MasterCard to Design Topnotch Blockchain-Based International Payments Solution

In fact, they are formulating a proof-of-concept for adding R3’s blockchain and DLT-centered trade finance system with SWIFT’s Global Payments …
Sep 14, 2019 at 12:10 // News

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On Friday September 13, MasterCard Incorporated, an American multinational financial services corporation based in New York, United States, announced its partnership with enterprise blockchain tech company R3 to design distributed ledger technology (DLT)-based international and transborder payments.

The main purpose of this deal is to significantly cut costs and handle liquidity management and a deficiency of regulation in payment clearing systems, according to the press release.

The credit card bull will go on with processing, clearing and settling the cross-border payments, but the collaboration gives MasterCard full access to R3’s Corda network, that is now being used by several firms such as Microsoft Corporation, developers of computer softwares, Intel Corporation, semiconductor chip producers, and Accenture plc, service providers of digital technology.

Blockchain Adoption Increases in Cross-Border Businesses

Earlier this year, R3 revealed they were working on incorporating Corda into the Society for Worldwide Interbank Financial Telecommunication ( SWIFT) network, a payments system which is projected to transfer more than $200 billion daily. In fact, they are formulating a proof-of-concept for adding R3’s blockchain and DLT-centered trade finance system with SWIFT’s Global Payments Innovation (GPI) structure.

Almost all organizations whether big or small, depend on the capacity to send and get financial payments, however, they are all using a clumsy and costly technology. Therefore, new blockchain-based technologies have to be developed to solve these challenges and allow enterprises to flourish, according to CEO R3 David Rutter.

The declaration comes days after MasterCard’s great rival established in California, Visa Inc. unveiled a deal that it made with a money transfer firm headquartered in Texas MoneyGram International Inc. to develop an effective international payment solution. However, Visa’s proclamation did not talk about blockchain. But Ripple Labs, the squad behind Ripple (XRP), have already dedicated to around $30 mln stake in MoneyGram.

Late last month, Mastercard and Visa were working on creating a professional distributed ledger technology and cryptocurrency team, and further design digital wallets, not forgetting making massive investments in this nascent industry. As a matter of fact, the former is in the process of recruiting various blockchain engineers and other DLT professionals.

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Bringing the youth workforce up to speed

Accenture, in its report Technology Vision 2019, underlined four emerging technological trends for the next three years: distributed ledger, artificial …

In the face of rapid global change, the way we live and work is becoming increasingly affected by forces that are out of our control.

These changes are happening faster than many of us can adapt to, as seen in the disruption of diverse industries. Those who are unable to unlearn old programming and adopt new ways of doing things are simply left behind.

As the pace of change accelerates, it is the younger generation who will be the most affected. Expectations are high for today’s leaders to prepare the people for the uncertainties ahead.

Adam Aziz surveys the state of affairs among the youth workforce — how the working environment is changing, what workers can do to adapt, and how organisations can help their employees to thrive in the challenging new era.

Technology is shaping tomorrow’s business environment

According to the Ministry of Finance’s Economic Outlook 2019 report, the unemployment rate among Malaysians aged 15 to 24 is estimated to hit 13.2% this year.

That marks the third consecutive year of increase since 2016 and is a 2.3% jump from 10.9% last year. Among those aged 20 to 24, the ratio is estimated to be at 11.9%, compared with the overall national unemployment rate of slightly over 3%.

The report underlined that the biggest factors include skills mismatch and lack of job experience, as well as lack of desirable high-skilled vacancies in the job market.

According to industry watchers, one factor at play is the change in technological trends that will continue to transform business models, and consequently, existing work arrangements.

“At the current appetite and speed of technology adoption, many businesses may become irrelevant in an instant, exploring and adopting are no longer optional,” Accenture Malaysia managing director Azwan Baharuddin tells The Edge.

Accenture, in its report Technology Vision 2019, underlined four emerging technological trends for the next three years: distributed ledger, artificial intelligence (AI), extended reality (XR), such as virtual reality simulation, and quantum computing or DARQ in short.

DARQ technologies and some of the capabilities they enable

In a nutshell, distributed ledgers eliminate the need for third parties; AI influences strategic decision-making; XR creates entirely new ways for people to experience their surroundings while quantum computing provides a jump in problem-solving speed.

The report also highlighted the emergence of post-digital consumers who are enjoying the results of technology saturation and can choose which technology they will or will not adopt to get the experiences they want.

Thus, companies must pay close attention, not only to the choices themselves but also to the powerful new insights those choices can provide about their customers and new market opportunities.

Further, the four trends are becoming the norm faster than we think, says Azwan, referencing lessons learnt from the past.

Adoption of new technology quicker than expected

“During the digital revolution, social, mobile, analytics and cloud (SMAC) combined to enable one such step-change … many ignored SMAC for too long and later struggled to keep up with the digital-first businesses,” he points out.

“To avoid this mistake with DARQ, companies must begin exploring new capabilities as they arise, experimenting with combinatorial effects and using their digital foundations to launch meaningful and effective pilots.”

According to Azwan, globally, 89% of businesses are already experimenting with one or more DARQ technologies, expecting them to be key differentiators.

In 2017, global investments in virtual reality (VR) and augmented reality (AR) — both XR components — rose 12% year on year to US$3 billion.

“Distributed ledger investments are exploding with blockchain and cryptocurrency-focused start-ups alone collecting almost US$3.9 billion in investments in the first three quarters of last year — nearly three times the total for the whole of 2017,” Azwan adds.

Among those that adopted these technologies are brewer Anheuser-Busch InBev and logistics firms American President Lines (APL) and Kuehne + Nagel, which developed a blockchain solution to save hundreds of millions of dollars in logistics costs.

“This approach reduces the need for data entry related to transport documentation by up to 80% while streamlining required cargo checks and customs compliance,” says Azwan.

Even the once far-fetched quantum computing technology is making headway. Volkswagen, for one, is utilising the technology to simulate the chemical structure of batteries in the hope of accelerating battery development for electric vehicles.

The automotive firm is also adopting AI in future models, exploring distributed ledgers for automated payments at gas stations and exploring AR to be utilised in future repair works.

All of this is a wake-up call for Malaysian employees. They recently concurred, through the Malaysian Employers Federation, that the nation is ill-prepared for the Fourth Industrial Revolution (IR 4.0), which has been a buzzword since 2015 and is now fast becoming the norm on the global front.

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What’s so Important About Distributed Ledger Technology?

Distributed Ledger Technology (DLT) has become a central means by which we store and update public records. An active DLT system is ideal …

Distributed Ledger Technology (DLT) has become a central means by which we store and update public records. An active DLT system is ideal because of its transparency. What bitcoin, for example, has achieved as a decentralized currency is replicated within bookkeeping. This form of accounting is now digital; it operates without a central authority.

DLT Nodes: Accountable, Accessible and Impenetrable

From the achievements of the distributed ledger, we also get the trademark idea of blockchain. Blockchain gets its name from a process of record keeping that’s achieved by various types of DLT systems. It starts with data being updated into “blocks of code.” Public nodes, which are the individual stations of a DLT network, receive data in an attempt to come to a consensus on it. A consensus is made when multiple nodes agree on the info that they receive.

Each agreement is how we collect data and then uphold it without any single authority in control of it. The next stage, which completes each “block” of information, is the encoding of the data that was “chained” from a prior transaction. Not all DLT networks need to be encoded, however, encryption protects data from being infiltrated. As in the world of finance, encoding keeps data from being altered once it has been received and agreed on.

What is Cryptography & How Does it Work?

Competing armies made cryptography popular during World War II, but no one knows when militaries began to use it. Cryptography works through a system of communication that presents a common language through substituted symbols or characters. Only if you have a decoder can you decipher messages written in cryptography. In warfare, the one sending a message would first give the one receiving it a decoder.

Modern cryptography uses a random generation of characters to encode each block of information that’s accepted by DLT nodes. This type of cryptography ensures that only the parties involved in a transaction have access to the information held within each block. This excludes the node operators. Cryptography makes distributed ledger technology relevant. As the source code for bitcoin proves, a DLT network can operate without interference. Its blocks of data only need to be protected from infiltration. DLTs will become common in many industries in the near future.

Originally published at robertsiekert.comon September 5, 2019.

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Blockchain Distributed Ledger Market – Global Industry Analysis, Size, Share, Growth, Trends and …

Distributed ledgers support the payment system for digital currency to operate in decentralized mode, by eliminating the need of intermediaries such …

Digital technology has become prevalent in today’s world. It has touched almost all aspects of life including conducting business, shopping, enhancing education and learning, entertainment, and staying connected with social world. In recent past, digital technology has evolved further to aid in conducting financial transactions. Online payments have gained huge traction along with card based payment methods such as credit and debit cards. At the same time, cryptocurrency also known as digital money is becoming increasingly popular. Distributed ledgers support the payment system for digital currency to operate in decentralized mode, by eliminating the need of intermediaries such as banks. Distributed ledger technology further enables tracking of financial transactions and makes it virtually possible to track and trade any value via digital money. It provides a robust environment for secure data sharing in real-time. Blockchain is a type of distributed ledger system providing enhanced security to the process. Blockchain comprises of blocks of digitally recorded data, creating a distributed ledger. There are many different types of distributed ledger systems, each obeying its own security and privacy levels.

Explore more informative data through brochure report @

Use of blockchain distributed ledger lends transparency to financial transactions and eliminates middle man, thus reducing the transaction costs. This is likely to drive the adoption of blockchain distributed ledger in the coming years. As the complex process of paper work and third party involvement extends the process of business transactions, blockchain-enabled distributed ledgers are anticipated to change the way business transactions take place. Moreover, enhanced security levels for transactions is another factor contributing to the growing influence of the technology. Distributed ledger systems are not controlled by any centralized authority and are not limited by legal rules. However, technology is governed by its own technical code.

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Ethereum blockchain voting sets precedent with Moscow elections

In 2009, an anonymous person who went by the pseudonym Satoshi Nakamoto introduced Bitcoin – a peer-to-peer electronic cash system based on …

Suffrage has been the greatest symbol of democracy, a unique way of expressing freedom. Over time, this word inspired many movements: universal male suffrage, black suffrage, and women’s suffrage, but all the movements had the same goal, the right to vote in political elections without any disparities. Our ancestors fought, held protest marches, and in some places even held hunger strike in order to be a part of the government formed by the people, for the people, and to the people.

Suffrage universel dédié à Ledru-Rollin | Source: Musée Carnavalet, Paris

But how often do we exercise this right? The statistics of the past elections held worldwide shows that an overwhelming majority of people failed to cast their ballots. There are various reasons for this, but it comes down to one main factor- accessibility. In this fast-moving world, everything we do is influenced by technology. However, for some reason, the electoral process continues to adhere to age-old inefficient process.

We live in a world where everything is just one click away, then why not voting? Convenience in voting is one of the main points highlighted by the US 2020 Presidential Candidate. His official campaign blog states,

“It’s ridiculous that in 2020 we are still standing in line for hours to vote in antiquated voting booths. It is 100% technically possible to have fraud-proof voting on our mobile phones today using the blockchain. This would revolutionize true democracy and increase participation to include all Americans – those without smartphones could use the legacy system and lines would be very short.”

Ridiculous? Of course, it is. When all the other industries and sectors have advanced over the years, why not the voting system? Why should we stick to an age-old tradition when all else has moved forward?

Blockchain for voting: A far-fetched dream?

In 2009, an anonymous person who went by the pseudonym Satoshi Nakamoto introduced Bitcoin – a peer-to-peer electronic cash system based on blockchain technology. A decade after the cryptocurrency and the technology was introduced to the world as the new Internet revolution, everybody wanted to buy-in.

From companies like IBM, Microsoft to banks like JPMorgan Chase, to regulatory authorities, everyone wanted to leverage this new technology for cross-border payments, supply chain, data storage and much more. One such sector this technology was poised to disrupt is the voting system.

Several claimed that leveraging blockchain technology could result in the creation of a system where people can cast their votes from anywhere in the world with just one click while maintaining transparency.

The First Vote | Source: Library of Congress

Sandeep Nailwal, the co-founder and COO of Matic Network, is one such person who believes that the voting system could be transformed by leveraging blockchain technology. He said,

“If blockchain voting was to become widespread, this would begin to highlight the real-world use cases of blockchain technology to the masses, likely leading to a hugely increased level of awareness of the opportunities blockchain can provide and will encourage exploration by actors within many industries of the benefits of blockchain for their specific needs. “

“At the moment, blockchain is a rather niche cutting-edge technology, but this is largely due to a lack of awareness and understanding at this early stage. Having blockchain utilized in the voting process would mean mass adoption of a blockchain-based system, and much greater levels of understanding among the general population and organizations alike.”

Even though the blockchain industry, in general, is still in its nascent stage, its use for voting was already envisioned by Alexei Navalny, a Russian lawyer, and political activist, for Moscow’s 2019 elections.

The Moscow Elections:

The very move of leveraging blockchain technology for voting in the capital of Russia can be considered an important milestone in the history of Russian elections as the country has constantly been under the radar for accusations of electoral fraud in both Presidential and Legislative elections. The allegations have, in the past, resulting in protests in Moscow and St. Petersburg.

The initial announcement with regard to blockchain voting was made at the beginning of December 2017 led by the Moscow Department of Information Technology via Active Citizen. The platform has been active for years, enabling residents to influence the city’s management via smart technology. This Smart Voting system was supported and promoted by Alexei Navalny in order to defeat the ruling party of Russia – United Russia

This voting system leveraged the Ethereum blockchain and would have allowed Moscovites to count the votes to validate the legitimacy of the results in real-time; creating a transparent system. The system was proposed to enable people to vote on their smartphones or computers, and this information would be stored on the Ethereum blockchain. Notably, this would mark as the first use of blockchain technology for voting in a large-scale operation, demonstrating the potential of blockchain technology to the world.

Louise Weiss along with other suffragettes in 1935 | Source: Wikipedia

On Ethereum blockchain being leveraged for the Smart Voting system in Moscow, Sandeep Nailwal stated that “it would, in essence, mean mainstream adoption of blockchain technology in that area of life.” He further stated,

If Ethereum was able to provide the answer to the flawed traditional voting system – which is, of course, a huge conundrum that traditional technology is not able to overcome – this would undoubtedly bring mass awareness of blockchain as a solution to many current technological problems. As Ethereum is by far the most secure, decentralized and widely-used smart contract platform, Ethereum would stand to benefit the most from this increased level of awareness and interest.”

To do so, Moscovites were required to install the Active Citizen software, after which he/she would become a node, recording the entire data and thereby, making it a distributed ledger and eliminating any chance of fraud or obstruction of data.

The Great Dismay:

While the prospect of Ethereum blockchain leveraged for Moscow voting saw a positive response in the community, the smart voting itself was not as easy as pie. In August 2019, a French Researcher, Pierrick Gaudry released a document titled, ‘Breaking the encryption scheme of the Moscow internet voting scheme’.

Gaudry illustrated how the encryption scheme used in the code is “completely insecure,” adding that it could be broken within minutes. He said,

The encryption used in this system is a variant of ElGamal with key sizes that are too small […] It can be broken in about 20 minutes using a standard personal computer, and using free software that is publicly available.

He further said, “More precisely, it is possible to compute the private keys from the public keys. Once these are known, any encrypted data can be decrypted as quickly as they are created.” The research suggested the key size be increased by at least 2048 bits as a solution. Gaudry also stated that the worst possible outcome would be that the voters voting data would be revealed as soon as they cast their vote via this system.

Succeeding this, the representatives of the project released a statement on the French researcher’s findings, stating that they would increase the key size to 1024 bits as a solution to the problem highlighted. The statement read,

“We absolutely agree that 256×3 private key length is not secure enough. This implementation was used only in a trial period. In few days the key’s length will be changed to 1024. We are very welcome for you to try to use cudo-nfs or similar or any other methods to break the used cryptography.”

The Scalability Trilemma:

While blockchain technology being leveraged for the voting system could be music to one’s ears, it sure would not be as simple as it seems. Even today, one of the main problem’s that needs to be addressed with Ethereum is its scalability problem, which comes under the blockchain trilemma concept. The scalability trilemma, a concept that was first brought up by the creator of Ethereum – Vitalik Buterin – asserts that a blockchain system can have not more than two components out of the three; decentralized, security, and scalability.

Scalability Trilemma

Nailwal stated that Ethereum being leveraged for mass elections would “certainly be a problem,” considering Ethereum’s current base infrastructure. He also stated that Ethereum’s network is “consistently congested and that the transaction processes are too lengthy to be radically usable for high-user-volume applications,” further citing the example of CryptoKitties.

“Although Ethereum has captured a significant market share- along with the imaginations of many blockchain enthusiasts- on its mission to facilitate the decentralized future as the decentralized ‘world computer’, it suffers from crippling scalability issues which cannot be ignored.”

CryptoKitties, launched by Axiom Zen on October 2017, was one of the most hyped blockchain games. The game gained a lot of traction, with players spending thousands of dollars for some kittens. But importantly, the game raised concerns of Ethereum’s scalability as it resulted in a massive congestion crisis. Nailwal stated that while this blockchain game did expose Ethereum 1.o’s scalability limitations, it was, however, not the only culprit. He said,

“[…] the Ethereum network can currently handle just 15 transactions per second [TPS]. If we extrapolate this out to a 24-hour period, that’s around 1.3 million transactions per day. The highest number of transactions ever seen on the Ethereum network was a little over 1.3 million, on Thursday, January 4, 2018. This was during the peak of Ethereum’s congestion, causing huge problems for network participants in terms of lengthy transaction times.”

Suffragist Elizabeth Selden White Rogers at the suffrage van | Source: Library of Congress

Further, Sandeep Nailwal explained how this could play out in elections by taking the 2018 Russian Presidential elections, which saw a turnover of 68 million voters.

“That’s 68 million votes which, in the case of using an Ethereum-based blockchain voting system, would equate to 68 million transactions running through the network within the span of time voters have to cast their votes (not accounting for the rest of the network transactions being utilised for other use cases within that same period of time). 68 million transactions through the Ethereum network would beyond cripple the network, bringing the whole system to a grinding halt.”

Nailwal further stated that if there was congestion in the Ethereum network during the voting period because of the high number of votes being cast, then it would result in the entire process being delayed for several days. He added that this would not be acceptable “in the context of a political voting process.” He stated that this could be solved with a high-throughput [TPS] Layer-2 solution, enabling near-instant transactions that will be secured by the Ethereum mainchain; a system similar to that of Matic Network.

Trentan Van Epps, a Developer Advocate at Whiteblock, also had a similar view on solving Ethereum’s scalability crisis. He said,

“There are many promising scalability solutions being developed for Ethereum that will be able to accommodate large-scale systems, including Serenity [Ethereum 2.0), plasma and ZK-Rollups. However, it’s important to be thorough when implementing blockchain voting systems, as naive implementations end up creating more problems than they solve. Zero knowledge mechanisms, which obfuscate user identifiers, are crucial to a minimum viable voting system.”

The Political Play:

Notably, the technical problems pointed out by the French Researcher and Ethereum’s scalability were not the only issue to brew in this so-called revolutionary elections. The entire idea of making the entire voting system more transparent was came crashing down days before the election day. According to a Russian news portal – Meduza – the online voting system designed to have “three means of controlling for the correct counting of votes” was forsaken because of restrictions placed by Moscow’s officials.

Selma to Montgomery March in 1965 | Source: Abernathy Family Photos

The online voting system was supposed to allow users to verify whether their votes were accurately recorded in the system, but this plan was eventually discarded. A decryption key was supposed to be made public in order to allow people to decrypt and count the votes, but this access was reduced to “the total number of encrypted ballots, the number of decrypted ballots, and the percentage of decrypted ballots.”

One of the key aspects of this entire system was access to the smart voting system’s blockchain. People were assured that they would be able to track all the transactions, enabling them to monitor the entire process. This was also, however, called off by the officials with the decision to restrict access to specific blocks.

The local news portal said,

Developers never explained publicly why they decided to abandon voting transparency, but the city’s working-group members say the programmers told them unofficially that they scrapped the vote-verification system on orders from their employer.”

It further stated,

As a result of all these shortcomings, the Moscow Mayor’s Office can effectively publish whatever Internet voting results it likes […] The only conceivable way of verifying the online election results would be to take the city to court, where officials could be compelled to grant access to the system’s original blockchain and vote decryption key.

The Curtain Call:

The elections that took place on September 8 – Sunday turned out to be one of the most controversial ones. According to reports, some of the opposition’s leading candidates were not even allowed to participate in this elections, thereby resulting in one of the biggest protests to take place in almost a decade. With everyone’s attention set on the results, the smart voting system was going to have its first test run in three precincts in Moscow for the local elections.

Dandi March 1930 | Source: Wikipedia

This test run, however, was not as successful as it was purported to be. Reports stated that the system crashed even before the elections began, and this was followed by two more outages. According to Medusa, some of the voters who had signed up for smart voting were not able to cast votes because of technical problems.

Ilya Massukh, a member of RF Public Chamber stated, {translated from Russian}

“The failure occurred in the general infrastructure of the public services portal, we localized the problem and tried to restore the hardware and replace it. They replaced it within 15 minutes, after which a second failure occurred, it was necessary to stop the voting system for an hour to exclude the systems that caused the failure.”

The tech blame game:

Google and Facebook, two of the biggest tech giants in the world, were accused of interfering in Russia’s elections. As per a local news portal, Aleksandr Malkevich, a member of Russia’s Civic Chamber stated that Google’s search engine displayed the smart voting system ads to those who were searching for data regarding the local elections in Moscow.

A comeback?

Despite the failures, the Smart Voting saw a turnover of 90.8 percent among the 10,200 registered users. Even, Navalny remarked that the results of Smart Voting was “fantastic,” on his social media handle. Additionally, the anti-corruption lawyer is also looking forth to using this system in future elections. As for the elections results, the ruling party, United Russia, which supports Vladimir Putin lost one-third of its seats in Moscow parliament, however, retained majority.

“If something’s important enough, you should try. Even if the probable outcome is failure,” Elon Musk.

Related Topics:ethereumMoscowVoting

Priya is a full-time cryptocurrency writer at AMBCrypto concentrating mostly on privacy coins. A graduate in economics, Priya focuses on developments on Ethereum and blockchain technology.

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