Blockchain For Business In 2020: Where Do We Stand? - Forbes

Blockchain For Business In 2020: Where Do We Stand? - Forbes
Major blockchain developer ConsenSys announces job losses - Reuters
INSIGHT: Blockchain Sits on the Cusp of Transforming the Courtroom - Bloomberg Law
No, a Blockchain Wouldn't Have Prevented the Iowa Caucus Debacle - Coindesk

Posted: 04 Feb 2020 04:30 AM PST

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The "crypto-craze" is over, but the question is whether "crypto-sanity" will follow. About two years ago, business investment spiked as people tried to figure out how to profit from Bitcoin and its many derivatives, such as Ethereum, EOS and Tether. By the end of 2018, cryptocurrencies had lost 80% of their value. Nearly $700 billion just vanished like a deleted email.

In 2020, the business world is entering a new phase in its relationship with blockchain and its more than 2,000 cryptocurrencies. I've researched the field in my role as an advisor to business leaders at mid-sized companies in the midst of momentous change or growth. What I've found is that cryptocurrencies and related blockchain-based applications are neither miracles nor scams. They represent a wide range of tools that can be, but usually aren't, deployed wisely and well.

Initial coin offerings (ICOs) tend to get the most attention from those in search of revenue to support projects in development. Even though ICOs raised $11.4 billion over the past year, 46% (or more, based on your definition) have failed. At the same time, future-oriented businesses are looking beyond coin offerings to discover what else blockchain can do.

A New Financial Battleground

When Facebook announced their plans to launch the cryptocurrency Libra in 2020, the French finance minister, Bruno Le Maire, responded saying, "We should not accept to have Libra being developed on the European territory." His point was that it is still too easy for cryptocurrencies to be used by criminals and terrorists. The Bank of England backed him up with a warning about the hurdles Libra would face abroad. However, those messages have not slowed Libra's development or warned off competitor payment networks like MetalPay.

While cryptocurrencies, ICOs and blockchain-based applications have survived the first hype, many business leaders are still watching and waiting before moving into the space. The risk they face is falling too far behind in understanding how to apply blockchain. As GE said in a 2000 report, "...when the rate of change inside an institution becomes slower than the rate of change outside, the end is in sight."

Here are some insights into what worked and what didn't in blockchain development over the past few years:

Why The Coins Fell

Too little, too late: Ivan Komar's story is like many of those who came to the table too late and unprepared. The coin Sponsy was built to support a solid idea: a standard platform for organizing event sponsorship. He launched this ICO in late 2017 but without a working prototype or active developers. The coin never found traction and the project stalled, so instead, Komar is selling all his ICO documentation and branding as a historical curiosity on eBay.

The devil in the details: Health care's market cap is growing daily with no sign of slowing. An ICO to support an AI that personalizes treatment plans would seem like a no-brainer. Linda Healthcare introduced their ICO for LNDA but didn't manage their pre-existing conditions well enough. The ICO wound up under investigation as unregistered security in the state of Colorado. A whiff of illness suggests a deteriorating condition, so investors stayed away like the plague.

Promising Blockchains

Pre-built coin environments: Computers only became household appliances after the introduction of the mouse and a visual interface. Before that, users had to type cryptic commands into a black screen. The same kind of democratization will eventually have to come to blockchain. Companies like Simple Token are doing that by building an environment ⁠— in this case, based on Ethereum ⁠— to simplify the creation of new coinbases. When coders work from an existing infrastructure, it eliminates half the burden of expenses and complexity in building blockchains.

Transparent supply chains: The days of two-step producer-to-retailer chains are long gone, and it's increasingly complex to keep track of international chains with murky sourcing. Blockchain has turned that around by transparently revealing who has touched a resource from beginning to end. Consumers are making buying decisions based on responsible sourcing, so companies from FedEx to Walmart use blockchain to track their goods at every step along the journey.

Standardized transactions: Only recently, companies like Coinbase have made it possible to handle exchanges between cryptocurrencies. The next stage involves the standardization of tokens. To do that, Coinbase is partnering with venture capital firms and their existing financial structures in an effort to make the underlying code more user-friendly and interoperable, just as HTML5 did for webpages.

Blockchain's Next Decade

For now, blockchain and cryptocurrency spending are dominated by industries such as software, energy, financial services and health care. A much wider base will likely open in the next few years, according to Coinbase CEO Brian Armstrong. He predicted that by 2030, a scalable blockchain solution will give birth to the next generation of stable cryptocurrencies, which will bring more than a billion users on board. He also suggested that by the end of the decade, a crypto component will be as common as machine learning is now.

Before that happens, quality control, security and communication with investors remain a problem in search of a solution. A study by the University of Pennsylvania Law School found that the lack of safeguards for investors is inherent in the way smart contracts are currently built. "The disconnect we observe," researchers concluded, "reflects the informality of the ICO world." While paper contracts and IPOs are hammered out by law firms, banks and regulators, smart contracts and ICOs are still informally built by coders and entrepreneurs. That has to change for blockchain to mature.

It's a bit ironic that security is what's preventing the wider adoption of cryptocurrencies and other blockchain applications because secure, transparent transactions are exactly what blockchain was designed to enable. The problem lies not with the technology but rather where blockchain is integrated into existing networks. That's the next bottleneck that must be solved, and the race to get there may be the most compelling story in the world of blockchain.

Major blockchain developer ConsenSys announces job losses - Reuters

Posted: 04 Feb 2020 11:40 AM PST

LONDON (Reuters) - Major blockchain developer ConsenSys has laid off around 14% of its workforce, it said on Tuesday, a move that comes as companies around the world frantically search for applications for the much-hyped technology.

New York-based ConsenSys is one of the largest specialist blockchain developers to have emerged from the advent of the shared ledger technology, originally conceived as the basis of the bitcoin cryptocurrency.

Companies from banks and oil traders to retailers and tech vendors, drawn to its promise of making cumbersome processes more efficient and secure, have invested billions as they look to find uses for the technology. Many have turned to blockchain development startups in the process for technical expertise.

Yet there have so far there have been few major breakthroughs in the practical application of blockchain, despite the spate of tests and pilots.

The restructuring at ConsenSys will separate its software development business from its venture activities, the company said in a statement. ConsenSys focuses on the ethereum blockchain, which underpins the world's No.2 cryptocurrency ethereum.

The cuts would allow it to "be better aligned with the needs of a focused software development company," ConsenSys said in a statement.

A spokeswoman for the company said the job losses would fall in roles across human resources, finance and marketing, with product teams unaffected. She declined to comment on the number of overall job losses.

In December 2018, ConsenSys cut around 13% of its workforce, which then totaled over 1000. The firm, which was founded in 2014 and operates in around 30 countries, with major offices in London, Dublin and Paris.

Editing by Philippa Fletcher

Our Standards:The Thomson Reuters Trust Principles.

INSIGHT: Blockchain Sits on the Cusp of Transforming the Courtroom - Bloomberg Law

Posted: 04 Feb 2020 01:01 AM PST

We are living at a time when the reliability of facts and evidence has never been more threatened. The increasing sophistication of advanced technologies continues to expose our digital content to the possibility of hacks, leaks, and manipulation at alarming rates.

In the legal sphere, there is an urgent need to ensure the digital information we cite and rely upon in the judicial system is verifiable, sourced properly, and immutable. Fortunately, innovative technologies, specifically blockchain—or Distributed Ledger Technology (DLT)—provide a unique opportunity to authenticate, validate, and secure the information we use in the courtroom, while also providing impetus to drastically improve existing processes.

The process of digitization, or converting information into a digital (computer-readable) format, is sweeping across every industry globally, including the justice system.

It was announced in the U.K. in 2018 that approximately 6,500 courthouse and backroom jobs were being lost due to the government's drive to modernize the justice system through online pleas and remote video hearings. In November 2019, U.S. Rep. Val Demings (D-Fla.) introduced bipartisan legislation to help police officers learn how to access digital evidence, including data and online messages, during investigations.

Forming a key part of this "going-digital" shift is the exploration of blockchain as a secure method to record important information and streamline processes in courtroom proceedings and legal interactions. Blockchain has a number of key features that make a good case for its integration into legal proceedings, with an extensive list of use cases in the courtroom.

Advanced Levels of Security

First, given the decentralized nature of blockchain technology, information can be stored across regions in a network of computers as opposed to an easily hackable data silo. Much like a traditional ledger, blockchain provides a record of transactions, however, it is encrypted and distributed, meaning it is nearly impossible to hack.

From a legal point of view, cybersecurity threats are increasingly prevalent today, and blockchain can provide advanced levels of security for this data. In July 2019, the Administrative Office of the Georgia Courts fell victim to a hack that forced its systems offline—the importance of ensuring judicial data is securely stored is a growing issue that must be addressed.

In addition to providing security, blockchain makes accessing information much more streamlined and efficient, while catering for the representation of evidence in a digital format. As the digitization of courtroom processes continues, this evidence can be cryptographically sealed, proving its origin and securing its authenticity.

Currently, several companies and governments are attempting to patent the use of blockchain for administering legal documents.

In China, the Hangzhou Internet Court decided in 2018 that the use of blockchain technology in evidence verification can be admissible on a case-by-case basis.

Delaware's General Corporation Law now permits corporate records such as "its stock ledger, books of account, and minute books" to be held in the form of "one or more electronic networks or databases (including distributed electronic networks or databases).

Similarly, the Dubai International Financial Center (DIFC) Courts has announced its plan to form a joint-task force to specifically develop a network built on blockchain technology and smart contracts to explore verification of court judgments and sharing of documents in real-time for efficient cross-border law enforcement.

Better Contracts

In a similar vein, blockchain has been heralded as an effective mechanism to execute contracts that legal professions traditionally oversee. A wide variety of day-to-day transactions require lawyer oversight for execution, however, blockchain allows for a contract to be executed digitally, reducing the need for legal instruments.

Smart contracts can remove the need for an intermediary in transactions while drastically reducing associated costs. Once a lofty ambition, this innovation is at the cusp of mainstream adoption and could steer us toward a trustless judicial system.

We know that courts are moving away from paper-based models—the 62nd Annual Meeting of the International Association of Judges and the International Association for Court Administrators characterized paper-based records as ineffective in case and evidence management, describing them as a major impediment that courts face today.

By taking steps to understand the benefits DLT can offer in terms of security and decentralization, we can accelerate the use of blockchain in legal proceedings. Blockchain technology, if harnessed correctly, can turn the tide on judicial mistrust, and be the solution that provides digital-based evidence in a more secure, accessible manner.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

Author Information

Greg Forst is director of marketing at the Factom Protocol and a founding Factom Protocol Authority Node Operator. He is also currently founder and director of digital marketing for Baltoro; partner at Go Immutable, where he provides enterprise blockchain consulting as a service; and a current and founding member of the Blockchain Council at CompTIA.

No, a Blockchain Wouldn't Have Prevented the Iowa Caucus Debacle - Coindesk

Posted: 04 Feb 2020 12:00 PM PST

Adam B. Levine is CoinDesk's podcast editor. The views expressed are his own.

We'd be the first to tell you: No, a blockchain wouldn't have prevented the voting debacle in Iowa.

The question is inevitable, if at this point cringe-inducing. Inevitable because the problems that delayed the results of Monday's Democratic presidential caucus are, conceptually, some of the same ones that blockchains (and distributed ledger technology broadly) seek to solve: a lack of transparency, centralization and inefficiency. Cringe-inducing because blockchain's record with political elections has been iffy at best.

As of early Tuesday afternoon, the voting results, normally revealed after the caucus that night, were still unknown. The state party says the delay is necessary as it performs "quality control" and verifies digitally reported results against the underlying paper trail.

This year held some notable changes for the notoriously manual and highly decentralized caucusing process, with the introduction of an app for individual local gatherings to report their results back to the Iowa Democratic Party. Traditionally, this was done with a phone call; while that process has its flaws, this year's results make them seem almost enviable.

From all appearances, it is this new results-reporting app that is at the core of today's chaos.

The Wall Street Journal reported:

The app was intended to help the precinct chairs record the results from each round of voting and take care of the delegate math. Then the precinct chair was supposed to use the app to send the results to the Iowa Democratic Party.

But critics expressed concern about the reliability of the app given security concerns around the 2020 elections. Cybersecurity experts also roundly criticized the Iowa Democratic Party's decision to not identify the app maker publicly or allow it to be subject to open security and reliability testing.

The cybersecurity wing of the Department of Homeland Security recently offered to do some security testing on the app but the Iowa Democratic Party declined the outreach, according to people familiar with the matter.

The state party has defended its plan, with officials saying in January that they were confident in their security systems and that if there were errors, the party would be able to correct them because there would also be paper records of the votes.

The presidential candidates, with their jammed schedules, looked into that void and basically all declared victory in one way or another. The lack of information created an opportunity for mass chaos that could imperil Iowa's early, hallowed place in the political landscape.

It's not that results weren't known, they just weren't known anywhere besides the local precinct level.

Blockchains add complexity

One could be forgiven, then, for asking whether and how blockchain might have helped here, since the technology is often touted as a way to add transparency and to automate paper trails.

In theory, had the reporting app used a blockchain to record the data, all reported results would have been transparent and equally available for everyone to see, from the campaigns to the media to the politicos who soak up every piece of information they can.

Of course, if any results are improper or even just incorrect, those numbers would at least initially appear valid because they're "on the blockchain," and any changes to them later would likely draw cries of foul play from candidates losing delegates because of corrections.

Really, though, the question is less about blockchains and more about the app being used. While there are many problems with the quirky Iowa Caucus approach to political decision making, it's certainly a decentralized process with very few central points of failure… until you introduce a mandatory reporting app!

At that point, all that decentralization is still there for the decision-making process at the local level, but when it comes to reporting results for tabulation it's just one app, with basically just one codebase that shares a common set of bugs.

If a precinct captain has a heart attack, there's a second and a third and basically as many as you need who can step up and fill that role to get the job done. But when the app fails? None of that matters, the app broke so the election broke.

Blockchains won't change that. In fact, they could and very likely would make it worse as blockchains add meaningful complexity, which means more ways things could go wrong under imperfect, real-life conditions.

The app's failure in this case was compounded by what appears to be a late rollout of the new tech-based approach, insufficient training for the staff who'd have to use it during this critical event and limited or no practice just to see if it could work in real life.

While many in our industry would like to claim we have a solution, imagine if a blockchain-enabled voting app had been deployed with as little testing and training. All of these problems occurred in a traditional app environment and without the need to make a thousand retired precinct captains write down a 24-word seed phrase.

Even if your technology is foolproof (and again, that's far from obvious with blockchain voting apps), when it comes in contact with the fabled early majority and beyond the problems are not technical in nature. They have much more to do with the very human processes we each use in our heads and which we've trained all our lives to find familiar and comfortable. Ask your grandma to write down 24 otherwise meaningless words and never lose them and you'll likely just get her upset.

Perhaps the one valuable contribution "blockchain" can make to this situation is by teaching people to view the world through a different lens, to question concentrations of power and asymmetries of information, to carefully weigh the pros and cons of established ways of doing things.

Blockchain, in other words, asks the right questions. But in this case, it's not the answer.

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