Blocktrak

2020 has arrived. As we progress into a new digital age, we see transformative technologies rapidly emerging like never before. People often do not comprehend how fast technologies evolve and how they affect our lives as a whole. Although this blog focuses more on blockchain, there are many emerging trends taking precedent alongside blockchain. As important as Distributed Ledger Technology can be, these other technologies should be observed and noted. These includes Machine Learning and automation tools. Companies like DuoLingo, SparkCognition, Augury, Signal AI, Chorus, Cobalt, and over 230 cities globally with Machine Learning startups in operation.

Multi-sensory projects are shifting peoples perceptions of the world. In the early 1990’s Virtual Reality experiences tried to gain adoption in shopping malls. If you recall the thriller movies “Lawnmower Man” or “Total Recall” this kind of environment can be visualized. Now, companies like Oculus, HTC, Hewlett Packard, Magic Leap, and of course Google are all rapidly deploying new experiences for mass adoption. Many of these experiences are geared towards gaming, but other uses include recruitment and training, pain management, creating and forecasting trends, training medical students, treatment of PTSD, and social cognition.

The democratization of of information continues to gain momentum. Data & Analytics tools, like MongoDB, Apache Hadoop, Lumify, RapidMiner, and others will allow for scalability and rapid deployment of data. Custom application through the use of AI, low-code and no code platforms will enable non developers to deploy solutions to the masses. Non IT professional will be enabled with tools allowing them to apply specialized skills above and beyond their training.

Human augmentation. Traditionally, we have referred to the science fiction name of “Cyborg” when thinking of man merged with machine. In 2020, companies are continuing research into solutions for prosthetics, sight, implants, and “Bio-printing” which essentially is 3-D printed organic tissues. This in particular could be quite revolutionary for human evolvement as many are in need of replacement parts which can be damaged from bone loss. When we think of Cyborgs, we think of action and entertainment movies of the future, however they are becoming very real with the merging of humans and machines. The movie “Blade Runner” illustrates a dystopia of this environment.

Smart Cities and Smart Spaces will continue to evolve. Some cities are rapidly deploying this model in Asia, Particularly Sejong and Busan in Korea. In China dozens of cities are deploying automation, facial recognition, automated transportation and endless IoT solutions. The advanced urbanization of our planet will only see massive and rapid increases of these practices in the years to come.

Distribution of the Cloud. Cloud computing will become more distributed and less centralized as more options open. Cloud initiatives will account for 70% of all technology spending going into 2020. 80% of all organizations globally will be involved in cloud computing by 2025. As remote working will continue to expand, workers will greatly benefit from Cloud advancements and its capabilities.

Automation is King. In simple language, robots could advance over human capabilities. Robots will rule the world – but not yet. Autonomous vehicles continue to be tested and have yet to hit mainstream due to safety reasons. There are parallel effects from this which will cut costs, but also remove low skilled labor and increase a demand in high tech skills for all humans. You may have experienced autonomous transportation by taking your local airport terminal commuter trains. Drones and other AuT (Autonomous Things) will expand.

Last but not least, Blockchain. Since the inception and notoriety of digital currency (Bitcoin), the general public has had a fascination with the capabilities of the various distributed ledgers. Most of this focus has been on the price of digital assets, and enterprise level firms have been deploying their own in house blockchains. The international banking giant HSBC recently announced that it will transfer $20 Billion in assets on a blockchain based custody platform. World governments are also starting to seriously explore the capabilities of their own national digital currencies. The wild west atmosphere of Cryptocurrency is becoming increasingly institutional but still piques the interest of more grass roots enthusiast communities, developers, and retail investors who still “Hodl”. One of the trending buzzwords of late 2019 was “DeFi” which is short for “Decentralized Finance”. Projects like MakerDao have gained prominence, loaning and staking platforms, as well as Stable Coins. Regardless of the price of Bitcoin, it will be an interesting year for all of these emerging technologies.

Malta is leading the pack in the emerging technology sector, entering a new era of digital innovation! Next month, 8,500 people from all over the world will gather here in the Blockchain Island to have the opportunity to discuss and invest in projects that are changing our future. Join us on the 7th and 8th November. www.aibcsummit.com

Many delegates will likely be attending the various conferences and workshops at AIBC Summit, which have always been extremely popular. Headline topics will include the Future of Fintech, Business and Emerging Tech, Innovation, and of course, Regulation. Leading the discussions will be Joseph Muscat (Malta Prime Minister), Silvio Schembri (Malta Financial Services, Digital Economy and Innovation), Anthony Pompliano, AKON, Ian Balina, Matt Greenspan, Yorick Wilks, David Orban, Miko Matsumura, Grace Rachman, Tim Draper, Virgil Griffith, and Alfio Bardolla.

The AIBC Awards on 7th November will be a glittering celebration of the best of the best in the worlds of AI, blockchain, tokenisation, robotics, IoT, and more. A charity event will wrap up the evening, with the intention of raising a 5 figure sum for the SiGMA Foundation’s global activities to help those in need.

Finally, this year’s show also adds glitz and glamour to the proceedings, courtesy of Grammy Awards-winning artist Akon, who will be delivering a keynote on the main stage about his West African AKOIN project, as well as performing at the extravagant closing night on Friday 8th November.

Eman Pulis, CEO & founder of SiGMA Group and AIBC Summit, said, “We’re so excited to bring this third edition of AIBC Summit to fruition in November. Alongside the latest government initiatives to further establish Malta as Europe’s leading hub for technology, our wider Malta Week activity will develop the synergy between the blockchain and medical cannabis sectors, offering a profitable new direction for smart DLT investors. It’s set to be a busy but successful week for everyone!”

Malta AI & Blockchain Summit is a bi-annual expo covering topics relating to the global sectors for blockchain, AI, Big Data, IoT, and Quantum technologies. The event includes conferences hosted by globally renowned speakers, workshops for industry learning and discussion, an exhibition space accommodating more than 400 brands and a number of networking events.

One of the topics often discussed in Blockchain communities is how mass adoption can be achieved. This revolves around decentralized applications, and scaling Blockchains which currently do not scale enough for widespread users globally. At a recent Keynote at Stanford University in California, founder Vlad Zamfir described what exactly Casper Labs does. But it is best described in reference to their GitHub:

“CBC Casper is a family of “correct-by-construction” consensus protocols that share the same proof of asynchronous, Byzantine fault tolerant consensus safety. We describe this family of protocols by defining their protocol states and protocol state transitions, and then we provide a proof of Byzantine fault tolerant consensus safety for the entire Minimal CBC Casper family of protocols. We give examples of members of this family of protocols, including a binary consensus protocol. “Casper the Friendly Ghost”, a blockchain consensus protocol, and a sharded blockchain consensus protocol. Each of these examples is “correct-by-construction” because the way they are defined guarantees that they are part of this family of protocols, and therefore satisfy the consensus safety theorem.”

Computation for networks like Bitcoin require a high amount of energy to operate, this is why multi million dollar mining facilities are constructed to operate this network. In the old days, Bitcoin could be mined at home on regular desktop computers. Since that time, networks like Ethereum came into existence from computer engineers like Vitalik Buterin, who was an early Bitcoin enthusiast. The main problem developers at Ethereum are working on is scalability, and reducing compute power. This can be done through what is referred to as “Sharding” which is what it sounds like, broken up pieces of information – think glass, organizing it a certain way and sending it to specific locations. It can also be achieved with the “Proof of Stake” consensus mechanism which means that the creator of a new Block is chosen from a pool of users that have staked a certain amount of Cryptocurrency, so there is no puzzle to complete like Proof of Work mining, and no reward for doing so. Many developers have been in favor of this model and it continues to gain attention in the Blockchain world.

Another added benefit to this project is being open to all programming languages. Ethereum requires knowledge of Solidity, which is a Javascript like based language. Languages like C, C++, Rust and others can be utilized with Web Assembly or WASM which is an open standard put forward by the W3C or World Wide Web Consortium. This organization was formed in 1994 and is designed for the purpose of developing standards for the world wide web. It currently has 444 members. Casper Labs also wants to allow for the development of “Side Chains” which is a separate blockchain that is attached to its parent blockchain using a two-way peg. The original chain is usually referred to as the ‘mainchain’ and all additional blockchains are referred to as ‘Sidechains’.

Casper Labs is also aiming to become fully decentralized which means the operation of the Blockchain will be open to anyone. Master Nodes will not exist on the network. For those who have never heard of a Master Node, a Master node is full node (a computer) that incentivizes node operators to perform the core consensus functions of running a blockchain. They want the project to be open source and run by the community and stakeholders. They are preparing governance models that would prevent any sort of centralization of this network. Currently, the governance model consist of validators, core devs, node operators, app owners, end users, token holders, and software licensees and will utilize a voting structure between these entities.

The team for Casper Labs is comprised of Blockchain veterans such as Vlad Zamfir and developer Michael Birch. Based on research done here at Blocktrak, this is one of dozens of initiatives in the Blockchain ecosystem with the goal of scalability. It is worth noting.

2019 has been an epic year compared to the depression of 2018. At the beginning of 2018 the Bitcoin bubble began to burst and prices crashed for most Token projects. The “Space” as many participants like to call it came under scrutiny from investors questioning the validity of these startups. However, Bitcoin has experienced many boom and bust cycles since its inception. Adoption has been slow and nobody really uses Cryptocurrency for anything other than trading what Crypto enthusiast and traders refer to as “Shitcoins”. Shitcoins are simply projects that don’t seem to produce much but have pump potential. Last year at Consensus, an event created by Blockchain media company Coindesk was a vast display of wealth generated from the bubble for those who sold the top. Lamborghinis parked on 6^th avenue, extravagant yacht parties and after party after after party. Consensus 2019 was a toned down version of last year but with the same “Fomo” in the air in my view. Still, thirsty investors who missed the pump of 2017 lurk its hallways along with hungry startups looking to spread the word about their new projects and forge alliances. Behind the scenes many of these startups have been quietly building, shipping code and building applications that could one day change how the world conducts business believe it or not. Also, for those who did not “buy the dip” they are regretting it now. Ethereum was possible to purchase under $90, and now it is well over $200, Bitcoin was in the low $3000 range and has gone back over $8000 again, Binance which has been one of the strongest performers went from around $5 to now over $30. Bitcoin has been the best performing investment globally of 2019 and that speaks volumes.

Blockchain Infrastructure Is Being Built

The general environment at Consensus was the same as last year, enterprises seeking to learn what is happening in this hard to decipher world of Cryptographers, coders, investors, funds, traders, and researchers. Some famous names have stepped into the arena such as IBM, Deloitte, JP Morgan, HSBC, Rakuten, and other banks and institutions seeking to build their very own Blockchains and solutions for Blockchain. A multitude of “Stablecoins” have been launched aiming to secure your money into the USD when prices fluctuate. Aside from these already established organizations, hundreds of new startups independent and looking to solve problems like scalability (Blockchains do currently not scale very well) governance, many of these Blockchains have varying governance models on how they should be run and everyone has a differing opinion on ways to operate within them, Decentralized Finance (also referred to as DeFI) which is an arena looking to rebuild and remake finance and other areas like gaming and general mass adoption. Right now if you take an inside look at some of these decentralized applications you will see a lot of new features that didn’t exist in 2018. I am a big proponent of ease of use, but we are in such an early stage that ideas are still being thrown around on new things to build. Not everyone in the space has an answer to every problem.

I’ve met some visionaries who tell me that Blockchain is designed to disrupt the current system we live in, to turn everything upside down. It is a free market where anyone can contribute their vision and ideas. Some outsiders may question the validity of these projects but the point of it all is a decentralized world, where people interact directly with each other with the use of these new systems. There are many ways to spin Blockchain. While many newcomers have been perplexed by Blockchain, it is not that complicated to understand. A Blockchain is a chain of blocks of information that once created cannot be reversed. This information can be viewed by anyone instantly. Cryptocurrency on the other hand is simply a Keypair, think of your GMAIL login. The public key is your e-mail address, the private is your password. Once logged in you can specify or move where the Key points (your private Keys). This is pretty much what Cryptographic money is, a public key and a private key stored on the Blockchain and with this, many have been spinning a multitude of ideas to build on on various Blockchains. Bitcoin was the first Blockchain, but “Alt Coins” came in later – forked versions of Bitcoin with new names slapped on them, and new Blockchains all together like Ethereum.

As a matter of fact the founder of Ethereum – Vitalik Buterin was a huge proponent of Bitcoin and Ethereum was his own expansion on Bitcoin, he added “Smart Contracts” which was borrowed from Nick Szabo an early visionary. Each Blockchain respresents a different set of values and governance models. Bitcoin works by way of massive computing power called Proof of Work or PoW for short. Ethereum runs the same but has decided to move in the direction of Proof of Stake, which simply means those who “Stake” (hold Coins/Tokens) have voting power and influence over the network along with other mechanisms. This is why thousands of new projects have launched in the Blockchain space, and continue to launch. Most of these projects will fail but the few that will survive will have an absolute impact on how society functions. Facebook is gearing up to make a statement in the Cryptocurrency arena in 2020, and who knows what will happen. It is also obvious that every major centralized organization will follow suit with their own iteration of Cryptocurrencies. The problem with this is that the idea of Bitcoin was created to avoid these sorts of organizations, so it will be fascinating to see the clashing of 2 mindsets.

At Token Summit I heard some interesting panels, one of the speakers Ryan King is the founder of FOAM which is a mapping project. They held a very democratic Token sale in 2018 without any sort of pre sales to “Whales”. For those new to the investing arena, a whale is a high net worth individual or group of individuals that purchases large amounts of Tokens and then prepares to “dump” or sell at a pump. This can often create a negative ripple effect to the smaller buyers and has lead to more restrictions on Token release. If a presale occurs, these early buyers may be forced to wait 1-2 years before they can have their Tokens which prevents them from selling too early and hurting the image of the Token by selling too fast. FOAM created a model called “Proof of Use” which forced investors to use the Token within the ecosystem before having full access to their locked Tokens. Essentially what this did was weed out unhealthy users and create a loyal following with real enthusiast. In some instances a competition is created to win a rare NFT or Non Fungible Token.

FOAM is one of the few projects that I find interesting and engaging. If you are a user of Google Maps you will understand the point of something like FOAM and why it can be an important add to the Blockchain ecosystem. Also contributing to the discussion was Brian Hoffman of “OB1” which pioneered a company called Open Bazaar. This is simply a place to buy and sell real world items for Cryptocurrency. It is not new and has been around for quite a while. He stressed the importance of each user becoming a node on the network contributing to the functionality and code. Ted Livingston, one of the founders of “Kin” believes technology serves the solution and to build money for the digital world whatever pieces to make it work. Kin currently serves as a Cryptocurrency for applications within its ecosystem. However with the recent announcement that Facebook is launching its own Cryptocurrency, you have to wonder what the future of projects like these will be.

Decentralized Finance – “DeFi”

Decentralized Finance (DeFi) is one of the newest buzzwords in the Cryptosphere. What this simply means is Cryptocurrency oriented finance. Years ago “FinTech” was the hottest buzzword and this was merging tech with the world of finance. Companies like Plaid have grown exponentially catering to millennials to help them organizes their finances. Companies like Uniswap, Compound, Maker DAO, and Etherisc are paving the way and making the assumption that Cryptocurrency will become the standard of money. While Wall Street is probably laughing at this or in denial, it all seems inevitable to me. We are clearly moving into a fast changing world of technological innovations. Hayden Adams created Uniswap as a simple Ethereum based (ERC-20) Token standard exchange. It has a simple interface and fairly easy to use. It is still in Beta mode. Compound is a new open finance project that adds value to other projects and its founder Robert Leshner believes the network effect is going to increase despite how bad the Blockchain currently is. He believes Ethereum could work for the next 50 years. Also contributing to the discussion was Gregory DiPrisco of Maker DAO (Decentralized Autonomous Organization) which specializes in collateral loans, community governance and its own stablecoin. Maker believes that HTML is the primary web language and not changing. He also stated that if Layer 1 (the blockchain layer – protocol level) is working then it already gives them many things to improve upon.

Hayden Adams of Uniswap thinks that open finance will enable more people to participate in the financial system than before. However Compound thinks that you need to be a “geek” to use this stuff currently. I do agree that participation in the Crypto world can be a bit cumbersome. Wallets, keys, organization of data, different functionalities, all of it can be overwhelming for the non technical person, but this is a new world and usually the early adopters are more technical. User experience is important and the amount of steps required to perform a transaction should be reduced over time. As much as people in the Crypto world dread Facebook I believe they will be providing solutions to these many problems and will probably look to partner with some of these DeFi startups. I can already envision this happening.

Fred Wilson – a famous Venture Capitalist who heads Union Square Ventures had a discussion with Olaf Carlson-Wee who was featured on the cover of Forbes magazine during the ICO boom of 2017, discussed the future of the space. Wilson proposed creating a fund for hackers to attack various Blockchain startups to test out the networks, which seemed very interesting. It was sort of a joke but makes total sense. These networks need to be secure in order to function. Olaf believes the next big thing is Web Assembly also known as WASM. He also wants to invest in more DAOs (Decentralized Autonomous Organizations) and feels that it is a promising area. He wants to see more decentralized governance. How will people behave when given capital, game theory behavior economics. DAOs are appealing in many ways because they do lean in the direction of what decentralization stands for. One of the early DAOs which launched in June of 2016 was hacked for over $50 Million in Cryptocurrency. Clearly security of these DAOs is an important factor and needs to be examined with each project. As I write this, Bitcoin is approaching the $9,000 mark. It is a clear sign that there is belief in Cryptocurrency and a more decentralized future. However, Facebook will be appearing very soon with its very own Currency and governance model. I expect Amazon to follow suit. eBay displayed multiple banners around Consensys hinting at a accepting digital currency as payment options. Which one is not yet clear. Overall I am convinced that Cryptocurrency is here to stay and this is just the beginning of a Blockchain based world.

While most people in the world of blockchain are paying attention to the top 10 projects on CoinMarketCap, new decentralized projects are being built behind the scenes, companies tackling the main issues that are important problems that have yet to be solved like scalability, security, regulation, trust, and adoption. In 2017, I attended a Hackathon for Blockstack held in New York City focused on building applications. At the time it was hard to tell which companies would become recognized because Billions were being raised for Initial Coin Offerings and the market was extremely crowded with different ideas. Blockstack did not come across like the typical ICO, throwing special events to attract investors and elaborate parties. It appeared they were just focused on delivering applications to be deployed on its network. The founder, Muneeb Ali is said to have been a childhood computer prodigy who built his first computer at age 13. He later went on to graduate from Princeton with a PhD in distributed systems. This is a common pedigree of leaders within the Blockchain world and people like Vitalik Buterin of Ethereum and Changpeng Zhao of Binance share similar talents for their vast computer engineering and programming talents. The world is currently going through a transition and seeing some major changes because of the technological landscape. Centralized organizations have been outed for data collection, privacy issues, and hacking. Younger generations are resisting old traditions and more and more people are vying for individuality and self expression yet at the same time, artificial intelligence and surveillance is rapidly expanding.

Is Decentralization Rising?

It is not evident at this time that the masses are interested in Decentralization. Most everyday people do not even know what this means. If it were explained to them they would probably agree it can be a good thing and would avail them the individuality and self expression they are keen to. If they knew that their information could be compromised by hackers, they would also agree that owning your own data is valuable. Centralization has been challenged many times over the years with companies like Napster in the early 2000’s which allowed anyone to openly share music with each other for free. This caused a major disruption with the music industry for several years until new strategies were initiated. We also saw the same occurrences with software being pirated on P2P networks. This clearly indicates how influential technology has been on the behaviors of its users, and how fast it happens. In 2008 we saw the implementation of decentralized money. While it never became adopted, Bitcoin cultivated a following of “Anarcho-Capitalist” and speculative investors hoping to become rich on this new technology.

When people heard about Bitcoin rising in value, the masses jumped on the bandwagon but it was too late and the bubble had bursted. What these FOMO investors did not realize is that this is an incredible piece of technology and the reinvention of money. They have not been paying attention to the technologies being developed by these world class Cryptographers. I was recently asked by a hedge fund manager “What asset globally is this most correlated to?” and what its backed by is Code. It is intended to change the old ways of doing things online. Blockstack believes the internet is outdated. They believe that most peoples data is at risk, security is weak, hackers have gained a huge advantage, and centralized organizations have not secured its users sensitive information and that is was used ruthlessly for data monetization. To solve this, Blockstack began building an infrastructure with three components: a blockchain using what they refer to as “virtual chains” used to bind digital property like domain names, to public keys. It aims to solve the problem of bootstrapping trust in a decentralized way. A peer network called “Atlas” that gives a global index for discovery information, and lastly a decentralized storage system called Gaia which provides high performance storage backends without introducing central trusted parties.

Using Blockstack Applications

Blockstack has over 80 decentralized applications under its umbrella. I went ahead and experimented with some of them, to get a feel of the ease of use. It begins with a registration for a Blockstack user name, you enter a name and receive a Keypair (Public Key & Private Key) to log in and out of the Blockstack system. When you are logged with your Blockstack user ID you can then proceed to deploy the different apps. Many of these are similar to applications that people currently use on the centralized web such as 1password, DocuSign, Flikr, etc. I began with “Blockvault” and it was easy enough to figure out. You simply enter the name of the site along with your passwords. You can add as many as you want for free. The UX is very simple and as the founder stated during a recent Keynote in New York City, the emphasis of this entire project is on security. They haven’t taken a deep dive into design but with time I expect to see more development on the look and UX of the applications.

“Encrypt My Photos” is the next application I used, uploading a few pictures was easy, it allows a secure place to store your memories and the keys are owned by the user, not Blockstack. Muneeb stated during his Asia Society Keynote in April that they are concerned about decentralization, privacy and security. Some of the attendees did ask the question about legality of activity within this ecosystem, and Blockstack responded that it is up to Law Enforcement to prosecute those who use their platform in a nefarious way and not Blockstacks responsibility to police its user base. It is fair to say that centralized platforms like Facebook can also have bad actors on its network as well. Nothing is immune to the bad behavior of individuals using an organizations network. “Blockusign” is another interesting application which mimics DocuSign in a decentralized way. I did not actually create any sort of document with another party, I simply explored the interface.

Another application of note is “SpringRole” which refers to itself as a verified professional profile on the blockchain. In early 2018 I heard about this project within the Crypto community as having great potential. “Zinc” a workplace reputation and identity system, and “Graphite” a place to share data. I find all of these fascinating, however I do not think the greater masses are interested yet in this technology. It could take many more years before the masses become interested in using decentralized applications and moving away from the centralized platforms they are comfortable with.

Incentivizing Developers to Build

As we are still in very early stages of Blockchain development, platforms like Blockstack need to incentive the development of applications or (dApps – decentralized applications) to be built on the network. Funds have been setup for this purpose which will allow for an Open Source growth model and that is one of Blockstacks goals. It is hard to tell what the killer application will be for Blockstack, or any Blockchain project. Some think privacy and being your own bank will be the harbinger of mass adoption, others think gaming will drive new users. It is too early to tell. Blockstack recently filed with the SEC for a $50 Million Token offering. They have already received over $10 Million USD from the Harvard Endowment Fund, which is a big endorsement. The team is made up of world class Cryptographers holding PhDs and they are expanding and building. Blockstack may one day be a globally recognized platform.