“The essence of the DLT infrastructure is that no single party should be trusted enough, but don’t we just trust a central bank to maintain the integrity of the global ledger?” said Harro Boven, policy adviser in the payments policy department of the Dutch central bank. Scott Hendry, senior special director of fintech at Bank of Canada, which piloted its Jasper project (built on R3’s Corda DLT platform) last year, agreed that “you don’t need a DLT to make a central bank digital currency.” “There doesn’t seem to be a lot of benefits if you look at a DLT system and the current efficient centralized system for the sole purpose of interbank payments,” Hendry said, adding that in the back office he leads, “they wouldn’t change anything” in the technology stack currently in use. No speaker ruled out using DLT for a CBDC in principle, but none showed much enthusiasm about the tech.
Discussions of cryptocurrencies and other blockchain technologies are bedeviled by a nearly universal assumption that attributes that are possible to achieve in theory are guaranteed to be realized in practice. Examples include decentralization and anonymity.Back in June David Gerard asked: How good a business is running a Lightning Network node? LNBig provides 49.6% ($3.7 million in bitcoins) of the Lightning Network’s total channel liquidity funding — that just sits there, locked in the channels until they’re closed. They see 300 transactions a day, for total earnings on that $3.7 million of … $20 a month. They also spent $1000 in channel-opening fees.Even if the Lightning Network worked (which it doesn’t), and were decentralized (which it isn’t), Gerard’s point was that the transaction fees were woefully inadequate to cover the costs of running a node. Now, A Cryptoeconomic Traffic Analysis of Bitcoin’s Lightning Network by the Hungarian team of Ferenc Béres, István A. Seres, and András A. Benczúr supports Gerard’s conclusion with a detailed analysis.
In sum, the blockchain back end shouldn’t matter to users – just like the Internet’s DNS or TCP/IP protocols don’t matter to web users. All web users care about is their web-based applications. All Blockchain users need to care about is their decentralized applications.Make no mistake: The days of seamless blockchain interoperability at the ‘atomic’ level are not here yet. Nor are the days of cross chain functionality where a single smart contract can update multiple blockchain platforms using a single process. We won’t see these needed functions go mainstream for at least two years.But the good news is we are seeing some very promising developments that will help move us closer to this end state, as highlighted in our recently published Hype Cycle for Blockchain Technology 2019.source: Hype Cycle for Blockchain Technology, 2019
ARTICLE 19 has issued a warning about the promotion of blockchain technology as a solution to censorship. In a report published today, the freedom of expression organisation identifies some of the risks that arise from the use of blockchain technology. It also identifies steps that states, public organisations and tech companies should take to ensure that human rights are protected when this technology is used.
What is a DAO? Here, we take as an (imperfect) definition something simple: “a censorship-resistant means to coordinate the deployment of shared resources towards a shared objective”. The simplest DAO, by this definition, would be a multi-sig wallet, in which individual members can withdraw paltry sums and many members together can withdraw significant sums.While a multi-sig may be sufficient for a group of friends on a backpacking trip, it quickly becomes apparent that for more ambitious objectives requiring the coordination of more resources, additional mechanisms are necessary. How permeable should the boundaries of the organization be? How much influence should any individual have? How can individuals be protected from the bad behavior of others? How easy or difficult is it to participate?For a certain type of person, these questions are irresistible, and it no surprise that many significant projects have emerged in recent years seeking to answer these questions. People frequently ask about the ways in which these projects are similar and different from each other; this essay is a step towards an answer.This commentary is based on my familiarity with these projects and their technical documentation, much of which I have read, as well as conversations with teammates from the various projects.
Source: Aragon, DAOstack, Colony, Moloch
If Facebook’s pivot from town square to private living room wasn’t laden with enough irony, here’s a new twist: Big business, it appears, has been invited to join us by the fireplace.
Gregory Barber covers cryptocurrency, blockchain, and artificial intelligence for WIRED.
On Thursday, The Wall Street Journal reported new potential details about Facebook’s long-awaited cryptocurrency plans. The company is reportedly seeking dozens of business partners, including online merchants and financial firms, in an effort to extend the reach of its blockchain-based marketplace. Facebook’s would-be partners are being asked to pitch into an investment fund, valued at $1 billion or more, that would serve as backing for Facebook’s coin and mitigate the wild speculative swings that make cryptocurrencies like bitcoin hard to spend. The pitch, according to the Journal, involves offering merchants lower fees than credit cards.
Some were quick to note that this would reduce Facebook’s ability to make money from payments in the short term. But that may not matter much—if, in the end, Facebook’s crypto effort is really all about getting you to spend more time glued to Facebook.
Facebook appears to be already building out the plumbing to make its marketplace a reality. At its F8 developer conference this week, the word “blockchain” was notably absent. But even as Zuckerberg emphasized the company’s plan to reorganize your Facebook experience around intimate relationships, his update included plenty of ways money would be involved. “I believe that it should be as easy to send money to someone as it is to send a photo,” he said, alluding to “simple and secure payments” as a core feature of his privacy-forward vision. That apparently extends beyond the peer-to-peer payments available on Venmo and Facebook’s own Messenger app. In a series of keynotes, Facebook execs touted a litany of commerce-focused improvements: better checkout for Instagram’s digital mall, donation stickers, and a new tool for small business owners to list items on WhatsApp.
Indeed, WhatsApp appears to sit at the center of Facebook’s commerce efforts—at least to start. At F8, Facebook said WhatsApp Pay, currently on limited trial in India, would expand to additional, unnamed countries later this year. The platform isn’t blockchain-based (for now) and is designed for peer-to-peer payments. But with 80 percent of small businesses in India using WhatsApp to market their goods, some form of payments processing is a natural evolution. In December, Bloomberg reported that the first tests of the crypto coin may occur in India, initially as a way for workers to send money home from overseas.
An added twist from the Journal’s report is the possibility that the coin will be integrated into Facebook’s lucrative ads ecosystem. The scheme, reportedly still under debate within Facebook, would potentially work on both sides of the ads equation: Merchants could use the coins to pay for ads, and users would be rewarded in coins for viewing or interacting with them. That reflects a growing perception—seen recently in efforts like the Brave browser, which compensates users through a token for clicking on ads—that people should get paid for their attention, not simply help internet giants make money. For Facebook, it also presents a vision of how its ads and eyeballs-driven business could continue in the company’s supposedly privacy-first era. The idea is to keep Facebook’s coins—and therefore users—tightly enmeshed in the platform.
The WIRED Guide to the Blockchain
“I don’t believe they’re doing anything that isn’t in the service of increasing interactions on their platforms,” says Joshua Gans, a professor at the University of Toronto. Sending money to businesses presents a challenge, he notes. Compared with friends and family, businesses are more likely to dump their Facebook coins at the end of the month in favor of real money. Gans is skeptical that Facebook would pay users for viewing ads—an immensely tricky system to create—unless it involved something like a rebate for buying a product through a Facebook advertisement. On the merchant side, encouraging businesses to pay for ads and services on Facebook with the coin could be one way of staunching the flow of money out of the system.
As the Journal notes, Facebook’s foray into blockchain could look a bit like a loyalty-points system—tokens that can be earned through and spent on Facebook services, or cashed out elsewhere though partner merchants. That’s not without precedent among technology companies: Uber, for example, has Uber Cash, which rewards users for purchases both in and out of Uber with app-specific money. Gans notes offerings like the Apple Card hold a similar purpose: It’s a service that, for all the talk of disrupting the credit card industry, is mostly a shiny, heavy way to buy more of Apple’s apps and products.
A Facebook spokesperson reiterated an earlier comment: “Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology. This new small team is exploring many different applications.”
Facebook still faces many challenges, from sorting out how it will oversee the system to assuaging the privacy concerns of users to determining how to funnel money in and out of its currency—a process that, for other cryptocurrencies, is typically handled by exchanges. It also has to contend with the realities of the global economic system, which runs on euros and yen as well as dollars. Even if it backs the currency with a basket of currencies, as reported, it “can’t be stable with every currency in the world,” says Gans. “That’s not how the world works.” Hence the need to enlist financial partners to smooth transactions in and out of Facebook’s system.
Bottom line: It’s very unclear how this will work in practice. “There are a lot of moving parts. Facebook doesn’t always do what we expect,” says Gans.
There has recently been a lot of interest in using cryptoeconomic or token-based techniques for fighting spam, maintaining registries, identifying fraudulent ICOs, reducing manipulability of upvoting, etc etc. However, this is an area where it is easy to create something very exploitable, or fail to achieve one’s goals, by building the application in the wrong way.Cryptoeconomics in social media has unique challenges; particularly: The inherent subjectiveness of judging the quality or suitability of a given message Rampant speaker/listener fault ambiguities 8 The public-good nature of internet content, making it difficult to incentivize The inability of a blockchain to know what happened “in the real world”, or make any measurements of the real world (with limited exceptions, eg. mining hashpower)However, there are ways to design primitives that sidestep these issues in different ways.This list is an ongoing work in progress.
It’s hard enough to get enterprises that compete with each other to work together as a team, but it’s especially tricky when one of those rivals owns the team.Shipping giant Maersk and tech provider IBM are wrestling with this problem with TradeLens, their distributed ledger technology (DLT) platform for supply chains.Some 10 months ago, the project was spun off from Maersk (the largest container shipping company on the planet) into a joint venture with IBM. But in that time the network has enticed only one other carrier onto the platform: Pacific International Lines (PIL), one of eight shipping lines in Asia and 17th in the world based on cargo volumes.As those involved admit, that’s not enough.