OCBC Trials Blockchain for Interbank Payments

One of the five largest banks in Singapore has tested a blockchain-based payment service, with an eye to develop commercial products around the tech.

OCBC Bank used the tech to send funds between its operations in Singapore and Malaysia, as well as transmit money to the Bank of Singapore, a private banking business it owns. The bank said it worked with BCS Information Services, a local payments firm, to develop the prototype.

The test is the latest for Asia’s banking sector, the members of which have spent much of the past two years investigating use cases, investing in startups and pursuing commercial applications.

Praveen Raina, OCBC senior vice president, was quoted as saying:

“We hope this will be a catalyst for more banks to adopt the blockchain technology so that, together, we can achieve efficiency and cost effectiveness while delivering more high-value financial services to our consumers.”

Though the bank announced its move on its official group website, the details of that announcement appear to have been removed at press time.

The move comes as the Monetary Authority of Singapore (MAS), the city-state’s central bank, has moved to create a pro-fintech environment within the domestic finance sector. Earlier this month, MAS has forged relationships with regional interests on the tech, coming more than a year after the institution began developing and investing in projects of its own.

Image Credit: Tang Yan Song / Shutterstock.com

US Health Department Selects 15 Blockchain Research Contest Winners

The Office of the National Coordinator for Health IT (ONC), a division within the US

Department of Health and Human Services (HHS), has announced the winners of a blockchain research paper contest.

The "Use of Blockchain in Health IT and Health-related Research Challenge", announced last month,solicited white papers that would explore how the technology can be potentially used in healthcare settings.

The ONC said that it received over 70 submissions, and that it ultimately chose just 15 to spotlight.

National coordinator Vindell Washington said in a statement:

"We are thrilled by the incredible amount of interest in this challenge. While many know about Blockchain technology's uses for digital currency purposes, the challenge submissions show its exciting potential for new, innovative uses in health care."

At the time it announced the contest, HHS indicated that it was weighing blockchain tech as part of a broader push for interoperability in the country’s healthcare IT systems. The ONC has been pursuing this line of inquiry for the past several years, releasing a report last October on this goal.

HHS, along with the Department of Defense and the Department of Homeland Security, are among the major US agencies looking into the technology.

The ONC is set to host a blockchain-focused workshop to be held at the National Institute of Standards and Technology (NIST) between 26th and 27th September.

Image via Wikimedia

Public Blockchains: The Community vs The Ecosystem

William Mougayar is the author of "The Business Blockchain", and a board advisor to the Ethereum Foundation, the non-profit that oversees the development of one of two blockchains seeking to popularize the ethereum software.

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In this opinion piece, Mougayar offers his thoughts on the recent ethereum hard fork, opining on how he believes it showcases issues in current public blockchain governance.

We always hear the word "community" as a reference to the body of players who are supposed to be the stakeholders that care the most about such or such blockchain.
This term has been a cornerstone of recent events, like bitcoin's 'block size' debate and the ethereum hard fork, coloring how these events are communicated to the wider public.
But what does "community" mean in this context?

Defining community

According to blockchain theory, the community is supposed to determine the future of a given public blockchain via decentralized governance and the magic of consensus.
Consensus decision-making is at the heart of public blockchains, because a plain majority can sway it one way or the other. Just like an election, more or less.
The baseline of a blockchain rests on its economic soundness, and the reality is that some players hold the strings to this economic soundness more than others. (Economic soundness also directly relates to blockchain security, but let’s not digress on that important tangent).
With such deciding power on the future of public blockchains, the community is an important body, because it represents the current governance.
So, I went on a research investigation to figure out the composition of a typical blockchain community. What I found is that this deciding community is a subset of a larger ecosystem.
The community represents the base players that have had an earlier economic role in the ecosystem. They are mostly the insiders, and they have an advantage in being more "in-the-know" than others. Their voices are louder, and their collective actions (or inactions) can effectively determine a blockchain's trajectory.

Who's who?

There is something contrarian about cryptocurrency communities.
In the traditional sense, most companies will firstly gain users or customers, either as end-users or developers. Then the body and variety of users becomes the community.
In the cryptocurrency space, that sequence seems to be inverted.
We start with the community of core supporters before we get to a large set of end-users. That’s okay, and perhaps a characteristic of fundamental technologies that need to garner a strong base before they flourish.
Generically, the base players of a cryptocurrency community are largely developers, exchanges and miners..
The larger ecosystem involves several other participants. It can be portrayed to include the base players, in addition to groups like venture capitalists and mainstream users.
Here's a breakdown of each group:

Let us take the cases of the recent ethereum hard fork decision, and the bitcoin block size debate epitomized by the Scaling Bitcoin conference series.
In both instances, the community was mostly formed of the respective base players. But these base players are a relatively small group.
In the bitcoin case, the number of attendees to the widely publicized Scaling Bitcoin process was probably under 100. And in the case of ethereum, when the Carbonvote was tallied, only a total of 1,325 addresses voted, which is a relatively small number compared to the overall number of ETH holders (considering there is an available supply of 82 million ETH).

Ecosystem approach

I hope we eventually use the word ecosystem instead of community, because it is more representative of a marketplace in the making.
And I wish that a part of this larger ecosystem would also have a voice into the future of these public blockchains.
Currently, the larger ecosystem is mostly a powerless silent majority that is watching events unfold, while remaining hopeful that the vocal and more powerful minority is going to lead the market in the right direction.
Eventually, any large scale public blockchain will need to reach a more balanced state where community leadership and ecosystem inclusion work together to strengthen its longevity and sustainability potential.
The base players are the community today, and they are steering the boat right now, but will they in the future?
Cul-de-sac image via Shutterstock
Disclaimer: The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, CoinDesk

Alibaba Affiliate Taps Blockchain for Charity Payments

Alibaba affiliate Ant Financial has created a private, proof-of-stake blockchain that seeks to help make charities more transparent and accountable.

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The news comes just months after Ant Financial closed a $4.5bn private fundraising round at a $60bn valuation. Ant Financial was spun out of China-based e-commerce giant Alibaba prior to its 2014 IPO, though both are overseen by executive chairman Jack Ma.
The trial is envisioned as one that could come to record donations made by Alipay users to charities through its “Ant Love” platform, Bloomberg reports, a move that may ultimately allow users to gain greater insight into how funds are handled by charities.
Ant Financial CTO Cheng Li told Bloomberg:

“We hope to bring more transparency to charity and blockchain technology’s decentralized nature fits that purpose well. It means that all the information and transaction history of funds will be more reliable and can’t be easily tampered with.”

According to the report, Ant Financial is currently the only firm with access to the blockchain, though it could open up access to third-party charities as the project matures.
Image credit: Fotos593 / Shutterstock.com

DAO Critic Defends Ethereum Hard Fork as 'Rite of Passage'

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A Cornell University professor of computer science who has proved to have a knack for pointing out flaws in blockchain code believes the hard fork that occurred earlier today is a sign of maturity for the ethereum platform.
Last month, Cornell's Emin Gün Sirer emerged as a major critic of The DAO, the project whose failings ultimately led to the hard fork, pointing out vulnerabilities in its code and becoming the go-to source for ethereum coders looking to understand what exactly happened and how it could be avoided again.
Though he’s still quick to point out that unforeseen vulnerabilities in the code might persist, he told CoinDesk there are several reasons to be hopeful for the future of ethereum, even after the weeks of drama that ended in today's hard fork.
From an ethereum bootcamp co-hosted with the Ethereum Foundation, Gün Sirer said "chains change" because they are responding to the needs of a community, and not necessarily because they are weak.
He told CoinDesk:

"It’s a point of strength to be able to adapt to that change, to be able to respond to it, to be able to do it in an orderly fashion. Ethereum just demonstrated this. I think this is a rite of passage for ethereum."

A lesson for every currency

After weeks of planning, and several coordinated efforts to help achieve consensus among the miners on the etherum blockchain, the hard fork occurred today at approximately 14:30 UTC, returning about $140m worth of funds lost in the collapse of The DAO to an account available to its original investors.
According to Gün Sirer, the hard fork should be seen as a sign of growth not just for ethereum, but a lesson for anyone using cryptocurrency of any sort, or for that matter, fiat currency.
In particular, he describes the belief among some cryptocurrency users that the length of a blockchain is the source of its value as "long-chain fetishism" that misses the point of what really gives any currency value.
He said:

"The most important lesson, at least for me, and I hope for the public at large as well, is that the fiat currency in my pocket and also the cryptocurrency in various different wallets that I have, they all have value because of community properties, because the community believes them."

No rest for the weary

Beginning today and for the next week, Gün Sirer is co-hosting an etherum bootcamp with both the Ethereum Foundation and the inventor of ethereum, Vitalik Buterin, as part of an effort to build out that community.
Thirty-eight guests have enrolled to participate in the event from all over the world, half of which come from Cornell University, where it is hosted. Coding instructors include Buterin and three other Ethereum Foundation members and multiple Cornell University staffers. Participants range in experience from early-stage developers to high-level executives from several companies interested in exploring ethereum.
But not everything about building such a strong community is positive, according to Buterin. In email to CoinDesk, Buterin explained that ethereum users were "lucky" the hack gave them time to respond, but that might not always be the case.
Buterin wrote:

"The next time around, we may well not have such an opportunity at all. Additionally, forks will only get more and more difficult to implement over time as the community grows."

Image via Michael del Castillo for CoinDesk

Washington State Utility Raises Power Rates on Bitcoin Miners

A Washington State utility is raising rates on bitcoin miners, months after a dispute with the local
industry began over its power usage.

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The Chelan County Public Utility District (PUD) announced earlier this week that, effective January 2017, electrical rates will rise for so-called "high-density load customers", or those that use 250 kilowatt hours per square foot per year. The definition, as stated by the PUD, is intended specifically to cover server farms and bitcoin mines, or data centers that specifically service network transactions.
The increase won't be immediately felt by the region’s bitcoin miners, however, as the PUD said that a five-year transition period is being initiated for existing customers who can show they’ve made "substantial investment" and meet additional criteria.
The process dates back several years, to when the industrial bitcoin mining boom began. At the time, several firms sought to establish a presence in the hydroelectric power-rich Chelan County. A reported influx of phone calls and on-site visits by prospective bitcoin miners prompted PUD officials to put a moratorium on new high-density load customers in late 2014.
Bitcoin miners run high-powered machinery in a race to discover the next block of transactions, a process for which they earn rewards from the network. Cheaper power means more profitability for miners, and some of the least expensive electricity can be found in Washington State, particularly in places like Chelan.
PUD representatives said in statements that they believe the rate increase is a fair one, resulting from months of discussion between utility officials and members of the public.
"There was a lot of individual and collective effort involved in bringing this proposal forward, and I think it's a good product," Commissioner Dennis Bolz said in a statement.
It’s not yet clear how bitcoin miners in the region are taking the news. Phone calls to miners in Chelan County were not immediately returned.
In interviews with CoinDesk earlier this year, miners working both in Chelan and in nearby counties criticized the planned rate increase harshly, with at least one suggesting that the move could put them out of business.
Chelan county image via Shutterstock