IBM Completes Blockchain Identity Trial With Crédit Mutuel
IBM has completed a #blockchain project with Crédit #Mutuel Arkéa that found the two firms using the #technology to verify customer identities.
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For Ether Investors, All Eyes Remain on Divisive Fork Debate
The price of #ether remains volatile following the loss of investor funds by one of the #blockchain platform’s signature projects.
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Specter of Ethereum Hard Fork Worries Australian Banking Group
As the #ethereum community debates a #hard #fork option to undo the losses sustained by The DAO, ANZ is questioning the credibility of its #blockchain.
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Tech Primer: What are Smart Contracts?
” #Smart contracts are computer protocols that facilitate, verify, or enforce the negotiation or performance of a contract, or that make a contractual clause unnecessary. Smart contracts usually also have a user interface and often emulate the logic of contractual clauses.” – Wikipedia
Smart contracts seem to be all the rage right now, and there have been quite a few posts about them on Twitter, LinkedIn, and in the blogosphere recently.
So… what are they?
You have more than likely experienced a smart contract within the last 12 hours, either personally or as an unknowing (or knowing) participant: Digital Rights Management as an example, whether for music or movies; Hotel room key usage; Online gambling (I hope not); Mobile data usage and overage charges; Book/ship arrangements for service payments. The list goes on and on.
More commonly, today, you are likely seeing these terms floating next to the words #Bitcoin, Codius, or #Ethereum (who has been in the news of late due to a hack), or #blockchain. None of these are required to have a smart contract, but they are likely culprits for increasing the buzz-wordiness of the concept.
Smart contracts basically boil down to this (simplified) explanation: Two people, or entities, decide on an arrangement that can be both digitally validated and enforced. A trusted electronic system monitors the validation point(s) and when a criteria has been met, the system enforces the arrangement. Here’s an overly-simple example:
- You want to rent a movie on DVD.
- You swipe your credit card at a kiosk.
- Your card is approved and rental funds are moved into the DVD owner’s account.
- Upon receiving the funds, the movie is released from the mechanism and you may take it.
- If you fail to return the movie within a time limit, you are billed the cost of the DVD.
- Attempts to rent another movie while you have another rented are rejected.
- Returning the movie — or a purchase transaction — frees you to rent another DVD.
The smart contract says you are welcome to rent the movie as long as you pay a fee and agree to be charged for a purchase if you fail to return it. The mechanism of enforcement is built into the lock/holding mechanism and the trusted system (you do trust your movie vendor, right?)
The example above is a physical implementation of DRM, the same process could be illustrated for digital locks on Pay Per View movies or downloadable content such as text-books or streaming music. The same IF THEN ELSE rules apply: IF something happens THEN do this, ELSE do this other thing.
- IF it’s the first of the month THEN pay the rent
- IF I am thirsty AND it’s 6pm on Friday THEN beer, ELSE water
- IF VALUE(MyStock) < $5 THEN BUY(MyStock) ELSE SELL(MyStock)
The Contract is Smart as long as the criteria can be electronically validated in some way that both parties trust and the enforcement can be done electronically and automatically.
The key to why you’re seeing more and more talk about Smart Contracts is the interest in several frameworks and systems that are being built. Bitcoin and Ethereum, or Barclay’s use of R3’s Corda platform being prime examples of some of those systems.
That’s it, Smart Contracts in a nutshell.
** Tech Primers are meant to be brief and to the point, they are by no means comprehensive. Want to learn more? A good book, your local technologist, Google, and/or Wikipedia are all great resources! **
[linkedinbadge URL=”https://www.linkedin.com/in/jerrygilreath” connections=”off” mode=”icon” liname=”Jerry Gilreath”] is IT executive at RagingWire Data Centers.
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Decentralizing IoT networks through blockchain
Imagine a washer that autonomously contacts suppliers and places orders when it’s low on detergent, performs self-service and maintenance, and schedules its cycles to take advantage of electricity prices; a connected car, smart enough to find and choose the best deal for parts and services; a manufacturing plant where the machinery knows when to order repairs for some of its parts… Read More -
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Engineering Giant Siemens to Invest in Blockchain Startups
German #engineering #giant #Siemens plans to #invest in #blockchain #startups and projects through a newly created business unit backed by $ 1.1b in capital.
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Presidential Candidate Hillary Clinton Pledges Support for Blockchain
US #presidential #candidate #Hillary #Clinton has announced she will #support #blockchain applications as part of her planned tech platform.
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German Stock Market Operator Releases Paper On How Fintech Will Reshape Capital Markets
#Blockchain, artificial intelligence (AI), machine learning and Big Data will transform #capital #markets, according to #German #stock #market #operator Deutsche Boerse. It urges established financial infrastructure players to start approaching #fintech firms and consider partnering with these innovative ventures.
In a new report entitled ‘Future of Fintech in Capital Markets,’ Deutsche Boerse, in collaboration with fintech research and advisory firm Celent, analyzes the potential impact of fintech on market infrastructure incumbents and highlights the opportunity for providers in partnering with these new innovative ventures.According to David Easthope, senior vice president and responsible for the securities and investments practice of Celent, pioneering fintech firms are transforming major parts of the financial services ecosystem. He urges incumbents and fintech firms to start pursuing a collaborative approach, arguing that fintech will mostly likely shape the future of capital provision, #technology, and other industry workflows.
In 2015, about US$ 19 billion in capital was invested globally in fintech across approximately 1,200 deals, highlighting the general appetite for financial services disruptors.
The report points out five capital market fintech clusters and technologies:
Blockchain technology and distributed ledgers have the potential to substantially change the nature of issuance, and potentially enhance exchanges&8217; role in price discovery, access liquidity, reduce frictional costs and offer a path to a more efficient core market infrastructure.
Post-trade digitalization: firms are looking into Big Data, AI and advanced analytics to process and create compliance and regulatory reporting. Regulatory technology (regtech) is an opportunity for incumbents to improve their operational efficiency, reduce systemic risk, and provide additional revenue-generating opportunities.
Machine learning, predictive analytics and Big Data technologies, will impact capital markets by providing tools to mine data across the value chain. New methods of data delivery and tools for insight and prediction will allow firms to make better decisions around allocation and risk, and investors to gain access to next-gen index products, ETFs, as well as other innovative trading and investment products.
Investment technologies, including automated investment management tools or #robo-advisors, are gaining relevance as the industry continues to shift towards automation in asset allocation and rebalancing. On the retail side, customers are shifting to cloud-based digital solutions that are accessible in terms of pricing as well as usability.
Alternative funding platforms and peer-to-peer business models are reshaping traditional channels for equity and debt capital formation, opening up new networks for accessing capital. Financial market organizations can capitalize on this trend and provide new solutions to the financing and funding market.
As trends in digitalization accelerate, established technology firms and market operators will need to collaborate with new business models and innovative technologies.
“Market participants need to continually evolve and innovate their business models,” the report says.
&8220;The financial market infrastructure provider of tomorrow will have leveraged its leadership in regulation, market structure, trading, clearing, and settlement to guide startup fintech firms in the journey towards creating an effective and safe capital market for the twenty-first century and beyond.&8221;
The report was released simultaneously with the announcement of Deutsche Boerse Group&8217;s new corporate venture capital platform, DB1 Ventures. The team, based primarily in Frankfurt, said it will invest in early to growth stage fintech firms and manage the group&8217;s existing portfolio of investments.
According to Carsten Kengeter, CEO of Deutsche Boerse, the idea behind DBI Ventures is to allow the group to continue on being an active investor in the space. DBI Ventures will primarily focus on ventures and products that &8220;are core or adjacent to our client, product, geographic and technology strategy,&8221; according to Kengeter.
Committed to keeping up with emerging fintech trends, Deutsche Boerse has been involved in the space via various means. In April 2016, the group launched its Fintech Hub in Frankfurt, an initiative aimed at acting as a cluster for German financial innovation.
Deutsche Boerse is also an investor in Digital Asset Holdings, a developer of distributed ledger technology for the financial services industry. In November 2015, it invested in Illuminate&8217;s IFM Fintech Opportunities Fund, which focuses on areas such as compliance, regulation and connectivity.
In July 2015, Deutsche Boerse acquired forex trading digital platform 360T for 725 million euros.
Featured image: Deutsche Boerse by Jochen Zick, Action Press, via Flickr.
The post German Stock Market Operator Releases Paper On How Fintech Will Reshape Capital Markets appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
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IBM Opens Blockchain Garage in New York
IBM has announced the opening of a new office for #blockchain coders in a trendy New #York City neighborhood.
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UBS View on Blockchain
How does it work today?
Economics without/before #blockchain
Building the trust engine: How blockchain can transform the financial industry
How blockchain transform the financial industry | How blockchain works
The industry gains benefits from blockchain
Blockchain benefits the businesses | Distributed Ledgers
The post UBS View on Blockchain appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
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