Many European companies and institutions are interested in blockchain. But in the current state of the market, where can you start? What is a promising area? Where should you better wait a little longer?
Together with BlockStart and Startup Lithuania. A key question is: How can projects and interest groups better connect capable developer and interested organisations?
The event will be a panel discussion to do just that: Bring together blockchain experts and SME adopters, to exchange on what works and what needs improvement.
This event will be held online, and live streamed in Facebook and YouTube, on 28 April at 3pm CEST (Brussels Time).
Mirko Lorenz, Expert at H2020 blockchain project NGI TruBlo
Mauro Manente, CTO at Latitudo40, one of the 18 SME adopters that piloted blockchain solutions during BlockStart’s 1st Pilot stage.
The event will be moderated by Vytautas Černiauskas, Expert at CIVITTA, BlockStart consortium partner.
Interested in joining us? This panel discussion is free-of-charge, but registration is mandatory. Upon your registration, you will receive an email a few days before the event, with a kind reminder and the link to join our speakers on 28 April.
TruBlo Open Call #1: Evaluation timeline for proposals
Timeline of TruBlo evaluation process for Open Call #1
Evaluation process
19.03.2021: Deadline for proposals for the open call
30.03 – 19.4.2021: Each proposal is reviewed by two independent evaluators. The project took extra care in the selection process, e.g. by randomizing the assignments of the evaluators. Further the project ensured that evaluators will review a project from their own country, as an additional measure
20.04.2021: Consensus meeting. This means that the evaluation results for each proposal from two evaluators are compared. A final score is applied to each proposal.
21.04.2021 – 27.04.2021: The creators of the top graded proposals are contacted, in order to create a final ranking.
28.04.2021 – 30.04.2021: Final results of open call #1 are announced
The selected projects – 10 for open call #1 – will be contacted directly.
Background: For years now Futurist Amy Webb and her team at the Future Today Institute in New York City publish insightful trend reports. The researchers dig through mountains of material, the goal is to find out how new developments will affect business and society. By now the yearly Tech Trends report has become a highly important source for many organisations around the world. The findings help to develop individual strategies and start to innovate.
How is the report organised? The entire Tech Trend report delves into more than 500 trends. For the 2021 edition, this 14th annual Tech Trend report is split up into 12 smaller reports, based on topics. One of those covers blockchain, which is what we care about here.
Key elements of the 2021 Tech Trends Report
Six indicators for each trend
To make the importance of each trend clearer, the report provides six indicators for each.These indicators are very helpful to understand whether a trend is important right now or over a longer period. Below are the six indicators used in the Tech Trend Report.
Years on the list: Some trends show up for the first time, others have been reported upon for several years. It must be noted that some trends take more than a decade to fully evolve. Others fade away when expected technologies are not evolving or when buyers are not interested as expected.
Key insight: A brief description of the trend, in simple words. This alone is helpful, simply to learn about many trends which are new and relevant.
Examples: Providing examples of the trend at work, by naming projects and companies.
Disruptive impact: What the trend might mean for business, government or society
Emerging players: “Individuals, research teams, startups or other organizations emerging” around the specific trend
Action scale: As a conclusion, the Tech Trend report provides recommended actions. These are ranging from “Watch closely” to “Informs strategy” to “Act now”. The latest stage is reached when uncertainty is low, there is data supporting the trend evolution.
Key trends for blockchain, fintech and crypto
The trends report is not just cheerleading further growths of tech. While some developments are seen as solutions to problems, the researchers warn about pessimistic scenarios for some trends, for example, the idea of “Human IPOs” (where people auction off their time, decisions).
The TruBlo take: What we found interesting: There are many opportunities for far-ranging impact for society, for example by making remittances simpler, easier and cheaper. The social aspects, over time, should be as important as the speculative, purely financial aspects of blockchain and crypto. By being of value for many and being reliable the chances for blockchain technology to fulfil expectations and promises is much more likely than simply using it for casino-style speculation.
General observations
The report starts with a summary of recent observations around blockchain and new finance platforms. These are not trends, but current conditions and characteristics of the blockchain field. The key observations, as reported by The Future Today Institute, are:
Existing, large crypto holdings enable investments for innovation.
Decentralised financial instruments will be adopted by enterprises
Four dozen countries are piloting digital fiat sovereign currencies
Blockchain is adopted for supply chain management, often for environmental purposes
Big demand for impartial and secure financial systems for fast (and low-cost) transactions
Smart contracts could remove intermediaries
Fractional ownership might evolve, based on the option to sell and trade tiny parts of an asset with crypto money fractions
Blockchain trends for 2021
Trend 1: Central Bank-Backed Digital Currencies (CBDCs)
There are big forces at work here. Should central banks enable digital currency, the whole cryptosystem would get a big boost. There are many positive aspects here: Payments could be executed faster, with fewer costs. What authorities try to avoid at all costs are big mistakes, such as sudden security problems, money theft or other illicit activity.
Examples (from Tech Trends Report) to better understand this trend: “In 2018, the Marshall Islands created a new digital currency called the Sovereign (SOV), which is now legal tender in the Micronesian nation. Singapore’s central bank created a digital currency backed by the Singapore dollar that runs on the Ethereum blockchain. Canada’s central bank has been researching the issuing of digital currency. China is the undisputed leader in CBDCs, successfully executing a large-scale pilot of more than 4 million digital yuan transactions from April to December 2020. An international coalition of central banks, including the Bank of Canada, Bank of England, Bank of Japan, European Central Bank, and U.S. Federal Reserve, issued a report in October 2020 outlining key principles for CBDCs.
Trend 2: Stablecoins
A stablecoin is a digital currency, but with the value connected (“pegged”) to a real-world currency. Quote from the report: “Stablecoins—specifically those pegged to the U.S. dollar—open up a universal means of exchange across the globe without traditional financial hurdles. People can now store savings in a stable asset rather than a local currency suffer- ing from inflation, and stablecoins offer faster, more affordable remittances.”
Trend 3: Social payments
The title of this trend initially a little misleading. It’s not so much about social, but about shifting payment features to social media platforms – to then be able to offer payment services like banks and credit cards. The trend is already huge. It will likely accelerate a global trend to move from cash money to digital tools, such as payment apps on mobile phones.
Examples (quoted from Tech Trend Report): “In 2009, Venmo became the first social payment app, requiring users to caption their transactions and offering the option to share transactions publicly. Owned by PayPal, it now has 300 million users, and social payments is a serious financial service sector. China’s Alipay gives its 870 million users access to wealth management services, loan applications, and credit scores—and issued half a billion dollars in Chinese loans in 2020. Face- book’s new WhatsApp Pay has 400 million users in India. Apple and Goldman Sachs created a credit card for iPhones and Apple Watches. Uber Money will build a bank for its drivers. Amazon is exploring a checking account service to go with its existing branded credit card. This year, Google will launch GooglePlex, a banking app integrated with Google Pay—creating a single app to pay businesses and peers, manage savings, and conceivably even apply for loans.”
Trend 4: Content Provenance and Permanent Archiving
One use case for blockchain which has not been mentioned that often: Content verification, content provenance (who published something and when) and permanent archiving (as a means against censorship).
Quote: “Blockchains can be used as a universal index of content authorship and edits. This is a powerful tool to authenticate content and to combat censorship and misinformation.
Trend 5: Automated Credit risk modelling
This trend does not rely on blockchain, but on the introduction of AI (Artificial Intelligence) to credit risk calculation. The danger here is that a system analyzed by machines might lead to unintended, but nevertheless, the extremely harmful bias of a system against certain lender groups in society e.g. marginalised communities.
DISRUPTIVE IMPACT: “In many cases, using AI in credit modelling has increased bias against marginalized groups. However, automated processes based on behaviour, and not demographics, could result in more just and equitable outcomes.”
Trend 6: Decentralized Exchanges and Automated Market Makers
Examples (from Tech Trend Report): “Centralized markets like the New York Stock Exchange or Nasdaq maintain fair, consistent, and transparent processes for publishing prices and orders, where market makers provide liquidity with both buy and sell positions. In cryptocurrencies and fully electronic markets, algorithms typically price assets, rather than traditional market books. Ethereum-based decentralized exchange Uniswap surpassed $50 billion in lifetime volume, despite concerns about liquidity and volume from darknet markets. Just months after its 2020 start, Curve.fi hit more than $47 billion in volume and became a decentralized finance leader. Total trading volume for these exchanged ballooned to $6 billion as of the first half of last year, up from $2.5 billion in 2018 and 2019.”
Trend 7: Web 3.0
This trend is about new options, extended capabilities of browsers, including financial or near-financial transactions. From the report: “Web 3.0 allows for web browsers and mobile applications to perform more complex processes and enable entirely new kinds of transactions.”
Examples: “Collaboration and decentralized creation are accelerated in Web 3.0—often referred to as the semantic web. Advanced techniques in data mining, natural language processing, and text analytics will make gathering and understanding unstructured data much easier. Plus, artificial intelligence and machine learning allow machines to collaborate directly with one another and, eventually, teach one another. In media, Otoy is cutting the costs of 3D visual effects production with a decentralized, distributed network of partners that can chip in spare processing power with a digital token known as RNDR. The InterPlanetary File System, a peer-to-peer hypermedia protocol, facilitates decentralized file sharing and cloud computing. Companies like Blockstack and Cosmos are building networking products that will unlock a new generation of applications and services.”
Trend 8: Smart Royalties
Quote from the report: Blockchain networks like Ethereum offer new ways to track ownership, licensing, and royalties through smart contracts or self-executing agreements in which the terms are directly written into lines of code.
Blockchains form the foundational infrastructure layer for new, low-friction ways to automate royalty payments for digital intellectual property. A smart contract, for instance, could automatically pay an artist when her song is streamed or simply track the number of times people share online content, preserving it in a shared public database.
Example: Blockchain is at the core of the Open Music Initiative (OMI)—made up of IBM, Netflix, Pandora, and Spotify—which is developing a standardized open-source protocol and APIs for the music industry. OMI launched a pilot with the Massachusetts Institute of Technology that lets Berklee College of Music students license their work to other universities.
Trend 9: Distributed Computing for a Cause
For example: “…the Golemnetwork, uses Ethereum blockchain and lets people rent out idle computing resources like storage, processing power, or band- width to render computer-generated images, conduct DNA analysis, and tackle machine learning tasks.”
Screenshot of Golem Network Homepage
Trend 10: Fractional Ownership
Quote from the report: “Fractional ownership, commonly associated with time-shares, allows unrelated parties to divide costs and risks in order to collectively own an asset. Now that the concept is being applied to blockchain and digital platforms, it can unlock new ways to purchase and own assets, whether they’re in fine art, stocks, or other markets.”
This trend shows how far-reaching changes in financial systems can be. Co-sharing has potential. But one must be very careful to not allow scams from the past to be repeated in the digital world.
Trend 11: Self-Funding Digital Infrastructure
Quote: “Although much of the internet relies on free open-source software, people are more inclined to use it than maintain it— which is difficult and often leads to burn-out of key contributors. Gitcoin, which caters primarily to the Ethereum blockchain community, created a marketplace of bounties for open-source developers who want to contribute to projects and earn income for their work. Since 2017, Gitcoin has facilitated $10.6 million open-source software projects. Other crypto projects, such as Zcash, earmark a portion of each “block reward”—the number of new coins that enter the circulation as the crypto is mined—to go toward community development.”
Trend 12: Non-fungible tokens and Digital Collectibles
Non-fungible tokens are a variety of crypto assets. In essence, they can not be split up. Instead, they are a link or identifier for a specific, unique asset – such as a work of art or a video or a song. On exchanges, it is possible to buy this item and then own it exclusively, though only in digital form.
NBA Top Shot, the recent auction of Beeples work via Christie’s are good examples. “As more aspects of our lives shift online, demand for digital status symbols and personal expression will increase.” Blockchains enable digital tokens that are provably unique and scarce. As a result, digital collectables are now a growing feature of eSports, online gaming, and social networks. These unique tokens have a variety of applications—from personal expression to commerce to investing.
Scenarios
Inserted into the blockchain trend report are three scenarios. These are larger possible evolutions, such as agreements on new global exchanges. The most interesting, in our opinion, is a scenario called “A new Bretton Woods”. The scenario could evolve around the concept of a “bancor”, a supranational currency for global trade. This would mean that not one country has a dominance in international trade or profits from the demand for its currency.
There is a negative scenario in the report, too. It is about a very new trend on some new social networks, where people (celebrities, influencer) can “go public”. This would mean that others can invest in them, with money or engagement. This scenario brings up a number of red flags because it might easily cross borders in a very negative way.
Key take-aways
Here are the key insights from the blockchain report:
Strategy: Innovative use cases for blockchain abound, but the complexity of the ecosystem remains a hurdle for most companies
Innovation: Companies interested in blockchain struggle to find meaningful use cases. Chief innovation officers can champion companywide ideation to identify value, brainstorm new use cases, test desirability and feasibility, create a proof of concepts with paper or functional prototypes, and launch new pilots— with systems to collect data, test, and evaluate applications. Within many organizations, blockchain enthusiasts are hiding in plain sight, ready to contribute to new initiatives.
R&D: More work is needed: re-searching bitcoin’s long-term economic security and addressing the protocol risks of crypto-currencies and deep code reviews.
Risks: In the longer term, as smart contracts and blockchain peer-to-peer frameworks gain acceptance, business models must transform. Blockchain will reduce operational costs and increase efficiencies. Human-based trust models will transition to algorithmic ones, potentially exposing companies to new risks.
Questions to ask
In general, any organisation should at least watch what is going on in blockchain and the financial markets. The trend is strong. It is partially good, partially dangerous that most of the markets are only used by small “insider communities”. The general public, so far, has not found wide-ranging use cases for crypto. But that might change, although only after some crashes and large scale scams. Once the systems reach a certain maturity later, the questions to ask are:
How will blockchain drive the efficiency of business practices?
Is there adequate planning for the longer term? And which assumptions must hold true for the current strategy to succeed?
Which parts of an organizations business are vulnerable to disruption by blockchain?
Open Call #1 is closed. If you found out too late, no worries: The next call will start in May 2021. The date will be published via the website, in this newsletter and on social media. Follow us on Twitter.
Updates this week:
TRUST
Pandemic boosts the market for digital signatures
Software for digital identities and digital signatures is in high demand. What has changed?
“The conversations five to six years ago were all about: ‘Is this legal? Is it legally binding?’” Ashley Still, the general manager of digital media at Adobe, told Protocol. “The conversations today are: ‘How does this fit into my overall infrastructure?”, via Protocol
Three examples:
DocuSign
“DocuSign, the industry leader, just reported a 57% increase in sales over the past year to $431 million. Adobe Sign had triple-digit year-over-year user growth in June, July, August and September last year, and high double-digit growth in the other months.”
Notarize
“The key to Notarize’s growth is more than just its core stamp and sign function. It’s the platform’s ability to navigate regulatory compliance… Trust is key as Notarize continues to onboard major companies like Adobe, Zillow, and Transamerica, and experience skyrocketing growth over the past year in financial services (up 324%), auto insurance (up 219%) and real estate (up 835%).”
Jumio (the company just raised $150 million)
“I think the big thing is that the foundation of the internet is identity, not anonymity,” said CEO Robert Prigge in an interview, who said the trend of digital transformation has spurred that change. “It’s been a big shift over the last couple of years. People wanted to originally hide behind anonymity, but now identify is the keystone. Whether it’s online banking or social networks, you need to be able to establish trust remotely.” LINK
Identity over anonymity. Is that the future? It is worth thinking a bit more about this statement.
California bans “dark patterns”
Have you ever tried to unsubscribe from a digital service and found it difficult? Likely it was not your fault at all, but a “dark pattern” on the website.
“Dark patterns are tricks used in websites and apps that make you do things that you didn’t mean to, like buying or signing up for something.”
California recently banned the use of such patterns. In Europe, such practices often violate GDPR or are an attempt to trick users into giving up their privacy.
The term was coined in 2010 by Harry Brignull, an expert in user experience. He created a website with examples and a “Hall of Shame”.
The challenge: There is quite a number of such layout tricks.
Three examples:
Indicating a high demand for an item or limited availability (“Only three left in stock”).
Forced enrollment: Before being able to enter a website, the user must provide private information.
Making it difficult or impossible to cancel a subscription or to delete an account. This practice is described as a “roach hotel”.
A 2019 study found that one in ten e-commerce websites uses such practices. LINK
CONTENT
BitClout: Controversy from the start
The idea was to create a social network that could not be censored and where people could follow prominent figures. So far it did not go well.
“When new crypto projects launch, the response is usually relentless cheerleading from Crypto Twitter. That wasn’t the case with BitClout. As details of the project began trickling out, including its decision to add people’s image without permission, a backlash swelled.” LINK
Facebook has 35.000 people tackling misinformation
Just an indicator of how big the problem of false content and fake accounts is.
“Facebook Inc said on Monday it took down 1.3 billion fake accounts between October and December 2020 and that it had over 35,000 people working on tackling misinformation on its platform. The company also removed more than 12 million pieces of content about COVID-19 and vaccines that global health experts flagged as misinformation”. LINK
Twitter is asking: Should presidents be allowed to tweet?
The company started a survey in 14 languages to get opinions from around the world. The questionnaire is open until April 12, 2021. LINK
BLOCKCHAIN
Blockchain-based COVID passport now live in the state of New York
”The pass will be used to confirm an individual’s recent negative PCR or antigen test result or proof of vaccination to help fast-track the reopening of businesses and event venues.”
Chainanalysis announced new funding of $100 million last week. This means the value of the company has doubled in four months. Clear sign more transparency and an overview of the crypto markets are in demand.
Founded in 2014, Chainalysis helps governments and private sector companies detect and prevent the use of bitcoin and other cryptocurrencies in illicit activities like money laundering with its investigations and compliance software. The New York-based company competes with Ciphertrace, which is based in California, as well as London-headquartered firm Elliptic. LINK
Blockchain 3.0 in China
In the past decade, China’s blockchain market has undergone two periods of development. In blockchain 1.0, pioneering firms primarily focused on digital currency applications; in blockchain 2.0, visionary enterprises and vendors began to gain business value by piloting blockchain technologies. Since the second half of 2019, the prioritization of enterprise customers, the technology progress made by tech leaders, and the government’s pragmatic measures have been driving the Chinese market into the age of blockchain 3.0. It is when blockchain adoption gains momentum in all major verticals.”
Some optimism here. China wants to get ahead. But it is easy to imagine serious disruptions, which then might result in a rollback.
But the separation of blockchain adoption into three phases is helpful and could be applied to judge development in other world regions, too. LINK
Thank You for reading.
If you like the newsletter, please forward it to a colleague or friend.
The TruBlo webinar on 26 February at 10:00 CET provides information about the TruBlo Open Call No. 1 with presentations from TruBlo partners.
Questions we cover:
What is the scope, who can apply?
How to apply?
How will partner Alastria provide technical support with blockchain infrastructure?
How will partner ATC provide business support?
There is an opportunity for interested applicants to put their questions to the TruBlo team in a Q&A session following the presentations.
What is your idea or concept for the next-generation technology for distributed trust? If this is your area of work, why not consider an application? The TruBlo project is calling for researchers, innovators and developers from academia, startups, high tech companies or natural person(s).
Further details about TruBlo and Open Call #1 are provided here:
Up to €175.000 for ideas applicable to trustable content on future blockchains. Apply here
Updates this week:
Trust and Content
Bitcoin Bubble
There is a speculation bubble forming, based on the rise of the Bitcoin price. Stories of lucky people who got in early now pull in others. Everyone wants a piece of the cake. This is how bubbles evolve and why they result in damage when they burst.
Why so negative? Because what is going on is too much, too fast. Digital money and trustable finance platforms have yet to pass a real stress test. There is much refinement needed and ultimately some form of regulation. But a boom-and-bust cycle will likely just ignore such warnings and concerns.
Misleading signals are part of the problem. Tesla made headlines because the company invested $1,5 billion in Bitcoin.
Many see this as the moment cryptocurrencies are validated as the new normal. This is not the case, instead it is just a perception caused by an overrepresentation of such events in the news. Everyone in the current market is a speculator.
Different from small investors who might even borrow money to get into crypto, Tesla uses funds which it does not immediately need. In a recent annual report Tesla said the Bitcoin transaction would help to “diversify and maximize returns on our cash that is not required to maintain adequate operating liquidity”. LINK
The European Central Bank (ECB) has issued stern warnings that investors can “lose all their money” when investing in cryptocurrencies. See, for example, this ECB publication: “The future of money – innovating while retaining trust”. LINK
New industry alliance: Digital Trust and Safety Partnership
Leading technology companies established a new industry framework to handle harmful content and conduct online. It is called the “Digital Trust and Safety Partnership”.
The companies who have joined are Facebook, Google, Microsoft, Twitter, Discord, Pinterest, Shopify and Vimeo. But so far the goal is simply to develop guidelines, not a rigid set of rules to fight the problem. Needs work. LINK
Wordproof: Timestamping content to verify digital articles
Wordproof from Amsterdam offers a way to “timestamp” an online article. This information is stored in a blockchain. This enables to determine who published something and when. Potentially search engines will consider such information, so that original and unique content can be displayed with preference. Interesting. LINK
Why changes to the “Identifier for Advertisers” are a big deal
Apple is in dispute with the mobile advertising industry, caused by intended changes to the Identifier for Advertisers (IDFA). Apple wants to ensure that iPhone users can keep their data private, this is why the company has announced more restrictive handling. For platforms which depend on advertising this likely causes a disruption. Facebook is strongly opposed to the changes. This is another evolving debate about the future internet. Because of multiple complaints the introduction of the changes was postponed to early 2021. LINK
BLOCKCHAIN
Promising European blockchain start-ups
A good article here, via EU startups. The list includes companies like Settlemint (Belgium), Odem (Switzerland) and DappRadar (Lithuania). The challenge is that many of these companies started during the hype over blockchain in 2018. There is a need for updated information on these efforts. In the coming weeks, TruBlo aims to reach out for updates. LINK
eWallet loyalty
We recommend, for inspiration towards new ideas: “The Future 100”, a well-researched trend report from WundermanThompson, an advertising agency. The study of hundred trends is interesting as it covers so many areas, from trends in interior design to innovative tech platforms.
One of the hundred predictions is the rise of eWallets. It makes sense to be able to pay with a device we all have in our pockets, the mobile phone. One early finding related to eWallets is that users are quite loyal to the application they initially selected – similar to sticking with a bank for a long time.LINK
What are NFTs (Non-fungible tokens)?
NFT is the acronym for “non-fungible tokens”. If you heard about this, but could not really fathom what “fungible” means, you are not alone.
So what are NFTs? Let’s start with the big difference: If you get one Bitcoin it does not matter which one it is, all coins are the same. This is what the economic term “fungible” describes. Gold is fungible, too: If you get one gold coin it is irrelevant which one you get.
NFTs are non-fungible. They are unique tokens and can be used for just one, specific digital item. This can range from collectables to digital art to a piece of land in a digital world.
For example: Imagine you are playing a digital game where items can be collected and traded. You might have a helmet, a sword and a pet dragon. Each of these three items would then have their unique NFT. They would establish ownership (you can proof, you are the owner). They are indivisible, one can not sell half of the sword you have, only the full item.
NFTs can not be destroyed, the coded connection is always valid. They are in possession of the owner. In other words, NFTs enable the market to trade digital goods. While the token is unique, the price is not. Based on supply and demand the price of an item represented through NFTs may rise or fall. When pet dragons are in short supply next time, be ready. LINK
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Blockchains form the foundational infrastructure layer for new, low-friction ways to automate royalty payments for digital intellectual property. A smart contract, for instance, could automatically pay an artist when her song is streamed or simply track the number of times people share online content, preserving it in a shared public database.
