On Wednesday

There has been considerable debate about how Blockchain and the tokenisation of property will unlock billions of Yen, £, €, CHF etc and enable people from across the globe to invest into property. For a number of years the likes of Deloitte has been purporting how “tokenization will fundamentally change the investment world. And those who aren’t prepared risk being left behind.”  However, what the proponents of the digitisation of real estate tend to ignore are Real Estate Investment Trusts (REITS), as the last thing a firm looking to issue tokens wishes to draw prospective investors to is that their tokens will trade at a discount to net asset value.

The laws that originally established REITS were created in the US at the 14th September 1960 Congress and have now since been copied in 35 other countries. In the US REITS are valued at $3trillion and, in 2019, distributed $69billion of income to 87 million investors.

Average discount to NAV for US REITS

Source: S&P Global Market Intelligence June 2020

Therefore, faced with these statistics, how else can Blockchain be used in the real estate sector since fractional ownership (i.e. enabling smaller investors to get access to this illiquid asset) has apparently been already widely addressed? The Foundation for International Blockchain and Real Estate Expertise (FIBREE), originally established in Holland and now with members in 30 countries, has released its second global industry report -"Blockchain Real Estate". In this report, Jan Veuger, Professor at Saxion University in Holland believes, “Blockchain is the cement between artificial intelligence and the Internet of Things [IoT]. Convergence will play a major role in the field of information and communication technology. Different technologies and market players will converge and intertwine. I see that happening between blockchain, artificial intelligence and IoT.” Certainly a good example of this can be seen in Beijing’s newest airport which connects 5G technology with AI, Blockchain and IoT. The Blockchain technology is seen as a ‘skeleton’ from which other technologies can be connected.

The FIBREE report has also identified issues such as climate change and lack of trust are essentially the challenges facing the world. It accredits Blockchain as being the ideal technology within real estate to help monitor, effectively and inexpensively, both an individual building as well as the carbon footprint of different jurisdictions. Actions taken to help minimise the impact of climate change can be verified, recorded and monitored against those targets which have been set to achieve agreed environmental goals. FIBREE has identified that the use of Blockchain technology can be applied in the following ways:
smart contract energy deployment;
smoother international climate finance transfers;
fraud-free emissions management;
better green finance law enforcement. 

The use of Blockchain-powered technology and smart contract deployment enable recording, tracking, management and sharing solutions across a wide area of energy markets and climate change-related activities. It also offers the possibility of creating permanent records and an audit of transactions for any individual property giving reliable and secure data. Subsequentially, a unique property ID for a building can be created thus offering the ability for an investor to monitor the ‘green credentials of the property’ as well as helping local authorities and governments to build a clearer picture of the environmental impact of the real estate in their environs. Insurance premiums could be lowered while, at the same time, potentially increasing the value of individual properties. Equally importantly, ‘eco-friendly’ and sustainable real estate is likely to attract a premium going forward.

Global real estate projects offering tokenised access

Source: Fibree.org

Indeed, Florian Huber, Co-Chair of FIBREE in Vienna, has identified that the majority of real estate tokenisation projects have less than €200,000 of capital, so they could hardly be described as offerings from institutional asset managers....


Bitcoin is now classed as money in Washington DC USA according to Judge Howell, 

who has said, “Money commonly means a medium of exchange, method of payment, or store of value.” Is this another step towards the US embracing cryptos?

Any organisations dealing in Cryptocurrencies in the Washington will now need a money transmitter license, so it was not all good news for those offering crypto-trading services in the country’s capital. Nor was Judge Howell’s other ruling in this particular court case, which stated that the plaintiff, Larry Dean Harmon, was not allowed to have the 160 Bitcoins that the law enforcement agency had confiscated, returned to him.

Meanwhile, Paypal, (with its 300 million users) is rumoured to be teaming up with a firm called Paxos to offer crypto services. However, it is not only Paypal which is becoming further involved with cryptocurrencies. It would appear that Mastercard is also looking to embrace cryptos as the lines between crypto and fiat become ever blurred. Mastercard has the third most Blockchain patents after IBM and the Chinese financial service giant, Alibaba, so clearly it has been carrying out considerable research into this technology. In a recent press statement regarding Mastercard offering Wirex to be granted Principal Membership License, Mastercard announced,Consumer interest and investment in digital currencies are growing, with research showing that up to 20 percent of the population of some countries are holding cryptocurrencies and an increasing number of merchants, digital players and financial institutions are exploring crypto payments”.

Most popular credit card by country

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Source: Merchant Machine.co.uk

Given the global reach of Mastercard, Visa and American Express, how long will it be before we see one of them launch their own digital currency/payments method? If not, then surely there could be some form of digital loyalty scheme to reward loyal customers, such as when Infosys highlighted the importance of loyalty schemes for financial services organisations to retain and attract customers in its report on ‘Global Trends in the cards and payments industry.’ The report included discussions on how traditional loyalty schemes have poor engagement often relying on cards as opposed to being digital (something that millennials tend not to engage with) and the fact that many existing loyalty schemes are not interoperable. Meanwhile, vendors (in particular smaller ones) find the expense of setting up loyalty programs not to be worthwhile. However, the use of Blockchain technology in a loyalty platform allows loyalty points/tokens to be earnt in one place and spent in another, simultaneously giving transparency, but not evading customers’ privacy, as data can be ‘hashed’ and thus anonymised on a Blockchain.

2 Weeks Ago

The cost of zoonotic epidemics is inordinate, with the International Monetary Fund predicting that COVID-19 alone will cause the global economy to contract by 3% in 2020, wiping out $9 trillion in productivity through 2021. Yet, even in the two decades before the present pandemic, the World Bank estimated direct costs from zoonotic diseases to be more than $100 billion.

‘Zoonotic’ diseases - 60%+ of all known human infectious diseases.

Source: Foodsource.com

COVID-19 is the first global pandemic arriving in an era when nearly the entire population can be tracked in real time, thanks to the ubiquity of smartphones and social media. Toronto-based start-up, Blue Dot (which uses an AI-enhanced surveillance system) seems to have been the first to detect COVID-19 outbreak several hours after its insurgence in Wuhan, but well ahead of the Chinese authorities and other international institutions and agencies. COVID-19 has decidedly manifested itself as a data problem and, according to the Blockchain Research Institute, the establishment of a self-sovereign identity system is integral to solving this problem. Undeniably, the question now facing non-authoritarian governments is how heavily to draw on the cache of private sector data in a bid to limit this deadly disease. 

Following the initial outbreak of COVID-19 in January, Chinese citizens had personal details leaked and published which, unsurprisingly, in turn led to personal harassment and reproach. The information circulated included names, photos, home and work addresses, mobile phone numbers and even ID numbers. Similarly, in South Korea, the government has published online the personal data of patients confirmed to have the disease. Its Health Ministry and regional governments have been disclosing not only patients’ movements, but also their personal information such as age, their admitting hospital, the approximate location of their residence and from where they are suspected to have contracted the disease. Equally, through text messages, citizens have been alerted in real-time when new cases are confirmed within the districts of their residence, with links to check the details of those known cases.

In Europe, governments and agencies have drawn location data from major mobile phone companies but, under European Union privacy rules protecting the confidentially of communication on telecom networks, location data can only be used by telecom operators when it is made anonymous, or with individuals’ consent. In view of this fact, on March 16th 

this year, the European Data Protection Board (the umbrella group of the EU’s data-protection authorities) stated that, “The public authorities should first aim for the processing of location data in an anonymous way” (i.e. processing data aggregated in a way that it cannot be reversed to personal data). Europe’s largest mobile operator, Vodafone, produced an aggregated and anonymous heat map for Italy’s Lombardy region (a global coronavirus hotspot), stating it was “willing to assist governments in developing insights based on large anonymized data” wherever it was “technically possible, and legally permissible.”  In Belgium, Proximus, Orange and Telenet all agreed to share part of their databases with a consultancy to help public authorities better fight the pandemic and in Germany, Deutsche Telekom disclosed anonymised customer mobile phone data to the Robert Koch Institute (a federal agency and research institute responsible for disease control and prevention) giving assurance that, “The tracking of individual citizens or infected people shouldn’t be possible”. However, Patrick Breyer, a privacy advocate and member of the European Parliament, concerned that the supposedly anonymous monitoring of movements within the...

In a rather bizarre twist, the US’s FBI has suffered a leak of its own data with the publication of hundreds of thousands of files. The files have been named ‘BlueLeaks’ and were published by Distributed Denial of Secrets (DDoSecrets).

DDoSecrets promotes itself as a “collective for transparency”, being described by some as an alternative to WikiLeaks. Emma Best, a journalist, reports, “It shows how law enforcement has reacted to the protests, it shows government handling of COVID, and it shows a lot of things that are entirely legal and normal and horrifying.” Part of the information leaked (assuming it was, indeed, a leak and not simply a ruse for the FBI to let the public know it is monitoring such nefarious activities) was details regarding the ‘washing’ of Cryptocurrencies via the dark web, such as Bitcoin in Panama. However, given the digital footprint that digital assets create, it seems odd that criminals would be keen to use such assets were they trying to be covert. Furthermore, it is alleged that, since 2015,  there has been a 90% reduction in the cryptos being used on the dark web. 

Historically, Blockchain, Cryptocurrencies (such as Bitcoin) and Ponzi schemes/the shadow economy were often thought to be one entity, resulting in many shying away from the technology and assets created by Blockchains for fear of being associated with such activity. However, these days more people are beginning to understand the transformational benefits Blockchain-powered solutions and Digital Assets offer. Indeed, they are being seen as an integral part of the solution in tackling criminal behaviour as they both can be used to address some of the challenges of reducing the social and economic impact of the shadow economy by bringing greater transparency to the flow of payments as well as goods and services.

3 Weeks Ago

A 2-minute video on a new ‘eco-city’ in Africa, and the creation of an ecosystem with its own cryptocurrency.

The American singer and song writer, Akon, has finally received the ‘thumbs up’ for his 2,000-acre crypto city in Senegal, Africa. Akon has been given the land, which is close to the sea and only one hour’s drive from Dakar’s new international airport, by the Senegalese President. Plans are for the city to be tax-free and enjoy tax incentives whereby encouraging others to invest. The US-based firm, KE International, has been given the initial $4 billion contract, with phase one of the city due to be completed by 2023. It will have homes, offices, a hospital, hotels, a school, a police station, a waste facility, and a solar-power plant (the intention being also to 100% power this new city by renewable energy). It will be the second of such cities in Africa, the other being Mwale’s Mwale Medical and Technology City in Kenya (also built by KE International).

Akon is, himself, also intending to launch a Digital Currency (Akoin cryptocurrency) which will be run on the Stellar Blockchain. ‘Akoin’ will be the method of payment in this new city and it is hoped that, by using Blockchain technology, there will be more transparency and less opportunity for corruption and fraud. The objective is that the cryptocurrency will be traded on exchanges and, via atomic swaps, it will also be possible to exchange Akoin on a Peer2Peer basis i.e. without the need to go via an exchange. This will enable people to swap Akoins in a similar way to which pre purchased ‘phone minutes are done currently. This Peer2Peer trading of pre-paid ‘phone minutes is common in countries such as Nigeria due to high inflation rates and a lack of traditional backing services. The intention is for Akoin to be 

available in all 54 African countries, thus making payments faster and cheaper across the continent (which could potentially rival national currencies).

This begs the question, will the likes of Google, Tencent (from China), Apple, Facebook or the global petroleum firms (such as Shell or Esso) be also looking to replicate this type of ecosystem, either by building their own eco crypto-based city physically or on-line? Many multinational firms already have customers and suppliers spread all over the world, by creating their own Digital Currency and using it as a method to allow payments to be made by its customers and suppliers. By creating a ‘digital-footprint’ and therefore offering optimum accountability in tracking and tracing transactions, these Digital Currencies could potentially help improve the speed of moving money and save costs whilst offering greater transparency and reducing the possibility of nefarious activities. This type of scenario could possibly come to fruition if we were to bear witness to what the publication Atlantic is calling, “The Coming of the Second Great Depression”. There is a very real possibility that the weakening of the US$ or the Euro, with their massive levels of debt and languid economic activity, could lead a loss in confidence with people turning to corporate currencies!
The debate continues to rage as to whether XRP is a security which, if deemed true it may have mean the US’s Security Exchange Commission (SEC) regulations had been broken. In the US, securities remain governed by both state and federal regulation including the Securities Act of 1933 and the Securities Exchange Act of 1934.

A 2 minute video looking at the challenges Ripple/XRP may face, but they still have their fans!
Given continuing confusion, the United States Supreme Court created the Howey Test in 1946 to give guidance as to whether on such matters. The Howey test relies on four criteria, all of which need to be met to be deemed a security. These include:
a transaction where money is invested
an expectation to make a profit
a common enterprise 
profits being generated by a third party.

Let us look at each criterium in turn with respect to XRP and Ripple (the company which created the XRP cryptocurrency).

A transaction where money is invested: Yes, investors paid to buy XRP - unlike a loyalty scheme, they were not given XRP tokens for free. Ripple took payment from the investors who bought XRP to pay for its on-going development. Indeed, in Ripple Labs’ quarterly reports in Q2 2019, it stated that “another 3 billion XRPs were released …..some were used to develop uses cases for XRP including Xpring (the Ripple VC initiative) and RippleNet partnerships such as MoneyGram.”  

An expectation to make a profit: Why were individual investors buying XRP, since they were unlikely to be using the services on offer from Ripple/XRP as this was an institutional (i.e. a B2B) service. It has to be assumed that they bought XRP with the purpose of making a profit. In addition, Ripple has made several announcements that, when selling XRP tokens from its trust, it is trying not to impact on the market price of XRP (presumably as Ripple does not wish for its investors’ profits to be damaged). Again, Ripple’s quarterly report states, “Ripple’s programmatic XRP sale was conducted with the goal of minimising market impact”.

A common enterprise: In essence this means will an investor share from the profits and losses of others. Ripple Labs is constantly developing and working on XRP with capital from the sale of XRP tokens and the more successful Ripple is then the more XRP is used so presumably the higher the price XRP rises. In an effort to distance Ripple from XRP, Ripple’s CEO, Brad Garlinghouse, has told Yahoo finance, “If Ripple the company shut down tomorrow, the XRP ledger would continue to operate”.

Profit being generated by a third party. The buyers of XRP have no engagement with the development of the business. They rely on Ripple Labs to develop its use cases (as stated above) with its VC ‘arm’ and with partnerships, such as MoneyGRAM.

An alternative way to look at whether a Cryptocurrency (Crypto) qualifies as a security or not is to look at what happens with the proceeds from the Crypto. Take the simple example of an enterprise wishing to operate a theatre issuing a Crypto to help fund its endeavours. Assuming that there is already an existing theatre and a Crypto is issued to current and new theatre goers to have a selection of ‘perks’, such as entitling them to have access to advance booking, discounts on merchandise, free pop-corn, premium seating etc This...

4 Weeks Ago

CurioInvest is looking to offer a range of digital assets backed by classic cars with the intention to actually tokenise 500 cars. Although CurioInvest’s team is based in Zug, Switzerland, it has received approval from Lichtenstein to issue a security token CT1 which will be backed by a 2015 Ferrari F12 TDF supercar. During the first five years, CurioInvest will accept a bid for the Ferrari if the price is more than 20% above the $1.023 million purchase price. If there has been no bid, then the car will be auctioned off and the proceeds paid to the original investors. CurioInvest will be responsible for insuring and storing the car in a highly secure location somewhere in Stuttgart, Germany, and it will earn 20% of any of the profit over the initial purchase price. The tokens that the digitised Ferrari represents will be listed on MERJ, a digital assets exchange which is based in the Seychelles.

A study, with data from 29,002 global auction rooms from 1998 to 2017, was used to ascertain the classic car Sharpe ratio (a measurement that takes into account the volatility of returns i.e. how much the price rises and falls, as well as growth of an asset). Regarding the gross annual Sharpe ratio of classic cars versus those of other asset classes over the sample period it was found that:

  • classic cars, overall, have a higher Sharpe ratio (0.35) than the S&P 500 Index (0.21), the MSCI World Index (0.16) and art (0.07). However, adding dividends would boost Sharpe ratios for the equity indexes to round about 0.30;

  • classic cars have a lower Sharpe ratio than global government bonds (0.40) and gold (0.40);

  • correlations between classic car returns and those of other asset classes are generally low, indicating the diversification benefits within a portfolio of other classes.

The study found that the value of classic cars bought and sold at these 29,000+ auctions was $1.3 billion p.a. Although private sales could boost this figure substantially, the global value of classic cars is estimated to be $130billion.

In a survey carried out in the USA by Bank of America it was found that, among its High Net Worth (HNW) clients, there was an average asset allocation to assets of 55% stocks, 21% bonds, 15% cash, 6% alternatives  and 4% other. These conclusions imply that the potential demand for alternative and other types of investments, such as digitised exposure to ‘non-traditional’ assets, is very real. So, how long before we see a variety of digital assets giving exposure to assets which have, to date, not been available? Interestingly, when the same cohort of HNW clients were asked, “What would make life better?” - more time and more friends and family were by far the most desired, as opposed to more trinkets i.e. more ‘stuff’!

What would make life better?

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Source: Financial Samurai.Com

Akin to classic cars, there is a range of other assets which are rare, illiquid and require specialist knowledge to select, store and find in the first place. So, what other assets could be targeted in order to be digitised? Well, Knight Frank (a UK-based estate agent/realtor) has been tracking the performance of luxury goods for a while, and some of the assets which have performed well over the last ten years have been rare whiskey, coins, wine, art and cars.

Knight Frank’s performance of luxury goods

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Source Knight Frank.com

There have been digitised/token offerings on most of these but, to be fair, although having raised relatively little capital, such digital assets offers illustrate the flexibility of being able to offer a digitised version of almost any asset class. Digitising these types of assets makes them more affordable for smaller investors, thus bring greater transparency and liquidity. Were we to see a fall in traditional assets (such as equities bonds or property) as a result of the slowdown in economic activity triggered by the Covid-19 pandemic, there could certainly be a propulsion of interest in these alternative assets.
Seemingly, Covd-19 has given added stimulus to Central Bank Digital Currencies (CBDCs) which are ‘moving up the agenda’ for quite a number of countries (although no doubt the fact that China has now launched its own CBDC has not gone unnoticed). The risk of spreading Covid-19 has encouraged many merchants not to accept cash, and many shoppers have equally turned to going on-line for their purchases. Subsequently, this has resulted in the dramatic decline of ‘physical’ cash being used and made people consider that maybe a Digital currency could, indeed, be feasible.

In September 2019, European Central Bank (ECB) board member, Benoit Coeure, was reported as saying, “The bank should ‘step up’ its thinking on a public digital currency”. This was then followed up in November 2019 when the bank, itself, added, “The ECB and other EU central banks could usefully explore the opportunities as well as challenges of issuing central bank digital currencies including by considering concrete steps to this effect.” One suspects that this statement was, in no small part, fuelled by concerns regarding the threat of a private organisation, such as Facebook, which could thus undermine the influence and control that the ECB has over Europe.

There would now appear to be several European countries jostling to launch some kind of Digital Euro. Indeed, in Germany, the Association of German Banks (a group of 200 private German banks) has been asking for regulators to issue a Digital Euro. Holland and France have both been asking for a while to see a Digital Euro and now the Italian Banking Association (ABI), comprised of 700 Italian banking institutions, has also urged for the process of introducing a Digital Euro to be sped up. A statement from the the ABI reported that, “A programmable digital money represents an innovation able to profoundly modify the way we conceive currency and exchange. This transformation can potentially deliver a great added value, in particular in terms of efficiency for both operational and support process. This is the reason why is so important to dedicate attention and energies to develop, quickly and in collaboration with the entire ecosystem, new instruments able to primarily support the development of the Euro area”.

It is not singular to Europe that Digital Currencies are being taken more seriously. According to the Bank of International Settlement (BIS) there are 44 central banks seriously contemplating CBDCs. As the World Economic Forum stated, “CBDC may be issued for general use (“retail” CBDC) for peer-to-peer payments and payments from consumers to merchants; or for use by commercial banks and clearing houses (“wholesale” CBDC) for more efficient interbank payments that occur outside traditional correspondent banking and other payment systems”. Indeed, it has just been announced that in Thailand the authorities are proceeding with the launch of a CBDC. This announcement follows on from both the Bank of Thailand and Hong Kong’s central banks revealing in January 2020 that they had moved a step closer to issuing digital currencies that could be used to make payments between the two countries far more efficient than at present.

Siam Commercial Bank (SCB) believes it needs to become digitally sophisticated in order to meet the potential challenges from multinational organisations such as Alibaba, Amazon or Samsung Electronics. SCB has also signed an agreement with the Bank of Thailand. SCB has been working with Digital Ventures (DV), a leading fintech venture capital firm, since 29018 using DV’s Blockchain-powered platform for to speed up procurement, invoice, and payment processes for companies. The platform reduces procurement processing time by 50% and reduces cost per transaction by 70%....

A Month Ago

One wonders what planet some people inhabit, as the above expression is not uncommon. Even in financial services companies and when talking to MPs and government officials there still is a perception that Blockchain technology is frivolous at best and in reality, only for ‘geeks and cyber-punks’. However, this could not be further from the truth as increasingly multinational corporations and governments are seen to be turning to Blockchain technology as a means to solve, in many cases, what have become intractable challenges.

Indeed, many of the products that we consume of a daily basis are manufactured by the world’s leading ‘Fast Moving Consumer Goods’ companies (FMCGs) These include Pepsi, Nestle, Unilever and SC Johnson i.e. firms that sell packaged foods, drinks, toiletries, over-the-counter drugs, cleaning products and other consumables. Without doubt, the types of products we all use on a day to day basis are embracing Blockchain technology. Arguably, given the rise in own label products from retailers/supermarkets and the competition they pose, FMCG firms need to operate as efficiently as possible to keep their prices competitive as well as maintaining their brand appeal. Own label products are often cheaper, but a report from IBM found that consumers will pay more for a product if they have details regarding its provenance. Unilever’s Marmite

Source: Digital Bytes

One of the most enduring aspects of Blockchain technology is its ability to engender trust, in offering greater transparency. This is paramount for an FMCG endeavouring to prove both the sustainability of its operations and the environmental credentials of its products. However, it is not simply convincing consumers that a multinational corporation is acting in a responsible manner, whereby encouraging the purchasing of its products, but legislation is now also playing a role particularly with the growing concern over climate change. Indeed, 93% of the world’s 250 biggest companies submit reports on sustainability. Notably, those FMCG companies which pride themselves as leaders in ‘sustainable supply chain management’ are Coca Cola, Nestle, L’Óreal, Proctor and Gamble, Unilever and Nike. Blockchain technology allows for greater transparency (and therefore trust) in what is manufactured and from where. As a result, it demystifies complex global supply chains, whereby giving governments and consumers alike greater clarity about both what they purchase, and the sustainability of these products.

A prime example of how an FMCG is embracing Blockchain technology is Unilever, which has recently announced it wishes to have net-zero carbon emissions by 2039 and is investing €1 billion in a Climate and Nature Fund over the next 10 years. The aim of this initiative is to reduce carbon emissions and deforestation by using Blockchain technology - 11 years ahead of the Paris International Climate Agreement of 2015, which looked to limit global warming to 1.5° degrees. Unilever has reported that, “The company said it will use satellite monitoring, geolocation tracking and blockchain among other digital technologies to increase traceability and transparency within its supply chain”.

It is not only bringing greater transparency to improve supply chains and help the environment that Blockchain technology is being used. FMCG firms are massive advertisers, such as Proctor and Gamble, which, itself, spent $3.4 billion in adverts last year and which is using Blockchain technology and smart contracts to monitor the effectiveness of its advertising. Indeed, Pepsi saw almost a 30% increase in efficiency during trial advertising harnessing Blockchain technology.

In the same way that people do not really dwell on the technology powering their mobile phones, or how a search engine such as Google or the social networking firms such as Twitter and Facebook work,...

Lotteries have been around since the Romans but the first national lottery, held in England on 11th January 1569, was to help pay to fortify English harbours during the reign of Elizabeth I. However, the British possibly took the idea from the ever-inventive Dutch who had, in 1434, organised a lottery (again to help pay for fortifications) on this occasion for the town of Bruges.

The word lottery means, chance/fate and while lotteries are not new, they haven’t changed that much since their invention. Certainly, in recent years many have struggled to command attention as players are increasingly being attracted towards on-line betting and gambling sites. However, lotteries are still popular, and growing. According to Marketing Insight Reports, the global lottery market stands at $302 billion and is expected to increase to $380 billion by the end of 2025. Some of the bigger Lotteries include China Welfare Lottery, China Sports Lottery, Hong Kong Jockey Club, Francaise des Jeux and Camelot (which runs the UK lottery).

Some of the disadvantages for many of the lotteries include:

lack of transparency in how the lottery provider actually operates;
the need to physically buy a paper-based ticket tin order to participate (there have been many examples of tickets being lost, washed or even stolen);
being restricted to national boarders, which results in lower prize money as fewer people participate.

Blockchain technology offers the ability to restore and maintain trust and transparency, not only in terms of how the lottery is run i.e. no potential manipulation of who wins, but also where the money is spent, by whom and on what. Blockchain technology also enables lotteries to be run digitally, thus removing the need for paper tickets (which can get lost) and the various other intermediaries. Another advantage of being digital is that lotteries using Blockchain technology can also be ‘boarder-less’ i.e. cross-national boundaries, so allowing citizens from more than one country to participate resulting in bigger prize money and hence encouraging more people to participate.

Blockchain technology additionally enables the use of Smart Contracts, enabling players to be assured of where the money spent on their lottery ticket is going. Furthermore, it can guarantee the monies are appropriately spent according the transaction, since all payments are automated. Blockchain-powered lottery platforms afford higher levels of security by removing the need to handle cash which, itself, incurs costly transaction fees being levied by banks. It also allows faster payments in Digital currencies, thus creating more flexibility and reaching people without any geographical restrictions.

Listed below are a variety of firms offering Blockchain-powered lotteries:

Bit4Win is a new Blockchain lottery which has a referral proposition, offering unlimited rewards to people who make referrals via its “win-chains”. This allows those customers referring BitWin24 to earn a percentage of all prizes acquired by their ‘first-tier’ direct referrals (as well as anyone down the line) which can result in massive rewards accumulated passively. The purpose of this mechanism is to incentivise people to refer the lottery, which will overcome an obstacle that Blockchain projects have had previously.

Nation Lottery, based in the Nordics, uses Ethereum Blockchain technology and Artificial Intelligence and allows family members, friends and/or work colleagues to be part of a ‘syndicate’.

Fire Lotto also uses the Ethereum Blockchain along with smart contracts to automate the platform as much as possible. Additionally, it allows players to buy lottery tickets with crypto currencies and fiat.

After 500 years, it would appear that lotteries are to be party to...

Blockchain technology offers the potential to save the music industry billions by revolutionising the rights and royalties process thus ensuring artists, writers, publishers and everyone in the music industry value chain is paid appropriately. It also offers the promise to remove many of the structural inefficiencies, layers of intermediaries and third parties that currently pervade the music industry by all taking a fee along the way. Embracing Blockchain across the music industry would enable the management of rights and royalties to be simplified by using a single database accessible for all relevant parties, regardless of territory and rights ownership specifics thereupon ensuring everyone is paid the correct amount in a more-timely fashion. It would also bring far greater transparency and trust, therefore facilitating the integration of the back-office systems by making them more digital, much in the same way that music today is. Indeed, it was way back in 2018 that downloads were accounting for over 75% of the income generated by music, with listeners choosing digital streaming as opposed to buying records and CDs.

Blockchain technology can offer the opportunity for those writing the music and lyrics to be better rewarded for their talents. The rise in number of people streaming music has been immense but this has, in effect, also intermediated fans and performers. Blockchain technology enables a more direct relationship between fans and performers in a peer-to- peer manner, without any intermediaries. An example of this is OPUS. OPUS is a Blockchain-powered music-streaming platform allowing listeners to stream music as well as distributing royalties to performers, both by using its own cryptocurrency token. With the Blockchain technology OPUS tracks and records the history of what has been listened to and, hence, is able to make streaming payments to performers in real-time. The OPUS whitepaper states, “Like Spotify users, Opus users are able to listen to new music releases, with each play count generating a small amount of revenue for the artist. Opus aims to address the lack of transparency and lengthy time delays in the current royalty reporting process. Opus pays artists between 97 and 99% of the total revenue generated, with the remaining 1-3% going towards operational costs.”

In 2020, conclusions from a Digital Music study commissioned by OPUS included:
musicians should be empowered by the transition of royalty payments into Blockchain for the music industry and;
there is a potential for growth in Blockchain in the digital music streaming services market.
It is not only OPUS, but other firms also using Blockchain technology are active in the music industry including Ujo, Madiachain, eMusic, Music Life. Indeed, in an article from builtin.com, seventeen firms using Blockchain technology are identified as to be disrupting the music industry.

The ability for new independent performers to have a closer/more direct relationship with their fans is indeed another key advantage that Blockchain-powered platforms offer. A new company launching in June 2020 is ANote Music, a firm which is creating, in effect, a ‘stock exchange’ for music royalties thus offering writers access to an alternative source of funding. Investors have the ability to access an alternative high-income asset class in the form of royalties, previously uncorrelated with the traditional equity and bond markets. By creating a music exchange, it is hoped that this will improve the liquidity and, therefore, trading of royalties. Publishers, record labels and artists will be able to sell some or all of their music rights. In simplistic terms, ANote Music introduces a new scheme of financing to sellers and to investors, new investment and diversification opportunities.

However, parallel to this, it is not only the music industry being ‘shaken up’ by Blockchain technology. Listeners are also being impacted, with firms such as Viberate (which claims to have 450,000 artists) incentivising listeners by paying them ‘VIB tokens’ for contributing to its database of artists, venues and events.
Equally, an interesting company (which has its roots in the London punk rock scene from the 1970’s) is FileProtected. Now based in LA in California, the founder, Andy Rosen, has developed a Blockchain-powered platform designed to protect the rights of artists and writers. Having...

There had been reports of WhatsApp being launched in India, back in May 2019, as Facebook looked to target the Indian remittance market (money sent back to India by workers based overseas) and estimated to be valued by the World Bank at $79 billion.

However, this week we have the announcement that Facebook’s WhatsApp has launched a payments platform in Brazil, so is this the dawn of Facebook and Libra’s global ambitions? The citizens of Brazil will now be able to use WhatsApp’s ‘chat app’ to pay for goods and services from companies in Brazil using fingerprint ID or a six-figure pin as part of their security arrangements when making purchases.

But, the question is, why select Brazil? According to 99firms.com, WhatsApp has 300 million  daily users (approximately 20% of Facebook’s global 1.5 billion people who log on to Facebook every day) and, interestingly, Brazil is the largest user of WhatApp in the world! Brazil, itself, accounts for 19.91% of WhatsApp users with India accounting for just 7.61% and in third place, Turkey at 5.62%. Subject to the reception from the  regulators in India and Turkey these countries may well be next on Facebook’s campaign to advance Digital payments.

WhatsApp was based on a set of very simple principles, “No ads! No games! No gimmicks!” . The founders, Brian Acton and Jan Koum, setting up WhatsApp Inc. in California in February, 2009 (having both left Yahoo and applying to work at Facebook, only to be rejected!) WhatsApp was launched on the App iPhone store in November 2009, and its unique selling point (USP) was that one could make calls and message, even internationally, for free. In February 2011, with 200 million users, WhatsApp was valued at $1.5 billion and then along came Google who tried to acquire WhatsApp for $10 billion only to be rejected as WhatsApp accepted Facebook’s $14billion offer! In 2018, WhatsApp, as an app, was ranked first in the social networking category in Apple’s App Store. The messaging app took the top spot with 11.58 million downloads during July of that year, while Facebook’s Messenger had only 9.62 million downloads in the same month.

All well and good, but what benefits and advantages does it deliver? In short, with a global reach across 180 countries,WhatsApp offers Facebook, in conjunction with Libra, the distribution many banks would ‘die for’. It possibly threatens to undermine governments in different countries as there is the potential of people migrating to use WhatsApp (as opposed to traditional currencies), particularly as WhatsApp and Facebook have been focusing more and more in businesses.

WhatsApp for Business API enables businesses to integrate the WhatsApp API with their own, providing a customer-friendly experience and allowing companies to message customers on WhatsApp automatically. Other features include, making it possible for banks to message confirmations of purchases and event promotors to confirm ticket booking applications securely through WhatsApp, in almost real time. This has proved extremely popular and there are now over 3 million business already registered on WhatsApp’s platform and growing. Subsequently, these firms could be offered incentives by Facebook to process transactions using a new Libra Digital Currency. Indeed some global corporations of sufficient size, could even have their own digital currency created and managed by Libra on a white label basis as discussed in previous editions of Digital Bytes.

The global remittance market and the revenue generated

Source: Save on Send analysis.com

Added to this, a further reason that WhatsApp payments will prove popular is the global remittance market is massive and is expected to continue growing. Therefore, whilst the cost of forwarding money is undoubtedly declining, a Digital Currency ought to be able to undercut the traditional money-transfer providers. Were it to...

The French financial market regulator, Autorité des Marchés Financiers (AMF), has given the ‘green light’ to a new Initial Coin Offer (ICO. This will be the second initial coin offering that is fully regulated under the ‘ICO Visa’ scheme which AMF set up in 2019, whereby helping firms to raise capital. It is to be used by companies to promote an ICO to investors, provided the company are not creating a security i.e. that the token genuinely has the characteristics of being used as a utility.

The ICO Visa falls under the French PACTE law, which has changed the legislation for foreign investments in France, enabling French authorities to sanction or preclude different investments as they deem appropriate. In February 2020, the first new-style ICO to be approved by AMF was launched to ‘French ICO’, a platform enabling businesses to issue these new-style and more regulated ICOs raising capital from both the public and institutional investors. However, the French regulator will also require cryptocurrency exchanges, as well as custodian providers, to be regulated. i.e. all those parties that are involved will need AMF approval.

Alongside this, the latest ICO being launched under the ICO Visa initiative is for a company called WPO (a renewable energy firm established in 2008 and currently running projects in 10 different countries). WPO has created Green Tokens (GTK) using the Ethereum Blockchain, with these GKT tokens due to start trading on 1st Dec, 2020 on a French Crypto exchange called SAVITAR, based in Paris.

WPO is looking to raise €1.5 million to €10 million, with investors being able to participate for as little as €100, buying each GKT for €95/each. The offer starts 8th September, 2020, although people are able to register their interest now. Jerome Souter, a partner at CMS in Paris, is a fan of properly structured ICOs and has recently said, “ WPO’s ICO is one of the first real interesting ICOs I have seen on the French market as it is a true ICO (and not an STO) launched by an existing and successful company which aims to change its business model relying on the blockchain. Yes, I do believe that it Is a new way to raise funds and, I would think that other serious players could rely on it”.

Source: WPO.eu

Interestingly, a UK-based platform has been working with a firm in the USA to issue a SEC- approved ICO. Although negotiations have taken a while, sources close to this project are confident that the SEC will give the ‘thumbs up’ before the end of 2020. This demonstrates that the SEC is not totally against ICOs, despite it forcing yet another ICO to return $25+million to investors as recently as the end of May 2020.

In the UK, a consortium has also been established to enable existing, not start-ups, to issue EquiBonds (a hybrid between an equity and a bond).The intention is to build on the success of crowdfunding thereby creating an instrument that would have a lighter regulatory touch than a security, but could be traded on a secondary, ideally digital, market 24/7. 

Subsequently, companies may well start to use these more structured and regulated methods of raising capital. Who knows, this may breathe life back into the crypto market and thus help realise the ambitions of some who say ICOs have created a new class of asset that potentially are not correlated with many existing asset classes. In any event, given the dire outlook for the economies in Europe and USA, any way to help raise capital for SMEs...

In a fascinating report looking at ‘smart cities’ and buildings, Dr Tuomo Kuosa PhD (who is based in Finland) identified seven key themes which will need to be considered by planners and the real estate market:

demographic changes - what are future urban populations likely to be?
construction and urbanisation - what kind of city structures will be inhabited?
work and income - how will people work and earn their living?
services - what kind of public services and private service providers will be utilised?
leisure and social interaction - how will citizens spend time and what will they value?
transportation - how will people move around in the urban environment?
security and safety – what will be different in terms of safety and security compared to the urban environments of today?

Smart cities of the future are likely to be even more reliant on information and data in order to enable greater automation and robotics. Subsequently, this will no doubt potentially lead to an increasing use of technologies such as Blockchain, AI, IoT, self-driving cars, additive manufacturing (as manufacturing ‘on-shores’- returning to the countries in which the products are consumed). It has been argued that ‘data will be like oil’  for our economies going forward. If this is the case, and more value is to be accredited to data, it will mean that the data itself becomes more valuable and needed (potentially by more parties). This, is turn, offers an opportunity to ‘package’ and monetise data and thereby trade the data in a similar way that historically other assets, such as equities and bonds, have been traded.  

A few years ago, people were proclaiming, “Yes, happy to buy books on-line, but not clothes” as they preferred to go to a shop, try on clothes, see different designs, let alone buy food. “Surely it is better to look and inspect the food, rather than buy on-line?” How wrong this has proved to be? Significantly, with office workers globally now having worked from home for several months due to Covid-19, will these same employees of the future really need to be located in an office building? Responses to this question are likely to depend on one’s own personal circumstances, such as type of job, age and industry sector. For example, a younger, single people are most likely to regard a city as an exciting place where they can socialise, eat and drink, network and enjoy the culture on offer. Conversely, an individual with a young family would potentially place more importance on access to open spaces, less congestion and the need for a larger home/garden for a growing family. It is interesting to observe not only how quickly people have embraced remote working (and, with it, conference calls etc) but also how quickly companies and employees have adjusted to it. Parallel to this, there are the added environmental benefits of less pollution and the saving of time as a result of not being able to commute into the office. The ‘challenges’ of raising a family whilst working from home has been shown to be a viable option.

These smart cities of tomorrow are going to be able to unlock the value of waste and those no longer required materials by using Blockchain technology. After all, it...

The ability to track and trace the origins of the food on your plate has some tantalising attractions for farmers’ shops and, most importantly, consumers. This gives some explanation as to why there are so many organisations now involved in using Blockchain-powered platforms. Blockchain allows for provenance of food items so retailers and shoppers have clarity over how, where and when produce has been grown/caught, the conditions in which it has subsequently been stored, and even the potential environmental impact it has and the sustainability of its production.

Many of the companies involved in offering greater transparency over their food supply chains are using a combination of technologies such as Artificial Intelligence (AI), Blockchain and Internet of Things (IoT). The information collected and stored by these technologies are then often accessible on mobile devices, including cell phones by using Quick Response (QR) codes. This enables various parties (along often complex supply chains which can in some cases span the world) to track and trace the journey of the goods  - how they are being transported, where they have come from, the temperature conditions in which they have been stored under, even the details of the trawler on which they were caught or the fields they were grown in.
Almost five years ago, in November 2015, a white paper (business proposition) was released by a company called Provenance, stating that, “Provenance enables every physical product to come with a digital ‘passport’ that proves authenticity (Is this product what it claims to be?) and origin (Where does this product come from?), creating an auditable record of the journey behind all physical products.” Provenance went on to quote Marc Andreessen who, in 1993, invented the first internet browser, Mosaic, and when talking about it, said, “Blockchain technology changes everything. The practical consequence […is…] for the first time, a way for one Internet user to transfer a unique piece of digital property to another Internet user, such that the transfer is guaranteed to be safe and secure, everyone knows that the transfer has taken place, and nobody can challenge the legitimacy of the transfer. The consequences of this breakthrough are hard to overstate”. 

There are many other examples of different organisations using Blockchain-powered platforms to track and trace various food products, which include:

Albert Heijn – the Dutch supermarket is now able to give customers the ability to trace and trace were their oranges were grown. It is planning to be able to offer provenance of all its produce by 2025;

Agriledger – working with the World Bank, this company is helping to increase farmers’ income by 2 to 3-fold, according to a report from the Said Business School at the University of Oxford (which grow mangos and avocados in Haiti);

Bumble Bee tuna - is using Multichain, running on the SAP cloud platform , to track and trace yellowfin tuna from the time it is caught to the moment it arrives on the shelves in a shop;

California Giant Berry farm - one of the USA’s biggest berry farmers is using the IBM Food Trust blockchain for its berry supply chains in order to give customers access to the provenance details and product tracking of its berries;

Farmers Hen House - with a QR code printed on each egg, this enables consumers to know form which poultry farm an egg was produced;

Starbucks - is working with Microsoft to give Starbucks a digital traceability of its products and also to support its sustainability strategy.

Meanwhile, IBM has commissioned a report, polling nearly 19,000 consumers from 28 countries across range of age groups,...

For several years Blockchain technology has promised to help foster the greater use of renewable energy sources due to the fact it is able to trace the production of green sustainable energy. This will prove to be vital, whether it be for peer 2 peer electricity trading in local communities (i.e. selling surplus power generated from your solar panels or wind turbines to your neighbour) or to allow companies to be carbon neutral by specific dates, examples of this being Amazon by 2040, Microsoft by 2030 or Heathrow airport by 2030 (excluding emissions from the planes that land). Increasingly, consumers of electricity are looking for green energy suppliers and in the UK the six major electricity suppliers all have green energy tariffs.

There are a variety of companies which have been developing Blockchain -powered platforms in various forms to enable the tracking of carbon certificates, peer 2 peer energy trading, diverting excess power to electric vehicles batteries to recharge them and much more. Here is a selection of some of the current initiatives:

Nori is a firm that uses Blockchain technology to issue certificates for tracking and tracing carbon. It has developed a platform that enables farmers to be paid to, in effect to, ‘lock up’ carbon in their fields and so help offset global warming.

Vodaphone has announced that it has teamed-up with Energy Web, which is trying to decarbonise the electricity grid by using Blockchain, AI and IoT technologies to enable heat pumps, solar panels and wind turbines (i.e. renewable and usually distributed energy production) to be integrated into power grids. In simplistic terms, Vodaphone and Energy Web’s platform is very similar to how mobile phones operate with their individual identities. Therefore, each renewable energy producer can be identified, thus enabling the grid either to instruct each power supplier as to whether energy needs to be supplied to the grid, to stop producing energy or to store the power in a battery.

Equigy is using electric vehicle car batteries to store excess energy using Blockchain technology helping to ‘smooth out’ the supply of energy to electricity grids. The aim is to encourage investment into more renewable sources of energy, thus helping the environment.

Electron, based in Orkney, north of Scotland, has historically produced more electricity from its windy shores than it consumes. By using Blockchain technology, surplus energy is tracked and then diverted to batteries for storage and to also charge electric car batteries.

Power Ledger, in Australia, has teamed-up with a property developer in Perth as part of Power Ledger’s goal to introduce a solar energy trading platform for users in Western Australia. 

The cost of renewable energy continues to decline

A close up of a map

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Source: International Renewable Energy Association

Encouragingly, renewable energy has entered a virtuous cycle of falling costs, increasing deployment and accelerated technological progress. The cost of solar power has fallen by approximately 80+% since the end of 2009, while wind turbine prices have reduced by up to 40%., all helped by economies of scale and improved efficiencies. Clearly, with the global ever- increasing focus on climate change and the need for more sustainable green energy, organisations have now transitioned from not just discussions about what might be, but to implementing real solutions in the energy sector thus helping to promote wider use of renewable energy suppliers. Blockchain-powered platforms are playing a vital role in this increased adoption of renewable energy solutions as they track and trace supplies for both energy producers and users alike.
Guide to Blockchain technology for those looking at supply chains The World Economic Forum (WEF) has published a comprehensive Tool Kit which it describes as “designed to help with the deployment journey, whether your organisation is seeking to gain increased efficiency, greater trust with counterparties, or other potential benefits offered by blockchain technology. Your organisation can use the toolkit to support more responsible blockchain deployments, de-risk early adoption, and ensure careful consideration of unintended consequences.”

The WEF has drawn on feedback from over 100 organisations experience and feedback that they have gained from implementing Blockchain technology. The Tool Kit draws from a wide cohort:

  • 50 countries 

  • 80 companies – covering the private and public sectors

  • 20 governments

  • 40 Blockchain projects

The Tool Kit is set out in 14 modules each including key topics as well as tools and resources. It also has a helpful ‘questions and answers’ section - Navigate Key Questions.

A close up of a logo

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Source: World Economic Forum Tool Kit

There is a new book from the Blockchain Research Institute called Supply Chain Revolution which, “identifies what leaders should be doing now to prepare their organizations for the inevitable decentralized future. Enterprise executives and entrepreneurs alike will find ideas and opportunities to discuss with their stakeholders and decide how best to participate in the blockchain revolution.

The world’s top experts show how blockchain—in combination with other innovations such as additive manufacturing, artificial intelligence, and the Internet of Things—can address longstanding problems that make the business of getting goods to customers so slow and expensive”.

Given the hugely complex supply chains created by globalisation and the number of parties involved to ship goods around the world, it is no surprise that we have seen the large technology companies targeting supply chains as ideal candidates for the use of Blockchain-powered platforms. Indeed, according to Tradelens - IMB’s venture with the shipping giant Maersk – it states; “Think about the last thing you bought online as a consumer, and the single, direct line of sight into its journey to your front door. The same can’t be said for your shipments. Each could be connected to as many as 30 independent parties and 100 people, generating up to 200 exchanges of information. Multiply that by the hundreds or thousands of shipments you’re responsible for, and the complexity and risk you deal with regularly is staggering”.

Oracle, is another behemoth technology company targeting supply chains, having partnered with CargoSmart which, itself, has the following ports and shipping firms on board:

It is not just large multinational corporations that are conscious of the inefficiency within supply chains. According to Stratis,  which is active in developing solutions for supply chains using Blockchain technology, “ A new study has found that the implementation of blockchain technology in supply chains could save businesses in Western Europe $450 billion in logistics-related costs. The report found that 60% of companies overpay their supply chain vendors and 70% have ‘visibility gaps’ between the initial supplier and internal clients’ systems.

In the food industry alone, a Juniper Research report revealed that blockchain will save $31 billion by 2024 through the streamlining of supply chains, efficient food recall processes and ‘simpler’ regulatory compliance.”

Whilst there is increasing debate regarding globalisation slowing (see above Video Byte above), it is unlikely to totally disappear in the short term as, subsequently, in order to improve the efficiency of supply chains (especially on a trans-national basis) this aligns with stakeholders’ interests.

2 Months Ago

The Covid-19 pandemic has generated enormous uncertainty around the world. Company boards are re-assessing the risk of being exposed to the current complex supply chains and individual countries, including those in Europe and the USA. To date, there has been concern that, for example, up to 97% of antibiotics are sourced from China (as highlighted by the Council for Foreign Relations).

A 2 min video considers the potential for the end of ‘hyper globalisation’

The complex nature of global supply chains has encouraged companies to turn to technologies such as Blockchain- powered platforms, such as Tradelens (backed by the shipping giant Maersk and IBM) or Oracle’s CargoSmart, in order to improve efficiency, cut 

costs and fraud and therefore hopefully lead to more transparency and trust. The era of hyper-globalisation (1990–2008) was where we saw production being moved to low wage countries, thus helping to drive down inflation. The fall of the iron curtain, China joining the World Trade Organisation and adoption of ‘containerisation’ (which now accounts for 60% of the value of seaborne trade) all fuelled the race to globalisation. The Centre for Economic Policy Research (CEPR), which is a network of universities and over 1,300 researchers, claims firms are reassessing business models which rely on global supply chains. These business models are also being changed due to increased use of robots and additive manufacturing, which are bringing factories and jobs back to more developed countries. 

The era of hyper-globalisation, according to the CEPR, came to an abrupt end in the Global Crisis of 2008/2009, subsequently due to a wave of uncertainty that had been triggered in the world economy. Between 2008 and the euro sovereign area debt crisis in 2012, Bretton Woods had a huge impact on the post-World War 2 global economy in encouraging global trade, as did the IMF and the World Bank (both of which are heavily influenced by America where they are based) The questions is - how relevant are they still? It would appear that as nationalism is on the increase, both witnessed by Trump’s “make America great again” and BREXIT in the UK, technology is making old jobs redundant, thus altering the world of work -  is this going to force politicians to focus more on the task of retraining workers and less on global trade?
Well, without a doubt Libra (the project initially backed by Facebook) certainly had a baptism of fire when it was first announced almost a year ago, in June 2019. The founding 28 members invested $10 million, although Paypal Visa, Mastercard, Stripe, Mercado Pago, Booking.com and eBay all left Libra last October.

Founder of Facebook, Mark Zuckerberg, was interrogated in a Congressional hearing as governments became concerned that, with 2.6 billion active monthly users, this ‘new-fangled’ Libra currency could even threaten the ‘mighty greenback’  - aka the US$. An American Senator committee member was reported in Australian Financial Review having said, “Large payment companies are wise to avoid legitimising Facebook’s private, global currency. Facebook is too big and too powerful, and it is unconscionable for financial companies to aid it in monopolising our economic infrastructure. I trust others will see the wisdom of avoiding this ill-conceived undertaking.”

It was not just the Americans who seemed less than keen to embrace Libra’s proposed digital currency. According to GreenWatch, “The G7 group of nations has vowed to block it unless Facebook can prove it is safe and secure. There are concerns the currency could be used for money laundering, disrupt the global financial system, or give Facebook too much control over user data”.

Source: British Network.com

However, Libra Association vice-chairman Dante Disparte said in an interview, "The journey since the original white paper was released has really provoked an important conversation around the world about, how do we appropriately regulate digital payments and digital currencies?” Given that the Chinese are about to launch their own Central Bank Digital Currency (CBDC) and what with the increasing call for other countries to have their own Digital Currencies as well, there will be a need to respond to Disparte’s question!

It is interesting to see Stuart Levey, who was Under Secretary for Terrorism and Financial Intelligence for the U.S. Treasury for 7 years being appointed CEO of Libra, that Temasek (Singapore’s sovereign wealth fund with an estimated value of $313billion) has joined Libra. Temasek Tweeted , revealing its engagement with Libra by saying, “Looking forward to the potential of this #blockchain-based digital currency, and how it can help create a regulated global network for cost effective retail payments”. Libra’s own press statement regarding Temasek’s involvement announced, “Temasek, a global investment company headquartered in Singapore, brings a differentiated position as an Asia-focused investor. Temasek sees innovative technologies such as blockchain as transformative enablers of growth. Temasek’s efforts to support and advance the use of blockchain technology across a range of use cases, asset classes and sectors, reflects its drive to explore, develop and invest in solutions to bring about a better, smarter, and more sustainable world”. Temasek’s engagement with Libra, once again, demonstrates how Asians are comfortable embracing digitisation.

Another significant appointment for Libra is Robert Werner as its General Counsel. He has worked at HSBC, Goldman Sachs (overseeing Privacy and Regulatory Relations) and Merrill Lynch (leading financial crime compliance). Werner also has in depth experience working with governments, having been a Director of the Financial Crimes Enforcement Network for the United States Department of the Treasury.

As well as continuing to talk about a digital currency backed by a basket of fiat currencies, Libra is also looking to create a portfolio of stablecoins each backed by different fiat currencies suitable for different countries. It would therefore be relatively...

There are some preliminary reports being published suggesting there could be a new strain of Covid-19 which is potentially even more infectious than the existing one. Interestingly, 75% of all emerging infectious diseases over the last 50 years have been zoonotic (from animal to human) according to the U.S. Center for Disease Control and Prevention. (CDCP)

Blockchain technology, itself, can be a main player in supporting the battle against these pandemics: 

by tracking those infected -  both Acoer and The Public Health Blockchain Consortium are monitoring the continual and anonymous verification of communities and workplaces that are free from coronavirus COVID-19;

in the carrying out of research and clinical trials - provides the ability to anonymise data thus keeping personal information confidential (pharmaceutical firms and governments need trends);

by tracking donations and how funds are spent- e.g. Hyperchain in China;

by way of tracing and tracking the quality control measures required for medical supplies e.g. Modum.io AG offers access to the temperature records of pharmaceutical products during their transportation in order that necessary compliance temperature requirements can be verified. Also, VeChain tracks the authenticity of medical masks together with the supply/production of them.

However, there are challenges to using Blockchain technology:
Regulatory – if a public blockchain is used potentially no party is responsible or can be held accountable for the data on the blockchain. Therefore; it would not be possible to delete data thus potentially breaching GDPR regulations and the right to be forgotten; 

Data privacy - as potentially people’s movements would be tracked to ascertain with whom they have been in contact;

Patient engagement - safeguarding issues in the case of the young, old or those with limited mental capacity;
Interoperability of data - there is a lack of standards and regulations between different systems/Blockchains;

Scalability and speed -this could well prove to be a challenge given the huge amount of data involved.

Guardtime, is a company which uses a blockchain-based platform to secure over 1 million patient records in Estonia and is cited as an example of the use of blockchain for the management of electronic medical records (EMR). Another such example is the MedRec project, a project of MIT Media Lab and Beth Israel Deaconess Medical Center. It is a blockchain system that ‘prioritizes patient agency’, giving a transparent and accessible view of medical history. The Gem Health Network (GHN) is yet another example, which is developed by the US start up, Gem, using the Ethereum blockchain platform. GHN allows different healthcare practitioners to have shared access to the same data. Healthbank, a Swiss digital health company, is similarly working on empowering patients to be in full control of their data using blockchain platform. In a systemic review on blockchain technology in healhcare from 2019 the author includes in his research the Medicalchain project, whose blockchain-based platform will be designed to facilitate the sharing of patients’ medical records across international healthcare institutions, as well as the Healthcoin initiative which aims at constructing a global EMR system. Other players involved in the research paper working on different initiatives and projects based on blockchain-enabled patient-centric EMR included Factom, HealthCombix, Patientory, SimplyVital, IBM’s Watson, BurstIQ, Bowhead, QBRICS and Nuco.

Zoonotic diseases, themselves, are very common, both in Asia and the United States, and around the world. Scientists estimate that more than 6 out of every 10 known infectious diseases in people can be spread from animals. Because...

One cannot escape noticing that this week something called ‘Bitcoin halving’ has occurred. A number of Digital Byte readers have asked what this means?

There have been 18.3 million BTCs mined so far with the intention that a total of 21 million BTC will be finally created by 8th October 2140. The theory is that by reducing the number of Bitcoin tokens being created this will counter the impact of inflationary pressures. Thus, every 210,000 ‘Bitcoin blocks’ (approximately every four years) the number of Bitcoins (BTCs) paid to a miner for a block on the Bitcoin network is halved. Subsequently, the block reward is now reduced from 12.5 BTC to 6.25 BTC, meaning that the amount of new BTCs created each day will fall from 1,800 to 900.Therefore, this will result in a BTC miner’s total income (assuming the current BTC price of $8600) falling from $15 million to $8 million each day. 

A close up of a map

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Source: ChartBTC

Melem Demirors of CoinShares believes, “That the past two halving’s cannot be compared to the current one because a robust derivatives market has been established. As a result, Bitcoin as an asset is decoupled from the supply-demand economy”.

Time will tell what impact the halving will have on BTCs’ price but it does, once again, remind us of the level of detail that went in to creating Bitcoin in the first place.

Therefore, in very simplistic terms:

Assuming the demand for Bitcoin remains the same, the theory is that by reducing the number of Bitcoins being issued every day the price of Bitcoin, itself, will be supported. Furthermore, by halving the number of Bitcoins given to a miner this means it will ultimately take longer for the maximum number (21 million) of Bitcoins to be reached.

To give an outline of what an EquiBond is:

An Equibond can be built on the success of crowdfunding in that it will allow SME’s to raise a limited amount of capital from private investors. Equally, EquiBonds be traded on a Digital Exchange, so therefore can be bought and sold 24/7 by investors.

  This offers an exit for those investors thus offering liquidity (which is missing from many crowdfunding propositions). An EquiBond also aligns investors’ and entrepreneurs’ interests since the time taken for the invested money to be redeemed will be reduced and hence the quicker the entrepreneurs can grow their revenue. Historically investors have had to rely on dividends to receive a return, which can only be generated if the company is profitable (which many smaller firms are not as focused on they often are more interested in growing the business).
Proposed guidelines:
Companies issuing an EquiBond are required to have at least 1 year’s audited accounts ensuring that a third party has reviewed the company’s financial position. This means that EquiBond investors will also avoid 20% of those businesses which become insolvent within 12 months of being established;
The maximum that can be raised is €8 million - same as current crowdfunding limits;
The maximum an investor can invest in a tax year into EquiBonds is £20,000 - same as the annual ISA allowance;
An EquiBond can be held in an ISA;
An investor can invest a maximum of £5,000 p.a. into each EquiBond - so not overly exposed to individual issue;
The income on an EquiBond is tax free;
Investors will be subject to full KYC and AML checks, which can be carried out by the exchange where the EquiBond is to be traded on;
10% of any monies raised from an EquiBond issue is to be paid to the National Lottery - so helping good causes and ensure that there is governance and independency as to the beneficiaries;
The total costs of issuing an EquiBond cannot exceed 5%. Therefore, including the 10% given to the National Lottery, investors are assured that 85% of the capital raised will be deployed into the company in which they are investing;
Money raised from an EquiBond is treated as capital so not taxable for the company receiving the capital;
Initially the EquiBond pays 10% of its revenue to investors above a pre-agreed level of company turnover. Once the initial capital invested is repaid, the share of revenue reduces to no more that 2% of the company’s Earnings Before Interest Tax Depreciation and Amortisation (EBITDA);
The income generated from a share of a company’s revenue is calculated based on the number of days the investor has owned the EquiBond - and can be paid as frequently as monthly;
The company wishing to raise capital has to have at least one non-executive director on its board; 
The directors need to have professional indemnity insurance (PI) in place as this will mean a third party (i.e. the firm offering insurance) has reviewed the company in order to agree to offer PI;
To issue an EquiBond, a company must produce a mini prospectus with any stated facts and claims fully verified.

There will be a prodigious need for SMEs to raise capital in Europe, the USA, UK and other jurisdictions and it is intended that EquiBond can help to this demand. Various discussions are currently in place and Digital Bytes will release further updates...

There is a growing trend of professionals and experts from traditional financial service companies engaging in digital assets.



Paul Tudor Jones, the ex-head of HSBC legal , is to head up Libra as its CEO. Given he was Under Secretary for Terrorism and Financial Intelligence for the U.S. Treasury for 7 years he will be well-aware of what governments are looking for and, no doubt, will be trying to position Libra to be acceptable. Jones, who was famous for predicting the 1987 crash, claims Bitcoin is the best bet against inflation that will arise from governments printing cash;

British historian
Niall Ferguson, previously professor at Harvard and New York Universities and senior research fellow at Jesus College, Oxford when asked about Digital Assets  stated, “I think the right lesson to draw from all of is that a global order needs to be based on a distributed operating system, not on a centralized architecture...", noting that cryptocurrencies are “essentially digital gold”;

Angela Knight, former COO of Standard Bank Private Bank in the UAE, has joined as a member of the advisory board of 220, the new challenger digital private banking start-up which is looking to offer access to digital assets as well as traditional assets to clients;

Caitlin Long, who ran Morgan Stanley’s pension solutions business for 9 years and held senior roles at Credit Suisse for 10 years has now set up Avanti - a US bank specialising in providing payment, custody, securities and commodities activities for institutional customers using digital assets;

Christopher Giancarlo former Chairman of U.S. Commodity Futures Trading Commission, is co-looking at a CBDC digital dollar with Accenture.  Giancarlo shown support  as he was reported saying; “unlike bank transfers, crypto asset transactions can be cleared and settled quickly without an intermediary”;

In May 2020,
China is going to issue its own CBDC in a selection of cities across the country. Popular refreshment and food outlets including McDonald’s, Starbucks and Subway have all reportedly been invited to trial this new Digital Asset.


Telegram was established in 2013 by Pavel Durov and his brother Nikolai Durov. Pavel, himself, is estimated by Forbes to be worth $2.8 billion and had previously founded Vkontakte, Russia's biggest social network (the Russian equivalent of Facebook). Pavel, with his brother, issued a whitepaper in Q1 of 2018 carrying out an Initial Coin Offering (ICO) selling 2.9 million ‘Grams’ tokens and raising $1.7 billion.

According to the SEC filing, Telegram is 100% owned by Pavel Durov, who is a resident of St Kitts and Nevis. Telegram Group Inc. is a privately-owned British Virgin Islands company, with its principal place of business being in Dubai, United Arab Emirates. The primary entity overseeing the Gram token distribution is TON Issuer Inc., again a British Virgin Islands (BVI) company wholly owned by Telegram Group Inc., and with its primary place of business in Tortola. TON Foundation is to be, or will be, incorporated as a Cayman Islands LLC. Its mission is to “promote and support the TON Blockchain” and includes management of Grams distributed to the TON Foundation by TON Issuer Inc. The sole members of the TON Foundation’s board are, and will be, Pavel and Nikolai Durov.

Telegram created ‘Grams’ which were claimed to be designed for users to spend on a global instant messaging app, powered by Blockchain technology and called Telegram Open Network (TON).  The intention was that Grams would have a finite supply, thus theoretically rising in value as more people used them on the network and as demand for the currency increased. According to a statement from Telegram, the intention was to offer “significant improvement upon previous platforms in terms of speed, usability and scalability.”

Telegram carried out two fundraisings - the first, in Q1 of 2018, attracted  81 investors putting in minimum of $20 million each and raised $850 million, at an average price of $0.38. In a filing to the Securities and Exchanges Commission (SEC) Telegram reported that it had carried out a second issue later in the year and had raised an additional $850 million from 94 investors, bringing the total amount to $1.7 billion. Telegram also added that it would possibly “pursue one or more subsequent offerings” beyond these first two sales. Of note, investors in the first round could use other Crypto currencies, such as Bitcoin or Ethereum, to buy Grams but in the second round one could subscribe for Gram tokens only in US dollars and Euros, at a price of $1.33. 

There were differences not only in price but also the ‘lock-up’ restrictions between the terms of the Purchase Agreements for investors in Telegram for the two rounds. Those in the first round were not permitted to sell their Grams immediately but had to wait 3 months, and then could only sell their Grams in 25% increments staggered over 18 months. On the other hand, the second set of investors did not have any restrictions and could sell their Grams as soon as they received them. However, in October 2018, the Security Exchange Commission (SEC) in the USA sued Telegram as it believed bank records would prove Telegram illegally sold tokens to resellers who were paid a commission on selling Gram tokens. Furthermore, Telegram had sold tokens after a March 2018 deadline.  

So, what is the value of Telegram? Unfortunately, valuing any cryptocurrency is difficult for main two reasons:

Cryptocurrencies are not ‘shares’ in a company but ‘representations’ of the value...