Blockchain research & industry insights

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

Leveraging future income with a blockchain

Income share agreements (ISAs) are on the rise for college students seeking tuition assistance. Instead of giving students a loan, universities make a deal with them. They finance the student's tuition in exchange for some percentage of the student’s future earnings for some number of years, say 10% for 5 years (with some cap). By assigning a percentage share of future income, ISAs can function like non-voting shares in a company where the individual student is treated like a company.

These agreements reduce the burden of debt on students and removes the pressure to find just any job in order to satisfy a loan bearing down on them. This financing method also puts more responsibility on the school to help students succeed. The colleges now have “skin in the game”. (Critics, however, argue it’s a small step away from indentured servitude: students indenture themselves to patrons in the investor class.)

Like any debt instrument, the creditor (the school or “investor”) may want to cash-in their share ownership today instead of waiting years to collect payment. Normally the process to transfer ownership would be cumbersome and costly, but with a blockchain it can be done seamlessly.

IncomeShare has created an app to create income share agreements on Ethereum with just a few clicks. Leveraging OpenLaw, a legal agreements platform with associated smart contracts, the worded contract produced is legally binding, and the associated smart contracts give the parties additional functionality on the blockchain. Specifically, the application creates an ERC20 token that represents the shares in the loan recipient. These tokens can now be transferred freely by the school to other parties, effectively selling their stake in the ISA. They can sell small fractions to many different parties. For the student this process is transparent and they don’t have any additional overhead when repaying their obligation. Instead of paying the various holders of the ISA shares, the student simply pays that smart contract that is managing the agreement. The smart contract will divvy up the payment proportionally to the various stakeholders.

This application demonstrates one powerful feature of blockchains and cryptocurrencies: programmable money. The way money flows amongst many parties is programmable and by taking one action—e.g. by making a single payment, a series of actions are automatically set off, paying many parties that are entitled to it.

To learn more about Income Share, see here.

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.  

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