Blockchain Research Institute tells stories of transformation on global scale

The Blockchain Research Institute (BRI) and Blockchain in Transport Alliance (BiTA) announced a partnership to support members of both …

The Blockchain Research Institute (BRI) and Blockchain in Transport Alliance (BiTA) announced a partnership to support members of both organizations in their efforts to build a collaborative network of leaders in blockchain technology last September.

BRI Managing Director Hilary Carter spoke at this week’s BiTA Spring Symposium in Atlanta, offering members insight into how the research institute operates.

“To be present at a meeting where organizations, competitors within a single industry, are coming together to create standards is music to my ears, and it is what we have been waiting for for a number of years,” Carter said. “There’s so much skepticism and negativity with the term blockchain, and to see leaders coming together to create new opportunities is fantastic.”

Don and Alex Tapscott, authors of internationally-acclaimed, “Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World,” founded BRI in 2017. The organization was founded to investigate blockchain transformations.

The organization has already seen blockchain technology come a long way since its inception.

“To see the evolution of blockchain turning into a team sport is incredibly satisfying. When the institute was founded, it was an incredible struggle to find real use cases,” Carter said. “There were maybe a dozen, and those who were working with the technology were not exactly willing to talk about it for obvious reasons. A lot of the information was proprietary.”

Carter is encouraged by the use cases she has seen popping up across the air and trucking industries more recently.

“What we do is take those stories, if you will, and we publish them to a global audience,” she said. “These are deep insights that can help others understand why this technology is so transformational, what efficiencies it creates and friction it helps overcome.”

When BRI begins to research transformations, the institute’s leaders start out by asking serval critical questions like:

Why blockchain?

How would blockchain technology solve some of the organization’s most pressing problems?

What are the implementation challenges?

What are the opportunities?

What are the regulatory hurdles we have to overcome?

The organization creates reports about blockchain’s impact on transportation, logistics and supply chain management. The reports are meant to help decision makers at various organizations understand the value of investing resources into blockchain technology.

“Our reports are designed to help individuals who are non-technical to better understand the opportunities,” Carter said. “When these things are explained in plain language, it makes everyone’s job a little easier.”

Carter was clear that BRI’s focus goes beyond simply exploring how Fortune 500 companies are using blockchain technology to solve problems.

“It is one thing for an organization to use blockchain technology to solve certain problems,” she said. “It is another thing to understand who the competitor of the future will be and pinpoint the initiatives that are being built today that will radically change the competitive landscape of tomorrow.”

Once blockchain becomes incorporated into an organization’s life, it will reshape it, according to Carter.

She believes blockchain technology, along with disrupting industries and enterprises, will also shake up the firms that implement it. The technology could have the power to change everything, from hiring practices to marketing spend.

At the heart of blockchain is the ability to source problems quickly, respond instantly and reduce waste in the economy. If companies can figure out how to utilize the technology to do just that, their reshaping may just be inevitable.

“We believe that blockchain plays an important role in the fourth industrial revolution,” Carter said. “It will be the underlying platform that underpins all the other technologies.”

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What is Ethereum’s ProgPoW and how is it impacting miners?

The Ethereum ProgPoW could split the Ethereum community down the middle and have significant consequences on the network’s evolution. The new …

The Ethereum ProgPoW could split the Ethereum community down the middle and have significant consequences on the network’s evolution. The new Programmatic Proof-of-Work mining algorithm was agreed on by Ethereum miners and coin owners through an online processing vote. However, now that it is entering an “audit” phase, many parties are debating the wisdom of their decision.

Could the Ethereum ProgPoW force another hard fork in 2019? It’s still too early to make predictions. However, more and more voices are talking about a split – whether the developers implement the new algorithm or not.

What is the Ethereum ProgPoW?

Programmatic Proof-of-Work is nothing more than an extension of the Ethereum algorithm Ethash. The upgrade is meant to help graphics cards become more competitive against ASICs. This way, miners can fight back against centralisation on the blockchain.

Sole miners who don’t have the resources to invest in expensive equipment can still have a chance of making profits from mining.

Why is the Ethereum ProgPoW important?

Since Ethereum was designed as a decentralised network, miners could use their GPUs to validate transactions and add new blocks to the chain.

But when tech companies started producing ASICs (which are more powerful than graphics cards and consume less energy), making profits using GPUs became a lot harder.

An ASIC (Application Specific Integrated Circuit) is specially designed to do one thing only – solve hashing problems and generate new coins.

The new equipment left GPU miners substantially out of pocket. Many of them, in fact, are still struggling to recover their initial investment.

This situation is leading to a loss of interest in maintaining network operations for Ethereum. Miners are moving to other blockchains where they have higher chances of getting rewards.

The domination of ASICs leads to a concentration of power in the hands of a limited number of users who own the right equipment. Decentralisation is therefore at risk. A handful of people could potentially gain control of 51% of the network. That would be enough to manipulate the entire blockchain.

The Ethereum ProgPoW consensus algorithm doesn’t eliminate ASICs. Instead, it brings some balance back to the equation by making them less effective than GPUs. The ProgPoW also aims to prevent a monopoly among equipment manufacturers by reducing the influence of ASIC users on the blockchain.

The principle behind this extension is quite simple. The algorithm uses all components of GPUs to their full extent while changing the problem in mining regularly.

By creating these random sequences of problems, the network requires more flexibility – a characteristic that ASICs don’t have for now. GPUs adapt faster to changes, making them more competitive against ASICs.

An unnecessary diversion from the Proof-of-Stake move?

The problem with ASICs’ domination is not new. The crypto community is split between people who see ASICs as a threat to decentralisation and those who have the resources to invest in expensive equipment to gain higher rewards.

Ethereum is already an “ASIC-resistant” network. And it’s not the first blockchain that would see a hard fork occur as an attempt to render ASICs unprofitable.

However, the adoption of the Proof-of-Stake consensus algorithm is the most effective way of countering ASICs’ domination once and for all. This is why Ethereum developers have been planning a switch to Proof-of-Stake for almost four years.

In this light, the Ethereum ProgPoW seems like an unnecessary diversion since it won’t have significant long-term effects on the network anyway. It’s just a matter of time before tech companies develop new ASICs for mining with Ethereum’s ProgPoW.

What about the audit?

The audit for the Ethereum ProgPoW has raised more controversy in the crypto ecosystem. Miners and coin owners who have already voted for the Programmatic Proof-of-Work algorithm are feeling undermined.

The audit performed by Least Authority (an independent German security consultant) is supposed to buy more time before integrating the extension.

However, there is increasing pressure from influential community members that have spoken against ProgPoW more than once. The audit of the code seems to be just one way in which developers are trying to deal with the criticism.

How the Ethereum ProgPoW could impact miners

Miners are essential for maintaining the blockchain, but loyalty alone doesn’t pay the bills. So, unless mining on Ethereum brings in a profit, many miners will look for more advantageous blockchains.

According to developers, the ProgPoW should balance forces on the network and encourage decentralisation. Miners will have more chances of making profits regardless of their equipment. This should be enough to motivate them to maintain network operations.

On the other hand, ASICs have their benefits, as they have higher hash power per unit of electricity and are more secure. Moreover, many community members don’t see this equipment as a real threat to decentralisation. It would likely take hundreds (or even thousands of ASICs) to control 51% of the Ethereum blockchain.

So how will things end up for Ethereum and its controversial ProgPoW? Will we have another major hard fork in 2019? It’s still too early to make predictions, but like anything in crypto, all bets are off.

The post What is Ethereum’s ProgPoW and how is it impacting miners? appeared first on Coin Rivet.

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New to Blockchain: Turning In-Game Virtual Goods into Assets

A so-called “digital collectible,” she lives a lonely life in perpetuity at an address on the Ethereum blockchain: You can look at her, but little else. Soon …

I recently started worrying about Catoshi Nakameowto. Last year, WIRED purchased its resident CryptoKitty, a cartoon cat with tiger stripes and trembling eyes, for $1.05. Since then, we haven’t seen her much. A so-called “digital collectible,” she lives a lonely life in perpetuity at an address on the Ethereum blockchain: You can look at her, but little else. Soon, though, her digital life could gain a bit more excitement—in the hands of game developers.

Gregory Barber covers cryptocurrency, blockchain, and artificial intelligence for WIRED.

For developers, the technology that underpins Catoshi offers an intriguing twist on the economics of gaming. Virtual goods are already a $50 billion-plus annual market, making up the bulk of gaming industry revenue as players shell out for the likes of fancier virtual swords and new character outfits. But unlike a CryptoKitty, gamers don’t really own the virtual items they pay for: at the end of the day, they’re pixels that disappear when you delete the game. Companies like Andreessen Horowitz–backed Forte and Hong Kong’s Animoca, which invested in CryptoKitties last year, want to use blockchain technology to turn these ephemeral items into assets.

Kevin Chou, Forte’s CEO, previously founded Kabam, the mobile gaming company that was a pioneer of the so-called freemium model: Games that are free to download and don’t require a fancy console to play, but generate revenue by selling virtual goods. Chou’s insight was that people increasingly live their lives online, and put real value on their virtual experience. “Imagine a person who’s spending three or four hours a day playing a game and is plugged into the community, talking about what’s going on in their lives with their friends,” he says. That makes people more likely to pay for virtual items, whether to unlock new types of gameplay or simply because they look pretty. Kabam sold for nearly $1 billion in 2017, primarily to South Korea’s Netmarble.

But Chou says in-game economies have grown so complicated that developers have trouble overseeing them. As a result, they place limits. Game developers typically sell goods directly to gamers and keep a firm grip on the levers of supply and demand. There’s no mechanism for players to sell the virtual items among themselves—because they don’t actually own the things. “Right now these are basically command-and-control economies,” says Brett Seyler, Forte’s COO.

Some players find loopholes to buy and sell their in-game spoils. CounterStrike: Global Offensive, a popular multiplayer shooting game, became notorious for supporting billions of dollars in bets that use decorative virtual weapons, known as “skins,” as gambling chips to wager on matches. Valve, the game’s publisher, never explicitly allowed the practice, but third-party trading sites could let players trade by plugging into the game’s API.

Chou believes blockchain tools could make in-game economies a bit more laissez-faire. He credits CryptoKitties, which arrived in 2017, with the concept. “All these light bulbs went on around the industry,” he says. With a blockchain system, gamers could trade virtual goods securely, without developers having to manage the commerce; they could even arrange to take a cut of each trade. But CryptoKitties’ initial success—one of the cats was auctioned for $170,000 in 2018—was a red herring, Chou says. The hype eventually fizzled, leaving a bunch of deflated cats stranded on the blockchain. There wasn’t much to do with them, apart from creating more cats.

Forte is looking to first develop trading platforms within well-established games where virtual goods are already used. In February, the company announced a $100 million fund with payments company Ripple to entice game developers to start using its tools, which involve a mix of Ethereum and Ripple technology to do things like handle transactions and help developers visualize what’s going on in the marketplace. The first round grants will be announced later this month, Chou says, with the goal of having “hundreds of thousands” of players involved by the end of the year.

The question is whether the traditional gaming industry will embrace a business model that lets gamers trade—and the nascent tech behind it. Serkan Toto, an analyst at Kantan Games, sees blockchain trading as an inevitable extension of the marketplaces built by the freemium model. Currently, when gamers pay for a new sword or outfit, they’re simply paying for pixels to appear on their screen; they haven’t actually invested in a virtual asset. “With blockchain, you actually own these items, and in that respect it’s really different from what we have today,” he says. “That’s a major shakeup potential for the industry.”

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That could also be perilous for game makers, Toto notes. Regulators are just now catching up to the freemium model with crackdowns on in-game spending—especially so-called loot boxes, where players pay for a haul of mystery items in the hopes of receiving a particular item. In Europe, some countries have banned the practice, calling it a form of gambling; this week US Senator Josh Hawley (R-Missouri) introduced a bill that would require developers to wall off loot boxes from younger players. But the concerns extend broadly to in-game spending, especially when it comes to kids.

“The defense that a company has against being regulated is that those virtual items have no value,” says Michael Pachter, video game analyst at Wedbush Securities. Trading, he adds, changes that calculus, and he’s skeptical that major publishers will take on the risk. There are other hurdles, he notes, like whether gamers themselves might rebel against new trading features that change how existing games are played.

Others are taking different approaches to blockchain games. Toto points to Animoca, which is focused on licensing popular brands, like Formula 1 and MLB, to build games with tradable race cars and baseball players. The company also invested last year in Dapper Labs, the makers of CryptoKitties, which CEO Roham Gharegozlou says is focused on building new experiences for your cat, like racing games, directly on Ethereum. But so far such decentralized applications, or dApps, have gotten little traction. Limited storage and speed mean Ethereum is fine for hosting a card game or a collectible item, but no good for the high-octane gaming of today. Not to mention what happens if you lose your cryptographic keys. (Your cat gets stranded forever.) But the company hopes to be there when the technology matures. “It’s purring along,” he says.

Toto compares today’s early blockchain efforts to micropayments a decade ago, before they became the ubiquitous way to buy items in freemium games. In other words, it’s early days, but with too much profit at stake for gaming companies to ignore. “We need basically one game that popularizes the concept,” he says. Still, that could take some time, with only flickers of interest from major publishers so far. Ubisoft is experimenting with blockchain technology, but hasn’t announced a game yet, while Fortnite creator Epic recently distanced itself from rumors that it was looking for blockchain partners.

It’s also unclear whether blockchain will prove the right fit for developers. Thus far, blockchain technology has struggled to find much practical use, not only due to technical hiccups but how to design economic incentives and integrate with the real world. A classic example is using blockchain tech to trace food supply chains and hunt down the source of, say, an E. coli outbreak; that’s great, as long as you can believe the head of lettuce you eat is the one that was tracked.

But Seyler says that perhaps the virtual worlds of games, with their tech-savvy participants and lack of real-world considerations, will be the place where blockchain technology can be tested and improved, a bit like how a self-driving car runs in simulation before navigating real-world streets. “Games will probably be the place where a lot of these technology and design problems are resolved first,” Seyler says. “It’s a great little sandbox.”


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Asian week in blockchain, May 4 to 10

The payment service agreement was updated to prohibit all dealings or discussions on virtual currencies and tokens. The new rulings will result in the …

Crypto asset markets have remained buoyant this week despite the news that Binance, the world’s largest exchange, suffered a US$40 million hack this week. In the past, major exchange breaches have caused markets to plummet, but this week Bitcoin and other major cryptocurrencies seemed to shrug off the bad news as markets reached a new 2019 capitalization high of almost $190 billion, and Bitcoin broke the psychological $6,000 barrier on Thursday, the same day as the Binance hack.

Binance boss Changpeng “CZ” Zhao announced that the firm would refund all the lost 7,000 Bitcoins out of a company fund set up to cover for such incidents. Binance also suggested a “rollback” of the Bitcoin blockchain to undo the fraudulent transaction, but this was soon shot down by most of the crypto community, who argue Bitcoin must be kept immutable.

Chinese social media platform WeChat has bowed to further pressure from Beijing by reportedly announcing that it will be banning all crypto related payments by the end of May. The payment service agreement was updated to prohibit all dealings or discussions on virtual currencies and tokens. The new rulings will result in the banning of merchant accounts if they service any crypto token project or fund. The Tencent-owned chat app blocked crypto and blockchain-related media outlets from its platform last August.

Still in China, widely read US-based markets blog Zerohedge has tied the recent surge in Bitcoin and crypto markets with a report that Chinese banks may be running out of dollars. It cites a SCMP report which claims that authorities in China have quietly begun “soft” capital controls on foreign currency withdrawals. As the trade war intensifies Chinese banks have started limiting USD withdrawals, which could be forcing people into other safe haven stores of wealth such as Bitcoin. Trading cryptos has been banned in China since late 2017, but investors can still get their Bitcoin fixes via over the counter (OTC) or peer to peer trading.

India also seems to be continuing with its crackdown on cryptos, which is seeing more exchanges seeking friendlier climes in which to operate. Zebpay was forced to close its doors to Indian customers last October, due to a national banking ban preventing crypto-related deposits and withdrawals. The exchange, now headquartered in Singapore, has now announced the launch of a crypto trading services in Australia. Zebpay has acquired a license from the Australian Transaction Reports and Analysis Centre, the country’s finance regulator, and opened an office in Melbourne.

Meanwhile, Thailand’s central bank is pushing ahead with its cryptocurrency efforts with the launch of a prototype blockchain platform. Bank of Thailand’s tech partner Wipro announced that the solution will enable the BoT to use a cryptocurrency to settle interbank transactions between its eight commercial banking partners, which include Bangkok Bank, Krung Thai, Siam Commercial Bank, Standard Chartered Bank (Thailand) and HSBC. The project dubbed lnthanon will be based on the Corda platform developed by blockchain firm R3. The prototype has demonstrated that blockchain technology can significantly enhance payment and transfer speeds and efficiency between banks.

Three of South Korea’s largest crypto exchanges, Korbit, CPDAX and GOPAX, have partnered with CrossAngle to improve their token listing processes. The firm has developed a data disclosure platform called Xangle, which says it will aim to tackle the lack of credible and comprehensive data for crypto token projects. This will help exchanges make more informed decisions while also avoiding scams and pump and dump schemes. CrossAngle will provide due diligence reports and the exchanges can decide on whether to list the tokens for trade or not.

Facebook has made a U-turn on its crypto advertising ban by allowing crypto related ads back on its platform. The social media giant first censored crypto advertising in January 2018 during the ICO boom. According to a report by crypto advisory Statis Group, more than 80% of token sales were fraudulent and Facebook did not want to take the risk of allowing them to advertise. It did not make any real attempt to block spammers or scammers from using the platform from their own accounts, however.

Facebook will reportedly launch its own blockchain project, with a cryptocurrency based payment system later this year.

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The Journey Towards Proof of Stake: Ethereum 2.0 Phase 0 Testnet Released

Prysmatic Labs, an Ethereum development team focused on implementing Ethereum 2.0, including full proof-of-stake and sharding, has launched a …

Prysmatic Labs, an Ethereum development team focused on implementing Ethereum 2.0, including full proof-of-stake and sharding, has launched a public testnet for phase 0 of it.

This is a significant milestone as phase 0 testnet will allow users on the network to stake their ETH and become validators. The testnet is a single client Prysm-only network.

Phase Zero Ready for Testing

Ethereum’s co-founder, Vitalik Buterin, announced back in 2017 that the blockchain would be making a switch from its current Proof of Work (PoW) protocol to Proof of Stake (PoS). Ever since, developers have been working on building the new blockchain called Ethereum 2.0.

On Tuesday, May 7, Prysmatic Labs published a blog post announcing that it has released the phase 0 testnet, an essential milestone for the PoS network. The phase 0 functionality will allow users to stake cryptocurrencies and act as validators in the network while earning rewards in the process.

In the blog post, the team explained that users interested in becoming validators on the network will need to store 3.2 Ether from the Goerli testnet. Storing the coins and acting as validators in the new system would allow them to earn rewards via the staking consensus.

The developers explained that each validator would accrue returns and penalties on the network depending on their behavior. The PoS mechanism is one that promotes liveness, which makes sure that the blockchain can continue even if the majority of validators are offline. However, a validator that is offline for an extended period would cause deposits to be penalized and would see the affected individuals lose funds as a result.

Scalability remains one of the biggest challenges facing the Ethereum blockchain, and PoS would help to improve that. Ethereum 2.0 is being developed with the idea of shards, which are coordinated by the beacon chain. Since phase 0 and Ethereum 2.0 implements this beacon chain, it will have shards which allow horizontal scalability on the blockchain. Thus, transactions can be carried out on the new chain parallel to the current Ethereum PoW network.

Phase Zero Testnet Not Built for a Large Number of Validators

The developers discussed both the current abilities and the hindrances of phase 0. At the moment, Prysm is the only client for the testnet. However, upgrading it to a multi-client system is a critical step the developers would take in the future. Also, the team assured the Ethereum community that the testnet is not a simulation and is publicly accessible.

However, it also has some drawbacks such as the fact that the network is currently not optimized to handle a vast number of validators. Without the super-optimal LMD GHOST fork-choice rule, attestation aggregation, and a few other features, Ethereum 2.0 can only host a limited number of validators at the testnet stage.

The testnet doesn’t have smart contracts or EVM functions yet as those will come when phase 2 of Ethereum 2.0 is launched. The testnet also doesn’t include transfer and withdrawal services, which will come later on the beacon chain.

Vitalik Buterin has been a champion of Ethereum’s move to the PoS protocol. Last month, he proposed that the network should adopt a higher staking reward when the PoS protocol is implemented. According to his proposal, 2,097,152 ETH would be issued annually when 134,217,728 ETH coins are staked. This would ensure that stakers get an annual return of 1.56 percent.

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