Posted on

Scandinavian Start-Up To Track World’s Shipping Containers Through Blockchain

A start-up led by seasoned professionals in the shipping industry is creating a Blockchain-driven platform which, for the first time, will provide a real-time registry of the world’s 27 million containers.

Blockshipping says its solution – which is called the Global Shared Container Platform (GSCP for short) – has what it takes to address staggering inefficiencies in the marketplace, bringing significant savings for businesses throughout the supply chain and dramatically reducing the industry’s toll on the environment.

Despite being a “hugely valuable” sector, Blockshipping says the industry has been plagued for years by security threats, overcapacity and ever-tightening environmental policies – adding that some issues have gone unresolved for decades.

Within a three to four-year period, the Scandinavian company aspires to have 60 percent market coverage – equating to 16 million shipping containers – and hopes its utility token will become the standard currency for transactions between firms operating in the industry.

Crunching the numbers

Blockshipping believes firms will be incentivized to adopt its technology by estimates which suggest the industry could enjoy annual savings of $5.7 billion if the Global Shared Container Platform goes mainstream.

This would be achieved through the “smarter handling” that the GSCP would enable – making it easier for deficit and surplus containers to be matched. Blockshipping’s white paper cites research which indicates that carriers could reduce the size of their container fleets by up to 20 percent by installing real-time tracking sensors and gaining accurate location data.

The company also claims that, at any given time, one in five containers worldwide (the equivalent of 5 mln units) is unaccounted for. To compound the problem, it can be difficult to gather information about whether containers are empty or loaded, meaning that, all too frequently, trains and trucks are wasting time and fuel transporting empty metal boxes.

Needless to say, this means that the environmental advantages of the GSCP could prove quite significant. According to analysis from Opsiana, a consultancy also based in Scandinavia, the platform could see global carbon dioxide (CO2) emissions fall by 4.6 million tons per annum – with nitrogen oxide (NOx) emission cut by 4,900 tons.

Important partnership announcements

In the weeks to come Blockshipping expects to announce 3-4 collaboration agreements with different technology partners who will assist Blockshipping in developing the GSCP platform.

Blockshipping has announced a partnership with MakerDAO, creators of the Dai stablecoin. The partnership specifically focus on the internal clearing and settlement token in the GSCP platform called CPT – Container Platform Token – that needs to be stable at all time. The partnership is expected to accelerate development and availability of the Blockshipping GSCP platform by leveraging Maker DAO’s proven Dai Stablecoin System to power the GSCP platform.

Rune Christensen, CEO of MakerDAO, sees a lot of possible benefits to Blockshipping by using the Dai Stability System to power the GSCP platform. In a joint press release he says:

“We look forward to a partnership with Blockshipping in developing the best possible solution for transforming the container shipping space, where the Blockshipping solutions on the longer term can be “powered by Dai.” We are eager to show that our stablecoin system is perfectly designed for supply chain projects like Blockshipping’s GSCP platform.”

“Huge industry interest”

Blockshipping says that its first customers will be able to start using the portal from the first quarter of 2019. This year, the platform is being designed and populated with data, paving the way for smart contracts to be developed and testing to take place.

The company is going to be offering two types of tokens. The first, known as the container platform token (CPT,) would be pegged to the US dollar and used for clearing and settling transactions. Meanwhile, the container crypto coin (CCC) is going to be issued on the global Ethereum Blockchain for its initial coin offering. Examples of when CPT would be used include fees associated with the land transport of containers, and costs linked to repairing and servicing units.

Blockshipping says its GSCP platform has been initially funded by the Danish Maritime Foundation as well as private angels, but an ICO is being performed to “further accelerate the development and adoption” of the ecosystem.

The company’s chief executive, Peter Ludvigsen, told Cointelegraph: “Traditionally, the shipping industry has a reputation for being rather conservative, but what I have experienced since the announcement of our GSCP project is anything but the traditional pushback on new business ideas. It has been like one unbroken series of positive dialogues with key players of all areas in the container shipping industry.

“I am extremely proud to say that a few days ago Blockshipping obtained confirmation from a global container carrier that they will join our GSCP platform as our first customer. This is a carrier in the 10-20 global ranking who has also confirmed that they will join our Customer advisory board.”

Blockshipping’s public sale will be commencing on May 14.

 

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

Posted on

6 Myths About Bitcoin And How To Bust Them: Expert Take

In our Expert Takes, opinion leaders from inside and outside the crypto industry express their views, share their experience and give professional advice. Expert Takes cover everything from Blockchain technology and ICO funding to taxation, regulation and cryptocurrency adoption by different sectors of the economy.

If you would like to contribute an Expert Take, please email your ideas and CV to george@cointelegraph.com.

Given all the negative press that Bitcoin has to fight against, the arguments in favor of Bitcoin may sometimes be lost in all the noise. So let’s have a look at the typical attacks on Bitcoin and how the community could respond to them.

The price of Bitcoin is too high

Despite being down more than 60 percent from its all time high, the price of 1 Bitcoin – around $7,000 at the time of writing ($7,116 at press time – Cointelegraph) – still deters many people from entering the market. Even though Bitcoin is on the main page of many online newspapers since mid-2017, most people still do not know they can buy a fraction of a Bitcoin. So let’s set the record straight: 1 Bitcoin can be divided into 100 million satoshis (the smallest Bitcoin unit). Just because one cannot afford a full gold bar – which are $600,000 a piece – does not mean one cannot buy a gold coin or invest as little as $126 through a Gold ETF to get exposure to gold. The same thing can be done with Bitcoin.

Bitcoin Maximum Supply

Assuming a world population of 7 bln people, it means that there are 300,000 satoshis available per human being, or 0.003 Bitcoin. Since several studies have estimated that 3 to 4 mln Bitcoins have been lost in the early years, the true number is probably closer to 220 – 250,000 satoshis per person.

This problem led to an exuberant rally at the end of 2017, when all the coins below $1 suddenly started going up as many thought they were “cheap”. As each coin has a different supply, the price of one coin is irrelevant, what matters is the market capitalization of the outstanding supply and whether a particular coin has a future or not. Since this rally, most of these coins have gone down 80 percent + as these increases never made sense in the first place.

Remember that there are more millionaires in the world than there will ever be Bitcoins, so the price of 1 Bitcoin will soon not be the right metric, but rather 1 mBTC (1 thousandth of a Bitcoin) or even 1 satoshi. The current market capitalization of Bitcoin is $120 bln, while the US Dollar M2 Money Supply is $14,000 bln and the value of all the gold ever mined is $8,000 bln, so there is still plenty of upside left. At $7,000 per Bitcoin, the price of 1 satoshi is  0.007 US cents – at this price anyone can invest.

The price of Bitcoin is too volatile to invest any money in it

There is no debate that the price of Bitcoin is very volatile, but it is so for good reasons. For the first time in the history of mankind there is a cryptographically secure, decentralized currency not backed by any central bank nor any physical asset. It would actually be even more surprising if Bitcoin were already stable. The volatility issue will likely sort itself out with time when the market capitalization of Bitcoin becomes comparable to that of the assets it is competing with – fiat currencies or gold – or if it goes to zero!

Cryptocurrencies are the most volatile and speculative asset class in the world, so if you invest in Bitcoin or other cryptocurrencies, you should know what you are in for and you should only invest what you can afford to lose. Investing only what you can afford to lose gives you something very valuable: time. If you have time, then you will never be forced to sell when the price is low and you can weather market cycles, including severe downturns.

Bitcoin is bad for the environment

When Bitcoin started being mined by Satoshi Nakamoto back in 2009, mining it could be done on a simple laptop and it took on average 10 minutes to mine a block just like it does today. The Bitcoin algorithm is such that it automatically adjusts the difficulty of the cryptographic puzzle that miners have to solve to validate a block and receive the reward such that it always takes 10 minutes to mine a block on average. The more resources are added to the Bitcoin network, the higher the difficulty. This difficulty is what makes the Bitcoin network the most powerful and hence most secure on Earth.

The reason miners have invested billions of US dollars in specialized mining equipment is because Bitcoin is so valuable – it is not as a result of an increase in the number of users nor the number of transactions. As long as Bitcoin is valuable, companies will invest in mining equipment to get the reward that comes with successfully mining a block. These miners consume large quantities of electricity to run their operations, and this is what has been heavily criticized. But since the cost of electricity is the main operating cost for miners, they are always looking for cheap electricity around the world. Electricity is cheap where there is a surplus of it, and this usually happens in countries that have large renewable resources, so the net impact of running a mining operation in a country that has excess hydro capacity for example may not be as bad as what has been written.

At $7,000 per Bitcoin, the current annual cost of the Bitcoin network is $4.6 bln, and a sizable portion of it spent on electricity bills. But what the Bitcoin network provides for this cost is a Blockchain that is unhackable by any existing computer or technology on the planet.

While Bitcoin has been targeted by environmentalists, the legacy fiat system is not perfect either. A lot of resources are also dedicated to running datacenters, building and powering bank branches and printing banknotes just to name a few.  The US Federal Reserve alone spends $700 mln a year just to print dollar bills. What makes Bitcoin an easy target is simply that it is relatively easy to figure out how much electricity it consumes.

40 percent of All Bitcoins Are Controlled by 1,000 people

Another myth is that supposedly 40 percent of Bitcoins are held by only 1,000 people. The reality is that this is pure speculation. What we know for sure is that there are currently 24 mln Bitcoin wallets. However, one person may have hundreds of wallets while one wallet may hold Bitcoins belonging to thousands, or millions of people, which makes any analysis of the concentration of wealth among Bitcoin holders quite impossible.

The two wallets holding the most Bitcoins have been identified as being the cold wallets of Bitfinex and Bittrex, but someone looking a the raw data would simply infer that the owners of these two wallets are billionaires, while the Bitcoins in these wallets belong to thousands or millions of clients of these exchanges. Coinbase alone claims to have more than 10 mln users. When you trust an exchange with your Bitcoins – you should not – the exchange does not create a wallet specifically for you on the Blockchain, it simply allocates some of the Bitcoins that have been deposited with them from one user to another one.

On the other hand, most wallets create a new address every time there is an incoming transaction. This means that someone with a hardware wallet would have received 5 times 0.2 Bitcoin will own 1 Bitcoin spread over 5 different addresses. There is no way to know that these 5 addresses actually belong to the same person. The heavy concentration of wealth in the Bitcoin world may or may not be a reality, but convincing evidence has yet to be produced to close the debate on this point.

Bitcoin Is used to buy drugs and for money laundering

With Bitcoin, every single transaction is public, which is not exactly ideal if you are looking to engage in illegal activities. Two reports were recently released claiming that only 1 percent of all Bitcoin transactions were used for money laundering or  44 percent for illegal activities. Needless to say there is no consensus on this issue.

The problem with using Bitcoin or any other cryptocurrency for illegal activities is that you cannot do much with those yet if you have acquired them illegally. If you are running a large illegal operation and you suddenly decide to collect Bitcoins instead of cash, how are you going to pay for your expenses? You will most likely need to go through an exchange to get good old fiat currency in exchange for your cryptocurrencies, and you cannot do this anonymously as many exchanges follow Know Your Customer (KYC) and Anti Money Laundering (AML) procedures when registering users. This is where criminals using cryptocurrencies will get caught as law enforcement agencies are monitoring these exchanges. So cash will probably remain the currency of choice for criminals for the time being.

Bitcoin transactions are slow and expensive

Ever since the SegWit soft fork got implemented about 6 months ago, the theoretical maximum number of transactions per second increased from 5 to 7 per second to close to 20 per second, or 1.7 mln per day. This number is of course very far from what it should be to compete with the legacy payment systems. But it has never been the objective of the Bitcoin Blockchain to record every single transaction. Many of the smaller transactions could be recorded off chain, and this is precisely what the upcoming Lightning Network will make possible.

The whole Bitcoin network has been designed around incentives. Fees are necessary to prevent spam attacks on the network. Without fees any malicious attacker could simply send millions of tiny transactions just to fill up the blocks and paralyze the system. The fees make sure that the most important transactions – those for which high fees have been paid – are processed first. And even if it takes a few blocks to get a transaction validated, it is still much faster than a wire transfer that may take up to 10 days (in the case of international wire transfers).

A long road ahead

Most people still misunderstand what Bitcoin is and how it works, and it is going to take time for them to figure it out. When the internet went mainstream more than 20 years ago, many people did not even see the point of having an email address as they did not know anyone who had one. Bitcoin and cryptos in general are there. Bitcoin adoption is still increasing – even in the middle of a bear market which saw the price of 1 mBTC fall from $20 down to $6 – and it is all that matters. Bitcoin has had its fair share of booms and busts in its 9 years of existence, but what makes Bitcoin different from other bubbles is that even though its price went down many times, it has always recovered.

The views and interpretations in this article are those of the author and do not necessarily represent the views of Cointelegraph.com and the World Bank.

Vincent Launay is a finance specialist at the World Bank in Washington DC. He holds an MSc in Finance from HEC Paris and a CFA charter.

Posted on

Bitcoin Mining Wastes Energy? What If That's a Good Thing?

Michael J. Casey is chairman of CoinDesk’s advisory board and a senior advisor of blockchain research at MIT’s Digital Currency Initiative.

I am frustrated by the debate over whether or not bitcoin is an environmental disaster waiting to happen.

No one seems to know what assumptions to use. Depending on what efficiency ratios we assume for currently operating ASIC mining rigs, they’re either consuming 35 terawatt-hours per year, the equivalent of Denmark, or something far less, closer perhaps to Bolivia. The stinginess of mining pools to provide information about their operations can be partly blamed for this.

We also don’t know how much of mining runs on low-carbon energy, such as the mining farms that use geothermal energy in Iceland or hydropower in Washington State. Surely that matters.

And then there’s the “compared to what?” question.

Gas-guzzling banks

If bitcoin is to be assessed as an alternative to fiat currencies, banks and traditional payment systems, then we must consider the costs of securing those systems – the physical bank branches, the armored cars, the staff employed in fraud detection, and so forth.

While only a portion of those legacy costs goes to energy consumption, savings from foregoing those costs could be put toward constructive uses for humankind, such as building more renewable energy sources.

But then, what metric do we use to compare bitcoin to banks? Bitcoin is still a pipsqueak compared with the total value of fiat transactions, which still means its energy consumption is proportionately very high. Motherboard recently claimed that one bitcoin transaction uses as much electricity as the average house does in a week.

Still, we all know that transaction growth on the network has slowed due to congestion and a fixed block size. So, as rising bitcoin prices keep enticing miners to add more hashing power, the numerator is increasing while the denominator stays steady, resulting in a massive surge in per-transaction electricity.

And while that’s hardly a shining endorsement for bitcoin, it’s less of a critique of its energy efficiency than of its scaling challenges.

Things change

Which brings me to an even bigger gripe I have with the ill-defined bitcoin energy debate, which is that too many people assume that technology remains static, perhaps without thinking.

That’s a crazy assumption for an industry in which intense competition for block rewards and an open-source developer pool come together in a dynamic cauldron of development. Technological advances in both cryptocurrencies and energy are changing more rapidly than any of us can keep up with. We must keep that in mind.

On that note, point number one: Lightning is coming. While its payment channels solution isn’t specifically aimed at energy efficiency, if we think about the cost issue as a per-transaction metric, it could help making bitcoin less damaging to the environment – at least when assessed relative to its utility as a payments service.

Whether Lightning succeeds in encouraging more people to use bitcoin for small transactions, rather than hoarding it to capture price gains, remains to be seen. But if you compare what it costs to run the tiny amount of computer processing power to send peer-to-peer payments over a network of Lightning channels against those of the banking and infrastructure needed to process card payments over the Visa network, this future model for bitcoin starts to look far more efficient.

Point number two comes via Coin Center’s Peter Van Valkenburgh, who astutely argued that the more miners are enticed to compete for bitcoin – again, a function of its rising price – the more they are encouraged to seek ever-more efficient sources of power to boost margins and secure an advantage over others.

With the price of solar and wind energy in some places now at 2 cents per KwH or lower, that search will increasingly lead them in the direction of renewable sources.

Where the argument gets really interesting is when we assume that a rising bitcoin price will drive demand for hashing power so high that the network, as some alarmists say, will consume more power than the U.S. by 2019.

Bitcoin saves humanity?

If that happens, then it should not only incentivize miners to seek low-cost renewable energy, but also drive energy firms to work hard at developing solutions for them, with spillover benefits for the rest of the world.

In other words, the incentives that bitcoin demand puts in place could not only drive efficiency and green energy solutions in the crypto world but help to spur them in the wider economy too.

In retrospect, Van Valkenburgh’s point should have be blindingly obvious to all familiar with how Moore’s Law and the incentives of economic competition have driven technology toward greater efficiency for the past 50 years.

It wasn’t obvious because, as I mentioned, people tend to think in terms of a stasis. They fail to see the dynamic feedback loops generated by rapidly changing technologies such as bitcoin.

This, I think is the most important lesson from the many debates that roil the bitcoin community.

In an industry where technological change – rapid, relentless technological change – is the only constant, any debate about the future must acknowledge it as a variable.

Solar power 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

Putin-Backed Political Group Advances 'Green' Cryptocurrency Concept

Members of a Russian political organization formed by President Vladimir Putin have announced plans to advocate for an eco-friendly cryptocurrency.

The All-Russia People’s Front, known as ONF and formed in 2011, recently organized a conference focused on the environment. It was there, according to the organization’s press service, that the plan for a cryptocurrency to be used to fund environmental causes was advanced.

Dmitry Mironov, one of the leaders of the ONF, said:

“We want the units of the cryptocurrency to be received by investors and enterprises that promote the development of environmental technologies. In our proposals, we will reflect our vision of the development of the green cryptocurrency in the country and we hope that the initiatives of the Popular Front will be included in the final version of the bill being drafted by the government.”

The proposal was put forward in the context of moves by the Russian government to prepare new regulations around the trade and exchange of cryptocurrencies. Last week, a senior member of the State Duma – the national legislature – suggested that work on the legislation could be completed by autumn, capping a multi-year process.

Whether the proposal actually advances in the government remains to be seen, however.

Russian officials, including those from the country’s central bank, have issued warnings on cryptocurrency investment in recent days. At the same time, one of Putin’s advisors is trying to raise as much as $100 million through an initial coin offering (ICO) to support a new crypto mining venture.

Putin 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. Have breaking news or a story tip to send to our journalists? Contact us at [email protected].