On Tuesday

If Libra is widely used for payments, cross-border payments in particular, would it be able to function like money?

With the announcement of Libra, Facebook’s new Digital Currency, it was reported in The South China Morning Post that Wang Xin - a director of the People’s Bank of China (PBOC) – said recently at an academic conference hosted by Peking University’s Institute of Digital Finance “If [Libra] is widely used for payments, cross-border payments in particular, would it be able to function like money and accordingly have a large influence on monetary policy, financial stability and the international monetary system?” China was one of the first countries to look at Digital Currencies back in 2015. Indeed China has enjoyed huge success replacing cash as its economy goes digital. Wepay (owned by Tencent) recorded 460 billion annual transactions in 2018, while Alipay (owned by Alibaba) recorded 197.5 billion transactions.

The widespread use of Alipay has created Yu’e Bao (Chinese for secret treasure), the world’s largest money market fund at $150 billion in size! Merchants use Alibaba’s fully digital C2C and B2C platforms which connect consumers and businesses while providing logistics, payments, and credit facilities. This means that merchants often decide to leave, in effect, their cash flow in Alipay’s Yu’e Bao’s fund.

Possibly, given the fact that daily life for many Chinese people is conduction without using cash, the PBOC does not wish to lose control and see a foreign Digital Currency, especially one backed by non-Chinese fiat currencies such as Facebook, gain too much traction in the Chinese economy. The PBOC, after receiving approval from the State Council, has been working with market institutions on creating a central bank digital currency, according to Wang Xin. However, there have been no public announcements of progress.

Cai Weide, a Chinese professor of Blockchain and crypto, who has worked around the world said “China was “lagging behind and that they should not underestimate the importance of Libra, an invention that, is (one of the) major financial technology reforms in the past 500 years”. 

There is no guarantee that Libra’s Facebook will succeed, but the ‘genie is out of the bottle’ causing many organisations and governments to take Digital Assets more seriously, as they begin to understand the challenges and opportunities these Digital Assets offer!


Digital Assets
The business of providing energy is rapidly evolving as the sector has to adjust to legislation to reduce carbon by decentralising, and we are seeing a rise of micro-generation suppliers entering the market.

Increasingly, we are seeing new business models being developed to hold, manage, and process data by implementing technologies such as Machine Learning, Blockchain, and Artificial Intelligence. With ever more data and the roll-out of smart meters, the “Internet of Energy” is slowly becoming a reality, increasing the need for data management even further.
In 2017, Cryptocurrencies fuelled interest in Blockchain technology, with many start-ups and pilot projects being funded by Initial Coin Offerings (ICOs), which seemed to be being launched on an almost daily basis! In the energy sector alone, there were over 150 projects using Blockchain, according to SolarPlaza, which it highlighted in a ‘Comprehensive Guide of Companies involved in Blockchain & Energy’. 
If you look at Google Trends to see the interest in terms of searches since December 2017, “Blockchain Energy” has fallen from 100 to 26,  so clearly, the hype has gone. However, we are still seeing a number of projects in the energy sector being developed in different parts of the world.
In France, Grenoble Ecole de Management conducted a survey to ask 112 experts from industry, science, and public administration in France about the role of Blockchain technology in the French energy sector. It wanted to understand how these experts thought Blockchain would be used in the next five years. Peer-to-peer energy trading and electric vehicle charging and sharing were the most popular choices.
Digisol, based in France, is a project designed with an objective to enable the sharing of solar energy between two apartments within the same building.
Meanwhile, in Japan, an Australian company has been using Blockchain technology to enable solar initiatives and working to expand the renewable energy market in Japan. Perth-based Power Ledger has announced a partnership with Japan’s Sharing Energy Company. Power Ledger is providing a Blockchain-based tokenised energy trading platform while Sharing Energy is a provider of solar installations and equipment.
According to Solar Market Insight, the USA installed 2.7 gigawatts (GW) of solar PV capacity in the first quarter of 2019. This brings the total amount of solar power installed capacity to 67 GW, which is enough to power 12.7 million homes. Furthermore, it is estimated that PV installations will double in the next five years, which will assist in reducing the impact of power generation on climate change. However, it presents some real challenges for power management and the electricity grid in the USA. In California, for example, solar farms have previously had to shut down on sunny days because the grid in the state was unable to handle the amount of solar energy being generated.
In 2012, Germany experienced industrial companies sustaining damages due to the instability of its electricity grid due to unprecedented solar and wind fluctuations. In Australia, there were major state-wide blackouts in 2016 for the same reasons.
This week a company called LO3 successfully gained funding from Royal Dutch Shell and Japanese giant Sumitomo Corporation Group. LO3 is looking at using Blockchain technology to track energy supplies, allowing users to select which supplier they wish to select so making peer-to-peer...

Emerging Tech
The announcement that this week SK Group (South Korea’s largest telecoms company) is going to invest $10 million into ConsenSys will come as no surprise, as South Korea has for a while been rapidly digitising its economy.

ConsenSys is a Blockchain consulting business set up by Joseph Lubin, co-founder of Ethereum. Although this is not the first time these two companies have signed an agreement, in 2018 they agreed to collaborate on technical training to help developers who wished to use the Ethereum blockchain.

SK group has been active in the Blockchain sector, having agreed to support Ok CashBag which is a Korean mileage loyalty program that has enrolled approximately 38 million people - 50% of South Korea’s population! The intention is to use Cryptocurrencies as part of the incentivisation program that Ok CashBag operates.

LG, the second-largest manufacturer after Samsung, has been developing a Blockchain-powered platform to help improve the transparency of information about food that is supplied to school canteens across South Korea. The intention is to have details about the production, processing, distribution, purchase, and consumption of products that school canteens use. As all of this information will be recorded on a Blockchain, it will become available for authorities, schools, and parents to see what is being consumed and who the suppliers are.

Samsung, which has dominance over the insurance, real estate, electronics, and payment sector in Korea, has been allocating most of the resources of its crypto and Blockchain department by developing its Cryptocurrency ASIC mining hardware. This hardware is used by people wishing to mine Cryptocurrencies like Bitcoin.

Hyundai, which is Korea’s leading car manufacturer, has been building a Blockchain-powered platform to monitor information about second-hand cars, such as mileage, age and service history.

The above examples are just a snapshot of the different ways that Korean conglomerates are using Blockchain technology, and how this technology is impacting on the day to day lives of Koreans. The Korean population is ageing quickly, as families tend to be smaller, meaning that there will be fewer workers to support its elderly retired citizens. This is one of the reasons why Korea is embracing new technology to ensure that it is able to create high-value exports and to be able to use technology as opposed to heavy manufacturing, which is arguably where much of its economic success historically came from.


Last Tuesday

MetLife, the US quoted insurance company with over 90 million customers worldwide, is piloting a project in Singapore called Lifechain.

The other firms involved with Lifechain are  Press Holdings and NUTC Income, which collectively are trying to simplify the process for relatives when someone dies. Once an obituary is placed in The Straits Times, these details are sent to LifeChain which forwards a consent form to the relatives and the deceased’s National Registration Identity Card is entered on to Lifechain. Lifechain will then search to see if the deceased had any valid life insurance policy in force. If a policy is found, then a claim will automatically be submitted so the claims process can commence.

It is estimated that, in the UK, there is over £2 billion of unclaimed life insurance, as relatives do not know that their loved ones had insurance policies, and the insurance companies are unaware that one of their insured clients has died. In the USA, according to the National Association of Insurance Commissioners, over 24,900 people in the just the last 2 years have tracked down life insurance policies and claimed over $360 million.

Insurance firms are looking at a variety of ways that Blockchain technology can be used. In the UK BlockClaim, which was developed at Imperial College in London, has recently secured £500,000 of funding for a platform that uses Blockchain technology for claim management, and AI to help as a fraud filter. The platform scans phone calls and emails to search for irregularities in a claim to try and identify fraud, while also managing the claims process more efficiently. The intention is that claims can be paid faster, while spurious claims can be queried and rejected. 

Also in the UK, Legal and General has announced that it is going to use Amazon’s blockchain expertise to launch estua-re, the first Pension Risk Transfer (PRT) reinsurance platform. The intention is that estua-re will handle every stage of the PRT reinsurance process, including pricing, claims handling, financial reporting and collateral and utilising data stored on a Blockchain. Using this new platform, it is believed that costs-savings can be generated, as well as creating much greater transparency. It will enable a secure record of information that cannot be altered, but easily retrieved by different parties about annuities - potentially in 50 years’ time. Legal & General Group's PRT transactions include the largest U.K. risk transfer to date, in 2018, when British Airways insured £4.4 billion in liabilities of its Airways Pension Scheme.

Blockchain technology is being used in the insurance sector more and more, as organisations understand how to utilise Blockchains’ secure, transparent, real-time characteristics. Increasingly, more transactions are being digitised and Blockchain technology enables the insurance companies to offer products that are more suitable and efficient in our digital economy.


International Crops Research Institute for the Semi-Arid Tropics (Icrisat) is exploring how it can use a Blockchain-powered platform called Elenev01, from India, in an effort to see how small Indian farmers can improve their productivity and revenue from selling the crops they are growing.

These improvements are hoped to be achieved by reducing the number of intermediaries involved,and allowing farmers to have more information about price of goods and connecting them with potential retailers, which is increasingly vital as merchants are being asked to prove the provenance of the goods they are selling. 

Blockchain technology is also being used to record and share farm-data as, by having one trusted secure ledger of information, it eliminates the challenges that are so common in the childhood game of “Chinese whispers”. Data and information on crop yields, soil conditions, moisture levels, etc., can easily be misinterpreted, as records are passed from the farm through a chain of different third parties so that, after three of four times, this information can easily be misunderstood from what the actual real data is saying. The Kansa State University has produced a report that offers a summary of some of the above challenges and how Blockchain technology is able to address them. Blockchain technology is able to help agricultural supply-chains to track the provenance of agricultural goods and, using sensors and Internet of Things (IoT), it is possible to monitor the conditions that goods have been kept in, from farm to retailer.

In Sri Lanka, Aon, the global insurance firm, has teamed up with Oxfam and Etherisc to offer insurance to 200 small farmers so they can protect themselves from damage to their crops due to extreme weather. Bojan Kolundzija, the country director of Oxfam in Sri Lanka has said “Allowing farmers to access the blockchain platform is an important milestone that is bringing an effective and affordable risk transfer mechanism to a large portion of the Sri Lanka economy.”

Blockchain technology is able to automate much of the traditional claims process, as the farmer will not need to submit a claim and the insurer will not need to incur the cost of sending claims’ adjusters to inspect the damage. Therefore, the cost of processing and handling the claim is faster, cheaper, and more trust is generated. Thus confidence is created to encourage smaller and often less-sophisticated farmers to protect their livelihoods.


2 Weeks Ago

Netflix has produced a documentary to explain who some of the people who have been pioneering Blockchain technology and who are the early adopters of different Digital Assets. 

It is thought the Netflix documentary will help to inform most people who have no idea about Digital Assets, other than what they have heard about Bitcoin. Unfortunately, most people associate Blockchain, Bitcoin, Ponzi schemes, Money laundering, and other nefarious activities altogether. To be fair this may be due to Bitcoin being used as a choice of currency on the illegal and now closed “Silk road” website.

As Blockchain technology and Digital Assets are being used by governments and multinational corporations, we are all going to be exposed and I suspect using this technology and new asset class more and more.

To see this TV show go to https://www.netflix.com/gb/title/80154500

The labour market in Asia is changing, and according to the headhunter Korn Ferry, by 2020 the Asia Pacific region (APAC) will face a labour shortage of 12.3 million workers at an annual opportunity cost of US$4.2 trillion!

Blockchain technology is playing an ever-increasing role in Asia, and this was highlighted in a report from LinkedIn. LinkedIn’s report has broken down what they understand to be the three most prevalent skills country by country compared to the average in the APAC region.

As the graphic indicates, Blockchain skills are required in a number of different countries.

LinkedIn analysed the skills listed by its members from the APAC region over the last five years to identify the top 10 rising skills. They found Blockchain to be the fastest growing skill in Singapore and among the top three in China, Japan, Taiwan, South Korea, Hong Kong, and Vietnam. Although this ought to come as no surprise, as a report back in 2017 by Cognizant identified up to 88% of financial businesses in Asia Pacific who believed blockchain to be important to the industry’s future. This was further supported by Global Market Insights in 2018, who predicted that the Blockchain-based industry in Asia Pacific to be worth about $16 billion by 2024, with the healthcare market contributing at least $1.4 billion.

Currently, Singapore is 7th globally out of all the governments measured by the E-Government Development Index (EGDI). The EGDI has been designed as a way to measure how much governments are embracing digital technology to promote access to public services for their citizens. It is thought that Blockchain technology will be able to offer greater transparency and so help fight corruption and fraud.

As an article in Asian Block review summed up: “British politician Lord Acton, “Power tends to corrupt, and absolute power corrupts absolutely.” Therefore, it may be preferable to trust technology instead of people.”


Labour Market
The Shoppers Drug Mart, which is the biggest drug store in Canada, has over 1,200 shops and has turned to Blockchain technology to help verify the provenance of cannabis supplies - as this is vital for patients using cannabis for medical purposes.

A Blockchain platform offers the promise of greater transparency of supplies while not compromising the privacy of users.

While medical cannabis has been legal since 2001 in Canada, using cannabis for recreational purposes was only legalised in 2018. According to government data, 5.4 million Canadians have bought cannabis since October 2018, and 600,000 have done so for the first time. However, the Canadian government is insisting that companies keep a monthly record on how much marijuana they have grown, harvested, sold, destroyed, used for research purposes or lost to theft. 

Cannabis sales are expected to reach over Can$7 billion next year and given the various data hacks and cyber-attacks the Canadian government are looking at how a Blockchain-powered platform can help both the private and public sector maintain confidence and reporting in this recently legalised industry. Canada is one of the first governments to legalise recreational use of cannabis, so no doubt other countries are monitoring the pros and cons in order to decide if they legalise cannabis for recreational use too!


Supply Chain
The Chair of Russia’s Central Bank, Elvira Nabiullina, has admitted that various central banks are investigating the possibility of issuing a Central Bank-backed Digital Currency.

The general stance in Russia towards Digital Currencies seems to be softening, as it had been very anti these assets. It was only just last week in Russia the Central Bank admitted that it would consider using a Cryptocurrency, backed by gold, for international settlements. Russia currently holds over $492 billion of gold which, if Digitised, some could be used to settle outstanding international debts and be a way around the economic sanctions Russia is subject to.
More and more governments are looking at Digital Currencies as a way to create more transparency, so minimising their “black economy” and, by using Smart Contracts, they could offer the potential to introduce an automatic collection of taxes - which would be faster and potentially more efficient for revenue authorities. 
Interestingly, Russia has a lot to gain from embracing Digital Assets as it is a big producer of commodities. These assets typically only trade for a few hours a day and only 5 days a week. A Digital Asset pegged to different commodities could help reduce the volatility of these commodities, and provide an alternative way for Russian companies to raise capital, so getting around the aforementioned sanctions. In Germany, BSAF’s new electric car battery factory, which has been built to use commodities such as palladium and produced by Nornickel (the huge Russian commodity miner), would potentially benefit from Digital Assets. This has not been lost on Nornickel as it has been discussing with Swiss regulators the idea of establishing a digital platform to offer tokens based on palladium and nickel. 
According to reports in Bloomberg, Vladimir Potanin, the Russian billionaire and CEO of Nornickle, is interested in creating new Cryptocurrency backed by palladium.
These Digital Assets could allow Nornickel to raise capital and potentially avoid sanctions.
Anything that can reduce the costs of trading in commodities has to be welcomed, and such Digital Assets could offer an interesting New Asset class for investors, as well as creating potentially greater liquidity and low commodity volatility for existing institutions.
Indeed there had been some reports, in February 2019, that Russia would develop an oil-backed Cryptocurrency. 
More recently, on the back of the announcement from Facebook about its new Libra Digital currency, Russia has said that it will not legalise Libra. In an interview with local radio station Kommersant FM, Anatoly Aksakov, Chairman of the Russian State Duma Committee on Financial Markets, said “With regard to the use of Facebook cryptocurrency as a payment instrument in Russia at this stage – my opinion is that. in our country, it will be banned.” 
Unfortunately, recent reports that the biggest ever hack of a Cryptocurrency exchange on  Coincheck, in Japan, (where it lost $530 million in January 2018) will not endear any regulators, including Russia, to Cryptocurrencies.
Nevertheless, Russia’s Agency of Far East for Investments and Exports is reported to be looking at creating a Cryptocurrency hub in the Chinese Russian border, on an island called Bolshoy Ussuriysky. This island falls under the national border of both Russia and China! Has Bolshoy Island been chosen for...

Digital Assets

Julian Gray, Technology Director in the Digital Innovation Organisation department in BP, told a packed room at the Blockchain Expo conference in Amsterdam this week that BP is looking to be a “Digital Energy Company”. Julian said that BP think of Blockchain in just five words-

“Trusting People Over The Internet”

He spoke about a number of projects BP are involved in, that use Blockchain technology.

Continuing with the theme of “Collaborative capitalism”(i.e like LVMH for luxury goods and Maersk’s Tradlens for the shipping industry), BP has invested and helped develop a Blockchain-powered, commodity trading platform, called Vakt. The Vakt platform, according to Business Insider, addresses two fundamental challenges:

1. It “slashes” the paperwork when trading commodities, so saving costs and making the process much more efficient.

2. As data and information are more accessible and transparent, commodity traders find it harder to have access to unique proprietary information, so trading profit margins are smaller. Therefore, traders are searching for more efficient ways to gather data and trade.

The Vakt platform has been trialled in the North Sea by a syndication of producers, who are responsible for over 80% of North Sea’s Brent crude oil production. It has been such a success, generating efficiency savings of 30% to 40% using Blockchain technology, that BP is now looking to deploy the Vakt platform to other regions around the world.

Gray also stated at the conference that BP has also established a company called Strala, which enables the energy created in one location to be transferred to somewhere else. Using the new Apple App, if you (as the customer/user) had solar panels in the country, it is now possible to have the energy that you use in your flat in a city, paid for from the energy your solar panels are generating. Could this encourage large power users, such as big office blocks, to invest in wind and solar farms and help the UK meet its recently announced target to be carbon-free by 2050? However, imagine the potential impact if someone in central Paris, or Edinburgh, or Berlin could buy electricity direct from a wind power or solar farmer in a remote desert location in Africa! We are not far from this being a reality, and using a Digital Currency as a form of payment with Smart Contracts on a Blockchain-powered platform like Strala would minimise the paperwork, human errors, reconciliation, and intervention - all in a very transparent manner!

A third way BP uses Blockchain technology is that it is working on a project that will measure the hydrocarbon emissions from the well-head of a gas field to the end user. Julian Gray explained that, in the USA, there is increasing pressure from users to be able to prove their carbon footprint. Historically, gas production and distribution networks had not been that efficient. Therefore, if BP proves that it is able to provide zero-leaking gas supplies, it can charge more for the gas, but the customer will be sure that the supply network has no leakage i.e. the gas they are buying is more environmentally-friendly.  

As big organisations start to use Blockchain technology more and more, different use-cases are being found. The world’s petroleum and car companies are desperate to reinvent themselves, so are investing heavily to find ways to be more ecologically and environmentally friendly!



A Month Ago

Target, who is the eighth largest retailer in the USA, has been working with Hyperledger, IBM, and Bitwise to use Blockchain technology, initially to help it improve its supply chain logistics for a number of its paper products.

Target is also looking at using Hyperledger as it is used by Cargill, who is one of Target’s main food suppliers. In a recent blog, Joel Crabb, at Target said “Working directly with one of our largest food suppliers will allow Target and all other participants to learn from one another as blockchain technologies mature. This also gives us an instant use case in determining which data to share and how to govern a multi-enterprise, blockchain-backed distributed ledger.

Once again, as we have seen in the luxury goods sector with LVMH and the shipping sector with Tradelens, Target is looking to collaborate with suppliers and other parties enabling them to all share their experience and knowledge. This style of “collaborative capitalism”, where independent organisations are actively engaging with each other and sharing information and knowledge, is intended to create a stronger, more robust and transparent solution which will help the market and not just the interests of one organisation. This collaborative style is well summarised by Crabb: Maturity in this space will take time, but we’ll only get there when enterprise partners like Target and Cargill dive in together.

Meanwhile, the third largest retail store in Russia, Dixy, is using Blockchain technology to help it develop an open-trade finance platform, called Factorin. This platform is designed to enable it to engage with factoring firms and help Dixy’s cash-flow management. The Factorin platform has been under trial for a few months and has already processed over 10,000 transactions. It has been developed to help improve efficiency, cut out human errors and speed up payments due to small and medium-sized business - which are estimated in Russia to be valued at $45 billion.

Supply Chain
In January 2018, KodakOne announced that it was going to launch the Kodak coin and, as a result, Kodak Inc share price went up 120%.

The basic idea behind KodakCoin is to use Blockchain technology to help photographers manage their photos by creating permanent, immutable records of ownership. It was believed that KodakOne would make it significantly cheaper and faster to register and sell digital images. The Platform was said to offer a simple, transparent Blockchain-powered worldwide royalty accounting, licensing, and payment system. The KodakCoin was never a part of Kodak Inc but was a separate company that licensed its name from Kodak Inc. While KodakCoin’s Initial Coin Offering (ICO) never proceeded, a year on, KodakCoin has generated over $1million in revenue in its beta-test trials.

Kodak Inc is back in the press and this time it is Kodak, the company that
invented the digital camera, and then decided not to commercialise it. This time it is looking to create a Blockchain-powered platform to store and manage documents, all held in the cloud. Kodak claims that its new platform could generate as much as 40% in terms of cost savings, using Blockchain technology.

So second time around, no ICO, no huge increase in Kodak’s share price, but just another example of a global brand using a Blockchain to offer its customers a service to help make business processes hopefully more efficient and cheaper.

Digital Assets
Bank of New York Mellon (BNY) is the largest custodian in the world, with assets in its custody of $34.5 trillion, and has been experimenting with Blockchain technology since 2016.

However, the first firm it has agreed to look after it’s Digital Assets on a public Blockchain is Bakkt. Bakkt is a company backed by International Clearing Exchange (ICE) which, in turn, owns and runs over a dozen regulated stock exchanges around the world. BNY is keen to emphasise that it is currently providing “safekeeping of Digital Assets for Bakkt” and not providing a custody service for them, partly because BNY feels the need to have far more regulatory clarity before it can offer full custody services.

One of BNY’s bigger custody competitors, Northern Trust, is also looking at offering custody for Digital Assets (according to Forbes) as it realises it, too, needs to keep ‘up to speed’ with how it may be able to offer services for those that wish to deal with this fast developing new asset class – Digital Assets. However, it is not just both the massive and traditional existing custodians who are looking at offering custody services for Digital Assets. Anchorage is a newly launched, crypto-custody firm backed by Silicon-valley based and highly successful VC investors, Andreessen Horowitz.

Bank Frick is a private bank based in Liechtenstein which now has a range of Blockchain-banking services, including Digital Asset custody. BitGo, from California, has been offering for Bitcoins a qualified custodian service since 2018. The California-based company is using its six years of experience as a ‘security-as-a-service provider’ to provide financial institutions and fund managers with Digital Asset custodianship. Also from California, San Francisco-based Digital Asset exchange and wallet provider, Coinbase, added a crypto custody service to its offering in 2018. Coinbase Custody is a qualified custodian which enables institutional investors to store over 30 different Digital Assets securely with a regulated and insured third-party storage solutions provider. Regulated Digital Asset exchange, Gemini, launched its qualified custodian service for institutional investors also in 2018.

Fidelity Digital Assets is the recently launched crypto-venture by Fidelity Investments Inc, which has $7.2 trillion of clients assets. The New York-based asset manager launched its crypto custody service in March 2018. Also in New York, Digital Asset exchange itBit launched a crypto-custody service last year to complement its exchange and Over The Counter (OTC) business. As a regulated New York State Trust Company, itBit ensures that all customer assets and funds are fully backed by mandatory capital reserves.

Alternative asset custodian Kingdom Trust, launched in 2017, was one of the first custodians to provide Digital Asset storage solutions. Currently, the Kentucky-based company has become a market-leading qualified Digital Asset custody service, with insurance provided by Lloyd’s of London. Koine, launched in June 2019, offers Digital Asset custody and settlement for institutional clients. The London-based start-up is targeting trading venues, institutional investors, Digital Asset issuers, and market infrastructure providers.

Prime Trust is a Las Vegas-based qualified Digital Asset custodian which supports Bitcoin, ETH, and ERC20 tokens. Finally, Xapo is one of the longest-standing Bitcoin storage solution providers. In the past five years, the Hong Kong-based company has grown its assets in storage to over 700,000...

Financial Services
Digital Assets
We wrote a few weeks ago about how the Singapore Government was developing a Blockchain-powered platform, allowing various Singaporean academic institutions to be able to enter their students' qualifications on to a Blockchain.

This is important because many CVs include information that is incorrect – in one survey of 5,000 CVs, it was found that 80% of CVs had at least one incorrect piece of information! By having qualifications and experience recorded on a Blockchain, it creates a transparent immutable record for relevant people to see.

It is understood that The United Arab Emirates (UAE) is now also going to be using Blockchain technology to hold and manage academic records, meaning that over 75,000 students’ qualifications will now be available online.

These are good examples of how Blockchains can help build trust and help to reduce fraud although, the users will not be aware of what technology is being used to make this happen  - nor will they care.

Higher Education
Carrefour has already found that, by enabling its clients to be able to track the provenance of some of its meat, dairy, and fruit products, there has been an increase in sales.

In the hyper-competitive grocery market, anything which one supermarket can give them an edge is bound to be copied by its competitors. Carrefour has said it will increase the number of products it sells using its Blockchain platform which offers greater transparency as to where these products originate from, where they were packed or picked, and if it subject to any genetically modified organisms, antibiotics or pesticides. It is now looking to expand in the future by adding non-food lines, i.e. clothing, as well as more information such as how much the farmer earns out of the shelf price. It is also experimenting with ways to identify products which do not rely on a “quick response’ (QR) code.

Emmanuel Delerm, Carrefour’s Blockchain project manager, told Reuters “The Blockchain initiative has proved most popular so far in China - where it is already common for shoppers to scan QR codes, followed by Italy and France, with some people spending as long as 90 seconds reading the provenance information. They are interested in information about the origin of products and how animals are cared for, with one video of a farmer with his chickens proving popular, millennials are buying less, but buying better products for their health, for the planet.”

To date, Carrefour has focused on using Blockchain technology to provide details on its own label brands. However, it has also been collaborating with Nestle to give consumers access to information for Nestle’s
Mousline potato puree products, thus allowing customers to be able to see it is only made from French potatoes.
It is not just Carrefour which is using QR codes and Blockchain technology to allow customers to get detailed information about the food they are buying - SAP has a platform too. Blueberry farmers in Chile are adding QR codes to their products so that the end-buyer is able to track the journey from the farm to the shelf. As reported in a
Forbes article by simply scanning the QR code with our smartphones, we’ll see proof of where the berries were grown, learn about the farm’s sustainability practices, and be assured that the harvesters are well-treated under fair labor laws. Blockchain will be behind it all”.

In Asia, the
South China Morning Post reported that Alibaba is trialling a project with four farmers in New Zealand to enable consumers to be able to identify what raw ingredients have been used, simply by using their mobile phones to scan the QR code. The intention is to build a “Food Trust Framework”, giving more information about the food consumers are buying. In the event of there being a problem, e.g. some form of contamination getting into the food distribution chain, if one is able to track the provenance using Blockchain technology, it will be faster to identify the source of the problem.

Food & Beverages
Logistics And Supply Chain
Wherever there is money to be made, it seems there is always someone who wants to carry out “dodgy dealings”, and unfortunately, this does not help the public’s perception about Cryptocurrencies.

Law courts globally continue to hand out prison sentences to people who have some form of involvement with Cryptos and, while some of the nefarious activities are clearly criminal, some of those perpetrators are indeed extraordinary.

Take Mr. Ye Lin Myint who was jailed for two years in Singapore, as he admitted to criminal intimidation and harassment against a multitude of people. The 36-year-old threatened to harm 30 people unless they transferred one Bitcoin each to him. However, instead of signing off his threats from Harry Potter’s arch-enemy “Lord Voldemort,” he added an extra “R” and signed himself as “Lord Voldermort”!

Meanwhile, rather than “whistle while you work” (aka Snow White and the seven dwarfs), an Australian government employee is being charged for “mining while he worked”. The 33-year-old man has been charged for mining Cryptocurrencies using government equipment that he had modified. This type of illegal Cryptocurrency mining using government property is similar to the story reported by the BBC last year about the Russians who allegedly rigged-up a supercomputer at The Federal Nuclear Centre in Sarov, western Russia, to mine Bitcoins.

In the US, Jacob Burrell Campos, a 22-year-old, has admitted breaching anti-money laundering checks, and operating a Bitcoin exchange business without registering his company. Campos has had to forfeit the $823,000+ money he made, and he has been in custody since August 2018. Also in the USA, Morgan Rockcoons from Nevada, has been charged with operating an illegal Bitcoin exchange and charged with fraud, resulting in being sentenced to 21 months in prison. Rockcoons allegedly sold 18 acres of land “which was supposed to be used to build Bitcointopia, a “Bitcoin megacity” in Elko County, Nevada” but he only owned 5 acres!

Then there is the case of Mark Karples, who has spent 11 months in a Japanese prison due to his involvement with the Mt. Gox affair, where over 600,000 Bitcoins (which would be worth today just under $5 billion) went missing. Karples has been charged with tampering with Mt. Gox’s records and was given a 2.5 year suspended sentence.

So, regardless of which jurisdiction, we have already seen people “doing time” and no doubt there will be many others facing the “strong arm of the law”. Hopefully, as these charlatans are apprehended and dealt with, this will deter others from carrying out criminal activities involving Crypto and Digital Assets.

The fact that “bad actors” are being sentenced ought to offer reassurance that people working with Digital Assets are subject to the normal law of the land and will face appropriate consequences.

FlashBoys, in Holland, has been working on a number of initiatives using Blockchain technology to help the retail sector in an effort to reduce fraud and improve transparency in supply chains.

One of the projects that it has developed is to use Near Field Communication (NFC) chips, and have these placed on bottles of wine or within items of clothes. An advantage of NFC chips is that no special equipment is required to read them, just a smartphone, and a product’s provenance can be held on the chip as well as other details, helping to tackle the sale of counterfeit goods.

Indeed, Flashboys is currently in discussions with Luxottica, the world biggest eyewear  manufacturer, to have an NFC chip inserted into a pair of sunglasses. Once the chip is in the sunglasses, it could create a unique token which could have information about the owner stored on a Blockchain. This would hopefully reduce the sale of second-hand sunglasses, as the new owner could easily scan them to see if they have been reported as lost/stolen. Ideas such as these are also being explored by fashion retailers, as they struggle to drive sales to their ‘bricks and mortar shops’ and find ways to differentiate themselves from online sales. One way would be to insert an NFC chip into items of clothes that are only sold in-store and say to customers “if you buy from one of our shops, you will get a discount of another purchase, or you will be able to see who and how your garment has been made”. By using an NFC chip, customers could use their mobile phones and retrieve discounts, and/or access to various different types of information. This could help retailers to encourage customers to use their physical shops more.

Meanwhile, American Express is looking at how it can use Blockchain technology to upgrade the many different loyalty programs it offers. Qiibee, founded in 2015 and based in Switzerland, also believes that Blockchain is a technology ideal for the loyalty industry as it offers brand owners more options and ways in which they can engage with customers, and hence offer them better value and information. Qiibee is trying to address the challenge such as when customers shop with a brand they like, they are rewarded with the branded token, ending up collecting numerous different tokens. These, in turn, are a hassle to use. However, by using the Qiibee platform, they can exchange the tokens they need from someone who requires the tokens they themselves have i.e. swap tokens!

So, it would appear that the retail sector is embracing Blockchain technology in a variety of ways, but I suspect, as this industry had greater adoption, more ways will be found to harness it still further for both on and off-line retailers.

Supply Chain
If you are involved with Blockchain technology, it is not long before the subject of Smart Contracts arises.

Smart Contracts was a term Nick Szabo was talking about in 1997, and he described them the following way: “Smart Contracts utilize protocols and user interfaces to facilitate all steps of the contracting process. This gives us new ways to formalize and secure digital relationships which are far more functional than their inanimate paper-based ancestors”.

A more simplistic way to explain Smart Contracts is to think of them as an algorithm. For example, if the plane is late, then there is pay compensation, if it is on time, no compensation is due.

As the diagram above illustrates, essentially Smart Contracts are able to digitise agreements. After all, Smart Contracts are, in effect, a software that automatically executes instructions without the need for any human interaction. Smart Contracts have their contractual terms encoded in computer language, instead of the legal language that you would find in a standard contract. Many lawyers will readily tell you that ‘Smart Contracts are not smart, nor are they contracts!’ Indeed, Nobel prize winner for economics in 2016, Oliver Hart, who won his award for the work he had done on contract theory, has recently claimed that Smart Contracts “are quite convenient, taking into consideration the fact that they are automatically executed”. He goes on to state that “their basic outlines suggest that the contracts are not a cure or solution for all issues plaguing the crypto verse… but contracts do not address conditions or problems where a smart contract may have been drawn out to cover a long-term situation”. However, we do need to take Hart’s comments with caution as he admitted he, himself, knew very little about smart contracts, or Blockchain, from a practical point of view!

These mixed views on Smart Contracts have not stopped Gartner from predicting that, by just 2020, autonomous software (not reliant on any human interaction) will account for 5% of economic transactions. As we see the global economy increasingly become more digitised (i.e devices using technology like Internet of Things (IoT) and Blockchains that can execute Smart Contracts) the challenges, as well as the opportunities that Smart Contracts present, will no doubt be tested in courts across the world.

Smart Contracts
Ernst and Young (E&Y), one of the top four accountants globally, has just announced that it is helping a firm called Blockchain Wine, in Singapore, to operate a platform using Blockchain technology.

The platform will be called Traceability, Authenticity, Transparency, Trade, Origin, and  Opinion (TATTOO), and will initially be used by an Asian wine retailer, called The House of Roosevelt, to be able to track and ensure the provenance of wine from vineyards to customers. It is also the intention to be able to use tokens, which help producers pay to track wine, by improving their supply chain logistics. In time, this may lead to lower insurance premiums, as TATTOO offers greater traceability from vine to a shop’s shelf.

There are other companies that are also using Blockchain technology to help track, trace, and improve the provenance of wine. Everledger, which started its platform in 2016 in response to research, claimed that up to 20% of international wine sales were counterfeit. Vinsent also has a Blockchain-powered platform for wine. It was formerly known as VinX and attracted investment from the venture capital arm of US-based Overstock (the firm that has created a Digital Asset trading platform in conjunction with the Boston Stock Exchange). Vinsent’s platform enables consumers to buy wine directly from vineyards and so cuts out many of the intermediaries while speeding up the time for the viticulturist to be paid.

The chart above shows the demand for red wine from China and Hong Kong has been increasing, and the Asian total wine market is predicted to grow by 4% p.a from its current $57,372 million size. As the Chinese population ages, it is expected that China will become the second biggest wine market globally. The US has 8.7% of the international share of imported wine – worth $22.9 billion, according to Vinexpo/IWSR figures.

Global sales of wine are expected to reach over $224 billion by 2021, and there is increasing demand for sparkling wine, together with premium wines, where provenance is so important. Therefore, with the credibility of a firm such as E&Y offering their Blockchain skills to create the ability to track and trace wine from vineyard to consumer, the outlook for Blockchains being used in the wine industry looks “rosé”.

Food & Beverages
Logistics And Supply Chain
There are over 1.8 billion Muslims in the worldwhich accounts for nearly 25% of the global population), with many of them living in Asia and having thriving, young and growing demographics, so this 1.8 billion is likely to expand further.

Indeed, in a report on the halal market globally, it was predicted this market will grow in value to be worth over $9.7 trillion by 2025. Therefore, it is of no surprise that a number of initiatives are being launched by different companies to ensure that Muslims can have better transparency as to where their food, cosmetics or pharmaceutical products have come from, and how they have been prepared.

Halal in Arabic means “permissible”, but halal is not just restricted to meat - it covers a wide range of other products and services.

Halachain claims to be the first public Blockchain company that is focussed on the Halal sector, helping companies to be able to assure their clients that certain food, drugs, and cosmetics comply with halal specifications. In Malaysia, Miss Elwani is a cosmetics company that is using the Halachain platform, offering transparency of where products have come from, details of the certification each product has, and what the certification actually entails.

In Singapore, WhatHalal has just launched an App designed to help companies that wish to trace the origins of ingredients, and so be able to offer assurance that a product is ‘halal-compliant’, as there is an auditable record from producer to the shop shelf.

Multinational companies will not want to ignore the rapidly growing Islamic markets and, as global supply chains become larger and more complex, any solution that can create greater transparency and is tamper proof (which is what Blockchain technology is able to offer) is going to be increasingly in demand.

Logistics And Supply Chain
Market Research
Microsoft had a stock market valuation of $1 trillion in April 2019, and for years has been a leader in software development, transforming the way organisations do business, having developed Windows, Excel, and Word.

Microsoft is embracing Blockchain and Digital Assets more and more, an example being how it is now looking to have a “Bitcoin icon” as a currency option as part of its latest version of Excel.

Microsoft was one of the first multinational companies to accept Bitcoin as a form of payment in 2014, so it is by no means a “newcomer” to using Digital Assets. It has also been using Blockchain technology internally to help speed up license and royalty payments for its Xbox video games. Microsoft claims that it has decreased the time it takes to get statements and information on payments from 45 days to just minutes. This could help Microsoft further target the global video games market which grew in 2018 by over 10% to $135+ billion, helping Microsoft to be more efficient and profitable.

Microsoft has also been rolling out it’s Azure cloud-based service, and by using its Blockchain expertise is now attracting attention from a wide range of different industries. Working with the luxury brand and goods manufacture, Louis Vuitton Moet Hennessy, Microsoft is creating a platform that will try and combat fraud in the luxury goods sector. Starbucks has also been using Microsoft’s Azure and Blockchain knowledge to help it have greater transparency over its supply chains. Starbucks’ customers will be able to download an App so they can see where Starbucks is sourcing its coffee beans from, and understanding how Starbucks is helping some of the 380,000 coffee farmers that it uses.

In the financial services sector, Microsoft is working with JP Morgan, as the bank will be using Microsoft’s Azure as it rolls out the JP Coin - a Digital Asset pegged to the US$. Microsoft is also working on a project to manage and verify identity, called Identity Overlay Network (ION). This enables your identity to be digitised, and then be shared, but only once you have given permission for others to have access. It would operate a little like Facebook Connect, whereby users can connect to over 15,000 websites based on details that they have initially entered onto their Facebook account. The big advantage that the Microsoft identity solution offers is that YOU, not Microsoft, control who and how your information is used.

Thus, one can see Microsoft is engaged with Blockchain and Digital Assets in many different ways, helping its clients develop new markets, such as ION, or bringing greater transparency to companies like Starbucks.

Supply Chain
Blockchain technology is being used in a variety of ways to help improve efficiency, cut costs, create greater transparency and offer provenance of where goods have come from in the agriculture sector.

Here are four ways through which this is happening:

      -Traceability - Blockchains are helping supply chains and logistics in the agriculture sector to improve traceability. This helps companies to quickly track unsafe products to their original source, so potentially preventing illness and reducing the cost of product recalls. A good example of this is the Walmart venture with IBM to track green leaf products it sources and sells. Frank Yiannas of Walmart has said “that the improved data traceability provided by the IBM platform reduced the time it took to trace a mango from the store back to its source from seven days to 2.2 seconds. That reduction in time enables companies to identify contaminated supply chains and recall affected products before they are consumed and cause illness”. Meanwhile, Irish-based arc-net has collaborated to create a whiskey Blockchain with Scottish distillery Ardnamurchan, which includes information on the water and grain used in the production of Scotch, as well as the identity of the distillers who made the whiskey. Wyoming cattle ranchers, who wanted to know where their beef was being sold, have created BeefChain, which tracks beef along the supply chain, and so enables the end-consumer to have provenance i.e. where the beef they buy has come from.

      -Payments - San Francisco - based Veem is used by tea distributor Tealet, to pay more than 30 different farmers and suppliers in countries across Africa and Asia, using a platform that harnesses Blockchain technology. Fees with which to pay suppliers can be as much as 12%, and international payments can take up to five days. The Veem platform uses Blockchain technology to convert payments from the source currency into the local currency. International payments cost 1.9% and are paid to vendors in one to three days (so it is faster and cheaper using Blockchain technology).

      -Commodity Management - Agricultural commodities business is massive and it can be difficult to collate the volume of data and minimise the time-delays it takes to get paid. Blockchain technology is able to help with these challenges. Australian company, AgriDigital, provides cloud-based agricultural commodity management services recorded onto a Blockchain. In 2016, AgriDigital completed the world’s first “farmer to buyer” wheat sale recorded on a Blockchain. Since then, it has run projects for supply chain provenance, real-time payments, digital escrows and supply chain finance for the food sector. At the end of 2017, Dutch-based Louis Dreyfus Co completed its first agricultural trade, using Blockchain technology, for a sale of US soybeans to China. Documentation, including contracts, letters of credit, and government certifications, were all digitised, and data was automatically matched in real time via a Blockchain platform, which avoided duplication and the need for manual checks. This reduced the time to process documentation to one-fifth of the usual time, and cut overall transaction time from two weeks to one.

      -Sharing information - Companies which buy or invest in agricultural products like to have information about...

Logistics And Supply Chain
Blockchain can be seen as a very secure database and, in the similar way that Excel replaced pen and paper records, Blockchain technology is able to help digitise records further, thus offering greater transparency and security.

For example, land ownership and a property’s history - what repairs or insurance claims has it had? e.g. subsidence, earthquake, floods - all of these potentially impact on the cost of insuring the property and can all be held on a ledger for each property.

The global commercial Real Estate market is huge, being valued at over $8.4 trillion in 2018, and has grown in size by over 15% since 2017.

The investment property market is typically dominated by institutions such as pension funds and wealthy individuals. Property tends to be illiquid, with many intermediaries involved in each purchase and sale, which adds layers of costs when buying and selling a property. 

Blockchain technology is going to have an impact on the property sector in a variety of ways, including:

       -Land registry – There is no reason why property records cannot be digitised and held on a Blockchain and, indeed, earlier this year HM Land Registry in the UK carried out a test project involving the digital trial of transferring property ownership confirming this. However, HM Land Registry concluded that while successfully speeding up the process of transferring title, it was simply a “proof of concept” and it was going to allow itself until 2030 to review the technology and decide the best way forward. However, other countries such as Dubai and Estonia have fully embraced this new technology for their land registry. 

      -Fractional ownership – Given the value of real estate, it is increasingly becoming more difficult for first-time buyers to get on the property ladder. In London, the average price of property last year was over £614,000, in New York $677,000 and Sydney AUS$ 1 millon. By dividing the ownership of a property into shares/tokens, it is possible for existing owners to sell a % of their property and so create more liquidity in the real estate sector. This is because more people are able to buy fractions of a property as opposed to the whole of the property. Furthermore, these property tokens could be traded on a Digital Exchange 24/7 and enable overseas buyers easier access to the real estate market, without the hassle of physical ownership and thus being responsible for maintenance, insurance, etc.

     -Income payments – Currently, rental income is paid to investors quarterly and are based on who is the registered owner on the day that the income is due. The actual payments are then processed via banks which, if they have to be paid overseas, can result in significant additional costs and time delays. However, if the property is “tokenised”, rental payments can be calculated and paid based on the number of hours or even minutes that an investor has owned it. The rental income can be paid immediately and cheaply, regardless of where the payment needs to be made. 

     -Removing intermediaries – Blockchain technology allows the creation of a trusted database with the ability to transfer the ownership of an asset. Therefore, once a property’s records have been digitised,...

Digital Currency
Cisco, the huge Silicon Valley electronics company, has a valuation of $240+ billion and claims in a recent report that 10% of the world’s GDP will be on different Blockchains by 2027.

It further found that 86% of company executives believe that trust is vital in a digital economy. Cisco claims that Blockchain technology is helping to create a digital, programmable economy which is expected to deliver over $3 trillion of efficiencies and new business value by 2030. Blockchain technology offers three key factors to save money and improve a company’s efficiency:

            -Transparency - a record of transactions is held on a ledger for all relevant parties to see, as well as helping to prove provenance. The cost of counterfeiting in the pharmaceuticals industry is estimated to be $75 to $200 billion p.a. In the electronics industry, it is $100 billion. In Europe alone, 10% of luxury goods sales are counterfeit, equating to $28 billion p.a.
            -Complexity – global trade is very complex, with many intermediaries and brokers. A good example of this is in financial services where a report from Thomas Philippon, from New York University, stated: “Despite its fast computers and credit derivatives, the current financial system does not seem better at transferring funds from savers to borrowers than the financial system of 1910”. Philippon calculated that just in the USA financial services sector, that 2% of the America GDP (over $280 billion of resources) is unnecessarily devoted to this sector. Blockchain technology is able to remove many of the intermediaries in the financial sector, unlocking huge cost savings and efficiencies, which ultimately will save customers money.
           -Security – many computer systems today have data held in one central location and often firewalls are easy to hack. Blockchain technology uses military-grade security, with information held in a decentralised manner making it more secure.

Cisco believes Blockchain technology is able to automate trust, increase transparency, disintermediate many third parties so unlocking efficiency cost-savings, all in a more secure manner and so making business simpler.