Why Out-of-Hospital Blockchains Matter

Cyrus Maaghul is a blockchain innovation advisor and the head of product at healthcare platform startup PointNurse.
In this opinion piece, Maaghul discusses what he sees as the potential applications for blockchain in the field of healthcare, an area increasingly of interest to industry firms.

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I bought my first bitcoin in May 2013 while on a vegan retreat in Asheville, North Carolina. Going through the purchase process reminded me of when I first downloaded Mosaic and surfed the net. I thought to myself, "this is going to be a game changer". It was.
Bitcoin and blockchain technology will be game changers, too.
Bitcoin, its underlying blockchain and evolving peer-to-peer networks with Turing-complete smart contracts such as Ethereum will have a disruptive impact on many industries for years to come. Financial services, payments, supply chain logistics, insurance, and healthcare are just a few that will be disrupted with these new technologies.

Out-of-hospital blockchains

Healthcare will be a primary beneficiary of these new technologies, especially outside of the walls of hospitals.
As more and more health and preventive care is provisioned in virtual environments, at home, in cars, at work, etc, the need for open and accessible tracking, verifying and provisioning of care will become extremely critical for patients, payors, providers, scientists and regulators.
These new out-of-hospital (OOH) blockchains developed in the non-clinical community will set the pace for how patient behavioral and inter-clinic visit vital data is tracked in the future for provider reimbursement, regulatory compliance, safety monitoring and patient adherence.
The blockchain is a near-perfect technology (not necessarily the current implementations) to securely and safely make OOH data easily accessible with relatively minimal privacy and hack risk to all patient stakeholders, including the patient themselves, family, caregivers, clinics, providers, insurance companies and all those with a stake in their patients’ health.
Each and every one of these stakeholders or network peers approved by the patient can easily join OOH blockchains as either nodes or buyer or seller of tokens or payments to gain access to patient data, utilizing a variety of open access methods and smart contracts that store and monitor real-time contractual conditions agreed to by and between various stakeholders.
There will be many OOH blockchains developed to address the myriad of use cases in healthcare, including tracking the development of drugs, doctor and nurses credentialing, real-time population health data analysis and alerts, insurance peer-to-peer risk pooling, telemedicine and home health visit data sharing, decentralized autonomous organizations, verification and audits, and remote device monitoring commonly addressed today under the Internet of Things category.
These open and viable peer-to-peer healthcare blockchains will open the door to new business models in healthcare, including analytics-for-healthcare products and services, flash malpractice insurance and friction-less claims processing hence shorter revenue cycles.

Healthcare insurance claims processing

It is no secret that healthcare claims processing is a nightmare for all parties involved. Reimbursement is opaque, fraud is prevalent, and transactions frequently difficult to reconcile.
For example, home health, a great OOH blockchain example, is possibly one of the greatest sources of fraud in the US healthcare industry today. Smart contracts powered by a blockchain could provide consumers and payors with the means to manage claims in a transparent, immutable and responsive fashion.
Insurance contracts, premium payments and their respective claims could be recorded onto a blockchain and validated by node consensus, preventing fraudulent claims from being processed. Smart contracts could enforce claims triggering payments when due or dispatching specialists, nurses or doctors to follow up with patients when anticipated claims are not recorded by presumptive dates.

Managing "super-utilizers"

The term super-utilizer describes individuals whose complex physical, behavioral and social needs are not well met through the current fragmented health care system.
These individuals go from emergency room to emergency room, to admission and re-admission, in a chaotic and costly manner. Mental health, substance abuse, poverty and education are frequently cited as common characteristics of many but not all in this group. Many researchers and experts postulate how more "community support" and "real-time engagement" is needed to manage this socially isolated population of healthcare super-utilizing consumers.
Smart contracts powered by an OOH blockchain utilizing the bitcoin payment system could be used to create a rewards and incentive system to manage super utilizer behavior.
Behavioral contracts could be developed between payor and patient to trigger rewards denominated in BTC for attending support groups, regularly engaging a telehealth professional, reporting health conditions (possibly at kiosks with bitcoin point-of-care devices), and meeting agreed upon health goals.
Payors would fund reward payouts via efficient BTC accounts established at commercial digital currency exchanges. A smart contract would trigger a reward payment (or loss) when goals are met near real-time to the patient’s public bitcoin address which in turn could be tendered at local participating outlets equipped with BTC point-of-contact devices including community centers, supermarkets and apartment complexes to pay bills, purchase healthy foods and meet rent obligations.

Medical malpractice insurance DAOs

In theory, decentralized autonomous organizations (DAOs) are entities that are self-governing. DAOs on a OOH blockchain could enable trust and provide an immutable record and audit trail of an agreement without a single controlling body.
Doctors and nurse practitioners could collaborate to establish a peer-to-peer malpractice DAO and record each peer's premium payments and claims on the blockchain. All premiums paid in would create a pool of capital to pay claims.
By combining the blockchain with the peer-to-peer business model, this creates the potential for a near-autonomous self-regulated insurance business model for managing policy and claims. No single entity would control the network. Policyholders could "equally" control the network on a pro-rata basis.
But, these are just a few examples of how bitcoin and blockchain technology will change the face of healthcare in the future.
The blockchain is a new and exciting technology, and we are now just beginning to see both small and large players dip their toes into the water. I personally would discourage any entrepreneur from pursuing the use of blockchain technology inside the walls of clinics and hospitals today, as the those lanes are laden with painful obstacles – the OOH blockchain is your winning lane today.
This article originally appeared on LinkedIn and has been republished with the author's permission.
Future doctor 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.

Building a Better Bitcoin Fee Market

Over the past year, we have seen the fee market for bitcoin transactions evolve at a rapid pace. As transaction volume continues to increase, so does the demand for block space, which remains in limited supply of 1 megabyte (MB) approximately every 10 minutes.
As we have debated the issue of increasing the supply of block space ad nauseum, this article will focus on the history and current state of bitcoin transaction fees.
The fact is that the pressures resulting from high contention for block space have degraded user experience and thus incentivized bitcoin wallets to make adjustments in order to keep their users happy by ensuring timely confirmation of transactions.
However, we're a long way from operating an optimal fee market.

The History of Transaction Fees

For the first several years of bitcoin’s existence, transaction fees were optional – they were considered a donation to miners.

Wallets paid the same fee on every transaction – defaulting to whatever fee the wallet developer thought was appropriate.
Bitcoin Core's default fee changed several times over the years as the bitcoin exchange rate increased, from 0.01 BTC to 0.0005 BTC to 0.0001 BTC. There were also rules around "priority transactions" that enabled users to send transactions with no fee if the inputs were old and high value enough, though miners have mostly phased those out at this point.
We learned over the years that hard-coded static transaction fees are terrible for several reasons:

• It's not the absolute fee that matters to miners, but rather the fee rate per bytes of transaction data. From the miner’s perspective, they only have 1 MB of space into which they want to insert as many transactions as possible in order to collect more fees. As such, a 200 byte transaction with a fee of 0.0001 BTC is preferable to a 1,000 byte transaction with a fee of 0.0001 BTC, because they can insert five of the former and collect five times as much in fees.
• From the user’s perspective, if you always set a static fee, you’ll likely eventually create a large data size transaction (due to spending many low value inputs) with a very low fee rate that may never get confirmed.
• Wallets with static fees can't adapt to quickly changing market conditions, resulting in users broadcasting transactions that are either overpaying or underpaying. The former won't get transactions confirmed much faster, while the latter will result in long confirmation times because miners pass them over in favor of more profitable transactions to confirm.

The release of Bitcoin 0.3.15 in November 2010 included a change to start calculating fees relative to the transaction’s data size, but not every wallet software followed suit and many users continued blindly setting the same static fee on every transaction. This was generally not a problem until we started bumping up against the max block size, because miners would confirm pretty much any valid transaction that was successfully relayed to them.
As blocks began to fill up in 2015, it became clear that the best practice is to use a dynamic fee algorithm because it can respond to changing conditions on the network.
Bitcoin Core started calculating dynamic fee estimates as of the 0.10 release in February 2015, and Alex Morcos has been steadily improving them since then. Core's fee estimate algorithm is rather complex; you can view its code here and the english explanation here.

A Fee Market Emerges

Antoine Le Calvez, developer of p2sh.info, provides a historical analysis of dynamic and static fees.
Here are the past two years:

Historic Dynamic Fee Usage, via P2SH.info

We can see significant jumps in dynamic fee usage during the network stress tests and attacks last fall.
However, I suspect that this was not due to normal users switching to dynamic fee wallets, but rather the attackers themselves paying fees that they intentionally set to be higher than the static fees being used by most wallets at the time.
Some of the more sophisticated users adjusted their hard-coded fees during the attacks, but these were likely a small minority of the total transactions. We can also see a jump at the beginning of March 2016 – this is likely partially a result of Blockchain's new wallet deploying dynamic fees about a month earlier.
Rusty Russell performed an excellent analysis of the emerging fee market in December 2015, which showed that more transactions are using dynamically calculated fees, and that the average value of a transaction is increasing as tiny payments are getting priced out of the blockchain.

AJ Towns followed up on Rusty’s post with more in-depth analysis. He identified eight distinct fee market phases over the course of bitcoin’s history:

Towns continued his investigation in a second post and came to several conclusions about the effects that the emerging fee market has had upon users.

These were:

• A significant number of wallets are dynamically calculating fees, at a per-byte granularity.
• Many wallets still don’t calculate fees dynamically, or even calculate fees at a per-byte level.
• Market-driven fees will only be able to rise further with increased adoption of wallets that support dynamic fee estimates.
• Significantly overpaying the market rate will not get your transaction confirmed any quicker.
• There have been two fee events that have impacted wallets with static fees, and a third fee event is coming soon.
• Wallets that dynamically calculate fees pay substantially lower fees on average than those that don’t.

I've been tracking Bitcoin Core's fee estimates with Statoshi; here you can see that they have tripled over the past six months as contention for block space continues to increase.

Bitcoin Core Fee Estimates, via Statoshi.info

Calvez also provides a dashboard with all of the publicly available fee estimate APIs and their historical estimate data:

Various services' fee estimates, via P2SH.info

Interestingly, it appears that 21, BitGo, and Blocktrail’s fee estimates appear to be the most responsive to changing market conditions while BitPay, Blockchain, and BlockCypher have less volatile estimates.
However, it would be negligent for me to broadly recommend everyone switch to using dynamically calculated transaction fees without first noting the dangers involved.
As the saying goes, every solution leads to new problems. Dynamic transaction fees are no exception.

Dynamic Difficulties

Dynamic fee estimates will never be perfect because they are an attempt to predict the (near) future.
As Danish physicist Niels Bohr once quipped: "prediction is very difficult, especially about the future". If a fee estimate algorithm fails to correctly predict the future state of the fee market then users get stuck in a "fee trap" as noted by Dr Washington Sanchez of OpenBazaar.
This can occur if you broadcast a transaction with a perfectly reasonable fee for the current market conditions, but immediately after doing so, many other higher fee transactions get broadcasted by other users, which essentially push your transaction to the back of miners’ priority queue. The problem is that you can't, without Replace By Fee (RBF), update your "bid" in order to compensate for the new market conditions.
Bugs in fee estimate algorithms also have potential to wreak havoc on the fee market. Take, for example, a recent user error that resulted in someone creating a transaction with a whopping 300 BTC fee. This was bad enough for the unfortunate user who likely fat-fingered the "fee" and "value" amounts into some poorly coded software, but it also had ripple effects:
This is an educated guess, but it appears that BlockCypher’s "1 to 2 block target" is using a fee estimate algorithm based upon a weighted moving average of fees from the past two days of blocks. As a result, when the 300 BTC fee transaction was mined, the recent fee average and thus their estimate spiked by 800%.
But this is not meant to pick on BlockCypher, as we have seen many wallets have issues with transaction fees. Not even Bitcoin Core is exempt, as I recently observed an unexpected spike in the fee estimates from Bitcoin Core 0.12.0:

Bitcoin Core Fee Estimate Anomaly, via Statoshi.info

I noticed that Statoshi.info’s "two block target" fee estimate surged from 44 to 112 satoshis per byte on 27th February for no apparent reason. My other bitcoin nodes did not report the same spike.
This could perhaps be explained by differences in mempool transactions since Core’s fee estimate algorithm only uses fees from transactions that were first received as unconfirmed.
It is concerning and is a demonstration of a downside to extrapolating the future based upon your node’s view of the network, which is not guaranteed to be the same as everyone else's.

Macro meltdown

While there are plenty of challenges presented to bitcoin developers on a per-transaction basis, we should also be cognizant of the effects upon the fee market as a whole.
I'm concerned by a couple potential scenarios that could drive fee rates up faster than necessary:

1. Poorly coded dynamic fee algorithms could create a feedback loop that drives the fee rate up with no ceiling as transactions continue to flood the network with no regard for the mempool backlog. This is not a huge concern if most transactions are being initiated by humans who are then seeing a fee displayed and deciding whether or not it is too high for their tastes. However, if many transactions are being created automatically without any human decision making and the algorithms creating them don’t have any sanity checks on the maximum fee paid, the market could run away until the engineers who wrote those algorithms notice and make changes to them.
2. Frustrated users (or lazy developers) who are still relying upon hard-coded fees may keep manually updating their wallet settings until their transactions start getting confirmed, likely overpaying significantly, but eventually forcing other static fee users to do the same in order to remain competitive. Dynamic fee users will be pulled upwards as a result. I've already observed the former happening, though not yet to the extent that it has affected dynamic fees significantly.

One recent development that hasn’t received much attention despite the fact that it has the potential to affect the fee market is the development of secondary miner fee markets.
This can take the form of special customer incentive programs such as BTCC’s BlockPriority service or it can take the form of private prepaid block space purchases. This spells trouble for any developers who are writing fee estimate algorithms because now there are opaque fee markets that are invisible to the rest of the world.
To quote BTCC’s press release:

"BlockPriority prioritizes all BTCC’s customers’ transactions, including those who pay zero transaction fees."

This should not be a problem for Bitcoin Core’s fee estimate algorithm because it requires 95% of mempool transactions with a given fee rate to be confirmed in X blocks after being seen, but it could affect more naive algorithms. The lesson for developers is that just because you are seeing transactions at a low fee rate of X being confirmed no longer means that it’s safe for your service to broadcast transactions at that fee rate.
It may make economic sense for mining pools to sell prepaid block space contracts because it gives them a new predictable revenue stream.
However, my warning to pools is this: you won’t be able to hide this activity if it becomes a significant portion of your mined transactions. There are plenty of wallet engineers such as myself who are monitoring for this type of behavior, and if it becomes a problem, we will go public. I suspect that any public mining pools found to be participating in this behavior will not fare so well if the individual hashers discover that the pool has been mining lower fee transactions and not sharing the profits from the private block space contracts.
This could result in hashers moving to a pool that they think will be more profitable.
Segregated Witness will also likely have an effect upon the fee market. It will offer a 75% fee discount in an attempt to rebalance the costs of creating versus consuming unspent transaction outputs.
This is expected to encourage users to favor the use of transactions that minimize impact on the UTXO set in order to minimize fees and to encourage developers to design smart contracts and new features in a way that will also minimize the impact on the UTXO set.
David Harding wrote up a helpful breakdown of the data savings provided by SegWit.
I think this is the right path to take, though I’m not sure that 75% is the optimal number. It seems to me that the most fair discount would be dynamic and based upon the ratio of the output’s data size to the corresponding data size of the same output when it is spent as an input.
Though this would certainly be much more difficult to implement, if it’s even possible at all.

Moving forward

There are still many wallets and bitcoin services that have not implemented dynamic fees. You know who you are, and your inaction is likely resulting in a poor experience for some of your users. If you haven’t implemented dynamic fees, then every transaction you broadcast fits into one of two categories:

1. You're overpaying the market rate and not getting confirmed significantly faster.
2. You're underpaying and transactions are getting stuck, resulting in a poor user experience.

It's highly unlikely that a transaction broadcast with a hard-coded fee is hitting the sweet spot and paying the optimal rate to match current market conditions.
Wallet developers should add safety mechanisms such as sanity check thresholds at the micro level and circuit breakers at the macro level to prevent users from shooting themselves in the foot.
Wallets should set a minimum threshold that is higher than just the minimum relay fee. By observing the minimum fee transactions that make it into blocks, we can clearly see that as of today if you’re paying under five satoshis per byte, you’re going to have a bad time.

Bitcoin Mining Fee Distribution, via BitcoinFees

Wallet developers should think adversarially about their fee estimate algorithms and write them to be robust against edge cases that could occur due to mistakes in other wallet software or malicious attacks by entities trying to manipulate the fee market. They should also monitor their fee estimate data and set alerts to notify them if the estimates become more volatile than expected.
But, we should recognize that there is no "one-size-fits-all" fee estimate algorithm – it really depends upon the use case your bitcoin transactions fall under.
Bitcoin Core's algorithm aims to be as generic and conservative as possible so that it's incredibly reliable, but for some use cases it may result in overpaying. Each wallet and service will need to decide what trade off they are willing to make to balance the risk of delayed confirmations against the reward of saving money on fees.
As such, I encourage all bitcoin wallets to make their fee estimates accessible via public APIs. I suspect that the fee estimate algorithms themselves will become a point of competition and often remain closed source, but it the estimates are public then we can more easily watch for abnormal activity. Perhaps someone will even build a "Bitcoin Average" aggregator for fee estimates!
We should recognize that the "fee market" isn’t exactly a market in the traditional sense of the word.
Users can place a "bid" by broadcasting a transaction, but miners don’t publicize their "asks" – wallets have to guess based upon the transactions miners have recently confirmed and by what transactions are currently waiting to be confirmed.
Konrad S Graf stated his thoughts on the "fee market" recently:

"Fees are paid; products and services are bought. So, this term already obscures the real product. Users submit transactions with a fee as an open bid in hopes of confirmation. I describe this as a market for transaction-inclusion services. Users bid to have miners include transactions in candidate blocks. Inclusion in more candidate blocks—especially in relation to the total hashrate mining for those candidates – raises odds of quicker confirmation. Users prefer quicker confirmation to slower, other things equal, so the time element of scarcity is key. It is a market for confirmation priority, a time market."

Perhaps if mining pools published public APIs with their mining policies and "going rates", then it could help wallet services make more informed decisions when calculating dynamic fees rather than forcing developers to rely upon guesswork. This could also help alleviate problems caused by miners who create opaque secondary fee markets via private block space contracts.
Bitcoin users should not need to keep track of the current state of block contention.
Wallets should be handling the complexities of the fee market under the covers, giving the user several simple options when sending a transaction. One potential route would be for the user to authorize a max fee depending upon the transaction urgency and have the wallet use RBF to ramp up the fee paid after each block that passes without it being confirmed.
Transaction fee values should be displayed to the user in terms of their preferred unit of account, such as dollars. It would probably also make sense to display the fee in terms of a percentage of the transaction's value if it exceeds a certain threshold, such as 1%. This will make it easier for users to decide if the current state of the fee market is too contentious and that they would prefer to delay making the transaction until they can safely do so at a lower fee rate.
When we are discussing transaction fees, bitcoin users should stop saying that they paid "X cents" or "Y bits" in transaction fees because this type of statement is nonsensical without knowing the size of the transaction. We should standardize using fee rates in discussions, preferably denominated in terms of satoshis per byte. It’s simpler for humans to write and keep track of "20 satoshis per byte" in comparison to "20,000 satoshis per kilobyte".
The evolution of bitcoin's transaction fee market has been a rocky road up to this point.
At first fees were set manually by developers, then manually by users, and now we're at a more chaotic and potentially dangerous point where developers are playing a more active role in steering the economics of this emerging market.
Kristov Atlas eloquently noted the risks we take by centrally planning economic changes to bitcoin without fully studying them; developers should keep this in mind when writing fee estimate algorithms. We should strive to ensure that the fee market remains driven by humans with the aid of machines, not the other way around. Wallet developers must be careful when building their fee logic so that we can provide a smooth user experience without taking away users' freedom of choice, which is necessary for maintaining a functioning fee market.
Image via Dan Nott for CoinDesk

Bitcoin Retreats Below $440 as Price Support Weakens

Bitcoin prices dropped below $450 late yesterday and then continued to fall below $440 as of press time, breaking two key psychological levels in the span of hours.
Bitcoin dipped below $450 at 21:00 UTC on 27th April, reaching $449.89, CoinDesk Bitcoin Price Index (BPI) figures show. The digital currency quickly mounted a recovery, passing $450 at 22:00 UTC and rising to $450.80.
But, bitcoin failed to stay above $450 for long, falling to $449.89 at 22:30 UTC and dropping past $440 to reach $435.28 at 1:30 UTC. At the time of report, the digital currency was trading at $442.71.
Still, the currency’s plunge below $450 and $440 on 27th April and 28th April, respectively, contrasted sharply with the steady climb it enjoyed earlier this week, when bitcoin prices surpassed several key levels amid the latest progress toward overcoming the blockchain’s inherent capacity challenges.
Market observers suggested that $475 may be the next psychological barrier for traders, and that weak volume ahead of this level may have inhibited the price from continuing its upward momentum.
The retreat from $475 is notable given that bitcoin prices were on the cusp of reaching highs not seen since before 2015. According to BPI data, the price of bitcoin last hit $490 on 19th December, 2015, the only time it touched that figure for the year.
The price of bitcoin last exceeded $500 on 31st August, 2014.
Charles L. Bovaird II is a financial writer and consultant with strong knowledge of securities markets and investing concepts.
Follow Charles Bovaird on Twitter here.
Markts image via Shutterstock

Stock Transfer Firm, Blockchain Startup Partner to Build Securities Registry

Australian stock transfer company Computershare is working with a UK-based blockchain startup to create a securities registry using the technology.

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The plan is to use Setl’s tech foundation to facilitate the exchange of title from securities buyer to seller, with Computershare aiming to attract clients and users to the platform as it takes shape.
The two companies announced the deal at an investor event in Sydney, according to a report by the Sydney Morning Herald. From the outset, Computershare and Setl will focused on applications in the Australian securities market, which is notable given past moves by the country’s major stock exchange to explore distributed ledger solutions.
Stuart Irving, chief executive of Computershare, told investors during the event that the technology – which some proponents have said could augment or outright replace elements of the securities trade sector – makes sense for the company.
He reportedly told investors:

"We believe the commentary that blockchain is automatically 'bad for Computershare' is ill-informed and reflects incomplete analysis or competing vested interests. The focus should be on payments and trade settlement, not registry. The view that 'distributed ledger' technology means everyone will get a copy of a share register is naive.”

Under the deal, Setl will provide software solutions for the planned registries, while Computershare will lobby industry stakeholders to participate.
Setl made headlines late last year when the startup named a former Bank of England executive director as its chairman. Sir David Walker, appointed in mid-December, had previously served in leadership capacities for Barclays and Morgan Stanley.
Image via Shutterstock

How MIT is Using Ripple to Push Blockchain Research Beyond Theory

MIT has moved its blockchain research from the blackboard to the real world through a partnership with distributed ledger tech startup Ripple.

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While MIT has long been involved in supporting the bitcoin and blockchain industries through research, the aim of this project is to develop blockchain, financial services and other enterprise data projects, the university said.
Project director David Shrier, of MIT Connection Science, said he expects this most recent step to attract a wide range of researchers, more than doubling in size its first six months of operation.
Shrier told CoinDesk:

"It’s one thing to develop a four node test blockchain. It's quite another thing to hook up to a large scale global network of nodes."

As part of the research, which is currently being conducted by seven students and professors, MIT is running a validator for the Ripple Consensus Ledger, its permissioned distributed ledger system. The validator is a server that confirms transactions on the network on which the XRP digital asset sits.
Going back to early 2015, MIT has been involved in blockchain tech most directly through support of bitcoin development through its Digital Currency Initiative (DCI). Last month, the MIT DCI helped raise $900,000 to support bitcoin developers, with donors to the fund including venture capitalist Fred Wilson and LinkedIn founder Reid Hoffman
MIT's decision to use Ripple over alternatives was in part due to what Shrier called the startup being "very well positioned" in finance. He added that the university is also interested in exploring "other different flavors" of blockchain.

Laying the foundation

However, MIT's embrace of blockchain has roots in its longstanding support of open-source projects in general.
Since 2007, MIT's Internet Trust Consortium, which includes UBS and NTT Japan, has been developing open-source projects dedicated to helping people more efficiently manage their data. Last year, the consortium was moved under Shrier's MIT Connection Science and began publishing blockchain-specific research.
Members of the consortium published the results of their "Enigma" research in June, which focused on how developers could build a decentralized cloud platform using blockchain. Co-led by Pentland, the project uses an external blockchain to manage who can access data and the identities of those users. The project is currently in beta.
This January, Pentland and fellow Ripple project leader Thomas Hardjono published an early draft of their work on ChainAnchor. While the final draft of the paper is not yet available online, the early version describes ChainAnchor as a means of "retaining user anonymity within a permissioned blockchain".
Both a paper showing their results and a website are expected soon.
The Ripple project, in turn, is led by MIT professor Alex Pentland; managing director David Shrier; and chief technical officer Thomas Hardjono. "Dozens" of researchers are expected to join over the next six months, according to Shrier.

Future Research

In total, Shrier says MIT now has about three dozen projects related to blockchain being run by between 50 researchers and 70 researchers.
"And I only expect that number to grow," he said.
As part of his work in blockchain, Shrier will teach a class on Future Commerce in an online setting for the first time this June. Previously the class was held in a traditional teaching environment, with 50 students creating 19 projects, five of which Shrier says are on their way to launching as startups.
So far, 500 students have signed up for the $2,300 12-week class, though Shrier expects the number to hit 1,000 students by the time class begins.
Image credit: Marcio Jose Bastos Silva / Shutterstock.com

Bitstamp Close to Securing European License for Bitcoin Exchange

One of the world’s largest bitcoin exchanges is reportedly close to announcing a new deal with the Luxembourg government that would enable it to launch regulated and licensed services across Europe.

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According to sources, Bitstamp may have secured a payment institution (PI) or electronic money institution (EMI) license from Luxembourg regulators, a move that the company has reportedly said would allow it to become "the first regulated and licensed bitcoin exchange for all 28 countries in the EU".
Founded in 2013 and originally based in Slovenia, Bitstamp has long been one of Europe’s largest bitcoin startups, offering bitcoin trading and gold buying services to investors. The company is registered in the UK, the US and Luxembourg, where its Bitstamp Europe SA entity is based.
Such a move would come nearly two years after Luxembourg first opened dialogue with the industry, and weeks after blockchain-based payment app provider Circle received an e-money license in the UK.
Bitstamp is currently the fourth largest exchange by total US dollar trading volume, according to data from Bitcoin Charts, behind Bitfinex, BTC-e and Coinbase. The exchange saw just shy of 4,000 BTC traded in the last 24 hours, representing $1.6m in trades. Notably, it does not yet offer EUR trading.
A representative of the Luxembourg Trade & Investment Office declined to comment but said an announcement on the government’s work with the industry could be forthcoming.
Bitstamp executives offered no comment when reached.
Image credit: Christian Mueller / Shutterstock.com

Coinkite Drops Consumer Wallet for Enterprise Bitcoin Hardware Pivot

Bitcoin technology startup Coinkite has announced it is winding down its web wallet in an effort to focus on enterprise hardware products.

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The phasing out of the product, Coinkite said in a blog post, will take place over the course of 30 days, after which users logging into the site will automatically have their balances withdrawn. The company indicated there would be an additional process for any unclaimed funds leftover from the transaction.
In interview, Coinkite CEO Rodolfo Novak said that the startup is keen to move away from software, as he indicated resources are being drained at the company by the “amount of bullshit” involved in offering the service.
Novak told CoinDesk:

"We want to write software, not deal with lawyers and DDoSing."

Novak also cited the high cost of offering reliable free software services as another pain point considered in the transition.
Founded in 2012, Coinkite has long offered prominent developer tools, including API and wallet products that the company once lauded as more decentralized and more privacy-friendly than alternatives.
"One of the main issues with SaaS is all the free users and need support and we want to provide good support. All these things have costs," Novak continued.
Coinkite encouraged wallet users to switch to products available from Bitcoin.org, Bitcoin Core, Electrum and Ledger.

Microsoft’s lunch

Novak said Coinkite now plans to focus on creating bitcoin transaction processing hardware, a product it positioned as one that would appeal to more lucrative enterprise users.
Notably, Novak positioned such a device as a more secure alternative to cloud-based services such as Microsoft Azure. The comments come at a time when Microsoft is ramping up its Blockchain-as-a-Service testbed with the goal of a more formal Spring launch.
"It’s not safe to use hosted services," Novak said. "It’s important to have servers that are meant to transact funds and that use bitcoin business logic."
Novak did not offer a timeline for the products, but suggested announcements on its latest offerings would be ready soon. Additional products Coinkite will now focus on include physical bitcoins and bitcoin payment terminals.
More details on the service shutdown can be found here.
New versus old image via Shutterstock

Industry Advocacy Groups Unite to Launch Global Blockchain Forum

A collection of interest groups focused on bitcoin, blockchain and digital asset-related issues has created a new business forum in a bid to shape how public policy relating to the technology is
formed.
Dubbed the Global Blockchain Forum, the group’s supporters include the US-based Chamber of Digital Commerce, the Australian Digital Currency & Commerce Association (ADCCA), the UK Digital Currency Association (UKDCA), and the Association of Crypto-Currency Enterprises and Start-ups (ACCESS), headquartered in Singapore.

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The group said that it aims to establish "international industry best practices" to encourage global innovation.
Perianne Boring, president of the Chamber of Digital Commerce, said that the effort grew out of organic communication between the various stakeholders that focused largely on public policy advocacy.
Boring told CoinDesk:

"We decided that the time was ripe to formalize our engagement to create a this platform and welcome other related organizations to coordinate efforts as well."

The group’s formation comes as governments worldwide continue to move toward establishing regulatory stances on the technology, with recent policy updates observed in Asia, Europe and the US.
According to Boring, the group will aim to promote communication between its stakeholders; push for “consistent” public policy approaches to digital currency and blockchain regulation; and conduct research to support the development of such policy.
"There is next no consistency among the various countries looking to regulate bitcoin and blockchain tech," Boring explained.
For example, she indicated that anti-money laundering (AML), know-your-customer (KYC) and Bank Secrecy Act (BSA) laws differ globally, forcing added costs on industry businesses.
Boring said that the group will also seek dialogue with applicable regulatory bodies as part of its goal of influencing public policy outcomes.
Image via Shutterstock

Coinalytics Rebrands As Skry, Hires IBM Vet to Go ‘Blockchain’

Coinalytics today announced it has rebranded as Skry, unveiling a new logo and revealing two new hires as part of its move to expand beyond services for the bitcoin blockchain.
In an interview with CoinDesk, Skry co-founder and CEO Fabio Federici said the company is working to merge blockchain, big data and artificial intelligence in to a single product.
Federici said:

"The company itself wants to move beyond bitcoin, so sending out that clear message was important. But in order to do so, and to make it applicable to any blockchain, we needed that expertise to go from a bitcoin analytics application to a blockchain analytics platform."

Announced today, Dr Akash Singh, IBM’s former chief researcher who worked for 10 years on IBM's Watson computer, joined Skry as its chief technology officer. Singh will focus on helping make Coinalytics "enterprise-ready" by ensuring that big banks and law enforcement agencies interested in its services can leverage a blockchain-agnostic platform.
The move to service larger companies also includes a new "fusion layer" of the analytics product.
Singh, who was also the CTO of data science at Shenzhen, China-based Huawei, will work to build the service designed to let clients safely analyze in-house data like user accounts and geolocation information but without turning it over to any third-party.
Also announced today, Dr Masoud Nikravesh, was hired as Skry's new chief data scientist. Nikravesh is an artificial intelligence researcher and former computational science and engineering director at the Center for Information Technology Research in the Interest of Society for the State of California.
Over his 25-year career Nikravesh has specialized in risk analysis and prediction models for credit risk scoring, according to the statement. He also worked on anomaly detection for anti-fraud services.
Nikravesh said in a statement:

"Skry is at the forefront of applying Machine Learning and Artificial Intelligence to turn the blockchain into actionable insights, which will have a crucial impact on the future of this technology, beyond bitcoin."

A new path forward

Founded in April 2014, Palo Alto-based Skry has raised a total of $1.3m from 500 Startups and The Hive to build its analytics platform for bitcoin.
But as the firm speaks with law-enforcement agencies and privacy-conscious banks, it has joined the ranks of companies like Elliptic, which last month raised $5m for its own set of blockchain surveillance tools.
In interview with CoinDesk, Federici said he wanted the newly rebranded company to help "bridge the gap" between the rapidly increasing sets of data available through machine-learning tools and the business use-cases that might only become apparent upon close examination.
In a hat-tip to the company’s name, which means to foretell the future using a crystal ball, Federici added:

"We believe in the real-time aspect of the service using machine learning and artificial intelligence to let the user get best possible look at the future."

Skry logo courtesy of Skry; Crystal ball via Shutterstock