoin, overseas transactions can take place at the same speed as domestic transactions.

Funds will be safer

Blockchain technology has also been highlighted as a safer alternative to transferring funds as well.

Decentralized vs. Centralized

One of the key selling points blockchain is that it is decentralized. Centralized networks, such as banks, put themselves at risk because they are easier to hack. Once inside a centralized network, a hacker has access to everything. It only takes one weakness to be manipulated.

By being decentralized, all information is shared amongst everyone all the time. This means that no one is in control of the network. For a hacker to manipulate the information on the network, they would need to control at least 51% of it. This is no easy feat and would require an extremely powerful computer.

Restoring Trust with Transparency

Trust is a major issue for many banks, especially after the 2008 crash. In 2017, a YouGov survey uncovered a number of interesting insights into global trust in banks. While 74% of Americans trust banks, only 37% of Europeans do.

Blockchain technology is also able to restore people’s trust in banks. Most blockchain’s use what is called a distributed ledger. This ledger is used to record every single transaction that takes place and can be viewed by anyone.

With such a powerful tool, banks can be properly regulated. This not only reduces illegal activity, such as money laundering. It also shows clients how their money is being used and transferred.

Cryptocurrencies Working with Banks

Some cryptocurrencies have been designed specifically to work with banks. One of the largest already doing this is Ripple, which is also considered the third largest cryptocurrency. Ripple works by acting as an exchange for money transfer. By doing this, transactions are more direct, much faster and cheaper as well.

Bitcoin’s Position

Bitcoin was designed as an alternative to fiat money. In an ideal world, users would not need to have banks or bank accounts, they would only need bitcoin. This, of course, puts it at odds with the banking world.

Despite the above, it is still possible Bitcoin can integrate with it. Some banks are already doing it and it could ensure their survival. Though, for wide-scale adoption to happen, it is likely Bitcoin will need to be a lot more stable.

Until that point is reached, Bitcoin is prime to be traded. Traders can utilize BitMex signals and Deribit Signals to make the most of it.

Conclusion

Blockchain technology benefits many industries for the better, most of the time making them more efficient. Banking is another industry that urgently needs to be simplified and blockchain looks like the perfect way to do that.

There are several benefits to adopting blockchain technology: banks can simplify transactions between themselves, making the process quicker and cheaper; banking institutions will be impenetrable to hackers, ensuring their client’s funds are safe; banks will be able to increase trust in their clients by utilizing a distributed ledger.

The banking sector will find it tough to accept the changes and some may fight them. This may even result in some banks closing and some new ones opening. It should be considered that different countries may adopt blockchain at a slower rate and may use a different blockchain. But the result will be the same, banks must embrace change or “bite the dust”.

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