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IBM, J.P. Morgan, and Others Build a New Blockchain For Business
by Stacey Higginbotham @gigastacey DECEMBER 17, 2015, 12:01 AM EST
Bitcoin is out and the Open Ledger Project is in.
IBM, Intel, J.P. Morgan and several other big banks are among those making a big bet on blockchain, the distributed transaction processing engine behind cryptocurrencies such as Bitcoin. The companies have joined forces to create the Open Ledger Project with the Linux Foundation, with the goal of re-imagining supply chains, contracts and other ways information about ownership and value are exchanged in a digital economy.
IBM is contributing thousands of lines of existing code based on its research into the blockchain based on a years-long research effort. Digital Asset, a company that makes software for designing blockchains, is contributing the Hyperledger name to the project, which will be used for branding the effort, as well as code and developer resources.
The Open Ledger Project isn’t proposing another cryptocurrency, but rather wants to use blockchain technology to create tools to allow businesses to build a distributed ledger for anything they can dream up–from exchanging automotive titles in seconds to paying retail suppliers when a sale is made.
Because the ledger is both connected and distributed, it is easy to track changes to the database and difficult to forge entries or delete them. Honduras uses the technology to track land titles and musicians use using it to let fans pay them directly for songs.
Jerry Cuomo, an IBM Fellow working with the Open Ledger Project, says he wants to help create a distributed ledger to offer businesses privacy, confidentiality and accountability. In many cases when customers came to IBM considering something like Ethereum or Bitcoin, they are worried about their data being stored in the larger community. Even big banks are cautiously embracing blockchain, as opposed to Bitcoin.
One of the options the Open Ledger Project tech provides is a way to limit the community of users who have access to the ledger. A company that chooses to implement a version of an Open Ledger blockchain can elect to use rules that determine who can generate transactions and even authenticate them. In Bitcoin for example, anyone who can do the mining work required to generate a Bitcoin generates a transaction. There’s no velvet rope or possibility of a closed door.
But to make blockchain for business, this element of limiting participation was essential.
“I don’t have a strong opinion on cryptocurrencies, but I have a strong opinion on the blockchain as a solution for contracts and supply chains and the internet of things, Cuomo says. “I think Bitcoin is an interesting application for blockchain but there are thousands of applications and wider use cases beyond that.”
more here:
http://fortune.com/2015/12/17/ibm-blockchain-for-business/
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Bring On the Cashless Future
45 JAN 31, 2016 5:00 PM EST
By Editorial Board
Cash had a pretty good run for 4,000 years or so. These days, though, notes and coins increasingly seem declasse: They're dirty and dangerous, unwieldy and expensive, antiquated and so very analog.
Sensing this dissatisfaction, entrepreneurs have introduced hundreds of digital currencies in the past few years, of which bitcoin is only the most famous. Now governments want in: The People's Bank of China says it intends to issue a digital currency of its own. Central banks in Ecuador, the Philippines, the U.K. and Canada are mulling similar ideas. At least one company has sprung up to help them along.
Much depends on the details, of course. But this is a welcome trend. In theory, digital legal tender could combine the inventiveness of private virtual currencies with the stability of a government mint.
Most obviously, such a system would make moving money easier. Properly designed, a digital fiat currency could move seamlessly across otherwise incompatible payment networks, making transactions faster and cheaper. It would be of particular use to the poor, who could pay bills or accept payments online without need of a bank account, or make remittances without getting gouged.
For governments and their taxpayers, potential advantages abound. Issuing digital currency would be cheaper than printing bills and minting coins. It could improve statistical indicators, such as inflation and gross domestic product. Traceable transactions could help inhibit terrorist financing, money laundering, fraud, tax evasion and corruption.
The most far-reaching effect might be on monetary policy. For much of the past decade, central banks in the rich world have been hampered by what economists call the zero lower bound, or the inability to impose significantly negative interest rates. Persistent low demand and high unemployment may sometimes require interest rates to be pushed below zero -- but why keep money in a deposit whose value keeps shrinking when you can hold cash instead? With rates near zero, that conundrum has led policy makers to novel and unpredictable methods of stimulating the economy, such as large-scale bond-buying.
A digital legal tender could resolve this problem. Suppose the central bank charged the banks that deal with it a fee for accepting paper currency. In that way, it could set an exchange rate between electronic and paper money -- and by raising the fee, it would cause paper money to depreciate against the electronic standard. This would eliminate the incentive to hold cash rather than digital money, allowing the central bank to push the interest rate below zero and thereby boost consumption and investment. It would be a big step toward doing without cash altogether.
Digital legal tender isn't without risk. A policy that drives down the value of paper money would meet political resistance and -- to put it mildly -- would require some explaining. It could hold back private innovation in digital currencies. Security will be an abiding concern. Non-cash payments also tend to exacerbate the human propensity to overspend. And you don't have to be paranoid to worry about Big Brother tracking your financial life.
Governments must be alert to these problems -- because the key to getting people to adopt such a system is trust. A rule that a person's transaction history could be accessed only with a court order, for instance, might alleviate privacy concerns. Harmonizing international regulations could encourage companies to keep experimenting. And an effective campaign to explain the new tender would be indispensable.
If policy makers are wise and attend to all that, they just might convince the public of a surprising truth about cash: They're better off without it.
http://www.bloombergview.com/articles/2016-01-31/bring-on-the-cashless-future
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Previous Posts:
cashless society - 05.09.2014
http://globalistnews.blogspot.com/2014/05/cashless-society-05092014.html
Is Cash Still King? - Cashless Society Update - 10.19.2014
http://globalistnews.blogspot.com/2014/10/is-cash-still-king-cashless-society.html
For those who think they will have to force people to take The Mark
http://globalistnews.blogspot.com/2014/11/for-those-who-think-they-will-have-to.html
gold, predictions, and the real agenda - 2013 - 12.31.2013
http://globalistnews.blogspot.com/2014/03/gold-predictions-and-real-agenda-2013.html
-Spyda
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