Final Blog Post

Watching and presenting our final presentations in Canada, we all realized how much we had learnt over a short week. We presented on the topic of mobile wallets, probably more accurately referred to as mobile money.

We investigated the process of a transaction, and identified all the parties involved. We realized that the current system is based on trusting few, very secure companies to hold sensitive data (i.e. credit card numbers, associated with the holder’s name etc.) On the side of the merchants, there exist payment service providers that ensure that the credit card data that a merchant needs to store after every transaction is secured. The merchants do not have access to any details regarding the credit card or mobile used to make the payment – all of this is stored in a “card vault” – which is essentially a secure database, which fulfills the requirements of PCI-DSS. The payment service provider stores the details against a randomly generated “token” in the database, and the merchant is only given the token to store in his records. Detokenising the token does not provide any outsider with information unless they can also break into the card vault, so the idea here is of concentrating security and restricting the number of entities required to comply with the robust established standards.

The rest of the transaction (the communication between the acquiring bank (merchant’s bank) and the issuing bank (buyer’s bank) is facilitated by the EMV (Europay, Mastercard, Visa) – the information is transferred (encrypted) between the banks, with EMV acting as a moderator. This is an area that could potentially be modified by blockchain technology, as the encrypted data could be sent and transactions recorded using blockchain, eliminating the need for EMV.

While banks around the world are wary of cryptocurrencies, many are interested in the blockchain technology, and the UBF in Netherlands is already developing a blockchain reporting system to help them to comply with the new transparency rules the EU has introduced.

Finally, it’s always nice to realise where the technology is having an impact around the world. Mobile money has big potential in Africa, partly because of the low number of people with bank accounts as well as the popularity of mobile money.

Here’s something I saw:

 

 

Post-Trip Blog

To contextualize our presentation, we started out with a fictitious character and problem. Our character, Jimmy, wins the lottery one day and wants to invest in the stock market. However, before he does, he hears about the cryptocurrency market (also known as the token market) from a mysterious bald finance professor. He comes to our group for some guidance on his issue. Throughout the presentation, we refer back to Jimmy in order to more easily explain concepts through theoretical examples.

Jimmy has two potential markets where he can invest as a general member of community. One of them is the stock market. In the stock market, only certain companies that went through IPO can be listed. So what is an IPO?
An initial public offering, or IPO, is the very first sale of stock issued by a company to the public. Prior to an IPO the company is considered private, with a relatively small number of shareholders made up primarily of early investors (such as the founders, their families and friends) and professional investors (such as venture capitalists or angel investors). The public, on the other hand, consists of everybody else – any individual or institutional investor who wasn’t involved in the early days of the company and who is interested in buying shares of the company. Until a company’s stock is offered for sale to the public, the public is unable to invest in it. You can potentially approach the owners of a private company about investing, but they’re not obligated to sell you anything. Key features of publicly traded company is that company that issued stock usually knows who are its shareholders, and in order to issue an IPO usually uses the help of banks and is listed in certain trading platforms such as NYSE and NASDAQ.
Another option that Jimmy has is the token market. Token market consists usually from various companies that have issued ICO in the blockchain platform. These companies can be tech companies in the blockchain filed, however token market is not restricted to them. Any company, that even has nothing to do with blockchain can issue an ICO. So what it is? ICO stands for “initial coin offering,” and refers to the creation and sale of digital tokens. In an ICO, a project creates a certain amount of a digital token and sells it to the public, usually in exchange for other cryptocurrencies such as bitcoin or ether. The price of the token is determined solely by the company, unlike shares that are evaluated based on the price and the value of the company estimated by the investors and regulated by the trading platforms. Token market tends to be relatively free and un-centralized. Companies, especially young startups, see it as a fast way to do crowdfunding, that does not require them to give up ownership of the company.

Regulations of issuing IPOs:

When a company decides to issue an IPO, there are two main entities that they have to take in to consideration. The first is the exchange itself. The most important condition that the firm has to fulfill is the minimum amount of income required to issue their shares on the exchange. For instance, NYSE requires a minimum of 10 million USD pre-tax income aggregated in the past 3 years). The other important factor to take into consideration is the law, the company has to prepare a prospectus, which is essentially a legal declaration of the company’s intention of issuing the shares.

Regulations of issuing ICOs:

ICOs are a new young concept, thus, no laws and restrictions are made for it. Therefore, it is easier for the company to issue an ICO. The only document that is expected of the company is white paper that explains the project and background of the company. And even this document does not have a fixed format.

Requirements for the investor:

For IPOs, the investor has to apply through a bank, which can reject or accept the application. Furthermore, purchasing shares from foreign markets can sometime be difficult and problematic. On the other hand, for tokens, investors can purchase tokens from any company in country in the world.

Utility:
Assuming that both investing opportunities are profitable, what does Jimmy acquire in that case?

For shares, Jimmy would most likely have ownership and voting right in the company. In addition, depending on how the company is doing, he will get yearly dividends.
As for tokens, Jimmy can literally get anything. It all depends on how the token is structured. A token can act like a share, or it can benefit the investor by giving him their products every month. Or it can be something as simple as obtaining right of eating in the company’s cafeteria. It all depend on the nature of the token and how it is structured.
We came to a conclusion that it all depends on Jimmy’s risk-tolerance. Was he fine with slow but consistent and steady growth of his investments through the stock market? Or was he willing to invest in a high risk, high reward system such as the cryptocurrency market? Due to the nature of the two markets, some people may choose one over the other. In any case, Jimmy could also choose to invest in both.

Last Blog-ly

We started off our last day with a final 4-hour long session. In this session, each team had to present on a specific topic that they had chosen a few days ago. While some of the topics were directly related to the presentations we had attended at EDCON others were somewhat different. Our team chose to present on Digital Identity and how the whole concept of Digital Identity could be changed using blockchain. While it was somewhat difficult to gather proper information on this topic, the knowledge, as well as the ability to ask the right questions that we had gained from attending all the different presentations and meetings throughout the trip made the whole research and information gathering process a little easier for us. Our presentation was mainly focused on how Self-Sovereign Identity systems can be implemented using blockchain. We started off the presentation with identifying the problem we wanted to solve. A general fact about the internet is that it was created without an identity layer which basically means that the internet cannot identify people but rather it can only identify machines. So the verification of identity then falls on the various service providers that are on the internet (websites and applications). Even these service providers have no way of identifying if the person that has signed-up for their service has used their proper information or whether they have used fake data to sign-up. This gives rise to the problem of fake users (the problem we focused on). A report by TeleSign shows that 82% of the businesses struggle with fake users and on average 10% of a web-facing organization’s user base is fake.

So how can we solve this problem of fake users? That’s where the idea of a Self-Sovereign Identity (SSI) system comes in. An SSI system is a decentralized system that enables an individual to fully own and manage their identity on the internet. An SSI System is extremely secure since all the identity data is encrypted and stored using a distributed ledger system. In an SSI system, the user is always in control of who can see and access their data (private keys are with the owner themselves) and the user can use their identity data wherever they want.

In addition to this, we also spoke about why blockchain should be used to implement an SSI system rather than the conventional technology. In theory, the current technology is prone to certain problems such as the proximity problem, the scalability problem, the flexibility problem, the privacy problem and the consent problem but only in theory since technologists have developed different ways to encounter these problems. So why should we still use blockchain then? Well, blockchain still provides a number of advantages as compared to the current technology. Blockchain provides better fault tolerance since multiple copies of a blockchain are stored on different nodes (computers), it also provides better security (basically less prone to hacking) because of the 51% attack rule and it is easier to implement.

In our presentation, we also spoke about the Sovrin foundation, a foundation which was founded specifically to create an open public distributed ledger for the purpose of enabling SSI. We also spoke about how Sovrin uses a hybrid model that is a public permissioned ledger to implement an SSI. This hybrid model can be explained using a small analogy, take the global ATM network, anyone can use an ATM (public), but only those who’ve been given special permission can add a new ATM to the ATM network (permissioned). With the Sovrin Identity Network, it is the Sovrin Foundation that grants permission for “nodes” (akin to ATMs in the metaphor) to join the network. The SSI system Sovrin has implemented involves two main “stakehodlers”, members and stewards. While Members are individuals who have registered identity records on the Sovrin ledger, Stewards are trusted institutions who support the goals of the Sovrin Foundation, meet its requirements, and have permission to operate Sovrin ledger nodes. In the presentation, we also explained how Sovrin’s SSI system works. In Sovrin’s SSI system once a Member has issued a claim about their identity, the claim gets encrypted and gets stored in a DID document. A DID document has a corresponding DID (Digital identifier), think of this as your QID but for the internet. Before the DID and the DID document are stored on a block and committed to the blockchain, a steward must verify if the identity being claimed is correct or not. So a steward will take the DID which is associated with the claim and using that DID the steward will access the claim that was stored in the DID document. Once the steward has verified that the claim made by the identity owner(member) is correct, the steward will then sign the DID corresponding to the claim with its own DID. Both the DID of the steward and the member is created by a software developed by the Sovrin foundation called agent. While the steward has only one identifier, the member gets a new identifier each time the member makes a claim about his/her identity. Once the verification process ends the block with the claim gets committed to the ledger.

In addition to all this, we also spoke about some of the benefits and challenges related to an SSI system. The SSI system allows its members to fully own and control their identity, decide what identity data to store on the ledger and who gets access to that data. While an SSI system has its benefits, it also gives rise to some challenges. While integrating the SSI system, an organization’s lack of technical knowledge can lead to different integration issues. A blockchain has limited storage so as the number of members who are storing their identity on the SSI system increase, data storage issues can arise.

Even though the members of our team have been a part of many trips, we all agree that this trip resulted in one of the best learning experience that we have ever had. This trip not only helped us understand blockchain on a higher level but it also taught us that in order to make good use of an emerging technology one must not simply try to create a product using that technology but rather look at problems that the current technology is facing and then try to fix those problems using the new technology.

Day 6ish

So we started out with using the subway for the first time in Canada. Even though we were supposed to get out on the York University station and then take the bus to the blockchain mind company, because of an on-going strike we had to take the subway again and get out on the next station which was the Pioneer Village Station.

After reaching the blockchain mind we were welcomed by the founder of the company, Aryan, a person with amazing networking skills, who claimed that the trend is our friend, which is one of the reasons why he started this company. He gathered the CEOs and CTOs of various companies that he had a stake in so that they could present to us the products that they were developing using blockchain. Most of these companies if not all just wanted to incorporate blockchain just because of the current blockchain trend. None of them actually explained to us what was the problem they were trying to solve using blockchain.

There was also a company that had created a hardware wallet which could store all of the cryptocurrency that a person owns. While the idea of a hardware wallet does sound more secure as opposed to a software one, the CTO of the company was not able to properly explain how all the cryptocurrency is restored if a person losses their hardware wallet.

In addition to this, there was also a company called Blockchain Torque. While the founder of this company was able to explain how he got the amazing and clever name of the company he didn’t really explain what kind of a product his company was creating and how they were using blockchain. But he did mention that this whole company was also one of the ways he could use to work with his mom since the company focused a lot on cannabis.

Overall it was a great experience. Attending all the presentation that the blockchain mind had arranged for us made us realize that blockchain is a technology which will continue to exist but the application created using this technology will definitely change over time.

Day 6 – Back to Blockchain

Starting with an eventful subway ride to the offices of Blockchain Mind, we were welcomed with an introduction which included a claim, “follow the trend”. I.e. our host was validating the use of blockchain in the company’s associated solutions by simply saying they saw financial gain in keeping up with the common trend.

That aside, we were presented to 5 startup ideas in various stages of development (most fairly new). There was a hardware wallet, which they claim is more secure than the online wallets we currently have. While I can understand that I can store the wallet in a safe and that’s secure, I failed to understand why the existing software wallets which have security protocols are insufficient. It’s actually kind of strange considering how the world is moving to everything being digitized and with the advent of digital wallets, that they believe there is a market for such a device.

Another one was EZ Exchange – which at face value seems to be a brilliant solution to a number of problems associated with the process of buying and exchanging cryptocurrencies. However there is always the question of why hasn’t it already been done – while I personally don’t have much knowledge about existing exchange platforms, I believe that there are nuances that the presenter skipped over which would pose as significant barriers to building such a platform. I’m sure its possible, but I believe it requires a lot more than the idealistic vision – which is true for most ventures.

An interesting one to see was Bill Wang – partly because he was 20, but also because he had created (I think they had tested a prototype) a hybrid of a centralised/decentralised cloud storage system which helps mitigate the problems associated with either category of cloud storage systems.

The other presentations were more overviews of the companies, and a bit about potential markets for mining in Qatar.

 

Day 3 – EDCON

We spent the day listening to the speakers at the EDCON Conference. It was a platform for innovators and developers who develop solutions using the Ethereum blockchain technology.

A number of interesting applications were presented. While we may not be equipped to judge the technical validity of the ideas presented to us, the value that a lot of them propose seems valid. For example, one company identified the problems associated with the volatility of cryptocurrencies. He then introduced us to the concept of a “stablecoin” – Dai in this case, and how this can mitigate the volatility (details to follow in one of the presentations).

Other innovative ideas were also proposed. What interested me more than the marketing pitch for each company was actually the problems that they identified. The tracking of funds given to charities, and similarly the funds used in crowdfunding startups and the secure sharing of private keys, were some of the problems identified.

I must say I am curious as to whether Ethereum is used as a platform for such a wide range of applications because of its use of smart contracts, or whether there are other reasons as well.

The presentations were useful in opening our eyes to much broader potential applications of the blockchain.

Is the Trend Truly our Friend?

Today we visited the blockchain mind company that has stakes in blockchain startup companies like ez exchange, BlockTorque, KOIN, Endereum, blockchain plus. Each of these companies explained what they do and how they implement blockchain in their company and start-ups. Blockchain mind main product is the hardware wallet, in which a person can connect the hard wallet to the computer and this hard wallet saves the money. However, when lost, the money is also lost and can be hacked if someone uses this hard wallet in their software. This startup also launched a chip that teaches people how to use blockchain and can be used as a device to play with it but could be hackable. However, what seems to be alarming about this “wallet” is that there appears to be no security and is a form of technology that has a high chance of being replaced. The job of this “wallet” is very much like a credit card. What our concern is that this wallet can soon be taken over by cards which can be implemented by banks if banks penetrated this type of “wallet”.

The ez-exchange is one of the start-ups that is funded by the blockchain mind company with the concept of simplicity rather than functionality.

The blockchain mind company has around 506 startups that uses blockchain technology and believes that “the trend is your friend”. One of the CEO’s says that the launch of their wallet was the reason behind them being famous. The issue here is that to what extent is the trend is always a good idea. Even though that’s what most business mindsets think, it isn’t always accurate or true. Therefore, what is wrong with this type of thinking is that this trend can soon die out even though it’s about technology. With the rise of these startups and companies going all out in blockchain, there will be too many and soon this trend will no longer be a trend. Therefore, coming at this from a business perspective, this trend will be like any other technological trend where it will soon be taken over by something new and up to date. What we can infer is that there’s too many companies/startups that are mainly focused on blockchain and if they continue to do so, we will hear about all of companies/startups going bankrupt.

The third startup was the BlockTorque which is a startup that focuses on the blockchain cryptography solutions. What the company wanted is to enter the marketplace and try to find opportunity within the businesses and expertise together to find solutions that integrate technology into the market and follow the trends. They invest in renewable energy and work with medical doctors regarding the Cannabis. This for us was an interesting company but what wasn’t interesting is that why the focus on Cannabis. This was actually quite disappointing because we didn’t want to see such focus on something that isn’t really good for a person. Our concern is that why are they implementing blockchain into the production of something that is considered as a drug? Why couldn’t they focus on something that’s actually worth it? It does appear to be more of using this “technology” to generate more profit and making something that was once considered taboo to something completely normal and business oriented. We have hoped to see blockchain to be used in a more ethical way and if good use. Even though there’s a lot of speculations as to whether Cannabis is good for you or not, it’s still something that shouldn’t be really encouraged because who knows what long term effects this can have on a person and the environment.

KOIN is the fourth start-up that blockchain mind funds. The idea behind this start-up is the use of multiple currencies to replace the fiat currency. One of the issues that the company wants to solve is the limited payment online in which you can pay for less than two dollars. And to have coin accounts that could be trading 24 hours besides not having transactions fees but relying on the interests and the deposits as a main revenue stream. What we are considered about is that how long will it take them to make profit if, as what they are claiming, they are relying on interested and deposits as heir revenue stream. When we look at this closely, it’s as though it’s operating as a bank but with some “modernism” into it.

Endereum is another startup that Blockchain mind has stakes in, the company is a hybrid of centralize and decentralize cloud storage. What the company focuses on is producing cloud solutions and specializes in consumer experiences. For the centralize storage the advantages according to the CEO are accessible, easy to use, efficient and the disadvantages are expensive, security in which it is easy to be hacked, and the high maintenance fees. For the decentralized cloud storage the pros are the lower cost and the easiness to expand while the cons are the high requirement for the encryption, easily accessible for hackers, the speed of the system, and the limited privacy. So they integrate both centralize and decentralize to solve all the solutions.

What we think at the end is that all these startups were motivated by the trend and what worked best with other companies and they implemented the blockchain for the sake of it. We also believe that these companies want to appear as though they are up to date with this modern technology and appear as though they are advanced. Other than that, we still aren’t sure how far these companies will go in terms of being challenged and if they can survive if they enter the big market.

 

Day… 5?

Today we visited the Blockchain mind folks for another session of pitching. New ideas emerged from this session such as the concept of soft and hard wallets, as well as getting a general overview of the potential commercialization of blockchain. Overall, I personally did not gain much from this session.

The interesting part of today was hearing other groups give a summary of their presentation topics and hearing feedback. Our topic was Dai, a stable coin ran by ethereum on their Maker platform. Feedback was tough, with many questions left unanswered and we are hoping to address all problems by tomorrow. Hearing other teams give an overview of their idea also helped a lot, by sharing their thought processes and finding gaps in their knowledge. Overall, we are looking forward to a dynamic presentation session.

Day 3 – Blog

Yesterday we went to the Community Etherium Development Conference (Edcon) which was being held at the Ryerson University. Overthere, we got exposed to a huge range of new applications that companies were trying to implement using the popular blockchain based platform Etherium. While we tried our best to understand what the representative of each company was trying to say about there technology, we were unable to keep up with all the information. However, there was one company that piqued our intrust, even though we could not completely understand their product. This was AION. AION has essentially built a platform or software that they referred to as the bridge, which allows them to take Ether and convert it to there own cryptocurrency which is AION coin. For now, they are only able to convert Ether to AION coins and not vice-versa. In addition to this, we also discussed how bitcoin works after we finished watching the conference. This discussion helped fill some of the knowledge gaps that we had about bitcoin. It also helped us to understand the difference between a bitcoin chain and a blockchain as well as the underlying problem because of which blockchain is being used in bitcoin.

Day 3 – Team BitConnect Blog Post

Today we attended the Community Ethereum Development Conference, EDCON, where we heard multiple speakers talk about various ways in which they have harnessed Blockchain in order to improve/modify an existing technology or service.

EDCON was mainly geared towards a more technical audience, and, as such, we lost some of the meaning intended to be given out by the presenters.  Nevertheless, we were able to gain a few different perspectives on the ways in which Blockchain can be used. One particular instance of something which was extremely interesting, yet we could not understand fully due to its technical nuance was the presentation revolving around the stablecoin, Dai.  Dai is a cryptocurrency which is always stable at 1 USD.  it is done through somehow absorbing some of the volatility involved with a crypto into another crypto, MKR.

The reason Dai exists is that most cryptos are incredibly difficult to use as an actual currency due to their volatility. The framework which has been used to make Dai a possibility could perhaps allow for any other cryptocurrency to become almost “artificially stable” through the absorption of volatility into another, more expendable currency.  Due to the inability to ask questions after a presentation at EDCON, it is still unclear how said absorbing of volatility is carried out.

Other than this example, there were many extremely technical presentations which left our group perplexed.  Due to this confusion, we are able to think about many different final presentation topics which pertain to the Blockchain space.  In order to start thinking about the final presentation, it will be of paramount importance to consider what we have learned thus far, and apply this knowledge to the talk.

When we returned from EDCON, we began a discussion centered around the core competency and functionalities of Bitcoin.  Bitcoin was the topic we initially set out to research, and it was very informative to fill in some of the knowledge gaps which were present before this discussion.

Day 3 was a very information-heavy day, and a very important stepping-stone towards understanding the multitude of applications for Blockchain.  In order to fully comprehend the information we received today, extensive research will absolutely have to be carried out by the various teams on this trip.