Chinese Blockchain-Related Company Xunlei Reports $45.3 Million Q3 Revenue

Chinese desktop software and blockchain-related company Xunlei has published its Q3 report Wednesday, Nov. 14. According to the report, the firm’s revenue increased in 2018 after the introduction of blockchain services.

The report notes that the company’s Q3 revenue reached $45.3 million, representing an increase of 1.1% year-over-year. The firm attributed $19.8 million of that revenue to its cloud and Internet value-added services sectors, which is an increase of 8.3 percent over the same period last year.

Lei Chen, CEO of Xunlei group, stated that blockchain remains one of the key investment areas for the company, noting:

“We believe that blockchain is a technology that can change our lives, and we will strive to make it available in different areas in a simpler and more cost-effective way.”

The company specifically mentioned its blockchain platform ThunderСhain, which has been launched this year, and lists recent blockchain-related partnerships, including a deal with the largest media group in China, People’s Daily, which is also the official newspaper of the Communist Party of China.

Xunlei, known for its P2P software and BitTorrent client and especially popular in China, re-oriented towards blockchain technology development in October 2017.

Back then, following a sustained downturn over two years, the company announced its first blockchain-driven initiative: the Link Token, which could be used to pay for some of Xunlei’s services. Shortly after, Xunlei became the best performing stock on Nasdaq, seeing up to 75 percent increase in shares, according to Bloomberg.

Later, in November, Xunlei came under scrutiny from China’s financial regulator following a state ban on Initial Coin Offerings (ICO). Consequently, its shares fell 40 percent. Despite the loss, Xunlei launched two new blockchain products in the spring, StellarCloud and ThunderChain Open Platform. Several months after the launch, the company’s CEO Lei Chen claimed that in Q2 Xunlei saw a $65.8 million in revenue, meaning a growth of over 70 percent on a year-over-year basis.

As Cointelegraph previously reported, in 2018 Xunlei also partnered with People’s Daily to construct a laboratory for “technology innovation” at the People Capital’s Blockchain Research Institute. Moreover, the two will develop a blockchain-driven platform to organize competitions, seminars, workshops, and promote and identify startups in the blockchain industry.

Several crypto-related companies have recently published their Q3 2018 reports: Japanese IT giant GMO Internet revealed a “historical performance” of its crypto-related sector, and Canadian Bitcoin (BTC) mining company Hut 8 declared a record revenue of $13.5 million, an increase by 126 percent compared to the previous quarter’s revenue of $5.9 million.

Moreover, Q3 2018 marks biggest quarter yet for Bitcoin revenue of Square — a U.S. financial services company that introduced Bitcoin support in its Square Cash payment app earlier this year.

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Blockchain.com Wallet Adds Stellar, Announces $125 Mln XLM Airdrop to ‘Drive Adoption’

Cryptocurrency wallet provider Blockchain.com has launched full support for altcoin Stellar (XLM), accompanied by a hefty airdrop of $125 million worth of XLM to its user base. The news was announced in an official blog post today, Nov. 6.

Blockchain.com pitched the mammoth offering as “the largest airdrop in the history of crypto and likely the largest consumer giveaway ever,” suggesting that airdrops are “a great way to drive decentralization and adoption for new networks.”

The firm underscores that the benefit of crypto airdrops for consumers are that they are able to “test, trade, and transact” unfamiliar crypto assets without having to mine or invest first.

Blockchain.com gives the rationale for its choice to launch support for Stellar as being due to the token’s network being “built for scalability,” as well as for its provision of the ability to create custom tokens that represent “real-world or virtual goods and services.”

Prior to adding Stellar support, the Blockchain.com wallet already supported three other cryptocurrencies, Bitcoin (BTC),  Bitcoin Cash (BCH), and Ethereum (ETH).

As of press time, Stellar (XLM) is ranked sixth largest cryptocurrency by market cap on CoinMarketCap’s listings, seeing a strong 5.35 percent growth on the day, trading at $0.258.

In late September, Cointelegraph reported that Blockchain.com had been ranked within the top ten most “sought-after” U.K. startup employers in new listings on LinkedIn. Among its attributes, LinkedIn noted Blockchain.com’s “benefits such as free food and flexible working,” unlimited holiday policy and a bonus scheme for employees paid in Bitcoin.

Airdrops have recently made headlines in less auspicious terms, with China’s stringently anti-crypto central bank, the People’s Bank of China (PBoC), announcing it would be widening its regulatory scrutiny to include token airdrops, which it characterized as “disguised” Initial Coin Offerings (ICOs) in its 2018 financial stability report.

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Will Small Companies Beat Large Corporations if They Use Blockchain?

An American startup is building a blockchain agnostic protocol in a bid to provide small businesses with affordable access to new technology, and drive the mass adoption of blockchain and cryptocurrencies.

Opporty, with experienced founders from the U.S., has also set up a “trusted and verified services marketplace” on the Ethereum blockchain, with features such as smart contracts, decentralized escrow, and lead generation. The company believes its platform helps small and medium enterprises (SMEs) to compete with large corporations, without requiring large investments in technology and marketing.

Widespread coverage

By now, Opporty has launched its platform’s localizations in China, the UK, Canada, the USA, and Australia. As the company reported to Cointelegraph, currently there are approximately up to 10 registrations per day, by new providers on the platform. “Therefore, we observe that SMEs are ready to grow and benefit with Opporty, an online Marketplace that cares,” added the company’s representative.

First providers already signed up

In the beginning of 2018, Opporty has acquired two new clients in New York. Both offer crypto payment options on their websites.

Universal Accounting Systems, uses the company’s platform to allow its clients to pay with Bitcoin and Ethereum for tax preparation and other services. It uses Opporty’s smart widget to offer its clients a simple view of its services, and allows them to pay with cryptocurrency.

Hudson Law Group, a midtown firm headed by David Treyster, has posted some customized crypto-based offerings for its clients using the Opporty marketplace. It also uses the smart widget and has already begun receiving crypto transactions through it.

The company says, the amount of U.S.-based providers which registered on the platform has increased. The Australian version, which has recently been released, already has new providers that accept crypto payments, including OPP, the company’s token.

The widgets by Opporty allow users to receive payments from customers. Companies that have listed their crypto-based offers at Opporty, ​get smart widgets on their websites​. Once the widget is placed, consumers can choose from several payment options, including ETH and BTC.

“Small business owners now realize that cryptocurrencies can give them a head start over their competition,” Opporty founder Sergey Grybniak said in a release. Opporty enables anyone to use cryptocurrency, and the attendant benefits of blockchain, without having to master the underlying technology, the entrepreneur added.

Opporty’s Plasma Protocol

In March 2018, the Opporty team decided to implement ​Ethereum’s Plasma Protocol to “resolve the trust issues in business transactions and lack of privacy in traditional blockchain solutions.” The ​First backend version of Opporty’s Plasma solution allowed users to process around 5,000 transactions per second, the company said.

“Then we have decided to come up with our own solution for ​Plasma Cash​, an enhancement technology for Plasma Protocol. After tireless work, our developers managed to enhance the technology​ to achieve the highest public test, which was more than Alipay at peak,” reported the Opporty team to Cointelegraph.

Opporty’s B2B platform allows providers to list their offerings on the B2B services marketplace in a targeted manner, post requests for proposals, receive bids, and execute deals.

The company claims that it resolves trust and sustainability problems between counterparties by storing business transaction data, including transaction quality, on the blockchain. It enables verification and validation of counterparty trustworthiness by implementing the Plasma Protocol. Its benefits position Opporty as a reliable option for domestic and cross-border transactions using cryptocurrencies, which can be used in supply chain risk management, corporate transactions and government procurements. The PoE protocol allows integration with other blockchain-powered platforms.

Big Achievements

Opporty’s project is constantly acquiring new updates and features, such as BLS threshold signatures and Delegated Proof of Stake, zk-SNARKs.

Right now Opporty is in its beta development, with MVP (Minimum Viable Product) already available for application and use. The open-source code has been released on GitHub.

Opporty is a member of China Cooperative Trade Enterprise Association, and the company is advised by Mr. Daniel Wu, who is a Deputy Director of One Belt One Road Development center.

In April 2018, Opporty joined the Enterprise Ethereum Alliance (EEA), the world’s largest open source blockchain initiative. EEA is a non-profit organization that supports Ethereum-based technology best practices and the whole industry.

The company is proud to be a partner of InfiniVision Network Technology (Shanghai) in the fields of big data and blockchain integrations.

In 2018, ​Opporty has scored two Bronze Awards​, a renowned reward among entrepreneurs and innovators. It won the Stevie International Business Competition in the following nominations: Company of the Year  —  Business or Professional Services  —  Small category, and Online Marketing Campaign of the Year category.

Understanding that an online marketplace could be something much more than just a business product, Opporty has become a UN Global Compact participant. Taking part in this initiative, the Opporty team conducts research work in the fields of resolving issues of poverty and unemployment.

OPP, the company’s token, is already available on several exchanges, and the list is being updated.

 

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

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Major Agriculture Companies Partner to Use Blockchain in Grain Trading

The world’s four largest agriculture companies, commonly known as ABCD, have partnered to digitize international grain trading by using blockchain and artificial intelligence (AI) technologies, Reuters reports Thursday, Oct. 25.

ABCD, composed of Archer Daniels Midland Co., Bunge Ltd., Cargill Inc., and Louis Dreyfus Co., states that blockchain implementation could make trading more efficient and transparent, as well as reduce costs. The conglomerate aims to digitize the system that has previously relied on paper contracts, invoices, and manual payments.

According to grain industry news outlet World-Grain.com, blockchain and AI will be initially used to automate grain and oilseed post-trade execution processes, which are a highly manual and costly part of the supply chain.

In the long run, ABCD plans to integrate blockchain technology on different levels of the supply chain, including shipping, storage, and customer experience.

As cited by World-Grain.com, CEO of Louis Dreyfus Co. Ian McIntosh explained how blockchain could help develop the agriculture industry, noting the technology’s “capacity to generate efficiencies and reduce the time usually spent on manual document and data processing.”

Major food giants across the world have been testing blockchain to improve the efficiency of the supply chain. Louis Dreyfus Co., along with four other parties, conducted its first blockchain-based shipment back in January 2018, sending soybeans from America to China using the Easy Trading Connect (ETC) blockchain platform.

U.S. national milk marketing cooperative Dairy Farmers of America also piloted decentralized solutions among its farmer-members in 48 states, while major Dutch supermarket chain Albert Heijn used blockchain to track orange juice production.

As per a recent study by Reportlinker, blockchain use in agriculture and food supply chains market will be worth over $400 million in the next five years.

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Consultancy Firm Accenture Targets Enterprise Blockchain Interoperability With Fresh Tool

Global management consultancy firm Accenture revealed a new blockchain tool in a press release Oct. 22, its second in a month focusing on interoperability.

A week after announcing a supply chain partnership with Thailand’s Siam Commercial Bank, Accenture said its latest offering facilitated existing enterprise blockchain systems to integrate with one another.

Specifically, blockchain platform Digital Asset can now work in tandem with R3’s Corda platform, while Hyperledger Fabric and JPMorgan’s Quorum form another interoperable pair.

Discussing the two separate solutions, which the company has already tested, managing director and Global Blockchain Lead David Treat described them as a “game changer.”

“The key challenge was to develop the ability to integrate without introducing ‘operational messaging’ between distributed ledger technology platforms in order to stay true to the principles and benefits of blockchain technology,” he commented, continuing:

“Applying this capability with our clients is already unlocking new opportunities to bring ecosystems together, mitigating key concerns about picking the ‘wrong’ platform or having to re-build if one partner uses something different.”

All four blockchain platforms continue to see success in enterprise uptake worldwide, making their way into systems throughout various sectors of the global economy.

For its most recent deal in Thailand, Accenture also opted for a single system, using Corda as the basis for its so-called Procure-to-Pay product.

“We have said right from the beginning that interoperability is key to avoiding the trapped assets and silos of the past,” R3’s CTO Richard Gendal Brown added in this week’s press release.

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Visa Set to Launch Blockchain-Based Digital Identity System with IBM in Q1 2019

Visa is readying its blockchain-based digital identity system for cross-border payments for launch in the first quarter of 2019, according to a press release published October 21.

The system, dubbed Visa B2B Connect, will provide a blockchain-based digital identity solution for financial institutions to securely process cross-border payments. The system reportedly tokenizes sensitive business data – such as banking details and account numbers – granting them a unique cryptographic identifier that will be used for transactions on the platform.

Kevin Phalen, global head at Visa Business Solutions, suggests that the system will help with fraud:

“B2B Connect’s digital identity greatly reduces the opportunity for fraud that might otherwise exist with checks, ACH and wire transfers today, while also helping companies remain compliant as part of the regulated financial ecosystem.”

From a technical standpoint the solution will integrate a Hyperledger Fabric framework (which is hosted by the Linux Foundation and was developed with input from IBM) with Visa’s “core assets,” which the release claims will establish a scalable permissioned network for use in the financial sector.

Jason Kelley, general manager at IBM Blockchain Services, is quoted as saying that the system represents one of the most “powerful examples to date of how blockchain is transforming payments.”

Fintech provider Bottomline Technologies – which serves 1,200 financial institutions, according to the release – is also partnering with Visa on the B2B Connect system, a partnership that will enable “mutual financial institution clients” to access the system.

As reported last month, Thailand’s fourth largest bank, Kasikornbank, just recently joined the B2B Connect corporate cross-border payments initiative.

According to Visa’s website, B2B Connect was first previewed back in 2017, and counted the U.S. Commerce Bank, South Korea’s Shinhan Bank, the Union Bank of Philippines, and the United Overseas Bank in Singapore as among the first partners processing pilot payments ahead of commercial launch.

Even as it embraces blockchain’s potential, Visa – alongside MasterCard – has this month reportedly moved to group cryptocurrency and Initial Coin Offering (ICO) under a new “High-Risk Securities Merchants” classification, meaning interaction with them will be subject to additional monitoring.

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Dubai – the Blockchain Oasis of the UAE: From Public to Private Sector

In some countries around the world, governments have had a stifling effect on the adoption of blockchain technology. Conversely, the government of the UAE and Dubai have been the driving force behind the promotion of blockchain use in the country.

2018 has seen some significant developments on this front but the foundations had been laid a couple of years ago.

Across the private and public sectors, there has been a push to incorporate this new tech to overhaul current systems. This includes as plans to launch a cryptocurrency that will be used by citizens and governmental departments.

EmCash

The first proposal for an official Dubai cryptocurrency called emCash came about in October 2017. The cryptocurrency is touted to be used for payments for governmental and nongovernmental services – and is pegged to the UAE Dirham.

Consumers could well be using emCash in the next few months after the government signed a deal with a number of parties to setup point of sale payments for the cryptocurrency.

The partnership was announced on October 9, which includes emCredit, a subsidiary of the Dubai Department of Economic Development, blockchain payment provider Pundi X and its partner Ebooc Fintech & Loyalty Labs LLC.

Ebooc will be responsible for providing point of sale terminals in retail outlets, while Pundi X is expected to create 100,000 point of sale units over the next three years.

Regulations – ICOs lead to cautious approach

The Central Bank of the UAE began working on legislation at the beginning of 2017 to address the use of cryptocurrencies in the country.

This culminated in a report by Abu Dhabi’s Financial Services Regulatory Authority in October 2017, which released its findings on initial coin offerings (ICOs) and cryptocurrencies – classing them as securities and commodities respectively.

A swathe of apathy towards ICOs, with bans in countries like China, happened around the same time last year. This had a slight ripple effect, as other institutions and regulatory bodies put out warnings to investors centred on the associated risks of investing in ICOs. This saw UAE Central Bank Governor Mubarak Rashid al-Mansouri caution citizens against the use of cryptocurrencies – amid fears of volatility and criminal uses.

This was primarily due to the corresponding drop in value of various cryptocurrencies following China’s ban, as Al-Mansouri said in a speech at the Islamic Financial Services Board Summit:

“The risks of trading in digital currencies have clearly appeared when the prices of digital currency fell sharply after some countries announced a ban on using initial coin offerings.”

The negative stigma around ICOs seemed to continue into the new year, amid an overall decline in the crypto markets following all time highs in December. In the US, the Securities and Exchange Commission (SEC) led the way with no-nonsense attitude towards ICOs in February 2018.

The UAE Securities and Commodities Authority (SCA) also cautioned local investors about the inherent risks associated with ICOs. Given that they are not regulated in the country, investors had no means of legal protection against fraud.

In an effort to address these concerns, it is understood that the UAE in nearing the completion of a draft of regulations for ICOs in the country. This was reported in September 2018, and is led by the UAE SCA.

Dubai – A Smart blockchain city

In 2016, the foundations were laid for Dubai to uncover startup companies that could help drive the way for the city to become blockchain-powered by 2020.

The UAE government founded the Smart Dubai initiative in 2013, an ambitious project looking to provide cutting edge technological innovations across the country, from technology to governmental processes.

A central part of the initiative is to improve government efficiency by using blockchain technology, in the hopes of making Dubai a global leader in the space. This includes a transition to digital systems which will see visa applications, bill payments, and license renewals move away from traditional paper documentation.

According to Smart Dubai, blockchain technology could redistribute up to 25 million hours of economic productivity by removing the need for paper document processing. The project also promised to benefit the tourism industry in Dubai as international travellers will have fast-tracked entry with pre-approved passport, visas, and security clearances.

Moving around the city will also be improved with approved drivers licenses and car rental, wireless connectivity as well as pre-authenticated temporary digital wallets.

An official Blockchain Strategy was launched in October 2016, in association with Seed Fund 1776, looking for companies building blockchain-based applications across a broad range of industries. In 2017 Dubai won the City Project award for its blockchain strategy, awarded by the Smart City Expo and World Congress in Barcelona.

In conjunction with the Smart Dubai initiative, in April 2018 UAE Vice President and Prime Minister Sheikh Mohammed bin Rashid eventually launched the broader UAE Blockchain Strategy 2021. At the time Sheikh Mohammed said that the project could save the UAE government up to $3 billion annually on document circulation, and drastically improve the quality of life and efficiency:

“The adoption of this technology will reflect on the quality of life in the UAE and will enhance happiness levels for citizens. 50 percent of government transactions on the federal level will be conducted using Blockchain technology by 2021. This technology will save time, effort, and resources and enable individuals to conduct most of their transactions in a timely manner that suits their lifestyle and work.”

Cointelegraph spoke with Muhammed Arafath, executive director at Apla Blockchain, platform helping integrate blockchain technology into government operations in a number of countries including India and the UAE, to get a first hand perspective on the current crypto climate in Dubai:

“Considering the vision which the Dubai government has set on being the ‘blockchain capital’ and the commitment for having most if not all of the government applications on Blockchain by 2020, Dubai is one of the most pro-blockchain governments in the region.”

Over the past two months, the UAE and Dubai have made significant progress in realizing some of the goals outlined in the Smart Dubai initiative.

Partnering with the Dubai Department of Finance, a blockchain-powered payment system was officially launched in September 2018. The Payment Reconciliation and Settlement (PRS) system aims to allow government entities like the Dubai Police, Roads and Transport Authority, and Dubai Health Authority to transact in real-time, providing a transparent system for intergovernmental processes..

According to local media outlet Zawya, the Dubai Electricity and Water Authority and the Knowledge and Human Development Authority have already been using the PRS system.

The tourism sector in Dubai is also expected to benefit from blockchain technology. In March 2018, plans for a virtual business-to-business tourism-specific marketplace using blockchain were unveiled. The Dubai Tourism Blockchain Marketplace will reportedly provide tourists with a platform that features real-time, transparent pricing of Dubai’s hotels availability.

From roads to the judicial system

Blockchain technology is also being leveraged to improve other areas of life in Dubai, from the streets of the city to its courts.

Thus, in February 2018 the Dubai Roads and Transport Authority (RTA) announced plans to launch a blockchain-based system in 2020 that would track the lifecycle of vehicles in the country.

According to media outlet Arabian Business, RTA chairman and executive director Mattar Al Tayer says the initiative should benefit almost every single player in the industry:

“The platform benefits many stakeholders including car manufacturers, dealers, regulators, insurance companies, buyers, sellers and even garages, providing transparency and trust in vehicle transactions, preventing disputes and lowering the cost of services. It tracks ownership, sale, and accident history to create smart, more efficient systems for supply chains.”

In July, Dubai International Financial Center Courts announced a formal partnership with Smart Dubai in order to set up a ‘Court of the Blockchain’ to facilitate improvements in the judicial system. The move would eventually create a blockchain-powered judiciary to help verify court judgements for cross-border enforcement.

Ambitious programs to lead the way

Countries like Malta and the UAE seem to be leading the way in terms of blockchain adoption. Having recognized the many benefits of the technology, strides have been made to actively get out ahead of other countries.

A seemingly important factor is the balance between accepting this new technology while providing the necessary frameworks to ensure investors are protected.

The UAE Blockchain Strategy 2021 is a clear indication of the efforts being made by the country to foster the development of blockchain to improve its own governance and the quality of life for people in the region.

This positive and proactive attitude towards the industry is proving a point, as Arafath told Cointelegraph:

“Dubai is clearly leading the region by example on the adoption of blockchain and crypto.”

As Dubai and the UAE continue to explore and develop technology with the use of blockchain technology, as well as provide a guideline for the use of ICOs and cryptocurrencies, the outlook in the region seems positive.

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Indian Internet ‘Blockchain Committee’ Attracts Reps From Zebpay, MasterCard, Microsoft

The Internet and Mobile Association of India (IAMAI) is forming a dedicated focus group for blockchain exploration made up of both big business and cryptocurrency players, Indian daily newspaper Economic Times reported Monday, Oct. 15.

Confirmed in a tweet Tuesday, the IAMAI, whose remit is to “expand and enhance” the online and mobile sector, will use its “Blockchain Committee” to “identify opportunities and challenges and work with government, industry and startups” to develop a blockchain “ecosystem.”

The move comes amid testing times for cryptocurrency in India, with the country’s supreme court still deliberating on the legality of the Reserve Bank of India’s (RBI) cryptocurrency banking ban it instigated in July.

Commenting on the plans, Tina Singh, chair of the newly-founded Blockchain Committee, said the technology was nonetheless “undoubtedly the technology of the future,” noting:

“The IAMAI Blockchain Committee will focus on creating dialogue between all stakeholders; curate and create content to aid skill development and move towards creating a participative economy with the usage of blockchain.”

Participants in the committee include major Indian cryptocurrency exchange ZebPay, itself a conspicuous victim of the central bank’s ban, having halted its exchange offering altogether late last month.

Other parties include representatives from MasterCard, Microsoft and IBM.

The RBI itself is also “researching” blockchain, sources reported in August, as part of an assessment process in which it would “check what can be adopted and what cannot.”

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Nouriel Roubini Versus Blockchain: Notes from the Senate Floor

Normally, there is very limited room for drawing legitimate comparisons between a Senate hearing and an Mixed Martial Arts (MMA) fight. Yet the hearing entitled “Exploring the Cryptocurrency and Blockchain Ecosystem,” which took place on October 11, 2018 on the US Senate’s Committee on Banking, Housing & Urban Affairs’ floor, definitely bore quite a few similarities to a hyped sporting event that had made big waves just a few days ago. Two witnesses who were brought to testify on issues and promises of crypto stood by polarising views on the subject matter, albeit they expressed these views with varying intensity.

On the pro-crypto side, there was Peter Van Valkenburgh, Director of Research at Coin Center, a reserved yet very articulate speaker. In the opposite corner, there was Nouriel Roubini. Roubini or “Dr. Doom”, whose reputation is mainly founded on the prediction of the 2008 housing bubble crash, would be the fighter who does trash talking. In the buildup to the hearing, he fired a long series of vehement tweets, bashing blockchain and its supporters, picking local fights and bragging about having debated best crypto gurus and “beating them by a wide margin”.

Into the hearing

Chairman Mike Crapo, a Republican Senator from Idaho, opened the proceedings with a statement that gave a nod to Bitcoin’s unique status as the first ever digital asset, and highlighted how the bulk of the latest news on crypto has been negative, including falling prices and regulatory woes. Ranking member Sherrod Brown of Ohio weighed in to point out that it was almost Bitcoin’s tenth anniversary, yet the space is still rife with fraud and misconduct, while tangible applications are scarce. He mentioned regulatory issues and referenced the famous statement by Jay Clayton, the chairman of the US Securities and Exchange Commission, as well as the recent report by the Attorney General of New York that was anything but complementary to biggest crypto exchanges. Brown implied, however, that blockchain could be potentially useful for improving the lives of the unbanked and underserved.

Roubini’s testimony

In his speech, the New York University professor followed rather closely the rambling argument presented in his 30-page written statement. In addition to a constellation of derogatory terms – it is quite likely that for many senators this became the first encounter with terms like ‘shitcoin’ – Roubini developed several central talking points that he would reiterate dogmatically throughout his testimony and on to the Q&A session. He argued that the whole crypto ‘asset class is imploding’ now, following the steep decline of prices compared to late 2017, and educated senators on the study that identified 80 percent of initial coin offerings (ICOs) in the same year as scams. He added that digital assets are useless as currency, since they are unable to serve as unit of account, means of payment, or store value.

A recurrent theme in Roubini’s account was superiority of centralized payment systems to blockchain-based ones. Several times he brought up the claim that the Bitcoin network’s throughput is only five transactions per second, while Visa can process up to twenty-five thousand transactions per second. Other attacks included assertions that ‘nobody uses it for transactions,’ except for criminals and terrorists, while mining is an ‘environmental disaster.’

Roubini also offered a rather unconventional view of what constitutes the realm of fintech. He claimed that, indeed, there is a revolution in the financial services industry currently going on, yet it has nothing to do with blockchain. Instead, it is allegedly powered by artificial intelligence, big data, and the Internet of Things (IoT), and displays in proliferation of centralized digital payment systems.

Meanwhile, the crypto libertarian dream of total decentralization is ‘utter nonsense.’ In fact, Roubini claims, ‘crypto land’ is subject to the opposite trend: heavy centralization of mining – which is apparently controlled mainly by Chinese and Russian oligopolies, trading at the hands of centralized exchanges that are ‘hacked daily’, and development reserved for a narrow tech elite that arbitrarily changes code and forks coins whenever things go wrong.

Against this background, massive manipulation permeates the ‘crypto land,’ where pump & dump schemes, spoofing, and insider trading call the shots. In Roubini’s view, stable coins exist for the sole reason of manipulation; security tokens break all security laws, and utility tokens pave the way back to the Stone Age, where barter was prevalent. According to Roubini, even the “Flintstones knew better,” as they used clams as a universal currency.

Finally, corporate permissioned ledgers received their fair share of beating: according to Roubini, they are no more than ‘glorified databases,’ and they have no relation to the concept of blockchain.

Van Valkenburgh’s testimony

Right after Roubini’s furious charge, a composed account that Coin Center’s Van Valkenburgh delivered sounded almost soothing. The crypto advocate decided not to overcomplicate things, and dedicated a huge share of his time to explaining what Bitcoin is, what it does, and why is it revolutionary. Unlike cash, which only works face-to-face, Bitcoin is the world’s ‘first globally accessible public money.’ It is not yet ‘perfect or stable,’ yet it is working. Similar to the early years of the internet, the technology is full of loopholes and inefficiencies, but this is by no means a reason to abandon it.

Various kinds of human interactions, Van Valkenburgh maintained, are riddled with state or corporate chokepoints. Like the internet had removed such chokepoints from the realm of communication, blockchain’s promise is to do away with single points of failure that are inherent to other interaction systems’ designs – such as that of monetary transaction systems. Giant private corporations are increasingly prone to security failures, such as electronic bank robberies and massive personal data leaks. The rise of IoT makes such concerns even more grave, as even cars and pacers can now be targeted. According to Van Valkenburgh, no critical infrastructure has to have a single point of failure, and to achieve that, we need a ‘light-touch, pro-innovation’ policy in place.

Questions

Chairman Crapo opened up the floor for questions on where the crypto markets are headed next year, and what conditions need to converge in order for them to stabilize. Van Valkenburgh responded that volatility is raging due to the markets having a hard time with finding a level, a fair price for something very new and disruptive. However, institutional money have already brought some sense of stability: it’s been beneficial to have  Commodity Futures Trading Commission (CFTC) regulated crypto derivatives enter the market, but it would be even better if the SEC allows the trading of crypto-based exchange-traded funds. Having a nationally chartered bank for crypto custody would bring even more rationality to the market.

Criticisms thrice told

Roubini responded to this point with the argument that cryptocurrencies are not scalable, not decentralized, and not secure, seasoning his response with the same points about five transactions per second, widespread oligopolies, and no authority to go to in case if one’s funds get stolen. Crapo pressed on, asking what hinders faster development of decentralized computing technologies’ real-world applications. Van Valkenburgh deflected this with a reference to email, which first appeared in 1972 and took a couple of decades before going mainstream, while Roubini said that no government or corporation will use permissionless decentralized systems. The idea of decentralization, he maintained, “won’t fly, because it’s nonsense”.

Ranking member Brown inquired whether there are blockchain-based applications ‘on a broader scale,’ which Roubini took as a chance to dismiss permissionless blockchains again, grudgingly admitting that there is some useful innovation in the sphere of private distributed ledgers. Again, he lauded payment systems like Paypal, China’s WeChat Pay, and African M-Pesa as the ‘real revolution,’ dismissing decentralized crypto systems as being losing users and transactions. While the internet had a billion users after a decade in existence, he added, cryptocurrencies command the following of just 22 million.

As Senator Brown asked to describe a typical crypto investor, Van Valkenburgh painted a portrait of a young, tech-savvy person, and quickly moved to a more policy-relevant conversation. After praising the US Financial Crimes Enforcement Network’s (FinCEN) trailblazing efforts in laying the groundwork for crypto investors’ protection, he criticized the current state-by-state approach to money transmission licenses’ issuance to crypto enterprises, and called for federal licensing system.

Bridging gender gaps & standing up to totalitarians

Senator John Kennedy of Louisiana demanded how the world got better since cryptocurrencies came into existence. Van Valkenburgh offered a story of an Afghani female entrepreneur who used crypto to pay her mostly female employees’ wages, which was the only way to do it in a society where women are especially underserved by banks, while few accounts that exist are often controlled by male relatives. Roubini, once again, brought up superiority of centralized payment systems and Bitcoin’s meager five transactions per second. He then went on to complain about concentration of miners in places like China, Russia, and – for some reason – Belarus and Georgia, claiming that these nations will use their alleged oligopolistic dominance to manipulate the US.

Van Valkenburgh retorted that with payment infrastructures like the Chinese WeChat Pay, users’ transaction records and personal details reside without encryption in centralized repositories, ready to be hacked or surveilled by the government, if needed. Such systems, he argued, are ‘tools for totalitarians.’

A word on security

Doug Jones of Alabama was concerned with the extent to which ‘bad guys’ and rogue nations can exploit the decentralized design of public blockchains. Van Valkenburgh noted that every worthy technology, especially at the early stages of development, gets exploited by shady characters – if it does not, it is probably not very useful. At the same time, he contended, US law enforcement is already quite comfortable for tracking illicit transactions on open ledgers. Roubini took to bemoaning the dangers of blockchains’ anonymity.

Potential for scaling

Pennsylvania senator Pat Toomey jumped in, showing off his intimacy with blockchain fundamentals and jargon. He said that while crypto assets are riddled with flaws, central banks do not have a flawless record of frictionless operations either. He suggested that an asset being a currency or not is just an issue of scale, and asked whether cryptocurrencies are fundamentally not scalable. Toomey was also interested whether the oligopolistic tendencies in mining really mattered for cryptocurrencies’ capacity to operate securely.

Van Valkenburgh delved into an overview of various scaling solutions, particularly highlighting the potential of batch settlement. He added that with oligopoly, you cannot really do much more to the network than denial-of-service attacks. Roubini’s response was anything but surprising:  five transactions per second, centralized mining, not secure. He explained that 51 percent attacks are a reality – they happen ‘every day’ with minor coins. Transactions costs “have gone through the roof,” while massive economies of scale implicit to mining operations incentivize cartelization.

ICO woes

Elizabeth Warren of Massachusetts was wondering how the theft of an aggregate $1.1 billion in the first half of 2018 was possible, as well as what could be done with the 80 percent rate of scam ICOs.  Van Valkenburgh explained that most of the funds stolen were in obscure alternative coins from overseas exchanges that failed to scale up their security systems to match the value they came to store. He also said he was on the same page with those who identify ICOs as securities, but added that it is entirely possible to have an ICO and comply with all the relevant securities regulations.

Maryland’s Chris Van Hollen appeared to be marginally interested in crypto affairs specifically. He lamented how the Fed was sluggish in moving towards a real-time payment system, blockchain-based or not, and moved on to solicit Roubini’s advice on the overall state and near perspectives of the US economy. The famed economist did not sound optimistic, suggesting that it’s possible that growth would stall by 2020.

Global KYC standards

Catherine Cortez Masto from Nevada was the last to pose questions. She asked if there are any provisions in the bitcoin protocol that enable detection of payments that go to human trafficking, drug trafficking, or money laundering. Van Valkenburgh responded that policing such activities is incumbent upon the businesses that operate on top of the blockchain, as well as law enforcement. Roubini noted that such policing won’t be efficient unless there is a globally ratified set of rules in place. Van Valkenburgh agreed that such a unified approach to know your customer (KYC) procedures are needed, marking a rare moment of solidarity with the opponent.

Finally, Cortez Masto asked Roubini whether he believed in blockchain technology’s successful applications beyond finance, to which he responded, once again, that no serious government or corporation would ever entrust an open, trustless, permissionless distributed system with any sensitive information. ‘It’s just nonsense!’ – he concluded.

Chairman Mike Crapo reminded senators that additional questions to witnesses, if any arise, are due within one week, and adjourned the hearing.

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Major Chinese Tech Magazine Adds Payment in Bitcoin to Show Blockchain ‘Practicality’

Beijing Sci-Tech Report (BSTR), China’s oldest media publication covering the tech industry, has announced it will offer subscriptions payable with Bitcoin (BTC), local media outlet Guangming reported Sunday, September 30.

An evidently rare occurrence from China, were government pressure has forced crypto exchanges and Initial Coin Offering (ICO) operators to halt activities over the past year, BSTR says it wishes to promote blockchain and crypto use through “practical actions.”

“[S]ubscribers can pay subscription fees to the specific bitcoin receiving address of the newspaper to complete the subscription,” Guangming confirms.

The product on offer is an annual subscription to the publication’s ‘Tech Life’ magazine, which costs 0.01 BTC (about $65).

Chinese authorities continue to clamp down on trading and promotional operations related to cryptocurrency, Cointelegraph reporting on fresh efforts to tackle overseas platforms by blocking access to them online in August.

At the same time, owning and investing in cryptocurrency is not officially illegal.

Responding to queries about the BSTR move on social media, Chinese cryptocurrency news commentator cnLedger underlined the fact that by offering a Bitcoin subscription, the publication was not breaking the law.

“Owning and investing in crypto is not banned,” it wrote.

“Otherwise Jihan (Wu, CEO) of Bitmain and Leon (Li, CEO) of Huobi would be among the first ones to get fined/caught. Thousands if not millions would have been arrested already (large amount of OTC tradings).”

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China's Nanjing Arbitration Commission Tests Blockchain Platform for Legal Disputes

The Nanjing Arbitration Committee is testing a new blockchain platform designed to store and process data for legal disputes. The organization officially announced this September 27.

China’s regional arbitration committees were established in 1995 with the passage of the Arbitration Law, and operate as independent non-profit organizations that offer services in arbitration, mediation, and other dispute resolution mechanisms as an alternative to litigation.

According to today’s announcement, the Nanjing Committee’s new platform:

“Makes extensive use of blockchain technology, and coexists with depository institutions, financial institutions, and arbitration institutions to deposit electronic data [and enable] real-time evidence preservation, electronic delivery, online trials and ruling.”

The Committee, based in the capital city of China’s eastern Jiangsu province, says it has “formulated a special network arbitration rule” within the system that will set a determinate time limit of thirty days for the resolution of online arbitration cases. This, the Committee notes, is shorter than existing online trial periods, and “significantly lower” than the standard for offline cases.

The new system is also presented as a means of reducing arbitration costs for all parties involved, with the new system overall expected to provide a more convenient, cost- and time-efficient  dispute resolution method for “the majority of Internet companies, especially in the financial field.”

As previously reported, on September 7 China’s Supreme Court ruled that evidence authenticated with blockchain technology is binding in legal disputes, as part of a series of comprehensive rules clarifying litigation procedures for internet courts across the country. The new ruling came into force immediately.

This January, a Hangzhou-based court dedicated to processing trials for internet-related disputes via an online “netcourt” web platform had handled its first case using legally valid blockchain-derived evidence.

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India's National Stock Exchange Trials Blockchain E-Voting for Listed Companies

The National Stock Exchange of India (NSE) is testing a blockchain platform developed by Elemential Labs to conduct e-voting for listed companies, local news outlet Hindu BusinessLine reports September 27.

The NSE’s pilot will entail tokenizing voting rights and using the blockchain platform to connect the firm, registrar and transfer agents (RTA), and the regulator. Hindu BusinessLine notes that tokenized votes are both easy to transfer and to proxy, and the test will reportedly be used to evaluate how easy it is to audit the entirety of the voting procedure using blockchain.

Sankarson Banerjee, CTO of projects at NSE, is quoted as saying that the blockchain system offers features that can bring the exchange “closer to an environment of improved corporate governance and compliance,” outlining that:

“The immutable nature of blockchain will ensure that every action taken by a network participant is transparent to the regulator. Additionally, the smart contract framework enables synchronisation of the vote count process between the company and the regulator in real time.”

Elemential Labs’ platform uses the Hyperledger framework, and NSE will reportedly take charge of developing and managing the front-end application of the system.

Elemential CEO Raunaq Vaisoha echoed Banerjee in advocating for blockchain’s power to ensure regulatory compliance in real time and to offer “highly transparent and clear corporate governance,” which he considered to be “an operating standard that most companies aspire to.”

As reported earlier this month, the Union Cabinet of India — the country’s chief decision-making body led by prime minister Narendra Modi — has approved a Memorandum of Understanding (MoU) with BRICS members on collaborative research into blockchain and other distributed ledger technologies (DLT).

This summer, the Indian state of Telangana announced it would be signing several MoUs with blockchain firms as to eventually implement the technology across government services.

As blockchain makes inroads with the country’s government, India’s Supreme Court is currently in the midst of reviewing the Reserve Bank of India (RBI)’s controversial ban on banks’ dealings with crypto-related entities. Just this week, the court listened to the final round of petitions on the ban, which has officially been in force since July 6.

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US Tech Firm Eyes Blockchain Supply Chain Solution for Major Chinese Ports

U.S.-based technology company Ideanomics has partnered with the Asia-Pacific Model Electronic Port Network (APMEN) Trade Tech Co. to streamline supply chains with blockchain tech, a press release reports Thursday, September 20.

Together with APMEN Trade Tech Co., Ideanomics aims to leverage blockchain and what it calls “super artificial intelligence” to cut out “layers of middlemen” in port clearance and shipping handling for the Asia-Pacific Economic Cooperation’s (APEC) online port clearance system.

The first instigation of the tools will take place in two major Chinese ports, Shanghai and Guangzhou, the former holding the title of the world’s busiest port in 2017.

The move marks the continuation of a growing trend in the blockchain sector, with a raft of major corporations aiming to disrupt legacy supply chain infrastructure with the technology’s introduction.

In the press release about the Ideanomics and APMEN Tech Trade Co. partnership, Bruno Wu, chairman and co-CEO of Ideanomics, stated:

“We will integrate business data from various partners, establishing a risk control model in cooperation with a single window to provide risk control services for regulatory authorities and enterprises.”

Ideanomics will have a 60 percent stake in the new venture, promising it will list on an unspecified Chinese stock exchange before the end of the year, the press release notes.

As the industry expands, some sources have more recently become skeptical of blockchain supply chain efficiency, cautioning the “hype” that may be associated with the phenomenon.

Speaking at the World Economic Forum in China last week, Tradeshift CEO Christian Lanng even went as far as to say blockchain was not suitably “high performance” in its current state to suit such purposes at scale.

“Whenever people say blockchain, I think what they’re really saying is they would like to connect things digitally,” he suggested.

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Report: Hong Kong Stock Exchange Eyeing Blockchain Firm Acquisitions

Insider sources have suggested that the Hong Kong Stock Exchange (HKEX) is eyeing takeovers in the blockchain and other tech sectors, according to a Bloomberg article published September 21.

Bloomberg cites “people with knowledge of the matter” as saying that the exchange is considering a change in strategy due to stalling trading links with exchanges in China, citing worsening U.S.-China trade relations as a further cause for concern.

The sources reportedly told Bloomberg that HKEX CEO Charles Li has met with “at least three investment banks” to discuss diversifying the exchange’s model, including a possible set of takeovers in the “data, analytics and blockchain sectors.” Due to the sensitivity of the matter, Bloomberg’s sources asked to remain anonymous.

They reportedly suggest that Li has been looking to the venture capital arms of U.S.-based stalwart exchanges CME Group Inc. and Nasdaq Inc. “as possible models,” with Bloomberg noting that Nasdaq saw 19 percent of its 2017 revenue from data products and 13 percent from market technology.

By contrast, Bloomberg’s data indicates that HKEX generated almost 100 percent of its 2017 revenue from clearing and trading fees.

Bloomberg’s sources further allege that potential technology acquisitions were “the focus” of two recent key HKEX meetings — a strategy discussion with senior managers on September 10, and a board member meeting on September 12. They report that the exchange is due to launch a three-year strategy plan starting in 2019, of which the details are currently under discussion.

Banny Lam, head of research at CEB International Investment Corp., told Bloomberg in an email that:

“The strategy is in the right direction but it is not easy to achieve the targets. HKEX needs to maintain a momentum of growth by exploring new businesses.”

According to Bloomberg, HKEX has “struggled to integrate” its 2012 acquisition of London Metal Exchange, and the article cites an unnamed HKEX advisor as saying that there are “industry concerns” surrounding the success of future deals.

As previously reported, within China itself, blockchain has been making inroads into the very infrastructure of major stock exchanges. Earlier this summer, the world’s fourth-largest stock exchange, the Shanghai Stock Exchange (SSE) released plans to adopt the technology for use in securities transactions.

The Australian Securities Exchange (ASX) is also planning to implement blockchain to replace its current system for processing equity transactions, a switch that is currently slated for spring 2021.

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Alibaba's Ant Financial to Launch Blockchain Backend-as-a-Service Platform

Ant Financial, the financial affiliate of Chinese e-commerce giant Alibaba, is launching a blockchain BaaS (Backend-as-a-Service) platform, local news outlet China Money Network reports September 21.

The announcement was reportedly made by Ant Financial vice president Jiang Guoefei at the Ant Technology Exploration Conference (ATEC) in Hangzhou yesterday. The new BaaS platform is being launched in tandem with an enterprise-focused “ant blockchain partner program” that will reportedly enable small- and medium-scale businesses to implement and innovate new blockchain solutions.

The announcement aligns with what Gueofei characterized as a move to “open up” Ant’s in-house technologies to the wider commercial sector:

“In the past two years, Ant Financial has been working on two aspects about blockchain. One is to improve the technology, and the other is to open it up and accelerate the commercialization of blockchain applications.”

As part of its impetus to commercialize the technology, Ant Financial trialed its very first blockchain remittances earlier this summer, using its newly-developed blockchain-based electronic wallet cross border remittance service. The trial demonstrated a transfer of funds between Ant Financial’s AliPayHK — the Hong Kong version of Ant’s popular mobile payment app Alipay — and Filipino payment app GCash.

Alibaba founder Jack Ma has signalled increasing involvement of AliPay in blockchain for several years, with Ant Financial most recently securing $14 billion in funding for the technology’s development this June.

Fresh data published late August revealed that Alibaba had sealed first place globally on a new list that ranked entities by the number of blockchain-related patents filed to date; the e-commerce conglomerate has filed a staggering 90 such patents, outflanking even IBM.

Nonetheless, Ma delivered a keynote lecture earlier this month in which he noted that blockchain is one of a host of advanced technologies that still need to prove they can help evolve society in a “greener and more inclusive” direction.

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‘Not High-Performance’: Tradeshift CEO Prudent on Blockchain Supply Chain Potential

Digital invoicing startup Tradeshift CEO Christian Lanng countered “hype” over blockchain’s role in supply chains Wednesday, September 19, telling CNBC the technology “wasn’t ready yet.”

In an interview at the World Economic Forum in Tianjin, China, Lanng highlighted the use cases for blockchain in areas such as identity and certifications, but argued supply chains were too much of a challenge for the technology in its current state.

“If you want to have authenticity, if you want to know where it is sourced, that it is done in a responsible way […] [blockchain] is a great technology to manage that kind of flow and be sure of the integrity,” he told the network, adding:

“The problem is just it’s not a high-performance technology.”

Talk of the promise of enhancing supply chain performance using distributed ledger technology has become commonplace across the global economy this year. As Cointelegraph continues to report, multiple global heavyweights are considering and working on implementing blockchain-based solutions to legacy infrastructure.

For Lanng, however, the optimism is premature. “Whenever people say blockchain, I think what they’re really saying is they would like to connect things digitally,” he continued, noting:

“I don’t think blockchain is a mature enough technology yet to carry that … I also want to be a little bit cautious for some of the hype.”

Lanng also highlighted cost hurdles and the difficulty of creating an “at scale” blockchain deployment.

The innovation has nonetheless already seen some success, as a joint shipping supply chain product from IBM and Maersk received heavy praise from logistics partner CEVA as a “big step forward” in August.

More recently, UK’s leading port operator, Associated British Ports (ABP), signed an agreement with digital logistics enabler Marine Transport International to develop blockchain use for port logistics.

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Korean Mobile Carrier LGU+ Launches Blockchain-Based Overseas Payment System

South Korea’s LG UPlus, a mobile carrier owned by the country’s fourth largest conglomerate LG Corp., is launching a blockchain-based cross-carrier overseas payment service, Korea Times reports today, September 16.

Last Thursday, September 13, LG UPlus had signed an MoU to develop the new service alongside three global partners: Taiwan-based Far EasTone Telecommunications, Japan’s SoftBank, and U.S.-based TBCASoft. Through the new service, users of one telecoms carrier will be able to frictionlessly complete transactions on the payment networks of another.

According to the Korea Times, the first trial of the LG UPlus partners’ blockchain-based cross-carrier payment system (CCPS) is slated for the beginning of 2019.

CCPS will reportedly deploy blockchain to enable a prompt settlement mechanism in cross-carrier services. This will mean that users can avoid fees on overseas credit card transactions, and are insulated from the effects of fluctuating foreign exchange rates as they are ultimately billed through their carrier in their home currency.

For example, the service will allow LG UPlus Korean subscribers to purchase retail goods when using their cellphones in Taiwan and Japan, while Far EasTone users from Taiwan will enjoy the same convenience in Korea and Japan.

Ling Wu, founder and CEO of TBCASoft, told the Korea Times that the cross-carrier payment system is the first in a planned series of telecoms-specific blockchain-based solutions, noting that systems designed for “identity and authentication” are next.

Far EasTone, SoftBank, and TBCASoft are all among the initial founding members of the Carrier Blockchain Study Group (CBSG), a global blockchain consortium of telecom carriers that launched in late 2017. As reported earlier this summer, CSBG has recently unveiled the creation of a new blockchain working group that will focus on global remittance services, as well as adding six further major global telecoms firms to its ranks.

Just last week, Softbank unveiled a new proof-of-concept (PoC) in partnership with Synchronoss Technologies and TBCASoft to use CCPS to allow users to conduct peer-to-peer money transfers globally using legacy messaging services such as SMS and email.

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IBM Joins Decentralized ‘Yellow Pages’ for Blockchain Projects

IBM has joined a decentralized cross-blockchain registry initiative which it states is a Yellow Pages analogue for blockchain projects, according to an announcement September 13.

The initiative called Unbounded Registry will be led by blockchain startup HACERA, and is designed to provide “a decentralized means to register, look up, join and transact across a variety of blockchain solutions, built to interoperate with all of today’s distributed ledger technologies.”

The project will reportedly address major issues in the field, including reserved naming for blockchain projects, the discoverability of blockchain networks and applications, and a catalogue of domain-specific functions and services.

Other members of the registry include Intel, Chinese tech giant Huawei, Batavia, Hitachi, and the Australian Blockchain Association.

IBM is known for its openness to the study and application of blockchain technology across various fields. Earlier this month, the tech giant revealed a Stellar-based “near-real-time” blockchain payment network called Blockchain World Wire (BWW). The solution is developed to facilitate international settlements between banks.

In August, IBM and Danish transport and logistics giant Maersk jointly launched their global blockchain-enabled shipping solution. The platform is reportedly able to track critical data about each shipment in a supply chain in real time, generating a distributed, immutable record on the fly.

In June, IBM iX, the business and tech consulting wing of IBM, in partnership with software supplier Mediaocean, launched a blockchain-powered tracker for digital media transactions to “clean things up” in the media buying industry.

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Energy Firm ENGIE Partners With Consulting Firm to Create Blockchain Software Offering

French electric utility company ENGIE and consulting firm Maltem Consulting Group have jointly established a blockchain development firm designed for commercial customers, according to a press release published September 7.

The new project called Blockchain Studio received seed funding totalling €1.9 million (around $2.1 million). Blockchain Studio has created a software suite for commercial enterprises comprised of two fundamental tools. One tool is focused on the development of smart contracts and enables its application by users without technical background. The other tool manages the creation of cloud-based or server-based blockchain infrastructure.

According to the announcement, the company is planning to roll out its services primarily on the Asian market at the beginning of 2019, with an office in Singapore. By the end of the first financial semester of next year, Blockchain Studio will also open operations in Southern Europe.

Yves Le Gélard, ENGIE’s Executive Vice-President and Chief Digital Officer expressed enthusiasm towards the new project:

“We are very pleased to be contributing to this development, which should allow Blockchain technology to be made accessible to many actors. It is an excellent example of an innovative tool contributing to ENGIE’s digital transformation.”

ENGIE has previously explored blockchain applications in its energy business. In July, the corporate research center of the ENGIE Group, ENGIE Lab CRIGEN, signed a Memorandum of Understanding with the IOTA Foundation. The collaboration is focused on the exploration of and experimentation with IOTA Tangle technology in the energy sector.

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China’s Supreme Court Rules That Blockchain Can Legally Authenticate Evidence

China’s Supreme Court has ruled that evidence authenticated with blockchain technology is binding in legal disputes, in an official announcement released today, September 7.

The new ruling comes as part of a series of more comprehensive rules that clarify litigation procedures for internet courts across China, and comes into force immediately.

According to today’s announcement, the Supreme Court declares that:

“Internet courts shall recognize digital data that are submitted as evidence if relevant parties collected and stored these data via blockchain with digital signatures, reliable timestamps and hash value verification or via a digital deposition platform, and can prove the authenticity of such technology used.”

In what had been dubbed a “world first,” in August 2017 the Chinese city of Hangzhou in Zhejiang Province opened a court dedicated to processing trials for internet-related disputes on an online ‘netcourt’ web platform. The court handled its first case with legally valid blockchain-derived evidence this January.

As today’s announcement clarifies, China’s Internet courts conduct cases online, with “litigation acceptance, delivery, mediation, evidence exchange, pre-trial preparation, court trial, and sentencing” all settled on the web. China currently has two further internet courts slated for the country’s capital, Beijing, as well as for the southern city of Guangzhou.

As a Cointelegraph expert take has outlined, blockchain-related innovations are not only being legally recognized as capable of authenticating evidence, but even —  as in the case of smart contracts — considered to have the potential of becoming a major disruptive force to the legal sphere. The immutable, time-stamped data generated on a blockchain provides an auditable trail with which smart contracts interact according to binding, pre-specified rules.

Earlier this summer, the U.K. Law Commission announced it would review legal frameworks to ensure that British courts remain a “competitive” choice for businesses that use smart contracts, and would aim to offer the necessary flexibility and clarity to keep pace with technological developments.

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Blockchain and Elections: The Japanese, Swiss and American Experience

Free and fair elections are one of the pillars of healthy democracies. From the United States to Sierra Leone, advocates of blockchain believe that the technology can bring a new level of transparency, fairness and efficiency to the electoral process. In spite of the enthusiasm of the blockchain community — and tentative support from political bodies — attempts to implement the technology have enjoyed mixed success and have faced impassioned criticism.

Japan’s scientific hub trials blockchain

In late August, the Japanese city of Tsukuba trialed the use of blockchain technology in its  voting system. Tsukuba is a city already closely associated with scientific research, and the recent blockchain trial is the city’s latest move to explore new ways to innovate.

Voters were able to participate by using their My Number Card — a 12-digit ID number issued to all citizens of Japan, which was introduced in 2015.

A release published on the city’s official website stated that the voters were able to cast ballots for the implementation of different social programs. Participants were able to choose which of the 13 initiatives they felt were most worthy of financial support, varying from the development of equipment to improve cancer diagnosis to a program for sound navigation in cities and new equipment for outdoor activities.

As cited by Cointelegraph, the trial was conducted to establish whether blockchain’s democratic and transparent properties would lend themselves well to the minimization of foul play in the voting process.

Although initially skeptical about the potential of blockchain, Tsukuba’s mayor Tatsuo Ugarashi said:

“I had thought [blockchain] would involve more complicated procedures, but I found that it’s minimal and easy.”

Although Japan’s most recent trial with blockchain appears to have gone smoothly, not all government efforts to capitalize on the technology’s potential have enjoyed the same reception.

Sierra Leone: The blockchain election that wasn’t

On March 7, 2018, it was reported that Sierra Leone had become the first nation to implement blockchain technology in the electoral process.

Agora Technologies, a Swiss company, published a series of tweets stating that it had overseen Sierra Leone’s first blockchain-based election:

The reality turned out to be a little different. In fact, Agora had actually been observing the voting process and running an entirely separate blockchain trial alongside the election to illustrate how future elections could be carried out using the technology.

The National Electoral Commission of Sierra Leone (NEC) sprang into action and published its own statement via twitter, denying that there had been any use of blockchain technology during the election:

Agora CEO, Leo Gammar, was forced to rectify Agora’s seemingly misleadingly statements. The fact that the group were accredited to trial their own blockchain system alongside the election indicates that, in spite of the media frenzy, governmental bodies are opening the door to new ways of of making the electoral process more efficient — and blockchain is one of them.

In spite of the seemingly rosy relations with Sierra Leone’s NEC, reception of the company’s involvement in the election has been mixed. Morris Marah, founder of the Freetown-based Sensi Tech Hub, expressed his concerns to RFI:

“What these guys [Agora] are saying is great. But they haven’t really tested it because they basically took a paper card of the results and put it on their system. That’s what everybody else is doing, that’s not new.”

Switzerland’s ‘Crypto Valley’ trials blockchain voting

In recent years, the Swiss town of Zug has become famous less for its mountain views and quaint Swiss architecture, but more for its association with low tax rates and cryptocurrency. The recent influx of crypto groups establishing bases in the central canton has led to it being dubbed “Crypto Valley.”

Keen to establish itself as a blockchain capital, the municipality allows payment in Bitcoin for services and recently completed a successful trial of blockchain voting.

The small-scale vote involved only 72 out of the 240 citizens with access to the online voting system, who participated in the non-binding trial vote between June 25 and July 1. The test questionnaire asked citizens to vote on both minor municipal matters as well as if they think a blockchain-based eID system should be used for referendum votes in the future. The Swiss News Agency writes that three people indicated that it was not easy to vote digitally, 22 responded that they would use blockchain for tax returns or surveys, 19 responded they would pay parking fees with their digital ID, and three said they would use it for borrowing library books. Communications Chief for Zug, Dieter Miller, called the premier a success.

West Virginia trials blockchain voting, but clouds threaten its blue sky thinking

West Virginia is set to allow citizens serving in the armed services — along with other citizens living abroad — to vote via smartphone with an app called Voatz in November 2018. This will be the first instance of voting on a smartphone in a federal election.

West Virginia officials posted a PDF outlining the process:

“All that is needed to cast their vote is a compatible Apple or Android mobile device and approved, validated State or Federal ID.”

The idea for the app first surfaced at a hacking summit hosted by the South by Southwest technology festival in Texas.

West Virginia Secretary of State Mac Warner was impressed with the app’s system of biometric authentication and the elements of blockchain-based security. Both Warner and the Boston-based startup that created Voatz claim the system is secure.

The state successfully carried out a pilot in May.

The recent fanfare over blockchain technology in voting procedures is being played out against a backdrop of scandal in relatively recent electoral history. The year 2000 saw reports of a miscount and, in 2016, several individuals were alleged to have cast ballots in more than one state.

A Brookings Institute report stated that the National Conference of State Legislatures has put forward a number of considerations needing to be addressed for a wider-scale implementation of electronic voting — such as security, voter coercion, authentication and the inconvenience for local officials. Although positive about the potential for blockchain technology to transform the voting process, the report concluded that blockchain needs to be comprehensively tested to take into account the cost and scale of wider implementation.

Matt Blaze, a cryptography and security researcher at the University of Pennsylvania, voiced criticism to the report, stating that blockchain introduces weaknesses into the system. Blaze also said that securing the voting system “is more easily, simply, and securely done with other approaches.”

Marian K. Schneider, president of Verified Voting, also blasted the Voatz app, stating that it is less of a blockchain-based app and more of a standard mobile app with a blockchain attached. The key concern is that, although the app encrypts the voter’s data, the current system cannot guarantee the voter’s phone and service network will be free from vulnerabilities. With regard to the protection of sensitive information as it travels over the internet from the app, Schneider said:

“I think they’ve made a lot of claims that really don’t justify any increased confidence in what they are doing versus any other internet voting system.”

Voatz claims the criticism leveled against it is “false propaganda” and that “most comments in the thread are incorrect or misrepresentations.”

However, criticism of the app’s capabilities are not entirely unfounded. A trial in Utah resulted in the startup being unable to support a high concentration of downloads shortly before polls opened. Voatz, however, remained upbeat and described the incident as a “valuable learning experience.”

Critics remain unimpressed

While most of the criticism for online and mobile voting has been targeted at specific flaws in programs, there are several prominent critics who disagree with the notion entirely.

Bruce Schneier, a cryptographer, computer scientist and author of several books on cryptography and computer security, published a blog in opposition to the use of blockchain in elections.

“The only way to reliably protect elections from both malice and accident is to use something that is not hackable or unreliable at scale; the best way to do that is to back up as much of the system as possible with paper.”

Schneier believes that past efforts to automate the voting system bear a message about the potential dangers of such a transformation. In 2007, the states of California and Ohio carried out comprehensive audits of their electronic voting machines. The outcome was far from positive. The review found that vulnerabilities were endemic throughout almost all components:

“Researchers were able to undetectably alter vote tallies, erase audit logs, and load malware onto the systems. Some of their attacks could be implemented by a single individual with no greater access than a normal poll worker; others could be done remotely.”

This is not the only instance where electronic voting machines have been compromised. In 2017, the Defcon hackers’ conference collected 25 pieces of equipment and challenged the attendees to compromise them. By the time the weekend was over, the participants had loaded malicious software onto devices, anonymously compromised vote counts and caused the devices to crash. “These were bored hackers,” writes Schneier, “with no experience with voting machines, playing around between parties one weekend.”

With regard to the best solution, Schneier wrote:

“Security researchers agree that the gold standard is a voter-verified paper ballot. The easiest (and cheapest) way to achieve this is through optical-scan voting. Voters mark paper ballots by hand; they are fed into a machine and counted automatically. That paper ballot is saved, and serves as a final, true record in a recount in case of problems. Touch-screen machines that print a paper ballot to drop in a ballot box can also work for voters with disabilities, as long as the ballot can be easily read and verified by the voter.”

The most scathing criticism for the concept comes from the Center for Democracy and Technology’s Joseph Lorenzo Hall, who calls the whole thing a “horrific idea”:

“It’s internet voting on people’s horribly secured devices, over our horrible networks, to servers that are very difficult to secure without a physical paper record of the vote.”

However, this barrage of criticism does not seem to have deterred governments from seeking to implement the technology in the near future. By now, we can talk only about the municipal, not national experiments, but given they were held in the U.S., Japan and Switzerland, it wouldn’t be an exaggeration to acknowledge a certain interest in DLT from the world’s leading democracies.

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Industrial and Commercial Bank of China To Embrace Blockchain Technology

The Chairman of the Industrial and Commercial Bank of China (ICBC) has said that the bank will focus on blockchain technology development, BiaNews reported September 1.

Founded in 1984, the ICBC is reportedly the largest bank in China with over 5,000 corporate and 530 million personal customers. In 2017, the bank focused on the construction of “intelligent banking” and “accelerated deployment in the field of financial technologies.”

The ICBC Chairman Yi Huiman reportedly said that the financial institution will focus on innovations in cloud computing, big data, artificial intelligence (AI), blockchain, and Internet of Things (IoT).

According to BiaNews, the bank will work on finding use cases for “smart banking,” which reportedly helps to improve service in the financial ecosystem and secure financial data that is shared with third parties.

While China is known for its negative stance towards digital currencies, tightening regulations on crypto since September 2017, the country has embraced the benefits of blockchain, and is actively working to develop and apply the technology in various industries.

Last week, the Beichuan Qiang Autonomous County of Sichuan Province and Beijing Sinfotek Group jointly established a new blockchain company, for “forestry economic development and industrial poverty alleviation.”

In the beginning of August, the Communist Party of China (CPC) released a primer on blockchain technology and its possible applications. By introducing the book, the CPC reportedly aims to assist government authorities in understanding the concept of distributed ledger technology (DLT) and consider the benefits and challenges of adopting blockchain on a national scale.

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PwC: Regulatory Uncertainty and Lack of User Trust Inhibit Blockchain Adoption

Regulatory uncertainty and trust are major barriers to blockchain adoption among businesses, according to a study released August 27 by ‘Big Four’ auditing firm PricewaterhouseCoopers (PwC).

A new study entitled “Blockchain is here. What’s your next move?” conducted by PwC examined 600 executives in 15 countries on their development of blockchain and opinions about its potential. The countries participating in the survey included Australia, China, Denmark, France, Germany, Hong Kong, India, Italy, Japan, Netherlands, Singapore, Sweden, the UAE, the U.K., and the U.S.

Respondents ranked regulatory uncertainty, lack of trust among users, and ability to bring a network together as the top three barriers to blockchain adoption. Blockchain leader at PwC, Steve Davies, said:

“Businesses tell us that they don’t want to be left behind by blockchain, even if at this early stage of its development, concerns on trust and regulation remain. Blockchain by its very definition should engender trust. But in reality, companies confront trust issues at nearly every turn.”

According to the study, four in five executives worldwide, which represent 84 percent of respondents, have blockchain initiatives in progress, 25 percent of which have fully live blockchain implementations or launched pilot projects.

46 percent of respondents identified the financial sector as the leader in terms of blockchain development in the next three to five years. Respondents also identified sectors with emerging potential for the same period of time as energy and utilities (14 percent), healthcare (14 percent), and industrial manufacturing (12 percent).

The U.S. and China were identified by respondents as leading markets for blockchain development, polling at 29 percent and 18 percent respectively. Respondents also predicted that within the next three to five years, the center of influence will shift to China (30 percent) from the U.S. (18 percent).

Last month, the scientific research institute under China’s Ministry of Industry and Information Technology in collaboration with Internet service provider Tencent Holdings published a report on blockchain in financial services.

According to the report, blockchain will enhance “the transparency of financial transactions, strengthen the flexibility of system operation, and automate processes, thus affecting the record keeping, accounting and payment settlement methods of financial services.”

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Banking on Blockchain: World Bank Unpacks Launch of ‘BONDI’ Bond With Australia’s CBA

It’s been close to 10 years since Bitcoin came into existence, and in that time, major financial institutions have slowly come to grips with blockchain technology and cryptocurrencies.

Some have taken to the industry quicker than others, and some have outright turned their backs on the thought of using or investing in cryptocurrencies.

However, the technology underpinning these decentralized digital currencies has been a major focal point, mainly in terms of how it can be used by traditional banking and financial institutions.

A number of big name financial companies have actively developed blockchain-based systems used for different operations. JPMorgan’s Quorum platform runs on the Ethereum blockchain and allows enterprises to process private transactions within a select group of participants.

While that project has garnered plenty of attention from mainstream media, the applications of distributed ledger technology stretches across multiple industries. Thus Morgan Stanley has leveraged blockchain technology to process transactions and backup internal data. The benefits of the technology have also been used by global auditing firms like PwC, Deloitte and KPMG.

In August, the World Bank announced that it was launching the first-ever blockchain-based bond, through the Commonwealth Bank of Australia (CBA). The project is called ‘Bondi’ (Blockchain Operated New Debt Instrument), which could also refer to the world-renowned Bondi Beach in Sydney.

The bond has now been officially issued and the $73 million deal sees two-year contracts that will settle on Aug. 28. The CBA says the deal will yield a 2.2 percent return.

The move is the latest and most significant by a global banking company, as it marks a shift toward the use and understanding of the possibilities of blockchain systems.

In an exclusive interview with Cointelegraph, the World Bank’s Paul Snaith, who is head of treasury operations, capital markets banking and payments, gave an inside look at the path taken to leverage blockchain technology at the institution, as well as the World Bank’s thoughts on cryptocurrencies:

Why blockchain, why Commonwealth Bank of Australia?

Cointelegraph: How long has this blockchain-based bond  been in development and why the Commonwealth Bank of Australia in particular was chosen to develop this platform?

Paul Snaith: We began considering that in August 2017, and after a while, we established the formal arrangement with CBA in January 2018.

There are three areas that are significant. On the first level, there is a very positive environment nurturing blockchain fintech. We think all levels of the Australian government are interested in all these technologies, and we think the regulators there are interested in what’s going on.

I think the example we used is that Australia’s stock exchange chose individual asset holdings to replace their equity settlement system in 2016. In a significant market like Australia, the equity settlement system and major market infrastructure is a powerful indication of understanding the benefits of the technology and governmental support — that’s at the governmental regulatory level.

CBA, they are innovative. We’ve worked with them for a very long time. We were aware of their prototype transactions, which they’ve been doing since January 2017. <…> We are aware that they’ve got a significant corporate commitment to innovation and that they understand this kind of technology is both a threat and opportunity in every line of business that they have. That’s why they have the innovation lab in Hong Kong, one in Sydney and one in London. We recognize them as innovative.

Lastly, the market: The World Bank has been issuing debt in Australia for a long time. We’ve been reactive to the Australian market and investors are familiar with our name. It’s a very convenient place for us to do business. Whether at the regulatory level, the innovation level or the market level where our name is used, it’s positive all round.

Cointelegraph: Was there any other country that you might have considered or any other field that you might have considered in order to move this project forward?

PS: We had quite a few preliminary conversations with various technology firms in the second half of 2017, but none quite resonated in the complete sense that I’ve given you for Australia. We use the term ‘contained’ — its the most contained-based market with positive views in regard to our partner, with innovation and regulation.

World Bank and cryptocurrencies

PS: The bank is considering developing an official line in that regard, and we do not have one at this time. But within that context, we have been having internal conversations about that.

The key thing is with cryptocurrencies that are using proof-of-work, and therefore considerable power and energy use in establishing consensus — we are primarily a development agency and we care deeply about development issues — including carbon dioxide emissions and power generation, which contributes to global warming, and so on.

We’re a little discomforted by the power usage associated with proof-of-work, for example. We are an official organization owned by over 190 countries, so AML and CFTC rules are very important for us, and there are still concerns about AML and CFTC with the use of crypto. And we think it’s important that we don’t associate with that until we have a clear framework to do so. Those are some of the reasons why we would not do that at the moment.

We did look at using a crypto token for the settlement on this bond transaction — but chose not to — primarily to de-risk the transaction a little bit to enable familiarity for all our investors with regard to the cash side of the transactions.

Getting investors to come into a significantly large transaction like this means us giving them comfort. They are certainly comforted by our name: We operate in a massive market and we are AAA rated. But there’s new technology underpinning it, so it’s important that we de-risk the transaction on the cash settlement portion.

We are very, very interested in how that side of the equation will develop and we will continue looking at that. We have no generic opposition to what I have described. We grouped these technologies both on the transfer of securities on a register and the exchange of ownership of the cash piece, so both of those problems are going to be solved in the long run, which will reform these markets and make them so much faster.

Blockchain-based bonds and the banking sector

PS: We are a big name in this market and we hope it’s going to catch attention. I think you are already aware of large players in international markets that are already doing some activities and exploration. We mentioned Australia’s stock exchange, which is fundamental — we have not seen big infrastructure projects in other areas yet, but there’s a lot of research being done in places like Singapore, Canada and elsewhere. We hope this is going to give a nudge in that direction.

Lastly, we are primarily a development organization. This transaction really helps us learn. We’ve always been innovative in the capital markets. We hope to deepen our understanding of the impact of this technology in the capital markets, and we certainly look forward to doing exploration with regard to other means of moving value. We think there is considerable promise for these technologies to help that part of the world which is presently unbanked or has little access to financial services.

We’ve got a deep interest in seeing how these technologies can be applied for the benefit of the poorest in the world, and that’s a major focus as an institution.

This interview has been edited and condensed.

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The “Fapiao” Case: How China Is Fighting Corruption With Blockchain

China has been on the verge of blockchain adoption as of late. The technology, in fact, has become part of the country’s national, president-signed program. The latest advancement in the field relates to the country’s old corruption staple — fake invoices used to embezzle corporate and state funds.

Tax authorities of the city of Shenzhen and a state-owned aerospace firm have recently turned to blockchain for immutable and transparent record-keeping, steadily putting an end to paperback corruption.

China’s complex ‘fapiao’ invoice system

To understand the nature of the latest blockchain solutions for China’s invoicing system, its general context should be explained first. Essentially, it revolves around the concept of the so-called ‘fapiaos’ (the Chinese word for an official invoice), which is a legal receipt that serves as proof of purchase for goods and services.

Fapiaos are issued by the Chinese Tax Bureau — but provided by the seller — for any goods or services purchased within the country. The Chinese government uses these invoices to track tax payments and forestall tax evasion. Individuals need fapiaos to reclaim business expenses, while companies are obliged to record their transactions on a fapiao — failing to do so violates the law.

However, the fapiao system, which was established back in the 1980s, is largely corrupt. As a New York Times article suggests, those tax invoices are openly sold on the streets, which are either original ones that weren’t claimed in the first place or high-quality replicas. Buyers use them to evade taxes and cheat employers: Essentially, a Chinese individual can obtain any kind of fake receipt — from travel receipts to value-added tax (VAT) receipts. Finding them does not necessarily require having deep connections to the black market, as promotions for counterfeit fapiaos are sent via text messages or even advertised on Taobao.com, where sellers offer special discounts and same-day delivery of those documents, as NYT article reveals.

Even the state-run agencies are involved in the grand scheme. In 2010, for instance, the National Audit Office claimed that it detected central government departments embezzling as much as $21 million through the use of fake invoices. Wang Yuhua, an assistant professor of political science at the University of Pennsylvania and the author of a study on corruption in China, told New York Times:

“Their salaries are relatively low. So they supplement a lot of it with reimbursements. This is hard to monitor.”

Tax evasion is a serious crime in China — sometimes punishable by death — but that doesn’t seem to hinder the counterfeit fapiao industry. Although state authorities boast impressive statistics on the matter (in 2009 alone, they reported detaining 5,134 people and closing 1,045 fake receipt production sites), the system is alive, and fapiaos are sold even in hotel gift shops. However, there is a technology that might finally tackle the system with some effect.

Blockchain versus corruption: Tax authorities and Tencent’s collaboration

While Bitcoin and other cryptocurrencies are often blamed for cultivating corruption — this remains to be one of the most commonly used arguments for conservative politicians and businessmen who are skeptical about the prospects of crypto — its underlying technology represents an efficient tool for fighting it. Blockchain, being an immutable, decentralized and encrypted ledger, can provide a clear record of any transaction that took place on it, any time of the day, thereby solving the problems of over-reporting, false-reporting and other true-false inconsistencies in the process of invoice circulation.

Hence, the prospect of applying blockchain to fight the fapioas might seem especially attractive for Chinese authorities. It became possible after the Shenzhen National Taxation Bureau teamed up with local internet titan Tencent — the developer of the one billion-user social media app WeChat — to fight tax evasion back in May. In the vein of their collaboration, they formed an “Intelligent Tax” innovation lab that aims to promote a technological approach to the field of tax, including the use cloud computing, artificial intelligence, blockchain and Big Data, the press release argued.

The release also explicitly outlined the first aim of the collaboration, as Li Wei, deputy director of the Shenzhen Municipal Bureau of State Taxation, claimed that Tencent’s success in the application of blockchain for invoicing would help to fight the issue of fake fapioas and “improve the invoice supervision process.”

First results: “A frictionless link between consumer scenarios and tax services”

On Aug. 10, local news platform EEO reported that China’s first digital invoice on the blockchain was issued in the city of Shenzhen, where the aforementioned collaboration was announced.

Thus, Tencent has created a pilot blockchain ecosystem for invoices designed for comprehensive use by consumers, merchants and tax authorities, according to local publication. The debut invoice was issued by a local restaurant, while several other Shenzhen businesses have already been granted access to the system, including a parking lot, auto repair shop and cafe.

Cai Yunge, the general manager of blockchain at Tencent, was quoted by EEO as saying that the new system achieves “a frictionless link between consumer scenarios and tax services.” Consumer payments are facilitated through Tencent’s WeChat, and an invoice suitable for further inspection and management by tax authorities is reportedly generated in “one click.”

Conversely, processing a traditional invoice takes multiple steps and requires a lot of time: When a consumer completes a transaction, they must wait for the merchant to generate the invoice, file it away safely, complete a returns form in the Finance Department, wait for the documents to be processed and then finally receive their returns.

As EEO explains, a blockchain-backed e-invoice only requires the customer to perform one click on the WeChat app during the checkout. After that, they just have to wait and track their reimbursement status in real time via the app. The process leaves no room for forging or over-reporting. Moreover, the technology also has the advantage of improving data privacy through encryption and of providing an overall cost-effective streamlining of processes, as multiple reviewing parties have been excluded from the process. 

More blocks on the chain: State-owned aerospace firm joins the new scheme

The next player to adapt blockchain for fighting invoices-induced corruption is the state-owned China Aerospace Science and Industry Corporation Ltd.

According to an article in the official state newspaper, People’s Daily, that was republished by the State Administration of Science, Technology and Industry for National Defence, blockchain will help innovate the supervision of invoices for tax purposes nationwide.

As the article suggests, electronic invoices are on the rise in China: In 2017, there were around 1.31 billion electronic invoices in circulation, and by 2022, the number is expected to hit 54.55 billion, as the projected average annual growth rate constitutes over 100 percent.

China Aerospace, in turn, uses electronic invoice services that are end-to-end, covering issuance, delivery, filing, inspection and reimbursement for the country’s taxpayers and authorities. It has already issued some 2.5 billion invoices to date, as per the People’s Daily article.

However, such an e-invoice system, like the traditional one, is not safe from over-reporting, false-reporting and traceability issues. Hence, China Aerospace has now created a blockchain system to allow for authenticated and “credible” invoice issuance, traceable circulation, and efficient and cost-effective oversight by tax authorities — just like in Shenzhen.

China Aerospace’s representatives are confident about fighting the fapiao corruption at its root with blockchain technology. As a company representative told People’s Daily, the technology will finally resolve the industry’s “pain points.”

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