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Former Visa Exec-Led Startup Ships Nearly 4,000 Crypto Cards in a Week

Crypterium, a crypto payment company led by former Visa exec, has shipped 3,736 Crypterium debit cards in the first week after the launch.

Crypterium, crypto payment firm led by former Visa exec, has shipped about 4,000 crypto debit cards in a week since the launch of the card, according to a press release on June 27.

Crypterium, an Estoniaheadquartered fintech company, launched its Crypterium Card on June 12, offering global community a prepaid card loaded with major cryptocurrencies such as bitcoin (BTC), ether (ETH), litecoin (LTC), USD Coin (USDC), as well as Crypterium’s own CRPT token.

As the company wrote in the announcement, the new bitcoin card operates “in the same way as a traditional prepaid card,” enabling online and in-store crypto purchases on a number of services including Amazon, Netflix, as well as tuition fees, or medical bills, among others. With that, users can also cash out from “any of the 2 million” automatic teller machines (ATMs), with funds converted automatically to local currencies.

Crypterium has managed to deliver 3,736 Crypterium Cards to around 70 countries in the first week after the launch of the solution, citing “booming demand” amid the current BTC price surge and nascent bull market.

While the majority of card orders have come from the United States, the firm also noted a significant demand from the Asia-Pacific region, with Australia ranking third by orders. Exceptional demand, in particular, came from countries with weak local currencies and unstable economies.

Steven Parker, former General Manager of global payment giant Visa, said that these impressive numbers reflect the actual global demand for a “stable debit card” that provides equal status to crypto and traditional currencies in terms of payments.

On June 11, U.S.-based crypto exchange and wallet service Coinbase launched its Visa debit card in six European countries, enabling customers to sync their cards directly to their Coinbase accounts and withdraw fiat currencies from ATMs.

Earlier this week, Cointelegraph reported that the total number of global bitcoin ATMs (BTMs) has reached 5,000.

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Ukrainian Delegation Visits Estonia to Learn About E-Government

A Ukrainian delegation led by an advisor to president met with Estonian authorities to get an expert evaluation of their e-government concept.

A Ukrainian delegation has visited Estonia to get an expert evaluation of their e-government concept, according to a statement one the website of the Administration of the President of Ukraine published on June 12.

Led by advisor to Ukrainian president Mikhail Fyodorov, the delegation met with Estonian authorities on June 10–11. The parties met to discuss future collaboration in the development of new technologies, as well as to get consultations about Ukraine’s govtech concept “Government in a Smartphone.”

Fyodorov stated that Estonia was the first government in the world that conducted digital elections and reached a 99% rate of services delivered online. The official claimed that the goal of Ukraine is to implement the most to-date and innovative technologies and approaches for their govtech concept.

According to the announcement, the delegation has carried out more than 10 meetings with major Estonian authorities, including representatives of the European Commission, Ministry of Foreign Affairs, Information Systems Agency, Estonia’s E-Governance Academy, and others.

The Estonian government has been actively applying blockchain technology in multiple services and administrations, claiming that they were the first country in the world that adopted blockchain tech in its production systems for ensuring the integrity of digital records and systems.

In 2016, Estonian authorities announced an initiative to deploy blockchain technology in healthcare records in partnership with United States data system service provider Guardtime. Estonia has also applied the technology to is e-residency programs and among public notaries.

Recently Cointelegraph reported that Estonia, along with the United Kingdom and Norway, will soon present the results of a blockchain pilot for digitizing government records of national archives.

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Blockchain Project for National Archives Reports Successful Trial for Audio-Visual Content

The blockchain project will present the results of a successful trial in the U.K., Estonia and Norway.

A blockchain project developed to safeguard the integrity and accessibility of digital government records of national archives worldwide will soon present the results of a successful trial deployment in the United Kingdom, Estonia and Norway. The news was revealed in an official press release published on May 29.

The project, named ARCHANGEL, involves the U.K. National Archives, the University of Surrey and the U.K. Open Data Institute, with funding from the The Engineering and Physical Sciences Research Council (EPSRC). Its trial deployment in the U.K., Estonia and Norway focused on leveraging blockchain and other technologies to tackle the long-term future of digital video archives.

In an academic paper to be presented at the CVPR 2019 conference in Los Angeles in mid-June, researchers from Surrey University’s Centre for Vision, Speech and Signal Processing (CVSSP) outlined their successes in developing a tamper-sensitive and future-accessible architecture for archiving audio-visual content. The system was then secured using a proof-of-authority blockchain that is distributed across multiple independent archives.

In a statement for the press release, University of Surrey professor John Collomosse and ARCHANGEL principal investigator said that it is becoming increasingly critical that institutions are able to vouchsafe the provenance and integrity of archival materials to the public in a transparent manner, considering the vast volume of digital content accumulating in archives worldwide. He added:

“By combining blockchain and artificial intelligence technologies, we have shown that it is possible to safeguard the integrity of archival data in the digital age. It essentially provides a digital fingerprint for archives, making it possible to verify their authenticity.”

The press release notes that ARCHANGEL forms part of the Surrey blockchain testbed, which reportedly includes over £3.5 million ($4.4 million) of UKRI (UK Research and Innovation) and EU funded projects.

Professor Adrian Hilton, director of CVSSP, noted in his statement that the ambitious project represents a “great opportunity for the UK to lead internationally in application of distributed ledger technology to secure personal and national data archives.”

The press release further includes the national government archives of the United States and Australia as two places where the ARCHANGEL project has been trialled thus far.

As Cointelegraph reported last year, ARCHANGEL participants have previously stated their aim as being the “promise that no individual institution could attempt to rewrite history.”

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Estonian Consulting Firm Claims It’s Harder to Get a Crypto License Following Regulation

Estonian consulting firm Eesti claims that it is getting harder to get a cryptocurrency license in Estonia.

Estonian consulting firm Eesti has claimed that it is getting harder to get a cryptocurrency license in Estonia in a press release published on May 16.

The Estonian government’s Ministry of Finance introduced changes to the licensing process on May 3. The new regulations adds a numbered formal obligation, extends the processing time from 30 to 90 day and establishes the requirement for a company or branch to be incorporated in Estonia.

Furthermore, the registered office address and the board of directors now needs to be located in Estonia, and the state fee for the emission of the license has been increased from €345 ($386) to €3,330 ($3,729). The country’s minister of finance, Martin Helme, explained the reasons behind the change:

“We have learned our lesson from the banking sector the hard way, and we must now deal with new international risks, with cryptocurrencies among the most urgent of these.”

Eesti claims that it will be hard to obtain a cryptocurrency license now with the new regulations. Current license holders will reportedly have time until the end of the year to fulfill the new requirements, otherwise their license will be withdrawn by the regulator.

As Cointelegraph reported in December last year, the Estonian Ministry of Finance already announced at the time that it would have added amendments to a recently-passed financial bill in order to tighten crypto-related regulation.

Last week, Cointelegraph also wrote that Germany plans to introduce draft regulations allowing blockchain bonds as soon as this summer.

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Bibox Crypto Exchange Rolls Out Blockchain Project Incubator

Estonian crypto exchange Bibox is launching a blockchain project incubator dubbed Bibox Orbit.

Leading cryptocurrency exchange Bibox is launching an incubator for blockchain projects called Bibox Orbit, according to an announcement published on March 30.

Estonia-based Bibox —  the ninth largest cryptocurrency exchange in terms of adjusted trading volume — has revealed that it is rolling out Bibox Orbit, an incubator for blockchain projects.

The announcement does not specify the exact date of the project launch and only says that “it is aimed to provide the best growing environment for high potential blockchain projects and assist them with ecological construction and long-term development.”

In August 2018, major cryptocurrency exchange Binance expanded its services by launching an incubator program dubbed Binance Labs. The initiative seeks to help early-stage blockchain and digital assets projects and entrepreneurs through direct investments and technical assistance.

Last December, Binance Labs released its first batch of blockchain projects from its Incubation Program. Following a try-out tour with over 500 applicants, Binance Labs selected only eight projects, each of which received $500,000 in seed funding and access to necessary resources and mentors.

In February, the Iota Foundation, the company behind the eponymous cryptocurrency, partnered with startup incubator Nova, which aims to fund new startups employing Iota’s platform through the “Iota Cofoundery” program on Nova’s website. The program focuses on the early stages of startup development and seed funding and also grants the selected startups access to Nova’s mentoring program and tech startup team, reportedly consisting of over 20 startup consultants.

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Nasdaq-Powered EU Digital Exchange DX Launches Security Token Trading

DX.Exchange is claiming an industry first with its launch of security token trading and security token offering listings.

Estonia-based Nasdaqpowered digital trading platform DX.Exchange is claiming an industry first with its launch of security token trading and security token offering (STO) listings. The development was shared with Cointelegraph in a press release on March 14.

As previously reported, DX.Exchange went live in January, with support for various fiat and cryptocurrency trading pairs and tokenized stocks. In March, the platform added tokenized exchange-traded funds (ETFs) to its supported products.

According to the press release, the platform now allows investors to purchase security tokens using both fiat and major cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Tether (USDT) and Ripple (XRP). Following this latest development, DX Group will also reportedly restructure into a new entity called DXtech Exchange.

Security token trading represents the latest offering enabled by DXtech Exchange’s existing partnership agreement with Cyprus-regulated broker MPS MarketPlace Securities Ltd., which has thus far enabled the platform’s provision of tokenized stocks and ETFs.

Trading of security tokens will reportedly require investors to undergo an additional layer of Know Your Customer checks, in compliance with the European Union Markets in Financial Instruments Directive II.

MPS will be the entity that lists the tokens and acts as a counterparty in their trading. All trades will be automatically matched using matching engine technology and monitored by a surveillance system.

To demonstrate its new services, DXtech Exchange launch STO listing and trading for a security token dubbed IGWT, which will be offered in a time-limited private security token sale of 18 million IGWT. Thereafter, ten percent of the company’s profits will reportedly be regularly distributed to IGWT token holders that will own 100 percent of the tokens.

The press release outlines the eligibility requirements for listing a security token with DXtech Exchange, which include evaluation by the platform’s investment committee, the provision of a legal opinion, full background vetting, a review of the token’s blockchain protocol and providing DXtech exchange with data on to whom and how tokens are distributed.

The platform’s investment committee reportedly assesses security tokens issuers on the basis of their white paper’s transparency, fundraising method and team.

The press release states that the platform eventually aims to list various security tokens including company shares, company profit splits, funds, bonds, real estate and art.

As security tokens continue to gain industry traction, top crypto exchange Binance is also eyeing the sector, signing an MoU last fall with the Malta Stock Exchange’s fintech and digital asset subsidiary, MSX PLC to jointly launch a new security token digital exchange.

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Nasdaq-Powered EU Digital Exchange DX Adds Tokenized ETFs

Nasdaq-powered digital trading platform DX.Exchange has announced the addition of tokenized ETFs, including SPY and QQQ, to its services.

Estonia-based digital trading platform DX.Exchange has added tokenized Exchange-Traded Funds (ETFs) to its services, according to press release shared with Cointelegraph on March 6.

The move involves the tokenization of popular ETFs, such as SPY, which represents the S&P 500, and QQQ, which backs the Nasdaq Composite at a 1:1 ratio. UWT (crude oil) and UDOW are among other ETFs offered on the platform. The ETFs offered can now be purchased both for cryptocurrencies and fiat during trading hours as well as after-hours.

According to the press release, the introduction of tokenized ETFs on DX.Exchange complies both with the latest guidelines issued by the European Securities and Markets Authority and with the EU Markets in Financial Instruments Directive II.

The chief operating officer of DX.Exchange, Amedeo Moscato, stated that he believes that the latest move by the EU-regulated company opens the world of popular financial assets to crypto holders. His statement reads:

“As of today, there’s over 130 Billion USD worth of Crypto that can now be invested in Digital Stocks and ETFs. Crypto investors who wished to hedge part of their crypto portfolio had only USD stable coins or limited options. Now they can invest in real world assets on the blockchain.”

DX.Exchange states that adding ETF trading to the platform will attract investors seeking to benefit from a lower-cost venue for executing their trades. Moreover, the decision will reportedly allow smaller retail investors or investors from developing countries to enter the market.

DX.Exchange first appeared as a concept in May last year and was launched in January of this year. The company uses Nasdaq’s Financial Information Exchange protocol to deliver its products.

As Cointelegraph wrote, the company initially proposed that crypto holders purchase tokens backed by stocks in various major companies, including Amazon, Baidu, Apple, Facebook, Google, Intel, Microsoft, Netflix, Nvidia and Tesla.

The trading at the Estonian exchange is currently only available for traders in the European Union. However, the company plans to make trading available to United States-based customers in 2019, according to a tweet from its co-founder and CEO in early January.

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Estonia: Amendments to Anti-Money-Laundering Regulations Will Tighten Crypto Regulation

The Estonian Ministry of Finance is about to add amendments to the national AML regulation, bringing tighter cryptocurrency regulation.

The Estonian Ministry of Finance will shortly add amendments to a recently-passed financial bill that are meant to “tighten” crypto-related regulation, Estonian financial newspaper Äripäev reports Nov. 28.

According to the article, a new version of the Anti-Money-Laundering (AML) and Terrorist Financing Prevention Act came into force this week in Estonia, conforming legislation to the EU’s so-called “Fourth Money Laundering Prevention Directive.”

The regulation introduced this week reportedly introduces “virtual currency exchange service providers” and “virtual currency payment service providers,” while before there only was “alternative means of payment service provider.”

Still, the Financial Supervision Authority (FI) has since announced that cryptocurrencies and the companies offering crypto-related services introduce money laundering risks, which is reportedly the reason for the new amendments, according to Äripäev.

As Cointelegraph reported, Estonia has rolled back its plans to release Estcoin, a national digital currency, after the President of the European Central Bank Mario Draghi criticized the initiative.

Canada is also looking towards more regulation to prevent crypto from being used for money laundering, as the Canadian House Finance Committee recommended during its review of the Proceeds of Crime Money Laundering and Terrorist Financing Act (PCMLTFA) in mid-November.

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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.

INFOGRAPHICS

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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Union of European Football Associations Implements Blockchain-Based Ticketing System

The Union of European Football Associations (UEFA) has successfully deployed a new ticketing system via mobile phones based on blockchain technology, according to an August 16 press release.

After the “successful implementation” of the blockchain ticketing system for 50 percent of the tickets for the 2018 UEFA Europa League final in Lyon in May, the UEFA had decided to increase the technology’s reach “to all of the general public” in Estonia.

The official UEFA announcement states that “100% of the match tickets” for the UEFA Super Cup soccer match between Real Madrid and Atletico Madrid held in Tallinn, Estonia on August 15 were sold using a blockchain-based iOS or Android application.

The UEFA will continue to develop the use of a blockchain-based ticket distribution system for future events, the announcement notes, adding:

“UEFA is looking to make its ticket sales process for matches more simple and safe — thanks to a new system aimed at providing secure ticket distribution, and which prevents the replication and duplication of tickets.”

Earlier this summer, Cointelegraph published a descriptive follow-up on how to use cryptocurrencies during the FIFA World Cup 2018 in Russia. And this winter, Harunustaspor, a Turkish soccer team, had announced that it had partially paid one of its players in Bitcoin (BTC), Cointelegraph reported January 31.