Posted on

January's Top Large Cap Crypto? Not Bitcoin or Ether…

January turned out to be a difficult month for the cryptocurrency markets.

Bitcoin, the world’s largest currency by market capitalization, dropped close to 30 percent, meaning its market capitalization shaved off billions after a torrid end to 2017. Meanwhile, excitement seemed to fade as the total value of all cryptocurrencies taken together topped out at $830 billion on Jan. 7, ending the month below $500 billion.

However, amid the gloom and doom, a few small-cap tokens managed to put on a good show.

For instance, names like VeChain, NEO, Populous and Stellar dominated the list of gainers among the top 25 cryptocurrencies by market capitalization (as of Jan. 31).

Here’s a closer look at their performance.

VeChain

  • January performance: +146 percent
  • All-time high: $9.55 hit on Jan. 22
  • Price on Jan. 1: $2.26
  • Price on Jan. 31: $5.58
  • Rank as per market capitalization: 18

Boasting an association with enterprise firms in China, VeChain has been aiming to use an open blockchain network to revolutionize the internet of things (IoT) since late 2016.

But despite the partnerships, it hadn’t garnered much attention throughout 2017’s cryptocurrency boom, trading under $1 as recently as December, up from as low as $0.20 in November.

That seems to have now changed, as the blockchain recently announced it will be rebranding VeChain (VEN) into VeChain Thor (VET/THOR) this month, a plan of action that may have sparked the interest of investors eager to chase gains in a cooling market.

To date, the project has garnered attention from Chinese state media and has also partnered with the China National Tobacco Corporation to develop and implement blockchain solutions.

NEO

  • January Performance: +95 percent
  • All-time high: $194.70 hit on Jan. 15
  • Price on Jan. 1: $74.54
  • Price on Jan. 31: $145.76
  • Rank as per market capitalization: 7

Sometimes referred to as “China’s ethereum,” neo has aimed to build a smart economy in much the same way as its larger competitor, though without the same enterprise fanfare.

Still, the retail market has shown a strong interest. Launched in Dec. 2016, neo weathered the storm created by China’s ICO ban in September last year to rebound with a strong start to 2018, possibly due to its innovative features. (Notably, it differs from ethereum in a sense that it can’t fork.)

The cryptocurrency is down 30 percent from the all-time high of $194.70.

Populous

  • January performance: +72 percent
  • All-time high: $75.60 hit on Jan. 29
  • Price on Jan. 1: $40.35
  • Price on Jan. 31: $69.78
  • Rank as per market capitalization: 23

Populous, an invoice and trade financing platform built on ethereum, aims to establish itself as a top player in the $3 trillion alternative business lending market.

Its token PPT surged in value last month reportedly due to increased interest among the investor community about its platform beta.

Lottery balls image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Interested in offering your expertise or insights to our reporting? Contact us at news@coindesk.com.

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

Posted on

Don't HODL, BUIDL: How Blockchain Tech Will Add Value in 2018

Ajit Tripathi is a EMEA partner at Consensys Enterprise, and a former director of fintech and digital banking at PwC, where he co-founded its UK blockchain and smart contracts practice.

The following article is an exclusive contribution to CoinDesk’s 2017 in Review.


I have come to trust Vitalik Buterin to ask the most important questions in blockchain.

The ethereum founder did that again last month when he asked in a tweet: “Alright, the crypto market is now worth $525 billion, but how much of that valuation have we really earned?”

We can answer Vitalik’s question by using the tried-and-true method of discounted cash flows.

This time isn’t different

During the 1990s dot-com boom, valuation by counting eyeballs and various other body parts was rampant.

During the housing boom, valuation was whatever you wanted by tuning projects’ default rates, prepayment rates, volatility and correlation.

During the current crypto boom, science fiction such as network-based valuation, technical analysis, Metcalfe’s law and Moon-based valuation have all blossomed.

Unfortunately, whenver bubbles burst, discounted cash flows return with a vengeance.

So, while we all believe blockchain technology can solve all our problems including valuation problems, let’s pretend this time is not different, and one day either everyone in crypto will have to generate fiat cash flows in some form.

The less likely that you will get the cash you think you will get in the future, the higher the discount rate. That is a big mess when you are dealing with anything except government bonds, which academic orthodoxy treats as risk-free (never mind the humongous national debt).

Asset pricing gets even worse when commodities and currencies are involved and we have to start watching costs and benefits of HODLing all your digital GODL or any “implied interest rate” you might earn on your GODL. That forecast of net benefit to the HODLer is basically your cash flow forecast.

So, as Vitalik pointed out – the crypto market is worth $525 billion but what did we do that is worth that in the future?

The question is what did we solve, enhance, or deliver that will make individuals, companies or governments produce more, be more efficient, or enjoy their lives and relationships more?

At a high level, we can ask:

1. What features (e.g. Truffle), products (e.g. UPort) or platforms (e.g. Digital Trade Chain) did we build that a consumer is using or benefiting from? No, I don’t mean tether, Telegram chat channels, or proofs of concept.

2. Which enterprise solutions went live and how much new revenue or efficiencies did they create? This includes the work ConsenSys and IBM are doing in Dubai, trade finance platforms by IBM and R3, MUFGCoin and so on.

3. How much did we improve the infrastructure and stack by in terms of scalability, privacy, confidentiality and other such nice things? Quorum, zcash, Fabric, Corda, Coco – all count.

4. What original business models and technologies were created in 2017? ERC-20 tokens and CryptoKitties are included. Stablecoin crypto exchanges are excluded.

5. For each of these, what’re the odds that we will see the invention used by a real person or enterprise over time? In the absence of any information, let’s assume 50% for each.

Incremental value added in 2017

There is simply no way that we baked $500 billion worth of additional consumer value last year that we didn’t have in 2016 and all we had then was PoCs and a few promising ideas.

Any which way you make your list, there was just not enough useful kit in consumer or enterprise production last year.

Bitcoin scraped through to Segwit and all sorts of forks. A very large set of ethereum tools and solutions was released; Quroum, Corda, and Fabric became useful in the enterprise ecosystem, and a very small number of consortia got into technical production.

We bypassed VCs and made it possible for good, bad, and ugly blockchain startups alike to fund their runway.

When we calculate the value of ERC tokens and CryptoKitties, we will subtract the future disasters from future Amazons and probably get a much smaller number than the $3 billion that was raised last year in ICOs.

Then we will thank Vitalik that all this money that could have gone into a largely useless coin instead went into useful tech.

Why I bet on ethereum

Yes, there will be a lot more value created with blockchain in 2018 and even more the year after but there’s so much future baked into the prices today – and it may need to be swapped around as we learn more.

I suspect that each year, half of the ICO-funded startups from the previous year will die – if they even make it that long.

Yet there will be the next Amazon or Google or Netflix in there. If you know how to pick them, go ahead. I don’t.

This is why I am making a big bet of time on ethereum rather than a bet of money in crypto.

Ethereum has momentum, developer adoption, and a team that is willing to address the technical limitations even at risk to the price of ether.

It has people who are serious about the Web 3.0 vision and solving real consumer and business problems.

Does that mean $7, $70, or $700 billion is a fair value for ether? I can’t say. Whether ether will go to the moon in 2025 depends on if ethereum is still the public blockchain in widespread use or if someone comes up with something much better, and if ethereum refused to evolve like some other crypto networks have.

Does that mean you should buy ether today? I can’t and don’t offer investment advice.

Should you start learning how to use ethereum to build solutions and decentralized businesses? Definitely – my son is learning how to build with ethereum and he is 14. He can do quite well just knowing how to build solutions for other people.

BUIDL, not HODL

When we are dead, it’s not what we HODL or SODL that matters. It’s what we BUIDL

So I advise everyone to think about that and BUIDL. Those who BUIDL do seem to enjoy it and look happier than the rest of us.

Besides, since BUIDLers don’t have the time to day trade or buy dodgy coins, they are also a lot less likely to get REKT.

The leader in blockchain news, CoinDesk strives to offer an open platform for dialogue and discussion on all things blockchain by encouraging contributed articles. As such, the opinions expressed in this article are the author’s own and do not necessarily reflect the view of CoinDesk.

For more details on how you can submit an opinion or analysis article, view our Editorial Collaboration Guide or email news@coindesk.com.

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

Posted on

Public Blockchain's Lure Will Become Irresistible for Enterprises in 2018

Paul Brody is a principal and global innovation leader for blockchain technology at EY.

The following article is an exclusive contribution to CoinDesk’s 2017 in Review.


Say what you will about Cryptokitties, but the app does something today that nearly all enterprise blockchains still cannot: exchange one item of value, a cryptokitty, for another item of value, ether.

That item of value may be silly (a digital kitten), but to those who care about them, it’s really enough.

More importantly, the entire contract and transaction, including the exchange of product, takes place on the ethereum blockchain. At EY, our hypothesis is that this kind of low-friction, closed-loop economic transaction is, in fact, the ultimate end game for most enterprise blockchain aspirations.

We’re still very far from that destination, however.

Right now, many enterprise blockchains are still operating like distributed databases and notary services, often with very specialized objectives, such as tracking product provenance. This is a useful start, but if we are not careful, it could be a dead end — a fancy, hacker-proof database, where the software company has replaced the central bank as the intermediary of choice.

To deliver on the full promise of blockchain technology, we believe that enterprises must embrace the full power of tokenization, and ultimately, the allure of the public network. And, 2018 is the year that this will come into view as the future of this technology.

Time for tokens

The foundation of this high-value future is the concept of tokenization: representing a company’s products and services as digital tokens on a blockchain, not merely as items of information, but as carriers of value.

Such digital tokens can stand for anything from pharmaceuticals to phones to music. Whatever they are, they should have assigned ownership and value. If you have a pallet of 1,000 mobile phones, each worth $1,000, that’s on a ship in transit, the blockchain should represent that with 1,000 small tokens with a collective value of $1 million.

When products are made, delivered or sold, value in the blockchain can change hands: 1,000 phone tokens for $1 million in U.S. dollar tokens. Not just bitcoin or ether, but U.S. dollar. Or euros or yen for that matter.

Set aside the debate about the value of traditional fiat vs. cryptocurrencies for the long run. The simple fact is that enterprise CFOs want to be paid the same currencies in which they have expenses and long-term liabilities.

That means tokenizing traditional fiat currency and doing so in the same blockchain as the products and services are tokenized.

Having both types of tokens in the same blockchain is critical — it is what enables the seamless, low-friction and low-risk exchange of items of value. Cross-chain connections are a nice idea, but they can’t beat the power and simplicity of direct exchange.

Central banks are already experimenting with the tokenization of their own currencies, but doing so in private, permissioned or proprietary blockchains that are managed by the central banks. It is a good start, but the next logical step is to create the legal and regulatory framework that enables the tokenization of fiat currency on any industrial or public blockchain.

Once a closed-loop tokenized industrial blockchain exists, many of the key foundations of specialized blockchains would become add-on features in the true economic blockchain. Trade finance is easy if you trust that the representation of 1,000 phones, each worth $1,000 is accurate — you can loan money against those tokens in the blockchain.

Similarly, customs declarations, tax calculations, and product history and provenance are all easily derived from looking at the history of the tokens in that blockchain. No separate blockchain is required for trade finance, payments or product traceability.

Next steps

This vision of the future will start arriving in 2018, and it will have two clear stages.

The first will be the development of what we are call full cycle economic blockchains, where products and services are tokenized and exchanged through digital smart contracts for digital currency tokens. This foundation will likely start with sales, procurement and logistics, and will then go on to see the addition of related services, such as trade finance.

The second phase of this will be the gradual emergence of public blockchains as the preferred ecosystems for these transactions.

We believe that decentralized public blockchains are the only way by which enterprises will truly and deeply commit to digitizing their products and services in a fully interoperable manner. No company will want a centralized intermediary to become the main point of exchange for trillions of dollars in products and services: that entity will have far too much power as a natural monopoly, protected by powerful network effects.

This second phase will depend on how quickly transaction privacy tools such as zero-knowledge proofs (and related zk-snarks and zk-starks) mature.

Right now, transaction scalability and data privacy are not yet ready for multiple competing enterprises to put their strategic transactions into a public blockchain and feel confident they are secure, but that those risks will start to fade in 2018.

Beyond privacy, there are still many challenges to making public blockchains usable for enterprises, including how to implement the rule of law and related know-your-customer and anti-money-laundering regulations.

We believe these are solvable problems and that they can be addressed without the need for centralization. We’re already testing our ideas of how to audit decentralized fiat currency tokens on public networks in ways that will company with AML and KYC rules, for example.

In the end, the lure of the public blockchain network is overwhelming. It’s the only place where companies can be sure they are being treated fairly on a transparent, inspectable and open playing field.

In 2018, the foundations for this future will emerge and the first pilots of these concepts will be visible on the world’s public blockchain networks.

Magnet image via Shutterstock

The leader in blockchain news, CoinDesk strives to offer an open platform for dialogue and discussion on all things blockchain by encouraging contributed articles. As such, the opinions expressed in this article are the author’s own and do not necessarily reflect the view of CoinDesk.

For more details on how you can submit an opinion or analysis article, view our Editorial Collaboration Guide or email news@coindesk.com.

Posted on

2018's Challenge: Promote Responsible Blockchain Innovation

Beth Knickerbocker is chief innovation officer at the Office of the Comptroller of the Currency, the U.S. agency that charters, regulates and supervises all national banks.

The following article is an exclusive contribution to CoinDesk’s 2017 in Review.


Innovation in financial services is critical to meeting the nation’s changing consumer and business needs, and the OCC’s Office of Innovation is working to promote responsible innovation in the federal banking system.

Operational since January 2017, the Office of Innovation is responsible for improving the agency’s ability to identify, understand and respond to financial innovation affecting the federal banking system and serves as the agency’s central point of contact and clearinghouse for innovation-related matters.

Early last year, the Office hosted “Office Hours” in technology hubs New York and San Francisco with more than 40 banks and non-banks to gain a better understanding of common issues and concerns that these entities face regarding innovation-related products, services, and emerging technologies.

The goal of the meetings was to provide these entities with candid regulatory advice and give participants a welcoming environment in which to express their views. Other topics discussed at these informal meetings included partnering with banks, third-party risk management expectations and how best to prepare to operate in a highly-regulated environment.

Action points

A dedicated web page was established on OCC.gov with links to innovation guides for community banks, financial technology companies (for example, marketplace lenders and startups in the blockchain technology and cryptocurrency space), and other non-bank institutions.

The page describes the OCC’s Responsible Innovation Framework and provides links to innovation-related news, speeches, and special purpose national bank charter information. Banks, non-bank companies, and fintech companies can contact the office through a dedicated e-mail address or phone number.

In addition to Office Hours, the OCC participated in more than 50 outreach events related to fintech and responsible innovation. Additional outreach and awareness efforts included collaborating and sharing information with other domestic and international regulators.

Internally, the Office conducts research, develops awareness materials, and maintains a library of fintech and innovation-related news articles, podcasts, and other resources. This material is available to the OCC workforce so that examiners, in particular, are prepared to discuss innovation topics with bankers and to answer questions about the OCC’s responsible innovation efforts.

The Office is also working with the OCC’s Continuing Education department on updating training plans to help OCC staff learn more about responsible innovation.

In March 2017, the OCC published a draft supplement to the Comptroller’s Licensing Manual describing its proposed approach to chartering fintech companies.

The draft supplement clarifies the agency’s approach to evaluating national bank charter applications from fintech companies, describes how it would supervise these banks and articulates expectations for how these banks would ensure fair access and fair treatment for all customers.

To date, the OCC has not decided whether to exercise its authority to grant special purpose national bank charters to non-depository fintech companies under 12 CFR 5.20(e)(1).

In a July speech to the Exchequer Club, Acting Comptroller of the Currency Keith Noreika made clear that fintech companies can seek national bank charters under other authorities used to charter full-service banks, as well as other, long-established special-purpose national banks, such as trust banks, banker’s banks, and Competitive Equality Banking Act (CEBA) credit card banks.

Outlook

Looking ahead to 2018, the OCC is considering developing a program for the OCC to participate in bank pilots to further the its understanding of innovative products, services, processes, or technologies.

A program such as this may accomplish the same goals as what others call “sandboxes,” and allow the OCC to foster responsible innovation by OCC-supervised banks and enable participants to obtain OCC feedback early in the development process.

Information gathered in the pilots could also inform OCC policies and ensure that we are ready to supervise the new activity when implemented on a larger scale. Pilots, however, do not provide a safe harbor from banks’ compliance responsibilities.

Also in 2018, the OCC will expand its Office Hours program to other financial innovation hubs, build on its outreach and research efforts, and improve the awareness and knowledge of OCC staff on emerging trends in the industry.

The OCC will continue to identify ways to promote and support banks interested in engaging in responsible innovation by partnering with fintechs and other non-bank companies in a safe and sound manner, reducing costs and increasing earnings, and serving their customers more effectively.

Rope net image via Shutterstock

The leader in blockchain news, CoinDesk strives to offer an open platform for dialogue and discussion on all things blockchain by encouraging contributed articles. As such, the opinions expressed in this article are the author’s own and do not necessarily reflect the view of CoinDesk.

For more details on how you can submit an opinion or analysis article, view our Editorial Collaboration Guide or email news@coindesk.com.

Posted on

Enterprise Blockchain Is Ready to Go Live in 2018

Mark Rakhmilevich is Senior Director of Blockchain Product Management at Oracle. He’s working on Oracle Blockchain Cloud Service and guides enterprises, ISVs, and SIs in building blockchain applications and integrating enterprise systems with this platform.

The following article is an exclusive contribution to CoinDesk’s 2017 in Review.


Talk to enterprise blockchain enthusiasts and they will tell you about the potential use cases in their industries and the proofs-of-concept they have run to prove blockchain value in the enterprise.

Ask them about production deployments… and they demur, pointing out implementation challenges and production-readiness gaps.  

Will this change in 2018 and will we see a significant shift from experimentation to production deployments of enterprise blockchains?

In numerous customer conversations during 2017, the challenges to moving even successful use cases from successful PoCs to pilots and production boil down to five areas of enterprise-grade requirements: performance at scale, operational resilience, security and confidentiality, supportability and management, and enterprise integration.

Enterprises experimenting with blockchain use cases are recognizing the need to address these challenges, and in 2017, some vendors, (including my company, Oracle), announced blockchain platforms focused on these requirements.

With all of the enhancements coming in enterprise blockchain platforms, 2018 will be the year enterprise blockchain goes live and businesses can move from experimenting to production.

Performance at scale

Many enterprise systems handle business transactions at a rate of hundreds or thousands per second. For example, a large Asian telecom handles more than 100,000 billing and mobile payments transactions per second (tps), and a major credit card processor was running over 13,000 tps at peak a number of years ago. Naturally enterprises are concerned about creating large blockchain networks with hundreds or thousands of members, handling growing transaction volumes, and providing sub-second transaction latency.

While today’s blockchain applications may not require these throughput levels, most real-world blockchains do not even approach 100 tps – bitcoin averages 7 tps and ethereum is about twice that, while the transaction wait times (latency) can run into minutes or hours. Enterprise blockchains not only need much higher throughput, but also transaction latency of less than a second for many businesses use cases.  

Reaching beyond these limitations requires an architectural approach that uses separation of concerns (different types of work are done in separate, independently scalable servers or containers), leverages asynchronous flows, exploits parallelization, uses faster consensus protocols, and runs on optimized execution environments.

Some of these architectural principles are already present in Hyperledger Fabric, a Linux Foundation project that Oracle joined in 2017, but more can be done leveraging the experience from those same systems delivering hundreds and thousands of tps at many enterprises to reach the transaction throughput and latency enterprises need.

In addition, scaling a permissioned blockchain, where all members are linked to legal entities, to dozens or hundreds of participants also requires a robust and efficient on-boarding process. Enterprise PoCs rarely include more than a dozen participants on a single blockchain.

Some onboarding processes make assumptions and take short cuts that do not withstand real-world scrutiny, so effective tools will be required to handle adding organizations onto the business network in production, with all the necessary verification and approvals processes, and in a streamlined way that can leverage established identity management services.

Joining members must be able to deploy their validating nodes using multiple, highly available resource pools across distributed cloud or on-site data centers in an open, hybrid environment.

Resilience

Enterprise systems are built to avoid downtime with highly available services and to recover rapidly when (not if) some components fail. Avoiding small issues leading to major outages and quick recovery from failure are key to ensuring high availability in any business-critical system. Software and hardware is subject to failures – and the first design principle of resilient systems is to assume failures will happen and to be prepared to keep the overall system running in these situations.

Traditional enterprise software from Oracle and others use replication of services and redundancy to ensure that the system survives an outage of any single and even multiple components. Similarly, deploying redundant peer nodes per member organization, clustered ordering service, and replicating other blockchain network components is an important foundation for resilient blockchain infrastructure, which is enabled with Hyperledger Fabric’s architecture.

Beyond redundancy, autonomous monitoring and recoverability of failed components, as well as continuous embedded backup of configuration information and ledger data can ensure rapid autonomous resolution of most glitches without manual intervention.

Minimizing intervention is an important aspect, as research shows that around 70 percent of outages are due to human error introduced while correcting other issues or adjusting configuration.

Security and confidentiality

Security assessments of blockchain deployments look at how blockchain can restrict transactions and ledger access to authorized participants, ensure encryption of data in-transit and at-rest, and verify that network messages are tamper-proof and their digital signatures are valid.

Enterprise blockchains start with a permissioned network model, meaning that all members are known legal entities and must be enrolled though membership services, which issue enrollment certificates. These cryptographically signed certificates securely link member identity and authorization attributes with the cryptographic key that enables authentication of their digitally signed messages.

Digital signatures applied to all network messages enable all nodes and clients to verify the sender and validate message integrity. This is coupled with transport security to authenticate the communications end points and encrypt the message traffic.

Further, automatically applying encryption for the stored data completes the best practices for encrypting data in transit and at rest. When this foundation is used transparently and pervasively for all secure communications and stored ledger data, it’s a big step forward in maintaining the integrity and security of the blockchain network, preventing most hacking attacks.

When a blockchain certificate authority enrolls a new member organization and issues its digital certificates, the underlying process depends on properly authenticating the organization’s identity and access privileges. This requires strong identity management and key management capabilities.

Moreover, since even in secure environments credentials can be stolen via spearfishing or social engineering attacks, a certificate revocation mechanism must be available as an integral part of the solution to prevent the use of compromised certificates.

Further, securing ongoing access to blockchain REST APIs or operations interfaces from external client applications or admin users requires strong multi-layered access control – with logical, physical, and data security controls, coupled with adaptive or behavioral authentication – comparing users’ behavior to historical patterns and generating alerts for significant deviations.

In addition to external security, enterprise blockchain must have the ability to conduct confidential transactions, e.g., using channels in Hyperledger Fabric, which insulate peer nodes and maintain private ledgers that are only accessible to other peers on the same channel.

Additional important capabilities, such as fine-grained authorizations for enforcement of access control within a smart contract, private peer-to-peer interactions that limit visibility of transaction information from other peers and selective encryption of the sensitive data for restricted access by authorized peers, are necessary to further enhance data and transaction privacy.

Supportability

Once an organization builds a PoC and proves the value of applying blockchain to a particular use case, how does it put it into production to achieve the promised results?

Who’s going to assemble, harden, and support the blockchain network components, and all their supporting infrastructure? Who will provide troubleshooting, day-to-day administration and monitoring, and deal with patching or upgrades to new versions? With a production blockchain, operations and supportability become critical, including blockchain operations and dynamic configuration, ability to monitor service-level agreements, troubleshoot anomalies, and manage a patching/upgrade lifecycle with backward compatibility.

One answer is blockchain as a managed service (BaaS), which leverages a service provider’s ready-to-deploy infrastructure and operations capabilities to manage, monitor, patch, and maintain the infrastructure, while enterprises focus on the application-delivered value of using the blockchain.

The service provider would integrate and maintain the foundational technologies required to run the blockchain, monitor and troubleshoot the blockchain network, and provide an operations interface for the members to perform dynamic configuration, monitor SLAs, and manage policies as well as tools to manage smart contract lifecycle – deploy initial chaincode, upgrade to a new version, etc.

Integration

Many of the multi-party processes and business-to-business interactions that would benefit from using blockchain touch a number of enterprise systems of record (SORs.)  

In the near term, blockchain will extend rather than replace many current enterprise systems of record (e.g., core banking, enterprise resource planning, supply chain management, human capital management.) But building these integrations one by one is very complex and costly. Business need pre-built onramps for enterprise systems and modern event and API-driven integration methods to invoke transactions, share data, and capture blockchain events and ledger updates into systems of record (SORs)

For example, a shipping transaction initiated in a supply chain management system can trigger a blockchain transaction to update the order information and related metadata stored in distributed ledger. In an outbound integration example, an account transfer associated with an invoice settlement in a blockchain system may emit an event to update an internal general ledger account.

Turning an isolated blockchain PoC into a fully fledged part of the enterprise IT depends on ability to simplify and accelerate such integrations. Application integration toolkits that address typical business processes and events is one promising approach.

This can be further extended with API-driven development that relies on managed API platform using REST APIs for invoking blockchain transactions and querying the distributed ledger. These can help to quickly deliver new applications that drive enterprise innovation and integrate existing back-end systems, such as General Ledgers, ERPs, SCM, and other systems that are key to information sharing and transactions with external organizations.

Conclusion

Last year saw a lot of blockchain experimentation in the form of PoCs and pilots in financial services, supply chain and a number of other industries as well as government operations (e.g., the U.S. General Services Administration’s FASt Lane process for IT Schedule 70 contracts).

For these to move toward production in 2018, the technology needs to mature in the key areas outlined above. But open source consortia like Hyperledger and enterprise software vendors like us at Oracle are stepping up to the challenge to deliver on these requirements.

Together we will help enterprises fully adopt blockchain technology as a part of their business-critical IT systems.

Sky scrapers image via Shutterstock

The leader in blockchain news, CoinDesk strives to offer an open platform for dialogue and discussion on all things blockchain by encouraging contributed articles. As such, the opinions expressed in this article are the author’s own and do not necessarily reflect the view of CoinDesk.

For more details on how you can submit an opinion or analysis article, view our Editorial Collaboration Guide or email news@coindesk.com.

Posted on

5 Blockchain Developments Coming in 2018

Peter Loop is associate vice president and senior principal technology architect at Infosys, where he focuses on delivering enterprise cryptocurrency and blockchain ledger technologies, API management and cloud migration of enterprise systems.

This article is an exclusive contribution to CoinDesk’s 2017 in Review opinion series.


During the course of 2017, we saw big technology players making moves in blockchain.

In addition to Microsoft and IBM, Oracle announced in October a new cloud-based blockchain-as-a-service offering, while SAP opened up early access to its own version of the offering in May. With these updates, and others, it’s safe to say that Fortune 500 companies are now pairing with providers to explore blockchain’s uses in their businesses

These are examples of the type of adoption and validity we expected to see in 2017, but even these positive developments can still be considered scratching the surface.

Government bodies are also collaborating on the many potential benefits of blockchain, and bold entrepreneurs are thinking about how the tech can be used as the basis for new smartphones and apps.

Even the recent frenzied nature of bitcoin – which has stunned the investment community and has caused both scorn and praise – can’t disrupt the ongoing progress of blockchain. While we follow bitcoin’s journey, let’s look ahead at what we can expect to see unfolding in 2018:

1. Asia and the Middle East will aggressively push blockchain

Interest in blockchain continues to be very high in Asia and the Middle East, where some of the largest banking institutions are forging ahead with blockchain projects or service offerings, particularly in payments.

For example, banks in Japan and South Korea have just begun testing a blockchain technology that could achieve same-day international transfers and cut costs by nearly 30 percent.

2. Cybersecurity will amplify blockchain adoption

With the rise of ransomware attacks demanding cryptocurrencies, blockchain and IoT cybersecurity will emerge with defenses based on cryptocurrency technologies.

While this may sound fantastical and futuristic, the emergence of blockchain cybersecurity tools may be the next big thing in blockchain. With major breaches such as Equifax proving that companies generally cannot safeguard current identity data systems, the need for a more secure blockchain-based identity approach, in which no one holds all the keys, will emerge.

3. ICOs will take off

There was a seismic jump in ICOs in 2017, and the ecosystem of cryptocurrencies has expanded in a huge way. In the next year, the pace of ICOs will grow significantly faster, and will overtake venture capital funding.

4. Finance and insurance will go all in

The insurance and finance sectors are two of the most likely to experience deep, and threatening, disruption from blockchain technology.

Insurance will emerge as a hot area as claims processing and complex multi-party processes like subrogation will show the business value of blockchain-based automation. And, JPMorgan will open a cryptocurrency trading desk, despite Jamie Dimon’s viral comments dismissing the validity of cryptocurrencies.

5. Automation, privatization are coming

Blockchain will drive digital transformation of the enterprise specifically with automation, digitization of processes, tokenization of physical assets and activities and codification of complex contracts.

In addition, governance issues will continue to plague bitcoin (Segwit2x), ethereum (frozen Parity funds) and others as new challenges emerge. This will drive enterprises to “private” blockchains but will not slow down the growth of core cryptocurrencies.

Airplane window view via Shutterstock

The leader in blockchain news, CoinDesk strives to offer an open platform for dialogue and discussion on all things blockchain by encouraging contributed articles. As such, the opinions expressed in this article are the author’s own and do not necessarily reflect the view of CoinDesk.

For more details on how you can submit an opinion or analysis article, view our Editorial Collaboration Guide or email news@coindesk.com.

Posted on

Blockchain in the Boardroom: Moving Toward Enterprise Deployment

Iliana Oris Valiente (CPA, CA, CBP) is a managing director and global blockchain innovation lead for Accenture’s emerging tech division. She is also the founder and chair of the board at ColliderX Blockchain R&D Hub.

The following article is an exclusive contribution to CoinDesk’s 2017 in Review.


While the price of cryptocurrencies and the ICO market tend to steal the spotlight, behind the scenes a growing number of enterprise businesses are evaluating blockchain technology.

These companies seek to enhance the business processes that impact our everyday lives.

Examples are processes that enable us to:

  • Deliver products from a supplier to our homes in time for the holidays
  • Make sure that financial payments are processed on time
  • Provide music and media content for entertainment while making sure the royalties reach the artists
  • Trace the quality and provenance of food from farm to table.

Large enterprise adoption of blockchain technology may not initially make as many waves as electronic peer-to-peer cash, but in many ways it’s just as important.

For anyone who attended CoinDesk’s Consensus conference in May, the growth in the number of attendees in business attire (relative to the number of technologists in the proverbial hoodies and jeans) did not go unnoticed. From the introduction of this nascent technology a few years ago, it’s taken some time for the enterprise community to take a closer look and to recognize that many of the principles of blockchain technology, originally utilized in the bitcoin protocol, could be leveraged in the enterprise world.

For those unfamiliar, the enterprise blockchain adoption timeline looks something like this:

  • 2013-2014 was characterized as a period of learning, understanding the distinction between bitcoin, the currency, and the underlying protocol.
  • 2015 introduced the concept of permissioned or consortium blockchains, as well as the term DLT (distributed ledger technology).
  • 2016 was the year of the prototype or POC (proof of concept), where success was measured based on how many use cases for an industry or company could be identified.
  • 2017 was braver, focusing on how companies could move beyond a POC and into a pilot, in preparation for production-level deployment.

The state of play

Additionally, it was a year of technical advances that will enable those pilots to go further. Enterprise-grade version 1.0 implementations were released by Hyperledger Fabric and R3‘s Corda.

It could also be argued that periphery and supporting institutions such as law firms, regulators, insurers and other necessary (yet ancillary) organizations began to realize the benefits of blockchain. For example, today, many lawyers are studying the technology as a way to enhance the time it takes to finalize patents or resolve contract disputes (via smart contracts.)

Working at Accenture, we have the good fortune collaborating with some of the world’s largest organizations (our clients span the full range of industries including more than three-quarters of the Fortune Global 500).

Accenture’s blockchain practice incorporates alliances, partnerships and leadership positions in every aspect of the blockchain ecosystem including the Hyperledger project, the Enterprise Ethereum Alliance (EEA), the Blockchain Research Institute (BRI), the Hashed Health Consortium, plus a variety of start-ups, and open-source communities.

We have a neutral, big-picture view of the blockchain ecosystem.

As a result, that enables our team to make educated observations about a wide range of technology trends. For example, whereas the interest in blockchain tech started with financial institutions, this year we’ve seen growth in adoption across industries. Some of the most impactful use cases were found in the supply chain, identity management and the public sector – especially around registries (with Delaware, Estonia, and the Province of Ontario for instance).

The one sentence summary that best describes the journey of enterprise adoption of blockchain tech and where this is all headed in 2018:

“Clients have moved beyond learning about blockchain and the disrupters are creating strategies to achieve real business transformation.”

2017’s FAQs

Put another way, enterprise clients have become more educated about blockchain.

In my practice at Accenture, this evolution is clear from the increasingly more sophisticated questions they ask us — a telling marker of the progress made and an indicator of what we can expect to see in 2018.

Beyond the technical specifications of what blockchain technology can do and how certain configurations are more advantageous, some of the most interesting questions that arise are not actually technology driven.

Rather, they mostly relate to the strategic shifts needed and corresponding change management.

Yet, our forward-thinking clients are wrestling with key questions based on how they, and their ecosystems, could transform business processes using blockchain technology.

These include:

  • If this is not just a technology, but rather a paradigm shift, what will our business look like in 10 years?
  • Given that this is a network technology, how do we find and participate in the relevant consortiums?
  • On a use case specific basis, how do we identify and align interests with other stakeholders?
  • Will these new blockchain-powered networks be run as a separate business venture of sorts?
  • How do we find and develop talent in a decentralized world? (We’re seeing investments made in academic partnerships, research initiatives, and training)

Why reinvent the wheel?

Arguably, in addition to everything listed above, one of the most powerful questions I encourage our enterprise clients to ask is, “What are we NOT thinking about?”

My response to the question above is simple; look at the new frontier of blockchain startups and initiatives that are related to your industry, but that are being incubated, tested and deployed outside of the enterprise community. These are oftentimes the open source, public blockchain projects that are re-imagining the way the world operates.

As a technology agnostic partner to our clients – we see the startups pitching their products to clients, or to us as potential systems integration partners.

In my view, as a result of our involvement across the blockchain spectrum, it’s becoming harder to ignore the parallels between the products being built by generation 2.0 blockchain companies and the systems we have in place today. Many blockchain startups initially started to compete with incumbents, only to realize that partnerships are the way to go to rapidly implement the solutions they offer. Others never set out to compete, and rather design new-world products targeting a different demographic of users.

The most obvious examples relate to the new crop of wealth management firms and products specifically designed for crypto assets, carrying out many of the functions of what existing financial institutions provide for traditional assets. Other examples include the ConsenSys hub-and-spoke method and their roster of decentralized projects.

Many blockchain ventures are, in fact, attempting to tackle the very problems our clients are trying to address.

Take Balanc3 – a next generation ERP system that seeks to tackle the construction of a triple-entry accounting system. Or Basic Attention Tokens (BAT), which run on the Brave platform, designed by Brendan Eich and the team that brought you JavaScript and Mozilla Firefox.

BAT seeks to modernize the publisher-advertiser-consumer relationship through the use of tokens between advertisers, publishers and users. Another example is DataWallet, the Draper-backed consumer-to-business data exchange that connects consumers directly with businesses.

When companies like these are mentioned in the boardroom, I am often met with blank stares. The blank stares are completely understandable. Established business with established business processes operate in a separate and distinct world from many of the new blockchain technology startups. In their defense, many blockchain startups are doomed to failure.

Anecdotally, they are often run by entrepreneurs with big ideas who lack the industry knowledge to understand the dynamics of the markets they are disrupting, the network effects or the regulatory complexity that takes a seemingly simple process and buries it in compliance. And that’s fine, 99% of startups fail – that shouldn’t be different in cryptocurrency world.

However, these initiatives could be wildly successful in 2018 because they are starting from scratch, funded through the increased gains of the crypto market or ICO funding – rather than by VCs or enterprise partnerships. Indeed, some of these business models are intentionally (or accidentally) defying the odds of what we would predict to be successful.

At a minimum, enterprises have an opportunity to learn from the unorthodox new ventures emerging in the blockchain world – either via a post-mortem review of the successes or missteps of a blockchain startup, or (preferably) by observing what’s going on during the life cycle of the startup.

And we’re certainly seeing this starting to play out – the Spotify acquisition of Mediachain in the spring of 2017 made headlines, and is likely to be a harbinger of what’s to come.

In Spotify’s case, we had the already established disruptor to the incumbents that saw the gap and possible challenge to its own business model (and hence opportunity) from further afield, and made a strategic bet to embrace the power of blockchain technology – sooner, rather than being surprised and caught off guard later.

What now? The 2018 agenda

In all, the progress being made on the enterprise front is tremendous.

We’re seeing fewer and fewer “blockchain for the sake of blockchain” undertakings and more impactful projects completed, such as Accenture’s recent work with the Monetary Authority of Singapore (MAS) on Project Ubin.

The work on Project Ubin illustrates how blockchain technology could significantly improve the kinds of payment systems that currently enable banks around the world to transfer trillions of dollars per day to each other and help them manage their financial liquidity. Recent announcements from the Australian Securities Exchange (ASX) about its forthcoming use of blockchain and the continuation of Project Jasper in Canada are other concrete examples that blockchain technology is being treated as a serious contender in the “most impactful tech” category.

For many enterprises, the journey starts with blockchain education and strategic thinking, and will certainly also result in new business models and collaborations. When it comes to blockchain, we will not know with certainty how the future state of the technology will look.

The best recommendation is to keep moving, learning, and testing out business models. In the midst of this technology paradigm shift, it’s ok to think really big – in fact, it’s imperative.

Colorful flag via Shutterstock

The leader in blockchain news, CoinDesk strives to offer an open platform for dialogue and discussion on all things blockchain by encouraging contributed articles. As such, the opinions expressed in this article are the author’s own and do not necessarily reflect the view of CoinDesk.

For more details on how you can submit an opinion or analysis article, view our Editorial Collaboration Guide or email news@coindesk.com.

Posted on

Blockchain and the Rise of Transaction Technology

Magda Borowik is the special envoy for fintech to the Minister of Digital Affairs of the Republic of Poland and the director of technology research at FinTech Poland.

The following article is an exclusive contribution to CoinDesk’s 2017 in Review.


The last couple of years were owned by the ‘fintech’ buzzword.

From startups to investors to government programs, fintech was everywhere. But within the last year, “regtech” and “govtech” have joined the conversation. Very often, you can spot the three in a thought-provoking proximity.

But, do they have something in common?

I believe they all can be described as transaction technologies that enable the secure transfer of value online – be it monetary or non-monetary value. Alternative financial technology, the use of modern computing, and also, technology as a means for building trust, all are tools that are needed by every government.

It’s no surprise then that applications are popping up in many areas – regulators and supervisors using DLT or cognitive computing, governments providing electronic payments for public services or social security. In Poland, strides have been made to harness emerging tech for digital identity, in such a way that it can be provided by the state along with banks and other institutions of trust.

Importantly, our national scheme of electronic identification is based on federated model, which means citizen’s identity is not only served by the state – banks, insurers and telecom providers are able to contribute, too.

This is an important distinction as transaction technologies are defined by the use of a special type of data, data that documents an exchange, agreement or value transfer between parties.

It’s a bit of information describing an event that includes the time and numerical value, and that specifies an agreement or value exchange of commercial or legal significance. Very often it relates to personal data and falls into the scope of banking secrecy.

A natural fit

In a digital dimension, all relations are transactions. Like it or not, that’s the way it is.

Administrations transact with citizens to provide them with trusted public services. They transact with businesses and governments, too. Sometimes citizens transact with government through business. Within strategic sectors, like energy or utility business, transacting is key.

In an increasingly data-focused economy, transacting data can even be said to be a special type of virtualized critical infrastructure. This is why states and businesses need to focus on assuring trusted data structures.

Blockchains and distributed ledgers, then, can be considered a tool for ensuring data integrity, immutability and trust. It does not mean we need to port everything to blockchain. But it can mean provide an additional, transaction layer to existing data structures, a robust audit trail on what happens on our critical infrastructure.

In this way, the possible role of distributed ledgers within digital state infrastructure too often goes unrecognized.

They can be a tool for licenses, rights and entitlements management. What the modern state mostly does is endorse, manage and verify ledgers of social relations; be it property titles register, ledgers of social security entitlements or identity ledgers – of who is a citizen and who can therefore participate in political dealings.

It’s a huge, important and largely under-appreciated and even overlooked function that state fulfills. Based on a social contract, the state is a large trusted entity.

How much we trust the state today is questionable, but the invention of distributed ledgers introduces a way of building a new type of institutional trust – trust in the computer code an institution operates, instead of relying only on trust in its human representatives. Human-to-machine is a new type of trust, which complements the one we traditionally put in people.

In order to progress with digitization, we need to ensure new type of digital trust, where appropriate investments are of highest priority.

Harnessing the potential

So, if distributed ledgers can act as a trust machine, what then?

The first step would be to audit our existing data resources – identifying, cleaning and structuring them in order to achieve organization. Then, a trusted transaction layer may be put on top. This means there won’t be an easy jump onto distributed ledgers for state-owned big data lakes.

Ensuring the integrity and immutability of random, inconsistent data makes no sense.

Still, within the scope of emerging transaction technologies, digitization can benefit from distributed ledgers in many aspects. Trusted data structures, arising from handling data with decentralized consensus mechanisms, can bring in additional value to many horizontal challenges, like e-commerce and legislative processes (where document version control and oversight is critical).

Ultimately, value transfer protocols and distributed ledgers may enable the functional digitization of public services, transforming the service stack together, not just rewriting each physical element to a digital twin. Particularly, if we consider value transfer protocols as digital public services, their use by the state becomes a bit more obvious.

In the coming months, governments around the globe will become more and more aware of the meaning of transaction technologies and the role they play in digitization. Having policies enabling experimentation with emerging transaction technologies will be key.

At the Ministry of Digital Affairs, Republic of Poland, we recently published a new industrial digitization strategy, in which transaction technologies are one of three key areas for growth.

Understanding requires experimenting, and experimenting is an act of humility – to acknowledge that there is no way of knowing without trying new things, making your hands dirty.

Understanding that truth is a first step, but it is important. I wish all government policymakers to act on it, in order to get well prepared for the future to come – sooner than later.

Calculator image via Shutterstock

The leader in blockchain news, CoinDesk strives to offer an open platform for dialogue and discussion on all things blockchain by encouraging contributed articles. As such, the opinions expressed in this article are the author’s own and do not necessarily reflect the view of CoinDesk.

For more details on how you can submit an opinion or analysis article, view our Editorial Collaboration Guide or email news@coindesk.com.

Posted on

What the Data Tells Us About Bitcoin in 2017

Jameson Lopp is an engineer at BitGo and the creator of Statoshi.info.

The following article is an exclusive contribution to CoinDesk’s 2017 in Review.


I’ve always been fascinated with the raw numbers relating to the operational status and growth of bitcoin, especially as we ride the rollercoaster of the adoption life cycle.

That’s why I created Statoshi.info in 2014 to track bitcoin metrics from the perspective of a full node.

To that same end, I’ve compiled statistical measurements of bitcoin’s growth in 2017 from a variety of sources.

A couple things are clear: bitcoin is at the forefront of an increasingly complex ecosystem that continues to grow in a variety of ways. And for the ninth straight year, it stubbornly refused to die.

While 2017 is well known as the year that institutional investors started showing interest in bitcoin, it was also picking up steam in smaller countries.

Academic interest continued to increase, which is great for the long-term prospects of this industry as we continue to gain a greater understanding of what we’re building.

Funding and forking

Venture capital funding continued to flow it in at pretty healthy levels, though there’s more to this story.

It may be that VC funding did not accelerate because new funding avenues have opened up for entrepreneurs in this space. The initial coin offering (ICO) boom of 2017 saw unprecedented levels of funds raised in a non-traditional form. CoinDesk’s ICO tracker logged over $3.5 billion in funds raised via ICOs!

On top of the ICO explosion we also saw another type of boom: in a new type of bitcoin fork that has come to be known as an “altcoin airdrop.”

While most of the crypto assets in existence have been created via software forks of Bitcoin Core, they have historically started with a new genesis block and thus a new distribution scheme for the tokens themselves.

You can see a fairly complete list of the airdrops at btcdiv.com, but many of them don’t even show up on market cap lists because they have little value.

From looking at the top few forks you could claim that about $50 billion in value was created/raised via bitcoin forks in 2017.

As an engineer who had to deal with the fallout from the fork frenzy, it became tiring pretty quickly as it was clear that the vast majority of these forks would not have sufficient value to warrant spending scarce developer resources trying to support them.

Technical development

At a protocol level, there was a great deal of work done in 2017. The Bitcoin Core repository in particular was a hive of activity.

Bitcoin usage

While you may think of bitcoin as being a cryptocurrency, some users think of it as a trust anchor. By embedding data into bitcoin’s blockchain, other systems can gain new properties such as tamper evidence and immutability.

The amount of outputs that embedded data into the blockchain more than doubled year over year, due to the increased popularity of platforms such as Blockstack, Colu, and Omni.

As adoption continued to increase, so did the size of the unspent transaction output (UTXO) set, AKA the state of all bitcoin ownership.

A more controversial aspect of the changing nature of bitcoin is the transaction fees.

While rising fees have caused significant frustration for users trying to transact in smaller amounts of value, an optimistic view is that the network security is on the right path toward sustainability.

If fees don’t eventually replace the block subsidy, then either the thermodynamic/computational security of the network will have to drop or perpetual inflation will have to be introduced in order to pay miners to maintain the same level of hashing power.

Bitcoin’s privacy properties are still pretty terrible, but at least we’re seeing some improvement on the address reuse metrics.

Network security and health

The size of the network mesh of nodes that validate and propagate bitcoin data is back on the rise after stagnating for several years.

As bitcoin becomes more valuable, miners are able to expend more energy securing the system from computational attack.

Technical improvements to block propagation continued to decrease the latency at which new blocks are seen by most peers across the network. This means that nodes come to consensus about the state of the blockchain faster, which reduces the occurrence of orphaned blocks.

Bitcoin economics

With an exchange rate increase of over 1,300 percent, bitcoin’s market cap increased past $230 billion, earning it 19th place globally in terms of M1 money supply.

While 30-day BTC/USD volatility was on the decline in 2015 and 2016, it began rising again in 2017.

On average, an estimated $12,000 per second was transacted via BTC in 2017 compared to ~$2,000 per second in 2016.

Interestingly, the output value of the average transaction (without trying to guess and subtract change outputs) appeared to rise along with the exchange rate. Almost as if BTC is being used as the primary unit…

And indeed, we can see from the raw UTXO value being spent that it was pretty consistent in BTC terms.

Bitcoin in 2018

Looking forward to 2018, Lightning Network development has been progressing nicely. I wrote about the promise of Lightning Network two years ago and it’s finally coming to fruition, though there are still plenty of challenges to overcome.

We’ve even seen Lightning Network payments conducted on the main network!

The next phase of development in the ecosystem will be speeding up economic interactions.

Payments via second-layer networks will be one leap forward, but the “atomic age” will usher in even greater innovations such as trustless, decentralized, real-time peer-to-peer exchanges.

I expect 2018 to be another exciting year with plenty of development and drama. Stay tuned!

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Blockstack and Colu.

Network image via Shutterstock

The leader in blockchain news, CoinDesk strives to offer an open platform for dialogue and discussion on all things blockchain by encouraging contributed articles. As such, the opinions expressed in this article are the author’s own and do not necessarily reflect the view of CoinDesk.

For more details on how you can submit an opinion or analysis article, view our Editorial Collaboration Guide or email news@coindesk.com.

Posted on

2018: The Year Blockchain, AI and IoT Converge

Jalak Jobanputra is founder and managing partner of FuturePerfect Ventures, an early-stage venture fund investing in decentralization and digital assets.

The following article is an exclusive contribution to CoinDesk’s 2017 in Review.


2017 was the year that cryptocurrency became mainstream.

But what’s even more exciting to many of us who have been investing in the sector for the past several years is the development of the underlying technology.

Blockchain technology, which powers most cryptocurrencies, is in nascent stages. This past year, we started seeing some early proof points of how this new infrastructure can be used, including the announcement by the Australian Securities Exchange that it would replace its current post-trade settlement process with a blockchain system, after running both concurrently.

This reminds me of the process large enterprises went through in the late 1990s and early 2000s as they moved from client-server software to web-based software, transitioning their supply chain and procurement processes online. They conducted extensive return on investment (ROI) studies to justify the upfront cost of replacing current systems. Twenty years later, the ROI is obvious, but many companies viewed the risk as significant at the time.

I believe we’ll continue to see more companies across more industries in 2018 take a look at how blockchain technology can create efficiencies (and potentially new business models in the future).

When I launched FuturePerfect Ventures in 2014 around the thesis of decentralization, I was most excited about the combination of blockchain with other emerging technologies, including machine learning/AI, security and internet of things. In this way, I expect 2018 will be the year that we start to see the convergence of these technologies to truly create the decentralized computing and communications platforms of the future.

Decentralization, by its very nature, requires that more intelligence shifts to nodes instead of residing in one central server.

We will continue to see the development of semiconductors that are capable of advanced computing in smaller and smaller devices. As devices at the edge become smarter, the smart contracts enabled by blockchain platforms will work better with more advanced data analytics capabilities.

I see a mini-brain in each of our devices, ranging from simplistic ones to ones capable of processing larger datasets and making decisions based on that data.

The open availability of more data and smarter processing at the nodes will enable broader datasets available to more companies and people, instead of proprietary data ownership that currently exists within companies such as Facebook and Google. More importantly, that data will be diverse and representative of the world we live in, instead of being filtered by a few companies that reside in one geography.

While this may not all happen within the next year, we have started an inevitable march towards that future, one that will be even more transformative than the internet was.

Weaving machine via Shutterstock

The leader in blockchain news, CoinDesk strives to offer an open platform for dialogue and discussion on all things blockchain by encouraging contributed articles. As such, the opinions expressed in this article are the author’s own and do not necessarily reflect the view of CoinDesk.

For more details on how you can submit an opinion or analysis article, view our Editorial Collaboration Guide or email news@coindesk.com.