One of the things that makes this job so much fun is the ability to talk to the really smart people in a dynamic market. Doing a startup is hard; we are entrepreneurs ourselves so we get that. However we want to counter the myth that all innovation comes #from VC fundedRead More
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We know by now that tech-land moves at lightning speed. Radio commercials for Digital Transformation consultancy? Check. I’ve heard them.
But over the past few months, there’s been some technological advancements – in the relative margins of the internet – which could potentially cause quite a fundamental stir. I’m talking about #Blockchain.
First a big caveat: I’m not a techie. I can pretend I know the difference between NodeJS and PHP, but I don’t really gét it. I look at #technology for what it means. And recently, I’ve come to realise that this whole Blockchain story is a lot more than Bitcoins, ‘virtual’ currencies and unintelligible tech-geek-babble.
Blockchain, WTF?
The techies will kill me, but let me have an attempt at trying to explain what Blockchain is, to me, the non-techie. Blockchain is a kind of database-technology, the engine behind #Bitcoin for example. It is effectively a decentralised verification system, where a global network of computers verifies and creates transactions, following a complex cryptographic code. Once verified, the transaction cannot be changed. Ever.
Sounds like Chinese? Just remember one thing: ‘decentralised’. It means that transactions no longer need a centralised authority.
There are a few Blockchain versions. And a crucial one is Ethereum. The thing that makes Ethereum different from Bitcoin is that it is effectively a platform, onto which applications can be built. Those applications can utilise such a decentralised computer network ánd the cryptography that comes with it. Ethereum also has a currency, Ether, which serves as the fuel for the system, this engine.
The thing that made me pay attention is that the platform, this network of computers, can create transactions that go beyond digital currencies. The Bitcoin-blockchain does one thing: transfer Bitcoin. But with Ethereum anything’s possible; we’re talking ‘transactions’, any transaction. A crucial aspect of Ethereum is Smart Contracts, programs to well… program and automate transactions. At least, that’s what I think it is.
Example? In Brooklyn, smart citizens have built an energy network with Ethereum’s Smart Contracts. Energy, created by solar panels on one side of the street, is being sold to neighbours on the other side of the street. Again: without the involvement of a central authority.
“That all sounds grand, dear Gerrie. So let them be, those tech geeks”, I hear you think. Well, no. Over the past few weeks I’ve started to get the feeling that as an entrepreneur, government or all round smart person, it is becoming important to stop watching from the sidelines and get more actively involved in this blockchain story. And I see a few reasons.
Speedy, speedier, speediest
The tempo at which new things happen in the blockchain world is very, very, very high. Ethereum as software isn’t even a year old. Friends of mine, who’ve been reading on and working in the subject matter for a while now, were perplexed a few weekends ago. That was the moment when the DAO-hub launched. A kind of platform, built on Ethereum to fund and support other blockchain projects. Kind of like a decentralised version of a Venture Capital fund. At least, that’s what I think it is. Today. Maybe I’ll understand it better tomorrow.
But fact is: after 2 weeks it had become the biggest crowdfunding project ever, raising more than 11m million Ether. Current value of 1 Ether: about 12 euros. These are no longer the margins of the internet, methinks.
Profit!
Ethereum’s website says: “like the internet was supposed to work”. Their mission is to develop an internet that is more free, more trustworthy. It is definitely connected to a certain vision of the world. But at the same time, it’s also about profit, making money and business opportunities. That’s what makes it so unique. I think.
For every old school CEO who still doesn’t really believe in the internet or e-commerce, there are smart entrepreneurs who will soon (read: now) start looking at how the transactions involved in for instance ‘shopping in a supermarket’ can be reconfigured when you look at them through a Blockchain lens.
Plus, these transactions aren’t limited to the internet. Connect the Blockchain concept to the internet of things and you’ve just added another billion use cases. At Slock.it – a bunch of leading thinkers and makers in the community – people are working on a smart lock, which only acts when all the conditions of a Smart Contract have been fulfilled.
Take the use case AirBnb. I rent a spare room to you. So when the smart lock know it’s you and it knows you’ve paid, it opens up. At the same time it triggers the financial transaction and – why not – books and pays the cleaning service when you leave.
Another fundamental aspect is that there’s an incentive system built into the core of Blockchain. It is technology after all and that requires hardware. Computer geeks who run the transaction software on their servers get a fee. That’s what keeps the decentralised network rolling. However, the fee is a fraction of the 10-ish% that AirBnB charges or the +20% that Uber deducts from its drivers’ earnings.
A real sharing economy
We need to pay attention because Blockchain is a technology that goes to the core, to the root. The word “revolution” gets mentioned occasionally. So does “Web 3.0”.
And without getting all too excited, I’m starting to see why. The internet was about disintermediation and the democratisation of information etc. But what happened? It became the bedrock for centralised platforms, who facilitated transactions at scale: AirBnB for holiday accommodation, Facebook for communications, Uber for transport,… At a price obviously.
These are amazing applications and I use use all of them. But the decentralised aspect of the blockchain technology makes it possible to redraw and reconfigure the relationships between user and supplier, in other words: the transaction as well as its value. The cost of a transaction decreases. The validation and the trust grows. An “internet of transactions”, “internet of trust”, “internet of value”,… these are all phrases that are being used in the numerous chat boxes and communities.
Example! Consensys is one of those companies who are building applications on the Ethereum framework. Ujo is one of them, “rebuilding the music industry”. Not only does it make the transaction between artist and fan more direct; it can also reconfigure the relationship between artist and session musician, between artist and film-producer-who-wants-to-use-that-song, between artist and whoever or whatever,… It’s not something Spotify is doing.
Arcade City does in a blockchain kind of way what Uber does: match demand for transport solutions to supply. The difference: the value is being distributed in another way.
Certainly, these are all experiments and prototypes. But it is significant that AirBnB has already bought up a Blockchain start-up. Their business model of ‘being the intermediary’ could potentially come under pressure.
The disruptors being disrupted? What’s next? Well, everything that’s a transaction can be looked at through a blockchain lens. Could a brand like Nike pay fees directly to people who watch their ads? And what with a concept like ‘issuing a driving license’, a typical example of centralised validation ánd transaction.
Learn, Unlearn, Relearn
Technology. Ethics. Profit. That’s what it says on the website of DAO Hub. And it’s this mix that makes the matter so complex.
So, show of hands: who has ever tried to buy BitCoin or Ether and moved them to a different wallet? I have a sneaky feeling it won’t be too many of you. And that’s a shame: because ‘that world’ involves different concepts of wallets, transactions, security,… So we have to practice, we have to get used to this new ‘language’, we have to make mistakes, get ripped off, be confused.
Because to be honest: buying Bitcoins is peanuts, compared to understanding Ethereum. And then we haven’t even started on DAO, the concept of a Decentralised Autonomous Organisation.
So, us, non-technies, need to practice, because this story is getting momentum.
Smart developers are currently learning Solidity to build blockchain-applications and create Smart Contracts.
Smart investors have known for a while who Vitalik Buterin is (inventor of Ethereum, 22 years old, no shit). They’ve been looking at daohub.org for the past few weeks and have been able to decide for themselves whether it’s a good idea to invest in DAO-tokens.
And what do entrepreneurs do? From small start-ups to the Microsofts and IBMs of this world: they’re all trying to get to grips with the blockchain-thinking. The question is: do they recalibrate their value proposition and their added value in a fundamental way? Or are they copying Blockchain technology to implement behind closed doors, like #banks seem to be doing?
And what about governments? Because when it comes to transactions, validation ánd identity, there’s a lot of thinking to be done. In Honduras they’re re-building the concept of land ownership on the blockchain. The innovation unit of Unicef is looking at blockchain to tackle the problem of identity with refugees.
But also closer to home, the penny has dropped. In my hometown of Antwerp, the council’s innovation unit A-Labs is building a blockchain application to facilitate communities. They call it Locals.world and are working on a currency of their own, the LocalCoin.
In the blockchain chat communities, where I spend a bit of time these days, I read things like:
“I’m kind of dreaming of buying Tesla powerwall towers and put smart contracts on them!”
Or
“We could invest in anything and collectively we’d be more informed than an individual to make good investment decisions.”
These guys are on a different level. And if we, laymen, want to get our hands on the wheel, we need to get flight time. We need to read, produce, buy, do. It’s up to us to understand blockchain and to translate it, take it away from the tech-talk. That way the discussion and the learning process will speed up and the possible implementations will become clear much faster.
Anyway, I’m starting to get it. Starting. And I’m going to dig deeper. If you’re interested, here‘s my growing list of blockchain-related bookmarks.
[linkedinbadge URL=”https://www.linkedin.com/in/gerriesmits” connections=”off” mode=”icon” liname=”Gerrie Smits”] is Digital Strategy Consultant (www.gerriesmits.com) and this post first appeared in Dutch on datanews.be)
IDEO coLAB member Dan Elitzer explores a #framework for digital #identity using #blockchain and other technologies.
fintech techcrunch
When it comes to #blockchain, the immutable ledger #technology that underpins #bitcoin, much of the limelight thus far has been on its potential to disrupt the finance industry. However, the transformation that #real #estate may experience from applying blockchain could arguably be just as profound. Unlike financial services, where technological innovation has largely been embraced in the pursuit of profit, much of real estate’s business conduct remains firmly stuck in the past. Many operating methods within the industry have remained unchanged for 50 years, if not longer.
Land registry systems contain records of a country’s land transactions, and operate on centralized ledger systems at present, with the centralized entity normally being a #government agency. At their best, the systems guarantee title of all land assets; however, in reality they provide incomplete security of tenure, are marred by corruption and frequently result in ownership disputes. In contrast, a blockchain land registry system would be decentralized.
This would mark a distinct improvement on the incumbent system, in that every authorized network member would have an authenticated copy of the registry, rather than just one centralized party. Given that everyone can see the records, therefore, the process would be more transparent, which again minimizes the potential for foul play. Removal of the centralized entity is also likely to be cheaper and more efficient – the operating cost of the land registry in England and Wales in 2013/14, for example, was nearly £240 million.
Ragnar Lifthrasir, who is President of the International Bitcoin Real Estate Association (IBREA), is among the pioneers in developing a real estate model which can operate on the blockchain. He identifies three specific uses of the technology in the industry – purchasing, escrowing and the recording of title ownership and associated transfers. Escrowing is perhaps the least developed idea currently, although ostensibly it would be similar to a common bank transfer, only in this case the transferable amount is first converted to bitcoins which are then put into escrow. Nevertheless, as long as both parties agree to use the blockchain over a government solution, Lifthrasir argues, then nothing can stop them.
A blockchain would allow someone to upload land title documentation to the network, which other users can record and verify if needed. This would provide proof that this person is the first owner of the documents, and decentralised network verification would prevent forgery. When it’s time to transfer title, the document simply requires ‘rehashing’ (encrypting) by the owner to prove he/she is in possession of the document.
During the actual transfer process, a ‘coloured coin’ system – which US stock exchange Nasdaq currently uses to settle securities – would be employed. A concept first outlined by Swiss computer scientist and Bitcoin core developer Mike Hearn, coloured coins are non-fungible tokens which provide the owner with private keys, thus allowing only the owner to transfer ownership while preventing fraudsters from corrupting the process.
The elimination of costs associated with title insurance and fraud, according to Lifthrasir, is the biggest advantage of using blockchain. This has been a persistent problem with the current system of centralised government records. Criminals are able to fake title ownership, often simply by using editing software to stipulate transfer of property ownership in their favour, and at negligible expense. Indeed, title insurance itself is a $ 20 billion industry, and Lifthrasir estimates that at present it is costing around $ 1 billion to combat title fraud.
Some argue for a replacement of the entire common law system, which currently requires a laborious examination process of public land records before a plot of land is transferred from one party to the other. Joe Dewey and Shawn Amuial, attorneys at US law firm Holland & Knight who specialise in real estate and finance, for instance, are in favour of replacing the government recording of deeds, mortgages and other instruments in land records with the blockchain, as government records are prone to human error and corruption.
Indeed, corruption within land registry has plagued much of the developing world, with insufficiently secure governmental systems being regularly prone to manipulation. Honduras is among the worst. USAid Land Tenure estimates that 80% of privately held Honduran land is untitled or improperly titled, while only 14% of citizens legally occupy properties, with less than a third of those citizens being officially registered. Land title disputes in Honduras have led to violent conflict and widespread fraud, with cases of the registry system databases being hacked into and bureaucrats being able to secure the most luxurious properties.
As a solution, US technology start-up Factom announced in May 2015 that it had agreed to build a secure land title record system for the Honduran government using blockchain technology, in conjunction with title software company Epigraph. Transferring land records onto the blockchain, therefore, could be a reality in the not too distant future.
In doing so, Factom CEO Peter Kirby believes that Honduras’ land registry system would leapfrog many systems in the developed world. Although recent reports suggest that the partnership has stalled, Factom is adamant that progress is still being made, so it may take longer for the project to come to fruition than initially thought.
Ghanaian NGO Bitland also claims to be developing a blockchain-based system for entering land title records, in a bid to correct for the numerous failed attempts by the government to develop a fair and efficient land administration system. At present, courts in Ghana are reportedly being inundated with land dispute cases.
Bitland hopes to reduce this burden, and will use the Factom/Epigraph technology, as well as satellites and GPS to verify the accuracy of plots of land. Buyers will also be able to discover the last owner of property rights and land ownership disputes, while the disputes themselves can be made visible to the network, thus ensuring greater security. However, as with Honduras, much work is yet to be done.
Registry system problems, moreover, are not solely confined to the developing world. The US State of Massachusetts has a specific court which has jurisdiction over the registration of title to real property, while in Canada, 95% of land in Newfoundland and Labrador is considered Crown Land, which results in land disputes regularly ending up in court. Kirby believes that the most important issue is for courts to have a true history of what has happened during such land dispute cases. Immutable records based on “evidence and precedent” will be instrumental in adjudicating land disputes, and can also then become part of the permanent record of the land, which the blockchain technology can ensure.
In terms of taking land title records away from government and onto the blockchain, it may prove to be more difficult in some countries than others. In the US, for instance, title companies exist and have large databases of land ownership records, in addition to the government’s own records.
The sheer number of landowners (and thus the number of records), coupled with the overall size of the US, makes the task of shifting from government records to blockchain a lot tougher. However, Dewey and Amiual point to the fact that title companies are likely to act as allies in the technology’s development, rather than enemies, especially if title insurance can still play a role in addressing those risks which are not eliminated by the blockchain.
Lifthrasir believes blockchain will offer significant improvements over the current government-administered system. It would allow the industry to avoid the inefficiencies that arise from the presiding record keeping practices used by government. While Kirby is willing to work alongside the government in the Honduran case, Lifthrasir does not think it is a worthwhile investment of people’s time to teach governments about blockchain. The opportunity to transact directly under blockchain means that the role of government becomes redundant.
Conclusion
Instead, IBREA’s intention is to gather together the real estate industry professionals who favour moving elements of the business onto the blockchain, especially operations pertaining to purchasing, escrowing, and recording of transfer of properties. As Lifthrasir puts it, “So, as long as people in the real estate industry start deciding to use the Bitcoin blockchain to record the transfer of properties, why bother with the delay, cost, and inefficiency of the government?” He is convinced that 2016 will be the year that title management moves onto the blockchain, and in turn, that the technology is developed enough to be used in the real estate industry.
The post Blockchain &8211; to Replace Government in Real Estate appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
Alternative lenders are looking for, well, alternatives to survive tough times. Matt Harris of Bain Capital Ventures commented to Bank Innovation last Friday that alternative lenders might need to give up equity or make other concessions in order to secure funding. He was proven correct just days later when #ProsperRead More
Bank Innovation
Nick Szabo proposed the idea of smart contracts back in 1997
Satoshi Nakamoto incorporated the idea of a smart contract in his Bitcoin: A Peer-to-Peer Electronic Cash System whitepaper. Instead of a vending machine safe keeping snacks and cash, and dispensing snacks plus change in exchange for cash, a distributed ledger, controlled by smart contract code, keeps account of how many bitcoins are held by which account and determines if new coins can be issued or existing ones transferred.
So what happens when the vending machine fails to give you back the right change? Most likely you look for a sticker on the vending machine with a phone number to call. You call the number, tell the operator the machine number, they pull up the instructions on what to do in case of failure, based on clauses of the vending machine legal contract, and hopefully proceed to solve the issue.
Wait, hold on, the operator follows instructions based on legal contract clauses! So there is an overall legal contract, some of contract clauses are performed by the vending machine’s smart contract code, others are performed by people. #Bitcoin’s design deliberately focused on a pure digital asset exclusively controlled by distributed-consensus-seeking smart contract code, which means that all legal clauses are covered by smart contract code, and hence there is no need for an encompassing legal contract, but for most real world use cases, including vending machines, you do need an overarching legal contract, and autonomous agents – be they humans, organizations or smart contracts, distributed or centrally operated, to ensure performance of one or more legal clauses.
Traditional legal contracts are unstructured paper or electronic documents that are not machine-readable, not surprising given they were only designed for human consumption. They also tend to be declarative, not procedural in nature i.e. they specify what should happen, not how.
That is why often there are operating instructions and procedures that describe how humans should do what things in order to comply with legal clauses. It is therefore useful to think of smart contracts as procedural code that is executed by a centralized or distributed-consensus-seeking platform in order to enforce performance of one or more declarative legal contract clauses, but in order to do that, the legal contract’s automation salient details must be machine readable.
This is where Ian Grigg’s idea of Ricardian Contract comes in
Whilst the focus of a Ricardian Contract is in recognizing that financial instruments e.g. currencies, bonds, shares should be issued as human and machine readable contracts, same principles can be in my opinion applied more broadly to any kind of legal contract, so as to be fully or partially enforced by both human and smart contract autonomous agents.
This is by no means a new idea. Primavera de Filippi published an excellent Legal Framework For #Crypto-Ledger Transactions post about integrating legal and smart contracts. She cites CommmonAccord, a global legal contract template system, as a means to create Ricardian Contracts.
Eris proposes an alternative eris: legal system, based on legal_markdown templates and CommonForm renderer, for what they call cryptographically-certain duel integration process:
#Blockchain smart contracts are by no means the only way to enforce Ricardian Contract clauses. Open-Transactions project, see whitepaper, implements financial instruments as Ricardian Contracts, processed by a transaction server based on cryptographic proof instead of trust, allowing any willing parties who wish to contract with each other to enjoy the benefits of a server without needing to trust it &8211; a solution that demotes transaction servers to mere notaries, only able to counter-sign contracts that have first been signed by their clients. Barclays’ Dr Lee Braine recently presented yet another alternative vision when he demonstrated an ISDA Master Agreement proof of concept on R3’s Corda &8211; a blockchain inspired platform lead by Richard Gendal Brown &8211; R3’s CTO.
One of the issues I foresee with the emergence of many different template and markup standards is the very plurality of standards. How do you know that the term in contract A is same or different in contract B. How can you create a nice looking document, yet mark it up in such a way as to make it machine readable. Turns out most of these questions have already been solved by the Semantic Webproject in the form of RDFa standard that embeds Linked Data in HTML, an extension to HTML5 that helps you markup things like People, Places, Events, Recipes and Reviews.
It builds upon standard Web technologies such as HTML, HTTP, RDF (allows creation of unambiguous structured data taxonomies) and URIs, but rather than using them to serve web pages for human readers, it extends them to share information in a way that can be read automatically by computers. RDFa was originally designed for Search Engines and Web Services to use this markup to generate better search listings and give users better visibility on the Web, so that people can find websites more easily, but in my opinion can be applied without alteration to Ricardian Contracts.
Let’s provide a simple example – a Ricardian Contract for weather insurance. Here is what a user would see in their web-browser:
—-
Example:
I, Alex Batlin, authorise the transfer from address ‘abcdwerr&8217; to address &8217;24dsfrg3434′ using smart contract agent address &8217;24dsfrg3434&8242; of &8217;10&8217; unit(s) of GBP pounds held by smart contract address &8216;4854398578934&8217; on the condition that website &8216;Weather.com&8216; confirms that &8216;0.5&8217; cumulative inches of rain did indeed fall between start date &8216;9:00AM UTC 10th of March, 2015&8217; and finish date &8216;9:00AM UTC 11th of March, 2015&8217; in country &8216;GB&8217; and postcode &8216;EC2Y 0RT’.
&8212;-
Hopefully pretty much self-explanatory, but on first glance not very useful for machine consumption. Let’s have a look at the underlying HTML:
&8212;-
<html>
<head>
<title>Example <a href=”http://reference.com/master-agreement-123&#8243;>Weather Insurance</a> Ricardian Contract</title>
</head>
<body prefix=&8221;rc: http://batlin.com/ricardian#&8221;>
<h1>Example Weather Insurance Ricardian Contract</h1>
<p typeof=&8221;rc:RicardianContract&8221;>
<span>I, Alex Batlin, authorise the transfer</span>
<span property=&8221;rc:hasTransferAuthorisation&8221; typeof=&8221;rc:TransferAuthorisation&8221;>
from address &8216;<span property=&8221;rc:hasFromAddress&8221;>abcdwerr</span>&8217;
to address &8216;<span property=&8221;rc:hasToAddress&8221;>24dsfrg3434</span>&8217;
using smart contract agent address &8216;<span property=&8221;rc:#hasAgentAddress&8221;>24dsfrg3434</span>&8217;
of &8216;<span property=&8221;rc:hasInstrumentUnits&8221;>10</span>&8217; unit(s)
of GBP pounds held by smart contract address &8216;<span property=&8221;rc:hasInstrumentAddress&8221;>4854398578934</span>&8217;
</span>
<span property=&8221;rc:hasTransferCondition&8221; typeof=&8221;rc:TransferCondition&8221;>
on the condition that
website &8216;<a href=&8221;https://www.weather.com&8221; property=&8221;rc:hasOracleUrl&8221;>Weather.com</a>&8217;
confirms that &8216;<span property=&8221;rc:hasCumulativeInchesOfRainDetected&8221;>0.5</span>&8217; cumulative inches of rain
did indeed fall between start date &8216;<span property=&8221;rc:hasStartDate&8221; content=&8221;2016-03-10T09:00:00<“>9:00AM UTC 10th of March, 2015</span>&8217; and
finish date &8216;<span property=&8221;rc:hasFinishDate&8221; content=&8221;2016-03-11T09:00:00<&8220;>9:00AM UTC 11th of March, 2015</span>&8217;
in country &8216;<span property=&8221;rc:hasCountryCode&8221;>GB</span>&8217;
and postcode &8216;<span property=&8221;rc:hasPostCode&8221;>EC2Y 0RT</span>&8217;.
</span>
</p>
</body>
&8212;-
You will notice that many HTML tags have additional attributes like property and type. When the same document is parsed through an RDFa parser, the following structured data (for this example in Turtle format) is extracted:
&8212;-
@prefix rc: <http://batlin.com/ricardian#> .
[] a rc:RicardianContract;
rc:hasTransferAuthorisation [ a rc:TransferAuthorisation;
rc:hasAgentAddress &8220;24dsfrg3434&8221;;
rc:hasFromAddress &8220;abcdwerr&8221;;
rc:hasInstrumentAddress &8220;4854398578934&8221;;
rc:hasInstrumentUnits &8220;10&8221;;
rc:hasToAddress &8220;24dsfrg3434&8221; ];
rc:hasTransferCondition [ a rc:TransferCondition;
rc:hasCountryCode &8220;GB&8221;;
rc:hasCumulativeInchesOfRainDetected &8220;0.5&8221;;
rc:hasFinishDate &8220;2016-03-11T09:00:00<&8220;;
rc:hasOracleUrl <https://www.weather.com>;
rc:hasPostCode &8220;EC2Y 0RT&8221;;
rc:hasStartDate &8220;2016-03-10T09:00:00<&8221; ] .
&8212;-
You will notice that at the top there is a link to the taxonomy definition file, which means every single property, is completely unambiguous. In fact you can define many different taxonomies or use many shared ones within the same document, which promotes re-use and efficiency, and you can use your client to also pull-in descriptions, labels, additional facts and any rules associated with a property. See if you can read the extract below, from the http://batlin.com/ricardian taxonomy file:
&8212;-
<rdf:Description rdf:about=&8221;http://batlin.com/ricardian#hasAgentAddress&8221;>
<rdfs:label xml:lang=&8221;en&8221;>Agent Address</rdfs:label>
<rdfs:comment xml:lang=&8221;en&8221;>Address of the smart contract responsible for doing the actual condition transfer.</rdfs:comment>
</rdf:Description>
&8212;-
Pretty powerful stuff! It’s worth pointing out that many financial vocabularies or taxonomies like ISO20022 are already expressed in XML Schemas, which can be easily converted to RDF schemas. In another words you do not need to re-invent how create your legal documents, just write them in HTML, which even MS Word supports, you don’t need to re-invent structured data serialization – use RDF, you can use RDFa to mark-up HTML with RDF, and you can reuse existing taxonomies like ISO20022 either by converting them from XML Schema or writing them native in RDF Schema or OWL.
So ok, you have defined your Ricardian Contract as RDFa marked-up HTML document that grants someone the right to withdraw some money from someone’s account based on a pre-specified condition, now what?
This is where I get inspired by Bitcoin – it defines a distributed ledger that safe keeps bitcoins and defines in a smart contract the generic transfer and issuance rules e.g. only allow someone who possesses the correct private key to spend only the ones what they own etc. If I try and create a more generic pattern, lets say on Ethereum, I end up with what I called the Instrument Smart Contract (ISC) – something that defines the procedural rules linked to one or more contractual clauses of a financial instrument Ricardian Contract and keeps ledger of ownership.
Bitcoin actually specifies some of it’s transfer rules via scripts attached to transactions – default one being that a specific key is required to spend the transactions, whilst double spend prevent etc. rules are hardwired into the protocol code. Scripts can support more advanced conditions like multisig. To create a more generic and re-usable pattern, I propose the idea of an Agent Smart Contract (ASC)– something that encapsulates more user specific conditions in procedural code to achieve the declarative end state, again linked to legal clauses.
In effect, the Weather Insurance ASC is granted permission to transfer value held in the GBP ISC from issuer to beneficiary if it is presented with sufficient evidence by the beneficiary. In this example, proof-of-contract and proof-of-weather (a form of proof-of-condition) will be required as evidence. Proof-of-contract is the digitally signed Ricardian Contract expressed as RDFa marked-up HTML document. Proof-of-weather is in this case a digitally signed JSON response from a RESTful API service by Weather.com with contract matching parameters. It could as easily be a smart contract controlled by a smart oracle – if on-chain notary is an advantage.
Here is a, not at all well thought out, process to claim your insurance and get paid:
Note, the ASC may itself be an ISC – meaning that for instance if you buy a bond, the bond gives you the right to get paid coupons from the issuer’s money smart contract. In this way you can implement complex atomic swaps spanning multiple instruments e.g. Delivery vs. Payment, Payment vs. Payment. In fact the ASC may be a good place to implement Interledger’s notary services, as long as the ISC supports ledger-provided escrow. Interledger is a protocol for payments across payment systems. It enables secure transfers between ledgers and allows anyone with accounts on two ledgers to create a connection between them. Ledger-provided escrow removes the need to trust these connectors. Connections can be composed to enable payments between any ledgers, creating a global graph of liquidity or Interledger.
The ASC can also be a good place to implement state (micropayment) channels and off-chain oracles. Many contracts never get exercised e.g. options, insurance – so recording them on-chain is a waste of resource – good enough security can be achieved without use of on-chain smart oracles or storage of contract instance if proof-of-contract and proof-of-condition (in this case weather) is submitted to ASC when the claim needs to be made. Another advantage of this approach versus bundling all logic into the instrument code is flexibility – code can be kept tight and implement core logic, and allow many claim conditions e.g. if the holder of a bond fails to collect coupon payments, but has a credit default swap, this can be activated and money collected from underwriter.
Source: Content from https://www.linkedin.com/pulse/crypto-20-musings-combining-ricardian-smart-contracts-alex-batlin and Image from http://www.lyntonweddingvenue.co.uk/hands.jpg
The post Alex Batlin’s Briefing of Crypto 2.0 Musings &8211; Combining Ricardian and Smart Contracts appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
#PayPal wants to be at the center of your “financial vibes,” Chief Executive Dan Schulman said to PayPal stockholders on Wednesday. To do so, Schulman continued, PayPal is reinventing itself, alongside the quickly evolving industry. No question, the world of financial services is being redefined by mobile and the digitizationRead More
Bank Innovation
Bitcoins underlying #blockchain #technology is a potential disruptor to the way core businesses have been working. This is the reason why it has been catching everyone’s attention, especially those involved in the financial services industry. The blockchain technology is in fact driving most innovation by #FinTech companies in the present time. Start-ups to well-established companies are involved or interested in putting the blockchain technology to use and benefiting from it in some way or the other.
The idea of applying blockchain technology outside of the realm of #Bitcoin has gained a lot of interest from forward-thinking companies in the past year or so. Blockchain applications are also called “distributed ledger technology” because they remove the need for a centralized database and, like Bitcoin, give every transaction in a particular system a cryptographic hash that can be checked by any member of the group.
In a report published in December, “Beyond the Hype: Blockchain in Capital Markets”, McKinsey said there is great promise in distributed ledger technology but expects that development will require cooperation among market participants, regulators and technologists.
IBM, Intel, Cisco, J.P. Morgan and several other big #banks are among those making a big bet on blockchain. The companies have joined forces to create the Open Ledger Project with the Linux Foundation, with the goal of re-imagining supply chains, contracts and other ways information about ownership and value are exchanged in a digital economy. The Open Ledger Project is described as a development library that will allow businesses to build custom distributed ledger solutions, without needing to rely on open, public blockchain such as those offered by bitcoin and Ethereum. To show its commitment towards the development IBM has open sourced a significant chunk of the blockchain code it has been working on, putting its weight behind the Linux Foundation and its hyper ledger project.
R3 (R3CEV LLC) leading a consortium of 42 financial companies in research and development of blockchain usage in the financial system. The full list of banks signed up are: Banco Santander, Bank of America, Barclays, BBVA, BMO Financial Group, BNP Paribas, BNY Mellon, CIBC, Commonwealth Bank of Australia, Citi, Commerzbank, Credit Suisse, Danske Bank, Deutsche Bank, J.P. Morgan, Goldman Sachs, HSBC, ING Bank, Intesa Sanpaolo, Macquarie Bank, Mitsubishi UFJ Financial Group, Mizuho Financial Group, Morgan Stanley, National Australia Bank, Natixis, Nomura, Nordea, Northern Trust, OP Financial Group, Scotiabank, State Street, Sumitomo Mitsui Banking Corporation, Royal Bank of Canada, Royal Bank of Scotland, SEB, Societe Generale, Toronto-Dominion Bank, UBS, UniCredit, U.S. Bancorp, Wells Fargo and Westpac Banking Corporation.
Last week a consortium of 11 giant banks including UBS and Credit Suisse announced that they had completed their first trial run of the idea of using software inspired by the digital currency Bitcoin to move assets around more efficiently was successful.
While all this development was going on Bank of America is trying to steal a march on the latest developments in the technology behind digital currency bitcoin by loading up on blockchain-related patents. BOA has already filed for 15 blockchain-related patents and is currently in the process of drafting another 20 to be submitted to the U.S. Patents and Trademark Office (USPTO) later this month.
Applying the blockchain concept to the world of Finance and IOT offers fascinating possibilities. Right from the time a product completes final assembly till the delivery , payment and service.Blockchain have a part for each process involved in business to make it more efficient, faster and reliable.
Auxesis a startup from IIT Bombay is a blockchain application development company going to release Btc2Bid for its European partners. We welcome entrepreneurs, managers having ideas related with the Blockchain for a cup of coffee to realize your ideas into products.
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While #Switzerland might be one of the best locations in the world to set up a business, the country’s own #entrepreneurship ecosystem has not yet reached its full potential, according to the Start-up Monitor foundation.
In a new report, the Start-up Monitor foundation provides an in-depth analysis of entrepreneurial activities in Switzerland. Founded in 2012 by ETH Zurich, University and St.Gallen and University of Basel, the Start-up Monitor foundation is an organization aimed at monitoring and helping develop the startup ecosystem in Switzerland.
The document, entitled ‘The Swiss Entrepreneurship Ecosystem Report 2015/2016,&8217; addresses the strengths and weaknesses of Switzerland&8217;s entrepreneurial scene and suggests that although the country is one of the most competitive and innovative in the world, there are still many challenges to overcome in order to become an internationally recognized “Start-up Nation.”
Switzerland is globally recognized for its stable, transparent and effective institutions, but also its healthy finances, attractive taxes, excellent infrastructure, exceptional capacity for innovation, and world-class education system, and yet, the country does not rank among the most entrepreneurial countries in the world, the report says.
It notes that due to the lack of growth-stage funding, many startups leave Switzerland at this stage to countries with more favorable conditions. &8220;Switzerland needs to ensure funding opportunities not only for seed-stage, but also for the start-up and growth-stages of a venture,&8221; the report says.
It advises for more entrepreneurship education programs on primary and secondary level, and notes that there is a strong need to strengthen a supportive entrepreneurial culture, notably among young people, in order for them to consider entrepreneurship as a desirable, feasible and viable career opportunity.
The document also claims that there is a strong need to focus on ageing workforces, increasing entrepreneurship intentions to prolong working lives and reduce older-age unemployment.
Moreover, the fact that Switzerland is a relatively small market can cause significant scalability challenges for new ventures.
The report lists a number of initiatives that have been undertaken to foster the Swiss entrepreneurial spirit, among which the new innovation center set to launch later this year in Dubendorf. The Swiss Innovation Park is a project of the federal government, cantons, science and economy, which will be dedicated to industrial research.
Another initiative is Digital Zurich 2025, which focuses on turning the greater Zurich area into a leading European center for digital innovation. It aims at being a platform where academics and experts in information and communication #technology would meet and collaborate. Digital Zurich 2025 is also planning an annual congress and a Swiss Investor Summit where startups would have the opportunity to meet with international investors and business leaders.
Balgrist Campus on the other hand, has recently established a research and development center for medicine located between the lake of Zurich and Balgrist University Hospital.
Finally, the Swiss Investment Fund (SIF) initiative of the Swiss Private Equity and Corporate Finance Association aims at closing the financing gap and foster innovation entrepreneurship in the Swiss innovation ecosystem. SIF acts as a &8220;fund of funds,&8221; which means that it invests in a number of smaller funds, which in turn, can provide equity capital to a number of young Swiss tech companies.
That said, Switzerland has got many advantages for businesses as well. In addition to its high innovation capability, Switzerland has a very supportive government, as well as regulations in favor of entrepreneurship.
Additionally, its geographical location provides young companies with an easy access to the European market and stronger trade links.
Featured image: Zurich pinned on a map of Europe by Dmitry Kaminsky, via Shutterstock.com.
The post Recommendations to Boost Entrepreneurship in Switzerland appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
More than 15 members of #Congress met with representatives of the #blockchain #technology industry this week in Washington, DC.
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