Category: Blockchain

Crypto adoption booms in November 2017

On By mehranmuslimiblogIn Bitcoin, Blockchain, ICOLeave a comment

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The last weekend of November 2017 may prove to be an historical point on the cryptocurrrency timeline. It is too early to say just yet how important it will prove to be, as we have seen a number of spikes in investor activity with Bitcoin since it appeared. However, this felt like an important moment and I’m not the only person watching cryptocurrency and other blockchain products who felt the same way.

Jon Buck, one of the expert commentators who I follow, wrote that this period of November signposts the fact that adoption of cryptocurrencie is increasing massively. He even goes so far as to say, “trading numbers from last weekend indicate that the volume of cryptocurrency trades exceeds that of many US equities trading markets.” And, the volume of Bitcoin traded exceeded $5 billion, which was more than business on the Chicago Stock Exchange as well as other exchanges.

It has been quite a dramatic month all round with the “will they, won’t they” situation with Segwit2X, which eventually didn’t happen and then the clash between Bitcoin and Bitcoin Cash. It looked like Bitcoin was going to be the loser, but it came back with some force to inspire renewed confidence in prediction that it will reach $10,000 by the end of the year.

That alone produced a spike in Google search volumes for ‘Bitcoin’ and the exchange Coinbase added another 100,000 users. The increased adoption we are witnessing is placing Bitcoin, Ethereum and Litecoin, which also traded very strongly at the weekend to reach milestone values, even more firmly in the spotlight. Jon Buck commented that it was surprising that the other altcoins had done so well, because a bull run on Bitcoin usually takes money away from the other altcoins and makes their prices drop. Instead we are seeing them growing together and this indicates that new money is flowing into digital currency.

Finally, news just on from Japan reveals that Bitcon has just broken through the 1,000,000 Yen price point. Like the $10,000 in the U.S., this level represents the breaking of a psychological price barrier. Some even believe that the weekend’s BTC bull market started in Japan and reports state that the yen is responsible for an impressive 59.6% of all Bitcoin trades worldwide. The Japanese government exempted BTC from an 8% consumption tax on BTC trading and this has made it very popular with the Japanese people who are now keen to own Bitcoin. Watch Japan, because its behaviour is influencing the global BTC economy. Their bullishness is encouraging others and a $10,000 BTC for Christmas—or even this coming weekend — is pretty much inevitable.

 

 

 

 

Europe’s Insurance Brokers Adopt Blockchain

On By mehranmuslimiblogIn BlockchainLeave a comment

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Every day there is some news about another sector of the mainstream financial world adopting blockchain. In the last few days news has come out that 14 of Europe’s largest insurance brokers have joined forces with Deloitte to operate a blockchain system that will simplify the transfer procedure for clients who want to move to another broker during the first year of taking out a policy. This move will enable insurers to comply with the Hamon Law, which states that insurance companies must make transfers easy for their customers.

Why have they chosen the blockchain? Because it will provide the most secure storage system for customer data. It is more secure than any existing database storage system and it will also allow these insurers to comply with a new EU directive on General Data Protection Regulations (GDPR), which is coming into force in 2018. And this won’t only affect Europe. If you plan to sell anything to an EU citizen, then you must comply with the upcoming General Data Protection Regulation (GDPR) standards (even if you don’t have operations in the EU).

The blockchain can overcome the challenges company’s face in complying with a range of regulations. It can provide a means of cost-effectively producing and sharing information with regulators whilst also reducing the burden of “report exhaustion” many organisations are facing. Furthermore, two of the key properties the blockchain can help with include provenance of assets and a chain of custody for operations on assets.

Companies that don’t adequately protect consumer data face large fines, so now is the time to turn to the blockchain as this group of insurance brokers have. The blockchain platform uses ‘Proof of Process’ technology that secures user data in a shared data storage system. It will limit data release to the absolute minimum for processing transactions.

AIG, another massive insurer has already started issuing policies on the blockchain. It is offer multinational smart contract-based policies in partnership with Standard Chartered Bank and IBM. According to AIG, the insurance sector is seen to vastly benefit from the blockchain technology. It will help cut down the processes that most insurance providers usually face with paperwork and filing of all the requirements.

As Adam Perlow, Founder and CEO of Zen Protocol told Jon Buck, writing for CoinTelegraph: “If the insurer sets some money in a smart contract, and the contract pays out based on the occurrence of an event as determined by an objective actuary/oracle, then there is no need for novel incentive schemes, the insurer simply cannot avoid the payout. In the long run, as one insurance company uses smart contracts to gain the public trust, others will be forced to follow suit.”

 

Cleaning up ICOs

On By mehranmuslimiblogIn Blockchain, Fintech, ICOLeave a comment

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This year has been the year of the ICO and whilst these have brought a breath of fresh air into the marketplace of funding startups and other ventures, the speed at which ICOs have gathered momentum has raised some eyebrows and some questions about just how ‘clean’ this new Fintech mechanism is.

There are two sides to the ICO debate: one the one hand it is positive for the innovators who can raise funds through fairly simple token sales and reach a global market. The popularity is clear for all to see, because the funds raised by ICOs grew from $200 million in 2016 to $2 billion in 2017.

On the negative side, there are those who are concerned about the lack of regulatory controls over these ICOs. That is one reason the mainstream financial authorities are reluctant to accept them as a legitimate method of capitalisation. Add some shady ICOs into the mix and their concerns are understandable.

There are some other issues around ICOs that need to be resolved as well and these involve the technology, which is still in its infancy. Some argue that there are insufficient reporting standards, no exchange regulation and little or no regulation in a number of countries. The result is a clash of standards when those entities using conventional financial systems start adopting the blockchain.

Resolving ICO problems

How can these issues be resolved? There are several ways to solve the transparency problem. One is to define standards of reporting for companies using ICOs and it easy for participants to view the internal workings of the ICO via the exchange interface. This will provide investors with more detailed information about the company behind the ICO.

Second, more due diligence by investors is needed. There needs to be a proper assessment of the proposed business models to ensure they are viable. Investors should also be provided with more information about the company’s legal status.

Greater understanding of the financial markets will also help. It is widely agreed that most financial instruments will migrate to the blockchain in the not too distant future and preference should be given to projects that are using time-tested instruments and are understood by conventional investors, over experimental utility token economy models.

A clean up of the ICO marketplace is needed, because they are not going to disappear. Governments may try to ban or restrict them, but decentralisation is the way forward and rather than ignore ICOs and pretend they are some kind of digital bubble, what is required is a “clean investment system.”

However, this cannot come from central authorities, because that would betray the whole basis of the blockchain, which is decentralisation. What is required is that the companies and investors involved in the ICO market “embrace systems that will promote credibility within the ecosystem,” as CoinTelegraph suggests. Transparency and openness from the company side, and more in-depth research by investors will greatly contribute to a more legitimate and trustworthy ICO marketplace.

 

 

 

 

KPMG backs blockchain

On By mehranmuslimiblogIn BlockchainLeave a comment

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There is some very interesting news today on Coindesk: KPMG, one of the Big Four accountancy giants has issued a press release announcing that it is joining the Wall Street Blockchain Alliance (WSBA). WSBA is a non-profit trading association and adding KPMG as a corporate member will provide a boost to mainstream belief in blockchain.

Eamonn Maguire, who is the global leader of KPMG’s digital ledger services said that he believed the blockchain was maturing and that it will have a dramatic impact on the financial industry. KPMG plans to use its position in WSBA as a board director to “facilitate the growth and adoption of distributed ledger technology across all financial markets.”

Other members of WSBA include BlockEx, Blockchain Intelligence Group and Calypso amongst others. This is KPMG’s latest consortium membership; last year it launched a blockchain services suite with Microsoft to explore this industry further and it has been making statements about how the technology can impact its clients in the future.

Its blockchain service suite consists of tools designed to help banks and other financial services firms build with blockchain in a compliant way. In September 2016 when KPMG launched the service, Maguire said the suite was designed to, “include “full life-cycle support” of blockchain application development, which means the firm is offering a range of services, from business case development to systems and operations integration.”

KPMG is busy training up staff to work specifically with blockchain. It began with about 80 specialists at its New York offices, but now has doubled that number and has a formidable global team, including a data and analytics group focusing on coding and development in support of proofs of concept, prototyping and integration of blockchain capabilities.

Where does KPMG see blockchain going? Eamonn Maguire is on record saying: “Eventually, we see the blockchain as a platform for the provision of services. We will get to the point where auditors and regulators will use the blockchain to perform their analysis.”

WSBA is very pleased to have KPMG on board and for others in the blockchain industry it surely signposts a future where more corporate entities accept and promote blockchain-based activities and products.