Crypto-digest 27.04.18: Singapore to speed up process of awarding Blockchain payment patents, Sony eyes Blockchain use for digital rights data, IBM reimagines Proof-of-Work for Blockchain IoT devices, CBOE saw its highest-ever Bitcoin futures volumes yesterday, Ripple says sales of XRP Cryptocurrency rose 83% in Q1, Romania’s oldest Bitcoin exchange is shutting down next week, IBM partners with jewelry industry on Hyperledger supply chain project.
Singapore to speed up process of awarding Blockchain payment patents
Singapore’s Intellectual Property Office announced an initiative to expedite the patent-granting process for fintech-related applications such as blockchain-based payments.
According to a statement from the Office, the FinTech Fast Track initiative seeks to shorten that process from about two years to as little as six months. The program was announced during the 2018 World Intellectual Property Day on Thursday by Low Yen Ling, Senior Parliamentary Secretary for Ministry of Trade and Industry and Ministry of Education.
In defining how an application can fall under the fintech category, the IP office suggested in an appendix that a technology that utilises blockchain to facilitate banking payments will be eligible.
The statement said:
“The incorporation of blockchain technology to improve the security and efficiency of clearing and settlement across borders for transaction and payment is deemed as a Fintech invention.”
The Office also requires the blockchain patent applicants to file documents first in Singapore with less than 20 claims in one application in order to be eligible for the fast-track initiative, among other criteria.
The move marks yet another notable effort taken by the Singapore government to promote the application of blockchain tech as part of its wider push for the city-state’s fintech development.
Currently, the Monetary Authority of Singapore – the de facto central bank – spearheads a cross-border payment system concept built on a blockchain platform called Project Ubin, in partnership with its Canadian counterpart.
The new initiative comes just weeks after the Singapore government launched a blockchain competition with government funding in a bid to reward and select successful blockchain startups.
Sony eyes Blockchain use for digital rights data
Japanese technology giant Sony is looking at using blockchain to store digital rights data.
In an application published Thursday by the U.S. Patent and Trademark Office, Sony explains that current digital rights management (DRM) solutions that aim for interoperability “may not be very reliable and rely on one unique point of failure. If the rights locker provider or system goes out of business or otherwise fails, the user loses all the acquired content.”
A blockchain could store the required identification information to ensure users could watch the products they purchase, according to the filing.
DRM systems refer to technologies that limit access to copyrighted materials only to those who purchase access. Sony cites UltraViolet, a cloud-based locker for digital rights, as one example.
The application was filed jointly by Sony and subsidiary Sony Pictures Entertainment, and the document specifically cites movies as an example of the type of media the system could be applied to.
However, Sony also argues the blockchain-based system could manage rights to “various types of content or other data, such as movies, television, video, music, audio, games, scientific data, medical data, etc.”
The application describes several potential implementations of the technology. In one, each user’s rights are encoded on a dedicated blockchain. This ledger begins with a genesis block, which stores identifying information about that user. When the user acquires rights to certain content – by purchasing a movie download, for example – those rights are committed to the blockchain.
Concurrently, a “DRM computer system would verify the rights in the blockchain and then decrypt the media when needed. This computer system can take different forms, including a “DRM agent” residing on a user’s device, according to Sony.
As previously reported, Sony has been looking at other applications of the technology, including as a means to authenticate user data and manage education data.
IBM reimagines Proof-of-Work for Blockchain IoT devices
IBM is seeking to patent a method for ensuring that a network of connected devices can securely execute blockchain-based smart contracts.
As the tech giant explains in a patent application published Thursday, “one example method of operation may include determining a proof-of-work via a device and using a predefined set of nonce values when determining the proof-of-work, storing the proof-of-work on a blockchain, and broadcasting the proof-of-work as a broadcast message.”
The problem of how to connect Internet of Things (IoT) devices using blockchain has drawn the attention of a number of developers, startups and companies in recent years – indeed, that was the central concept behind IBM’s “ADEPT” proof-of-concept, created in partnership with Samsung and unveiled in early 2015.
An IoT-focused blockchain network couldn’t engage in the kind of competitive “mining” that powers the bitcoin network, largely because a smart toaster or lightbulb can’t harness the power of a warehouse full of specialized computers. At the same time, a large-scale blockchain mine could conceivably have an easier time of attacking a network of IoT devices and, thus, potentially compromise it.
IBM’s proposed solution – described in the application – wouldn’t ditch bitcoin’s proof-of-work system. Proof-of-work adds a block of data – transaction data, in bitcoin’s case – to the blockchain by running it through a hash function. This is a simple process; the “work” comes from the requirement to obtain a hash that meets certain parameters, which calls for running the hash function again and again.
Essentially, IBM explains that it would limit the number of nonces, or one-time-use numbers, within a defined range that the IoT-connected devices can employ when updating the conceptual blockchain.
That way, IBM’s patent application says, “the complexity of constructing a PoW [proof of work] can be adjusted dynamically, such that there is no incentive for any IoT device to use computing power beyond a determined threshold to increase its chances of a successful completion of a PoW.”
This system, the application argues, has the dual benefit: it averts competition among the network’s devices for greater and greater computing power, and it prevents an outside actor with a high hash rate from being able to take control of the blockchain. It should, in other words, “provide equal chances of successful completion of proof-of-work to all IoT devices in the network.”
IBM envisions applying this invention to smart contracts, with use cases such as “peer to peer (P2P) energy networks, logistic networks, crowd-sourced weather networks, and the like.”
CBOE saw its highest-ever Bitcoin futures volumes yesterday
Two major markets for bitcoin futures contracts saw a major boost in volume on Wednesday.
Available market data shows that CBOE saw its highest-ever volume for bitcoin futures since it first debuted the contracts back in December. 18,210 contacts for the May futures were traded, along with 703 for the June contract and 87 for the July contract. No volume was reported for the exchange’s August-dated contract.
CBOE Options Institute senior instructor Kevin Davitt, in a social media video posted on Thursday, said that “[the] average daily volume (ADV) runs about 6,600 in XBT Bitcoin Futures. Yesterday’s volume was nearly three times ADV.”
He went on to explain:
“Yesterday was the highest daily volume for bitcoin futures since their introduction here at CBOE nearly five months ago. The lead month May futures traded 18,210 contracts, and across the term structure a total of 19,000 bitcoin futures traded here yesterday. The previous high-volume session was January 17 with just less than 15,500 contracts traded.”
Wednesday’s volume was an outlier among the past several days, as well as the results seen during Thursday’s session. On Monday, XBT Bitcoin Futures traded at 3,881, rising to 6,653 on Tuesday. On Thursday, volume was reported at 5,634 contracts as of press time.
CME, according to market data, also saw a big trading day on Wednesday.
The exchange saw the volume of its bitcoin futures contracts market double on Wednesday from the day before, shooting past 11,000 contracts. Unlike CBOE, it was CME’s April 2018 contracts which saw the bulk of the spike, according to its website.
The spike in January’s volume coincided with the expiration of the first set of contracts, Davitt said. However, Wednesday’s volume did not, nor did it have a 15-20 percent range in futures Davitt would otherwise have expected, he added.
“We will certainly be watching to see if this is a volume aberration or if more and more institutional types are moving into crypto,” he said. However, he noted that “the overall bullish sentiment continues in XBT Bitcoin Futures.”
Ripple says sales of XRP Cryptocurrency rose 83% in Q1
San Francisco startup Ripple Inc. is reporting an uptick in sales for a cryptocurrency core to its product suite.
According to a post on the firm’s site, released Wednesday, the company sold $167.7 million worth of XRP in the first three months of 2018, an increase of 83 percent compared to the previous quarter and of 2,400 percent compared to the first quarter of 2017. Ripple has long been closely associated with the open-source XRP Ledger, a technology on which it has built tools aimed at enterprise businesses.
The company further said direct sales of XRP totaled $16.6 million – a decline of 17 percent compared to the previous quarter. Programmatic sales of the cryptocurrency more than doubled, on the other hand, rising from $71.5 million to $151.1 million.
Tom Channick, Ripple’s head of corporate communications, told CoinDesk that XRP sales “exceeded our expectations.”
“As a company, our strategy remains focused on signing up customers to use our technology and moving those customers into production. If we continue to do that, we will fix how money moves around the world.”
The total volume of XRP traded globally also increased markedly in Q1: volumes grew 68 percent to reach $160 billion for the period.
XRP’s clout relative to the total cryptocurrency market grew in Q1, with its share of overall market volume growing from 5.3 percent at the end of 2017 to 6.9 percent at the end of March.
As for its share of total cryptocurrency market value, the report notes:
“While the total market capitalization of all digital assets was the same on both November 24, 2017 and March 31, 2018, XRP’s share of that market capitalization doubled, rising from 3.56 percent to 7.57 percent – a continuation of a trend that first began in 2017.”
XRP’s price took off in late 2017, rising from less than $0.25 at the beginning of December to a peak of $3.84 in early January. The token’s subsequent fall was just as steep, and within a month, it was trading at just under a dollar. At the time of writing, 1 XRP is worth around $0.82.
Ripple’s first-quarter report also addressed the negative influence that a global regulatory crackdown, combined with uncertainty about the future, has had on cryptocurrency prices. It did not specifically reference Ripple’s own regulatory questions, however, including whether XRP is a security.
Ripple markets XRP and other solutions to banks as a means to increase efficiency and reduce cost in payments, particularly those transacted across borders. The cryptocurrency has attracted a devoted following, but also a fair amount of criticism too, including questions about its degree of centralization and the pace of adoption.
Ripple has issued quarterly XRP reports since Q4 2016, when it sold $4.6 million XRP directly to institutions.
David Schwartz, the startup’s chief cryptographer, explained programmatic sales on Reddit in November, saying:
“This is done by third parties that Ripple employs to use agreed algorithms to execute sales, usually by market making that is biased in favor of a net sale. Ripple does not have direct control over these sales and cannot adjust their timing on a short-term basis.”
Direct sales, by contrast, are conducted by XRP II, LLC, a registered and licensed money service business. The main buyers, the company has stated in the past, are financial institutions.
Ripple placed 55 billion XRP in escrow accounts in December “to create certainty of XRP supply at any given time.” The company released around 300 million of these XRP in Q1, which it says “are being used in a variety of ways to help invest in the XRP ecosystem.”
Romania’s oldest Bitcoin exchange is shutting down next week
Romania’s BTCxChange announced it was closing its platform earlier this week.
In a notice dated April 22, the nation’s oldest cryptocurrency exchange told its customers to withdraw all of their remaining funds from the platform, which had already suspended most of its operations – including the ability to trade between cryptocurrencies and fiat currencies like the Romanian leu – earlier this year.
The notice said:
“We inform you that starting from 1st of May 2018, our platform will be closed. Operations stopped back on 1st of February but you still could stock your bitcoins on our platform.”
Earlier this year, the exchange’s chief executive, Max Nicula, said the startup’s bank accounts had been shut down, and it would no longer able able to process fiat trades, Cryptoninjas reported.
This marks the third time the exchange has said that it would close. In September 2016, the company announced it would possibly be sold, and prepared for a closure at the time. At the time, the startup’s owner, Horea Vuscan, said he wanted to retire, and placed the exchange up for sale, as previously reported.
Before then, the exchange asked its users to withdraw all their funds after its team lost access to their servers in September 2014, less than a year after it first opened.
IBM partners with jewelry industry on Hyperledger supply chain project
IBM is collaborating with jewelry industry leaders to create a cross-industry supply chain tracking platform, the tech giant announced on Thursday.
Powered by a permissioned blockchain built on Hyperledger Fabric, the TrustChain initiative will facilitate the tracking of diamonds and precious metals as they advance from mine to market.
The consortium comprises a variety of industry businesses, with U.S. jewelry retailer Helzberg Diamonds, precious metals refiner Asahi Refining, jewelry manufacturer Richline Group, independent third party verification firm UL and precious metals supplier LeachGarner as members.
TrustChain will kick off by tracking six styles of gold and diamond engagement rings on the system.
Transparency and trust are at the core of the Initiative, IBM general manager of blockchain services Jason Kelley told CoinDesk in an interview, due in no small part to consumer demand for corporate responsibility and ethical consumption.
“Consumers now have a high demand for trust in what they’re buying,” he said, noting that statistics show that most consumers – especially millennials – will pay more for brands and products that are sustainable.
However, Kelley said businesses stand to benefit from the initiative too. He compared the project to IBM’s other supply chain initiatives for the food and shipping industries, for which blockchain pilots have rapidly reduced the amount of time required to track the origin of a product.
In the jewelry industry use case, businesses will be able to share data with one another in real time, streamlining the steps of the supply chain and reducing redundancy.
As a result, Kelley added,
“You get an operating system that drives effective trust and innovation.”
“And as you start to increase this effectiveness, you start thinking about what you’re freeing up” – namely capital, labor and time, he added. “You’re able to return that value back to the system and look at new ways to do business.”
As such, Kelley considers the blockchain the “OS for trust and innovation.”
However, a lack of access to digital technology at crucial points in the supply chain – remote mines, for example – could encumber the TrustChain Initiative.
“It’s not the answer to all things,” Kelley conceded.
Nonetheless, he suggested that the increasing ubiquity of smart phones across the globe means that this obstacle is likely only temporary.
In such instances of limited access to digital technologies, “there obviously will be and has always been a challenge for connectivity,” Kelley said. “So we’re not solving that small gap but we are allowing them to now connect into the blockchain when they have the connectivity.”
Initiative members expect TrustChain jewelry to be available to consumers by the end of 2018.