Michael J. Casey is the chairman of CoinDesk’s advisory board and a senior advisor for blockchain research at MIT’s Digital Currency Initiative.
The following article originally appeared in CoinDesk Weekly, a custom-curated newsletter delivered every Sunday exclusively to our subscribers.
One of the biggest rhetorical challenges blockchain advocates confront is something I’ll call “stasism:” their critics’ false assumption that the technology is in stasis, that it will never reach its potential because, in its current state, it’s too cumbersome, expensive or inefficient.
This, I believe, is one of two flaws in a widely circulated anti-blockchain screed by Bruce Schneier, who made no reference to the ongoing work of engineers, regulators, and business leaders who are constantly improving this new value exchange system so it can eventually work at scale in the real world. (The other flaw is that in attacking the myth of a “trustless” world where “math is law,” he created a straw man, since only the most naïve proponents of this technology share that nightmare vision of a system devoid of human authority.)
But the purpose of this column is not to pick a fight with Schneier, one of the smartest, most respected minds in IT security. That strikes me as a risky undertaking.
Instead, I want to point out a few breakthroughs from the past couple of weeks that have reinforced my belief in the ongoing inventiveness of the people working in this industry and, by extension, in the technology’s vast potential. This is not, by any means, an industry in stasis.
There are no doubt countless other new ideas and breakthroughs worthy of attention that won’t get a mention here. (I’m quite certain my Twitter mentions will again fill up with people accusing me of bias for not including their favorite new coin project.) So treat these merely as examples of a much wider creative process.
What I can say is that these ones stood out to me because they come from outside the box. This is how challenges faced by new technologies are always solved: by looking at the problem differently.
Consider Abra’s new product offering: a non-custodial wallet that uses the bitcoin blockchain to allow investors to get fractionalized exposure to the price movements of real-world capital market assets such as stocks, bonds and ETFs, all with as little as $5 down.
The service combines smart contracts, price feeds, and automated, on-chain execution to allow short-term price bets to be rolled over or settled in bitcoin without Abra taking custody of private keys or assets, according to the company. The model opens a host of new possibilities for disintermediated investment markets.
We’ll have to see how regulators react if this product takes off, but for now it looks as if Abra’s design has done an ingenious runaround of existing commodity and swaps trading rules. Abra is working under legal guidance that, because contracts created using its app will be rolled over or settled with “physical” delivery of bitcoin, and because the company has no role in that clearing process or in the custody of a customers’ keys, it is exempt from the Commodity Futures Trading Commission’s registration requirements.
Why this idea most matters, I believe, is that it leverages the power of bitcoin, not as a currency per se, but as an immutable, decentralized settlement system. The bearer instrument aspect of bitcoin is integral to the design, as it becomes the “commodity” being delivered, but it’s the prospect of decentralized, smart contract-executed settlement that contains the real power of this idea.
All the legal, regulatory and intermediation costs that go into protecting people’s rights in existing derivatives contracts, with multiple middlemen, lawyers and compliance officers taking their cut, are absorbed instead by the consensus-driven decentralized network running the blockchain.
It’s an outside-the-box model that opens up many possibilities.
The combination of the Internet of Things and non-fungible tokens means that a wider array of assets, whether physical goods or digital products, will soon be given tradable digital representation. Abra-style contracts could allow efficient hedging mechanisms and synthetic investment strategies to evolve around what is an almost endless array of assets.
What you still need, of course, are exchanges that match buyers and sellers of the underlying assets so that they enjoy efficient and effective price discovery (the price signal upon which Abra’s model depends). In essence, markets need a “place” for investors to meet and trade and a trustworthy means of broadcasting the price they agree to.
The problem is that investors have until now had to trust retail exchanges with custody of their crypto assets. These have been frequently hacked or subject to double-spends, creating a security hole that Schneier cited as a core reason people can’t trust public blockchains. This risk was also spectacularly brought home by the stunning story of QuadrigaCX’s failure following the reported death of its CEO.
So, what if investors could tap an exchange’s much-needed capacity for “matching” but retain full custody of their assets until they’re transferred to a buyer? That’s what Arwen, formerly known as Commonwealth Crypto, is aiming to achieve with the testnet release of its technology, now being used in beta form by crypto exchange KuCoin.
Arwen’s tech offers further validation for the development of “Layer 2” solutions that revolve around the combination of smart contracts, multi-signature lock-ups of assets, and “atomic swaps.” Other ideas for decentralized asset trading are being developed on top the Lightning Network and by projects such as the Komodo Platform.
Add to these advances the work on security token offerings, or STOs, by the likes of Polymath, Swarm and Securrency and we can start to imagine a future in which fractionalized claims of any size on mainstream, real-world assets are traded in a peer-to-peer manner and settled in real-time with very low risk.
Yes, there’s a lot of work that needs to go into all these projects to make them viable. And, yes, we still need to achieve scalability of the underlying functionality of blockchains, which involves some trade-offs. And, yes, there is a tendency among some crypto zealots to hype the ideas spawned by this technology in utopian terms.
But the people who will change the world are focused on building, not hyping. And they’re working on top of mostly open-source software that lets them collaborate, iterate, test and constantly improve their ideas.
Those are the people making progress in scaling challenges, with both on- and off-chain solutions, and they are the people who are thinking outside the box to build exciting new trading applications such those highlighted here.
If such work weren’t being done, well, sure, you could dismiss this field as an over-hyped, impractical solution in search of a problem.
But, just as it would have been wrong to assume that the Internet’s usability would forever be confined by the snail pace of 14.4 kbps dial-up modems, so too is it misguided to assume that blockchain technology is stuck in one place..
Pundi X Launches Africa’s First Blockchain Smartphone
While at the GSMA Mobile 360 Africa event on July 16, 2019, Pundi X, a distributed ledger technology (DLT) startup launched XPhone, a blockchain-based smartphone in Kigali, Rwanda. XPhone is the first blockchain-powered smartphone to be unveiled in Africa, reportsNewtimes on July 17, 2019.
First Blockchain-based Smartphone to be Launched in Africa
Per the report, Pundi X has released XPhone, the first blockchain-based smartphone launched in Africa. The XPhone can make calls, text, take photos and surf the net amongst other things with the help of the distributed ledger technology.
As a result, it bypasses local service providers in Rwanda such as MTN and it is decentralized in nature without any third parties involved in its transmission, ensuring that the user’s data remains private.
XPhone also differs from other smartphone devices because it is neither powered by Android, iOS, nor Windows Operating systems, but the Function X (FX) OS which is based on blockchain technology. The smartphone allows for a seamless transition between traditional Android to blockchain mode..
Pundi X to Release 5,000 XPhones in Late 2019
Notably, the Pundi X team has revealed its intention to release 5,000 XPhones in late 2019 and that it is looking for telecommunication companies to partner with in order to launch more of these devices.
The blockchain company had recently completed integration support on its XPOS module on Verifone’s X990 in a bid to enable retail outlets to process crypto payments as well as fiat transactions.
Nonetheless, there are regulatory concerns in the Rwanda which may negatively impact on the adoption of its new blockchain phone. Rwanda citizens may also be adamant about adopting the devices due to the sceptical nature people have about complex technologies.
It is, however, remarkable to see an increasing rise in the launch of blockchain smartphones in 2019, even though they are powered with their respective operating systems.
Electroneum, a blockchain company on February 25, 2019, launched a low-cost blockchain smartphone which features the company’s cloud mining technology and mobile crypto mining app to enable users to earn its ETN native token.
In the same vein, technology company Sirin Labs which launched its Finney blockchain smartphone in 2018 announced on March 21, 2019, that it will be integrating MyEtherWallet into the phone. BTCManager on April 29, 2019, also informed that the electronics giant HTC is planning the launch of a second-generation blockchain-based smartphone by the second quarter of the year.
Mining Disrupt Conference 2019 – BlokTech Organizes The Premier Digital Asset Event in The US
BlokTech Network, the leading community builder in the Blockchain space with global reach, is organizing a two -day digital asset event in Miami, Florida on July 23 & 24, 2019.
The goal of the conference is to highlight upcoming startups, technologists and entrepreneurs in the blockchain space. The Mining Disrupt Conference [MDC] will take place at the DoubleTree Hilton Hotel convention center where top experts, influencers, and strategists from across the world are expected in this unprecedented event.
According to Robin Lam, Co-Founder of BlokTech Network.
“Every year, Bitcoin becomes more scarce than before as evident in its lowest price value increasing. But yet, only less than 10% of the world population know about it, let alone understand. This conference – Mining Disrupt – will put you ahead of the curve.”
Hosted in Miami, considered to be the gateway to South America, MDC is strategically positioned to attract individuals from all over the world. Having secured world-class speakers in the industry such as Haijiao Li, Director of overseas operation at Bitmain & COO at Bitmain Antpool, and David Vorick, CEO and co-founder of Oblisk ASIC Manufacturer, MDC promises to provide the ideal opportunity to connect with innovative and talented individuals across the cryptocurrency and blockchain industry.
The President of Florida division, Fernando Rivero said:
“I’m excited to leverage what I’ve learned and observed over the years and provide a conference that fosters collaboration and education.”
Founded in September 2017 by Robin Lam, BlokTech Network growth has been exponential, starting in Miami and eventually expanding globally with branches in Latin America, Atlanta, North Carolina, and Los Angeles. The company’s headquarters is in Miami, Fl.
However, BlokTech’s network is global, with strong industry players and up-and-coming talent that will carry the company’s vision forward. A network that has already help secured top speakers from the blockchain community and more speakers and panelists are being gradually released to the public as part of the marketing plan.
New Blockchain Technology Puts Focus On Security
A cryptocurrency startup is revolutionizing the way blockchain and crypto work. ILCoin is a project that boasts of its own pioneering technology that makes blockchain more secure if that’s even possible.
When Bitcoin was introduced in 2009 by Satoshi Nakamoto, the first cryptocurrency changed online transactions forever. It was also the first time blockchain was put in the mainstream limelight and everyone in the industry was gobsmacked, to say the least. It was a pure genius — a decentralized digital ledger that cannot be modified, secured by cryptographic hash and without a governing body.
However, over the years, chinks in its armor were slowly revealed. But this has since changed with newer technology reinforcing blockchain’s security and adding to its advantages.
Founded in 2015, ILCoin aims to become a new, global digital currency-based economic system wherein members can earn, accumulate, spend and trade ILCoins to benefit not only the currency owners but the entire community as well. The cryptocurrency was initially conceptualized as an alternative to Bitcoin.
While ILCoin has joined other digital coins in being listed on several exchanges, what makes ILCoin stand out from all other cryptocurrencies is the technology that powers it.
ILCoin is built upon a decentralized cloud blockchain — the world’s first data storage platform based on a decentralized blockchain system that can remind services off-chain how it relies on storing data with an on-chain system. The technology is based on the SHA-256 Proof-of-Work algorithm.
As if SHA-256 wasn’t enough, the ILCoin Dev Team took the technology and put a “hack-proof” vest around it for even more security. The crypto’s Command Chain Protocol [C2P] eliminates all security risks associated with quantum computing, including hacking, double spending, roll-backs, and any other malicious activity.
C2P was established to deal with the biggest issue facing cryptocurrency — “51% attack,” or an attack on a blockchain network by a group of miners who control a majority of a network’s computing power [more than 50%]. This would allow them to disrupt the network — prevent new transactions, halt payments, reverse transactions and more.
Other than 51% attack, C2P has been created in such a manner that it is also insusceptible to quantum computers and the immense computing power and the hash rate they can bring to the table. No matter how big, the hash rate alone is not enough to overcome C2P due to its unique 3-layered system based on digital signatures. The protocol’s structure effectively future-proofs ILCoin’s blockchain against the impending threat of quantum computers, which pose a considerable danger to the majority of existing Blockchain systems.
Norbert Goffa, ILCoin Executive Manager explained:
“At ILCoin, we follow the defensive blockchain approach – with security being the main focus, we are trying to eliminate the current issues of present systems which, in their current state, allow too much room for malicious attacks.”
The technology has already been recognized by cybersecurity specialist Palo Alto Networks Partner, who presented ILCoin Dev Team with a certification earlier this year.
Mr. Goffa further said:
“From the ILCoin Development Team’s standpoint, the real breakthroughs in cryptocurrency can only be brought about by the resolution of security issues and after the users become freed from the threat of attacks by hackers.”
Apart from the success of C2P, ILCoin developers also hope to achieve the same success with each of the future projects. The team is looking to expand to its crypto exchange listings. It also aims to be able to create smart contracts on its network before the end of 2019.