Blockchain Companies Dominate the Forbes Fintech 50 List 2018 0 147

The headlines have been dominated by the crypto world of late. Mostly, the record highs and plummeting lows of Bitcoin’s value and hackers syphoning off money from major ICOs. All this negative press is enough to make investors nervous, but it isn’t all bad news. In fact, as Forbes releases its Fintech 50 list for 2018, nine of the companies are blockchain.

The Impact of Blockchain on the Financial Industry

Beyond the concerns about digital currency, whether Bitcoin’s real value has been inflated, and major banks banning purchase of it with their credit cards; blockchain has further implications for the financial industry. In fact, blockchain technology could be the answer to many an outdated and inefficient solution in the banking world, revolutionizing how financial transactions are recorded and carried out worldwide.

The fact that blockchain technology can trace specific transactions and provide transparency make them music to the ears of agencies like the IRS and FBI. Blockchain doesn’t just drive efficiency, it changes the whole manner in which trust is federated between buyer and seller, government agencies and countries.

By using smart contracts, blockchain digitalizes and automates the information, removing various counterparties that were previously involved in that process, effectively cutting out the middleman and creating greater transparency. Let’s take a look at some of the companies causing a stir in the blockchain community:

The Bitfury Group, Amsterdam

The Bitfury Group make hardware and software that allows for Bitcoin mining and security. They also provide software that supports blockchain in supply chains for government and insurance, specifically working with the government of Georgia to transfer land titles to the blockchain.

According to Valery Vavilov, CEO & Co-Founder and one of the richest men in cryptocurrency, “The internet allows us to digitize information and transfer it globally, but it lacked a solution to digitize and securely transfer assets. The Bitfury Group utilizes the technology of the Blockchain to allow companies to successfully digitize their assets and safely transact them over the internet – making the world safer, simpler and more efficient.”

Chainalysis, New York

It’s bad news for would-be crypto criminals with companies like Chainalysis gaining protagonism. With customers including the IRS, FBI and Drug Enforcement Administration, this newcomer to the Forbes Fintech 50 is allowing major institutions and law enforcement agencies to trace specific transactions. This could mean an end to money laundering and illicit transactions.

Claiming to “protect the junction between finance and the decentralized internet,” Chainalysis is the leading provider of anti-money laundering software for Bitcoin, with customers racking up over $15 billion worth of transactions on their platform.

Coinbase, San Francisco

Widely recognized as the easiest and most user-friendly platform to start your journey into the cryptocurrency world, most people have been introduced to Coinbase by now. Trading in Bitcoin, Ethereum and Litecoin, this trusted tool offers customers digital currency wallets, and has already racked up over 10 million users, registering more than $1 billion in revenue and over $50 billion in transactions. Its Co-Founder, Brian Armstrong, also made the Forbes list of the Richest People In Cryptocurrency.

Shapeshift, Zug, Switzerland

They say it’s all about location, location, location, and Shapshift’s headquarters in a country famous for its financial institutions is no accident. Claiming to be the “safest, fastest asset exchange on earth,” users can trade in up to 70 different cryptocurrencies, without even setting up an account or having a wallet. How very Swiss of them.

With a focus on privacy, Shapeshift does not accept fiat currencies and does not link to any bank accounts. The benefits of this were accidentally showcased not so long ago when the company was hacked into by a disgruntled employee. No crypto was lost at all, due to the fact that the company does not hold onto customer funds.

As the fintech industry begins to reach something close to maturity, it’s clear that blockchain is leading the charge in 2018. With an emphasis on transparency, security, and privacy for those who want to keep their financial transactions under wraps, there’s a blockchain company out there to tackle most financial woes.

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Christina is a technology and business communicator who has worked with high profile ICOs and blockchain influencers to break industry news.

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Bitcoin Uses As Much Energy As Austria, Could Add 2°C to Earth’s Atmosphere 3 277

Bitcoin mining, it turns out, damages the earth more than more traditional environmental assaults like actual mineral mining.

According to a paper published Monday in Nature Sustainability, the power-hungry Bitcoin mining process consumes more than triple the amount of energy needed to mine the equivalent amount of gold, more than quadruple what’s needed for copper, and more than double what it takes to mine platinum.

Other coins didn’t fare much better. By their measurements, Ethereum and Litecoin consume 7 megajoules of electricity to produce the equivalent of $1, the same energy expenditure as copper mining but more than that of platinum or gold. Monero eats up 14 megajoules to produce $1.

Naturally, these measurements refer to the notoriously variable dollar valuations of such tokens. “While the market prices of the coins are quite volatile,” write researchers Max J. Krause and Thabet Tolaymat, “the network hashrates for three of the four cryptocurrencies have trended consistently upward, suggesting that energy requirements will continue to increase.”

Bitcoin’s Growing Electricity Bill is Bigger Than Some Countries

We’ve long known that Bitcoin is unsustainable. In a 2015 article for Motherboard, Christopher Malmo pointed out that a single Bitcoin transaction used 5,033 times as much energy as a Visa swipe, and could power 1.5 American homes for a day.

The electricity used to crunch Bitcoin code—and its environmental cost—has been growing with its increasing popularity. Digiconomist’s Bitcoin Energy Consumption Index shows Bitcoin currently consuming 73.12 terawatt hours (or 263.232 billion megajoules) of electricity annually. To put that in context, it’s comparable to the amount of energy it takes to power Austria for a year.

That means there are 175ish countries on earth using less energy than Bitcoin (to say nothing of crypto on the whole), while 66 countries consume less energy per capita than one Bitcoin transaction (it takes 94 thousand kilowatt hours of electricity to mine a single Bitcoin).

Iceland, a major hub of Bitcoin mining farms, spends nearly as much energy on Bitcoin as it does powering its residential homes. In this case, the damage is mitigated because most of Iceland’s power comes from renewable energy.

Canada’s Bitcoin emissions are also on the lower end due to renewable energy sources. They’re using this to court mining companies from China, where mining emissions are about four times that of Canada’s. Montreal International attracts foreign investment by calling Quebec the land of “green bitcoin”. This has caught the eye of some Chinese mining companies looking to go overseas as the Chinese government has discouraged expansion and shut down some mining operations altogether.

Depending on Bitcoin’s growth, some have projected that it could use as much energy as the entire world by 2020.

Digital Currency Has a Real Carbon Footprint

Krause’s and Tolaymat’s research reminds us of the sobering reality that all this invisible wealth has real world costs.

For the 30 months they measured between January 2016 and June 2018, they estimate their four featured tokens collectively belched out at least 3 million tons of CO2 emissions, possibly as much as 15 million tons.

These findings follow another study, published last month, which determined Bitcoin alone could add two degrees Celcius to global warming within the next three decades. That’s enough to raise ocean acidity by 29 percent.

Solving Bitcoin’s Energy Consumption Crisis

So what is the solution? If the world were to switch to 100 percent renewable energy overnight, the problem would be moot. But we can’t hold our breath for that. There could be ways of incentivizing clean energy so greener mines reap more coins, or of implementing clean energy in other ways.

It’s also possible to adopt less computationally intensive mining algorithms so the mining computers don’t guzzle as much juice. This would disappoint a lot of old school Bitcoiners who have invested in hardware, but their feelings don’t really outweigh that 2 degrees celcius that everyone will have to live with (or die by).

Whatever the best solution turns out to be, something needs to change soon. Bitcoin is growing up, and it’s time for it to mature into something more sustainable.

Kenya Looks to Blockchain for Affordable Housing Project 1 168

The “Silicon Savannah” is moving deeper in direction of tech. The Kenyan government has announced a plan to manage the property allocation and funding of 500,000 affordable housing units with blockchain technology.

The units, which the government aims to build by 2022, will be set aside for households with an annual income below 100,000 Kenyan Shillings, about $990 USD. The World Bank estimates Kenya’s gross national income per capita at $1,290, according to Business Daily.

Blockchain will help ensure that the affordable housing is in fact going to those who fall below the average income bracket. Land title fraud has caused problems for Kenyans, as land grabbers target homes and even schools for illegal sales and development. Blockchain’s ability to store verifiable proof of title could help safeguard against fraudsters.

“Kenya will use blockchain technology to ensure the rightful owners live in government funded housing projects,” said Principal Secretary of Housing and Urban Development Charles Hinga, speaking with the World Bank on Monday.

Hinga said the plan will be financed by the National Housing Fund, which will raise over $59.5 million per month to get the project underway. But Cabinet Secretary for Transport, Infrastructure, Housing and Urban Development James Macharia said it will take $31.7 billion to build a million homes, each of which will cost between $3,000 and $30,000. Macharia called for support from private sector financing.

Under the financing plan, working Kenyans will contribute 1.5 percent of their salary, which will be matched by their employers. “On affordable housing one should not spend more than 30% of their disposable income for housing,” Hinga tweeted yesterday. “Anything above 30% is not affordable.”

A Trustless Relationship Between People and Government

The initiative represents a considerable push to solve housing and title problems for the nation’s lower income families. But how will the government decide to whom the housing units will go? With so much talk about financing underway, people are already calling on the government to outline a plan for how they’ll distribute the affordable housing units.

The government will need to deliver the housing projects in a time when, Hinga acknowledges, the public is skeptical. Earlier this year $78 million went missing in a corruption scandal involving the National Youth Services. Where there is little trust between the people and their government, Kenya hopes to establish transparency through the blockchain’s distributed ledger system.

Kenya’s Move Toward Tech

In March, Kenya’s Ministry of Information, Communications and Technology appointed a blockchain taskforce to explore the ways the nation could use blockchain technology in the public and private sectors. They called it the Distributed Ledgers and Artificial Intelligence taskforce, and by September its chairman, Bitange Ndemo, was calling on the government to tokenize the economy.

Ndemo also proposed government implementation of blockchain to certify the authenticity of retail goods, so consumers can be sure of where their food is coming from, for example.

Governor of Kenya’s central bank Patrick Njoroge has also voiced support for the use of blockchain technology to strengthen service delivery, although he’s opposed the use of tokens and digital currencies.

But the affordable housing initiative could be the Kenyan government’s first real world implementation of the blockchain.

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