Category: Blockchain

The case for decentralisation

On By mehranmuslimiblogIn Bitcoin, Blockchain, FintechLeave a comment

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Centralisation came in the second phase of Internet development. In the first phase of the web, Internet services were built on open protocols, but by the time of the new millennium this was rapidly changing to centralised platforms. Firms like Google and Amazon, Facebook and Apple (GAFA) designed software that outpaced the open protocols, and once smartphones arrived, the trend picked up speed.

The centralisation effect

What then happened is that startups found it much harder to grow their businesses online, because of the dominance of centralised platforms that could change the rules at any moment and take away the newcomers’ audience. Innovation has been stifled and the Internet environment is less dynamic because of it. Furthermore, centralisation has aided the rise of fake news and the numerous debates over privacy and biased algorithms.

One response to centralisation might be to impose government regulation on the largest Internet companies, but the problem here is that the web is software based, which means the networks can be redesigned to exploit market forces. So, this type of solution is not of much benefit.

Decentralisation is the answer

Cryptonetworks are a decentralised solution. They are governed by communities and have the potential to outperform centralised platforms.  The reason they are an answer is that they behave in a different way to those platforms that are centralised. For example, when a  centralised platform starts up they do everything they can to recruit users and third-parties like developers, businesses, and media organisations to give the service added value. Facebook is a good example of this. As platforms like this move up the adoption S-curve, their power over users and third parties steadily grows. Again, look at Facebook.

Cryptonetworks operate in a very different way. These decentralised networks “ use consensus mechanisms such as blockchains to maintain and update state, 2) use cryptocurrencies (coins/tokens) to incentivize consensus participants (miners/validators) and other network participants,” as Chris Dixon suggests.

Other advantages are that they also stay neutral as they grow, and use open source protocols, whereas centralised platforms use a ‘bait and switch’ approach. Users have a voice via the community that governs the decentralised network and users work together towards a common goal – community growth and strengthening the token’s value.

Ultimately, the question of whether decentralized or centralized systems will win the third era of the Internet depends on who is going to build the most compelling products. The entrepreneurs working on decentralised platforms are up against the strong cash flow of Google etc, but on the other hand they also have a growing fan base that will provide robust support.  Decentralisation also provides a more level playing field for third-party developers and businesses, and that could well be one of its biggest advantages.

 

 

 

Chinese energy firm partners with Spanish mining outfit

On By mehranmuslimiblogIn AI, Blockchain, FintechLeave a comment

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Chinese media outlet PV Tech announced this week that Risen Energy, a China-based company, is partnering with a Spanish crypto mining farm to develop its capacity to 300 megawatts (MW) of photovoltaic power.

CryptoSolarTech is building two farms using energy-efficient technology in the Tech Park of the southern city of Málaga. As CryptoSolarTech says, Spain is one of the best places in Europe to take advantage of clean and environmentally friendly solar energy, and choosing the southern region of Andalucia, which has an average of 320 days of sunshine annually, makes sense. Furthermore, the basic reason why solar energy is profitable in Spain is due to the lower cost of building materials, as well as the improved performance of electrical equipment. Investors are now betting again on solar power generation in Spain, which for a decade was in the doldrums as the country cut subsidies for the clean but expensive source of energy.

The partnership with Risen Energy comes only two months after CryptoSolar announced the new farms. According to the press report, Risen Energy “will develop and take on engineering, procurement and construction (EPC) responsibilities for the projects.”

CryptoSolarTech released its own token via an ICO  in June 2018 to assist with financing its operations, and according to ICO Bench it raised $68.2 million (€60 million) According to its ICO statement, “CryptoSolartech will use the Ethereum Blockchain for the management, income generation and start-up of the physical assets that form this project. The ultimate goal is the creation of a farm for cryptocurrency mining and a photovoltaic plant to generate electricity.”

PV Tech also revealed that “Funding for the project is secured against the launch and sale of the cryptocurrency tokens from the farms and is based on a 15-year power purchase agreement (PPA).”

This news represents a turnaround for CryptoSolarTech, which originally announced at the end of its ICO that it had concluded a power supply contract with Barcelona-based Respira Energia, however, it appears that it has chosen to partner with Risen Energy instead, or work with both, however that is not clear from current news reports.

This news is good for Spain’s blockchain ambitions, which are growing apace, and a strong indication that Spain’s solar energy market is finally gaining ground, as the cost of solar power production plunged 73 percent between 2010 and 2017, and will continue to fall according the International Renewable Energy Agency (Irena).

 

 

A blockchain revolution in Accountancy

On By mehranmuslimiblogIn BlockchainLeave a comment

Blockchain technology is heralded as the game changer in so many fields: banking, currency, logistics just being a few of them, but there is one service area that nobody has talked about so much and that is accounting.

Most people would agree that accountancy isn’t quite as ‘sexy’ as banking, hence the lack of excitement about how the blockchain may completely revolutionise a service industry that is centuries old. As much as we like to make jokes about accountants, their services are invaluable to businesses and to entrepreneurs.

History shows us that double-entry bookkeeping, the foundation of all accounting, can be traced back to medieval Jewish merchants in the Middle East, and later picked up by Genoese merchants in the 14th century. From there it became the standard method and it is relatively simple — for every intake of money in one account (credit), there must be an equivalent outflow in some other account (debit).

Overall, accountants focus on managing risk. It allowed businesses to keep track of a number of transactions at the same time, and in a range of currencies. Accountants have a specialist skill set, but as John Katsos argues, the blockchain could potentially make many in the profession unemployed.

In traditional accounting there is room for errors and fraud, as many famous cases have shown. When a mistake happens, more accountants have to be brought in to correct it, and that leaves rooms for more errors. Katsos claims that the blockchain is not double-entry bookkeeping; it is “potentially infinite bookkeeping.”

As he says, “blockchain technology can give every user in a system an automatically updated list (a “chain”) of all transactions (“blocks”) that have occurred within that system.” Plus it has validators: designated members of the system who come to “consensus” over a transaction. The only limitation is the number of users and the amount of computing power available.

There is also the potential to use permissioned blockchain to avoid fraud. In this system, people using the blockchain have been verified in advance and limits imposed on what they can do on the system, such as ‘read only’. Add in AI to detect fraud and we may have an even more robust accounting system. Is it the end of the accountancy profession? The answer is probably not, but there could be some big changes.

5 ways blockchain can save the environment

On By mehranmuslimiblogIn Blockchain, UncategorizedLeave a comment

Blockchain technology is primarily associated with cryptocurrency, smart contracts, fintech and so on, but there are ways in which this new technology can solve environmental problems, and could potentially reverse climate change.

Blockchains they are particularly interesting for environmental causes, because they make it possible to track and verify transactions and interactions without a centralised authority. We can use this to increase transparency, accountability, and efficiency of environmental projects.

Here are five examples of how it could be used.

  1. Recycling

People are often not incentivised to participate in recycling. And, as most cities are responsible for their own recycling programmes, there is no way to compare their effectiveness. A recycling program on the blockchain could encourage participation by giving a financial reward in the form of a cryptographic token in exchange for depositing recyclables like plastic containers, cans, or bottles. These schemes already exist in some parts of Europe.

  1. Energy

Traditional power grids are centralised, which can create inefficiencies in energy distribution, like having unused surplus. A peer-to-peer blockchain based energy system would reduce the need to transmit electricity over long distances, and thus reduce loss and energy storage requirements. It could also encourage companies and people to get returns from investing in renewable energy.

  1. Environmental charities

It can be difficult to track how money donated to a charity is spent. Blockchain technology can ensure that money intended to be used as a reward for conservation, or a payment to a specific cause, does not disappear into the wrong places.

  1. Carbon footprint tax

Currently, the environmental impact of each product is difficult to determine, and its carbon footprint is not factored into the price. Consumers are given little price incentive to buy products with a low carbon footprint. A blockchain-based reputation system could give each company and product a score based on the carbon footprint of the products they sell.

  1. Consumer incentives

It can be difficult for individuals or companies to see the direct effects of their actions. Therefore, the incentives for acting in an environmentally sustainable way aren’t always clear, especially in the short term. Blockchain technology can be used to track data, such as carbon footprints and incentives created that encourage people and companies to act in a sustainable way through tokenised rewards for specific actions.