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Bahrain: Government Official Hails Blockchain as ‘True Mark Of Progress’

The government of Bahrain has stressed the importance of blockchain technology for the country’s economy while urging cybersecurity vigilance, local media outlet News of Bahrain reported Tuesday, September 4.

As part of an address to audiences at the country’s SmartSec Cyber Security and Blockchain Conference 2018, Abdulhussain Mirza, Bahrain’s minister of electricity and water affairs, appeared to confirm the government’s commitment to fostering blockchain.

“Technologies such as blockchain take us a huge step forward in finding a secure way to facilitate transactions,” Mirza said, adding:

“Blockchain’s ability to protect user’s data is a true mark of progress, especially due to the fact that it can be applied in different companies from different industries including cyber security.”

Bahrain has traditionally remained somewhat silent regarding its stance on both blockchain and cryptocurrencies. While neighboring Dubai has sought to revolutionize its economy using blockchain, the Internet of Things (IoT), and artificial intelligence (AI) in recent years, Mirza’s words mark a rare official comment in this sphere for Bahrain.

Nonetheless, in June, the country issued its first “sandbox” license to cryptocurrency exchange Palmex, allowing the latter to trial its services while regulators look on and consider necessary controls.

Mirza, meanwhile, further cautioned about the need to increase safety through the use of blockchain, noting that “this is the kind of initiative that we would like Bahraini companies to have so that innovation can arise amongst the great minds of this community”:

“Cyber-security is an essential part of our lives because most of our daily lives involve the use of technology in one way or another.”

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Online ID Control: Blockchain Platforms vs. Governments and Facebook

We’re living at a time of unprecedented concern over identity. Fears abound that our personal data is being abused by distant third-parties, while this data has become more valuable to us at a time when our identities and the identity politics we base around them have become more central to our lives. It’s in this context that blockchain technology has appeared, and while its application beyond cryptocurrencies is still limited, protecting our online identities and data more securely looks set to be one of its most central applications.

In its most basic outline, the use of blockchains in the area of securing personal data is simple: Our data is stored in encrypted form on a decentralized network, and we can grant other parties access to (some of) this data by the use of our private keys, in much the same way that using our keys allows us to send cryptocurrency to someone else. By virtue of this basic framework, blockchain tech promises to place control over our data back in our hands, at a time when Facebook and other technology giants have been abusing and misusing it. And seeing as how crypto-giants such as Coinbase have recently moved into the area of decentralized ID, it would seem that it already has strong backing and support within the cryptocurrency industry.

However, as sound as this all is in principle, there are a variety of challenges — some technical, some commercial — that have to be overcome before blockchains can be used at scale to secure personal data. The companies working in this area are all approaching these problems from different angles, yet it would appear that in solving them, a (partial) departure from the ideals of ‘complete’ decentralization is necessary.

And even when the technical challenges are all surmounted, there will still be the issue of weaning people off platforms such as Facebook, which — thanks to the profits of centralization — can afford to offer the public an enticingly ‘free’ and polished service.

Control and privacy

Alastair Johnson, CEO and founder of e-commerce and ID platform Nuggets, Johnson understands the pitfalls of storing masses of ID data in centralized siloes all too well.

“Today, the reality is that individuals do not control their personal data in any meaningful way. On average, a person has personal data — in the form of payment card details, home addresses, email addresses, passwords and other personal details — spread over roughly 100 online accounts. They can access this data but they do not own it.”

By contrast, the use of blockchain tech grants newfound control to the user, who will be empowered to share their ID data only with the parties they approve. This is achieved primarily through the utilization of “decentralized identifiers” (DIDs), as explained by the Sovrin Foundation, which is building a blockchain platform aimed at providing individuals with “self-sovereign identity” (i.e. an ID they can take with them from platform to platform). As it notes in its white paper, “decentralized identifiers” (DIDs) not only encode information that identifies someone as, say, female, Asian, 35, and living in France, but they also circumvent the need for a centralized authority to verify ID claims.

“A DID is stored on a blockchain along with a DID document containing the public key for the DID, any other public credentials the identity owner wishes to disclose, and the network addresses for interaction. The identity owner controls the DID document by controlling the associated private key.”

In other words, a protocol for a suitable blockchain is created, users register their ID data on this blockchain, and then use their private keys to decrypt this data for chosen parties. This is the kind of system also employed by Nuggets, although in its case it’s referred to as “zero-knowledge storage,” since no one else knows what your data says about you. And it’s also the system being worked on by Coinbase, which on August 15 announced its acquisition of ID-focused startup Distributed Systems. Having purchased the San Francisco-based company for an undisclosed fee, it will now develop a decentralized login system for its own crypto-exchange platform that will enable users to retain ownership of their ID credentials.

“A decentralized identity will let you prove that you own an identity, or that you have a relationship with the Social Security Administration, without making a copy of that identity,” it wrote in its press release.

With such a setup, there’s little chance of a Cambridge Analytica-style scandal where data gets shared with unwanted groups or individuals, while it also grants unprecedented power to the individual user, who’s likely to be treated with much more respect by companies now that his data is in such scarce supply. As explained by Johnson, this provides a vast improvement over the current stage of affairs.

“[Personal data] is stored and controlled in a series of centralized databases controlled by institutions such as retailers, marketing companies, utility companies and data reporting companies. In order to make purchases online, individuals simply authorize these different bodies to connect the different pieces of information they hold in order to authorize a transaction.”

However, while the individual user is currently dependent on hundreds of different companies to store and transmit his/her data in order to gain access to the services, the introduction of blockchain technology completely reverses the balance of power. Johnson shares with Cointelegraph:

“Blockchain-based solutions flip this model on its head, so that individuals can store and control their data associated to a digital identity. It is not stored in the centralized databases of third party organizations, it can be stored on the blockchain in a decentralized network. With the individual controlling their data in this way, they are then in full control to ideally not have to share or store anything by using attestations, tokens or references and share it only if and when they choose to do so.”

Yet, this is only the tip of the iceberg, as using blockchain tech to confirm who we are furnishes many additional benefits beyond user control. For one, it heightens privacy, since with many of the platforms being proposed, our ID credentials won’t even be revealed to those parties and organizations requiring their verification.

This is enabled via the use of zero-knowledge proofs (ZKPs), a cryptographic method that can prove a claim without actually sharing the data (‘knowledge’) through which the claim is proven. ZKPs are being implemented by Sovrin and are also planned for use by such startups as Civic, Verif-y, and Blockpass. By using them, these companies will make the process of ID verification simpler and more efficient, while opening up the possibility of storing biometric ID on the blockchain. They’ll spare organizations that verify our IDs the headache of having to securely store personal data after validating it, which in turn eliminates a potential vulnerability, given that these organizations would have normally kept any data they received on a centralized database.

And while not all decentralized identity platforms will employ ZKPs, others will still make use of functionally similar methods. For example, SelfKey harnesses a technique it describes as “data minimization,” which “allows the identity owner to provide as little amount of information as possible to satisfy the relying party or verifier.” This sidesteps the need to develop advanced technologies such as ZKPs, although it raises questions as to what is meant by ‘minimal.’ SelfKey writes that “claims can be signed in a way whereby one could choose to disclose only a minimum of information.” But without a more formal specification of “minimum” and “choose,” it’s conceivable that such functional approximations of ZKPs might end up revealing more data than some users would want.

Security

Aside from providing greater user control and privacy, blockchain-based platforms for verifying ID are more secure than their centralized counterparts. This is because, being distributed among multiple nodes, they won’t suffer from having a single point of failure like traditional ID systems — e.g. government databases, social networks. As such, one or two nodes of a blockchain can become inactive and users will still be able to use it, while the encryption involved prevents any publicly available data from being gleaned for sensitive info.

By removing the single point of failure, decentralized ID platforms make a large, Yahoo! style hack nigh-on impossible. Instead of being able to penetrate a centralized database that houses all user information in a single location, attackers will have to obtain the private keys for every individual on a one-by-one basis, something which is extremely unlikely in practice. Alastair Johnson agrees:

“The major benefit of a decentralized ledger of personal data over a centralized database is the security against hackers that it provides. We’re all familiar with the major data breaches that have occurred in recent years, such as that at Equifax in 2017. These centralized databases act like magnets to hackers who often only need to take advantage of a single vulnerability to either take them down or extract data from them.”

By contrast, decentralized ledgers aren’t so sensitive to cyberattacks. “The hijacking of a single node will not disrupt the ongoing functioning of the ledger, as the other nodes can continue to operate without the compromised node’s involvement and the network requires consensus to prove the blocks.”

Security is part of the reason why the Indian government, for example, is turning to blockchain for its AADHAAR database — the world’s biggest biometric ID system, containing the records of over one billion people – as the country has been the victim of repeated hackings over the past year.

With such a revamped platform, there will be a variety of security benefits. The transparency and immutability of blockchains would mean that users are able to see when their data has been accessed and by whom, thereby providing a deterrent to any would-be hacker. Similarly, this transparency and immutability can be violated only in the unlikely event that a bad actor assumes control of 51 percent of the blockchain’s nodes, which in theory would enable to access data and then erase the corresponding records of this illegitimate access.

AADHAAR currently isn’t blockchain-based, while a comparable project from the government in Dubai to use blockchain-based ID at the international airport is still under construction. However, one government-led ID system than does use distributed ledger technology (DLT) right now is in Estonia. Its KSI (Keyless Signature Infrastructure) Blockchain forms the backbone of various e-services, including e-Health Record system, e-Prescription database, e-Law and e-Court systems, e-Police data, e-Banking, e-Business Register and e-Land Registry.

Once again, the use of the KSI Blockchain provides greater transparency than previous systems, since it detects when user data has been accessed and when it has been changed. And as the e-Estonia FAQ explains, it’s much quicker than traditional platforms in detecting misuses of data:

“[It] currently takes organizations […] about seven months to detect breaches and manipulations of electronic data. With blockchain [solutions] like the one Estonia is using, these breaches and manipulations can be detected immediately.”

Not only are breaches capable of being detected immediately or quickly on a blockchain-based ID system, but they’re more likely to be detected more quickly than with a centralized platform due to their public and continuous access to scrutiny from a wide range of armchair experts and professionals alike, as highlighted by PolySwarm CTO Paul Makowski in a December blog post on decentralized threat intelligence:

“Geographically diverse security experts proficient at reverse engineering or capable of providing unique insight will be able to exercise their knowledge from the comfort of their own home or wherever (and whenever) they choose to work.”

Standardization, interoperability

At the present moment in history, the world’s digital identity systems are siloed off from each other, separated in a way that forces people to create new accounts and new data for virtually every digital service they use. This causes personal data to proliferate to dangerous levels, making data breaches and cybercrime much likelier. For instance, the cost of identity theft reached $106 billion in the United States alone between 2011 and 2017, at a time when the average consumer has a staggering 118 online accounts (at least in the United Kingdom, where data was available).

Blockchain-based digital ID systems offer a way out of this. While most chains are currently cut off from each other, standards for sovereign digital identity are being devised by the Digital Identity Foundation (DIF) and the World Wide Web Consortium (W3C). Similarly, a number of startups are building interoperability platforms connecting separate blockchains together, including Polkadot, Cosmos and Aion. By working to achieve an ecosystem in which the standards of one identity platform are accepted by all other platforms that require ID verification, such organizations could dramatically reduce the amount of personal data people need to produce. Instead, users would create an account with one blockchain-based ID service, which they’ll then use to register with a host of other services and systems.

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Never Stop Marketing CEO Jeremy Epstein said in a December blog:

“Interoperability standards free up capital and time to drive value. What’s more, it offers the possibility to pool security (making the whole system more robust against attack) and enable trust-free transactions across chains.”

Blockchain interoperability is still a nascent field, and different organizations are pursuing different approaches to it. However, to take one example, Polkadot is aiming to achieve interoperability via its “heterogeneous multi-chain,” which has three fundamental components. These are “parachains,” which are in fact the individual blockchains being linked together, “bridges” that connect each parachain to the Polkadot network, and then the Polkadot network itself, which is a “relay chain” of the various parachains being connected.

Other routes to interoperability diverges from this, with Cosmos achieving inter-chain communication via use of the Tendermint consensus algorithm, and with the Aion network monetizing interchain transactions. However, assuming that an interoperability platform receives universal adoption within the blockchain ecosystem, users would find that they’ll have to register their personal data only once. From then on, they’ll be able to provide other platforms with ID attestations securely and quickly, all without having to reveal any of their data to the companies and services they use.

Scaling toward a new kind of blockchain

The benefits promised by blockchain-based ID systems — control, security and standardization — are all appealing, yet questions remain as to how feasible such systems are and how long we’ll have to wait for them to be released in fully functioning form. Added to this, there’s also the worry that — for all the improvements offered by blockchains — as a society we may still remain wedded to ‘traditional’ online services and the organizations responsible for them, which may actively resist the adoption of decentralized platforms that enable us to keep data to ourselves.

Unsurprisingly, the biggest issue with regard to feasibility is that of scalability, so often the achilles heal of many a crypto-based project. Given that an ID service should — by definition — be able to serve millions of people, any blockchain that forms the basis of such a service has to be significantly scalable. Yet, so far the most popular blockchain for decentralized applications (DApps) — Ethereum — was almost brought down by a popular video game last year, CryptoKitties. This is why most of the platforms mentioned above aren’t built on any of the most well-known blockchains, but rather on proprietary ledgers, some of which don’t meet the conventional definition of a decentralized blockchain.

For example, Enigma is a “decentralized computation platform” that has been designed for use with identity verification, among other things. As described in its white paper, it solves the scalability problem by delegating all “intensive computations to an off-chain network.” This network also stores all the user data, while the blockchain itself merely stores “references” to this data. In other words, Enigma’s platform isn’t really a blockchain — and while its off-chain network is still distributed (although each node sees separate parts of the overall data), this isn’t decentralization in the way that, say, the Bitcoin blockchain is.

Something similar could be said for other ‘blockchain-based’ ID platforms: Estonia’s KSI Blockchain isn’t a full-fledged blockchain that uses asymmetric key cryptography, but rather a Merkle tree-based ledger. Meanwhile, the Sovrin network achieves consensus via a limited set of “validator nodes,” arguably making it less decentralized than certain other blockchains. Together, what such tradeoffs reveal is that, if an ID platform is to be scalable (and also private), it needs to be less distributed in certain areas — and arguably less secure as a result. But more importantly, from a practical viewpoint, it also needs to redefine and adapt just what a ‘blockchain’ is, since the most familiar chains currently aren’t up to the task of securing and communicating our personal data on a massive scale.

Vested interests

This is why even the most advanced projects have roadmaps that extend beyond 2020, since a viable ID platform requires a new kind of distributed ledger that squares the need for cryptographic transparency with the need for individual privacy. And even if any of the platforms above reach this goal anytime soon, they will have another massive hurdle to clear: the dominance of existing arbiters of identity, including social media giants like Facebook, as well as national governments.

Governmental initiatives

For instance, the U.K. and Australian governments have been investing millions in building their own centralized ID verification systems in recent years, making it unlikely that they’ll easily give way to a decentralized alternative. Likewise, the idea of Facebook overhauling itself with a truly decentralized platform — where users keep their personal data a secret — is, well, frankly unthinkable, seeing as how the social network reaps billions in annual profit from selling our data to the highest bidder. It’s also widely used to identify people online, so it’s unlikely that it will give up its dominance to blockchain-based platforms easily.

That said, a small number of national and state-based governments (e.g., Singapore, Illinois) have been trialling blockchain-based ID systems. In addition, figures within the burgeoning crypto-ID industry are hopeful that public and private organizations alike will either be forced to decentralize or will fall by the wayside.

“When you operate a centralized system that provides your organization with control and allows you to benefit from this position, it’s understandable that you might be resistant to change,” says Alastair Johnson. “But when there is a penalty if this information is breached in the form of fines, loss of share price and cost of recovering the situation and all the PR damage that comes with a breach, businesses will start to see that the model has to fundamentally change.”

A key driver of this change could be public sentiment, which has already been shifting in the wake of the Facebook-Cambridge Analytica scandal. “The blockchain provides clear benefits for customers in terms of control over personal data and digital identities and I expect the public recognition of this to move from an early adopter cohort to an early majority in the near future,” Johnson says. “From the other side, I expect organizations that have already experienced breaches in their centralized databases to be amongst the most willing to adopt blockchain-based solutions, as they seek to rebuild trust with consumers.”

It could be argued that slick, free-to-use, ad-based services such as Facebook will always be more attractive to the average user — a view strengthened by the fact that Facebook reported a 13 percent year-on-year increase of users in April, despite its recent loss of younger users in the wake of the aforementioned data harvesting scandal. However, Johnson believes that a gradual sea-change in attitudes is underway.

“The ‘Delete Facebook’ movement is one sign of change, as is the continuing scrutiny that the tech giant is being put under by American and European authorities. People are starting to wake up to the fact that their personal data is valuable. Not only could blockchain help them to monetize it for themselves, it will also eradicate the kinds of costly personal data loses that I have experienced myself.”

And even if blockchain technology is still largely unproven outside the domain of cryptocurrencies, it will start winning converts as soon as it demonstrates its superiority to previous systems when it comes to privacy and security.

“Right now, there may be hesitation to adopt decentralized platforms, but its common sense that personal information should be owned and controlled by the person, and because of this it will prevail.”

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Smart Dubai and DIFC Courts Partner to Explore Blockchain-Powered Judiciary

The Dubai International Financial Centre (DIFC) Courts and Smart Dubai have announced their partnership to develop a “Court of the Blockchain,” for streamlining the legal system, local news outlet Arabian Business reports today, July 30.

DIFC and Smart Dubai will reportedly explore how the technology could aid verification of court judgements for cross-border enforcement as part of a wider push to create a “blockchain-powered judiciary.”

The newly created joint DIFC Courts-Smart Dubai task force believes that the technology could make a wide range of processes within the legal ecosystem more efficient, and will spearhead research into how to handle disputes that arise in the context of both public and private blockchains by refining existing smart contract systems.

According to Arabian Business, the research will tackle how to develop smart contracts that would “incorporate logic and allow for various forms of exceptions and conditions,” thereby mitigating the irrevocability of smart contract-powered transactions and allowing “for seamless and efficient dispute resolution.”

Dr. Aisha bint Butti Bin Bishr, the director general of the Smart Dubai Office (SDO), noted that the Dubai Blockchain Strategy plans to run “100% of applicable government transactions on Blockchain by 2020,” adding,

“An invention of this calibre and potential requires an equally disruptive set of rules and an empowered institution to uphold them. This is where our partnership with DIFC Courts comes in.”

Dubai’s bid to become a blockchain hub has been announced in several high-profile projects as part of its Dubai 10x initiative “to be 10 years ahead of other world cities,” from its precipitous launch of a state-issued cryptocurrency back in October 2017 to planning to become the first blockchain government by 2020.

Sheikh Mohammed bin Rashid, the vice president and Prime Minister of the UAE and ruler of Dubai, unveiled the latest “UAE Blockchain Strategy 2021” incarnation this April, announcing that “50 percent of government transactions on the federal level will be conducted using blockchain technology by 2021.”

His Highness Sheikh Mohammed bin Rashid has anticipated that blockchain adoption would “enhance happiness levels for [UAE] citizens,” save millions of work hours, and reduce government documents by 389 million.

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Dubai Plans to 'Disrupt' Its Own Legal System with Blockchain

A Dubai-based international court dealing with civil and commercial disputes in the financial industry is planning to launch what it calls a “Court of the Blockchain” to streamline legal operations.

The Dubai International Financial Center (DIFC) Courts announced on Monday that it is teaming up with the government-backed Smart Dubai initiative to form a task force that will focus on developing the blockchain-based legal platform.

The DIFC said the goal is to employ a network based on blockchain and smart contracts to allow different courts to share information in a decentralized manner. With the system, it said, the need to carry out manual tasks such as document duplication will be eliminated, bringing a higher level of efficiency to the current system.

As an initial step, the two partners said the task force will focus on an R&D effort to put court judgement data on a blockchain so institutions can verify and share information in real-time for better cross-border law enforcement.

“Future research will combine expertise and resources to investigate handling disputes arising out of private and public blockchains, with regulation and contractual terms encoded within the smart contract,” according the the release.

The effort comes as part of the Dubai’s wider push to bring smart innovations to its government operations.

The Smart Dubai Office’s director general, Dr Aisha Bint Butti Bin Bishr, explained in today’s announcement that Dubai’s blockchain strategy “seeks to run 100 percent of applicable government transactions on blockchain by 2020.”

The director general added:

“An invention of this calibre and potential requires an equally disruptive set of rules and an empowered institution to uphold them. This is where our partnership with DIFC Courts comes in, allowing us to work together and create the world’s first disruptive court, helping to truly unlock the power of blockchain technology.”

As part of the 2020 project, various government bodies have already announced individual blockchain initiatives.

For instance, in May, the Department of Economic Development announced its plan to develop a commercial business registry platform using blockchain tech. And, last year, the Dubai Immigration and Visas Department also said it was working on blockchain-based passports that could potentially eliminate manual checks at the U.A.E. city’s international airport.

Dubai image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Dubai Works on the First Commercial Platform for Free Zones

Dubai has several times been in the media because of its developments on blockchain technology. The city has been embracing distributed ledger technology for different projects in several areas. This time, the Dubai Airport Free Zone Authority (DAFZA), an economic zone that covers Dubai’s International Airport, is working on the first commercial digital platform for free zones.

Dubai Implements Blockchain Technology

The modern city of Dubai will be working with Blockchain technology in another important area of the city, which is related to the International Airport and its surroundings. With this implementation, the zone will be the first one around the world that implements a digital commercial platform.

Using blockchain technology, companies will be able to trade and connect through Dubai. With this new implementation, enterprises will be able to be established in the country without requiring to be physically located in the city of the UAE.

The information has been released by the DAFZA and it will be known as Dubai Blink. The new project will be using artificial intelligence (AI), virtual business licenses, and blockchain technology.

Sheikh Ahmed Bin Saeed Al Maktoum, explained that Dubai Blink will be part of the Dubai 10x initiative.

About it, Mr. Maktoum, commented:

“The Dubai Blink project will be one of the most innovative models for the future of global supply chains and e-commerce across the free zones. It will help boost trade for companies operating in Dubai’s free zones.”  

With this project, the intention is to create a new model for smart commerce and attract new investors to the city. Multinational companies and small and medium-sized enterprises will be able to set up their digital businesses in Dubai.

“The work that is being done between the free zones and government agencies will help create a new model for smart commerce in the international industry as well an attractive future for foreign investments within the free zones of Dubai,” commented Sheikh Ahmed.

Benefits of the New Project

With this project, trade will be speeded up in free zones, something that would provide comprehensive solutions for companies to search for services and products. Moreover, it will be possible to process transactions in a very easy and safe way.

With the implementation of AI and blockchain technology, cross-border transaction costs and time will be radically cut, engagement between enterprises will grow, and international trade barriers and regulations will be reduced.

DAFZA director general, Dr Mohammed Al Zarooni, explained:

“Dubai Blink will be a gateway to leverage free zone assets, network, and connect with trusted providers of product or services to evolve your business. It will be an integrated platform that will allow business to manage supply chains and transactions, underwritten by the speed, truth and reliability of blockchain smart contracts.”

The project may take two years to be built and implemented, and it will be connected with other blockchain-related projects that Dubai has promoted in the past, including the Dubai Blockchain Business Registry unveiled by the Department of Economic Development.

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Blockchain For Elections: Advantages, Cases, Challenges

The list of potential uses for blockchain technology span many different sectors with the belief being that almost every facet of life, from finance, technology, economics and sociology, can be disrupted by this decentralized force.

However, it is in politics, and especially elections where there is a buzz building about the positive influence blockchain technology can bring to the ballot boxes. Elections have been subject to scrutiny and corruption for so long that many in the tech space, as well as electoral committees are viewing blockchain as the future of fair elections.

There have been some use-cases already where blockchain has come to the aid of elections. Different countries and organizations have begun experimenting with the immutable distributed ledger that offers transparency and security.

However, the ball is only starting to get rolling as across the globe digital ballots and blockchain elections make great strides.

From Sierra Leone to Virginia

On March 7, it was reported as an apparent world-first that Sierra Leone has employed blockchain technology in tallying its presidential elections – according to Agora CEO Leonardo Gammar.

However, it appeared as if Gammar had jumped the gun as the technology had not been directly used to tally the votes, rather it was run alongside the normal process as a demonstration of how the election could be conducted using blockchain technology.

This led to a media storm as the Sierra Leone government denied the use of blockchain, and forced Gammar to rectify the issue, which he did to Cointelegraph, stating that they were trying to showcase its possibilities.

Despite the furore, the fact remained that blockchain elections were starting to surface, and there appeared to be interest in the possibility of organizations as big as national governments turning to the technology for their possible use.

Gammar told Cointelegraph that the National Electorial Commission in Sierra Leone was still interested in having them back for by-elections scheduled to run in the country.

“By-elections are coming up in a few weeks time and I will be going back to Sierra Leone to see how we can further demonstrate and develop the blockchain voting potential. They are still keen to see what can be done despite this media storm.”

A little smaller in scale, but equally important, polls closed in West Virginia’s primary election on May 8 seeing the completion of the first government-run, blockchain-supported vote in US history.

Again, this was not a full blockchain election, as it was only available to a select group of voters, such as military members. However, the response was again positive as experimenting with the use of blockchain in voting continues to be ramped up.

Mike Queen, West Virginia Secretary of State Mac Warner’s communications director said:

“[The office of the Secretary believes] blockchain does provide a heightened level of security on this type of mobile voting app. We’re genuinely hoping that will allow this type of a mobile app to be made available in the future – as early perhaps as our general election – to military voters.”

However, while the election in West Virginia seemed to have gone off without a hitch, there are some that see it as “completely nuts.”

Duncan Buell, a computer science professor at the University of South Carolina who focuses on voting systems and election integrity, has been strongly opposed to digital voting from as far back as 2015 and feels like this new idea of blockchain voting brings in too many issues.

“I am strongly opposed to electronic voting, and I think the whole notion of internet voting is completely nuts,” Buell says.

“There are a number of issues that come up. The first is authentication. How do you verify who’s at the other end?”

He is more referring to the company, Voatz, which ran the election here and their protocols which include fingerprint-scanning or facial-recognition technology on its users’ smartphones, but Buell maintains these can be hacked.

What does blockchain offer?

The interest in blockchain technology taking over from traditional election methods has potential advantages due to the big technological upgrade from how elections are currently held. Many national elections still take place using a paper-based system, leaving open huge holes for security breaches, fraud, and corruption.

Blockchain offers an updated system for voters that could potentially fix these concerns.

Its traditional assets, such as its transparency, allow for votes to be followed, counted, and correlated by many different sources while still maintaining the privacy of the voters due to the anonymous transactions along the blockchain.

Security is also key in fair elections as each vote needs to be guarded and respected, which is often not the case.

Cybersecurity firm Kaspersky Lab introduced a blockchain-based secure online voting system dubbed as Polys. The project’s website explains:

“[Online] voting imposes extremely stringent requirements on the security of every aspect of voting. We believe that the blockchain technology is the missing link in the architecture of a viable online voting system.”

Nimo Naamani, of Horizen State, a company that is working to build secure blockchain voting systems, told Cointelegraph why organizations as big as national governments are suddenly interested in blockchain elections:

“Elections are the heart of democracy. Any government or electoral committee is going to take their job very seriously when it comes to changing the way elections are carried out.”

Naamani explained that Horizon State is currently in talks with two governments, however, he cannot divulge which two countries they are. But their responses give good insight into the perception of this technology as it currently stands in this sector.

Horizon State have recently launched their consensus tools in Indonesia, which could indicate where the epicenter of blockchain interest could be emanating from, although Naamani still denies that Indonesia is one of the governments.

“The two governments I have discussed general elections on the blockchain with – one said it is interesting but they do not want to be the first” Naamani added. “They also mentioned that cost is not much of an issue for them, but transparency and accountability are paramount.

“The second government – they are very much actively thinking about it, and I think they will definitely have an election running on the blockchain in the next 4 years.”

Like is so often the case, the wait-and-see approach – which is also gripping the banking sector when it comes to blockchain – is a factor that is slowing the adoption of the new technology down. However, it is also understandable why these nations are not diving headlong into blockchain elections without through testing being down. As Naamani added:

“When you have a appetite for technology, and being at the forefront – government and regulators will do what they can to achieve it. However, they will not risk the election going wrong. This is a must-not-fail situation.”

Goes even beyond voting

Because blockchain technology is still very much in the embryonic stages of its disruption across many aspects of society, it has a long way to go. However, there are some real strides in finance – banks are building blockchains, corporations are decentralizing, and similar advances are being made in politics and voting.

However, these are still only examples of use-cases in which the technology can prove itself before it becomes a foundational technology on which new building blocks of society are laid upon.

This is the view of Muhammed Arafath, of APLA blockchain, a company that provides blockchain platforms for governments to onboard their existing applications. One such use is also voting related as, in Dubai, the company is providing voting applications for businesses to use in their annual general meetings etc.

Arafath sees the blockchain transcending simple use-cases such as voting and elections, and rather becoming a ‘foundational element’.

“If you ask me, this is just the tip of the iceberg, the kind of projects we are working on, we believe blockchain will essentially cut across all industries, and it will go down to the foundational technology.”

“These use-cases are just to test and understand how the system functions, it is just to get a feel, than to go forwards. There will be further cases, which are more in depth and more engaging, and more at the foundational level,” Arafath added.

“Eventually blockchain will become the foundational infrastructure for other technologies to be embedded on, AI, machine learning, and things like that.”

The blockchain infrastructure

Blockchain technology certainly has many different use-cases, with some more advanced in terms of their potential, and many differing in their time-to-market. However, blockchain’s growth and sophistication in spaces such as finance and elections would lead to a global blockchain infrastructure being laid down.

The fact that major corporations, banks, and now governments – both in terms of regulation, and for elections – are looking deeply into the blockchain means that there is a big future building for it. If it can be shown to be a success in electing a country’s leader, helping enact democratic needs and ensuring that democracy is enacted fairly, then there’s not much else that can stop it.

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US Judge Denies Alibaba’s Request To Stop Alibabacoin From Using Matching Name

A US court has ruled this week against the Chinese e-commerce giant Alibaba’s request for an injunction against the Dubai-based Alibabacoin Foundation (ABBC Foundation) due to their similar names, Forbes Middle East reported yesterday, May 1.

In the beginning of April, Alibaba sued the ABBC Foundation for copyright infringement, alleging that Alibabacoin engaged in “prominent, repeated, and intentionally misleading” behavior using the company’s name. The initial lawsuit was accompanied by a temporary restraining order against Alibabacoin that was negated by Judge J. Paul Oetken’s ruling, but Alibaba can keep pursuing its lawsuit in spite of the judge’s injunction denial, according to Forbes Middle East.

The ABBC Foundation, which raised more than $3.5 mln in an Initial Coin Offering (ICO), says on its website that they are “building the fund security system that is fundamentally improved by using new technology using a secret technique for implementing the blockchain algorithm into the facial recognition hashing process.”

A Google snippet for the ABBC Foundation offers this explanation:

“Alibabacoin Foundation is best Cryptocurrency company with success predicted & amazing whitepaper. This digital currency has secure Facial Recognition.”

The Foundation has maintained the right to their name, citing the Middle Eastern character “Ali Baba” from One Thousand and One Nights as their inspiration rather than the Chinese commerce company. According to an email from the ABBC Foundation sent last month to Forbes Middle East, the word Alibaba is “free of use in its legitimate business activities”:

“[The lawsuit] is either a reasonable or proportionate response to our client’s entirely legitimate use of an inherently generic word which emanates not from China, but indeed from the very region in respect of which your client would seek to prohibit its use.”

A spokesperson for Alibaba told Forbes Middle East in an emailed statement that “Alibaba Group is not affiliated with the ABBC Foundation”:

“The court’s ruling on April 30 was with respect to jurisdiction. We will be submitting a new motion and are confident we will be able to put an end to this willful, concerted and unlawful scheme by the ABBC Foundation to exploit Alibaba Group trademarks.”

Rumors that Alibaba was delving into the crypto sector were denied in January of this year when the company release a statement that their new P2P platform was not cryptocurrency, blockchain, or crypto mining related:

“We reiterate that Alibaba Cloud has never issued a Bitcoin-like virtual currency, and it will not host any [cryptocurrency] mining platforms.”

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Dubai Launches Blockchain Business Registry To Ease Market Entry

Dubai has partnered with IBM to launch a Blockchain registry that will help businesses operate under its jurisdiction. The latest step in the city’s 2020 Blockchain Strategy was announced in an official press release May 1.

The Dubai Blockchain Business Registry Project will also see involvement from Smart Dubai and Dubai Silicon Oasis Authority (DSOA), while the government input comes in the form of the Department of Economic Development (DED).

Together, they will seek to add extra features to Dubai’s extant blockchain for business project known as Unified Commercial Registry (UCR).

The Registry will store registration information from companies, as well as keep track of changes, and thus “will streamline the process of setting up and operating a business, roll out digital exchange of trade licenses and related documentation for all business activities, and ensure regulatory compliance across Dubai’s business ecosystem,” the press release explains.

Dubai’s 2020 Blockchain Strategy has made steady progress since it began in 2016. Authorities aim to transform the emirate into a hub for the technology, using it to power municipal apparatus such as public services and beyond.

“With the Blockchain Corporate Registry, investment as well as doing business in Dubai will become a seamless and smart experience, and testimony to successful innovation,” Sami Al Qamzi, Director General of DED commented.

IBM Middle East’s general manager Amr Refaat shared the enthusiasm, the IT giant having become a leader in blockchain experimentation in its own right over the past two years.

“Dubai is a leader in innovation with many ambitious projects that have already become a reality,” he said.

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Dubai Government Unveils Blockchain Business Registry

Dubai’s government is using blockchain technology to make it easier for companies to set up and operate in the country.

According to an announcement on Tuesday, the country’s Department of Economic Development (DED) has teamed up with the Dubai Silicon Oasis Authority (DSOA), as well as the Smart Dubai initiative and IBM, to developed a commercial business registry built with blockchain.

The platform – called Dubai Blockchain Business Registry – is aimed to streamline the process of establishing and operating a business in Dubai, as well as to ensure regulatory compliance and help firms gain direct investments from overseas.

The government announcement states:

“The collaborative effort will streamline the process of setting up and operating a business, roll out digital exchange of trade licenses and related documentation for all business activities, and ensure regulatory compliance across Dubai’s business ecosystem.”

Dubai Silicon Oasis (DSO), the country’s technology free-zone, will be the first to implement the project, while other entities will be able to query and publish registry data, the announcement states.

The project is aimed to support the Unified Commercial Registry (UCR) project, a blockchain-enabled trade license repository launched by the DED in a bid to modernize the registration of company information.

Amr Refaat, General Manager, IBM Middle East said the initiative will boost collaboration and efficiency at government institutions and “provide transparency, security and visibility in government transactions.”

The registry also comes as part of the Dubai Blockchain Strategy, launched in 2016, which aims to power all government services with blockchain by 2020.

Dubai image via Shutterstock

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Hong Kong Securities Regulator Says Raising Capital Is Job For VCs, Not ICOs

The head of the Hong Kong Securities and Futures Commission (Hong Kong SFC) said during a speech on April 13 on “New Technologies and Asset Management” that the type of fundraising conducted through Initial Coin Offerings (ICO) is better suited to venture capital funds.

Julia Leung, who is also the chair of the 2016 established Fintech Advisory Group, described the current era as the “fourth industrial revolution,” citing scholar Klaus Schwab, due to its new technological innovative promise. Leung notes that although the Hong Kong SFC in its role as a securities regulator sees new technologies like Blockchain as beneficial, she underlines that embracing this new technology comes with some important caveats:

“While we acknowledge that innovative technologies such as [B]lockchain have the potential to improve efficiency and financial inclusion, that does not entitle anyone to conduct fundraising from the public in violation of securities law. Because of the highly technical content and opacity of some of these projects, it is hard for an average investor to pick winners, a job more suited for professional investors such as venture capital funds.”

Leung adds the the reality is that many of the ICOs are “dubious, if not downright frauds […] [that] escape the scrutiny of the police or securities regulators because of their crossborder nature and the way the crypto assets are structured to fall outside any regulator’s perimeter,” mentioning the recent hacking of crypto exchanges in Japan and South Korea as a “sharp reminder of the risks” of crypto trading.

In February of this year, the Hong Kong SFC warned crypto investors about the risks of investment and vowed to keep policing ICOs and crypto markets. In March, the securities regulator shut down Black Cell Technology’s ICO on the ground that it was an unregistered securities offering, making the company return the funds it had raised to investors.

Moving forward with a crypto regulatory framework, Leung notes that the G20 recently spoke about the crypto sphere at their last meeting in March. In terms of Hong Kong specifically, Leung said that the Hong Kong SFC is working with their Investor Education Center to make crypto investors more aware of risks, as well as working with organizations overseas for fintech collaboration.

The Hong Kong Exchanges and Clearing Market (HKEX) announced in March that they would be opening a dialogue with the Australian Securities Exchange (ASX) on Blockchain innovation and implementation. Leung said in the speech that the Hong Kong SFC has also signed fintech innovation agreements with regulatory bodies in the UK, Australia, Malaysia, Dubai, and Switzerland.