Not only cryptocurrency: How the world is experimenting with bloccano
Not only cryptocurrency: How the world is experimenting with bloccano
The application of the blockchain is not limited to cryptocurrencies. The new technology gradually penetrates in various companies and government agencies. CNBC learned, what are the use cases of the blockchain in the corporate world and for administrative tasks.
The key role of the blockchain is that it allows multiple parties, who need not trust each other, to share a common database that is protected using cryptography. This means that such complex processes, such as contract negotiations, you can organize easier, faster and cheaper.
Co-Founder Of Mosaic.io Garrigue Hileman, who runs blockchain research, says:
Blockchain promises to governments a solid Foundation for building confidence between different actors. It is a way to minimize the degree of required trust, and historically, governments around the world spent much effort in its creation and maintenance.
Blockchain, which was first seen by governments very skeptical because of its direct connection with bitcoin and other cryptocurrencies, are now in favor. Experiments on the use of DLT are conducted at the national level. Of course, it’s not about simulating bitcoin blockchain: governance process will apply the principles of distributed systems such as transparency, resistance, lack of need for trust.
Until the DLT is in the early stages of its development, and there are many problems that need to be addressed before you will see the use of technology at the government level.
The state of cryptocurrency
Given that the blockchain of bitcoin began with the natural was the desire of some countries to implement its own digital currency. The discussion of the state of cryptocurrency is still going on: the participants in lively discussions trying to figure out how to work such currency.
The Venezuelan Petro cryptocurrency
The first country which actually provided the state a cryptocurrency that was Venezuela. It is known as the Petro and was launched in the beginning of 2018 in an attempt to raise funds amid the economic crisis and international sanctions.
Venezuelan President Nicolas Maduro said that the digital currency is supported by oil and start-up raised $735 million Trying to save the country’s economy, Maduro devalued the Bolivar and introduced a new currency, known as the “sovereign of Bolivar” — the latter should be supported by Petro.
However, Petro does not participate in the auction unlike other digital currencies. Many experts called him a fraud, and the Parliament of the country outlawed. Here is what is says on the issue of Petro Maduro himself:
They dollarsaver our prices, and I “petroleiro” wages and prices… We are going to turn Petro to a standard that will be assigned to the whole economy.
In General, Venezuela and Maduro would like to liberate themselves from the dollar.
Head of BCG DV Jeff Schumacher says that the attempt of the Venezuelan government to use the cryptocurrency is unlikely to be a good model for others:
The state of cryptocurrency in such regimes, like Venezuela, can not stimulate economic recovery. Regardless of what cryptocurrency is or plain money, the currency must be supported by fundamental Economics. […] Venezuela’s economy is in ruins, and the creation of the cryptocurrency will not change anything. Most people will not appreciate it, because I don’t believe in the government or in the economy. History will inevitably be repeated, and Venezuela will once again fail.
China, Russia, Turkey, Qatar and Iran are also among countries that discussed the state of digital currency. The similarity between these countries is that they are authoritarian and they have dependence on the U.S. dollar.
Cryptocurrencies are often seen as a way to reduce dependence on the dollar, to control the movement of funds.
Hileman says digital currency can help a number of countries who aspire to the so-called de-dollarization:
Autonomous cryptocurrency can become more independent and reliable alternative to the us dollar, especially if at an early stage, these countries provide support for such asset oil or gold. This must be done while cryptocurrencies will gain some stability in which the support resources they may not need.
However, Hileman said that it was unclear how to work the state of cryptocurrency. Perhaps they really should be issued by the Central Bank and from the very beginning to be supported by any assets or resources as it was with the Venezuelan Petro.
Not only authoritarian countries are considering the introduction of a government cryptocurrency. For example, Singapore is testing a digital version of their national dollar with an eye on cross-border payments. The Swiss government is also exploring the possibility of introducing “e-Swiss franc”.
Perhaps it would be a mistake to call the state of digital currency, cryptocurrency, because they don’t have to work on the blockchain. This could be the digital version of national currencies.
Stephen Poloz, Governor of the Central Bank of Canada, told CNBC in January:
Nobody is in a hurry. It is unlikely Central banks will make a bet on the blockchain version of digital currencies.
Thus, these monetary units can be very different from bitcoin, which is based on the blockchain and decentralized. The state of the digital currency will be issued and maintained by the Central authority, which is contrary to the nature of the “true” cryptocurrency.
Other uses of the blockchain
By its nature, the blockchain technology is able to effectively manage the processes that require clarity and accuracy. This is a great opportunity for governments, given the amount of information when working with the public, as well as the desire to digitize the data and the whole process. Talk about in what areas and how the government is testing blockchain technology.
The election results are very sensitive to fraud and human error. The blockchain is often touted as technology that can solve this problem. And it has already been tested for these purposes in various parts of the globe. For example, in may in the American West Virginia conducted one of these tests. Voting citizens were given the opportunity to use the blockchain mobile app from the company Voatz.
How is this blockchain the vote?
The mobile app has become, in fact, equivalent to the ballot. Mobile Bulletin — token, or the voice which is tied to the voter cryptographically (by encrypting). The voter takes his decision and it is checked several servers and checking nodes. After checking the token/voice is transferred from the register of voters in the register of the candidate. This automatic process means that one person cannot vote twice. And all this is controlled by the blockchain that can’t be forged.
Check credit history
China declared war on the cryptocurrency and ICO, but saw benefits in DLT technology. So, this year, Chinese President XI Jinping said that the blockchain is showing all the signs of “breakthrough”.
The Chinese government is now cooperating with the blockchain— companies in various fields, such as verification of credit rating. So, the startup has partnered with Points division of the Ministry of industry and information technology of China and Chinese Academy of information and communication technologies to create a blockchain decisions designed to organize the KYC and credit evaluation.
This product eliminates the need to apply to the relevant institutions or to conduct KYC manually.
The founder of the Points Sarah Zhang says:
Thanks to a partnership with the Chinese government at Points there is a possibility of checking on criminal record 1 billion people in China and other information. The blockchain increases the efficiency of institutions in General, because the Protocol automatically performs time-consuming process of KYC, which is usually performed manually.
She explains that companies do not store data on their servers, and are turning to a previously audited company data Points.
Such innovations can be used worldwide, but to run such systems, it is necessary to obtain data about personality of citizens and their credit rating with their consent.
The supply chain is quite complex, as it combines many participants from different countries. DLT was tested in conditions when goods are transferred between different parties and processes involved many contractors.
In the UK implemented a pilot project using blockchain technology for the slaughterhouse. In this case, the Agency for food standards (FSA) and the slaughterhouse has access to the same data. They could share information about the supply chain, conducting joint work on a single registry and not on different documents.
Now many companies are trying to test the blockchain for supply chains, and the examples above demonstrate how it can be used for time consuming operations.
Blockchain, without a doubt, one of the most Haimovich technologies, given that the supporters see it as the perfect solution for many processes. Testing continues, but until the mainstream is still a long way to go.
Place the dominant players fight a number of blockchains, Ethereum to Hyperledger. One of the big problems of the DLT is scalability, a feature indicating whether the network to work effectively on a large scale.
Hileman says that the volatility of cryptocurrencies, perhaps forcing many of the developers of the underlying technology, the blockchain back to the creation of “useful and scalable” solutions based on DLT that will appear on the market in the next 12— 18 months. Hileman emphasizes that “resources and brains” to design scalable systems so that their appearance is only a matter of time.