‘The’ Blockchain

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Totally free of charge. So today I saw this video of Jeremy Allaire saying: There are perfectly good reasons for wanting to use a blockchain without Bitcoin. Hopefully after reading this, the differences in approach between. The report confirms what we at Eris Industries have been saying for months: As Bitcoiners often claim it can be. So we invented our own stuff that we thought was a better fit. Cryptocurrency aims at creating systems that are global replacements for the financial system.

Stateless, bankless, ownerless digital cash. One which keeps itself in synch with very low supervision and without a central server to run it. Data infrastructure without physical infrastructure. The world they live in — unlike Bitcoin — has legal rules and obligations, banks, states, and regulators. Basically, he says that.

Smart contract enabled protocols for value transfers between ledgers are one candidate for the Internet Protocol IP equivalent of money. The Internet Protocol serves to mediate the exchange of data between two geographically separate Local Area Networks. Similarly, operations described above serve to mediate the transfer or exchange of value between two distributed ledgers. Once value transfer protocols are in place, more complex inter-nation value transfers, such as payments originating in Citibank USD and terminating in UBS Swiss Francs, can be realized by a chain of operations mentioned above.

The most efficient chains or paths can be computed using automated services. This idea leaves intact all innovative characteristics of cryptocurrencies. Any application pioneered by the cryptocurrency community can be implemented for the banking system by programs utilizing the value interchange mechanism.

Despite the fact that distributed ledgers are more likely to be commercially useful, VC investment in the space has been allocatively extremely inefficient. They are thus unlikely to be of direct usefulness in any commercially viable, mainstream application.

Permissioned finance is different than permissionless, and each organization should look at which network best supports its requirements. Perhaps, as some Bitcoin enthusiasts suggest, this is all akin to Highlander or Lord of the Rings: While it cannot be known a priori, this narrative may not prove true for cryptocurrency systems and is most unlikely for distributed ledger networks as well. Most of the space: Use them if you would like to. And their chains are entirely theirs to control.

We merely provide the tools to help them achieve their objectives. Whither Bitcoin and cryptocurrency more generallythen, as Tim asked? Alleged paradigm shifts are no exception. I believe it will surviveand keep on keeping on — in the context of addressing a very specific set of needs for a very specific audience. Like any software application. This is a wholly reasonable position to take.

People should have the ability to use whatever data structures they want, to interact with any people they want, for any purpose. Bitcoin is a form of freedom of association. That alone is valuable. Nor is there a choice to be made; these are not mutually incompatible propositions.

Utility-blockchain and cryptocurrency-blockchains, though they share common origins, are simply not comparable. They do different things and address different needs. And it would be irresponsible to predict. He says that from a commercial standpoint using a blockchain as a data structure is enough. Sure, if you want to build centralized or quasi-centralized solutions, that can be useful, too, and maybe you can call it a blockchain.

People accuse you of trying to drum up business for your company by spreading misunderstanding just to generate some controversy. Not everything has to be that decentralized. You may not have realized it, but the community has already built up an immunity to attention-seeking concern trolls and controversy trolls.

Which quite clearly some people are! What a lot of the Bitcoin set are trying to sell to mainstream institutions is a financial utility for mainstream use.

Just watch the rest of the Jeremy Allaire quote and that will be clear. You have something great here. I do agree that the blockchain tech will play a huge part in the future of technological innovation, with AND without coins.

However, I must say that the use of terminology like BBPC may be harmful to adoption of both bitcoin and the use of a coinless chain. In any case, we are all treading on ground that has not been thoroughly tested, and would likely move forward faster if the contention between the chain we know and love, and the future of blockchain tech could be reconciled.

The two do not need to be set against each other, but this is what has happened in certain forums…. I feel that a lot of this disagreement is based in the way both sides have presented themselves in those forums. Anyway, I really like what you guys at Eris have been doing, and I am glad that you put this page up.

Like you pointed out, not much with any substance can be said in characters. Like Liked by 1 person. They are totally different approaches to the same tech. From the distributed application side of things there will be a lot of interoperability between what we do and what Bitcoin does decentralised market infra that can also talk to BTC as a decentralised value transfer system.

From the perspective of mainstream financial stuff as Tim pointed out it is less likely that there will be overlap between the two spheres in the near-future. Accordingly our stuff is designed to do more than just financial applications — our first App was a YouTube-type thing including a Bitcoin content tipping button for a reason. You hint that there are benefits: We have been very open about our thoughts on the benefits of blockchain tech on our companydistributed business and engineering blogs over the last four months, for those who have taken the time to read them.

Increased verifiability of data for small businesses or for data-driven multiparty processes think: Increased availability of ready-made international data infrastructure at low cost ; easily repeatable, paired with rapid and secure onboarding. Following from 2actually banking the unbanked instead of just exposing them to price volatility in BTC. Given mining economics and BTC volatility, it is likely a permissioned blockchain could serve this function even betterand in a way that actually serves the function of a depository institution rather than just imitating one.

It would require a ton of smart contract programming work, but it could be done. Bitcoin is a a a database and b a network of validators that c communicate among themselves through the use of a protocol. It is not a protocol in the sense that IP is. Scriptable consensus experimentation and verifiable cross-database actions with regard to applications that solely utilize distributed databases.

Also, this guy puts the case well. There are dozens of database systems out there that are thousands of times more efficient and can be replicated with replication services in a few other places than a blockchain?

Points 1 and 2 can be easily done far better with actual client server architectures. Why have one client connect to every other node or many of them to verify transactions if the final decision or trust nature is centralized?

Why not just simply connect to one centralized datacenter or two or three or many more replicated with actual database replication services? Also why not using bitcoin? A few satoshis could send millions of dollars. April 8, October 30, Categories: Blockchain vs Bitcoin cryptocurated Author April 9, at 6: Anonymous Author April 9, at 4: Some of the key benefits include: Scriptable consensus experimentation and verifiable cross-database actions with regard to applications that solely utilize distributed databases 7.

What is missing on Data security on actual rdbm systems if you have trust on the server?

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The terminology around the whole phenomenon of blockchain technology is still heavily in flux. The term was defined in the Bill as follows:. The data on the ledger is protected with cryptography, is immutable and auditable and provides an uncensored truth. The essential characteristics of the blockchain are the distribution of ledger copies and the independently verified consensus process that is used to validate any changes.

It also streamlines transactions by removing third-party middlemen. Other important facets are immutability and transparency of the ledger, which are vital to the existence of trust among parties. As most ledger protocols currently function, no single party can unilaterally override a transaction added to the ledger. Advanced cryptography ensures that altering the ledger comes with high computational costs, thus ensuring immutability.

Moreover, by requiring consensus among participants who can view what the ledger currently recognises as true, any attempts to falsify a ledger should fail. Blockchain as a foundational technology and owing to its generative qualities, will create new value propositions, value chains and also new services. It will not only impact Banking and Finance but the effects of disintermediation and decentralisation which are concatenated but distinct , will cut across a plethora of sectors and affect the social fabric of our community.

All of these have different applications, permissions and effects which is particularly relevant for AML purposes. Rising globalisation and the increase in financial transactions and digitalisation has already proven an arduous task for AML compliance. Now, if you add the decentralised element, disintermediation, as well as encryption and anonymity, existing and static AML would struggle to cope.

The scepticism surrounding the mainstream use of cryptocurrencies and, by extension, the blockchain, can likely be blamed on the high percentage of illegal activity that takes place online. Cryptocurrency however accounts for the identity of its users both at the beginning and at the end of transactions through digital wallets where tokens are stored, instead of bank accounts.

The owner can send and accept tokens from one wallet to another by providing the identification code of their wallet. The code itself acts as a key, eliminating the need for names or other types of identification. So, while the transaction itself is seemingly anonymous, in most countries today you need to undergo the Know-Your-Client KYC process in order to open a new digital wallet.

So, by owning a digital wallet, even without necessarily using it, anonymity is compromised. To a certain extent, identifying the parties in a transaction and information, a record of the transaction, and even enforcement, can exist in the cryptocurrency system. However, inflexibility may be clouding judgment: The technology, by its very nature, lends itself to integrated decentralised monitoring efforts of financial transactions. An anti-money laundering system built on the blockchain this needs to be permissioned can leverage the cryptographically secure, decentralised and immutable nature of the technology to identify and stop suspicious transactions effectively.

Each financial institution in this system would serve as a node within the private permissioned blockchain network and would use the network directory and smart contracts to record transactions on the blockchain. Since relevant information would be stored on the blockchain and be made available to each node, suspicious activity can be detected and highlighted to all related participants. Participating financial institutions would thus be able to instantly alert each other about any potentially fraudulent transactions and flag them for further investigation.

A blockchain-based AML platform would make it possible for the responsible authorities to monitor complex transactions in an automated and effective manner, as well as immutably record audit trails of suspicious transactions across the system. The design of the blockchain can ensure compliance with data sovereignty laws while complementing existing legacy AML solutions, enhancing their effectiveness by adding an additional layer of scrutiny and visibility.

Another advantage that blockchain technology could present is a dramatic change in the KYC process when onboarding new clients. The current onboarding process to set up a bank account is a lengthy process, involving a lot of paperwork. One of the primary reasons for this is security against fraud and money laundering. This however tends to result in frustration on the part of clients, as the process is somewhat inconveniencing. The bank on its end needs to go through the cumbersome process of ensuring all details are correct, while being held responsible for identifying any potential security risks.

There are two different cases through which this KYC process can be adopted. The first would be a shared setup, whereby a central entity such as the Government or any authorised entity, would take care of storing all the details, and other entities such as banks can plug into this system in order to access those details.

If this option is unavailable, another possibility would be for the bank to create an internal KYC tool. The DLT is still in its early days, and cases exploring the potential of blockchain are isolated and limited.

However, to truly realise their potential, implementations of blockchain-based solutions for AML need to be integrated into the core IT landscape within each participating institution. Leveraging a blockchain platform for AML nationwide or across a geographical region will give regulators, auditors and other stakeholders an effective and powerful set of tools to monitor complex transactions and immutably record the audit trail of suspicious transactions across the system.

However, this will need cross-industry participation and require buy-in from leaders across regulatory authorities as well as the participating banks and other financial institutions. This article is not intended to impart legal advice and readers are asked to seek verification of statements made before acting on them. The term was defined in the Bill as follows: Blockchain Incorporation within AML Procedures The technology, by its very nature, lends itself to integrated decentralised monitoring efforts of financial transactions.

The element of trust is key in this process and setup, and it manifests itself in two forms: Self-Sovereign Identity — Individuals have the power to take full ownership of information on their identity.

Custodians are required to provide and verify identity attributes, but ultimately the individual retains control. The system should run on user-permissioned data models in which consent is essential.