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Blockchain.io | Your Gateway to the Internet of Value

BCIO: The art of building a successful Crypto team

Meet our CTO: Dominique Rodrigues, a highly skilled engineer and an experienced entrepreneur

Blockchain.io: a new generation of cryptocurrency trading platforms

How Blockchain.io takes on investors worst Crypto dilemma

Ready for upcoming crypto-trading regulations

We are pleased to announce our filing has been accepted and are now registered with the SEC!

Centralized order-book with decentralized settlement. Encouraging trade while ensuring trust.

Centralized order-book with decentralized settlement. Encouraging trade while ensuring trust.

Pierre Noizat, CEO of Paymium & Blockchain.io describes its vision of the Internet of Value at Chainges, Amsterdam.

It is in the interest of American cryptocurrency traders to invest in a European platform

Paymium is planning to raise 60 Million.

Meet our team at the Next Web Conference in Amsterdam on May 24 & 25.

What is BCIO Token ? A brief rundown of our crypto-exchange proprietary token.

What is BCIO Token ? A brief rundown of our crypto-exchange proprietary token.

A brief introduction to crypto trade

Pierre Noizat will be speaking at Chainges in Amsterdam on May 4-5th. Meet us there !

Pierre Noizat announces the launch of Blockchain.io at The Bitcoin, Ethereum & Blockchain SuperConference in Dallas – February 16th 2018

Cryptocurrencies, why should Europe embrace them ?

In the crypto-economy, France has shinning global champions, among them include Ledger, Paymium and Stratumn.

Why are crypto-currencies indispensable to Europe? A rundown from Pierre Noizat on perspectives in Europe.

Round table on cryptocurrency regulation with Cathy Lubochinsky, member of the Circle of Economists; Pierre Noizat, cofounder of Paymium; and Emmanuel Lechypre, columnist at BFM Business.

Paymium is capitalizing on bitcoin with Dentsu Consulting.

Paymium Launches European Cryptocurrency Trading Platform Blockchain.io

Watch Pierre Noizat interview with CEO Money about blockchain.io cryptoexchange at the Bitcoin, Ethereum, and Blockchain Superconference in Dallas

Paymium launching European cryptocurrency trading platform Blockchain.io

Pierre Noizat will speak at the Bitcoin, Ethereum, and Blockchain Superconference in Dallas, Texas on February 16th to present blockchain.io .

Welcome to the Internet of Value ! In the same way as the Internet redefined global communication, Bitcoin and other cryptocurrencies are now reinventing money and value transactions.

Sbastien Couasnon and his guets are investigating the rise of bitcoin. with Eric Larchevque, CEO of Ledger and Pierre Noizat co-founder of Paymium.

Cofounder of Paymium (Bitcoin Central) and bitcoin specialist Pierre Noizat reacts to the bankruptcy of MT Gox and explains his service.

See more here:

Blockchain.io | Your Gateway to the Internet of Value

Blockchain – Official Site

Your Passport to the Future of Finance

The first and most trusted global cryptocurrency company

Exchange and transact bitcoin, ethereum, and bitcoin cash using the worlds most trusted and secure cryptocurrency wallet.

Use the first and most popular bitcoin block explorer to search and verify transactions on Bitcoins blockchain.

Stay on top of bitcoin and other top cryptocurrency prices, news, and market information.

More here:

Blockchain – Official Site

Blockchain – Wikipedia

distributed data store for digital transactions

A blockchain,[1][2][3] originally block chain,[4][5] is a growing list of records, called blocks, which are linked using cryptography.[1][6] Blockchains which are readable by the public are widely used by cryptocurrencies. Private blockchains have been proposed for business use. Some marketing of blockchains has been called “snake oil”.[7]

Each block contains a cryptographic hash of the previous block,[6] a timestamp, and transaction data (generally represented as a merkle tree root hash). By design, a blockchain is resistant to modification of the data. It is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way”.[8] For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for inter-node communication and validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without alteration of all subsequent blocks, which requires consensus of the network majority.

Though blockchain records are not unalterable, blockchains may be considered secure by design and exemplify a distributed computing system with high Byzantine fault tolerance. Decentralized consensus has therefore been claimed with a blockchain.[9]

Blockchain was invented by Satoshi Nakamoto in 2008 to serve as the public transaction ledger of the cryptocurrency bitcoin.[1] The invention of the blockchain for bitcoin made it the first digital currency to solve the double-spending problem without the need of a trusted authority or central server. The bitcoin design has inspired other applications.[1][3]

The first work on a cryptographically secured chain of blocks was described in 1991 by Stuart Haber and W. Scott Stornetta.[10][6] They wanted to implement a system where documents’ timestamps could not be tampered with or backdated. In 1992, Bayer, Haber and Stornetta incorporated Merkle trees to the design, which improved its efficiency by allowing several documents to be collected into one block.[6][11]

The first blockchain was conceptualized by a person (or group of people) known as Satoshi Nakamoto in 2008. It was implemented the following year by Nakamoto as a core component of the cryptocurrency bitcoin, where it serves as the public ledger for all transactions on the network.[1]

In August 2014, the bitcoin blockchain file size, containing records of all transactions that have occurred on the network, reached 20GB (gigabytes).[12] In January 2015, the size had grown to almost 30GB, and from January 2016 to January 2017, the bitcoin blockchain grew from 50GB to 100GB in size.

The words block and chain were used separately in Satoshi Nakamoto’s original paper, but were eventually popularized as a single word, blockchain, by 2016. The term blockchain 2.0 refers to new applications of the distributed blockchain database, first emerging in 2014.[13] The Economist described one implementation of this second-generation programmable blockchain as coming with “a programming language that allows users to write more sophisticated smart contracts, thus creating invoices that pay themselves when a shipment arrives or share certificates which automatically send their owners dividends if profits reach a certain level.”[1]

As of 2016[update], blockchain 2.0 implementations continue to require an off-chain oracle to access any “external data or events based on time or market conditions [that need] to interact with the blockchain.”[14]

IBM opened a blockchain innovation research center in Singapore in July 2016.[15] A working group for the World Economic Forum met in November 2016 to discuss the development of governance models related to blockchain.

According to Accenture, an application of the diffusion of innovations theory suggests that blockchains attained a 13.5% adoption rate within financial services in 2016, therefore reaching the early adopters phase.[16] Industry trade groups joined to create the Global Blockchain Forum in 2016, an initiative of the Chamber of Digital Commerce.

In May 2018, Gartner found that only 1% of CIOs indicated any kind of blockchain adoption within their organisations, and only 8% of CIOs were in the short-term planning or [looking at] active experimentation with blockchain.[17]

The Bank for International Settlements has criticized the blockchain as an “environmental disaster” entailed by high energy consumption.[20][18][21]

Nicholas Weaver, of the International Computer Science Institute at the University of California, Berkeley examines blockchain’s online security, and its energy efficiency, and in both cases finds it grossly inadequate.[19][22]

A blockchain is a decentralized, distributed and public digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the consensus of the network.[1][23] This allows the participants to verify and audit transactions inexpensively.[24] A blockchain database is managed autonomously using a peer-to-peer network and a distributed timestamping server. They are authenticated by mass collaboration powered by collective self-interests.[25] The result is a robust workflow where participants’ uncertainty regarding data security is marginal. The use of a blockchain removes the characteristic of infinite reproducibility from a digital asset. It confirms that each unit of value was transferred only once, solving the long-standing problem of double spending. Blockchains have been described as a value-exchange protocol.[13] This blockchain-based exchange of value can be completed quicker, safer and cheaper than with traditional systems.[26] A blockchain can assign title rights because, when properly set up to detail the exchange agreement, it provides a record that compels offer and acceptance.

Blocks hold batches of valid transactions that are hashed and encoded into a Merkle tree.[1] Each block includes the cryptographic hash of the prior block in the blockchain, linking the two. The linked blocks form a chain.[1] This iterative process confirms the integrity of the previous block, all the way back to the original genesis block.[27]

Sometimes separate blocks can be produced concurrently, creating a temporary fork. In addition to a secure hash-based history, any blockchain has a specified algorithm for scoring different versions of the history so that one with a higher value can be selected over others. Blocks not selected for inclusion in the chain are called orphan blocks.[27] Peers supporting the database have different versions of the history from time to time. They keep only the highest-scoring version of the database known to them. Whenever a peer receives a higher-scoring version (usually the old version with a single new block added) they extend or overwrite their own database and retransmit the improvement to their peers. There is never an absolute guarantee that any particular entry will remain in the best version of the history forever. Because blockchains are typically built to add the score of new blocks onto old blocks and because there are incentives to work only on extending with new blocks rather than overwriting old blocks, the probability of an entry becoming superseded goes down exponentially[28] as more blocks are built on top of it, eventually becoming very low.[1][29]:ch. 08[30] For example, in a blockchain using the proof-of-work system, the chain with the most cumulative proof-of-work is always considered the valid one by the network. There are a number of methods that can be used to demonstrate a sufficient level of computation. Within a blockchain the computation is carried out redundantly rather than in the traditional segregated and parallel manner.[31]

The block time is the average time it takes for the network to generate one extra block in the blockchain.[32] Some blockchains create a new block as frequently as every five seconds.[33] By the time of block completion, the included data becomes verifiable. In cryptocurrency, this is practically when the transaction takes place, so a shorter block time means faster transactions. The block time for Ethereum is set to between 14 and 15 seconds, while for bitcoin it is 10 minutes.[34]

A hard fork is a rule change such that the software validating according to the old rules will see the blocks produced according to the new rules as invalid. In case of a hard fork, all nodes meant to work in accordance with the new rules need to upgrade their software.[35]

If one group of nodes continues to use the old software while the other nodes use the new software, a split can occur. For example, Ethereum has hard-forked to “make whole” the investors in The DAO, which had been hacked by exploiting a vulnerability in its code.[36] In this case, the fork resulted in a split creating Ethereum and Ethereum Classic chains. In 2014 the Nxt community was asked to consider a hard fork that would have led to a rollback of the blockchain records to mitigate the effects of a theft of 50 million NXT from a major cryptocurrency exchange. The hard fork proposal was rejected, and some of the funds were recovered after negotiations and ransom payment.[37]

Alternatively, to prevent a permanent split, a majority of nodes using the new software may return to the old rules, as was the case of bitcoin split on 12 March 2013.[38]

By storing data across its peer-to-peer network, the blockchain eliminates a number of risks that come with data being held centrally.[1] The decentralized blockchain may use ad-hoc message passing and distributed networking.

Peer-to-peer blockchain networks lack centralized points of vulnerability that computer crackers can exploit; likewise, it has no central point of failure. Blockchain security methods include the use of public-key cryptography.[4]:5 A public key (a long, random-looking string of numbers) is an address on the blockchain. Value tokens sent across the network are recorded as belonging to that address. A private key is like a password that gives its owner access to their digital assets or the means to otherwise interact with the various capabilities that blockchains now support. Data stored on the blockchain is generally considered incorruptible.[1]

Every node in a decentralized system has a copy of the blockchain. Data quality is maintained by massive database replication[9] and computational trust. No centralized “official” copy exists and no user is “trusted” more than any other.[4] Transactions are broadcast to the network using software. Messages are delivered on a best-effort basis. Mining nodes validate transactions,[27] add them to the block they are building, and then broadcast the completed block to other nodes.[29]:ch. 08 Blockchains use various time-stamping schemes, such as proof-of-work, to serialize changes.[39] Alternate consensus methods include proof-of-stake.[27] Growth of a decentralized blockchain is accompanied by the risk of node centralization because the computer resources required to process larger amounts of data become more expensive.[40]

Open blockchains are more user-friendly than some traditional ownership records, which, while open to the public, still require physical access to view. Because all early blockchains were permissionless, controversy has arisen over the blockchain definition. An issue in this ongoing debate is whether a private system with verifiers tasked and authorized (permissioned) by a central authority should be considered a blockchain.[41][42][43][44][45] Proponents of permissioned or private chains argue that the term “blockchain” may be applied to any data structure that batches data into time-stamped blocks. These blockchains serve as a distributed version of multiversion concurrency control (MVCC) in databases.[46] Just as MVCC prevents two transactions from concurrently modifying a single object in a database, blockchains prevent two transactions from spending the same single output in a blockchain.[47]:3031 Opponents say that permissioned systems resemble traditional corporate databases, not supporting decentralized data verification, and that such systems are not hardened against operator tampering and revision.[41][43] Nikolai Hampton of Computerworld said that “many in-house blockchain solutions will be nothing more than cumbersome databases,” and “without a clear security model, proprietary blockchains should be eyed with suspicion.”[7][48]

The great advantage to an open, permissionless, or public, blockchain network is that guarding against bad actors is not required and no access control is needed.[28] This means that applications can be added to the network without the approval or trust of others, using the blockchain as a transport layer.[28]

Bitcoin and other cryptocurrencies currently secure their blockchain by requiring new entries to include a proof of work. To prolong the blockchain, bitcoin uses Hashcash puzzles. While Hashcash was designed in 1997 by Adam Back, the original idea was first proposed by Cynthia Dwork and Moni Naor and Eli Ponyatovski in their 1992 paper “Pricing via Processing or Combatting Junk Mail”.

Financial companies have not prioritised decentralized blockchains.[49]In 2016, venture capital investment for blockchain-related projects was weakening in the USA but increasing in China.[50] Bitcoin and many other cryptocurrencies use open (public) blockchains. As of April2018[update], bitcoin has the highest market capitalization.

Permissioned blockchains use an access control layer to govern who has access to the network.[51] In contrast to public blockchain networks, validators on private blockchain networks are vetted by the network owner. They do not rely on anonymous nodes to validate transactions nor do they benefit from the network effect.[52][bettersourceneeded] Permissioned blockchains can also go by the name of ‘consortium’ or ‘hybrid’ blockchains.[53]

The New York Times noted in both 2016 and 2017 that many corporations are using blockchain networks “with private blockchains, independent of the public system.”[54][55][bettersourceneeded]

Nikolai Hampton pointed out in Computerworld that “There is also no need for a ’51 percent’ attack on a private blockchain, as the private blockchain (most likely) already controls 100 percent of all block creation resources. If you could attack or damage the blockchain creation tools on a private corporate server, you could effectively control 100 percent of their network and alter transactions however you wished.”[7] This has a set of particularly profound adverse implications during a financial crisis or debt crisis like the financial crisis of 200708, where politically powerful actors may make decisions that favor some groups at the expense of others[56][57], and “the bitcoin blockchain is protected by the massive group mining effort. It’s unlikely that any private blockchain will try to protect records using gigawatts of computing powerit’s time consuming and expensive.”[7] He also said, “Within a private blockchain there is also no ‘race’; there’s no incentive to use more power or discover blocks faster than competitors. This means that many in-house blockchain solutions will be nothing more than cumbersome databases.”[7]

Blockchain technology can be integrated into multiple areas. The primary use of blockchains today is as a distributed ledger for cryptocurrencies, most notably bitcoin. There are a few operational products maturing from proof of concept by late 2016.[50]

As of 2016[update], some observers remain skeptical. Steve Wilson, of Constellation Research, believes the technology has been hyped with unrealistic claims.[58] To mitigate risk, businesses are reluctant to place blockchain at the core of the business structure.[59]

Blockchain-based smart contracts are proposed contracts that could be partially or fully executed or enforced without human interaction.[60] One of the main objectives of a smart contract is automated escrow. An IMF staff discussion reported that smart contracts based on blockchain technology might reduce moral hazards and optimize the use of contracts in general. But “no viable smart contract systems have yet emerged.” Due to the lack of widespread use their legal status is unclear.[61]

Major portions of the financial industry are implementing distributed ledgers for use in banking,[62][63][64] and according to a September 2016 IBM study, this is occurring faster than expected.[65]

Banks are interested in this technology because it has potential to speed up back office settlement systems.[66]

Banks such as UBS are opening new research labs dedicated to blockchain technology in order to explore how blockchain can be used in financial services to increase efficiency and reduce costs.[67][68]

Berenberg, a German bank, believes that blockchain is an “overhyped technology” that has had a large number of “proofs of concept”, but still has major challenges, and very few success stories.[69]

Blockchain technology can be used to create a permanent, public, transparent ledger system for compiling data on sales, tracking digital use and payments to content creators, such as wireless users [70] or musicians.[71] In 2017, IBM partnered with ASCAP and PRS for Music to adopt blockchain technology in music distribution.[72] Imogen Heap’s Mycelia service has also been proposed as blockchain-based alternative “that gives artists more control over how their songs and associated data circulate among fans and other musicians.”[73][74] Everledger is one of the inaugural clients of IBM’s blockchain-based tracking service.[75]

New distribution methods are available for the insurance industry such as peer-to-peer insurance, parametric insurance and microinsurance following the adoption of blockchain.[76][77] The sharing economy and IoT are also set to benefit from blockchains because they involve many collaborating peers.[78] Online voting is another application of the blockchain.[79][80]

Blockchains facilitate users could take ownership of game assets (digital assets), an example of this is Cryptokitties.[81]

Non-cryptocurrency designs include:

IBM offers a cloud blockchain service based on the open source Hyperledger Fabric project[85][86]

On May 8, 2018 Facebook confirmed that it is opening a new blockchain group[87] which will be headed by David Marcus who previously was in charge of Messenger. According to The Verge Facebook is planning to launch its own cryptocurrency for facilitating payments on the platform[88].

Currently, there are three types of blockchain networks – public blockchains, private blockchains and consortium blockchains.

A public blockchain has absolutely no access restrictions. Anyone with an internet connection can send transactions[disambiguation needed] to it as well as become a validator (i.e., participate in the execution of a consensus protocol). [89][self-published source?] Usually, such networks offer economic incentives for those who secure them and utilize some type of a Proof of Stake or Proof of Work algorithm.

Some of the largest, most known public blockchains are Bitcoin and Ethereum.

A private blockchain is permissioned.[51] One cannot join it unless invited by the network administrators. Participant and validator access is restricted.

This type of blockchains can be considered a middle-ground for companies that are interested in the blockchain technology in general but are not comfortable with a level of control offered by public networks. Typically, they seek to incorporate blockchain into their accounting and record-keeping procedures without sacrificing autonomy and running the risk of exposing sensitive data to the public internet.

A consortium blockchain is often said to be semi-decentralized. It, too, is permissioned but instead of a single organization controlling it, a number of companies might each operate a node on such a network. The administrators of a consortium chain restrict users reading rights as they see fit and only allow a limited set of trusted nodes to execute a consensus protocol.

In October 2014, the MIT Bitcoin Club, with funding from MIT alumni, provided undergraduate students at the Massachusetts Institute of Technology access to $100 of bitcoin. The adoption rates, as studied by Catalini and Tucker (2016), revealed that when people who typically adopt technologies early are given delayed access, they tend to reject the technology.[90]

In September 2015, the first peer-reviewed academic journal dedicated to cryptocurrency and blockchain technology research, Ledger, was announced. The inaugural issue was published in December 2016.[91] The journal covers aspects of mathematics, computer science, engineering, law, economics and philosophy that relate to cryptocurrencies such as bitcoin.[92][93]

The journal encourages authors to digitally sign a file hash of submitted papers, which will then be timestamped into the bitcoin blockchain. Authors are also asked to include a personal bitcoin address in the first page of their papers.[94]

View post:

Blockchain – Wikipedia

Blockchain – Most Trusted Crypto Company

Your Passport to the Future of Finance

The first and most trusted global cryptocurrency company

Exchange and transact bitcoin, ethereum, and bitcoin cash using the worlds most trusted and secure cryptocurrency wallet.

Use the first and most popular bitcoin block explorer to search and verify transactions on Bitcoins blockchain.

Stay on top of bitcoin and other top cryptocurrency prices, news, and market information.

See the original post:

Blockchain – Most Trusted Crypto Company

Blockchain – Wikipedia

distributed data store for digital transactions

A blockchain,[1][2][3] originally block chain,[4][5] is a growing list of records, called blocks, which are linked using cryptography.[1][6] Blockchains which are readable by the public are widely used by cryptocurrencies. Private blockchains have been proposed for business use. Some marketing of blockchains has been called “snake oil.”[7]

Each block contains a cryptographic hash of the previous block,[6] a timestamp, and transaction data (generally represented as a merkle tree root hash). By design, a blockchain is resistant to modification of the data. It is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way”.[8] For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for inter-node communication and validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without alteration of all subsequent blocks, which requires consensus of the network majority.

Though blockchain records are not unalterable, blockchains may be considered secure by design and exemplify a distributed computing system with high Byzantine fault tolerance. Decentralized consensus has therefore been claimed with a blockchain.[9]

Blockchain was invented by Satoshi Nakamoto in 2008 to serve as the public transaction ledger of the cryptocurrency bitcoin.[1] The invention of the blockchain for bitcoin made it the first digital currency to solve the double-spending problem without the need of a trusted authority or central server. The bitcoin design has inspired other applications.[1][3]

The first work on a cryptographically secured chain of blocks was described in 1991 by Stuart Haber and W. Scott Stornetta.[10][6] They wanted to implement a system where documents’ timestamps could not be tampered with or backdated. In 1992, Bayer, Haber and Stornetta incorporated Merkle trees to the design, which improved its efficiency by allowing several documents to be collected into one block.[6][11]

The first blockchain was conceptualized by a person (or group of people) known as Satoshi Nakamoto in 2008. It was implemented the following year by Nakamoto as a core component of the cryptocurrency bitcoin, where it serves as the public ledger for all transactions on the network.[1]

In August 2014, the bitcoin blockchain file size, containing records of all transactions that have occurred on the network, reached 20GB (gigabytes).[12] In January 2015, the size had grown to almost 30GB, and from January 2016 to January 2017, the bitcoin blockchain grew from 50GB to 100GB in size.

The words block and chain were used separately in Satoshi Nakamoto’s original paper, but were eventually popularized as a single word, blockchain, by 2016. The term blockchain 2.0 refers to new applications of the distributed blockchain database, first emerging in 2014.[13] The Economist described one implementation of this second-generation programmable blockchain as coming with “a programming language that allows users to write more sophisticated smart contracts, thus creating invoices that pay themselves when a shipment arrives or share certificates which automatically send their owners dividends if profits reach a certain level.”[1]

As of 2016[update], blockchain 2.0 implementations continue to require an off-chain oracle to access any “external data or events based on time or market conditions [that need] to interact with the blockchain.”[14]

IBM opened a blockchain innovation research center in Singapore in July 2016.[15] A working group for the World Economic Forum met in November 2016 to discuss the development of governance models related to blockchain.

According to Accenture, an application of the diffusion of innovations theory suggests that blockchains attained a 13.5% adoption rate within financial services in 2016, therefore reaching the early adopters phase.[16] Industry trade groups joined to create the Global Blockchain Forum in 2016, an initiative of the Chamber of Digital Commerce.

In May 2018, Gartner found that only 1% of CIOs indicated any kind of blockchain adoption within their organisations, and only 8% of CIOs were in the short-term planning or [looking at] active experimentation with blockchain.[17]

The Bank for International Settlements has criticized the blockchain as an “environmental disaster” entailed by high energy consumption.[20][18][21]

Nicholas Weaver, of the International Computer Science Institute at the University of California, Berkeley examines blockchain’s online security, and its energy efficiency, and in both cases finds it grossly inadequate.[19][22]

A blockchain is a decentralized, distributed and public digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the consensus of the network.[1][23] This allows the participants to verify and audit transactions inexpensively.[24] A blockchain database is managed autonomously using a peer-to-peer network and a distributed timestamping server. They are authenticated by mass collaboration powered by collective self-interests.[25] The result is a robust workflow where participants’ uncertainty regarding data security is marginal. The use of a blockchain removes the characteristic of infinite reproducibility from a digital asset. It confirms that each unit of value was transferred only once, solving the long-standing problem of double spending. Blockchains have been described as a value-exchange protocol.[13] This blockchain-based exchange of value can be completed quicker, safer and cheaper than with traditional systems.[26] A blockchain can assign title rights because, when properly set up to detail the exchange agreement, it provides a record that compels offer and acceptance.

Blocks hold batches of valid transactions that are hashed and encoded into a Merkle tree.[1] Each block includes the cryptographic hash of the prior block in the blockchain, linking the two. The linked blocks form a chain.[1] This iterative process confirms the integrity of the previous block, all the way back to the original genesis block.[27]

Sometimes separate blocks can be produced concurrently, creating a temporary fork. In addition to a secure hash-based history, any blockchain has a specified algorithm for scoring different versions of the history so that one with a higher value can be selected over others. Blocks not selected for inclusion in the chain are called orphan blocks.[27] Peers supporting the database have different versions of the history from time to time. They keep only the highest-scoring version of the database known to them. Whenever a peer receives a higher-scoring version (usually the old version with a single new block added) they extend or overwrite their own database and retransmit the improvement to their peers. There is never an absolute guarantee that any particular entry will remain in the best version of the history forever. Because blockchains are typically built to add the score of new blocks onto old blocks and because there are incentives to work only on extending with new blocks rather than overwriting old blocks, the probability of an entry becoming superseded goes down exponentially[28] as more blocks are built on top of it, eventually becoming very low.[1][29]:ch. 08[30] For example, in a blockchain using the proof-of-work system, the chain with the most cumulative proof-of-work is always considered the valid one by the network. There are a number of methods that can be used to demonstrate a sufficient level of computation. Within a blockchain the computation is carried out redundantly rather than in the traditional segregated and parallel manner.[31]

The block time is the average time it takes for the network to generate one extra block in the blockchain.[32] Some blockchains create a new block as frequently as every five seconds.[33] By the time of block completion, the included data becomes verifiable. In cryptocurrency, this is practically when the transaction takes place, so a shorter block time means faster transactions. The block time for Ethereum is set to between 14 and 15 seconds, while for bitcoin it is 10 minutes.[34]

A hard fork is a rule change such that the software validating according to the old rules will see the blocks produced according to the new rules as invalid. In case of a hard fork, all nodes meant to work in accordance with the new rules need to upgrade their software.[35]

If one group of nodes continues to use the old software while the other nodes use the new software, a split can occur. For example, Ethereum has hard-forked to “make whole” the investors in The DAO, which had been hacked by exploiting a vulnerability in its code.[36] In this case, the fork resulted in a split creating Ethereum and Ethereum Classic chains. In 2014 the Nxt community was asked to consider a hard fork that would have led to a rollback of the blockchain records to mitigate the effects of a theft of 50 million NXT from a major cryptocurrency exchange. The hard fork proposal was rejected, and some of the funds were recovered after negotiations and ransom payment.[37]

Alternatively, to prevent a permanent split, a majority of nodes using the new software may return to the old rules, as was the case of bitcoin split on 12 March 2013.[38]

By storing data across its peer-to-peer network, the blockchain eliminates a number of risks that come with data being held centrally.[1] The decentralized blockchain may use ad-hoc message passing and distributed networking.

Peer-to-peer blockchain networks lack centralized points of vulnerability that computer crackers can exploit; likewise, it has no central point of failure. Blockchain security methods include the use of public-key cryptography.[4]:5 A public key (a long, random-looking string of numbers) is an address on the blockchain. Value tokens sent across the network are recorded as belonging to that address. A private key is like a password that gives its owner access to their digital assets or the means to otherwise interact with the various capabilities that blockchains now support. Data stored on the blockchain is generally considered incorruptible.[1]

Every node in a decentralized system has a copy of the blockchain. Data quality is maintained by massive database replication[9] and computational trust. No centralized “official” copy exists and no user is “trusted” more than any other.[4] Transactions are broadcast to the network using software. Messages are delivered on a best-effort basis. Mining nodes validate transactions,[27] add them to the block they are building, and then broadcast the completed block to other nodes.[29]:ch. 08 Blockchains use various time-stamping schemes, such as proof-of-work, to serialize changes.[39] Alternate consensus methods include proof-of-stake.[27] Growth of a decentralized blockchain is accompanied by the risk of node centralization because the computer resources required to process larger amounts of data become more expensive.[40]

Open blockchains are more user-friendly than some traditional ownership records, which, while open to the public, still require physical access to view. Because all early blockchains were permissionless, controversy has arisen over the blockchain definition. An issue in this ongoing debate is whether a private system with verifiers tasked and authorized (permissioned) by a central authority should be considered a blockchain.[41][42][43][44][45] Proponents of permissioned or private chains argue that the term “blockchain” may be applied to any data structure that batches data into time-stamped blocks. These blockchains serve as a distributed version of multiversion concurrency control (MVCC) in databases.[46] Just as MVCC prevents two transactions from concurrently modifying a single object in a database, blockchains prevent two transactions from spending the same single output in a blockchain.[47]:3031 Opponents say that permissioned systems resemble traditional corporate databases, not supporting decentralized data verification, and that such systems are not hardened against operator tampering and revision.[41][43] Nikolai Hampton of Computerworld said that “many in-house blockchain solutions will be nothing more than cumbersome databases,” and “without a clear security model, proprietary blockchains should be eyed with suspicion.”[7][48]

The great advantage to an open, permissionless, or public, blockchain network is that guarding against bad actors is not required and no access control is needed.[28] This means that applications can be added to the network without the approval or trust of others, using the blockchain as a transport layer.[28]

Bitcoin and other cryptocurrencies currently secure their blockchain by requiring new entries to include a proof of work. To prolong the blockchain, bitcoin uses Hashcash puzzles. While Hashcash was designed in 1997 by Adam Back, the original idea was first proposed by Cynthia Dwork and Moni Naor and Eli Ponyatovski in their 1992 paper “Pricing via Processing or Combatting Junk Mail”.

Financial companies have not prioritised decentralized blockchains.[49]In 2016, venture capital investment for blockchain-related projects was weakening in the USA but increasing in China.[50] Bitcoin and many other cryptocurrencies use open (public) blockchains. As of April2018[update], bitcoin has the highest market capitalization.

Permissioned blockchains use an access control layer to govern who has access to the network.[51] In contrast to public blockchain networks, validators on private blockchain networks are vetted by the network owner. They do not rely on anonymous nodes to validate transactions nor do they benefit from the network effect.[52][bettersourceneeded] Permissioned blockchains can also go by the name of ‘consortium’ or ‘hybrid’ blockchains.[53]

The New York Times noted in both 2016 and 2017 that many corporations are using blockchain networks “with private blockchains, independent of the public system.”[54][55][bettersourceneeded]

Nikolai Hampton pointed out in Computerworld that “There is also no need for a ’51 percent’ attack on a private blockchain, as the private blockchain (most likely) already controls 100 percent of all block creation resources. If you could attack or damage the blockchain creation tools on a private corporate server, you could effectively control 100 percent of their network and alter transactions however you wished.”[7] This has a set of particularly profound adverse implications during a financial crisis or debt crisis like the financial crisis of 200708, where politically powerful actors may make decisions that favor some groups at the expense of others[56][57], and “the bitcoin blockchain is protected by the massive group mining effort. It’s unlikely that any private blockchain will try to protect records using gigawatts of computing powerit’s time consuming and expensive.”[7] He also said, “Within a private blockchain there is also no ‘race’; there’s no incentive to use more power or discover blocks faster than competitors. This means that many in-house blockchain solutions will be nothing more than cumbersome databases.”[7]

Blockchain technology can be integrated into multiple areas. The primary use of blockchains today is as a distributed ledger for cryptocurrencies, most notably bitcoin. There are a few operational products maturing from proof of concept by late 2016.[50]

As of 2016[update], some observers remain skeptical. Steve Wilson, of Constellation Research, believes the technology has been hyped with unrealistic claims.[58] To mitigate risk, businesses are reluctant to place blockchain at the core of the business structure.[59]

Blockchain-based smart contracts are proposed contracts that could be partially or fully executed or enforced without human interaction.[60] One of the main objectives of a smart contract is automated escrow. An IMF staff discussion reported that smart contracts based on blockchain technology might reduce moral hazards and optimize the use of contracts in general. But “no viable smart contract systems have yet emerged.” Due to the lack of widespread use their legal status is unclear.[61]

Major portions of the financial industry are implementing distributed ledgers for use in banking,[62][63][64] and according to a September 2016 IBM study, this is occurring faster than expected.[65]

Banks are interested in this technology because it has potential to speed up back office settlement systems.[66]

Banks such as UBS are opening new research labs dedicated to blockchain technology in order to explore how blockchain can be used in financial services to increase efficiency and reduce costs.[67][68]

Berenberg, a German bank, believes that blockchain is an “overhyped technology” that has had a large number of “proofs of concept”, but still has major challenges, and very few success stories.[69]

Blockchain technology can be used to create a permanent, public, transparent ledger system for compiling data on sales, tracking digital use and payments to content creators, such as wireless users [70] or musicians.[71] In 2017, IBM partnered with ASCAP and PRS for Music to adopt blockchain technology in music distribution.[72] Imogen Heap’s Mycelia service has also been proposed as blockchain-based alternative “that gives artists more control over how their songs and associated data circulate among fans and other musicians.”[73][74] Everledger is one of the inaugural clients of IBM’s blockchain-based tracking service.[75]

New distribution methods are available for the insurance industry such as peer-to-peer insurance, parametric insurance and microinsurance following the adoption of blockchain.[76][77] The sharing economy and IoT are also set to benefit from blockchains because they involve many collaborating peers.[78] Online voting is another application of the blockchain.[79][80]

Blockchains facilitate users could take ownership of game assets (digital assets), an example of this is Cryptokitties.[81]

Non-cryptocurrency designs include:

IBM offers a cloud blockchain service based on the open source Hyperledger Fabric project[84][85]

On May 8, 2018 Facebook confirmed that it is opening a new blockchain group[86] which will be headed by David Marcus who previously was in charge of Messenger. According to The Verge Facebook is planning to launch its own cryptocurrency for facilitating payments on the platform[87].

Currently, there are three types of blockchain networks – public blockchains, private blockchains and consortium blockchains.

A public blockchain has absolutely no access restrictions. Anyone with an internet connection can send transactions[disambiguation needed] to it as well as become a validator (i.e., participate in the execution of a consensus protocol). [88][self-published source?] Usually, such networks offer economic incentives for those who secure them and utilize some type of a Proof of Stake or Proof of Work algorithm.

Some of the largest, most known public blockchains are Bitcoin and Ethereum.

A private blockchain is permissioned.[51] One cannot join it unless invited by the network administrators. Participant and validator access is restricted.

This type of blockchains can be considered a middle-ground for companies that are interested in the blockchain technology in general but are not comfortable with a level of control offered by public networks. Typically, they seek to incorporate blockchain into their accounting and record-keeping procedures without sacrificing autonomy and running the risk of exposing sensitive data to the public internet.

A consortium blockchain is often said to be semi-decentralized. It, too, is permissioned but instead of a single organization controlling it, a number of companies might each operate a node on such a network. The administrators of a consortium chain restrict users reading rights as they see fit and only allow a limited set of trusted nodes to execute a consensus protocol.

In October 2014, the MIT Bitcoin Club, with funding from MIT alumni, provided undergraduate students at the Massachusetts Institute of Technology access to $100 of bitcoin. The adoption rates, as studied by Catalini and Tucker (2016), revealed that when people who typically adopt technologies early are given delayed access, they tend to reject the technology.[89]

In September 2015, the first peer-reviewed academic journal dedicated to cryptocurrency and blockchain technology research, Ledger, was announced. The inaugural issue was published in December 2016.[90] The journal covers aspects of mathematics, computer science, engineering, law, economics and philosophy that relate to cryptocurrencies such as bitcoin.[91][92]

The journal encourages authors to digitally sign a file hash of submitted papers, which will then be timestamped into the bitcoin blockchain. Authors are also asked to include a personal bitcoin address in the first page of their papers.[93]

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The Truth About Blockchain – Harvard Business Review

In Brief The Hype

Weve all heard that blockchain will revolutionize business, but its going to take a lot longer than many people claim.

Like TCP/IP (on which the internet was built), blockchain is a foundational technology that will require broad coordination. The level of complexitytechnological, regulatory, and socialwill be unprecedented.

The adoption of TCP/IP suggests blockchain will follow a fairly predictable path. While the journey will take years, its not too early for businesses to start planning.

Contracts, transactions, and the records of them are among the defining structures in our economic, legal, and political systems. They protect assets and set organizational boundaries. They establish and verify identities and chronicle events. They govern interactions among nations, organizations, communities, and individuals. They guide managerial and social action. And yet these critical tools and the bureaucracies formed to manage them have not kept up with the economys digital transformation. Theyre like a rush-hour gridlock trapping a Formula 1 race car. In a digital world, the way we regulate and maintain administrative control has to change.

Blockchain promises to solve this problem. The technology at the heart of bitcoin and other virtual currencies, blockchain is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. The ledger itself can also be programmed to trigger transactions automatically. (See the sidebar How Blockchain Works.)

With blockchain, we can imagine a world in which contracts are embedded in digital code and stored in transparent, shared databases, where they are protected from deletion, tampering, and revision. In this world every agreement, every process, every task, and every payment would have a digital record and signature that could be identified, validated, stored, and shared. Intermediaries like lawyers, brokers, and bankers might no longer be necessary. Individuals, organizations, machines, and algorithms would freely transact and interact with one another with little friction. This is the immense potential of blockchain.

Indeed, virtually everyone has heard the claim that blockchain will revolutionize business and redefine companies and economies. Although we share the enthusiasm for its potential, we worry about the hype. Its not just security issues (such as the 2014 collapse of one bitcoin exchange and the more recent hacks of others) that concern us. Our experience studying technological innovation tells us that if theres to be a blockchain revolution, many barrierstechnological, governance, organizational, and even societalwill have to fall. It would be a mistake to rush headlong into blockchain innovation without understanding how it is likely to take hold.

True blockchain-led transformation of business and government, we believe, is still many years away. Thats because blockchain is not a disruptive technology, which can attack a traditional business model with a lower-cost solution and overtake incumbent firms quickly. Blockchain is a foundational technology: It has the potential to create new foundations for our economic and social systems. But while the impact will be enormous, it will take decades for blockchain to seep into our economic and social infrastructure. The process of adoption will be gradual and steady, not sudden, as waves of technological and institutional change gain momentum. That insight and its strategic implications are what well explore in this article.

Before jumping into blockchain strategy and investment, lets reflect on what we know about technology adoption and, in particular, the transformation process typical of other foundational technologies. One of the most relevant examples is distributed computer networking technology, seen in the adoption of TCP/IP (transmission control protocol/internet protocol), which laid the groundwork for the development of the internet.

Introduced in 1972, TCP/IP first gained traction in a single-use case: as the basis for e-mail among the researchers on ARPAnet, the U.S. Department of Defense precursor to the commercial internet. Before TCP/IP, telecommunications architecture was based on circuit switching, in which connections between two parties or machines had to be preestablished and sustained throughout an exchange. To ensure that any two nodes could communicate, telecom service providers and equipment manufacturers had invested billions in building dedicated lines.

TCP/IP turned that model on its head. The new protocol transmitted information by digitizing it and breaking it up into very small packets, each including address information. Once released into the network, the packets could take any route to the recipient. Smart sending and receiving nodes at the networks edges could disassemble and reassemble the packets and interpret the encoded data. There was no need for dedicated private lines or massive infrastructure. TCP/IP created an open, shared public network without any central authority or party responsible for its maintenance and improvement.

Traditional telecommunications and computing sectors looked on TCP/IP with skepticism. Few imagined that robust data, messaging, voice, and video connections could be established on the new architecture or that the associated system could be secure and scale up. But during the late 1980s and 1990s, a growing number of firms, such as Sun, NeXT, Hewlett-Packard, and Silicon Graphics, used TCP/IP, in part to create localized private networks within organizations. To do so, they developed building blocks and tools that broadened its use beyond e-mail, gradually replacing more-traditional local network technologies and standards. As organizations adopted these building blocks and tools, they saw dramatic gains in productivity.

TCP/IP burst into broad public use with the advent of the World Wide Web in the mid-1990s. New technology companies quickly emerged to provide the plumbingthe hardware, software, and services needed to connect to the now-public network and exchange information. Netscape commercialized browsers, web servers, and other tools and components that aided the development and adoption of internet services and applications. Sun drove the development of Java, the application-programming language. As information on the web grew exponentially, Infoseek, Excite, AltaVista, and Yahoo were born to guide users around it.

Once this basic infrastructure gained critical mass, a new generation of companies took advantage of low-cost connectivity by creating internet services that were compelling substitutes for existing businesses. CNET moved news online. Amazon offered more books for sale than any bookshop. Priceline and Expedia made it easier to buy airline tickets and brought unprecedented transparency to the process. The ability of these newcomers to get extensive reach at relatively low cost put significant pressure on traditional businesses like newspapers and brick-and-mortar retailers.

Relying on broad internet connectivity, the next wave of companies created novel, transformative applications that fundamentally changed the way businesses created and captured value. These companies were built on a new peer-to-peer architecture and generated value by coordinating distributed networks of users. Think of how eBay changed online retail through auctions, Napster changed the music industry, Skype changed telecommunications, and Google, which exploited user-generated links to provide more relevant results, changed web search.

Companies are already using blockchain to track items through complex supply chains.

Ultimately, it took more than 30 years for TCP/IP to move through all the phasessingle use, localized use, substitution, and transformationand reshape the economy. Today more than half the worlds most valuable public companies have internet-driven, platform-based business models. The very foundations of our economy have changed. Physical scale and unique intellectual property no longer confer unbeatable advantages; increasingly, the economic leaders are enterprises that act as keystones, proactively organizing, influencing, and coordinating widespread networks of communities, users, and organizations.

Blockchaina peer-to-peer network that sits on top of the internetwas introduced in October 2008 as part of a proposal for bitcoin, a virtual currency system that eschewed a central authority for issuing currency, transferring ownership, and confirming transactions. Bitcoin is the first application of blockchain technology.

The parallels between blockchain and TCP/IP are clear. Just as e-mail enabled bilateral messaging, bitcoin enables bilateral financial transactions. The development and maintenance of blockchain is open, distributed, and sharedjust like TCP/IPs. A team of volunteers around the world maintains the core software. And just like e-mail, bitcoin first caught on with an enthusiastic but relatively small community.

TCP/IP unlocked new economic value by dramatically lowering the cost of connections. Similarly, blockchain could dramatically reduce the cost of transactions. It has the potential to become the system of record for all transactions. If that happens, the economy will once again undergo a radical shift, as new, blockchain-based sources of influence and control emerge.

Consider how business works now. Keeping ongoing records of transactions is a core function of any business. Those records track past actions and performance and guide planning for the future. They provide a view not only of how the organization works internally but also of the organizations outside relationships. Every organization keeps its own records, and theyre private. Many organizations have no master ledger of all their activities; instead records are distributed across internal units and functions. The problem is, reconciling transactions across individual and private ledgers takes a lot of time and is prone to error.

For example, a typical stock transaction can be executed within microseconds, often without human intervention. However, the settlementthe ownership transfer of the stockcan take as long as a week. Thats because the parties have no access to each others ledgers and cant automatically verify that the assets are in fact owned and can be transferred. Instead a series of intermediaries act as guarantors of assets as the record of the transaction traverses organizations and the ledgers are individually updated.

In a blockchain system, the ledger is replicated in a large number of identical databases, each hosted and maintained by an interested party. When changes are entered in one copy, all the other copies are simultaneously updated. So as transactions occur, records of the value and assets exchanged are permanently entered in all ledgers. There is no need for third-party intermediaries to verify or transfer ownership. If a stock transaction took place on a blockchain-based system, it would be settled within seconds, securely and verifiably. (The infamous hacks that have hit bitcoin exchanges exposed weaknesses not in the blockchain itself but in separate systems linked to parties using the blockchain.)

If bitcoin is like early e-mail, is blockchain decades from reaching its full potential? In our view the answer is a qualified yes. We cant predict exactly how many years the transformation will take, but we can guess which kinds of applications will gain traction first and how blockchains broad acceptance will eventually come about.

In our analysis, history suggests that two dimensions affect how a foundational technology and its business use cases evolve. The first is noveltythe degree to which an application is new to the world. The more novel it is, the more effort will be required to ensure that users understand what problems it solves. The second dimension is complexity, represented by the level of ecosystem coordination involvedthe number and diversity of parties that need to work together to produce value with the technology. For example, a social network with just one member is of little use; a social network is worthwhile only when many of your own connections have signed on to it. Other users of the application must be brought on board to generate value for all participants. The same will be true for many blockchain applications. And, as the scale and impact of those applications increase, their adoption will require significant institutional change.

Weve developed a framework that maps innovations against these two contextual dimensions, dividing them into quadrants. (See the exhibit How Foundational Technologies Take Hold.) Each quadrant represents a stage of technology development. Identifying which one a blockchain innovation falls into will help executives understand the types of challenges it presents, the level of collaboration and consensus it needs, and the legislative and regulatory efforts it will require. The map will also suggest what kind of processes and infrastructure must be established to facilitate the innovations adoption. Managers can use it to assess the state of blockchain development in any industry, as well as to evaluate strategic investments in their own blockchain capabilities.

In the first quadrant are low-novelty and low-coordination applications that create better, less costly, highly focused solutions. E-mail, a cheap alternative to phone calls, faxes, and snail mail, was a single-use application for TCP/IP (even though its value rose with the number of users). Bitcoin, too, falls into this quadrant. Even in its early days, bitcoin offered immediate value to the few people who used it simply as an alternative payment method. (You can think of it as a complex e-mail that transfers not just information but also actual value.) At the end of 2016 the value of bitcoin transactions was expected to hit $92 billion. Thats still a rounding error compared with the $411 trillion in total global payments, but bitcoin is growing fast and increasingly important in contexts such as instant payments and foreign currency and asset trading, where the present financial system has limitations.

The second quadrant comprises innovations that are relatively high in novelty but need only a limited number of users to create immediate value, so its still relatively easy to promote their adoption. If blockchain follows the path network technologies took in business, we can expect blockchain innovations to build on single-use applications to create local private networks on which multiple organizations are connected through a distributed ledger.

Much of the initial private blockchain-based development is taking place in the financial services sector, often within small networks of firms, so the coordination requirements are relatively modest. Nasdaq is working with Chain.com, one of many blockchain infrastructure providers, to offer technology for processing and validating financial transactions. Bank of America, JPMorgan, the New York Stock Exchange, Fidelity Investments, and Standard Chartered are testing blockchain technology as a replacement for paper-based and manual transaction processing in such areas as trade finance, foreign exchange, cross-border settlement, and securities settlement. The Bank of Canada is testing a digital currency called CAD-coin for interbank transfers. We anticipate a proliferation of private blockchains that serve specific purposes for various industries.

The third quadrant contains applications that are relatively low in novelty because they build on existing single-use and localized applications, but are high in coordination needs because they involve broader and increasingly public uses. These innovations aim to replace entire ways of doing business. They face high barriers to adoption, however; not only do they require more coordination but the processes they hope to replace may be full-blown and deeply embedded within organizations and institutions. Examples of substitutes include cryptocurrenciesnew, fully formed currency systems that have grown out of the simple bitcoin payment technology. The critical difference is that a cryptocurrency requires every party that does monetary transactions to adopt it, challenging governments and institutions that have long handled and overseen such transactions. Consumers also have to change their behavior and understand how to implement the new functional capability of the cryptocurrency.

A recent experiment at MIT highlights the challenges ahead for digital currency systems. In 2014 the MIT Bitcoin Club provided each of MITs 4,494 undergraduates with $100 in bitcoin. Interestingly, 30% of the students did not even sign up for the free money, and 20% of the sign-ups converted the bitcoin to cash within a few weeks. Even the technically savvy had a tough time understanding how or where to use bitcoin.

One of the most ambitious substitute blockchain applications is Stellar, a nonprofit that aims to bring affordable financial services, including banking, micropayments, and remittances, to people whove never had access to them. Stellar offers its own virtual currency, lumens, and also allows users to retain on its system a range of assets, including other currencies, telephone minutes, and data credits. Stellar initially focused on Africa, particularly Nigeria, the largest economy there. It has seen significant adoption among its target population and proved its cost-effectiveness. But its future is by no means certain, because the ecosystem coordination challenges are high. Although grassroots adoption has demonstrated the viability of Stellar, to become a banking standard, it will need to influence government policy and persuade central banks and large organizations to use it. That could take years of concerted effort.

Into the last quadrant fall completely novel applications that, if successful, could change the very nature of economic, social, and political systems. They involve coordinating the activity of many actors and gaining institutional agreement on standards and processes. Their adoption will require major social, legal, and political change.

Smart contracts may be the most transformative blockchain application at the moment. These automate payments and the transfer of currency or other assets as negotiated conditions are met. For example, a smart contract might send a payment to a supplier as soon as a shipment is delivered. A firm could signal via blockchain that a particular good has been receivedor the product could have GPS functionality, which would automatically log a location update that, in turn, triggered a payment. Weve already seen a few early experiments with such self-executing contracts in the areas of venture funding, banking, and digital rights management.

The implications are fascinating. Firms are built on contracts, from incorporation to buyer-supplier relationships to employee relations. If contracts are automated, then what will happen to traditional firm structures, processes, and intermediaries like lawyers and accountants? And what about managers? Their roles would all radically change. Before we get too excited here, though, lets remember that we are decades away from the widespread adoption of smart contracts. They cannot be effective, for instance, without institutional buy-in. A tremendous degree of coordination and clarity on how smart contracts are designed, verified, implemented, and enforced will be required. We believe the institutions responsible for those daunting tasks will take a long time to evolve. And the technology challengesespecially securityare daunting.

How should executives think about blockchain for their own organizations? Our framework can help companies identify the right opportunities.

For most, the easiest place to start is single-use applications, which minimize risk because they arent new and involve little coordination with third parties. One strategy is to add bitcoin as a payment mechanism. The infrastructure and market for bitcoin are already well developed, and adopting the virtual currency will force a variety of functions, including IT, finance, accounting, sales, and marketing, to build blockchain capabilities. Another low-risk approach is to use blockchain internally as a database for applications like managing physical and digital assets, recording internal transactions, and verifying identities. This may be an especially useful solution for companies struggling to reconcile multiple internal databases. Testing out single-use applications will help organizations develop the skills they need for more-advanced applications. And thanks to the emergence of cloud-based blockchain services from both start-ups and large platforms like Amazon and Microsoft, experimentation is getting easier all the time.

Localized applications are a natural next step for companies. Were seeing a lot of investment in private blockchain networks right now, and the projects involved seem poised for real short-term impact. Financial services companies, for example, are finding that the private blockchain networks theyve set up with a limited number of trusted counterparties can significantly reduce transaction costs.

Organizations can also tackle specific problems in transactions across boundaries with localized applications. Companies are already using blockchain to track items through complex supply chains, for instance. This is happening in the diamond industry, where gems are being traced from mines to consumers. The technology for such experiments is now available off-the-shelf.

Developing substitute applications requires careful planning, since existing solutions may be difficult to dislodge. One way to go may be to focus on replacements that wont require end users to change their behavior much but present alternatives to expensive or unattractive solutions. To get traction, substitutes must deliver functionality as good as a traditional solutions and must be easy for the ecosystem to absorb and adopt. First Datas foray into blockchain-based gift cards is a good example of a well-considered substitute. Retailers that offer them to consumers can dramatically lower costs per transaction and enhance security by using blockchain to track the flows of currency within accountswithout relying on external payment processors. These new gift cards even allow transfers of balances and transaction capability between merchants via the common ledger.

Blockchain could slash the cost of transactions and reshape the economy.

Transformative applications are still far away. But it makes sense to evaluate their possibilities now and invest in developing technology that can enable them. They will be most powerful when tied to a new business model in which the logic of value creation and capture departs from existing approaches. Such business models are hard to adopt but can unlock future growth for companies.

Consider how law firms will have to change to make smart contracts viable. Theyll need to develop new expertise in software and blockchain programming. Theyll probably also have to rethink their hourly payment model and entertain the idea of charging transaction or hosting fees for contracts, to name just two possible approaches. Whatever tack they take, executives must be sure they understand and have tested the business model implications before making any switch.

Transformative scenarios will take off last, but they will also deliver enormous value. Two areas where they could have a profound impact: large-scale public identity systems for such functions as passport control, and algorithm-driven decision making in the prevention of money laundering and in complex financial transactions that involve many parties. We expect these applications wont reach broad adoption and critical mass for at least another decade and probably more.

Transformative applications will also give rise to new platform-level players that will coordinate and govern the new ecosystems. These will be the Googles and Facebooks of the next generation. It will require patience to realize such opportunities. Though it may be premature to start making significant investments in them now, developing the required foundations for themtools and standardsis still worthwhile.

In addition to providing a good template for blockchains adoption, TCP/IP has most likely smoothed the way for it. TCP/IP has become ubiquitous, and blockchain applications are being built on top of the digital data, communication, and computation infrastructure, which lowers the cost of experimentation and will allow new use cases to emerge rapidly.

With our framework, executives can figure out where to start building their organizational capabilities for blockchain today. They need to ensure that their staffs learn about blockchain, to develop company-specific applications across the quadrants weve identified, and to invest in blockchain infrastructure.

But given the time horizons, barriers to adoption, and sheer complexity involved in getting to TCP/IP levels of acceptance, executives should think carefully about the risks involved in experimenting with blockchain. Clearly, starting small is a good way to develop the know-how to think bigger. But the level of investment should depend on the context of the company and the industry. Financial services companies are already well down the road to blockchain adoption. Manufacturing is not.

No matter what the context, theres a strong possibility that blockchain will affect your business. The very big question is when.

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The Truth About Blockchain – Harvard Business Review

The Blockchain: What It Is and Why It Matters – Brookings

New TechTank Blog Posts Are Available Here

Chances are that youve heard of bitcoin, the digital currency that many predict will revolutionize payments or prove to be a massive fraud depending on what you read. Bitcoin is an application that runs on the Blockchain, which is ultimately a more interesting and profound innovation.

The Blockchain is a secure transaction ledger database that is shared by all parties participating in an established, distributed network of computers. It records and stores every transaction that occurs in the network, essentially eliminating the need for trusted third parties such as payment processors. Blockchain proponents often describe the innovation as a transfer of trust in a trustless world, referring to the fact that the entities participating in a transaction are not necessarily known to each other yet they exchange value with surety and no third-party validation. For this reason, the Blockchain is a potential game changer.

In 2008, Satoshi Nakamoto, the pseudonymous person or group of people credited with developing bitcoin, released a whitepaper describing the software protocol. Since then, the network has grown and bitcoinhas become a recognized unit of value around the globe. Bitcoinis extremely important because it provides a mechanism for accessing the Blockchain but its not the only application that can leverage the platform.

Bitcoin has also been on the receiving end of some bad press, such as around the collapse of the Mt. Gox bitcoin exchange earlier last year. The Mt. Gox story is not necessarily an indictment of bitcoin. For the purposes of this post, simply remember this: bitcoin is just a mechanism for transacting on the Blockchain and the Blockchain is the key innovation.

The Blockchain enables the anonymous exchange of digital assets, such as bitcoin, but it is not technically dependent on bitcoin. The elegance of the Blockchain is that it obviates the need for a central authority to verify trust and the transfer of value. It transfers power and control from large entities to the many, enabling safe, fast, cheaper transactions despite the fact that we may not know the entities we are dealing with.

The mechanics of the Blockchain are novel and highly disruptive. As people transact in a Blockchain ecosystem, a public record of all transactions is automatically created. Computers verify each transaction with sophisticated algorithms to confirm the transfer of value and create a historical ledger of all activity. The computers that form the network that are processing the transactions are located throughout the world and importantly are not owned or controlled by any single entity. The process is real-time, and much more secure than relying on a central authority to verify a transaction.

There are many analogous concepts both ancient and modern. Technology has and will continue to transfer power and control from central authorities and distribute them to the masses. For example, time used to be determined and communicated by large clock towers that were expensive to build and maintain. Engineering innovations ultimately decentralized the quantification of time to the individual. Likewise, WhatsApp, a popular cross platform messaging app, cut the transaction cost of sending messages globally and cut profits for the carriers. The central authority (phone carriers) lost to the application (WhatsApp) built on a decentralized network (i.e. the Internet).

Similarly, third parties that currently verify transactions (the central authority) stand to lose against the Blockchain (the decentralized network). As such, the Blockchain essentially disintermediates these third-party transaction verifiers: auditors, legal services, payment processors, brokerages and other similar organizations.

While you may not be convinced that exchanging bitcoin is an invaluable service, there are many other examples of value transfer that are critical and currently very slow and expensive. Consider the exchange of property: numerous intermediaries are currently involved in this process, such as a third-party escrow service that works for both parties to ensure a smooth transfer. The escrow service, like other services built solely on trust and verification, collect fees that would be mitigated by performing the transaction on the Blockchain as would wire transfer fees, third party financial auditing, contract execution, etc.

The use case of the Blockchain enabling a decentralized currency exchange such as bitcoin is well defined and will likely be the dominant use case near term, however there are a multitude of innovative and disruptive use cases. Companies are already building their own Blockchains for various applications such as Gridcoin that leverages the Blockchain to crowdsource scientific computing projects. Gridcoin uses its own protocols that require much less computing power and electricity to manage than traditional bitcoin networks.

The Blockchain is a foundational technology, like TCP/IP, which enables the Internet. And much like the Internet in the late 1990s, we dont know exactly how the Blockchain will evolve, but evolve it will.

Similar to the Internet, the Blockchain must also be allowed to grow unencumbered. This will require careful handling that recognizes the difference between the platform and the applications that run on it. TCP/IP empowers numerous financial applications that are regulated, but TCP/IP is not regulated as a financial instrument. The Blockchain should receive similar consideration. While the predominant use case for the Blockchain today is bitcoin currency exchange that may require regulation, this will change over time.

Had we over-regulated the Internet early on, we would have missed out on many innovations that we cant imagine living without today. The same is true for the Blockchain. Disruptive technologies rarely fit neatly into existing regulatory considerations, but rigid regulatory frameworks have repeatedly stifled innovation. Its likely that innovations in the Blockchain will outpace policy, lets not slow it down.

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The Blockchain: What It Is and Why It Matters – Brookings

Blockchain – Official Site

Your Passport to the Future of Finance

The first and most trusted global cryptocurrency company

Exchange and transact bitcoin, ethereum, and bitcoin cash using the worlds most trusted and secure cryptocurrency wallet.

Use the first and most popular bitcoin block explorer to search and verify transactions on Bitcoins blockchain.

Stay on top of bitcoin and other top cryptocurrency prices, news, and market information.

See more here:

Blockchain – Official Site

The Blockchain: What It Is and Why It Matters – Brookings

New TechTank Blog Posts Are Available Here

Chances are that youve heard of bitcoin, the digital currency that many predict will revolutionize payments or prove to be a massive fraud depending on what you read. Bitcoin is an application that runs on the Blockchain, which is ultimately a more interesting and profound innovation.

The Blockchain is a secure transaction ledger database that is shared by all parties participating in an established, distributed network of computers. It records and stores every transaction that occurs in the network, essentially eliminating the need for trusted third parties such as payment processors. Blockchain proponents often describe the innovation as a transfer of trust in a trustless world, referring to the fact that the entities participating in a transaction are not necessarily known to each other yet they exchange value with surety and no third-party validation. For this reason, the Blockchain is a potential game changer.

In 2008, Satoshi Nakamoto, the pseudonymous person or group of people credited with developing bitcoin, released a whitepaper describing the software protocol. Since then, the network has grown and bitcoinhas become a recognized unit of value around the globe. Bitcoinis extremely important because it provides a mechanism for accessing the Blockchain but its not the only application that can leverage the platform.

Bitcoin has also been on the receiving end of some bad press, such as around the collapse of the Mt. Gox bitcoin exchange earlier last year. The Mt. Gox story is not necessarily an indictment of bitcoin. For the purposes of this post, simply remember this: bitcoin is just a mechanism for transacting on the Blockchain and the Blockchain is the key innovation.

The Blockchain enables the anonymous exchange of digital assets, such as bitcoin, but it is not technically dependent on bitcoin. The elegance of the Blockchain is that it obviates the need for a central authority to verify trust and the transfer of value. It transfers power and control from large entities to the many, enabling safe, fast, cheaper transactions despite the fact that we may not know the entities we are dealing with.

The mechanics of the Blockchain are novel and highly disruptive. As people transact in a Blockchain ecosystem, a public record of all transactions is automatically created. Computers verify each transaction with sophisticated algorithms to confirm the transfer of value and create a historical ledger of all activity. The computers that form the network that are processing the transactions are located throughout the world and importantly are not owned or controlled by any single entity. The process is real-time, and much more secure than relying on a central authority to verify a transaction.

There are many analogous concepts both ancient and modern. Technology has and will continue to transfer power and control from central authorities and distribute them to the masses. For example, time used to be determined and communicated by large clock towers that were expensive to build and maintain. Engineering innovations ultimately decentralized the quantification of time to the individual. Likewise, WhatsApp, a popular cross platform messaging app, cut the transaction cost of sending messages globally and cut profits for the carriers. The central authority (phone carriers) lost to the application (WhatsApp) built on a decentralized network (i.e. the Internet).

Similarly, third parties that currently verify transactions (the central authority) stand to lose against the Blockchain (the decentralized network). As such, the Blockchain essentially disintermediates these third-party transaction verifiers: auditors, legal services, payment processors, brokerages and other similar organizations.

While you may not be convinced that exchanging bitcoin is an invaluable service, there are many other examples of value transfer that are critical and currently very slow and expensive. Consider the exchange of property: numerous intermediaries are currently involved in this process, such as a third-party escrow service that works for both parties to ensure a smooth transfer. The escrow service, like other services built solely on trust and verification, collect fees that would be mitigated by performing the transaction on the Blockchain as would wire transfer fees, third party financial auditing, contract execution, etc.

The use case of the Blockchain enabling a decentralized currency exchange such as bitcoin is well defined and will likely be the dominant use case near term, however there are a multitude of innovative and disruptive use cases. Companies are already building their own Blockchains for various applications such as Gridcoin that leverages the Blockchain to crowdsource scientific computing projects. Gridcoin uses its own protocols that require much less computing power and electricity to manage than traditional bitcoin networks.

The Blockchain is a foundational technology, like TCP/IP, which enables the Internet. And much like the Internet in the late 1990s, we dont know exactly how the Blockchain will evolve, but evolve it will.

Similar to the Internet, the Blockchain must also be allowed to grow unencumbered. This will require careful handling that recognizes the difference between the platform and the applications that run on it. TCP/IP empowers numerous financial applications that are regulated, but TCP/IP is not regulated as a financial instrument. The Blockchain should receive similar consideration. While the predominant use case for the Blockchain today is bitcoin currency exchange that may require regulation, this will change over time.

Had we over-regulated the Internet early on, we would have missed out on many innovations that we cant imagine living without today. The same is true for the Blockchain. Disruptive technologies rarely fit neatly into existing regulatory considerations, but rigid regulatory frameworks have repeatedly stifled innovation. Its likely that innovations in the Blockchain will outpace policy, lets not slow it down.

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The Blockchain: What It Is and Why It Matters – Brookings

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Blockchain Technology and Applications | Microsoft Azure

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Blockchain is a transparent and verifiable system that will change the way people think about exchanging value and assets, enforcing contracts, and sharing data. The technology is a shared, secure ledger of transactions distributed among a network of computers, rather than resting with a single provider. Businesses are using blockchain as a common data layer to enable a new class of applications. Now, business processes and data can be shared across multiple organizations, which eliminates waste, reduces the risk of fraud, and creates new revenue streams.

When fully automated, blockchain can enforce consistency in execution, assist with dispute resolution, increase accountability, and deliver end-to-end transparency that can inform better business decisions.

What are businesses doing with blockchain?

Explore how blockchain is being applied across the banking, capital markets, and insurance industries. See how blockchain helps financial services institutions eliminate intermediaries, collaborate more efficiently, and create disruptive new business models.

Read about how blockchain helps resolve disputes quickly and transparently. Discover how blockchain adds visibility to the corporate supply chain by keeping a single, real-time view thats consistent for everyone.

Why use blockchain on Azure?

Cut development time and experiment easily with modular, preconfigured networks and infrastructure.

Iterate and validate blockchain scenarios quickly by using built-in connections to Azure and tools youre already familiar with.

Keep your data secure and scale when you need toon an open, trusted, globally available cloud platform.

Customers are doing great things with blockchain on Azure

Ground-breaking insurance blockchain solution runs in Microsoft Azure

Webjet uses Azure to power Rezchain, a payment reconciliation service for the online travel market

Microsoft uses blockchain to deliver royalty statements to Xbox game publishers faster with significant efforts reduction

View all case studies

3M uses Azure Blockchain to enable a new label-as-a-service approach for helping secure the supply chain and fight product counterfeiting

The Monetary Authority of Singapore and the Association of Banks in Singapore use blockchain on Azure for the clearing and settlement of payments and securities

Jumpstart your blockchain project on Azure

Build with the ledger that suits your use case

Build your own blockchain applications with help from our trusted partners

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Currently, the healthcare industry suffers major inefficiencies due to diverse uncoordinated and unconnected data sources/systems. Collaboration is vital to improve healthcare outcomes. With digitized health data, the exchange of healthcare information across healthcare organizations is essential to support effective care collaboration. Traditional health information exchanges have had limited success.

Were excited to see a ton of engagement and positive feedback on Azure Blockchain Workbench since our initial public preview release in May. Last month, we made our first major update to the public preview release based on your feedback and feature requests. Today, were releasing our next update to Workbench, which were calling version 1.2.0. You can either deploy a new instance of Workbench through the Azure Portal or upgrade your existing deployment to 1.2.0 using our upgrade script.

Healthcare costs are skyrocketing. In 2016, healthcare costs in the US are estimated at nearly 18 percent of the GDP! Healthcare is becoming less affordable worldwide, and a serious chasm is widening between those that can afford healthcare and those that cannot. There are many factors driving the high cost of healthcare, one of them is fraud.

Related solutions

Power your digital transformation, collect untapped data, and find new insights by connecting your devices, assets, and sensors

Make the most informed decision possible by analyzing all of the data you need in real time

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Blockchain Technology and Applications | Microsoft Azure

The Truth About Blockchain – Harvard Business Review

In Brief The Hype

Weve all heard that blockchain will revolutionize business, but its going to take a lot longer than many people claim.

Like TCP/IP (on which the internet was built), blockchain is a foundational technology that will require broad coordination. The level of complexitytechnological, regulatory, and socialwill be unprecedented.

The adoption of TCP/IP suggests blockchain will follow a fairly predictable path. While the journey will take years, its not too early for businesses to start planning.

Contracts, transactions, and the records of them are among the defining structures in our economic, legal, and political systems. They protect assets and set organizational boundaries. They establish and verify identities and chronicle events. They govern interactions among nations, organizations, communities, and individuals. They guide managerial and social action. And yet these critical tools and the bureaucracies formed to manage them have not kept up with the economys digital transformation. Theyre like a rush-hour gridlock trapping a Formula 1 race car. In a digital world, the way we regulate and maintain administrative control has to change.

Blockchain promises to solve this problem. The technology at the heart of bitcoin and other virtual currencies, blockchain is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. The ledger itself can also be programmed to trigger transactions automatically. (See the sidebar How Blockchain Works.)

With blockchain, we can imagine a world in which contracts are embedded in digital code and stored in transparent, shared databases, where they are protected from deletion, tampering, and revision. In this world every agreement, every process, every task, and every payment would have a digital record and signature that could be identified, validated, stored, and shared. Intermediaries like lawyers, brokers, and bankers might no longer be necessary. Individuals, organizations, machines, and algorithms would freely transact and interact with one another with little friction. This is the immense potential of blockchain.

Indeed, virtually everyone has heard the claim that blockchain will revolutionize business and redefine companies and economies. Although we share the enthusiasm for its potential, we worry about the hype. Its not just security issues (such as the 2014 collapse of one bitcoin exchange and the more recent hacks of others) that concern us. Our experience studying technological innovation tells us that if theres to be a blockchain revolution, many barrierstechnological, governance, organizational, and even societalwill have to fall. It would be a mistake to rush headlong into blockchain innovation without understanding how it is likely to take hold.

True blockchain-led transformation of business and government, we believe, is still many years away. Thats because blockchain is not a disruptive technology, which can attack a traditional business model with a lower-cost solution and overtake incumbent firms quickly. Blockchain is a foundational technology: It has the potential to create new foundations for our economic and social systems. But while the impact will be enormous, it will take decades for blockchain to seep into our economic and social infrastructure. The process of adoption will be gradual and steady, not sudden, as waves of technological and institutional change gain momentum. That insight and its strategic implications are what well explore in this article.

Before jumping into blockchain strategy and investment, lets reflect on what we know about technology adoption and, in particular, the transformation process typical of other foundational technologies. One of the most relevant examples is distributed computer networking technology, seen in the adoption of TCP/IP (transmission control protocol/internet protocol), which laid the groundwork for the development of the internet.

Introduced in 1972, TCP/IP first gained traction in a single-use case: as the basis for e-mail among the researchers on ARPAnet, the U.S. Department of Defense precursor to the commercial internet. Before TCP/IP, telecommunications architecture was based on circuit switching, in which connections between two parties or machines had to be preestablished and sustained throughout an exchange. To ensure that any two nodes could communicate, telecom service providers and equipment manufacturers had invested billions in building dedicated lines.

TCP/IP turned that model on its head. The new protocol transmitted information by digitizing it and breaking it up into very small packets, each including address information. Once released into the network, the packets could take any route to the recipient. Smart sending and receiving nodes at the networks edges could disassemble and reassemble the packets and interpret the encoded data. There was no need for dedicated private lines or massive infrastructure. TCP/IP created an open, shared public network without any central authority or party responsible for its maintenance and improvement.

Traditional telecommunications and computing sectors looked on TCP/IP with skepticism. Few imagined that robust data, messaging, voice, and video connections could be established on the new architecture or that the associated system could be secure and scale up. But during the late 1980s and 1990s, a growing number of firms, such as Sun, NeXT, Hewlett-Packard, and Silicon Graphics, used TCP/IP, in part to create localized private networks within organizations. To do so, they developed building blocks and tools that broadened its use beyond e-mail, gradually replacing more-traditional local network technologies and standards. As organizations adopted these building blocks and tools, they saw dramatic gains in productivity.

TCP/IP burst into broad public use with the advent of the World Wide Web in the mid-1990s. New technology companies quickly emerged to provide the plumbingthe hardware, software, and services needed to connect to the now-public network and exchange information. Netscape commercialized browsers, web servers, and other tools and components that aided the development and adoption of internet services and applications. Sun drove the development of Java, the application-programming language. As information on the web grew exponentially, Infoseek, Excite, AltaVista, and Yahoo were born to guide users around it.

Once this basic infrastructure gained critical mass, a new generation of companies took advantage of low-cost connectivity by creating internet services that were compelling substitutes for existing businesses. CNET moved news online. Amazon offered more books for sale than any bookshop. Priceline and Expedia made it easier to buy airline tickets and brought unprecedented transparency to the process. The ability of these newcomers to get extensive reach at relatively low cost put significant pressure on traditional businesses like newspapers and brick-and-mortar retailers.

Relying on broad internet connectivity, the next wave of companies created novel, transformative applications that fundamentally changed the way businesses created and captured value. These companies were built on a new peer-to-peer architecture and generated value by coordinating distributed networks of users. Think of how eBay changed online retail through auctions, Napster changed the music industry, Skype changed telecommunications, and Google, which exploited user-generated links to provide more relevant results, changed web search.

Companies are already using blockchain to track items through complex supply chains.

Ultimately, it took more than 30 years for TCP/IP to move through all the phasessingle use, localized use, substitution, and transformationand reshape the economy. Today more than half the worlds most valuable public companies have internet-driven, platform-based business models. The very foundations of our economy have changed. Physical scale and unique intellectual property no longer confer unbeatable advantages; increasingly, the economic leaders are enterprises that act as keystones, proactively organizing, influencing, and coordinating widespread networks of communities, users, and organizations.

Blockchaina peer-to-peer network that sits on top of the internetwas introduced in October 2008 as part of a proposal for bitcoin, a virtual currency system that eschewed a central authority for issuing currency, transferring ownership, and confirming transactions. Bitcoin is the first application of blockchain technology.

The parallels between blockchain and TCP/IP are clear. Just as e-mail enabled bilateral messaging, bitcoin enables bilateral financial transactions. The development and maintenance of blockchain is open, distributed, and sharedjust like TCP/IPs. A team of volunteers around the world maintains the core software. And just like e-mail, bitcoin first caught on with an enthusiastic but relatively small community.

TCP/IP unlocked new economic value by dramatically lowering the cost of connections. Similarly, blockchain could dramatically reduce the cost of transactions. It has the potential to become the system of record for all transactions. If that happens, the economy will once again undergo a radical shift, as new, blockchain-based sources of influence and control emerge.

Consider how business works now. Keeping ongoing records of transactions is a core function of any business. Those records track past actions and performance and guide planning for the future. They provide a view not only of how the organization works internally but also of the organizations outside relationships. Every organization keeps its own records, and theyre private. Many organizations have no master ledger of all their activities; instead records are distributed across internal units and functions. The problem is, reconciling transactions across individual and private ledgers takes a lot of time and is prone to error.

For example, a typical stock transaction can be executed within microseconds, often without human intervention. However, the settlementthe ownership transfer of the stockcan take as long as a week. Thats because the parties have no access to each others ledgers and cant automatically verify that the assets are in fact owned and can be transferred. Instead a series of intermediaries act as guarantors of assets as the record of the transaction traverses organizations and the ledgers are individually updated.

In a blockchain system, the ledger is replicated in a large number of identical databases, each hosted and maintained by an interested party. When changes are entered in one copy, all the other copies are simultaneously updated. So as transactions occur, records of the value and assets exchanged are permanently entered in all ledgers. There is no need for third-party intermediaries to verify or transfer ownership. If a stock transaction took place on a blockchain-based system, it would be settled within seconds, securely and verifiably. (The infamous hacks that have hit bitcoin exchanges exposed weaknesses not in the blockchain itself but in separate systems linked to parties using the blockchain.)

If bitcoin is like early e-mail, is blockchain decades from reaching its full potential? In our view the answer is a qualified yes. We cant predict exactly how many years the transformation will take, but we can guess which kinds of applications will gain traction first and how blockchains broad acceptance will eventually come about.

In our analysis, history suggests that two dimensions affect how a foundational technology and its business use cases evolve. The first is noveltythe degree to which an application is new to the world. The more novel it is, the more effort will be required to ensure that users understand what problems it solves. The second dimension is complexity, represented by the level of ecosystem coordination involvedthe number and diversity of parties that need to work together to produce value with the technology. For example, a social network with just one member is of little use; a social network is worthwhile only when many of your own connections have signed on to it. Other users of the application must be brought on board to generate value for all participants. The same will be true for many blockchain applications. And, as the scale and impact of those applications increase, their adoption will require significant institutional change.

Weve developed a framework that maps innovations against these two contextual dimensions, dividing them into quadrants. (See the exhibit How Foundational Technologies Take Hold.) Each quadrant represents a stage of technology development. Identifying which one a blockchain innovation falls into will help executives understand the types of challenges it presents, the level of collaboration and consensus it needs, and the legislative and regulatory efforts it will require. The map will also suggest what kind of processes and infrastructure must be established to facilitate the innovations adoption. Managers can use it to assess the state of blockchain development in any industry, as well as to evaluate strategic investments in their own blockchain capabilities.

In the first quadrant are low-novelty and low-coordination applications that create better, less costly, highly focused solutions. E-mail, a cheap alternative to phone calls, faxes, and snail mail, was a single-use application for TCP/IP (even though its value rose with the number of users). Bitcoin, too, falls into this quadrant. Even in its early days, bitcoin offered immediate value to the few people who used it simply as an alternative payment method. (You can think of it as a complex e-mail that transfers not just information but also actual value.) At the end of 2016 the value of bitcoin transactions was expected to hit $92 billion. Thats still a rounding error compared with the $411 trillion in total global payments, but bitcoin is growing fast and increasingly important in contexts such as instant payments and foreign currency and asset trading, where the present financial system has limitations.

The second quadrant comprises innovations that are relatively high in novelty but need only a limited number of users to create immediate value, so its still relatively easy to promote their adoption. If blockchain follows the path network technologies took in business, we can expect blockchain innovations to build on single-use applications to create local private networks on which multiple organizations are connected through a distributed ledger.

Much of the initial private blockchain-based development is taking place in the financial services sector, often within small networks of firms, so the coordination requirements are relatively modest. Nasdaq is working with Chain.com, one of many blockchain infrastructure providers, to offer technology for processing and validating financial transactions. Bank of America, JPMorgan, the New York Stock Exchange, Fidelity Investments, and Standard Chartered are testing blockchain technology as a replacement for paper-based and manual transaction processing in such areas as trade finance, foreign exchange, cross-border settlement, and securities settlement. The Bank of Canada is testing a digital currency called CAD-coin for interbank transfers. We anticipate a proliferation of private blockchains that serve specific purposes for various industries.

The third quadrant contains applications that are relatively low in novelty because they build on existing single-use and localized applications, but are high in coordination needs because they involve broader and increasingly public uses. These innovations aim to replace entire ways of doing business. They face high barriers to adoption, however; not only do they require more coordination but the processes they hope to replace may be full-blown and deeply embedded within organizations and institutions. Examples of substitutes include cryptocurrenciesnew, fully formed currency systems that have grown out of the simple bitcoin payment technology. The critical difference is that a cryptocurrency requires every party that does monetary transactions to adopt it, challenging governments and institutions that have long handled and overseen such transactions. Consumers also have to change their behavior and understand how to implement the new functional capability of the cryptocurrency.

A recent experiment at MIT highlights the challenges ahead for digital currency systems. In 2014 the MIT Bitcoin Club provided each of MITs 4,494 undergraduates with $100 in bitcoin. Interestingly, 30% of the students did not even sign up for the free money, and 20% of the sign-ups converted the bitcoin to cash within a few weeks. Even the technically savvy had a tough time understanding how or where to use bitcoin.

One of the most ambitious substitute blockchain applications is Stellar, a nonprofit that aims to bring affordable financial services, including banking, micropayments, and remittances, to people whove never had access to them. Stellar offers its own virtual currency, lumens, and also allows users to retain on its system a range of assets, including other currencies, telephone minutes, and data credits. Stellar initially focused on Africa, particularly Nigeria, the largest economy there. It has seen significant adoption among its target population and proved its cost-effectiveness. But its future is by no means certain, because the ecosystem coordination challenges are high. Although grassroots adoption has demonstrated the viability of Stellar, to become a banking standard, it will need to influence government policy and persuade central banks and large organizations to use it. That could take years of concerted effort.

Into the last quadrant fall completely novel applications that, if successful, could change the very nature of economic, social, and political systems. They involve coordinating the activity of many actors and gaining institutional agreement on standards and processes. Their adoption will require major social, legal, and political change.

Smart contracts may be the most transformative blockchain application at the moment. These automate payments and the transfer of currency or other assets as negotiated conditions are met. For example, a smart contract might send a payment to a supplier as soon as a shipment is delivered. A firm could signal via blockchain that a particular good has been receivedor the product could have GPS functionality, which would automatically log a location update that, in turn, triggered a payment. Weve already seen a few early experiments with such self-executing contracts in the areas of venture funding, banking, and digital rights management.

The implications are fascinating. Firms are built on contracts, from incorporation to buyer-supplier relationships to employee relations. If contracts are automated, then what will happen to traditional firm structures, processes, and intermediaries like lawyers and accountants? And what about managers? Their roles would all radically change. Before we get too excited here, though, lets remember that we are decades away from the widespread adoption of smart contracts. They cannot be effective, for instance, without institutional buy-in. A tremendous degree of coordination and clarity on how smart contracts are designed, verified, implemented, and enforced will be required. We believe the institutions responsible for those daunting tasks will take a long time to evolve. And the technology challengesespecially securityare daunting.

How should executives think about blockchain for their own organizations? Our framework can help companies identify the right opportunities.

For most, the easiest place to start is single-use applications, which minimize risk because they arent new and involve little coordination with third parties. One strategy is to add bitcoin as a payment mechanism. The infrastructure and market for bitcoin are already well developed, and adopting the virtual currency will force a variety of functions, including IT, finance, accounting, sales, and marketing, to build blockchain capabilities. Another low-risk approach is to use blockchain internally as a database for applications like managing physical and digital assets, recording internal transactions, and verifying identities. This may be an especially useful solution for companies struggling to reconcile multiple internal databases. Testing out single-use applications will help organizations develop the skills they need for more-advanced applications. And thanks to the emergence of cloud-based blockchain services from both start-ups and large platforms like Amazon and Microsoft, experimentation is getting easier all the time.

Localized applications are a natural next step for companies. Were seeing a lot of investment in private blockchain networks right now, and the projects involved seem poised for real short-term impact. Financial services companies, for example, are finding that the private blockchain networks theyve set up with a limited number of trusted counterparties can significantly reduce transaction costs.

Organizations can also tackle specific problems in transactions across boundaries with localized applications. Companies are already using blockchain to track items through complex supply chains, for instance. This is happening in the diamond industry, where gems are being traced from mines to consumers. The technology for such experiments is now available off-the-shelf.

Developing substitute applications requires careful planning, since existing solutions may be difficult to dislodge. One way to go may be to focus on replacements that wont require end users to change their behavior much but present alternatives to expensive or unattractive solutions. To get traction, substitutes must deliver functionality as good as a traditional solutions and must be easy for the ecosystem to absorb and adopt. First Datas foray into blockchain-based gift cards is a good example of a well-considered substitute. Retailers that offer them to consumers can dramatically lower costs per transaction and enhance security by using blockchain to track the flows of currency within accountswithout relying on external payment processors. These new gift cards even allow transfers of balances and transaction capability between merchants via the common ledger.

Blockchain could slash the cost of transactions and reshape the economy.

Transformative applications are still far away. But it makes sense to evaluate their possibilities now and invest in developing technology that can enable them. They will be most powerful when tied to a new business model in which the logic of value creation and capture departs from existing approaches. Such business models are hard to adopt but can unlock future growth for companies.

Consider how law firms will have to change to make smart contracts viable. Theyll need to develop new expertise in software and blockchain programming. Theyll probably also have to rethink their hourly payment model and entertain the idea of charging transaction or hosting fees for contracts, to name just two possible approaches. Whatever tack they take, executives must be sure they understand and have tested the business model implications before making any switch.

Transformative scenarios will take off last, but they will also deliver enormous value. Two areas where they could have a profound impact: large-scale public identity systems for such functions as passport control, and algorithm-driven decision making in the prevention of money laundering and in complex financial transactions that involve many parties. We expect these applications wont reach broad adoption and critical mass for at least another decade and probably more.

Transformative applications will also give rise to new platform-level players that will coordinate and govern the new ecosystems. These will be the Googles and Facebooks of the next generation. It will require patience to realize such opportunities. Though it may be premature to start making significant investments in them now, developing the required foundations for themtools and standardsis still worthwhile.

In addition to providing a good template for blockchains adoption, TCP/IP has most likely smoothed the way for it. TCP/IP has become ubiquitous, and blockchain applications are being built on top of the digital data, communication, and computation infrastructure, which lowers the cost of experimentation and will allow new use cases to emerge rapidly.

With our framework, executives can figure out where to start building their organizational capabilities for blockchain today. They need to ensure that their staffs learn about blockchain, to develop company-specific applications across the quadrants weve identified, and to invest in blockchain infrastructure.

But given the time horizons, barriers to adoption, and sheer complexity involved in getting to TCP/IP levels of acceptance, executives should think carefully about the risks involved in experimenting with blockchain. Clearly, starting small is a good way to develop the know-how to think bigger. But the level of investment should depend on the context of the company and the industry. Financial services companies are already well down the road to blockchain adoption. Manufacturing is not.

No matter what the context, theres a strong possibility that blockchain will affect your business. The very big question is when.

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The Truth About Blockchain – Harvard Business Review

The Truth About Blockchain – Harvard Business Review

In Brief The Hype

Weve all heard that blockchain will revolutionize business, but its going to take a lot longer than many people claim.

Like TCP/IP (on which the internet was built), blockchain is a foundational technology that will require broad coordination. The level of complexitytechnological, regulatory, and socialwill be unprecedented.

The adoption of TCP/IP suggests blockchain will follow a fairly predictable path. While the journey will take years, its not too early for businesses to start planning.

Contracts, transactions, and the records of them are among the defining structures in our economic, legal, and political systems. They protect assets and set organizational boundaries. They establish and verify identities and chronicle events. They govern interactions among nations, organizations, communities, and individuals. They guide managerial and social action. And yet these critical tools and the bureaucracies formed to manage them have not kept up with the economys digital transformation. Theyre like a rush-hour gridlock trapping a Formula 1 race car. In a digital world, the way we regulate and maintain administrative control has to change.

Blockchain promises to solve this problem. The technology at the heart of bitcoin and other virtual currencies, blockchain is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. The ledger itself can also be programmed to trigger transactions automatically. (See the sidebar How Blockchain Works.)

With blockchain, we can imagine a world in which contracts are embedded in digital code and stored in transparent, shared databases, where they are protected from deletion, tampering, and revision. In this world every agreement, every process, every task, and every payment would have a digital record and signature that could be identified, validated, stored, and shared. Intermediaries like lawyers, brokers, and bankers might no longer be necessary. Individuals, organizations, machines, and algorithms would freely transact and interact with one another with little friction. This is the immense potential of blockchain.

Indeed, virtually everyone has heard the claim that blockchain will revolutionize business and redefine companies and economies. Although we share the enthusiasm for its potential, we worry about the hype. Its not just security issues (such as the 2014 collapse of one bitcoin exchange and the more recent hacks of others) that concern us. Our experience studying technological innovation tells us that if theres to be a blockchain revolution, many barrierstechnological, governance, organizational, and even societalwill have to fall. It would be a mistake to rush headlong into blockchain innovation without understanding how it is likely to take hold.

True blockchain-led transformation of business and government, we believe, is still many years away. Thats because blockchain is not a disruptive technology, which can attack a traditional business model with a lower-cost solution and overtake incumbent firms quickly. Blockchain is a foundational technology: It has the potential to create new foundations for our economic and social systems. But while the impact will be enormous, it will take decades for blockchain to seep into our economic and social infrastructure. The process of adoption will be gradual and steady, not sudden, as waves of technological and institutional change gain momentum. That insight and its strategic implications are what well explore in this article.

Before jumping into blockchain strategy and investment, lets reflect on what we know about technology adoption and, in particular, the transformation process typical of other foundational technologies. One of the most relevant examples is distributed computer networking technology, seen in the adoption of TCP/IP (transmission control protocol/internet protocol), which laid the groundwork for the development of the internet.

Introduced in 1972, TCP/IP first gained traction in a single-use case: as the basis for e-mail among the researchers on ARPAnet, the U.S. Department of Defense precursor to the commercial internet. Before TCP/IP, telecommunications architecture was based on circuit switching, in which connections between two parties or machines had to be preestablished and sustained throughout an exchange. To ensure that any two nodes could communicate, telecom service providers and equipment manufacturers had invested billions in building dedicated lines.

TCP/IP turned that model on its head. The new protocol transmitted information by digitizing it and breaking it up into very small packets, each including address information. Once released into the network, the packets could take any route to the recipient. Smart sending and receiving nodes at the networks edges could disassemble and reassemble the packets and interpret the encoded data. There was no need for dedicated private lines or massive infrastructure. TCP/IP created an open, shared public network without any central authority or party responsible for its maintenance and improvement.

Traditional telecommunications and computing sectors looked on TCP/IP with skepticism. Few imagined that robust data, messaging, voice, and video connections could be established on the new architecture or that the associated system could be secure and scale up. But during the late 1980s and 1990s, a growing number of firms, such as Sun, NeXT, Hewlett-Packard, and Silicon Graphics, used TCP/IP, in part to create localized private networks within organizations. To do so, they developed building blocks and tools that broadened its use beyond e-mail, gradually replacing more-traditional local network technologies and standards. As organizations adopted these building blocks and tools, they saw dramatic gains in productivity.

TCP/IP burst into broad public use with the advent of the World Wide Web in the mid-1990s. New technology companies quickly emerged to provide the plumbingthe hardware, software, and services needed to connect to the now-public network and exchange information. Netscape commercialized browsers, web servers, and other tools and components that aided the development and adoption of internet services and applications. Sun drove the development of Java, the application-programming language. As information on the web grew exponentially, Infoseek, Excite, AltaVista, and Yahoo were born to guide users around it.

Once this basic infrastructure gained critical mass, a new generation of companies took advantage of low-cost connectivity by creating internet services that were compelling substitutes for existing businesses. CNET moved news online. Amazon offered more books for sale than any bookshop. Priceline and Expedia made it easier to buy airline tickets and brought unprecedented transparency to the process. The ability of these newcomers to get extensive reach at relatively low cost put significant pressure on traditional businesses like newspapers and brick-and-mortar retailers.

Relying on broad internet connectivity, the next wave of companies created novel, transformative applications that fundamentally changed the way businesses created and captured value. These companies were built on a new peer-to-peer architecture and generated value by coordinating distributed networks of users. Think of how eBay changed online retail through auctions, Napster changed the music industry, Skype changed telecommunications, and Google, which exploited user-generated links to provide more relevant results, changed web search.

Companies are already using blockchain to track items through complex supply chains.

Ultimately, it took more than 30 years for TCP/IP to move through all the phasessingle use, localized use, substitution, and transformationand reshape the economy. Today more than half the worlds most valuable public companies have internet-driven, platform-based business models. The very foundations of our economy have changed. Physical scale and unique intellectual property no longer confer unbeatable advantages; increasingly, the economic leaders are enterprises that act as keystones, proactively organizing, influencing, and coordinating widespread networks of communities, users, and organizations.

Blockchaina peer-to-peer network that sits on top of the internetwas introduced in October 2008 as part of a proposal for bitcoin, a virtual currency system that eschewed a central authority for issuing currency, transferring ownership, and confirming transactions. Bitcoin is the first application of blockchain technology.

The parallels between blockchain and TCP/IP are clear. Just as e-mail enabled bilateral messaging, bitcoin enables bilateral financial transactions. The development and maintenance of blockchain is open, distributed, and sharedjust like TCP/IPs. A team of volunteers around the world maintains the core software. And just like e-mail, bitcoin first caught on with an enthusiastic but relatively small community.

TCP/IP unlocked new economic value by dramatically lowering the cost of connections. Similarly, blockchain could dramatically reduce the cost of transactions. It has the potential to become the system of record for all transactions. If that happens, the economy will once again undergo a radical shift, as new, blockchain-based sources of influence and control emerge.

Consider how business works now. Keeping ongoing records of transactions is a core function of any business. Those records track past actions and performance and guide planning for the future. They provide a view not only of how the organization works internally but also of the organizations outside relationships. Every organization keeps its own records, and theyre private. Many organizations have no master ledger of all their activities; instead records are distributed across internal units and functions. The problem is, reconciling transactions across individual and private ledgers takes a lot of time and is prone to error.

For example, a typical stock transaction can be executed within microseconds, often without human intervention. However, the settlementthe ownership transfer of the stockcan take as long as a week. Thats because the parties have no access to each others ledgers and cant automatically verify that the assets are in fact owned and can be transferred. Instead a series of intermediaries act as guarantors of assets as the record of the transaction traverses organizations and the ledgers are individually updated.

In a blockchain system, the ledger is replicated in a large number of identical databases, each hosted and maintained by an interested party. When changes are entered in one copy, all the other copies are simultaneously updated. So as transactions occur, records of the value and assets exchanged are permanently entered in all ledgers. There is no need for third-party intermediaries to verify or transfer ownership. If a stock transaction took place on a blockchain-based system, it would be settled within seconds, securely and verifiably. (The infamous hacks that have hit bitcoin exchanges exposed weaknesses not in the blockchain itself but in separate systems linked to parties using the blockchain.)

If bitcoin is like early e-mail, is blockchain decades from reaching its full potential? In our view the answer is a qualified yes. We cant predict exactly how many years the transformation will take, but we can guess which kinds of applications will gain traction first and how blockchains broad acceptance will eventually come about.

In our analysis, history suggests that two dimensions affect how a foundational technology and its business use cases evolve. The first is noveltythe degree to which an application is new to the world. The more novel it is, the more effort will be required to ensure that users understand what problems it solves. The second dimension is complexity, represented by the level of ecosystem coordination involvedthe number and diversity of parties that need to work together to produce value with the technology. For example, a social network with just one member is of little use; a social network is worthwhile only when many of your own connections have signed on to it. Other users of the application must be brought on board to generate value for all participants. The same will be true for many blockchain applications. And, as the scale and impact of those applications increase, their adoption will require significant institutional change.

Weve developed a framework that maps innovations against these two contextual dimensions, dividing them into quadrants. (See the exhibit How Foundational Technologies Take Hold.) Each quadrant represents a stage of technology development. Identifying which one a blockchain innovation falls into will help executives understand the types of challenges it presents, the level of collaboration and consensus it needs, and the legislative and regulatory efforts it will require. The map will also suggest what kind of processes and infrastructure must be established to facilitate the innovations adoption. Managers can use it to assess the state of blockchain development in any industry, as well as to evaluate strategic investments in their own blockchain capabilities.

In the first quadrant are low-novelty and low-coordination applications that create better, less costly, highly focused solutions. E-mail, a cheap alternative to phone calls, faxes, and snail mail, was a single-use application for TCP/IP (even though its value rose with the number of users). Bitcoin, too, falls into this quadrant. Even in its early days, bitcoin offered immediate value to the few people who used it simply as an alternative payment method. (You can think of it as a complex e-mail that transfers not just information but also actual value.) At the end of 2016 the value of bitcoin transactions was expected to hit $92 billion. Thats still a rounding error compared with the $411 trillion in total global payments, but bitcoin is growing fast and increasingly important in contexts such as instant payments and foreign currency and asset trading, where the present financial system has limitations.

The second quadrant comprises innovations that are relatively high in novelty but need only a limited number of users to create immediate value, so its still relatively easy to promote their adoption. If blockchain follows the path network technologies took in business, we can expect blockchain innovations to build on single-use applications to create local private networks on which multiple organizations are connected through a distributed ledger.

Much of the initial private blockchain-based development is taking place in the financial services sector, often within small networks of firms, so the coordination requirements are relatively modest. Nasdaq is working with Chain.com, one of many blockchain infrastructure providers, to offer technology for processing and validating financial transactions. Bank of America, JPMorgan, the New York Stock Exchange, Fidelity Investments, and Standard Chartered are testing blockchain technology as a replacement for paper-based and manual transaction processing in such areas as trade finance, foreign exchange, cross-border settlement, and securities settlement. The Bank of Canada is testing a digital currency called CAD-coin for interbank transfers. We anticipate a proliferation of private blockchains that serve specific purposes for various industries.

The third quadrant contains applications that are relatively low in novelty because they build on existing single-use and localized applications, but are high in coordination needs because they involve broader and increasingly public uses. These innovations aim to replace entire ways of doing business. They face high barriers to adoption, however; not only do they require more coordination but the processes they hope to replace may be full-blown and deeply embedded within organizations and institutions. Examples of substitutes include cryptocurrenciesnew, fully formed currency systems that have grown out of the simple bitcoin payment technology. The critical difference is that a cryptocurrency requires every party that does monetary transactions to adopt it, challenging governments and institutions that have long handled and overseen such transactions. Consumers also have to change their behavior and understand how to implement the new functional capability of the cryptocurrency.

A recent experiment at MIT highlights the challenges ahead for digital currency systems. In 2014 the MIT Bitcoin Club provided each of MITs 4,494 undergraduates with $100 in bitcoin. Interestingly, 30% of the students did not even sign up for the free money, and 20% of the sign-ups converted the bitcoin to cash within a few weeks. Even the technically savvy had a tough time understanding how or where to use bitcoin.

One of the most ambitious substitute blockchain applications is Stellar, a nonprofit that aims to bring affordable financial services, including banking, micropayments, and remittances, to people whove never had access to them. Stellar offers its own virtual currency, lumens, and also allows users to retain on its system a range of assets, including other currencies, telephone minutes, and data credits. Stellar initially focused on Africa, particularly Nigeria, the largest economy there. It has seen significant adoption among its target population and proved its cost-effectiveness. But its future is by no means certain, because the ecosystem coordination challenges are high. Although grassroots adoption has demonstrated the viability of Stellar, to become a banking standard, it will need to influence government policy and persuade central banks and large organizations to use it. That could take years of concerted effort.

Into the last quadrant fall completely novel applications that, if successful, could change the very nature of economic, social, and political systems. They involve coordinating the activity of many actors and gaining institutional agreement on standards and processes. Their adoption will require major social, legal, and political change.

Smart contracts may be the most transformative blockchain application at the moment. These automate payments and the transfer of currency or other assets as negotiated conditions are met. For example, a smart contract might send a payment to a supplier as soon as a shipment is delivered. A firm could signal via blockchain that a particular good has been receivedor the product could have GPS functionality, which would automatically log a location update that, in turn, triggered a payment. Weve already seen a few early experiments with such self-executing contracts in the areas of venture funding, banking, and digital rights management.

The implications are fascinating. Firms are built on contracts, from incorporation to buyer-supplier relationships to employee relations. If contracts are automated, then what will happen to traditional firm structures, processes, and intermediaries like lawyers and accountants? And what about managers? Their roles would all radically change. Before we get too excited here, though, lets remember that we are decades away from the widespread adoption of smart contracts. They cannot be effective, for instance, without institutional buy-in. A tremendous degree of coordination and clarity on how smart contracts are designed, verified, implemented, and enforced will be required. We believe the institutions responsible for those daunting tasks will take a long time to evolve. And the technology challengesespecially securityare daunting.

How should executives think about blockchain for their own organizations? Our framework can help companies identify the right opportunities.

For most, the easiest place to start is single-use applications, which minimize risk because they arent new and involve little coordination with third parties. One strategy is to add bitcoin as a payment mechanism. The infrastructure and market for bitcoin are already well developed, and adopting the virtual currency will force a variety of functions, including IT, finance, accounting, sales, and marketing, to build blockchain capabilities. Another low-risk approach is to use blockchain internally as a database for applications like managing physical and digital assets, recording internal transactions, and verifying identities. This may be an especially useful solution for companies struggling to reconcile multiple internal databases. Testing out single-use applications will help organizations develop the skills they need for more-advanced applications. And thanks to the emergence of cloud-based blockchain services from both start-ups and large platforms like Amazon and Microsoft, experimentation is getting easier all the time.

Localized applications are a natural next step for companies. Were seeing a lot of investment in private blockchain networks right now, and the projects involved seem poised for real short-term impact. Financial services companies, for example, are finding that the private blockchain networks theyve set up with a limited number of trusted counterparties can significantly reduce transaction costs.

Organizations can also tackle specific problems in transactions across boundaries with localized applications. Companies are already using blockchain to track items through complex supply chains, for instance. This is happening in the diamond industry, where gems are being traced from mines to consumers. The technology for such experiments is now available off-the-shelf.

Developing substitute applications requires careful planning, since existing solutions may be difficult to dislodge. One way to go may be to focus on replacements that wont require end users to change their behavior much but present alternatives to expensive or unattractive solutions. To get traction, substitutes must deliver functionality as good as a traditional solutions and must be easy for the ecosystem to absorb and adopt. First Datas foray into blockchain-based gift cards is a good example of a well-considered substitute. Retailers that offer them to consumers can dramatically lower costs per transaction and enhance security by using blockchain to track the flows of currency within accountswithout relying on external payment processors. These new gift cards even allow transfers of balances and transaction capability between merchants via the common ledger.

Blockchain could slash the cost of transactions and reshape the economy.

Transformative applications are still far away. But it makes sense to evaluate their possibilities now and invest in developing technology that can enable them. They will be most powerful when tied to a new business model in which the logic of value creation and capture departs from existing approaches. Such business models are hard to adopt but can unlock future growth for companies.

Consider how law firms will have to change to make smart contracts viable. Theyll need to develop new expertise in software and blockchain programming. Theyll probably also have to rethink their hourly payment model and entertain the idea of charging transaction or hosting fees for contracts, to name just two possible approaches. Whatever tack they take, executives must be sure they understand and have tested the business model implications before making any switch.

Transformative scenarios will take off last, but they will also deliver enormous value. Two areas where they could have a profound impact: large-scale public identity systems for such functions as passport control, and algorithm-driven decision making in the prevention of money laundering and in complex financial transactions that involve many parties. We expect these applications wont reach broad adoption and critical mass for at least another decade and probably more.

Transformative applications will also give rise to new platform-level players that will coordinate and govern the new ecosystems. These will be the Googles and Facebooks of the next generation. It will require patience to realize such opportunities. Though it may be premature to start making significant investments in them now, developing the required foundations for themtools and standardsis still worthwhile.

In addition to providing a good template for blockchains adoption, TCP/IP has most likely smoothed the way for it. TCP/IP has become ubiquitous, and blockchain applications are being built on top of the digital data, communication, and computation infrastructure, which lowers the cost of experimentation and will allow new use cases to emerge rapidly.

With our framework, executives can figure out where to start building their organizational capabilities for blockchain today. They need to ensure that their staffs learn about blockchain, to develop company-specific applications across the quadrants weve identified, and to invest in blockchain infrastructure.

But given the time horizons, barriers to adoption, and sheer complexity involved in getting to TCP/IP levels of acceptance, executives should think carefully about the risks involved in experimenting with blockchain. Clearly, starting small is a good way to develop the know-how to think bigger. But the level of investment should depend on the context of the company and the industry. Financial services companies are already well down the road to blockchain adoption. Manufacturing is not.

No matter what the context, theres a strong possibility that blockchain will affect your business. The very big question is when.

Link:

The Truth About Blockchain – Harvard Business Review

The Blockchain: What It Is and Why It Matters – Brookings

New TechTank Blog Posts Are Available Here

Chances are that youve heard of bitcoin, the digital currency that many predict will revolutionize payments or prove to be a massive fraud depending on what you read. Bitcoin is an application that runs on the Blockchain, which is ultimately a more interesting and profound innovation.

The Blockchain is a secure transaction ledger database that is shared by all parties participating in an established, distributed network of computers. It records and stores every transaction that occurs in the network, essentially eliminating the need for trusted third parties such as payment processors. Blockchain proponents often describe the innovation as a transfer of trust in a trustless world, referring to the fact that the entities participating in a transaction are not necessarily known to each other yet they exchange value with surety and no third-party validation. For this reason, the Blockchain is a potential game changer.

In 2008, Satoshi Nakamoto, the pseudonymous person or group of people credited with developing bitcoin, released a whitepaper describing the software protocol. Since then, the network has grown and bitcoinhas become a recognized unit of value around the globe. Bitcoinis extremely important because it provides a mechanism for accessing the Blockchain but its not the only application that can leverage the platform.

Bitcoin has also been on the receiving end of some bad press, such as around the collapse of the Mt. Gox bitcoin exchange earlier last year. The Mt. Gox story is not necessarily an indictment of bitcoin. For the purposes of this post, simply remember this: bitcoin is just a mechanism for transacting on the Blockchain and the Blockchain is the key innovation.

The Blockchain enables the anonymous exchange of digital assets, such as bitcoin, but it is not technically dependent on bitcoin. The elegance of the Blockchain is that it obviates the need for a central authority to verify trust and the transfer of value. It transfers power and control from large entities to the many, enabling safe, fast, cheaper transactions despite the fact that we may not know the entities we are dealing with.

The mechanics of the Blockchain are novel and highly disruptive. As people transact in a Blockchain ecosystem, a public record of all transactions is automatically created. Computers verify each transaction with sophisticated algorithms to confirm the transfer of value and create a historical ledger of all activity. The computers that form the network that are processing the transactions are located throughout the world and importantly are not owned or controlled by any single entity. The process is real-time, and much more secure than relying on a central authority to verify a transaction.

There are many analogous concepts both ancient and modern. Technology has and will continue to transfer power and control from central authorities and distribute them to the masses. For example, time used to be determined and communicated by large clock towers that were expensive to build and maintain. Engineering innovations ultimately decentralized the quantification of time to the individual. Likewise, WhatsApp, a popular cross platform messaging app, cut the transaction cost of sending messages globally and cut profits for the carriers. The central authority (phone carriers) lost to the application (WhatsApp) built on a decentralized network (i.e. the Internet).

Similarly, third parties that currently verify transactions (the central authority) stand to lose against the Blockchain (the decentralized network). As such, the Blockchain essentially disintermediates these third-party transaction verifiers: auditors, legal services, payment processors, brokerages and other similar organizations.

While you may not be convinced that exchanging bitcoin is an invaluable service, there are many other examples of value transfer that are critical and currently very slow and expensive. Consider the exchange of property: numerous intermediaries are currently involved in this process, such as a third-party escrow service that works for both parties to ensure a smooth transfer. The escrow service, like other services built solely on trust and verification, collect fees that would be mitigated by performing the transaction on the Blockchain as would wire transfer fees, third party financial auditing, contract execution, etc.

The use case of the Blockchain enabling a decentralized currency exchange such as bitcoin is well defined and will likely be the dominant use case near term, however there are a multitude of innovative and disruptive use cases. Companies are already building their own Blockchains for various applications such as Gridcoin that leverages the Blockchain to crowdsource scientific computing projects. Gridcoin uses its own protocols that require much less computing power and electricity to manage than traditional bitcoin networks.

The Blockchain is a foundational technology, like TCP/IP, which enables the Internet. And much like the Internet in the late 1990s, we dont know exactly how the Blockchain will evolve, but evolve it will.

Similar to the Internet, the Blockchain must also be allowed to grow unencumbered. This will require careful handling that recognizes the difference between the platform and the applications that run on it. TCP/IP empowers numerous financial applications that are regulated, but TCP/IP is not regulated as a financial instrument. The Blockchain should receive similar consideration. While the predominant use case for the Blockchain today is bitcoin currency exchange that may require regulation, this will change over time.

Had we over-regulated the Internet early on, we would have missed out on many innovations that we cant imagine living without today. The same is true for the Blockchain. Disruptive technologies rarely fit neatly into existing regulatory considerations, but rigid regulatory frameworks have repeatedly stifled innovation. Its likely that innovations in the Blockchain will outpace policy, lets not slow it down.

New TechTank Blog Posts Are Available Here

See the article here:

The Blockchain: What It Is and Why It Matters – Brookings

Latest News on Blockchain | Cointelegraph

The most basic definition of blockchain is a shared, digitized ledger that cannot be changed once a transaction has been recorded and verified. All parties to the transaction, as well as a significant number of 3rd parties maintain a copy of the ledger (i.e. the blockchain), which means it would be practically impossible to amend every copy of the ledger globally to fake a transaction.Bitcoins success has triggered the establishment of nearly 1000 new cryptocurrencies, leading to the delusion that the only application of blockchain technology is for the creation of cryptocurrency.However, the blockchain technology is capable of a lot more than just cryptocurrency creation and may support such things as transactions that require personal identification, peer review, elections and other types of democratic decision-making and audit trails.

Originally posted here:

Latest News on Blockchain | Cointelegraph

Blockchain – Wikipedia

distributed data store for digital transactions

A blockchain,[1][2][3] originally block chain,[4][5] is a growing list of records, called blocks, which are linked using cryptography.[1][6] Blockchains which are readable by the public are widely used by cryptocurrencies. Private blockchains have been proposed for business use. Some marketing of blockchains has been called “snake oil.”[7]

Each block contains a cryptographic hash of the previous block,[6] a timestamp, and transaction data (generally represented as a merkle tree root hash). By design, a blockchain is resistant to modification of the data. It is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way”.[8] For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for inter-node communication and validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without alteration of all subsequent blocks, which requires consensus of the network majority.

Though blockchain records are not unalterable, blockchains may be considered secure by design and exemplify a distributed computing system with high Byzantine fault tolerance. Decentralized consensus has therefore been claimed with a blockchain.[9]

Blockchain was invented by Satoshi Nakamoto in 2008 to serve as the public transaction ledger of the cryptocurrency bitcoin.[1] The invention of the blockchain for bitcoin made it the first digital currency to solve the double-spending problem without the need of a trusted authority or central server. The bitcoin design has inspired other applications.[1][3]

The first work on a cryptographically secured chain of blocks was described in 1991 by Stuart Haber and W. Scott Stornetta.[10][6] They wanted to implement a system where documents’ timestamps could not be tampered with or backdated. In 1992, Bayer, Haber and Stornetta incorporated Merkle trees to the design, which improved its efficiency by allowing several documents to be collected into one block.[6][11]

The first blockchain was conceptualized by a person (or group of people) known as Satoshi Nakamoto in 2008. It was implemented the following year by Nakamoto as a core component of the cryptocurrency bitcoin, where it serves as the public ledger for all transactions on the network.[1]

In August 2014, the bitcoin blockchain file size, containing records of all transactions that have occurred on the network, reached 20GB (gigabytes).[12] In January 2015, the size had grown to almost 30GB, and from January 2016 to January 2017, the bitcoin blockchain grew from 50GB to 100GB in size.

The words block and chain were used separately in Satoshi Nakamoto’s original paper, but were eventually popularized as a single word, blockchain, by 2016. The term blockchain 2.0 refers to new applications of the distributed blockchain database, first emerging in 2014.[13] The Economist described one implementation of this second-generation programmable blockchain as coming with “a programming language that allows users to write more sophisticated smart contracts, thus creating invoices that pay themselves when a shipment arrives or share certificates which automatically send their owners dividends if profits reach a certain level.”[1]

As of 2016[update], blockchain 2.0 implementations continue to require an off-chain oracle to access any “external data or events based on time or market conditions [that need] to interact with the blockchain.”[14]

IBM opened a blockchain innovation research center in Singapore in July 2016.[15] A working group for the World Economic Forum met in November 2016 to discuss the development of governance models related to blockchain.

According to Accenture, an application of the diffusion of innovations theory suggests that blockchains attained a 13.5% adoption rate within financial services in 2016, therefore reaching the early adopters phase.[16] Industry trade groups joined to create the Global Blockchain Forum in 2016, an initiative of the Chamber of Digital Commerce.

In May 2018, Gartner found that only 1% of CIOs indicated any kind of blockchain adoption within their organisations, and only 8% of CIOs were in the short-term planning or [looking at] active experimentation with blockchain.[17]

The Bank for International Settlements has criticized the blockchain as an “environmental disaster” entailed by high energy consumption.[20][18][21]

Nicholas Weaver, of the International Computer Science Institute at the University of California, Berkeley examines blockchain’s online security, and its energy efficiency, and in both cases finds it grossly inadequate.[19][22]

A blockchain is a decentralized, distributed and public digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the consensus of the network.[1][23] This allows the participants to verify and audit transactions inexpensively.[24] A blockchain database is managed autonomously using a peer-to-peer network and a distributed timestamping server. They are authenticated by mass collaboration powered by collective self-interests.[25] The result is a robust workflow where participants’ uncertainty regarding data security is marginal. The use of a blockchain removes the characteristic of infinite reproducibility from a digital asset. It confirms that each unit of value was transferred only once, solving the long-standing problem of double spending. Blockchains have been described as a value-exchange protocol.[13] This blockchain-based exchange of value can be completed quicker, safer and cheaper than with traditional systems.[26] A blockchain can assign title rights because, when properly set up to detail the exchange agreement, it provides a record that compels offer and acceptance.

Blocks hold batches of valid transactions that are hashed and encoded into a Merkle tree.[1] Each block includes the cryptographic hash of the prior block in the blockchain, linking the two. The linked blocks form a chain.[1] This iterative process confirms the integrity of the previous block, all the way back to the original genesis block.[27]

Sometimes separate blocks can be produced concurrently, creating a temporary fork. In addition to a secure hash-based history, any blockchain has a specified algorithm for scoring different versions of the history so that one with a higher value can be selected over others. Blocks not selected for inclusion in the chain are called orphan blocks.[27] Peers supporting the database have different versions of the history from time to time. They keep only the highest-scoring version of the database known to them. Whenever a peer receives a higher-scoring version (usually the old version with a single new block added) they extend or overwrite their own database and retransmit the improvement to their peers. There is never an absolute guarantee that any particular entry will remain in the best version of the history forever. Because blockchains are typically built to add the score of new blocks onto old blocks and because there are incentives to work only on extending with new blocks rather than overwriting old blocks, the probability of an entry becoming superseded goes down exponentially[28] as more blocks are built on top of it, eventually becoming very low.[1][29]:ch. 08[30] For example, in a blockchain using the proof-of-work system, the chain with the most cumulative proof-of-work is always considered the valid one by the network. There are a number of methods that can be used to demonstrate a sufficient level of computation. Within a blockchain the computation is carried out redundantly rather than in the traditional segregated and parallel manner.[31]

The block time is the average time it takes for the network to generate one extra block in the blockchain.[32] Some blockchains create a new block as frequently as every five seconds.[33] By the time of block completion, the included data becomes verifiable. In cryptocurrency, this is practically when the transaction takes place, so a shorter block time means faster transactions. The block time for Ethereum is set to between 14 and 15 seconds, while for bitcoin it is 10 minutes.[34]

A hard fork is a rule change such that the software validating according to the old rules will see the blocks produced according to the new rules as invalid. In case of a hard fork, all nodes meant to work in accordance with the new rules need to upgrade their software.[35]

If one group of nodes continues to use the old software while the other nodes use the new software, a split can occur. For example, Ethereum has hard-forked to “make whole” the investors in The DAO, which had been hacked by exploiting a vulnerability in its code.[36] In this case, the fork resulted in a split creating Ethereum and Ethereum Classic chains. In 2014 the Nxt community was asked to consider a hard fork that would have led to a rollback of the blockchain records to mitigate the effects of a theft of 50 million NXT from a major cryptocurrency exchange. The hard fork proposal was rejected, and some of the funds were recovered after negotiations and ransom payment.[37]

Alternatively, to prevent a permanent split, a majority of nodes using the new software may return to the old rules, as was the case of bitcoin split on 12 March 2013.[38]

By storing data across its peer-to-peer network, the blockchain eliminates a number of risks that come with data being held centrally.[1] The decentralized blockchain may use ad-hoc message passing and distributed networking.

Peer-to-peer blockchain networks lack centralized points of vulnerability that computer crackers can exploit; likewise, it has no central point of failure. Blockchain security methods include the use of public-key cryptography.[4]:5 A public key (a long, random-looking string of numbers) is an address on the blockchain. Value tokens sent across the network are recorded as belonging to that address. A private key is like a password that gives its owner access to their digital assets or the means to otherwise interact with the various capabilities that blockchains now support. Data stored on the blockchain is generally considered incorruptible.[1]

Every node in a decentralized system has a copy of the blockchain. Data quality is maintained by massive database replication[9] and computational trust. No centralized “official” copy exists and no user is “trusted” more than any other.[4] Transactions are broadcast to the network using software. Messages are delivered on a best-effort basis. Mining nodes validate transactions,[27] add them to the block they are building, and then broadcast the completed block to other nodes.[29]:ch. 08 Blockchains use various time-stamping schemes, such as proof-of-work, to serialize changes.[39] Alternate consensus methods include proof-of-stake.[27] Growth of a decentralized blockchain is accompanied by the risk of node centralization because the computer resources required to process larger amounts of data become more expensive.[40]

Open blockchains are more user-friendly than some traditional ownership records, which, while open to the public, still require physical access to view. Because all early blockchains were permissionless, controversy has arisen over the blockchain definition. An issue in this ongoing debate is whether a private system with verifiers tasked and authorized (permissioned) by a central authority should be considered a blockchain.[41][42][43][44][45] Proponents of permissioned or private chains argue that the term “blockchain” may be applied to any data structure that batches data into time-stamped blocks. These blockchains serve as a distributed version of multiversion concurrency control (MVCC) in databases.[46] Just as MVCC prevents two transactions from concurrently modifying a single object in a database, blockchains prevent two transactions from spending the same single output in a blockchain.[47]:3031 Opponents say that permissioned systems resemble traditional corporate databases, not supporting decentralized data verification, and that such systems are not hardened against operator tampering and revision.[41][43] Nikolai Hampton of Computerworld said that “many in-house blockchain solutions will be nothing more than cumbersome databases,” and “without a clear security model, proprietary blockchains should be eyed with suspicion.”[7][48]

The great advantage to an open, permissionless, or public, blockchain network is that guarding against bad actors is not required and no access control is needed.[28] This means that applications can be added to the network without the approval or trust of others, using the blockchain as a transport layer.[28]

Bitcoin and other cryptocurrencies currently secure their blockchain by requiring new entries to include a proof of work. To prolong the blockchain, bitcoin uses Hashcash puzzles. While Hashcash was designed in 1997 by Adam Back, the original idea was first proposed by Cynthia Dwork and Moni Naor and Eli Ponyatovski in their 1992 paper “Pricing via Processing or Combatting Junk Mail”.

Financial companies have not prioritised decentralized blockchains.[49]In 2016, venture capital investment for blockchain-related projects was weakening in the USA but increasing in China.[50] Bitcoin and many other cryptocurrencies use open (public) blockchains. As of April2018[update], bitcoin has the highest market capitalization.

Permissioned blockchains use an access control layer to govern who has access to the network.[51] In contrast to public blockchain networks, validators on private blockchain networks are vetted by the network owner. They do not rely on anonymous nodes to validate transactions nor do they benefit from the network effect.[52][bettersourceneeded] Permissioned blockchains can also go by the name of ‘consortium’ or ‘hybrid’ blockchains.[53]

The New York Times noted in both 2016 and 2017 that many corporations are using blockchain networks “with private blockchains, independent of the public system.”[54][55][bettersourceneeded]

Nikolai Hampton pointed out in Computerworld that “There is also no need for a ’51 percent’ attack on a private blockchain, as the private blockchain (most likely) already controls 100 percent of all block creation resources. If you could attack or damage the blockchain creation tools on a private corporate server, you could effectively control 100 percent of their network and alter transactions however you wished.”[7] This has a set of particularly profound adverse implications during a financial crisis or debt crisis like the financial crisis of 200708, where politically powerful actors may make decisions that favor some groups at the expense of others[56][57], and “the bitcoin blockchain is protected by the massive group mining effort. It’s unlikely that any private blockchain will try to protect records using gigawatts of computing powerit’s time consuming and expensive.”[7] He also said, “Within a private blockchain there is also no ‘race’; there’s no incentive to use more power or discover blocks faster than competitors. This means that many in-house blockchain solutions will be nothing more than cumbersome databases.”[7]

Blockchain technology can be integrated into multiple areas. The primary use of blockchains today is as a distributed ledger for cryptocurrencies, most notably bitcoin. There are a few operational products maturing from proof of concept by late 2016.[50]

As of 2016[update], some observers remain skeptical. Steve Wilson, of Constellation Research, believes the technology has been hyped with unrealistic claims.[58] To mitigate risk, businesses are reluctant to place blockchain at the core of the business structure.[59]

Blockchain-based smart contracts are proposed contracts that could be partially or fully executed or enforced without human interaction.[60] One of the main objectives of a smart contract is automated escrow. An IMF staff discussion reported that smart contracts based on blockchain technology might reduce moral hazards and optimize the use of contracts in general. But “no viable smart contract systems have yet emerged.” Due to the lack of widespread use their legal status is unclear.[61]

Major portions of the financial industry are implementing distributed ledgers for use in banking,[62][63][64] and according to a September 2016 IBM study, this is occurring faster than expected.[65]

Banks are interested in this technology because it has potential to speed up back office settlement systems.[66]

Banks such as UBS are opening new research labs dedicated to blockchain technology in order to explore how blockchain can be used in financial services to increase efficiency and reduce costs.[67][68]

Berenberg, a German bank, believes that blockchain is an “overhyped technology” that has had a large number of “proofs of concept”, but still has major challenges, and very few success stories.[69]

Blockchain technology can be used to create a permanent, public, transparent ledger system for compiling data on sales, tracking digital use and payments to content creators, such as wireless users [70] or musicians.[71] In 2017, IBM partnered with ASCAP and PRS for Music to adopt blockchain technology in music distribution.[72] Imogen Heap’s Mycelia service has also been proposed as blockchain-based alternative “that gives artists more control over how their songs and associated data circulate among fans and other musicians.”[73][74] Everledger is one of the inaugural clients of IBM’s blockchain-based tracking service.[75]

New distribution methods are available for the insurance industry such as peer-to-peer insurance, parametric insurance and microinsurance following the adoption of blockchain.[76][77] The sharing economy and IoT are also set to benefit from blockchains because they involve many collaborating peers.[78] Online voting is another application of the blockchain.[79][80]

Blockchains facilitate users could take ownership of game assets (digital assets), an example of this is Cryptokitties.[81]

Non-cryptocurrency designs include:

IBM offers a cloud blockchain service based on the open source Hyperledger Fabric project[84][85]

On May 8, 2018 Facebook confirmed that it is opening a new blockchain group[86] which will be headed by David Marcus who previously was in charge of Messenger. According to The Verge Facebook is planning to launch its own cryptocurrency for facilitating payments on the platform[87].

Currently, there are three types of blockchain networks – public blockchains, private blockchains and consortium blockchains.

A public blockchain has absolutely no access restrictions. Anyone with an internet connection can send transactions[disambiguation needed] to it as well as become a validator (i.e., participate in the execution of a consensus protocol). [88][self-published source?] Usually, such networks offer economic incentives for those who secure them and utilize some type of a Proof of Stake or Proof of Work algorithm.

Some of the largest, most known public blockchains are Bitcoin and Ethereum.

A private blockchain is permissioned.[51] One cannot join it unless invited by the network administrators. Participant and validator access is restricted.

This type of blockchains can be considered a middle-ground for companies that are interested in the blockchain technology in general but are not comfortable with a level of control offered by public networks. Typically, they seek to incorporate blockchain into their accounting and record-keeping procedures without sacrificing autonomy and running the risk of exposing sensitive data to the public internet.

A consortium blockchain is often said to be semi-decentralized. It, too, is permissioned but instead of a single organization controlling it, a number of companies might each operate a node on such a network. The administrators of a consortium chain restrict users reading rights as they see fit and only allow a limited set of trusted nodes to execute a consensus protocol.

In October 2014, the MIT Bitcoin Club, with funding from MIT alumni, provided undergraduate students at the Massachusetts Institute of Technology access to $100 of bitcoin. The adoption rates, as studied by Catalini and Tucker (2016), revealed that when people who typically adopt technologies early are given delayed access, they tend to reject the technology.[89]

In September 2015, the first peer-reviewed academic journal dedicated to cryptocurrency and blockchain technology research, Ledger, was announced. The inaugural issue was published in December 2016.[90] The journal covers aspects of mathematics, computer science, engineering, law, economics and philosophy that relate to cryptocurrencies such as bitcoin.[91][92]

The journal encourages authors to digitally sign a file hash of submitted papers, which will then be timestamped into the bitcoin blockchain. Authors are also asked to include a personal bitcoin address in the first page of their papers.[93]

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Blockchain – Wikipedia

Blockchain in Transport Alliance (BiTA)

BiTA was formed by experienced tech and transportation executives to create a forum for the development of blockchain standards and education for the freight industry. Our goal is to bring together leading companies in the freight technology industries that have a vested interest in the development of blockchain technology.

Thousands of companies have applied for membership.

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Blockchain in Transport Alliance (BiTA)

2018 Bahamas Blockchain & Cryptocurrency Conference

Day 1 June 20th

All Day Exhibits (Local, Regional, and Global Companies Sponsors, Service Providers

9:00am 10:15am Official Opening Programme

10:30am 11:45am Speaker/Panel/Fireside Chat Opportunities

Topic: How Can I Get Funded?

Moderator: Rhonda Eldridge, CPA, CA, Founder & Impactioneer, Harness All Possibilities, Inc.

Panelists

12:00 noon 1:15pm Invitation Only: Prime Ministers Lunch

Speaker: The Honourable K. Peter Turnquest, M.P., Deputy Prime Minister and Minister of Finance

1:30pm 3:15pm Afternoon Panel Discussion:

Topic: The Technology Sector in The Bahamas is Open for Business: Cryptocurrencies, ICOs, and Exchanges

Moderator: Dr. Donovan Moxey, Chairman, 2018 BBCC Planning Committee and Co-Founder, CBI Mobile (Bah) Ltd

Panelists

3:30pm 4:45pm Speaker/Panel/Fireside Chat Opportunities

Topic: Islands in the Data Stream: Blockchain as a Global Resource for Seed and Growth Capital

Moderator: Kristie Powell

Panelists

5:00pm 6:30pm Speaker/Panel/Fireside Chat Opportunities

Topic: Should I Invest?

Moderator: Kelly Banks, Head of Digital and Innovation, Ansbacher

Panelists

6:30pm Private Reception

Day 2 June 21st

All Day Exhibit (Local, Regional, and Global Companies Sponsors, Service Providers

9:00am 10:45am Investor Pitches

11:00am 11:45pm noon Opening Keynote Address

Speaker: Michael J. Casey, Chairman, CoinDesk Advisory Board

12:00 noon 1:15pm Lunch Break at Local Establishments

1:30pm 4:15pm Main stage

1:30 pm Investor Pitches

2:20 pm 3:15 pm Full STEAM Ahead: Small Island Nation Educational Outreach

3:30 pm 4:30 pm RoundTable Discussions Outreach

Topic: Bahamian Blockchain Enthusiasts

Moderator: Michael J. Casey, Chairman, CoinDesk Advisory Board

Panelists

4:30pm 5:45pm Afternoon Panel Discussion

Topic: A Global Perspective on Regulatory Frameworks for Cryptocurrency and ICOs

Moderator: Joel Telpner, Partner, Sullivan & Worcester

Panelists

Day 3 June 22nd

All Day Exhibit (Local, Regional, and Global Companies Sponsors, Service Providers

9:00am 10:45am Investor Pitches

Discussion Leader: Donovan Moxey

11:00am 11:45am Keynote Address

Speaker: Mr. Anthony Di Iorio, CEO, Decentral

12:00 noon 1:15pm Lunch Break

1:30pm 2:45pm Afternoon Panel Discussion

Moderator: Stuart Hoegner, General Counsel, Bitfinex

Topic: Digital Token Exchanges

Panelists

3:00pm 4:15pm Investor Pitches

4:30pm 6:00pm Afternoon Presentation and Fireside Chat Topic: What Does the Future look like for Blockchain, Cryptocurrency, and FinTech Solutions?

Interviewer: Kimberly King Burns, Managing Director, Convergenz

Speaker(s): Manie Eagar, CEO, Digital Futures; Matthew Arnett, CEO, Po8; John Willock, Co-Founder & CEO, Quantex, Ltd.

7:30pm Closing Reception/Celebration/Local Culture Sponsored by: BTC

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2018 Bahamas Blockchain & Cryptocurrency Conference

The Blockchain: What It Is and Why It Matters – Brookings

New TechTank Blog Posts Are Available Here

Chances are that youve heard of bitcoin, the digital currency that many predict will revolutionize payments or prove to be a massive fraud depending on what you read. Bitcoin is an application that runs on the Blockchain, which is ultimately a more interesting and profound innovation.

The Blockchain is a secure transaction ledger database that is shared by all parties participating in an established, distributed network of computers. It records and stores every transaction that occurs in the network, essentially eliminating the need for trusted third parties such as payment processors. Blockchain proponents often describe the innovation as a transfer of trust in a trustless world, referring to the fact that the entities participating in a transaction are not necessarily known to each other yet they exchange value with surety and no third-party validation. For this reason, the Blockchain is a potential game changer.

In 2008, Satoshi Nakamoto, the pseudonymous person or group of people credited with developing bitcoin, released a whitepaper describing the software protocol. Since then, the network has grown and bitcoinhas become a recognized unit of value around the globe. Bitcoinis extremely important because it provides a mechanism for accessing the Blockchain but its not the only application that can leverage the platform.

Bitcoin has also been on the receiving end of some bad press, such as around the collapse of the Mt. Gox bitcoin exchange earlier last year. The Mt. Gox story is not necessarily an indictment of bitcoin. For the purposes of this post, simply remember this: bitcoin is just a mechanism for transacting on the Blockchain and the Blockchain is the key innovation.

The Blockchain enables the anonymous exchange of digital assets, such as bitcoin, but it is not technically dependent on bitcoin. The elegance of the Blockchain is that it obviates the need for a central authority to verify trust and the transfer of value. It transfers power and control from large entities to the many, enabling safe, fast, cheaper transactions despite the fact that we may not know the entities we are dealing with.

The mechanics of the Blockchain are novel and highly disruptive. As people transact in a Blockchain ecosystem, a public record of all transactions is automatically created. Computers verify each transaction with sophisticated algorithms to confirm the transfer of value and create a historical ledger of all activity. The computers that form the network that are processing the transactions are located throughout the world and importantly are not owned or controlled by any single entity. The process is real-time, and much more secure than relying on a central authority to verify a transaction.

There are many analogous concepts both ancient and modern. Technology has and will continue to transfer power and control from central authorities and distribute them to the masses. For example, time used to be determined and communicated by large clock towers that were expensive to build and maintain. Engineering innovations ultimately decentralized the quantification of time to the individual. Likewise, WhatsApp, a popular cross platform messaging app, cut the transaction cost of sending messages globally and cut profits for the carriers. The central authority (phone carriers) lost to the application (WhatsApp) built on a decentralized network (i.e. the Internet).

Similarly, third parties that currently verify transactions (the central authority) stand to lose against the Blockchain (the decentralized network). As such, the Blockchain essentially disintermediates these third-party transaction verifiers: auditors, legal services, payment processors, brokerages and other similar organizations.

While you may not be convinced that exchanging bitcoin is an invaluable service, there are many other examples of value transfer that are critical and currently very slow and expensive. Consider the exchange of property: numerous intermediaries are currently involved in this process, such as a third-party escrow service that works for both parties to ensure a smooth transfer. The escrow service, like other services built solely on trust and verification, collect fees that would be mitigated by performing the transaction on the Blockchain as would wire transfer fees, third party financial auditing, contract execution, etc.

The use case of the Blockchain enabling a decentralized currency exchange such as bitcoin is well defined and will likely be the dominant use case near term, however there are a multitude of innovative and disruptive use cases. Companies are already building their own Blockchains for various applications such as Gridcoin that leverages the Blockchain to crowdsource scientific computing projects. Gridcoin uses its own protocols that require much less computing power and electricity to manage than traditional bitcoin networks.

The Blockchain is a foundational technology, like TCP/IP, which enables the Internet. And much like the Internet in the late 1990s, we dont know exactly how the Blockchain will evolve, but evolve it will.

Similar to the Internet, the Blockchain must also be allowed to grow unencumbered. This will require careful handling that recognizes the difference between the platform and the applications that run on it. TCP/IP empowers numerous financial applications that are regulated, but TCP/IP is not regulated as a financial instrument. The Blockchain should receive similar consideration. While the predominant use case for the Blockchain today is bitcoin currency exchange that may require regulation, this will change over time.

Had we over-regulated the Internet early on, we would have missed out on many innovations that we cant imagine living without today. The same is true for the Blockchain. Disruptive technologies rarely fit neatly into existing regulatory considerations, but rigid regulatory frameworks have repeatedly stifled innovation. Its likely that innovations in the Blockchain will outpace policy, lets not slow it down.

New TechTank Blog Posts Are Available Here

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The Blockchain: What It Is and Why It Matters – Brookings


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