A Framework for Identity
IDEO coLAB member Dan Elitzer explores a #framework for digital #identity using #blockchain and other technologies.
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Blockchain – to Replace Government in Real Estate
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.
What is a land-registry in a blockchain?
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.
What are the benefits?
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.
Reducing Bribery 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.
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From Blockchain PoCs to commercial launch
People working in big companies experimenting with #blockchain we receive PoC proposals every week, and in most cases the selling argument is always how cheap the #technology is, with phrases like “you don´t need any special integration, we can set up a private network or a public node in this or that cloud” (always very well known clouds with Blockchain as a Service offering). I always wonder the value of those PoCs not integrated with core #banking systems or at least with a sandbox environment.
Most PoCs I have seen so far not take into account the security and regulatory requirements when launching a financial service into production
I mean, when we decided to build our own blockchain banking infrastructure the goal was to build a blockchain platform that meets banking security architectural standards and is easy to integrate with existing core banking so that going into production could be done straight away. The first thing we did was to hold meetings with our architects to understand our current architecture (fo both the core banking and digital extensions) with the special focus on the security, APIs and microservices pieces. After those meetings, we realised that we had to change some of our initial assumptions for the blockchain technical design, based on the PoCs we had run outside the banking infrastructure.
The problem is that this technology was born to replace the banking industry and most start-ups and IT vendors have no real experience in the banking industry and the requirements around security in payments or customers personal data and credentials, or they just suggest you to abandon the current core banking and use blockchain as a standalone piece. So, most PoCs I have seen so far not take into account the security and regulatory requirements when launching a financial service into production, or even worse a profitable business model (but profitability is another story I may write about in future). At the end, all the work done during the PoC is not valid and has to be thrown away and remanufactured from scratch.
When designing a PoC we must take into account the requirements for integration with the IT systems
So, my humble recommendation when designing a PoC we must take into account the requirements for integration with the IT systems since it can impact the customer experience, platform productivity, and even the investment costs/ business case when going live. Otherwise, the movement from PoC to commercial pilot/ launch could be a nightmare.
[linkedinbadge URL=”https://es.linkedin.com/in/roberto-garc%C3%ADa-938a333″ connections=”off” mode=”icon” liname=”Roberto García”] is Innovation Manager at Santander Group (IT&Operations Global Division)
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Five Myths About the Blockchain Revolution
By Don Tapscott and Alex Tapscott, co-authors, #Blockchain Revolution.Blockchain #technology is the most important invention in computing in a generation because, for the first time in human history, we have at our disposal a truly native digital medium for peer-to-peer value exchange. Blockchain, a vast global platform based on a distributed ledger, establishes the rules — in the form of computations and heavy duty encryption — that enable two or more parties to transact or do business without needing a third party to establish trust.
Rather than relying on a bank, government or other intermediary to create trust, the blockchain ensures it through mass collaboration and clever code. Trust is built into the system, which is why we call blockchain the Trust Protocol.
Taken one step further, the blockchain also acts as a ledger of accounts, a database, a notary, a sentry, and clearing house, all by consensus. We believe it is the second generation of the Internet and holds the potential to rewire the economic power grid and shake up the old order of things for the better.
Here are the five main myths about blockchains:
(Read an excerpt of our book, Blockchain Revolution, here.)
1. Blockchain good, #bitcoin bad
Many people, especially those in the financial services industry, are excited about the potential of blockchain technology but believe that digital currencies like bitcoin are unfeasible, undesirable or even dangerous.
Whereas the bitcoin blockchain is entirely permissionless — that is, anyone can access it via an Internet-enabled device and interact with it like they would the open Internet — permissioned blockchains require users to have certain credentials, like a license to operate on that particular blockchain, granted by the members or some governing body. Permissioned blockchains use distributed ledger technology without having a digital currency attached.
At first blush, these private and permissioned blockchains appear to have a few clear advantages. For one, members can easily change the rules if they so desire, as they only need to get their small group to agree to a change, rather than convincing a huge network of people. Costs can be kept down, as transactions only need validation from the members themselves, not a network of millions of participants. This streamlining could reduce electricity usage too, which is good for the environment. Regulators might also prefer them over public blockchains, like the bitcoin blockchain, because they need not be anonymous or pseudonymous.
But not so fast. The easier it is to change the rules, the easier it is to flaunt them. Intentionally limiting certain freedoms or access can inhibit neutrality. With no open value innovation, the technology is more likely to stagnate and become vulnerable. Further blockchains tied to a digital currency like bitcoin have a built-in system to incentivize people to do the work necessary to validate transactions.
2. The main opportunity for blockchains is in the financial services industry.
The financial services industry can transform itself around blockchain technology, if it can find the leadership to do it. The technology holds great promise to revolutionize the industry — from #banks to credit card networks and everything in between. When everyone shares the same public, distributed ledger, settlements occur instantly for all to see. Banks could speed up the metabolism of the system, and cut out massive costs. The smartest incumbents will use blockchain technology strategically, including permissionless systems to penetrate new markets like the unbanked and bring new services to market.
Yet financial services are the tip of the iceberg.
Blockchains can disrupt the disrupters like Uber. They will be at the heart of the Internet of Things — animating the physical world by, for example, allowing smart devices to contract, transact and securely share data peer-to-peer through blockchains.
They can reinvent democracy by making politicians accountable to citizens through smart contract. Imagine if a politician only received her salary or an appropriation for a project after fulfilling pre-set objectives laid bare in that smart contract. She would be beholden to the people, not powerful interests or donors.
3. Blockchains are really a B2B thing. They won’t affect me personally.
We’re convinced that this technology will change our economy, our institutions and day-to-day life in more dramatic ways than the first era of the Internet.
These are but a few ways blockchain will help you.
The list goes on.
4. Blockchains have too many problems for them to be feasible.
Some say the technology is not ready for prime time; that it’s still hard to use, and that the killer applications are still nascent. Other critics point to the massive amount of energy needed to reach consensus in the network: What happens when thousands or perhaps millions of interconnected blockchains are each processing billions of transactions a day? Are the incentives great enough for people to participate and behave safely over time, and not try to overpower the network? Is blockchain technology the worst job killer ever?
Our research suggests such concerns should not go into a category called “Reasons why this is a bad idea” but rather into a category called “Implementation challenges.”
5. Craig Wright is Satoshi Nakamoto
Early this month, Australian entrepreneur Craig Wright claimed to be the pseudonymous creator of bitcoin, Satoshi Nakamoto.
We know for a fact that he is not the sole creator. The reason? We — Don Tapscott and Alex Tapscott — are among those who created bitcoin.
Let us explain. Whomever wrote the original bitcoin paper and protocol got things off the ground. Then he (or she) disappeared, leaving it to an ever-growing community to carry on. This community is now responsible for the vast majority of code and other content related to bitcoin. In that sense, we are all Satoshi.
Which is why it doesn’t really matter who wrote the original paper. In other open source communities, such as Linux, there is an ultimate arbitrator. Bitcoin, and for that matter all permissionless blockchains, will never have such a benevolent dictator. As such the entire ecosystem needs to take the next steps in achieving bottom-up, self-organizing governance to steward these extraordinary resources forward.
[linkedinbadge URL=”https://www.linkedin.com/in/dontapscott” connections=”off” mode=”icon” liname=”Alex Tapscott “] is the founder and CEO of Northwest Passage Ventures. Don Tapscott is CEO of The Tapscott Group and an Inaugural Fellow at the Martin Prosperity Institute at the University of Toronto.
This post is adapted from Don & Alex Tapscott’s new book, BLOCKCHAIN REVOLUTION: How the Technology Behind Bitcoin is Changing Money, Business, and the World and originally appeared in Thomson Reuters.
Connect with the Authors on Twitter at @dtapscott and @alextapscott
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Alex Batlin’s Briefing of Crypto 2.0 Musings – Combining Ricardian and Smart Contracts
Nick Szabo proposed the idea of smart contracts back in 1997
- Many kinds of contractual clauses (such as collateral, bonding, delineation of property rights, etc.) can be embedded in the hardware and software we deal with, in such a way as to make breach of contract expensive (if desired, sometimes prohibitively so) for the breacher.
- A canonical real-life example, which we might consider to be the primitive ancestor of #smart #contracts, is the humble vending machine. Within a limited amount of potential loss (the amount in the till should be less than the cost of breaching the mechanism), the machine takes in coins, and via a simple mechanism, which makes a freshman computer science problem in design with finite automata, dispense change and product according to the displayed price. The vending machine is a contract with bearer: anybody with coins can participate in an exchange with the vendor. The lockbox and other security mechanisms protect the stored coins and contents from attackers, sufficiently to allow profitable deployment of vending machines in a wide variety of areas.
- Smart contracts go beyond the vending machine in proposing to embed contracts in all sorts of property that is valuable and controlled by digital means.
The Origin of Peer-to-Peer Electronic Cash System
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.
The Idea of Ricardian Contract
This is where Ian Grigg’s idea of Ricardian Contract comes in
- Our innovation is to express an issued instrument as a contract, and to link that contract into every aspect of the payment system.
- By this process, a document of some broad utility (readable by user and program) is drafted and digitally signed by the issuer of the instrument. This document, the #Ricardian Contract, forms the basis for understanding an issue and every transaction within that issue.
- By extension, all issues of value, such as currencies, shares, derivatives, loyalty systems and vouchers, can benefit from this approach.
- A Ricardian Contract can be defined as a single document that is a) a contract offered by an issuer to holders, b) for a valuable right held by holders, and managed by the issuer, c) easily readable by people (like a contract on paper), d) readable by programs (parsable like a database), e) digitally signed, f) carries the keys and server information, and g) allied with a unique and secure identifier (content hash).
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:
- Deploy a smart contract
- Reference the chainId and contractAddress of the deployed smart contract in the final draft of the real world contract.
- Finalize the real world contract and find its digital fingerprint.
- Send a transaction logging the checksum of the real world contract into the storage of the smart contract.
Blockchain enforces Ricardian Contract clauses
#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.
Example Weather Insurance Ricardian Contract
Let’s provide a simple example – a Ricardian Contract for weather insurance. Here is what a user would see in their web-browser:
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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’.
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Hopefully pretty much self-explanatory, but on first glance not very useful for machine consumption. Let’s have a look at the underlying HTML:
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<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>
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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:
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@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; ] .
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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:
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<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>
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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.
Agent Smart Contract
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:
- Beneficiary buys the weather insurance from an insurer and receives from them by email or other means the digitally signed Ricardian Contract, which is stored in beneficiary’s digital wallet.
- Beneficiary’s wallet will inspect the contract and decide when it should query the weather service to determine if a claim can proceed.
- Assuming a claim can proceed, the wallet sends a transaction that primarily includes the Ricardian Contract to the ISC to register the ASC as a trusted third party able to act as a value transfer delegate on behalf of the issuer.
- The wallet then sends a transaction to the ASC, primarily including the Ricardian Contract and Weather.com JSON response.
- The ASC validates the contract and JSON response, and if all ok sends a transaction to the ISC, instructing transfer of GBP in this case from issuer to beneficiary.
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.
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The World’s Most Comprehensive Public Blockchain Startup Tracker
Today we are officially opening up our database of startups through the launch of a #Blockchain Startup Tracker. With over 760+ startups and growing from across the globe it makes it the World’s largest and most comprehensive public database of its kind.
Because we at Blockchain Angels are the World’s largest network of professional investors dedicated to blockchain inc. over 400+ angels and VCs, it means startups listed can quickly and easily gain visibility to the most active investors in the space to increase deal-flow. Being able to directly make submissions themselves and keep their profiles up to date as they progress.
The ecosystem aims to be the go-to resource for investors active in the blockchain space and we have committed teams tracking every public start-up as far back as 2012 including corporate venturing activity. Unlike Coindesk’s data, our data covers everything from basic POCs all the way to Series A.
”The feedback was just hearing about those that have completed their Series A round is often too late for investors. They want to see where the innovation is happening and it’s not always in the obvious places. This gives our network an edge which is why many of the top investors use us for insights”.
Because of the work we do at Blockchain Angels, speaking with at least 2 startups a day, we know who their teams are, the sectors they are targeting, and even what tech stack they are using. Along the way we track if they fold or pivot as well as levels of funding and investment stage.
By signing up by email you can also receive deeper insights and analysis to track trends and significant events live as they happen in a monthly newsletter from our research team who power the tracker headed by Lawrence Lundy.
Data can be segmented live in charts at the Blockchain Angels site and can be embedded live in blogs through a handy widget.
- If you are an entrepreneur, raise your profile with investors and increase your chances of securing funding as well as be assessed to pitch at a Blockchain Angels event by adding your startup here.
- If you are an investor, and want to understand the opportunities in the blockchain market sign up here for regular insights including region and country level breakdowns, latest funding rounds, #technology trends and a curated list of the most investable companies.
An example of some of the insights investors can expect include:
- The infrastructure layer in the blockchain stack still dominates in terms of total numbers with 42.7% of startups addressing Infrastructure, Financial Exchanges and Trading, and Wallets.
- The application layer has begun to see huge growth with 4.3% using blockchain technology to provide provenance services across a range of different industries from diamonds, wine and the logistics supply chain.
- We now see 3.5% of startups applying blockchain technology to Governance & Transparency use cases
About Blockchain Angels
Blockchain Angels is a market intelligence and events platform to educate and connect up angel networks and early stage VCs to enable deal-flow for the blockchain community.
http://www.blockchainangels.eu
About Outlier Ventures
Outlier Ventures, the owner of Blockchain Angels, is a blockchain venture builder founded in 2014 which services Outlier Capital LLP to deliver ventures to budget through joint-venturing with a partner ecosystem.
[linkedinbadge URL=”https://www.linkedin.com/in/jamieburke” connections=”off” mode=”icon” liname=”Jamie Burke”] is founder of Blockchain Angels, CEO @ Outlier Ventures & Outlier Capital LLC
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Technology behind Bitcoin is coming to high finance faster than predicted
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.
Thanks for reading you can also find me at facebook.
[linkedinbadge URL=”https://www.linkedin.com/in/kumargauravitc” connections=”off” mode=”icon” liname=”Kumar”]
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US Congress Reps Receive Blockchain Briefing at Capitol Hill Event
More than 15 members of #Congress met with representatives of the #blockchain #technology industry this week in Washington, DC.
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Nasdaq Opens Blockchain Services to Global Exchange Partners
#Nasdaq‘s new financial infrastructure hub could pave the way for other exchanges to start using #blockchain #technology in a wide range of #services.
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Blockchain Entrepreneurs, Musicians Test Ideas at Berlin Music Festival
A group of #musicians, #entrepreneurs and #blockchain advocates is set to gather at a #festival in Germany later this week.
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