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This Week in Blockchain – 01/30– 2/05

NASA Jumps on the Blockchain Train, Big Bank Comments on Blockchain’s Strengths, SEC Seeks Big Data Tool

Ecosystem

Blockchain’s Main Strengths Are Transparency and Instantaneity: HSBC Exec
Article Link: [Coin Telegraph]

An HSBC Executive claimed transparency and instantaneity are the main strengths of financial blockchain technology, following up an announcement in January that HSBC has already settled $250 Billion in foreign exchange trades using blockchain technology. Arguably, while transparency and transaction settling time are undoubtedly large wins for blockchain based payment systems, the decentralized nature of the technology is what is driving blockchain technology in many use cases. The ability of a technology to be used and trusted by multiple parties, without any true owner or master of the system, is a revolutionary concept in the modern digital world. Moving back to HSBC, the executive also noted that the technology is not quite there yet, citing issues of adoption, a divided market, and lack of interoperability. Regardless, blockchain appears to remain at the front of global financial technology, and even pilot programs are a great step towards a more efficient financial system

Bitcoin is a ‘Fad,’ But Even NASA is Investing in Blockchain

Article Link: [CCN]

Ignoring the speculation on cryptocurrencies, NASA engineer Ronald Reisman is investigating the use of Hyperledger Fabric as a potential solution to outdated Air Traffic Control systems. While current systems are over 40 years old, the emerging next generation of air traffic control, aptly named NextGen, is already 5 years late and as much as $500 million over budget (and isn’t set to be implemented until 2020). Reisman already depicts concerns in the security of this new system, noting that it “does not provide for the protection of flight plans and positions and other state data”. He looks towards a permissioned blockchain, Hyperledger Fabric, as a potential solution that could be rapidly deployed to address concerns over spoofing, DOS, and other digital attacks.

Don’t Believe the FUD: Ethereum Can Scale

Article Link: [Coindesk]

Among currently low transaction throughput capacity and a myriad of competitive technologies emerging, industry and public faith in the future of Ethereum is dwindling. The article covers in depth many solutions for the seemingly insurmountable issue of scaling to handle constant global transactions loads, dividing them into two categories: scale the core platform to handle higher throughput, and reduce the load on the main chain by introducing a system for side-chains without the need to constantly settle on the main chain. Dubbed Layer 1 or On-Chain solutions, current projects addressing the performance of the main chain include Sharding and Casper, and are for the most part headed by The Ethereum Foundation and Vitalik. Layer 2 or Off-Chain solutions offer a unique new viewpoint as to the purpose of the Ethereum main chain, claiming it could be used for very few settlements while side-chains (Plasma, state chains, etc) would handle the majority of transactional and processing volume. These solutions are being actively pursued by many industry developers, both for Ethereum related projects and for general blockchain use. Looking towards active development efforts and market ready solutions, will Ethereum be able to scale effectively before competitors are able to produce a higher-performance rival system.

How Blockchain Can Fight Plastic Pollution

Article Link: [Coindesk]

Joe Lubin, co-founder of Ethereum, joined CNNMoney Switzerland to discuss the outlook of blockchain for 2019 when the conversation took an unexpected turn. While referring to assisting with the cleanup of plastics in oceans, Lubin said, “we can use mechanism designed goals for the problem, fund the amelioration of that problem, and coordinate that activity using mechanisms on the blockchain.” He proceeded to infer the imminence of this project’s initiation.

Regulatory

SEC Solicits Blockchain Analytics Firms to Monitor Crypto Industry
Article Link: [SEC Solicits Big Data]

Notice Link:[SEC Sources Sought Notice]

The SEC has issued a “sources sought” notice seeking blockchain analytics firms to provide data on the crypto industry in order to “monitor risk, improve compliance, and inform Commission policy. . . .” Specifically, the SEC is seeking to acquire data on “the most widely used blockchain ledgers” and all available information and transaction details. This notice is consistent with the SEC’s earlier statement that regulating the cryptocurrency market will continue to be a top priority in 2019. While this may be a sign that the SEC is seeking to utilize this data to ramp up its enforcement actions against ICOs, the SEC may also use the data to finally release guidance on whether ICOs involve the offering of securities subject to federal securities laws. Or it could be that the SEC is taking a closer look at Bitcoin ETFs and may approve them sometime in the near future. Who knows what the SEC is up to. Only time will tell

Research Notes:

Ecosystem - Christopher Sides, Duke University ‘19 & Justin LoTurco, Duke University ‘19

Regulatory - Carlos Manzano, Duke Law School ‘19

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