The concept of open bank data is pretty much a no-brainer once you start to think about the implications. Providing free, standardised access to the banks in real time liberates developers, entrepreneurs and – most importantly – consumers around the world who are otherwise hampered by legacy technology deployed by financial institutions.
The team from TESOBE did a sterling job over the weekend leaving no stone unturned in their quest to create the ideal environment for those burning the midnight oil, providing a selection of massages, whisky and bagpipe accompaniment (!) in addition to the obligatory Red Bull, food and support throughout.
I was delighted to be asked to act as a mentor at the event. It’s something that I’ve done at a few times at a number of hackathons (in different capacities) and it’s always an honour. I’m always full of admiration for anyone who chooses to come together to work – hard – over a weekend out of choice out of a simple desire to create and build something new and worthwhile.
The final pitches were great. As usual, I’m not going to share the ideas here (it’s not clear yet who wants to go forwards with these). Needless to say I was happy to see the guys from miiCard bring home the prizes for most disruptive (believe it or not, I had no say in the judging!)
All together, big congratulations go to Ismail Chaib, Simon Redfern and the rest of the Open Bank Project team; Kirsten Bennie and the rest of the RBS team who are clearly engaging positively with the upcoming disruption that’s undeniably en route; and last, but not least, all the developers and disruptors who proved that Scotland is now starting to really build on a burgeoning FinTech reputation.
It’s noticeable that there have been far fewer Bitcoin Conferences taking place this year. Speaking from experience, I can understand why. Conference organising brings its own challenges, particularly when you add into the mix the topic of an emerging technology that most people don’t yet understand whose application could disrupt a variety of industries. What area(s) should you focus on when programming a coherent and informative event?
There were no such worries for the London Blockchain Conference on 24th June. It turns out that hosting this in the Barclays Accelerator and simply dropping the ‘B’ word from the title (that’s ‘Bitcoin’, not ‘blockchain’) was a smart move, evidenced by the huge turn out of representatives from a broad range of financial organisations.
Hardly surprising. Because, as Simon Taylor pointed out in his brief opening, the potential for cryptographic proof equates to “an accountant’s wet dream”. Now, lofty claims about the power of a blockchain to instantly solve the world’s collective ills (or to “benchpress the earth”, as Simon put it) might not be helpful. But the simple, undeniable truth is that the existing financial system needs a reboot. So what’s the appropriate architecture to let this building commence in a digital world? Because it’s pretty clear that the system of the near future is not one that relies on masses of independently-verified, slow and expensive paper-based processes.
Undoubtedly, many in the room that day have been attracted by this shift in focus. The conversation was not, like so many in the past, one about consumer applications. Instead, this discussion sidestepped the question almost in its entirety and looked instead at the application of blockchain solutions at an enterprise level – seeking efficiencies where the industry currently shoulders significant costs and collectively dreams of reducing the settlement time for trades that travel at a snail’s pace today.
Less of a currency focus – but still unmissable
That’s not to say that there was no discussion of Bitcoin as a digital currency however. It was good to hear both Adam (Diacle) and Dan (Innovate Finance) remind everyone that the UK continues to lead the way globally when it comes to building a supportive environment on the basis of a non-interventionist policy, with money being allocated to research into digital currency. Far from being a regulator’s worst nightmare, the blockchain promises a completely different and seemingly vastly improved model for compliance (where the necessary data is verifiably correct and ‘pushed up’ as required as opposed to being extracted painfully by the regulator in a top-down model).
I don’t write about regulation on this blog often (partly to avoid people assuming I’m giving legal advice given my previous career – but mainly because, to be frank, it doesn’t really excite me). But one thing I haven’t really flagged up previously (because it’s obvious to anyone other than perhaps a newcomer to the scene) is a very valid concern that emerging regulation of Bitcoin risks somehow ensnaring those building businesses that rely on blockchain technology to certify the provenance of data (as part of a non-financial transaction – such as Provenance for example which uses Ethereum). We’re fortunate that this hasn’t turned into a major issue (in the UK) at present – but it remains an area to watch closely.
Blockchain startup tips – from your target customers
But what about the startup scene? Are the institutions starting to see an evolution and growth in maturity from those who are seeking to sell blockchain-influenced solutions into the financial services market?
Lee Braine of Barclays made a number of good points during the day. It’s time to move on from the early rhetoric of the Bitcoin startup scene. Financial institutions continue to look for solutions to a screed of vast array of problems, relating to everything from SLA’s to regulatory requirements. It’s clear that blockchain technology provides a new approach. But it’s been hard for them to engage with many entrepreneurs to date who have approached such problems from the opposite perspective – more along the lines of “we have the solution, we just need to implement it”.
I liked Lee’s comment that the blockchain is nothing more than a massive WORM (Write-Once Read Many) drive. He also had a couple of valuable pieces of advice for the Bitcoin community:
To sell into financial services enterprises, you have to ‘bake in’ the bank’s non-functional requirements from the start (e.g. strive for security, reliability and low-latency at all stages).
Solving part of a known issue isn’t good enough from a bank’s perspective. In other enterprise business sectors, a solution often requires a collaboration between third party vendors who collectively solve the problem in its entirety. Perhaps it’s time for startups to think in terms of forging similar alliances in order to bring blockchain-based solutions to the banks.
The message that seems to be coming across loud and clear in these discussions is that banks are (finally) starting to understand the power of blockchain technology. However, their challenge comes in trusting that the legal entity (or group) that possesses the ‘right to write’ to the (private) blockchain is sufficiently robust to provide them with trust that all of the information recorded is legally enforceable and correct (as I outlined previously). But, in general terms, they all seem to be looking for a system that provides a private ledger with designated miners, collective administration and one that focuses on the assets being exchanged, with the details of the technology itself being hidden.
Onwards and upwards
So there was definitely a much-improved level of understanding in general around the technology in comparison to a few events that I’ve been at recently, although we’re clearly still at the start of the curve. It was impressive to see the newly-launched Everledger burst out of the accelerator and set out their vision for (initially) the use of the blockchain to track diamonds “from the mine to the mistress” to prove provenance and slash insurance costs for physical items within the legacy system. And that’s without even mentioning what appeares to be an extremely promising new entrant into the world of private blockchains as a new whitepaper was released by MultiChain, developed by the hugely talented team behind Coin Sciences.
The organisers of the WebSummit got in touch a few weeks ago and asked me to head across to Belfast for a couple of days to chair a couple of panels at their new event MoneyConf last week. It was a great gathering of some of the big names in FinTech and it was striking just how predominant Bitcoin and/or blockchain businesses were in the conference programming.
Whilst I’ve spoken increasingly frequently in public on Bitcoin over the past couple of years or so and compered/organised the Scottish Bitcoin Conference, this was actually the first time I’ve chaired panel sessions. I wasn’t too sure of what to expect (how opinionated should you be as the chair, what to do if someone talks too much or – worse – too little etc). However, I’m happy to say that it was a blast. Both panels seemed to go down well and I’m eager to do it all over again just as soon as possible.
And, as Nic Cary pointed out, any financial institution that does not have a blockchain strategy discussion of sorts taking place in its boardroom at present is not a business that’s likely to be around in a few years’ time.
It was fascinating to hear Halsey Minor of BitReserve in conversation with Max Keiser (here’s another conversation if they’ve had since). For those of you who aren’t aware, Halsey is – there’s no other words for it – a serious player. When someone who helped to create not one but two billion dollar businesses (CNET and Salesforce) says that the announcements that he has planned for the next few months about the evolution of BitReserve are by far the most disruptive of his entire career – take note.
One final note: Adam Ludwin of Chain and Vinny Lingham of Gyft announced a ridiculously cool collaboration in the form of blockchain-powered gift cards. I’ve just found the video here of the presentation here as well if you’re interested. So all in all, a great couple of days in Belfast. If I had to find fault with anything, it was the lack of Bitcoin ATM’s…. but you can’t have everything 😉 I for one will be heading back next year to see how the event grows that’s for sure
So it’s General Election day. Maybe it’s me but it all feels a bit anti-climactic here in Scotland, coming as it does hard on the heels of the Referendum. Regardless of which side you were on in that process, it feels different when you’re voting ‘just’ for the next five years (as opposed to the indefinite future) of your country.
But while we’re on the subject of politics, I wanted to just flag one thing up quickly which has intrigued me about the political process this time around that’s new. And (surprise!) it relates to Bitcoin.
For example, you can see every donation that was made as part of the campaign, recorded permanently and publicly here. Every. Single. Donation.
Of course, it’s not exactly taxing for anyone to follow funds donated in this way moving forwards. And for any others to audit donations in order to provide any necessary checks and balances within the electoral system. Develop the potential a little further, scale it up and then unleash that (free) technology on a country that went through the parliamentary expenses scandal in 2009.
So, if you still don’t think that Bitcoin helps with real-world issues, it’s worth having a think about this. I predict that if we do end up with a government by the morning that can govern for a few years (far from a certainty at this stage) then by the time we go through the next major political event, this kind of transparency should be something that’s expected – and demanded – by the electorate.
Now where’s the popcorn? Looks like it’s a long night ahead.
One Bitcoin company that continues to cause a stir in the industry is the mysterious 21 Inc. Not only has the business remained in stealth mode since it started back in 2013, it’s captured the interest of some serious heavy-hitters (founders of PayPal, Dropbox, eBay and Expedia are involved), it’s taken investment from chipmaker Qualcomm (a massive player in the global mobile phone business). And then, to top it all off, it’s raised a total of a staggering $116 million already pre-launch.
To put it another way, the only thing that we do know is that some seasoned veterans known for delivering unusually big successes are taking a punt on the chance that this particular business might turn into something very special indeed. I’ve had two fairly high profile people on differen sides of the Atlantic tell me conflicting rumours about the nature of the company’s business so I suspect we’ll just need to wait and see.
“All of Google today would represent less than 1% of mining. The sheer degree of what is happening in mining hasn’t been appreciated in the press.”
If we view the Bitcoin network as the worlds largest supercomputer, then it’s likely that this is bigger than Google in terms of computing power and power consumption.
As onename.io co-founder Muneeb Ali points out in a follow-up post on Medium, it’s not so much that we’re yet at the stage where it would be beyond Google’s ability to catch up (if they chose to do so). It’s simply the fact that for them to do so would involve massive capital expenditure. They simply don’t have the necessary hardware (ASICs in this case) to suddenly move in that direction quickly. Take on board the fact that they are one of the most cash-rich companies in the world and you get, I believe, a sense of the sheer scale of the project that we’re all so fascinated by.
The news came quick and fast this afternoon. To be honest, I’ve not yet had a chance to dive into the various documents in great depth. But it’s worth summarising a few key developments here in case you missed it.
The Budget lands…with funding for digital currency research
As rumoured, the Chancellor came out in the Budget today with some positive news for the nascent digital currency scene (see point 19). He announced that £10 million of funding would be made available for the launch of a new research initiative into the future potential of digital currency technology.
Response to the Call For Information on Digital Currencies
Apply anti-money laundering regulation to digital currency exchanges to prevent criminal use.
Ensure that law enforcement bodies have the necessary training, resources, and legislation to address criminal activity conducted with Bitcoin.
Work with the British Standards Institute and the digital currency industry to develop a set of best practices for consumer protection that does not impose an extreme regulatory burden players in the space.
Launch a research initiative with leading institutions within the UK to study digital currencies and increase funding for digital currency research to £10 million.
I’ve always been fascinated by blogging, certainly since it really broke into the consciousness of the general public around a decade ago. Regardless of the quality of the content, the ability to actively share content directly with an audience, no matter how niche it might be, immediately hit me as being incredibly powerful.
I’ve learned a huge amount over the last decade or so from simply reading blogs. I remember once asking work colleagues how many blogs they read regularly. Or even irregularly. The answer, it transpired, was that there wasn’t a single person who was. That still amazes me. Needless to say, I also understood that I was in the wrong job.
Of course the landscape has shifted hugely over the last decade. Some bloggers, real and anonymous, have moved on of course but many stalwarts remain (for example, Fred Wilson started blogging back in September 2003). Larger numbers of people are now producing content which, thanks to technology that’s freely available, has at least the potential of reaching a global audience. And of course the emergence of micro-blogging platforms such as Twitter really helped to tap into that pent-up desire that so many had to share something (with 288 million active monthly users generating 500 million Tweets per day currently).
The philosophy’s really interesting here and really validates the open source model. Almost everything on WordPress.com is free. They charge for upgrades (whether it’s spam filters or custom domains) but the core proposition is – and always will be – free. If you’re worried about giving something away for free, I suggest you go and have a chat with Matt. I’m sure giving stuff away has done him much harm over the last decade or so.
Going back to the article, there seem to be some parallels between WordPress in 2004 and the state of Bitcoin in 2015. You can sense a seismic change coming. It’s impossible to say when or where the ultimate winners will be so far. But it’s certain that there will be winners. As Scott Maxwell mentioned in the Q&A after the Bitcoin talk we gave up to Dundee Tech Meetup yesterday, there’s probably 5 or 6 places lying vacant at the moment just waiting for people to carve themselves a place in the history books. With every day, we get a little closer to the time when we find out who it’s going to be.
Anyway, I don’t usually just post an episode of something on the blog post but I figured this might be of interest to a few readers who are still getting to grips with Bitcoin.
I suspect most people know who Morgan Spurlock is. I like the fact that he didn’t even attempt to pretend he knew what was going on at the start. There’s a lot to be said for going down that route – especially if you’re planning to live on nothing but Bitcoin for a week.
I’ve written about a number of times beforeabout trying to kickstart the discussion around digital currencies and particularly blockchain technologies throughout Scotland. Not because I believe in any way that I somehow have all the answers. But simply because I see it as a crucial topic for anyone who wants to understand an game-changing development that will inevitably shape the future of our society in a wide range of ways.
Last week Edinburgh University’s Design Informatics ran the Creative Currencies Chiasma, a ground-breaking 2.5 day residential course focused on helping people to develop digital currency business ideas from a standing start. I was delighted to be asked to help out after previouslyspeaking at a couple of the warm-up events. There’s no doubt in my mind that as a group, the participants really did something unique over that few days. I take little credit on that front though, full kudos must go to Chris Speed and Debbie Maxwell who designed and project managed the whole event under the Design In Action umbrella.
The event was unique (check out more pictures of the event here) because it handpicked people from a wide variety of backgrounds, mixing those with extensive knowledge of crypto-currencies with newcomers, locked them in a room for a few days and stood back to see what sort of new business ideas would result. With the added icing on the cake being the prospect of £20,000 funding being awarded to the best ideas.
The first night of the event kicked off with a great introductory talk by Chris as he explored the hidden potential in the flows of data (including money) through our cities, after which Patrick Stevenson-Keating gave a fascinating talk about his recent project at the Design Museum in London where he took on the task of re-imagining financial services using a design perspective. Some really great ideas there – how about a lengthy credit card that lets you pay more money the further you insert it into the card reader for example?
George Kelsey from RBS then spoke after dinner, mentioning that whilst he wasn’t a fan of Bitcoin itself (unsurprisingly, Ripple appears to be the current frontrunner for those within the bank), he remains completely convinced that blockchain technologies are going to change the world. Whilst we perhaps have differing views on the details in the future scenarios that could play out, I felt that was a pretty significant statement from an experienced bank representative.
After that, I gave a general introduction to Bitcoin to the group before we all decamped to another room to run through a blockchain workshop that we’d devised using a combination of lego, trading cards, stickers, Countdown and all manner of other ecosystem tweaks as trading conditions evolved! We’d tried running it out on a student class a few weeks earlier with great success. The ideas that they’d come up with after having their minds opened to the possibilities of having this secure, immutable record and programmable money were truly fascinating given the short time they’d been given. The same happened here, no doubt nicely lubricated by a few drinks. The attendees at the Chiasma didn’t disappoint with their thoughts on the future..
The evening then evolved into a further investigation of the potential for cryptocurrencies into the wee small hours. It shows what happens when you get the right people into the same room – I could tell that the level of engagement was going to be immense when the earlier dinner chat at my end of the table revolved around the existential threat of AI, drones, 3D printing and the re-engineering of the financial system….
The next morning, it was up bright and early to set up camp within the RBS Technology Solutions Centre. I certainly wasn’t alone I’m sure in feeling slightly strange ideating through concepts that could fundamentally disintermediate the banking industry whilst within the belly of the beast, so to speak. But I have to say that RBS were very accommodating and freely provided the location for the event – regardless of what their motivations might have been, it’s a genuinely step forward to see a financial institution engaging in such a positive way with the topic. This would not have happened a couple of years ago and it shows you just how far things have progressed in recent times.
The next couple of days were a bit of a blur to be honest. A healthy mix of education, unrestrained ideation and problem-solving with, very interestingly, many relative newcomers immediately identifying similar areas that have attracted more seasoned Bitcoiners over recent months as being ripe for the exploration of new business models. For example, some of these included looking at ways to rebalance existing financial inequality, strengthen a variety of communities, reward previously unmeasured positive behaviours, harness the power of smart contracts and transparency, cut through the jargon, track the providence of money and secure records on a permanent basis.
I’m not going to write anything about the ideas that were developed throughout the remaining time as each of the individuals involved in the teams that made up the eight final pitches now has the opportunity to work up the concepts into a more robust proposition before applying for further funding that will support future development. However, it’s worth saying that I was very impressed with the progress that was made. Bitcoin – and cryptocurrencies in general – are difficult to grasp. It’s one thing to turn up at a Bitcoin conference or a hack weekend when you have that background knowledge and you’re surrounded by people who are steeped in the culture and daily echochamber of the Bitcoin scene. But for so many relative newcomers to openly embrace the process of education whilst simultaneously grasping the immediate potential gives me real hope for the future in terms of the way with which such ideas will be able to spread.
With such a significant paradigm shift taking place, it takes a few brave organisations to stand up and provide a framework for others to coalesce around. It’s a vital role and full credit goes to Chris, Debbie and the rest of the team for pulling this together. I suspect those involved will think back to those two and a half days in a decade or so and then truly realise how lucky they were to be involved at this point in time.
Thanks to everyone who took part. Let’s hope we can do it again some time.
Check out this short video with Chris Ellis on the excellent IamSatoshi site. It’s only 5 minutes long. Chris has long been an insightful commentator and active participant within the scene (see the World Crypto Network and his recent World Passport). If you’re still struggling to understanding why the blockchain is so significant, watch this and see if this helps with the concept of timestamping.
Chris makes the point that the blockchain acts like gravity in a way. It helps the ever-increasing mountains of data being produced to maintain internal consistency by ensuring that important information is now timestamped using Bitcoin’s distributed network. Or, to put it another way – anyone now has the ability (for free) to record important documentation on the blockchain in a way that doesn’t reveal the details as such but simply the fact that it existed at a particular point in time.
This timestamp concept is crucial. We now have an open free system that anyone can access which represents the truth. Anyone can confirm whether specific information existed at a particular point in time. A quick search can confirm that the majority of the network was fully cognisant of that fact. And as a side-product, we automatically prevent the fabrication of claims around the sequence of events that are all too common in our current systems.
With the technology, everyone on the planet now has the potential to access to the same information that was previously restricted or incomplete that they need to be fully informed about a variety of decisions that they will inevitably make in their lives. No more pulling the wool over other people’s eyes.
On a basic level, that means that a charity for example now no longer has any excuse not to record events on the blockchain in order to build cast-iron proof of its activities – and expenditures – at a later date. Seeking such a level of accountability should prove to be uncontroversial when it comes to looking at any charitable organisation. However, during the next few years the promise of the technology is that commercial organisations will be required to show publicly whether they are willing to adhere to the same ethical standards.
On a higher level, the power to share information fairly across space and time on the blockchain means that the balance for power within societies will also inevitably change. You’ll often hear the argument that Bitcoin can do little in the developing world where food and running water remain of greater importance than fancy new currencies. But Chris’ point is that this is an over-simplification. The reality is that the very information that will be captured on the blockchain is of crucial importance and should not be under-valued. Whoever controls the information controls the system. Such control impacts on the beliefs, actions and freedoms of those within that society.
The promise of the blockchain is that such transparency and accessibility of truthful information on a global scale will inevitably reset that position.