AWS Backs $100000 Competition to 'Change the Face of Blockchain' - CoinDesk

AWS Backs $100000 Competition to 'Change the Face of Blockchain' - CoinDesk

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• AWS Backs $100000 Competition to 'Change the Face of Blockchain' - CoinDesk
• What Is the Difference Between Blockchain and DLT? - Cointelegraph
• Bigger than blockchain - Accounting Today
• Despite the Hype, Utilities Still Wary of Blockchain - Greentech Media News
• When It Comes To Blockchain, Stick To Your Core Competency - Forbes

AWS Backs $100000 Competition to 'Change the Face of Blockchain' - CoinDesk Posted: 02 Aug 2019 05:30 AM PDT The problem: Given 1024-bit input x, compute the verifiable delay function 'h=x^(2^t) mod N' as fast as possible. t=2^30 N=12406669568412474139879892740481443274469842712573568412813185506497689533 7309138910015071214657674309443149407457493434579063840841220334555160125016 3310409336906745695712173376302391915172057213101976083872398463643608502208 9677296497856968322944926681990341411705803010652807392863301711868982662559 4484331 If you can understand the above, you could be in for a portion of a $100,000 prize – that is, if you can then beat the others attempting to calculate the answer with the greatest speed improvement. The highly technical conundrum has been posed to coders in a competition supported by Amazon Web Services (AWS) that aims to "change the face of blockchain," as well as how hardware is designed and made. Launched by the VDF Alliance, the competition aims to solve how to calculate something called the verifiable delay function (VDF) in the shortest time. In its announcement, AWS paraphrases Justin Drake, a researcher with the Ethereum Foundation, explaining that "VDFs are a low-level building block in cryptography, barely more than a year old. It's the "V" or 'verifiable' in VDF that makes the approach so unique." "It's trustless," according to Drake. "For the first time, it adds this notion of time with which you can build all these cool things." Included in the "cool things" promised by VDF tech is "unbiased proof of randomness." Effectively, it could enable trustless, truly random number generators on blockchains. Currently, these are pseudo-random and can be exploited by bad actors by effectively being able to guess the number. With true randomness, that wouldn't be possible. If the tech can be advanced sufficiently it could help to move blockchain such as ethereum from the energy-intensive and hence costly proof-of-work algorithm to one called proof-of-stake. "The Ethereum ecosystem alone currently uses on the order of 850 megawatts to extend blocks. That's about $460 million in running costs per year," said Tim Boeckmann, senior startup business development manager for AWS in the U.K. "With VDFs in Ethereum, there is an opportunity to bring down that cost to less than $0.13 million for the 0.25 megawatts of energy to power the hardware random beacons." In fact, the competition is being held in partnership with the Ethereum Foundation, as well as other alliance members, the Interchain Foundation, Protocol Labs, Supranational, Synopsys, and Xilinx, which are sponsoring the event "with support from AWS." As reported by CoinDesk previously, the Ethereum Foundation is already working on the VDF problem, revealing in February that it was considering spending $15 million in the search for true randomness. VDFs are envisioned for use in ethereum's much-anticipated proof-of-stake system called Serenity, to which the ethereum network will migrate in the next few years. The first round of the competition will run till the end of September, and will award prize money to the fastest design that solves the problem at the top of this article. In the initial round of the competition, successful entrants will be awarded $3,000 for every nanosecond improvement. Full details can be found here. Drakes suggests that those entering will need a blend of skills. "You are going to need people who are really good at hardware design, but also people with algorithmic skills," he said. "My guess is the winning team will have a combination of that expertise." AWS image via Shutterstock

What Is the Difference Between Blockchain and DLT? - Cointelegraph Posted: 02 Aug 2019 06:36 AM PDT "Blockchain" and "distributed ledger technology." Many of us have been guilty of confusing these two terms and using them interchangeably. But even though their meanings overlap in a number of areas, and even though they've both reached similar levels of public notoriety since the 2017 cryptocurrency bull market, they aren't quite identical. Yes, they both generally refer to a record of information that's distributed across a network, and yes, they both foster a greater degree of transparency and openness than had been enabled by earlier, centralized databases or digital records. But this is where the analogies end, since blockchains and distributed ledger technology (DLT) each come with their own important distinguishing features. Openness, decentralization, cryptography There are two big distinctions, and depending on where you sit on the Bitcoin vs. blockchain spectrum, some qualify Bitcoin-style blockchains as largely superior to and more innovative than their distributed ledger counterparts while others qualify DLT as more useful for everyday commercial purposes.  The illustration below outlines how the two technologies relate to each other, showing that one way to implement DLT is through a blockchain: Firstly, blockchains are generally public, meaning that anyone can view their transaction histories and that anyone can participate in their operations by becoming a node. They are, as cryptocurrency parlance puts it, "permissionless." This is the key feature pointed out to Cointelegraph by Marta Piekarska, the director of ecosystem at Hyperledger. According to Piekarska: "First and foremost: one is permission less, the other is permissioned. This means that in the first case anyone can participate in the network, in the other: only chosen participants have access to it. This also determined the size of the network: Bitcoin wants to grow infinitely, while in a permissioned blockchain space, the number of parties is smaller." Put simply, the public aspect of blockchains generally implies three interrelated things: 1) Anyone can use the blockchain, 2) anyone can serve as a validating node of the blockchain, and 3) anyone who becomes a node can, in turn, act as part of that blockchain's governance mechanism. In theory, this makes blockchains decentralized and democratic structures resistant to undue control or influence from any single party. By contrast, a distributed ledger generally doesn't enable any or most of these public features. It restricts who can use and access it (hence the "permissioned" terminology), and it also restricts who can operate as a node. And in many cases, governance decisions are left to a single centralized company or body. Compared to the ideal of a public, decentralized blockchain, it exists solely to serve the interests of a concentrated group of commercial players and interests. Below is an image detailing how centralized, decentralized and distributed networks are structured: And then there's the second main difference. As the name implies, blockchains consist in a series of time-stamped "blocks" that record the then-current state of the overall blockchain/cryptocurrency and that need to be cryptographically validated by a majority of the network in order to form the next entry in the chain. As Bitcoin Core developer Kalle Alm explained to Cointelegraph, this ensures a greater level of security for the blockchain, insofar as the need for cryptographic consensus makes it very difficult to fake transactions. Alm went on to say: "Blockchains alleviate the trust requirement in a shared timestamped database. For a public cryptocurrency, this is obviously necessary or someone might just go and give themselves a million USD, but for a private database, especially when it is not a cryptocurrency but some more abstract form of smart contract platform, it starts to make less and less sense." However, while some distributed ledgers aren't cryptographically validated chains of blocks, it's worth stressing that some are — or that they still feature cryptographic consensus. For instance, while R3's Corda ledger doesn't actually comprise a chain of blocks, it nonetheless relies on its notaries (i.e., nodes) reaching consensus over time-stamped transactions. Because of this, it should be emphasized that there's really only one essential difference between blockchains and distributed ledgers, which is simply that one is permissionless and the other is permissioned. Michal Zajda, the blockchain architect at Aeternity blockchain, told Cointelegraph: "The only difference between private and public blockchains is the range of availability. I can easily imagine deploying the Bitcoin protocol in a private cloud serving just a small group of users. The fundamental difference here is between permissionless blockchains — like Bitcoin, and permissioned ones. For permissionless ones, we do not need to trust any third party company to run it fairly and honestly." But assuming that a distributed ledger is private and isn't a time-stamped chain of blocks that results from cryptographic consensus, it often just amounts to a fairly conventional database that just happens to be shared among a select group of participants. This is the point made by Phil Chen, the decentralized chief officer at HTC Exodus. He told Cointelegraph that the difference between public and private blockchains is vast: "In the enterprise space, people are talking about private blockchains, which technically are not blockchains but a better database management system. Nevertheless, it does have productivity gains; I call it a 9 to 10 innovation, whereas public blockchains like Bitcoin and Ethereum are 0 to 1 innovations that completely change the way we think and use money and computation. Bitcoin is a true public blockchain that is open, neutral, censorship resistant and borderless. And distributed ledgers are simply permissioned databases." Privacy, scalability But as Chen's explanation indicates, even though blockchains are arguably superior to distributed ledgers, DLT can still be a useful addition to the global economy's technological arsenal, particularly in cases in which it would be unwise to harness a truly public and decentralized blockchain. Alm added that:  "The strongest argument for a private blockchain seems to be when a bunch of banks get together to create a system for transferring money between each other. In this case, no bank would be content letting any of the other banks 'maintain' the database on their own, so a shared blockchain controlled by no one would make sense." Added to this, the privacy of private ledgers is an obvious benefit for any company protective of its business or customer data. Still, the chief commercial officer at the Energy Web Foundation, Jesse Morris, contends that, even here, the privacy of public blockchains can actually be much stronger than some people realize. He told Cointelegraph that: "A common criticism of public chains has to do with privacy (e.g., the details of every transaction are known to all). This criticism does not recognize two simple facts: 1) any dApp can shield certain transactional details by only transmitting the bare minimum of information necessary across any blockchain while keeping sensitive data off-chain and 2) even in private networks, privacy-preserving features are applied to protect sensitive information from participants on a private blockchain, and these same privacy preservation measures (e.g. EY Nightfall, other zero knowledge proofs) are beginning to be utilized on public blockchains as well." In other words, there is a recognition that public blockchains potentially offer many of the privacy benefits promised by their more private rivals, and then some. Of course, private ledgers still generally have the advantage of being controlled by the companies that use them — and for big multinational banks that want to have control over their processes, this is obviously a big plus. There's also the very salient benefit of improved scalability, since, as mentioned above, distributed ledgers are often shared yet largely centralized databases. As such, they can process hundreds — if not thousands — of transactions per second, while decentralized blockchains such as Bitcoin struggle to top seven transactions per second, all the while consuming vast quantities of electricity. This is perhaps the main benefit offered by distributed ledgers, and even if they don't offer much decentralization and transparency beyond previous database systems, it's one reason why they'll continue being used in the future.

Bigger than blockchain - Accounting Today Posted: 02 Aug 2019 07:30 AM PDT Blockchain is more than a buzzword — it's a big opportunity for accounting firms to provide services around the technology, which powers business innovations like cryptocurrency and smart contracts. Atlanta-based Top 100 Firm Aprio has been ahead of the curve, having opened a blockchain practice six years ago and, as vanguards in the space, established the firm as an early thought leader in the technology. Leading that effort are Mitchell Kopelman, partner-in-charge of the firm's tax practice and technology & blockchain group, and Jagruti Solanki, assurance partner specializing in technology and blockchain. They head up the group in providing blockchain assurance, accounting, tax and consulting services, covering a range of regulatory and operational issues. Mitchell Kopelman The practice essentially began with one client, a digital-asset/crypto-payment processing company. Aprio had established a technology practice 30 years ago, but the expertise needed to service this blockchain client was more specialized. Kopelman calls the firm fortunate to have gotten "involved in blockchain six years ago, before most people knew what bitcoin or blockchain was." Even as education around blockchain has advanced, bitcoin is most often associated with the technology. Blockchain is a distributed, decentralized, ledger that stores information in a database keeping permanent record of any modifications. Using this technology, bitcoin and other cryptocurrencies can be exchanged between parties with no intermediary. The affiliation with cryptocurrency fostered some initial uncertainty and miseducation about blockchain, according to Kopelman. "Bitcoin [was associated] with illegal transactions," he explained. "It started out with negative publicity, with negative connotations and skeptics… people associated bitcoin with illegality. That exists, but it's not like that didn't exist with wire transfers, cash… It got a bad wrap initially [but] some people realize bitcoin is bigger than illegal transactions… some people are realizing blockchain is bigger than bitcoin." The 35 to 40 clients Aprio serves in its blockchain practice are well aware of blockchain's broader applications--as many are technology and financial technology companies. "In fintech, many companies receive money transmitter licenses in this country," Kopelman explained. "Our blockchain practice came out of our fintech practice; we have a huge fintech practice." Born out of financial technology, Aprio's blockchain practice has gone on to touch many of the firm's services and specializations, including its large manufacturing and distribution client base. Jagruti Solanki "There are about 110 people working in the technology practice, and some of those people [focus] on traditional software versus blockchain, but pretty much everyone working in the technology practice is working on blockchain clients," explained Solanki. "Some people are very focused on blockchain. The risk assurance practice, with SOC 2, ISO 27001, GDPR…. They're predominantly working with fintech companies. There's a fair amount of people in valuation, and in M&A — everyone is touching blockchain in that respect. Looking at blockchain as part of technology, it even bleeds into manufacturing and supply chain companies using blockchain." The practice still serves "primarily technology companies," but "what's changing is we are spending a lot of time working with companies in other industries, adopting blockchain to their business practices," Kopelman said. As more and more industries adopt the technology, the accounting profession must be prepared, warned Solanki, who speaks about blockchain at various industry events, teaches classes for state societies, and is part of an American Institute of CPAs committee exploring digital assets and submitting recommendations for much-needed guidance. "We recognized early on, as accountants, there is not a whole lot of education out there," she said. "We can't continue to do what we're doing without changing the way we think, and our internal knowledge. We do that with our staff, in our technology niche groups, internal education and external education to our clients and companies… We didn't see a whole lot of CPA firms out there, midsized and smaller sized, trying to understand that space in 2013 when we entered it." Solanki counts client acceptance, understanding and doubt among the biggest hurdles for other firms in accepting blockchain clients. "There's uncertainty about whether this is a space they should jump into. One key thing for any CPA firm is, our profession is going to change. From an audit standpoint — five to six years ago we had to audit a crypto-payment company. We couldn't audit the way we would normally audit for a non-blockchain [company]. You have to understand blockchain technology, as the audit procedures for such companies are different; that's just the nature of business and technology. The way we look at it, you have to jump in, and understand the technology to solve that." Solanki points to the example of Walmart, last year, announcing that food suppliers will be required to use Walmart's blockchain "Otherwise, vendors can't do business with Walmart," she explained. "[They will be] forced to use someone's blockchain technology, and not understanding what blockchain technology is. They will be forced to use it; how will that impact our profession. We have to think forward, to help these kinds of vendors, so we are not reactive but more proactive." As Solanki and Kopelman help lead the conversation, they await regulatory input. "Jagruti is talking about best practices," Kopelman said. "There is virtually no guidance from the IRS — we might get some shortly, but not a whole lot, besides what was put out a few years ago. The AICPA submitted more than 140 recommendations; we were part of the AICPA working groups that started over a year ago on blockchain. Hopefully we get guidance this year." In addition to blockchain, Aprio has expanded its advisory and consulting practice into other cutting-edge technology like artificial intelligence and machine learning, while keeping an eye out for the next big thing. "For 30 years we've been working with technology companies," Kopelman said, "and with every new wave there's been, our people have had to learn and understand--before the cloud, before the internet. [We've been serving] technology companies before the internet existed. Over the years, we're learning other technology; new ways of how to make this world a better place. At the end of the day, blockchain, you can use it for good, use it for bad. It keeps me excited for my job everyday. I've been working in the technology sector for 30 years, tax-focused for me, to stay current in the leading technology. Another five years, it's something else. Blockchain will not be the last technology to be developed." Danielle Lee Danielle Lee, managing editor of Accounting Today, previously served as technology editor of Accounting Today and editor-in-chief of Accounting Technology. More from this Author For reprint and licensing requests for this article, click here.

Despite the Hype, Utilities Still Wary of Blockchain - Greentech Media News Posted: 02 Aug 2019 03:26 AM PDT Utilities remain wary ofblockchain despite the technology having been touted for energy applications for more than three years, new research finds. In a survey of 15 utilities and one regional transmission organization across North America and Europe, 69 percent saw blockchain as "still emerging." Despite hype from more than 150 energy blockchain vendors and startups, "there's very little live activity" among utilities, said David Groarke, managing director of Indigo Advisory Group, which carried out the research for the Electric Power Research Institute (EPRI). Groarke said North American companies, in particular, are adopting a wait-and-see approach to blockchain. None of the four utility blockchain pilots reported in the U.S. lasted more than six months, the researchers found. In contrast, European utilities have been more willing to test the technology. The research uncovered three live utility blockchain implementations across Europe, two of which had been ongoing for more than a year, along with a couple of pilots. "Many utilities around the world have made an effort to understand and test blockchain, but the technology may need to mature before real-world applications become common," observed the report. Utilities' tepid response to blockchain was evident in the resources that companies dedicated to the technology, Groarke said. The researchers found companies had an average of just 2.2 full-time employees working on blockchain projects. This was a tiny proportion of the headcount of many of the companies surveyed, which included Centrica, Consolidated Edison, EDF and Enel. Lack of standards a turnoff The muted utility response to blockchain contrasts with the hype generated by startups and technology developers, most of which have only been in existence for a couple of years. Indigo estimates more than a quarter of these startups have completed or are planning initial coin offerings (ICOs), a common but unregulated cryptocurrency venture funding mechanism that usually requires a significant promotional effort by the fundraiser. A handful of energy blockchain firms have pulled in more than $200 million apiece through ICOs, the EPRI paper says. In March 2018, GTM reported that more than 70 energy blockchain demonstration projects had been deployed or were planned around the world. Beyond a few published cases, such as Iberdrola's use of blockchain to certify clean energy delivery or Kansai Electric Power Co.'s investigation of the technology for peer-to-peer trading, most of these demonstration projects have not involved utilities. On the contrary, said Groarke, the utilities consulted in the study had tended to dismiss blockchain after looking into it. "We know some utilities started off in 2017 with six proof of concept [tests] and today they're doing none," he said. Plus, in North America, said Groarke, "there's probably more of an acknowledgement that the technology is middleware and it needs very solid use cases for applications." He said 77 percent of U.S. utilities expressed wariness toward embracing blockchain because of the lack of industry standards for the technology. "Utilities are risk-averse over here," he said. "Without standards, they are reluctant to engage in even proof of concepts." That could change with P2418.5, a standard for blockchain in energy being developed by the Institute of Electrical and Electronics Engineers. Groarke predicted the launch of the standard could lead to higher blockchain adoption by North American utilities. Another factor that could help improve uptake would be the merging of blockchain with other technologies, such as artificial intelligence and smart contracts. "Once a technology becomes commercially deployable within this sector, it can get deployed pretty quick," he said. As for what kinds of blockchain will ultimately be used by utilities, the EPRI paper points to an early lead by the platform that Energy Web Foundation (EWF) has developed specifically for the industry. The EWF blockchain was the most widely used of those employed within four utility-led consortia, followed by ethereum, bitcoin and Hyperledger. Groarke cautioned about reading too much into the figures, though. "It's really a mixed bag," he said. "It's not who's winning; it's who's reducing risk for utilities the most. The Energy Web Foundation is reducing risk by having multiple utilities involved, because there are no standards in place. [But] I don't think there's any clear winner at this point."

When It Comes To Blockchain, Stick To Your Core Competency - Forbes Posted: 02 Aug 2019 05:00 AM PDT As David Packard, co-founder of Hewlett-Packard, so aptly stated: "More businesses die from indigestion than starvation." While this applies to all businesses, I believe that startups should pay close attention. This sage advice is meant as a warning to overzealous entrepreneurs who get too far in over their heads when launching a company, product or service — and it's perhaps even more valid when it comes to startups in the blockchain space.  In a mere 10 years, the blockchain technology has turned the world upside down. Over the past year, it has become apparent just how much blockchain technology has had an impact. Many well-known companies have launched their own initiatives to bring blockchain technology to everything from online shopping, to grocery supply chain management.  Fortune 500 companies are entering the fray. Earlier this month, Facebook revealed it will be creating a cryptocurrency called Libra, which is backed by a variety of traditional currencies. The cryptocurrency will be managed on its own blockchain and the social media behemoth plans to use it as a cross-border payment transfer tool for its worldwide user base. Rumors are also currently circulating that Samsung is building on top of Ethereum. Unlike Facebook, Samsung has chosen to fork the Ethereum codebase to power its blockchain strategy — this may also include Samsung Coin, a cryptocurrency powered by the mobile phone company. Samsung has also announced it will be incorporating cryptocurrency hardware wallets into some of its mobile devices. Earlier this year, JPMorgan decided to test the blockchain waters by issuing its own digital asset, JPM Coin, on the Ethereum blockchain. My company holds some Ethereum and uses it to power token transactions to our community. Should you start your own blockchain or build on an existing one?  Within startups creating tools and software built on blockchain technology, it seems to have become a badge of honor to launch a proprietary blockchain. This decision shouldn't be made light-heartedly. It takes a massive amount of development effort to create and maintain the codebase that powers a blockchain, not to mention community buy-in to ensure your blockchain remains secure. If there aren't enough nodes being run to verify transactions on your blockchain, it could become compromised in a 51% attack.  Samsung, Facebook and JPMorgan are all taking unique approaches that require different amounts of development effort. Facebook is taking the most complex approach by creating its own blockchain. The company is also charging a staggering $10 million per license for those who would like to run a node to verify transactions. Samsung's approach requires much less effort. By forking the current Ethereum code, they can begin with a proven blockchain on which they can improve how they desire. By building JPM Coin on the Quorum version of the Ethereum codebase and inviting other enterprises to participate, JPMorgan can focus the grand majority of its efforts on building utility and use-cases around its cryptocurrency, rather than having to solely own the herculean task of maintaining a blockchain.  It takes hundreds of thousands of development hours to create blockchain platforms like Etherum. It would take a sizable capital investment for a company to achieve the same results on its own. Facebook may be able to make such an investment, but for a startup, it would likely be impossible to achieve this while also building a usable product or service to run on top of said blockchain.  A Lesson From SpaceX A great example of the benefits of using existing technology (rather than starting or building your own) is the Space Tech industry. There are now hundreds of startups trying to innovate in outer space. These companies are boldly going where no one has gone before, revolutionizing everything from mining (not the hash rate kind), to communications, to tourism and even aiming to colonize far-off worlds. If you were starting a satellite internet company, you'd have a massive workload on your plate. You'd need to build the satellites, code the software for the satellites, generate a customer base and accomplish countless other things before you see your company turn a profit. Once you've accomplished all those goals, you would still need a launch vehicle to send your satellites into space to begin relaying data for your customers. You have two options here: Build a launch vehicle or use someone who specializes in launch vehicles to send your satellites into outer space. When you perform a cost analysis, it quickly becomes apparent that building your own launch vehicle is going to cost too many man-hours and too much capital. Instead, contracting with a company like SpaceX or RocketLab means you can focus 100% of your efforts on the area of your business that will help you serve your customers and differentiate from the competition.  Outsource your blockchain. No matter what your blockchain startup is building, it likely makes more sense to build on top of an existing blockchain. This will allow you to focus on your core competencies, instead of muddying the waters so to speak. As the legendary Peter Drucker said, "Do what you do best and outsource the rest!" This advice should be (and is often not) applied to blockchain startups. Just as in the traditional startup world, budgets for blockchain startups are very tight. Creating your own blockchain will likely become your biggest development drain. Instead, utilize an existing blockchain that fits your needs, allowing you to focus on everything else that really matters. To identify the best blockchain technology for your needs, first determine which traits to prioritize. Different blockchains are driven by different purposes. Some quickly process transactions, others enable programmatic transactions. Perhaps you only need a value store. Once you determine what's most important, you can figure out which existing blockchain can best support your efforts and get to work.

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