Microsoft’s New Ethereum Blockchain Product Gets Rid of Mining
Software giant Microsoft has debuted a new Blockchain as a Service (BaaS) product that allows businesses across industry verticals to deploy a flexible instance of Ethereum tailored specifically for enterprise environments.
Announced on Tuesday, Ethereum Proof-of-Authority on Azure allows enterprises to build applications on an Ethereum blockchain that is not secured by a Proof-of-Work (PoW) consensus algorithm and consequently does not require mining — features that are better suited for networks in which participants do not trust one another.
PoW “works great in anonymous, open networks where cryptocurrency promotes security on the network,” said Azure Global software engineer Cody Born. “However, in private/consortium networks the underlying ether has no value.”
Born explained that, since all participants on an enterprise blockchain network are known and reputable, governance can be separated from network operation.
To this end, the Proof-of-Authority product features a built-in decentralized application (DApp or dApp) called the “Governance DApp” that provides consortium members with the authority to govern the network or delegate their voting power to others. Network participants can also delegate other nodes to vote on their behalf in the event that their primary nodes go offline, ensuring that all members maintain continual consensus participation.
Network administrators, in turn, can use on-chain voting to vote on and alter network authorities in a transparent and auditable manner.
Along with Azure’s original, PoW-based Ethereum product, blockchains using this new consensus model can be deployed in as little as five minutes, providing enterprises with a “single-click” DLT solution.
To further increase the product’s usability, Microsoft integrated support for smart contracts built using Parity’s WebAssembly (Wasm) toolkit, enabling developers to write smart contracts in familiar programming languages such as C, C++, and Rust in lieu of learning Solidity, Ethereum’s primary programming language.
IBM-Maersk blockchain alliance cuts oceanic shipping times by 40%
The TradeLens shipping partnership now has 94 partners, despite blockchain skeptics.
Did you just get a TV from Tokyo or flowers from France? Blockchain, that potentially disruptive but much-derided technology, might have helped deliver the goods.
A blockchain-based IBM partnership with global shipping colossus Maersk has now expanded to include 94 partners, Big Blue said Thursday. That includes shippers, customs houses, ports and others that have to wrangle paperwork as containers full of goods move around the world.
The result is shipping times that dropped a whopping 40 percent on average, according to Marie Wieck, who leads IBM’s 1,600-employee blockchain work.
That’s the kind of improvement that every inventory manager and bean-counter in accounting loves. And it ultimately means lower prices for anyone buying that TV or those flowers.
“We believe it has the potential to have the same amount of impact on the process,” Wieck said.
Wait, what’s blockchain again?
Blockchain cuts paperwork-handling hassles by a factor of 10 by making it easier for everyone involved to get bills of lading, sanitary certificates, customs releases, invoices and other necessary documents, Wieck said. Before blockchain’s swifter processing, a “container spent more time in the ports than in the ocean” when shipping flowers from Mombasa, Kenya, to Rotterdam in the Netherlands, she said.
Blockchain lets cooperating companies or people share data — sales transactions or property records, for example — on a shared network of computers. The information is distributed across all of them instead of isolated on just one, an idea called a shared ledger, with encryption technology writing the data to all the systems in an ever-lengthening series of interlinked blocks.
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Blockchain bakes trust into transactions because a single database eliminates some he-said, she-said disagreements that ordinarily crop up when multiple parties are trying to reconcile two separate databases. Encryption technology ensures that transactions really are between the parties involved.
The blockchain idea grew out of bitcoin and stores transaction data for all other cryptocurrencies, too. But much of the enthusiasm for blockchain is from its use in other domains, everything from voting and lotteries to ID cards and graphics rendering.
Still, blockchain has plenty of detractors who think of it as a solution in search of a problem.
Vint Cerf, one of the creators of the internet, tweeted a photo of a flowchart for tackling the issue. The top box in the flowchart states: “Do I need a blockchain?” A single arrow points to another box: “No.”
The chief executive of Western Union, a partner in a high-profile blockchain money-transfer project from startup Ripple, said in June that so far, “it’s still too expensive.”
But TradeLens shows there’s enthusiasm, too. Among its 94 partners are shippers Pacific International Lines and Hamburg Süd; customs authorities in the Netherlands, Saudi Arabia, Singapore, Australia and Peru; and port operators in Philadelphia, Hong Kong, Rotterdam, Halifax, Nova Scotia, and Bilbao, Spain.
IBM rival SAP, a business software maker and another blockchain fan, said that the reality of blockchain is that it’s not a get-rich-quick scheme.
Blockchain is a business network, said Gil Perez, SAP’s senior vice president of products and innovations. “It is critical for multiple companies to come together and agree on a business process, which is lengthening the adoption of blockchain in the enterprise,” he said.
SAP has a blockchain project for shipping, logistics and customs, too, and it’s working with partners including the US Customs and Border Protection agency and shipping company UPS.
Logging a million events per day
That work is in the proof-of-concept stage. IBM’s TradeLens service is part of IBM’s early adopter program, but it’s up and running in the real world. It captures more than a million shipping events each day, 154 million in total so far.
“We don’t see scalability as a factor at all,” Wieck said.
TradeLens for now has been a closed partnership, but that’s changing. “We’re anticipating opening up general availability for anybody who wants to join later this year,” Wieck said. Cryptocurrencies use public blockchains, which means anyone can operate a node on the network and contribute transactions, but TradeLens uses a more restrictive “permissioned” approach with some controls on participation. It maintains the core blockchain idea of distributing data across multiple servers, though.
Also Thursday, IBM opened a programming interface that will let other companies’ computer systems interact with the blockchain. IBM charges for access to the TradeLens, offering it online as software as a service and sharing revenue with founding partners.
IBM has found it’s needed to make course corrections with TradeLens — for example, in the types of documents stored on the blockchain and the “onboarding” process to enlist new partners. But when done right, the blockchain greases the wheels of commerce.
“When there is real transparency to all data on the chain, you have less disputes because everybody has seamless visibility,” Wieck said. “We feel very comfortable about the model having value for the different types of participants.”
Starbucks customers may soon be able to pay for their lattes with bitcoin.
The company announced on Wednesday that it’s teaming up with Microsoft and Intercontinental Exchange, the owner of the New York Stock Exchange, to let customers use cryptocurrencies to buy items in stores.
The companies are working on a platform called Bakkt to allow users to store digital currency and trade it for products. Starbucks won’t store or accept the cryptocurrency directly, but Bakkt will turn people’s digital currency into US dollars that can be used at the coffee chain.
Starbucks said the move is part of an effort to stay innovative and offer customers more ways to pay.
Bitcoin(BTSC), the first currency that’ll be available on Bakkt, is a buzzy alternative currency, but its rise in popularity has been far from stable. Late last year, the value of one bitcoin was as high as $20,000, but it’s currently priced at just over $7,400. People can also purchase a fraction of a bitcoin.
Bakkt is expected to launch in November, and it’s unclear when Starbucks will be able to implement the technology for customer use. The platform will also be available for other merchants to use.
World’s Biggest Stock Exchange Operator is Launching a Bitcoin Market
Intercontinental Exchange (ICE), the owner of the New York Stock Exchange (NYSE), has announced that will list a physically-settled bitcoin futures contracts and form a new company whose mission is to make bitcoin a mainstream financial asset.
ICE to Launch Physically-Settled Bitcoin Futures
ICE made the groundbreaking announcement on Friday, revealing that the new platform — Bakkt — has been developed in partnership with a variety of blockbuster names, including Microsoft, Starbucks, and BCG.
Bakkt will integrate with the ICE’s U.S. futures market and clearinghouse to list a physically-settled one-day bitcoin futures product, complete with physical warehousing managed in-house by ICE. This product will launch in November, pending regulatory approval.
Because ICE — one of the biggest names in finance — will serve as custodian for all assets stored on the Bakkt platform, institutional investors such as pensions, endowments, and insurance companies may be less hesitant to take a bet on this burgeoning asset class. As CCN reported, analysts and others with knowledge of the institutional investing landscape had consistently fingered a lack of a respected, regulated custodian as the primary reason that institutions were staying away from bitcoin.
“Bakkt is designed to serve as a scalable on-ramp for institutional, merchant and consumer participation in digital assets by promoting greater efficiency, security and utility,” said Kelly Loeffler, CEO of Bakkt. “We are collaborating to build an open platform that helps unlock the transformative potential of digital assets across global markets and commerce.”
However, far from just a bitcoin futures exchange, Bakkt — whose other investors include Microsoft subsidiary M12, Fortress, Susquehanna, Pantera Capital, and Galaxy Digital — is intended to be a full-fledged platform that helps digital assets evolve into a mainstream financial asset class.
“In bringing regulated, connected infrastructure together with institutional and consumer applications for digital assets, we aim to build confidence in the asset class on a global scale, consistent with our track record of bringing transparency and trust to previously unregulated markets,” said Jeffrey C. Sprecher, founder, chairman, and CEO of Intercontinental Exchange.
Taking Bitcoin Mainstream
Indeed, Sprecher and Loeffler lay out their ambitious plans for Bakkt in an interview with Fortune, revealing that the platform will feature its own “omnibus ledger” that operates on top of the Bitcoin blockchain, similar to the Lightning Network (LN).
They said that they envision that, with ICE’s help, bitcoin can become a bona fide currency that could become the asset of choice for international payments.
Once a firm’s assets are custodied with ICE, they will be able to conduct frictionless transactions with other institutions and businesses that are connected to the Bakkt ledger.
”Bitcoin would greatly simplify the movement of global money,” Sprecher told the publication. “It has the potential to become the first worldwide currency.”
Toward that end, Bakkt is exploring how to increase bitcoin’s utility as a payment instrument. The announcement states that Starbucks will take an active role in providing consumers with the ability to seamlessly convert their holdings into USD so that they can use them to pay for items at Starbucks locations.
“As the flagship retailer, Starbucks will play a pivotal role in developing practical, trusted and regulated applications for consumers to convert their digital assets into US dollars for use at Starbucks,” said Maria Smith, Vice President, Partnerships and Payments for Starbucks. “As a leader in Mobile Pay to our more than 15 million Starbucks Rewards members, Starbucks is committed to innovation for expanding payment options for our customers.”
But while ICE believes it can be the one to take bitcoin mainstream, it also says that that reality likely will not resemble the crypto-anarchist vision harbored by many early cryptocurrency adopters.
“Bitcoin can’t survive as a rogue idea,” Sprecher said in the Fortune profile. “To evolve, the cryptocurrencies need to run on established infrastructure. They need the trust and rules that have been built into our financial system for many years. They need the kind of trust that the Big Board represents.”
The bitcoin price saw moderate bump in the hours following the announcement, rising as high as $7,503 on Bitfinex after dipping as far as $7,282 earlier in the day.
Developing…CCN will continue to update this story, so check back for more information.
Flow and Cryptomkt Enable Crypto Payments at 5000+ Stores
Cryptocurrency exchange Cryptomkt has partnered with Chilean payment platform Flow to allow customers to pay with three cryptocurrencies at over 5,000 stores. The announcement follows two Chilean courts ruling that banks must reopen the accounts of crypto exchanges they previously closed.
5,000+ Stores Accept Cryptocurrencies
Cryptocurrency exchange Cryptomkt announced this week that over 5,000 stores now accept three cryptocurrencies.
Chilean payment platform Flow has integrated the exchange’s payment solution, Cryptocompra, into its system. Customers shopping at merchants using Flow can now choose to pay with cryptocurrencies during the checkout process.
Flow claims to currently provide service to over 5,000 stores with over 180,000 monthly transactions and over 20,000 customers.
Available now for businesses in Chile, Argentina, Brazil and Europe, Cryptocompra “allows merchants to accept payments in bitcoin, ethereum and stellar cryptocurrencies quickly and easily,” Cryptomkt detailed, emphasizing:
Chileans today can access various products and services in more than 5,000 stores affiliated to Flow.cl using bitcoin and other cryptocurrencies through Cryptocompra.com … Client pays in cryptocurrencies, trade receives pesos, reales or euros.
On its website, Flow lists a fee of 0.90% for next-business-day payment with cryptocurrencies. By comparison, paying with credit cards using Webpay Plus or Onepay costs 4.99% to receive payment the next business day.
“You do not need to have contracts with the means of payment, Flow does it for you,” the company wrote. “Each time someone pays you, we will notify you of the payment made: We will indicate the detail of the payment made and the date on which we will transfer your money.”
Battle Between Banks and Crypto Exchanges
Crypto exchanges in Chile have been battling with banks over the closure of their bank accounts. In April, Chile’s Court for the Defense of Free Competition (TDLC – Tribunal de Defensa de la Libre Competencia) ordered three banks to reopen the accounts of crypto exchanges, including Cryptomkt. In May, Banco Estado complied and reopened the account of the exchange.
Earlier this month, the Fourth Chamber of the Court of Appeals of Santiago ruled in favor of cryptocurrency exchange Orionx against Banco Estado for closing its account.
What do you think of Flow integrating crypto payment option? Let us know in the comments section below.
Images courtesy of Shutterstock, Cryptomkt, and Flow.cl.