Blockchain research & industry insights

Take an in-depth look at blockchain technology's latest developments, projects and products.

The blockchain is modeling lava cooling

EDF (Électricité de France), the fifth largest electrical utility company in the world, has launched its visual simulator software on iExec, a decentralized application that uses Ethereum behind the scenes. The EDF simulator explores “smoothed particle hydrodynamics” for modeling fluids and studying all sorts of things, such as water dams or lava cooling. 

Your wallet is about to get fatter

What do Samsung, Facebook, JP Morgan and Nike have in common? They are all creating their own cryptocurrency. Samsung is not only creating Samsung Coin, but is also creating an Ethereum-clone blockchain to host it; Facebook is seeking $1B in investment for its cryptocurrency project; JPM Coin is being created (on an Ethereum spin-off) to improve the way it moves $6 trillion daily in its wholesale payments business, and Nike is working on a cryptocurrency “Cryptokicks” to be used by its sneaker fans.

These are just some of the companies creating their own blockchain-based currency. Jaguar, Mitsubishi Financial, and AirAsia are some others. Facebook's WhatsApp won’t even be the first messenger with an integrated cryptocurrency. Telegram (with 300 million users) has raised $1.7B for its cryptocurrency that will be used for in-app payments this fall.

There are already smartphones (Samsung’s Galaxy S10) that natively support cryptocurrency, as well as web browsers, such as Opera and Brave, that have built-in crypto wallets too.

At this rate many dozens of the products you use regularly will have their own associated currency, not unlike the Starbucks stars, Amazon points, and Delta SkyMiles you have today. The difference is that now these company currencies can be more robust and trustworthy and in turn may be accepted not just by the issuer, but by other vendors as well. A blockchain brings transparency into the inner workings of the currency, such as how many coins actually exist and what the creation or inflation rate is; and it allows you to hold the currency independently of your account. By holding the “keys” to the currency, you control it and are free to transfer it as you like.

A problem with national currencies today is that there’s no direct insight into how much of it has been printed. How many paper dollars are there? The FED says approximately $1.7 trillion, but you need to take them at their word. Paper money has an additional problem of counterfeiting. Roughly 1 in 10,000 US bills are counterfeit, a cost we all absorb. Not to mention the money spent to prevent, detect and punish counterfeiting.

So we’re going to have dozens or hundreds of currencies in our wallets in just a few years. This may sound like a step backwards, to before the Civil War, when there were 8,000 different kinds of money in the United States. Banks printed their own paper money. And, unlike today, a $1 bill wasn't always worth $1. Sometimes people took the bills at face value, sometimes they accepted them at a discount, and sometimes people rejected certain bills altogether. Merchants would need to keep a book detailing the reputation and value of different currencies, and generally the further away you were from the issuing bank, the less it was worth.

But with the arrival of modern cryptocurrencies those problems won’t exist. We’re in the digital age and computers will take care managing and exchanging the different currencies. Instead of selecting a credit card, you'll select the currency you want to pay with. Your digital wallet (as an app or browser extension) will automatically show you the currencies you own in common with what’s accepted by the seller.

The reason why there will be multiple currencies, and people will welcome them, is the same as why there are many different types of handbags, chairs or cars. We could just have one universal type for everyone, but why would we want to? Can you think of any everyday product or tool that there is only one type of? Some monies will be faster, some will be safer, some will be cuter (see Dogecoin). Some will be better for the young, some will be better for the old, some will be better for the single parent, and some will be better for the vegetarian. They would all be interchangeable, but the monies you hold will be in alignment with the beliefs and communities that you support and identify with.

Having a non-fiat (non-government) currency is not new.  There are over 4000 privately issued currencies in more than 35 countries. These include commercial trade exchanges that use barter credits as units of exchange, private gold and silver exchanges, local paper money, computerized systems of credits and debits, and electronic currencies such as digital gold currency.

The oldest and largest private currency in the United States still operating is the Ithaca Hours, where its primary function is to promote local economic development. Businesses who receive Hours must spend them on local goods and services, thus building a network of inter-supporting local businesses.

Soon there'll be a currency for nearly every initiative and product you support. The days of the boring dollar are numbered. See Santa and his reindeer in the banknote above.

Bitcoin’s most controversial figure

There’s a man who writes a Medium article on bitcoin nearly every day. The comments range from “You stand like a giant above all the other leaders crypto-fans follow...You will someday be revered, not scorned. I greatly admire you and your work!!!!!!” to “You are talking out of your butt, Dr Craig Wright.” These are articles by Australian computer scientist Craig Wright, the (self)-proclaimed creator of bitcoin, aka Satoshi Nakamoto, and the man behind the bitcoin-alternative Bitcoin SV (Satoshi Vision). Two parallel investigations in 2015 by Wired and Gizmodo pointed to Dr. Wright as being Satoshi Nakamoto, and early bitcoin heads including Gavin Andresen and Jon Matonis have unequivocally said the same. However most of the cryptocurrency community feel it's all a hoax.

Ethereum creator Vitalik Buterin is one of those who have called Craig Wright a fraud. Last week Buterin wrote an eloquent (as usual) blog post on his views on free speech and its importance in all community spaces, not just public government spaces. However he's forced to address, somewhat unsatisfyingly, the time he himself tried to censor Craig Wright. 

Combing through Dr. Wrights writings one finds fascinating, informative and iconoclastic nuggets, no matter what you believe about his backstory. Here are some random, non-technical, selections from a few of his posts:

1. Satoshi Nakamoto. The name “Satoshi Nakamoto is an amalgamation of 富永 仲基 (Tominaga Nakamoto) and Ash Ketchum (サトシ; aka Satoshi)” Wright identifies with the ideas of Japanese philosopher Nakamoto and calls him the Eastern Voltaire. Wright is not motivated by Tominaga's words to come into the limelight. “The time for remaining in the shadows has passed. Tominaga taught us that ‘concealment is the beginning of the habit of lying and stealing.’”

This is Good for Bitcoin

There’s a meme in the bitcoin world that goes "this is good for bitcoin". No matter what happens, the price drops, an exchange goes goes down, China bans crypto: "this is good for bitcoin". The rationales might include: this will flush out the "weak hands", this will bring better exchanges and teach people to not hold crypto on an exchange, this will force the west to take an opposing stance.

Sometimes however, this tongue-in-cheek attitude is helpful when reading negative news about cryptocurrency or arguments criticizing it, and to recognize the positive that is hidden in the criticisms.  

The Greatest Indicator of Blockchain’s Future Success

The greatest indicator that blockchains are a transformative technology and will overcome whatever obstacles come their way, is how it holds the imagination of the people working on it. Developers around the world working on blockchain technology sacrifice their livelihood and even put their lives at risk for it.

When the lead developer at Prysmatic Labs, Preston Van Loon, tweeted that the biggest obstacle for them is that they don’t have enough monetary support for their work on Ethereum infrastructure, Vitalik Buterin replied “Yolo” and sends Preston 1000 ETH. Paul Hauner at Lighthouse complained they’re struggling too—Vitalik then sends him 1000 ETH. Mikera Quintyne-Collins of Chainsafe says she would “literally drop out” of school if she had financial support for the work she was doing on Ethereum. Vitalik sends her 1000 ETH, and she drops out of the University of Toronto.

Blockchain's Most Necessary Feature

On November 18, 1883 time got organized. Or rather time was standardized across America. Before 1883 every town had it’s own clock with it’s own time. Following the sun in one county would differ slightly from another. Towns could arbitrarily set their clocktower as they liked. Different trains followed different clocks which naturally made it difficult to prevent them from colliding. So in 1883 a standard time was instituted by all railroads across North America. Factories followed suit, using train-time to monitor and schedule work. A few decades later, the federal government began to enforce this standard time throughout the United States.

Without an agreed way of doing things it makes it hard to organize and collaborate. Drive on the left vs right? 110v vs 240v? Socket Type A vs Socket C or D, E, F, G, H..? Inches vs Centimeters? GSM vs CDMA? Standards in industry became highly important with the onset of the Industrial Revolution and the need for high-precision machine tools and interchangeable parts. Henry Maudslay developed the first industrially practical screw-cutting lathe in 1800, which allowed for the standardization of screw thread sizes for the first time.

With modern technologies we are very aware of the need for standardization. From internet protocols, wireless communication, to operating systems, we need standardization more than ever to make these products practical. This led to the proliferation of standards organizations such as ITU, IEEE-ISO, ANSI and thousands of others. Without such organizations we would see a fracturing of technology into a myriad directions making them far less useful and even dangerous.

How are blockchains standardized? Right now the situation is bad. There is a proliferation of blockchain systems, and even efforts to make them interoperable has resulted in multiple solutions, such as Cosmos, Polkadot and Aion.

With most blockchains it’s very difficult to introduce changes, because there’s no formal mechanism for such changes to be incorporated. Generally, updates result in a fork, where two versions emerge, with the expectation that one of them will be dropped. But that is not always the case, as it’s happened with Bitcoin forking into Bitcoin Cash, and then Bitcoin Cash forking again into Bitcoin SV. The same goes for Ethereum which forked into Ethereum Classic. Even in cases where one fork is dropped there is no guarantee that the better of the 2 forks emerge. The incentives for the network operators (or miners) may not be aligned with the interests of everyday users, leaving users with the inferior option.

Since blockchains are normally open source, anyone is free to make a tweak and release a new version. In fact many early blockchains such as Litecoin and Dogecoin were essentially the bitcoin codebase with a few tweaks.

Having two blockchains emerge from one is a problem, since each time a blockchain forks it reduces its network effect. If you’re making a payment you only need do it on one. If you’re deploying a smart contract you only need to host it on one.

The solution to this mess is to introduce rules for upgrading the blockchain within the blockchain itself. Participants in the network vote on which new features they want to include. When a majority is reached those changes are activated. The effect is the blockchain today morphs into the blockchain of tomorrow. There is only one version. Even the rules on how to upgrade can be changed.

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