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Bank of America Files Three New Blockchain Patents

· August 4, 2017 · 5:45 pm

Bank of America has filed three new blockchain-related patents geared towards data authentication and identity verification. The new patents are the latest in a growing number of blockchain patents filed by the financial services giant.


Creating Innovation With Blockchain

Creating Innovation With Blockchain

Financial services company Bank of America has submitted three new blockchain patents that focus primarily on authenticating information as well as those who handle it.

According to the official website of the United States Patent and Trademark Office (USTPO), one of the patents focuses on the conversion of non-secure “instruments” through a validation process into “transaction confirmation outputs”.  The document explains:

The blockchain recordation component receives a plurality of transaction records for each of a plurality of transactions (…), and when the transaction amount is available, it cryptographically records the transaction in a blockchain comprising a plurality of hashes of transaction records

Essentially the patent would allow Bank of America to authenticate user and transaction information through a blockchain system.

The second patent utilizes a distributed ledger system that monitors and verifies user identities on a network. In the patent documents, it is described as following:

[the system] integrates stored information, real time information and real-time information/data/image(s) from an object/array of objects (Internet of Things (IoT))

The last patent is centered around a system that monitors changes in user history at a specific timeline and creates a “map” of the user and his history. The patents suggest that Bank of America is going to heavily invest in Bitcoin and blockchain technology.

Bank Of America and Blockchain Technology

Bank Of America and Blockchain Technology

This isn’t the first time that the famous finance corporation has shown its intention to innovate with blockchain technology. According to an article by CNBC on January 28, 2016, Bank of America decided to get ahead in the innovation ‘game’ and filed 15 different blockchain-related patents.

It is worth noting that the majority of these innovative patents are focused on user and transaction verification through blockchain technology, which could greatly reduce transactions costs and drastically cut transaction times for customers.

Catherine Bessant, the chief operations and technology officer at Bank of America, explained the company’s interest in blockchain technology:

Blockchain’s very intriguing and for us it’s a balance between not wanting to be Neanderthal but not wanting to put something out in a commercial application where the commercial application is still very unclear as a technologist, the technology is fascinating. […] And we have tried to stay on the forefront, I think we have somewhere around 15 patents, most people would be surprised at Bank of America with patents in the blockchain or cryptocurrency space. (It’s) very important in the intellectual property world to reserve our spot even before we know what the commercial application might be.

Through its rapid movements, Bank Of America is clearly trying to win the innovation race with the help of blockchain technology. We are looking forward to seeing how other financial institutions will respond to this.

What are your thoughts on these patents? Do you think that Bank of America will be able to win the innovation race? Let us know in the comments below!


Images courtesy of Pexels, Reuters/Shannon Stapleton, iStockPhoto

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Russian Economic Minister Cautions Against Bitcoin ‘Pyramid Scheme’ As Russian Banks Adopt Blockchain Technology

· August 2, 2017 · 5:30 pm

Russian Economic Development minister, Maxim Oreshkin brands Bitcoin “a pyramid scheme” as the country’s largest banks including Sberbank PJSC and VTB Group look to a modified Ethereum blockchain to provide safer and faster payments.


What appears to be mixed messages coming out of Russia, where both a Bitcoin pyramid scheme warning and a veritable big bank endorsement of Ethereum based blockchain technology have been issued in the same week, proves indicative of the approach taken by governments around the world. Governments not wanting to stifle their countries’ role in what essentially amounts to be a technological revolution are taking a cautious and tentative approach to cryptocurrency in general.

In an interview with Russia’s Rossiya 24, Russian Economic Development Minister Maxim Oreshkin said (translated):

So far the markets of cryptocurrencies resemble a financial pyramid, and it is necessary to treat the value of this asset very carefully.

Technology Benefits

Bitcoin and blockchain technology benefits

Bitcoin as a pyramid scheme investment is a warning issued by governments and investors around the world, carefully considering a balance between promoting the benefits of blockchain technology and protecting inexperienced investors from it. Governments are keen to emphasize that cryptocurrencies such as Bitcoin are not a currency, which does avoid issues of regulation, with the President of the Russian Federation Vladimir Putin having previously announced;

Our attitude to this today is very cautious because almost nothing is regulated in this area today.

Benefits of Blockchain Technology For Banks

Benefits of blockchain technology for banks

Pyramid scheme investment warnings do not necessarily contradict news of active investment in blockchain-based technologies. Russia’s big banks have formed a consortium, similar to that of other banks outside of Russia, including Sberbank PJSC and VTB Group to provide safer and faster methods of payment. The consortium

The consortium is focusing on a modified version of the Ethereum blockchain, utilizing its ability to provide smart contracts. For instance, a blockchain method could cut costs by as much as 80% in the highly notarized financial sector, cutting out intermediaries in key areas such as mortgage certificates. Intermediaries such as notary bodies also increase security risks and data exposure in areas such as data storage and document transference.

Russian banks are keen to remain apace with technological advancement in the blockchain arena, seeking the cost saving, efficient and secure form of banking. Another factor to consider is the current state of banking in Russia. According to Vyacheslav Putilovsky, an analyst at the Moscow-based rating company Expert RA:

Russia’s not a very developed banking market. The top banks here are betting that they can catch up and maybe even overtake their western competitors in their adaptation of this type of technology.

It provides an opportunity for Russia to both reform their banking practices and keep up with the latest technological advancements. Exactly how they can mimic the same security provided by a large, decentralized and financially incentivized blockchain like that of Bitcoin remains to be seen.

Bitcoin’s financial incentive, rewarding miners, is a fundamental component of establishing a decentralized and secure blockchain ledger potentially leaving governments to see cryptocurrency investment as a potential state asset as opposed to empowering a rival to a state regulated currency. With other banks looking to companies like IBM to provide their infrastructure, it seems further cost cuts could be made by embracing what is already readily available and secure by utilizing Bitcoin’s already well establish and secure blockchain.

Do you think Russia’s warning about Bitcoin and its major banks forming a consortium to explore blockchain technology contradict one another? Let us know in the comments below.


Images courtesy of Shutterstock, Pixabay

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Money20/20 Panel: Integrating Blockchain Into Mainstream Business

Source: bitcoin

Money20/20 Panel: Integrating Blockchain Into Mainstream Business

On Sunday afternoon at the Money20/20 Conference in Las Vegas, a panel of industry experts discussed the exciting potential of blockchain applications and the array of solutions being developed to meet the needs of a wide number of players. Panelists urged the packed auditorium to take a serious look at the quickly evolving cryptocurrency technology space, and honed in on the need to lower settlement costs and times.

Also read: Money 20/20: BitPay Announces New Mobile App

Much like the internet of the early 1990’s, blockchain applications can potentially open up an entirely new ecosystem for digital project deployment. Financial services firms are increasingly aware of this opportunity and issue.

Money 20/20 Panel: Which Mainstream Firms Use the Blockchain?

Overstock.com is one organization taking a lead in this realm. Through trading their stock on a blockchain, settlement times are reduced to 10 minutes. Judd Bagley, director of communications at Overstock, pointed out the power of exponential change ushered into the financial services industry by blockchain technology:

“Most tech changes only affect point marginally. This isn’t a small matter of degree, this is orders of magnitude difference. A 90% reduction in cost.”

Such cost reductions make a real business case for blockchain technology to financial services providers such as payment processors looking to cut costs.

By 2017, Overstock will have established a beachhead for blockchain-based equities trading, but will in-turn need to convince others to join the t0 platform. Through eliminating counter-party risk in times of panic, such as the Great Recession in 2008, or the Flash Crash of 2010, opposing parties can leverage shared ledgers to ensure the accountability of an opposing party.

Emmanuel Aidoo, Director of Investment Banking Technology at Credit Suisse, pointed out how much capital is stifled by being locked up in the slow, overhead intensive traditional systems. Credit Suisse has a lot of legacy in these traditional systems, and needs to figure out how to merge with blockchain in the with existing cloud and internal IT solutions.

Many industry players’ hard work is beginning to pay off, as blockchain technology applications have moved towards launches and direct proofs of value. For example, IBM is using blockchain technology to show that transparency provided through a blockchain enables for quicker dispute resolution in for food quality intake tracking on Chinese supply chains.

Jacob Farber sampled things through pointing out that all blockchain application can move beyond Bitcoin towards pointed gateway applications to be implemented within financial systems.

“We went from Bitcoin, what’s that? To, Bitcoin,watch it,” Farber said. “And now, to an assumption now that blockchain technology will be deployed, it’s just about how and where.”

Initiatives such as the R3 consortium, made up of over 50 banks, large financial institutions now collaborating on massive scales to research the potential applications of blockchain technology.

So where are we in the hype cycle, you may ask? Yolanda Goettsch, Vice President and Associate General Council at NASDAQ  was rather optimistic.

Estonia, for one, is a leader in collaborating for instituting blockchain applications, as shareholder voting in a use case in the NASDAQ-operated region. NASDAQ’s Linq platform already enabled a successful trade of shares from Chain.com to a private group of investors last December. Through eliminating processes that are done manually, reconciliation costs are lowered as peer-to-peer, real time information on a distributed ledger can increase efficiencies for many parties.

Furthermore, according to Goettsch, two-thirds of banks are working on commercializing blockchain tech by 2019, with many proof of concepts will go into production within the next 2 years, may take 5-8 years.

The panel painted a rather optimistic future for adoption of blockchain technology. Large players are rightfully looking towards the technology to offer a competitive advantage, increase security, and scale with the experimental blockchain infrastructure in development. Exciting questions are additionally raised around crowdfunding projects and their relation to these initiatives.

What are your thoughts about the increased adoption of blockchain technology? Share your thoughts in the comments below!


Images courtesy of Ryan Strauss.

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Money20/20 Panel: Integrating Blockchain Into Mainstream Business

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ECB Executive Places Europe As Leader In Blockchain Technology

Source: bitcoin

ECB

The European Central Bank is engaged in “experimental work” on blockchain technology. As some banks have warned, the technology is still too new to know what real world uses it has. But, according to an ECB executive board member on Monday, the central bank is researching how the technology could apply to modern financial systems. 

Also Read: Bitcoin Prices Inches Towards $470. Will $500 Be Next? 

Member of the Executive Board of the ECB, Yves Merch, confirmed the ECB is investigating blockchain technology and how it could be adopted by the euro zone’s central banks.

ECB Believes Their Future Might Be Blockchained

“From a central bank perspective, in the context of our strategic reflections on the future of the Eurosystem’s market infrastructures, we are certainly open to new technologies and, like many market players, have launched some experimental work with DLT,” Mersch said. “It is clear that we have a lot of more thinking to do on DLT-related questions and their policy implications.”

He explains that the central bank is in the midst of researching possible technologies to change the future of central banking. Mersch said that blockchain technologies are “one of several possibilities” the central banking system could adopt. Blockchain-inspired technology could lead to “lower costs and a more resilient and legally sound market infrastructure.”

He cautioned: ”But even if, ultimately, DLT emerged as technically superior in terms of safety and efficiency, we will also have to reflect on the wider implications of the use of this technology for the role of central bank money.”

The blockchain technology became a focal point in 2015, overshadowing the Bitcoin technology which had been shrouded in controversy a la the bankrupt Bitcoin exchange, Mt. Gox, and darknet marketplace, Silk Road.

Currently, through partnerships like R3 CEV, some of the largest banks in the world are researching blockchain technology, in particular with Ethereum, an alternative blockchain from Bitcoin.

The Bank for International Settlements, and Santander bank, have posited that blockchain technology could make banking more efficient and less expensive. Many technologists say the blockchain has implications for industries outside of the financial industry.

“The possibility for financial intermediaries and market infrastructures to share a distributed ledger – i.e. a decentralised common database – is something unprecedented,” Mersch said. “It has the potential to advantage some actors, by lowering back-office costs and collateral or capital requirements. At the same time, it may possibly disintermediate or even make redundant some market actors that do not provide core functions.” He implies that a move to blockchain-inspired technology could mean central bank’s have their own, private crypto-currency on a private distributed ledger. 

Bringing our Eurosystem market infrastructures on DLT automatically means bringing central bank money on DLT,” he said. “This may have implications on the central bank functions which go beyond the operational and technical sphere. It is therefore important to structure the discussion along the lines of who could access the central bank ledger.”

He added: “It is clear that we have a lot of more thinking to do on DLT-related questions and their policy implications. Before wielding the hammer we have to make sure that we have a strong anvil.”

No Blockchain-Specific Regulations For Now

EU lawmakers decided recently they would not yet regulate blockchain technology. “We don’t want pre-emptive regulation, but we do want precautionary monitoring,” Jakob von Weizsaecker, a German center-left member of the European Parliament, informed Reuters.

The regulators claimed they did not want to stifle innovation in financial technology. “One reason why regulating now in detail would be difficult is that we don’t know yet what the most important use of blockchain might be,” von Weizsaecker said.

BitStamp’s history paints a portrait that regulators also believe they already have the regulations necessary to keep an eye on Bitcoin. That exchange recently received a license from Luxembourg to operate as a money transmitter. 

The report is not held as law. It requests the European Commission to monitor blockchain and fintech developments.

Andrew Hauser, BoE executive director for payments, said last week the authorities had to keep abreast of blockchain.

“Central banks can’t afford to be Ubered,”Andrew Hauser, BoE executive director for payments, Andrew Hauser quipped of the EU lawmakers to not spell out further details.

This, coupled by the European Central Bank and BitStamp’s transmission license, spells an optimistic future for blockchain technologies. Bitcoin could benefit from the good news in the general blockchain industry. A block reward halving in the not so distant future – July 10 more or less – the case is being made for a bullish second half for the digital currency.

What do you think about the ECB’s statements on blockchain technology? Let us know in the comments below!

The post ECB Executive Places Europe As Leader In Blockchain Technology appeared first on Bitcoinist.net.

ECB Executive Places Europe As Leader In Blockchain Technology

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