ESG means Environmental, Social & Governance. SDG means Sustainable Development Goals. SDGs are set by the UN. Most SDGs have ESG implications. ESG rated companies have become popular in investment portfolios. This is because the ESG standing of a company is a proxy for long term value, say the boosters of ESG based investing. The retail investor, by necessity, outsources research on ESG to professionals and invests in funds with a sustainable focus. The funds are meant to investigate the sustainable claims of many companies. Instead of doing so themselves, they rely on outfits like MCSI and Sustainalytics to choose the portfolio companies.

Much like the ratings agencies whose triple A rated bonds cratered as the financial crisis hit in 2008, these ESG raters do not and cannot stand by their scores when non-sustainable practices at firms with high ratings are exposed. Similar to those rating agencies who also got paid by their targets to rate the bonds that they issued, there is often a conflict of interest at the heart of these ratings. The scores are often proprietary and employ models and methods, including survey based results which rely on the enterprises to self-report. Self-reporting has never been a good method to rate enterprises or individuals.

Sustainable Development Goals

After laying bare the debate about ESG based investment strategies; some efforts to improve the quality and depth of the data and hence make the scores more objective are discussed. Some of these proposals use the blockchain to secure the truths about the business attested by programmatic or other verifiable metrics. A combination of methods probably works best, with suspicious activity getting investigated further, including the use of shoe leather.

The US Labor department regulators recently released a proposed new rule, to clarify the ERISA guidelines as being concerned purely with pecuniary results. The new rule says that ESG ratings should not be used as a criteria for investment. Since this affects all investments by pension plans, it has a great influence on investment strategy and climate in the US; since pension plans control a huge chunk of investment. This new rule could be a huge problem for portfolio managers who are in charge of pension funds.

Another idea that has gained prominence when talking about the superior pandemic performance of ESG rated companies was that ESG ratings have nothing to do with it. A well respected analyst has asserted that ESG ratings do not have anything to do with the better performance of ESG rated companies; since the difference in performance during the pandemic is due to the fact that energy companies and airlines who have poor ESG ratings cratered in first weeks of the pandemic. You can certainly apply this narrow logic to the performance metrics focused on a specific crisis. However, nothing can be said about the wider alpha generated by better ESG metrics. Indeed the better performance of ESG companies during the pandemic can be thought of as being generated by their resilience, better credit ratings and being relatively sheltered from black swans like the pandemic.

One more example is a company called Boohoo in the UK. Boohoo had received good ESG ratings from the ESG rating agencies which earned it a place on some portfolios in ESG funds. When news broke that their supply chain included vendors that underpaid their workers, the stock dove. These revelations resulted in its removal from the ESG funds. This points to the lack of depth in the rating; for a fashion brand suppliers matter. This is a case of a company receiving higher grades than they should have, because of the lack of proper due diligence.

The head of State Street Advisors STT , Cyrus Taraporevala, published an op-ed in the Financial Times arguing against the dept of labor rule about the Erisa guidelines and its proscription of ESG ratings as criteria for investing. Taraporevala is all for the guidelines that put the fiduciary responsibility of the portfolio managers to focus on pecuniary results. However, his argument is that ESG forward companies are better suited to weather the storms since they focus on employee well-being, resilience of supply chains and agile management. This is more true in the longer horizon which most pension plans should be focused on. He asserts that stocks with higher ESG ratings are better bets in the long term. Taraporevala does admit that there are some gray areas in measurement and accounting for ESG risks.

There was some talk in the ESG community that using the SDGs to measure ESG performance would be better, since they are finer grained and may be actually measurable. There are 17 headings there rather than just three in ESG.

For carbon emissions and other types of environmentally destructive activities where there can be a measure of objectivity, independent auditors and public data can bridge the transparency gap. The IWA has created a Carbon Emissions Token that includes several measurements and assertions. Nominally this would be on the blockchain so that the various parties who issue and monitor the token can assert to the measurements.

Another effort in the climate & accounting SIG in Hyperledger to setup utility emission channels will use public eGrid data, published by the EPA, along with the customers utility bills to calculate the emissions attributable to their energy consumption can be used to rate enterprises on their emissions profile. This uses a blockchain to capture this information from multiple parties. All of this point to the original use case for the blockchain to be a non-repudiable source of ordered documents.

Other ESG factors are harder to measure, especially the social and governance aspects. The ESG rating agencies who use a host of factors to calculate the ESG ratings will have to use many more automated methods using publicly available data; including some from blockchain anchored data stores. These methods will get better as time passes and ESG ratings will no longer be questioned as proxies for long term performance.

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ESG And SDG Alpha Backed By The Blockchain - Forbes

Its no secret that women are underrepresented in the technology and financial industries. In the U.S, women only hold a quarter of computing-related jobs. Some sectors, like software engineering, fare even worse, with female representation as low as 15%.

And now along comes blockchain, a technology that promises a global revolution through decentralization. Blockchain has already begun to transform many industries, from finance and supply chain management to healthcare and governance.

However, it has yet to significantly change the demographics of the tech industry.

According to a study conducted by Long Hash, a cryptocurrency research firm, women only represent 14.5% of blockchain startup team members. At the management level, the number is even lower, with women only accounting for 7% of executives and 8% of advisors.

In Africa, the story has been quite different. The continent has greatly taken to blockchain technology and cryptocurrencies, and women have been playing a key role. Despite the tech industry traditionally being a boys club, a rapidly growing number of fearless, dedicated and determined women have taken the industry by storm, rising to various positions of power and influence.

In Africa, women have faced marginalization for centuries. Economic exclusion, lack of access to education, gender-based violence, limited participation in political decisions these are just a few of the many challenges that the continents women face.

This has been one of the reasons Bitcoin, and the underlying blockchain technology, have appealed to many women. For them, blockchain promises freedom. The technology gives them hope that they can break free from the shackles of financial captivity by the legacy systems, decades of corruption, lack of opportunities and more.

For example, in Botswana Alakanani Itireleng has been on the frontline in preaching the blockchain gospel. Known as The Bitcoin Lady, she is the founder of Satoshicentre, a blockchain hub which works with several developers to use blockchain to solve Africas biggest challenges.

In South Africa, Sonya Kuhnel has continued to be one of the most renowned leaders in the blockchain space. Kuhnel is the founder of Xago, an XRP cryptocurrency exchange and payment gateway that allows retailers to accept XRP payments. She is also the founder of The Blockchain Academy, an institution committed to up-skilling 10,000 software engineers on blockchain technology by 2022.

In Kenya, Roselyn Gicira leads blockchain innovation and adoption, serving as the chairperson of the Blockchain Association of Kenya. Gicira also leads the Kenya Women in Blockchain Chapter which seeks to ensure that more women get into the blockchain industry.

And in Nigeria, Doris Ojuedeires efforts to promote blockchain have gone beyond her home country, reaching out to women across the continent and bringing them into blockchain and cryptocurrencies. She shared her journey with me, one that has seen her rise to become one of Africas most influential blockchain voices.

Doris got into cryptocurrencies when she was studying accounting in university, eight years ago. At the time, crypto was a niche field that few in Africa were involved with most of them men. This didnt faze Doris, and she sought all the materials she could find to learn more about Bitcoin and other upcoming cryptocurrencies.

She started off by investing in crypto trading. As a novice, Doris lost a lot of money initially through online scams. However, she battled on, and in time she started making profits from crypto trading. The venture proved to be quite fruitful for her, giving her financial independence while still at the university.

It was when she graduated that she discovered there was much more to Bitcoin than just making profits. As she learned about blockchain technology, she realized that it had the potential to transform lives for millions of Africans, especially the continents women. It was then that she decided to embark on educating the masses about blockchain, a passion that still drives her today.

In Africa, Bitcoin had become synonymous with scams after several investors lost millions of dollars to Ponzi schemes. This was the first thing Doris set out to change, educating thousands of Nigerians about Bitcoin and the world of opportunities it opens up.

She realized that women were vastly underrepresented in Bitcoin and blockchain. She set out to change this, eventually leading to the birth of Blockchain African Ladies (BAL). BAL is a non-profit organization that educates African women on blockchain technology. The organization has grown rapidly and now has members in Kenya, Cameroon, Nigeria, South Africa, Ghana, Egypt, Cote dIvoire and many other countries.

BAL organizes meet-ups, workshops, mentorship programs and conferences for the women, geared towards sparking an interest in blockchain. Its biggest event is the Blocktech Women Conference, an event that attracts some of the foremost leaders in blockchain to inspire, educate and interact with the women. Unlike most blockchain events that have only a few female speakers, 80% of the speakers at Blocktech are women.

Doris has gone beyond education, though. She told me:

While blockchain can help eradicate, or at least reduce, many of the challenges that African women go through, teaching them about it isnt enough. The women need to be financially independent. This is the biggest weapon they can use to liberate themselves. When they no longer depend on anyone, they can then reach their full potential.

Her desire to make African women financially stable led to the founding of Crypto Lioness, a platform she uses to educate women about crypto trading. Crypto Lioness allows the women to connect via WhatsApp, Telegram and other social media platforms to learn the dos and donts of crypto trading, share tips, learn from experts and support each other.

Through Doris efforts, thousands of women in Africa have joined the blockchain industry. This is her greatest accomplishment, she tells me. She believes that this will be a catalyst for widespread adoption of the technology and cryptocurrencies across the continent.

However, she believes that there is much more to be done if women are to become fully involved in blockchain, a belief that Ciara Sun, the vice president of Huobi Global shares.

Sun joined the blockchain industry after working with global giants such as the Boston Consulting Group and Ernst & Young.

Having seen how the current financial world was working, it was an easy move towards what I considered the future world of finance, she tells me.

Women continue to face challenges that most men dont, including having their decisions frequently questioned, she revealed. With blockchain being an intersection of finance and technology two industries where women are underrepresented its no surprise that women occupy very few positions of power and influence.

This has to change if blockchain is to achieve its full potential, she believes, stating:

Crypto and blockchain is so heavily based on doing things differently, but when you have only one half of the population involved in up to 99 percent of the big decisions, you are limiting the potential to really change things and cause great disruption.

The crypto and blockchain space needs to be bold and brave enough to seek out the other perspectives that can come from women in the space.

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Championing Blockchain Education in Africa: Women Leading the Bitcoin Cause - Cointelegraph

Everyone in crypto has been talking about decentralized finance (DeFi) since bankless lending started to boom in June. But, looked at another way, its really a governance boom.

Into this environment has stepped Greenfield One, an early-stage venture capital firm that just published a comprehensive new resource on the topic of blockchain governance.

Take, for example, COMP. DeFi has been hot ever since Compound started distributing its COMP governance token on June 15. COMP didnt introduce new features to the product, it just gave users a means to voice how the $777 million lending protocol should evolve.

The report from the Berlin-based Greenfield One looks at this and every notable spin on blockchain governance leading up to the birth of yield farming following COMPs debut.

The [Compound] community uses a variant of liquid democracy, the report states.

But despite crypto founders best intentions, the Greenfield One team found blockchain governance schemes tend to get put together fast and then treated with reverence. At times that faith is misplaced.

Im not saying that teams arent taking governance seriously, but it always feels like something that they build on the side, Jascha Samadi, a Greenfield One partner, told CoinDesk in a phone call.

The venture firm often starts working with portfolio companies well before mainnet launch, Samadi said, coaxing them to consider various governance models as early as possible.

Therefore, Greenfield One thought it would be helpful to have an overview of what different groups have tried so far. Since such a guide didnt already exist, the group decided to make one.

This is such an important topic that we really just need to raise awareness, Samadi said.

The report covers Bitcoin, Ethereum, Decred, Tezos, Cosmos, Polkadot, several DAO frameworks, MakerDAO, Nexus Mutual and Compound.

It also deals with describing the roles of stakeholders seen across blockchains such as miners, validators, users, full-node operators and companies. It deals with strategies for off-chain governance as well as the various questions that can be dealt with on-chain.

The cryptocurrency industry has a tendency to function as if the world began on Halloween 2008, when Satoshi Nakamoto released the Bitcoin white paper, but Greenfield One realized there is a larger literature of organizational theory that applies to cryptocurrencies.

Traditionally, scholars have been focused on the firm as the unit of analysis in organizational design, which has become less and less congruent with the emerging patterns of organizing in peer-to-peer networks and on platforms, they write.

The report opens its discussion by grounding decentralized technology in a larger conversation about how humans get things done together, such as through firms or nations.

From an institutional perspective, blockchains can be viewed as a new coordination technology competing with firms, markets and national economies as institutional alternatives organizing the economic actions of groups of people, the report states.

This alternative first manifested with Bitcoin.

But not everything Bitcoin and other cryptocurrency networks need can be sorted out on-chain. By far not all activities are reliably traceable and automatically verifiable on public blockchains (especially human labor, where some subjectivity in quality is involved), the authors write. Thus the need for residual control, that is human-powered governance.

The deeper we dug we realized that its such a broad and vast topic, Samadi told CoinDesk. Before we dive into how to best or most effectively govern we need to understand what blockchains are in a broader sense of organizational theory.

Cryptocurrency may be moving Earth toward the singularity, but humans are still key to the project for the foreseeable future. As the writers note in their conclusion:

"In the end, social consensus is what defines a cryptonetwork."

Read the full report below:

Read the original here:

Crypto VC Firm Assesses the 'State of Blockchain Governance' - CoinDesk - CoinDesk

The 2020 election cycle poses many challenges to election security, voter integrity, voter confidence and voter safety. Renewed efforts from threat actors to disrupt the elections process, combined with the effects of the COVID-19 pandemic, raise serious questions about what Election Day will look like.

Many argue that integrating blockchain technology into the election process will address these new concerns and improve the integrity and security of elections. While efforts to leverage blockchain technology in elections are noble, there is still much for election officials to understand about blockchain technology:

What is blockchain technology and how could it secure the election?

Blockchain technology takes many forms but typically consists of a decentralized public ledger made of records, or blocks. In theory, the decentralized nature and mathematics of blockchain technology would improve the integrity and auditability of elections: Its design relies on distributed copies, across many nodes, of each entry on the ledger for immutable proof of each ballot cast. Researchers and private organizations have referenced these blockchain elements as ways to respond to old and emerging threats.

However, election officials must understand how blockchain technology would be integrated into the current election infrastructure. Voting is currently limited to in-person voting or mail-in ballots. Blockchain technology would require a digital platform and almost certainly require an internet connection, two things that are not easily accessible to many Americans.

How would blockchain integrate into the current elections infrastructure?

U.S. elections rely almost entirely on in-person voting, with mail-in ballots accepted for documented exceptions. Transitioning to a blockchain-based solution would only be feasible in the context of remote voting. There are many moving parts to elections infrastructure, including voting machines, voter registration databases, voting tabulation technology and election management systems. All of these components are essential to ensuring every Americans ballot is properly counted. If we move to blockchain, what technology requirements would exist for each voter to cast a ballot? How would voters verify their identity online? Would blockchain solutions require everyone to vote online?

In addition, blockchain does not exist in a vacuum. It requires extensive support from human personnel and other technology. The expertise for managing instances of blockchain technology remains scarce. Many state and local elections officials often have minimal technical resources to meet basic business requirements. Incorporating challenging and largely unproven blockchain technology into their environment would be an onerous task.

Is blockchain technology currently in use in American elections?

Remote blockchain voting solutions have been used in local elections in West Virginia, Oregon, Utah and Colorado. However, these initiatives were short-lived following research that the remote voting services were found to be vulnerable to attack. Academic and governmental organizations have expressed concern about the vulnerability of these new technologies. Despite significant interest in the technology, blockchain continues to only be implemented on a limited scale.

What authority do federal, state, and local governments have in the authorization or prohibition of blockchain technology?

The American election system is designed to be decentralized, with most authority at the state and local level. This guarantees that elections are conducted in the most secure and accessible way for citizens. What regulations should be in place for blockchain technology? Would there be direction from the federal government regarding blockchain? How can government ensure the integrity of the vendors offering blockchain solutions to elections? Third-party technology used in 2020 Iowa Primary elections led to confusion and concerns over the validity of results. While the software solution used in Iowa did not leverage blockchain technology, this is proof that without proper testing, new technological solutions can complicate election operations. It is crucial that election officials address supply chain risks and vet firms offering election software.

Will blockchain technology ever be ready to implement into the voting process?

There is still much to learn about the costs and benefits of blockchain technology. The potential benefits that blockchain could provide to the elections process cannot be discounted. Improvements to election integrity and auditability are attractive technologies. However, the American election system is not quite ready to implement blockchain technology on a large scale.

There is little doubt that officials must address the concerns of security and integrity of American elections. However, more questions than answers exist on what blockchain means for the U.S. election system, so it should not be seen as the solution at this point.

Burt Barrere is a manager for cybersecurity and Dan Goga is an associate for cybersecurity, both with Grant Thornton Public Sector.

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The U.S. Election System Is Not Ready for Blockchain Technology Yet - Nextgov

I started to ponder this question after I read this thought piece by Zurab Ashvil, the Founder of L3COS, on ABC Money. In it, Ashvil outlines why he thinks existing decentralised blockchains have failed and how a permissioned, decentralised and regulated blockchain is needed if the technology is going to be used to power digital economies.

Most people in crypto and blockchain will dismiss this idea out of hand and I must admit it isnt an idea that has ever struck me as the answer to the problems the industry faces. At the same time though, theres no doubt that blockchain technology has huge potential but hasnt been adopted en masse. Furthermore, Ashvils assertion that the public and permissioned blockchains used today have failed to prove popular enough is certainly a valid one.

Which brings me back to my original question is permissioned, decentralised and regulated blockchain the future of this technology?

First of all, its worth looking at the arguments for and against the existing blockchain solutions that exist. On the one hand, there are public blockchain, like Ethereum, and on the other there are permissioned blockchain, like IBM Blockchain.

Anyone who has been around long enough will know that blockchain began in the public sphere. Bitcoin was released as a peer-to-peer electronic cash system and Ethereum was developed afterwards as a public blockchain for decentralized applications. These public blockchain are certainly driving innovation, as the massive increase in DeFi use cases has shown. However, the reality is that these are still niche interests within tech and finance.

When it comes to permissioned blockchain, you see some headline grabbing stories, such as how Maersk has collaborated with IBM on the Tradelens platform. But these stories are isolated and sporadic rather than a gathering snowball of use cases that you would expect if this approach was going to win through.

So, to the future. Ashvil argues that the decentralised elements of blockchain technology are the important bits that must be kept because they mean that huge amounts of bureaucracy can be cut from economies as they digitise. The problem he wants to solve is the anonymity of entities interacting in a public blockchain, which he describes as follows:

This is such a fundamental error because it doesnt reflect human nature or the societal structures we all recognise. People want to know who they are dealing with so they can be trusted to operate fairly and honestly.

L3COS claims to solve this problem through the implementation of 195 super nodes, under the control of sovereign states, at the top of a triple layer consensus system. These nodes exchange information with each other via Proof of Government consensus, with the system already achieving over 1.5 million transactions per second. It certainly sounds impressive and, according to Ashvil, the L3COS system provides the regulated infrastructure that can power Central Bank Digital Currencies (CBDC), another hot topic in blockchain right now.

Of course, the big question as to whether the permissioned, decentralised and regulated blockchain they propose will achieve all this revolves around whether it can gain traction in a way that previous blockchains have not.

The involvement of governments will be key and might be tricky considering how many states have cracked down on cryptocurrencies in the past. At the same time though, it is wrong to conflate blockchain technology with cryptocurrencies and some nations are already using blockchain in their digital services for citizens. Furthermore, L3COS is designed to allow all existing decentralised applications to transfer from other blockchain networks, which could help it to gain momentum.

All of these things, plus many other factors, will play a role in deciding whether blockchain has a permissioned, decentralised and regulated future and well have to wait and see what occurs. Predicting which technologies will or wont succeed is always difficult but the fact that so many states are now looking at blockchain for their CBDC must suggest that government involvement will play a role in the technologys evolution.

Excerpt from:

Is permissioned, decentralised and regulated the future of blockchain? - fingerlakes1.com

A major satellite city in South Korea, Seongnam, is preparing to expand its existing blockchain-powered payment program by issuing new digital gift certificates.

According to Kyunghyang Shinmun, the citys Blockchain infrastructure will rely on a mobile app named Chak app. This app will be built by the Korea Minting and Security Printing Corporation, or KOMSCO. Seongnams project hopes to make it easier for elderly and middle-aged residents to utilize the citys existing Blockchain technology. They also hope to strengthen the use of contactless payments during the COVID-19 pandemic.

Local media outlets said that three digital gift certificate types representing cash, check cards, and mobile cards can be used at 45,000 card merchant locations across the city.

Seongnam is well known for its Pangyo Tech Valley an IT complex that serves as the headquarters for many of the countrys tech giants, such as Kakao Group, SK Telecom, AhnLabs, Nexon, among others.

The operator behind Seongnam's project previously praised the record breaking profits brought in by its stablecoin and blockchain projects in 2020.

KEB Hana Bank, one of the biggest commercial banks in South Korea, reached an agreement on August 9 with the state-backed highway operator, the Korea Expressway Corporation, to bring blockchain-based toll payments to the nations highways.

Original post:

A City in South Korea Is Expanding Its Blockchain Payment Program - Cointelegraph

AS the world becomes increasingly digital, many of the traditional ways to transfer and trade assets can be deemed as time-consuming and inefficient, particularly so for transactions that need to be safe, secure and traceable.

In the wake of new technology, OMC Group is advocating blockchain as the solution to these problems.

Co-founder and chief executive officer Datuk Jack Lee believes there is enormous potential for businesses to develop blockchain-linked applications for the security of data and information.

Most people equate blockchain to bitcoin and speculative cryptocurrency investment. In reality, says Lee, the technology enables traditional assets to be digitised conveniently, making them more secure to trade, manage and operate.

In recent times, asset tokenisation has become increasingly popular.

So OMCs mission is to redefine peoples understanding of blockchain and its benefits, he says.

The company, which developed the OMC platform, is a subsidiary of software and IT services provider AIO Synergy Holdings Bhd.

Capturing business: Lee aims to grow its B2B segment, particularly in supply chain integration, real estate transactions, healthcare records and financial sectors.

Lee, who hails from Miri, Sarawak, is no stranger to the tech scene and has been involved in nurturing and growing tech related businesses.

OMC started developing its proprietary blockchain platform in 2017 and has invested more than RM10mil of its internal funds in the business. It has been offering solutions through its own patented decentralised ledger technology (DLT) known as Authorised Proof of Capacity (APoC), which is the consensus mechanism used to run its OMChain.

The APoC consensus mechanism is used for trust and verification purposes on the OMChain, a public blockchain network which distributes data in a decentralised way.

This is to enable companies in different industries to gain insights that can be combined with blockchain technology to build new kinds of projects.

OMC, in turn, will be able to monetise its blockchain-as-a-service (BaaS) platform through charges for users to develop applications for various industries such as plantation and agriculture, e-commerce, financial services and entertainment.

OMCs platform also supports private transactions and smart contracts to ensure data privacy on the blockchain.

The company also sells its hybrid point-of-sales (POS) devices, which include a mining feature that rewards users with points that can be used for transactions. At the moment, OMCs POS system is used by more than 30,000 customers in China, Taiwan, Vietnam, Thailand, Singapore and Malaysia.

Setting up its tech: OMC has invested more than RM10mil in the business.

However, Lee acknowledges that there is still a lot of market education work needed to increase awareness on this technology despite the fact that blockchain technology has been around since early 2000.

Our focus is currently on the business-to-business (B2B) segment, especially in the areas of identifying management and certification, supply chain integration, real estate transactions, healthcare records and financial sectors.

The key benefits of blockchain technology is that it can reduce processing time and save money while ensuring transparency, security and trust by removing intermediaries from these processes as well as removing the risk of manipulation by the participants in the process.

This allows businesses to save time and cost and build trust and confidence for their brand with consumers, he says.Target industries

With industries rushing to digitise and automate their operations and transactions, Lee opines that blockchain could potentially play a role in revolutionising government applications, supply chain logistics, consumer transactions and data security.

At the moment, the healthcare market in the Asia Pacific region has seen the most significant growth in the level of blockchain technology adoption.

The end users in this sector include healthcare providers, healthcare payers and pharmaceutical companies. There are a number of applications within the healthcare segment that are utilising, or could potentially leverage, blockchain including clinical data interoperability and exchange, billing, claim settlements and supply chain management.

In short, Lee says, the technology has made the management of data much more methodical for the industry and has enhanced data security and interoperability.

While Asia is seeing strong growth in this area, China remains the most prominent player in blockchain growth. Tech giants such as Alibaba and Tencent also offer or are developing similar blockchain services.

Blockchain technology is still in the early majority adoption phase, where the technology has begun to gain traction and spread exponentially, but there is still some way to go for it to reach full adoption.

But one of the obstacles that the industry faces is the lack of talent. As with most new technology, the expertise needed to support its growth is scarce. And despite growing interest in Asia, there are not as many blockchain developers in the region.

On its part, Lee says the group is taking the initiative to help develop the blockchain ecosystem in this part of the world through the Asia Blockchain Center (ABC) which will serve as an accelerator, incubator and coworking space to nurture major blockchain innovations.

ABC will also provide various academic programmes and collaborate with universities to cultivate talents to meet market needs. The centre also aims to enable developers to innovate and work together.

This will hopefully develop talent as well as assist businesses to adopt this fast growing technology.

OMC strives to work with the best talents and groups in the industry to research and develop blockchain solutions to help businesses adopt blockchain technology to further benefit businesses, society, community and the country.

We strongly believe in achieving our vision to become the leader in the blockchain industry, says Lee.

Lee says the groups legal team is currently engaging with regulators to work out a possible legal framework on blockchain payments. Its plans include obtaining a licence in Malaysia to offer financial services in 2021 such as cross-border payment services, as well as expanding its footprint globally through its own patented technology, APoC.

Another important factor for the companys growth is funding a notable challenge for most startups in the tech space to continue developing its technology.

Lee says OMC has attracted interest from the tech and investment community, and is in talks with a strategic investor from China to raise new funds to expand its BaaS platform across the region.

It aims to secure an investment to further develop and promote its B2B blockchain ecosystem, especially in North Asia and Asean countries. Such capital would also help them in developing the expertise needed to enhance the ecosystem, says Lee.

While investment discussions have been delayed by the Covid-19 pandemic, Lee says OMC continues to engage and welcome approaches from strategic partners.

Additionally, ABC will be playing a part in drawing in more funds for this technology by becoming the nexus of Asias blockchain investment firms.

Although the company has to navigate through delayed plans and short-lived trends in a fast changing market, Lee expects 2020 to still be a very busy year for OMC. The coronavirus outbreak may have disrupted some of the timelines, but the company has taken the time to refine and recalibrate many of its products and services and Lee hopes to roll them out by the end of the year.

The team continues to labour through its research and development work and they remain focused on their long-term goals.

I believe that blockchain will be the trend in the future and I foresee that the demand for blockchain applications will be huge, hence our move into this direction will help to redefine how companies and businesses adopt this technology in the new digital age, says Lee.

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Advocating blockchain adoption - The Star Online

Acting Comptroller of the Currency Brian Brooks said Thursday he thinks banks will be connecting to blockchain the way they are connecting to the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network in three to five years.

Then, they won't be the bottleneck of transactions, he told Jeremy Allaire, CEO of Circle, in a Zoom interview for the stablecoin payments software company's "Money Movement" podcast.

Instantaneous settlement [with stablecoin] would be a game-changer," Brooks said, noting the system's speed and cost advantages.

There is a 7%charge on a transactions changing dollars to yen, he said. "Imagine if you could take the cost out,"he said.

Beyond that, he said, stablecoin may help preserve the role of the dollar in the financial system.

"Currently, we are the only country in the world that doesn't have to change money to buy oil in Saudi Arabia. Even the Saudis do. That can't last for years,"Brooks said. "The dollar has been reserve currency for a long time not because it's better or easier to use but because it's more liquid."

Stablecoin is to the dollar what email is to the letter, Brooks said,and users need to have no less confidence in it than if they were using a prepaid debit card.

He argued for a decentralized system of payment rails led by companies rather than one that is government-owned, noting that the Visa network began as a credit card offered by Bank of America.

"What I always find puzzling when we talk about this is, why, given that history, people now believe that the payments system is a government service,"Brooks said.

The comments could be seen as a blow against the Federal Reserve's effort to roll out the FedNow system when The Clearing House's Real Time Payments network is already running,with 29 participating financial institutions and a reach of more than half of demand deposit accounts in the U.S.

"My personal view is, the ultimate public ownership of the payment rails is when you have a network, like the internet, of interconnected institutions and computers that are maintaining ledgers and allowing direct person-to-person transactions,"Brooks said. "We're way down the path of decentralization."

Before joining the Office of the Comptroller of the Currency, Brooks served as chief legal officer for the digital currency exchange Coinbase.

Regulators need to establish reserve and audit expectations for stablecoins, he said, adding that Bank Secrecy Act and anti-money laundering safeguards are the most important aspects of money transmission networks to be perfected.

There needs to be a balance between privacy and the ability to investigate crime with stablecoins, Brooks said.

"Private transactions that can't be traced forever is a nonstarter,"he said.

The risks of stablecoins are not trivial, Brooks said but added there is too much public appetite for their benefits to stop them.

By analogy, Brooks said every municipal government wanted to ban Uber, but consumer demand for the service overwhelmed their objections.

The OCC last month told nationally chartered banks and federal savings associations in an interpretive letter they had the authority to provide cryptocurrency custody services for customers through escrowing encryption keys used in connection with digital certificates.

Institutions that provide crypto custody services must conduct them "in a safe and sound manner, including having adequate systems in place to identify, measure, monitor, and control risks," the letter said.

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OCC chief expects SWIFT-like bank-to-blockchain connections in 3 to 5 years - Banking Dive

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The advent of blockchain technology in the year 2009 hascompletely revolutionised the digital space. The idea of creating auniversal, entirely decentralised network for carrying outtransactions of a myriad nature has forced us to re-think thecapabilities and limitations of the internet. While blockchaintechnology holds the future and the key to ensuring ease ofcarrying out transactions over the digital space, the same has alsoled us to contemplate some very pertinent questions as to thelegality of such transactions devoid of any laws or regulationsoverlooking the same. A blockchain network that is transnational innature also leads us to examine how our existing territoriallylimited laws can ensure supervision over transactions happeningover such a vast network.

The present series seeks to examine some of these ragingquestions that need to be discussed, deliberated and answered. Theseries has been divided and presented into multiple, separate,comprehensive parts, with each part dealing with a specificsubject. The first paper in the series is presented in three parts,wherein the first part will capture the intricacies of theblockchain network, its essential characteristics and types, whilethe second part will discuss blockchain from a legal perspectiveand will set out the measures adopted by various sectoralregulators in India, the third and final part shall discuss theinitiatives of various States in India in advancing theimplementation of the technology. The forthcoming parts in theseries aim to analyse the interaction of the technology withdistinct legal practices such as Data Privacy, Arbitration, DisputeResolution, Corporate Transactions, Intellectual Property Rightsetc.

As the world advances towards a digital revolution, it has ledto the birth of a decentralised world that seeks to self-govern andnot rely upon a central authority of power to sustain and survive.It is a world that is increasingly controlled by codes, hash,programming to name a few. This system of decentralised power overthe internet arises from a general mistrust of central structures,established rules of conduct (overregulation) and governance thatseeks to promote an era of digital anarchy.

The name 'blockchain' stems from its technical structure a chain of blocks. Each block is chronologically linked tothe previous block via a cryptographic hash. A block is adata structure that allows each system to store a list oftransactions/information. Transactions are created and exchanged bypeers of the blockchain network which modify the state of theblockchain. As such, transactions can exchange monetary amounts,but are not restricted to financial transactions only and evenallow the execution of arbitrary code within so called smartcontracts.1

Blockchain was created to support a uniform, secure,decentralised system for sustaining the transfer of value-basedcrypto assets. The technology that first made its appearance in2008 in a paper written by Satoshi Nakamoto2 (apseudonym), was directed towards creating a decentralised onlineeconomy which did not require a central authority to sustain orgovern the system, one that was beyond borders, and theirconcomitant rules and regulations. In essence, blockchaintechnology was as big of a revolution as the creation of theinternet, combining a rebellion against all sources of power withthe genius of cryptography so much so that it seems almost ironicalthat during the current times governments across the globe havestarted channelling the usage of the technology having realised thepotential it possesses. While Nakamoto's paper only sought toutilise blockchain technology for enabling the transfer ofcryptocurrencies, more specifically bitcoins, this is merely asingular application of the revolutionary technology. The geniusbehind the technology lies in the distributed ledger system that itworks on.

Interestingly, cryptocurrencies unlike tangible currencies areeasier to copy and may be re-utilised since these constitutecompletely digital transactions leaving no trace in the tangibleworld especially in absence of a central authority. This issue waswitnessed by DigiCash which was created by cryptographer DavidChaum in 1994.3 Digicash relied upon Chaum's companyto validate all transactions and unfortunately, when his companywent bankrupt in 1998, DigiCash went down with it.4

Blockchain showcased an elegant solution to this problem ofdouble spending and continued reliance on a central regulatoryfigure. Blockchain permitted mutually mistrusting entities toperform financial payments without relying on a central trustedthird party while offering a transparent and integrity protecteddata storage.5 Due to these properties, blockchain as atechnology has gained much attention beyond the purpose offinancial transactions with the technology being utilisedacross various fields and services, such as financial market, IOT,supply chain, medical treatment, voting, storage and decentralizedautonomous organizations to name a few.6

Blockchain, has been defined as a digital, decentralised(distributed) ledger that keeps a record of all transactions thattake place across a peer-to-peer network.7 Apeer-to-peer network allows all participants within the network toshare files, resources and data that does not separately require amain server computer.8 Blockchain may also be conceivedas a transparent distributed database that records details of alltransactions performed by the system'sparticipants.9

Put simply, a blockchain stores a record of information (asa ledger) that does not require a central authority to governthe network (decentralised). The technology is powered byan interconnected network of participants (nodes orminers), that lend to the network the unique characteristicsof being decentralised and distributed.

A blockchain network is a multi-layered dimension in itself withseveral systems or nodes connected to the network, with nothird-party interference or control. A node could be a laptop, acomputer, or even a small server. Each node over a blockchainnetwork stores the entire record of transactions over the network.These nodes are linked together by a software protocol whichgoverns the blockchain network.

If we are to draw a parallel between a banking system and ablockchain, the similarity lies in the fact that both systems needto store information with respect to transactions. While banksstore the information on a private and centralised system, thestorage system in a blockchain is completely different and uniquewith the entire blockchain functioning as a giant, decentralisedledger that stores information.10 Each node over ablockchain network stores a copy of the information/transactionsover the network, such that there is no central single systemserving as a ledger for the information. The records so saved getsautomatically updated whenever a new transaction is added to ablock.

Interestingly, while a technical glitch in the central server ofa bank that stores the records of all transactions might cause amassive uproar, the same would just never happen on a blockchainnetwork because even if one 'node' (i.e. a system)fails to function or experiences a glitch of some sort, theremaining network of nodes would still hold a copy of the recordsin the ledger. Another major difference between a bank ledger andthe decentralised ledger is that while all nodes have access to therecords stored over a blockchain network the same is not the casein a bank ledger which is subject to restricted access and anysteps to access the records without authorisation might land one inprison. This system also allows all nodes over the network tovalidate and authenticate each and every transaction before it canbe stored on a block.

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The above figure is a classic representation of a decentralisedledger. Alice who wants to send cryptocurrency over the network toBob will have to do the same through a network of nodes spreadacross the globe. Once the transaction has been validated through aconsensus mechanism, the records maintained by every node over thesystem will get automatically updated.

Certain set of nodes who perform a more specialised function arereferred to as 'miners'. A 'miner' is a node in thenetwork who works towards authenticating a transaction. Simply putminers are nodes who have invested in higher levels of programming,specialised mining software and computer power that enables them tocarry out extremely complex computational tasks in order tovalidate a transaction. While all miners are nodes, all nodes mayor may not be miners.

Any person who wishes to join a blockchain network as a mineronly needs to create an account over a platform that gives accessto the network, and additionally invest in specialised computersoftware and programming powers. Upon doing the same, the person(or in essence his system) may become a miner and thereafter mayparticipate in validating transactions. In reality, it is not theindividual miner who authenticates the transaction, rather it isthe system that performs extremely complex tasks using hashingfunctions (SHA-256) towards authenticating the transaction. Theprocess of performing SHA-256 hash twice to arrive at a winninglottery number which is less than a target threshold, which in turncan then be used to authenticate and add new blocks of informationto the blockchain, is known as mining. In exchange for the task ofauthenticating, miners are incentivised with a block reward by thenetwork.

Blockchains possess the capacity to function on a transparent,public network, where the identities of nodes and miners are hiddenaway with private keys and encryptions. Every node over the networkhas a public key and a private key that are paired together. Whilea public key is visible to all and could be considered akin to anemail address, the private key is more like a password and ispossessed by the node only. The private key attaches authenticityto any information sent out by the node or any transaction made byattaching a digital signature to the transaction and the privatekey is only known to the miner/node it belongs to.12

For a transaction to be validated over a blockchain network,each miner over the network performs the SHA- 256 hash twice in thehope that the said hash will provide a number lesser than a targetthreshold. Essentially, it is like performing a long mathematicaldivision and hoping that the number arrived at is a single digit.The miners/computers are expending huge amounts of energy hopingthat it would randomly pick a winning lottery number (and not amathematical puzzle as is commonly misunderstood) which will allowthe miner to claim that they have the next block and thus entitledto the next block reward.13

Hashing is an integral part of the process because it assistsother nodes in authenticating or tracing the transaction. Whilemining and hashing techniques are complicated and a detailedexplainer on these is outside the purview of this paper, it is safeto say that mining involves a game of trial and error by each mineruntil one hits the jackpot by creating a valid hash andauthenticating the transaction. A miner's system has to keepgenerating hash numbers till one wins the gamble. The Bitcoinnetwork typically uses the Secure Hashing Algorithm 256 (SHA-256)that performs the task of reducing every input transaction to afixed output length of 256 bytes. This means no matter the inputlength of the data, the output length is always fixed.

Before the block with the validated information can be added tothe blockchain, the same has to be verified by a majority of nodesover the system. These nodes run a simple calculation in order toensure that the hash output so generated is valid and abides by thenetwork protocol. This system of verification ensures that onlyauthentic data has been stored on a block. Once the block has beenverified, it is added to the network.

Every validated transaction is stored on a block which is thenadded to the chain. Each block over a network comprises of fourcomponents: (a) Timestamp; (b) Nonce & Difficulty; (c) Hash ofthe present block; and (d) Hash of the previous block.

When a miner attains the winning lottery number, it generates aunique hash number that attaches validity to the transaction. Ahash is a unique 64 digit hexadecimal number that operates as aunique fingerprint for each block. Instead of searching for acertain transaction in a network of thousands of blocks, everytransaction can simply be traced through its uniquehash.14 The hash so generated is authenticated by amajority of nodes over the network, once authenticated thetransaction gets recorded in a block.

A block does not simply record the hash of its own data, it alsostores the hash of the previous block. However, the first block ina blockchain (called the 'Genesis Block') cannot pointtowards the hash of a previous block. The Genesis Block depicts theprevious hash value as 0.15 This feature lends toblockchain network a certain amount of authenticity, sincemodifying the hash of a particular block would necessarily requiremodification of the hashes contained in all other preceding blocksover the network. Accomplishing this would require a node or aminer to possess extremely fast computational power that changesthe hash numbers of the blocks faster than they are created.

In addition to the hash, each block over the blockchain networkalso consists of a nonce number. This number is appended to theblock header, and miners must guess this nonce number through trialand error in order to get through to the hashvalue.16

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A blockchain network has no centralised authority to govern andregulate the system. All the decisions over the network have to bemade by the network of nodes by reaching a consensus. The consensusmechanism may manifest itself in several ways over a blockchainnetwork. For instance, consensus may be said to be achieved when amajority of the nodes validate the hash generated by the miner andcreate a consensus that the block should be added to the blockchain(the proof-of-work consensus).18 This consensus is ofutmost significance on the network due to the lack of a centralauthority.

This consensus forms the grundnorm upon which the blockchainsubsists. However, in some cases, the nodes may be unable to cometo a consensus as to a certain transaction. This is where a'fork' or a split is created. A fork results in creation ofa new chain of blocks stemming from the previous chain. The forkcreated may be a soft fork, one that does not alter the validity ofthe old chain, however, it may also be a hard fork, one wherein thenew chain cannot be validated with the old rules, and a consensusis needed as to which chain of blocks shouldprevail.19

The diagram below elaborates how a transaction is undertaken ona bitcoin network:

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Blockchain networks carry a unique set of characteristics, fewbeing:

Like the internet, blockchain network transcends borders andfunctions seamlessly. Nodes over a blockchain network may be spreadacross the globe each possessing a copy of all transactions takingplace over the network. This decentralised network of nodes spreadacross the globe constitute the real authority over a blockchainnetwork responsible for keeping the network up and running. Thereis no central authority governing the activities over the network,no central server holding all records together. The nodes over thenetwork operate together in-tandem with each other to verifytransactions, adding a block to the chain, and serving asindividual ledgers with updated record of all transactions takingplace over the network.

The blockchain network functions on a pre-defined consensusmechanism. The consensus that has to be reached among the nodesover the network accords to the network its unique characteristics,constituting the ability to remain decentralised, and renderingdata stored over the network non-repudiable. For validating andrecording a new transaction over the network, a consensus of nodeswould have to be achieved. The consensus mechanism allows users totrust the network without the need of knowing the identity of othernodes.

The soul of a blockchain network lies in the fact that there isno central power figure in the system. If we imagine a blockchainnetwork to be a nation in itself, it would be a nation run by theindividual citizens all of whom have equal power to run the same,build aspects that they want, and most importantly simultaneous anduniform access to information. Relying upon the same analogy, on ablockchain network, citizens are replaced by the individual nodesin the system. All of these nodes have equivalent and universalpowers. All of them have the capacity to authenticate or validatetransactions broadcasted over the network, although they mustcompete to achieve the valid hash.

While the records of transactions stored on a block areaccessible to all nodes over the network, the data stored on ablock cannot be modified or deleted. If data over a block is indeedto be modified or deleted, it would require a consensus of morethan half the number of miners or nodes over a system, that is,about 51% of the system would have to collude in order to attainthe objective.21 This would mean convincing a majorityof anonymous nodes over the system to tamper the data, which on theface of it may be challenging.

Also, since all records are stored with a unique hash and everyblock is timestamped, tampering with one block will trigger therequirement to modify all the previous blocks which will requiremassive computational power especially in order to attain 51%consensus.22 This unique characteristic essentiallymakes a blockchain network tamper-proof and resilient to change.This may be of great benefit in several sectors (especiallyfinancial sector) that must necessarily rely upon the tamper proofnature of records, for instance, banking and financial sectors.

While all blockchains operate in a similar manner, blockchainsmay be of three types depending upon the extent of accessibility tothe system:

Blockchain technology constitutes one of the most potent digitalrevolutions of our times and it is here to stay. With consistentresearch and efforts on in the field in order to make it morecompatible with distinct sectors, the technology is bound to beclosely tied up with digital advancements in the near future.

While the technology may prove to be quite beneficial whenapplied across sectors, certain concerns may arise. While theinherent decentralised, tamper-free nature of the technology lendscertain benefits and advantages to the network, the samecharacteristics also bring forth a plethora of challenges. Theseconcerns arising from the interplay of the technology with the lawand various sectoral regulators shall be discussed in the secondpart of this paper.

Footnotes

1. Karl Wst & Arthur Gervais,Do you need a Blockchain?, (April 27, 2020, 10:33 am), https://eprint.iacr.org/2017/375.pdf.

2. Satoshi Nakamoto, Bitcoin: APeer-to-Peer Electronic Cash System, (April 28, 2020, 11:01am), BITCOIN.ORG, https://bitcoin.org/bitcoin.pdf.

3. Aaron Wright & Primavera DeFilippi, BLOCKCHAIN AND THE LAW 19 (2018).

4. Id.

5. Supra note 2.

6. Iuon-Chang Lin & Tzu-Chun Liao,A Survey of Blockchain Security Issues and Challenges,INTERNATIONAL JOURNAL OF NETWORK SECURITY, Vol.19, No.5, 653-659(2017).

7. Blockchain: the next innovation tomake our cities smarter, (May 18, 2020, 11:10 am), FICCI-PWC,http://ficci.in/spdocument/22934/Blockchain.pdf.

8. James Cope, What's aPeer-to-Peer Network?, (April 27, 2020, 13:30 PM), https://www.computerworld.com/article/2588287/networking-peer-to-peer-network.html.

9. Balamurali K., 2020: an Era ofb-Governance Blockchain, 21ST NATIONAL CONFERENCE ONE-GOVERNANCE - COMPENDIUM OF SELECTED PAPERS, 2020, DEP. OFADMINISTRATIVE REFORMS & PUBLIC GRIEVANCES, GOVT. OF INDIA, 69,73.

10. The Economist, Blockchain TheNext Big Thing, Or Is It?, (April 27, 2020, 13:30 PM), https://www.economist.com/special-report/2015/05/07/the-next-big-thing.

11. CB Insights, What is BlockchainTechnology?, [image], (April 27, 2020, 13:30 PM), https://www.cbinsights.com/research/what-is-blockchain-technology/.

12. Leon Di, Why do I Need a Publicand Private Key over a Blockchain? (June 08, 2020, 19:13 PM),https://blog.wetrust.io/why-do-i-need-a-public-and-private-key-on-the-blockchain-c2ea74a69e76.

13. Keir Finlow Bates, https://www.linkedin.com/feed/update/urn:li:activity:6678487266249314304/.

14. Online Hashcrack, Hashing inBlockchain Explained, (April 27, 2020, 15:00 PM), https://www.onlinehashcrack.com/how-to-hashing-in-blockchain-explained.php.

15. Medium, What is Genesis Block andWhy Genesis Block is needed?, (May 16, 2020, 10:00 PM), https://medium.com/@tecracoin/what-is-genesis-block-and-why-genesis-block-is-needed-1b37d4b75e43.

16. Jake Frankenfield, Nonce(May 16, 2020, 10:00 AM) https://www.investopedia.com/terms/n/nonce.asp.

17. Hash of the previous block,[image], (May 9, 2020, 8:45 pm), https://www.mdpi.com/J/J-02-00021/article_deploy/html/images/J-02-00021-g002-550.jpg.

18. Investopedia, Consensus Mechanism(Cryptocurrency), (May 16, 2020, 14:30 PM), https://www.investopedia.com/terms/c/consensus-mechanism-cryptocurrency.asp.

19. Geeks for Geeks, BlockchainForks, (May 15, 2020, 11:57 PM), https://www.geeksforgeeks.org/blockchain-forks/.

20. How Bitcoin TransactionsWork?, [image], (June 10, 2020, 13:28 PM), https://janzac.com/how-bitcoin-transaction-works/.

21. The Economist, supra note10.

22. Aaron Wright, supra note 3,at 36.

23 Darya Yafimava, What areConsortium Blockchains and What Purpose Do they Serve?, (April29, 2020, 9:00 AM), https://openledger.info/insights/consortium-blockchains/.

Originally published 6 August2020

The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circumstances.

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Persol Group, one of the largest human resource companies in Japan, has partnered with major Japanese IT and electronics company, NEC Corporation, to build a new blockchain-powered recruiting platform. Persol Group is one of the largest staffing companies in the country, with 32,000 employees and a market cap of $5.7 billion as of 2017.

According to the announcement, the two companies have begun working on a Proof-of-Concept to test a direct recruiting service that utilizes blockchain technology to securely manage personal data, prevent falsification of information, and ensure authenticity.

This new platform is expected to target the shortage of IT human resources in Japan. Citing data from Japan's Ministry of Economy, Trade, and Industry, the companies reps noted that the skill gap could account for 800,000 people by 2020.

According to the announcement, NEC is acting as a technology provider within the initiative. Teruyuki Nakajima, general manager of corporate business incubation at NEC, said:

NEC will start a new direct recruiting initiative that utilizes its own blockchain technology. Through these initiatives, we hope that opportunities to find employment online will be provided to everyone fairly, and that a world where diverse work styles and lifestyles will be realized.

A number of companies around the world have implemented blockchain to improve their recruitment-related processes so far. This has come at a crucial time, given the increased unemployment rate caused by the COVID-19 pandemic. In February 2020, human resources firm Randstad announced an integration with enterprise blockchain platform Cypherium to automate its workflow using smart contracts. In 2019, Big Four auditing firm Deloitte integrated privacy tech by cryptography startup QEDIT to track, share, and validate the qualifications of staff.

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Japans Top HR Firm Is Working on a Blockchain-Based Recruitment App - Cointelegraph

Next generation technology tools and applications have the potential to redefine the economy; blockchain will need to play a leading role.

NurPhoto via Getty Images

There is no shortage of emerging technology applications and tools that are rapidly moving from the realm of science fiction to practical reality. Self-driving cars, the internet of things, smart devices for both individual and institutional use, digital twins of physical devices, and all kinds of other new ideas are quickly becoming mainstream.

That said, and no matter what specific tool is being examined, all of these new ways of doing business are dependent on the information that is being communicated. Put simply, data needs to flow in real time, and do so in a manner that is encrypted or otherwise deemed trustworthy.

If blockchain had not already been invented or thought of, it would certainly be in development to address these needs. Taking a step back from the specifics of blockchain, it makes perfect sense that in order for this array of new inventions, products, and services to operate as advertised, and create the economic growth that is predicted, the information that underpins these inventions must be secure.

A smart phone malfunctioning might represent an inconvenience, but if self-driving cars are hacked or other industrial devices connected to a 5G network are hacked, it can very quickly become a dangerous situation for all parties involved.

While a full-fledged blockchain policy might still be a pipe dream at this point, there are several specific components of the 5G economy that are directly dependent on successfully implementing and integrating blockchain.

Lets take a look at just how integral the core components of blockchain are to this next stage of economic growth and development.

Data security. This is perhaps the most obvious connection between blockchain and the 5G economy that is rapidly approaching. Specifically, as more and more types of data and information are communicated wirelessly between sensors, devices, and all kinds of other tools, the importance of keeping this data safe is of paramount importance. Self driving cars, for example, may already exist, but hacks and other technology failures highlight the importance of keeping these devices secure.

Collaborations underway between IBM IBM and several automakers to develop a blockchain designed for this purpose, in addition to the efforts at the Mobility Open Blockchain Initiative (MOBI), are clear indicators of how seriously these projects are being taken.

Blockchain iterations. Blockchain is not being developed and refined in a vacuum, and is actually a logical extension of current technology trends emphasizing data mobility, transparency, and analytics. The digital economy requires a network that can scale, is flexible enough to handle different kinds of information, and can interoperate with existing technology tools.

Much like how 5G technologies build on existing digital and technological infrastructure, blockchain runs on existing infrastructure being turbocharged with the development of other technologies. The recent launching of a blockchain and AI unit by the Korean Central Bank shows just how powerful the combination of blockchain with other technologies can be.

Secured automation. Automation is an underlying business trend that shows no sign of abating, and even though blockchain did not cause this trend to exist, the digitization of virtually every service as a result of 5G will only accelerate automation. Automating subpar or substandard processes, however, will not create any economic value and might actually do more harm than good.

Blockchain-based smart contracts can provide a potential solution to this problem; since the contracts and executory clauses included therein need to be reviewed as a part of the conversion of regular contracts to smart contracts, the risk of erroneous events happening will decrease. Especially when combined with other technologies such as robotic process automation (RPA) and artificial intelligence (AI) platforms, the implications of blockchain-enabled automation are exciting.

These are just a few of the ways in which it makes logical sense for the increased adoption and implementation of 5G tools and platforms to accompany more widespread implementation of blockchain technology.

As promising as this sounds, and despite the reality that these changes and shifts have actually already started, the promise will never fully materialize if customers and business owners do not have confidence in the data driving the process. Data should be increasingly viewed as a competitive advantage and core competency for every organization, and protecting this data should be a priority at every organization.

Blockchain, although not a perfect tool, is well positioned to address some of the issues that currently exist in the technology space, and could prove to be the secret sauce necessary to propel 5G adoption forward.

Link:

Blockchain Adoption Is Critical For The 5G Economy To Thrive - Forbes